SCHRODER CAPITAL FUNDS /DELAWARE/, 485BPOS, 2000-02-29

SCHRODER CAPITAL FUNDS /DELAWARE/
485BPOS, 2000-02-29

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<PAGE>

As filed with the Securities and Exchange Commission on February 29, 2000
Investment Company Act File No. 811-1911; Securities Act File No. 2-34215

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Post-Effective Amendment No. 76 [X]

and/or

REGISTRATION STATEMENT UNDER INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 56 [X]

SCHRODER CAPITAL FUNDS (DELAWARE)
787 Seventh Avenue, New York, New York 10019
(212) 492-6000

Alexandra Poe, Esq.
Schroder Investment Management North America Inc.
787 Seventh Avenue, 34th Floor
New York, New York 10019

Copies to:
Julie Tedesco, Esq.
State Street Bank and Trust Company
P.O. Box 1713
Boston, Massachusetts 02105-1713

Timothy W. Diggins, Esq.
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624

It is proposed that this filing will become effective (check appropriate box):
[x] Immediately upon filing | | On (date) pursuant to paragraph (b)
pursuant to paragraph (b)
| | 60 days after filing pursuant | | On (date) pursuant to paragraph (a)(1)
to paragraph (a)(1)
| | 75 days after filing pursuant | | On (date) pursuant to paragraph
to paragraph (a)(2) (a)(2) of Rule 485.

If appropriate, check the following box:
| | This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC As soon as
practicable after this Registration Statement becomes effective.

<PAGE>
[LOGO]

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

PROSPECTUS

MARCH 1, 2000

SCHRODER CAPITAL FUNDS (DELAWARE)
INVESTOR SHARES

This Prospectus describes seven mutual funds offered by Schroder Capital Funds
(Delaware). Schroder Investment Management North America Inc. ("Schroder")
manages the Funds.

SCHRODER INTERNATIONAL FUND seeks long-term capital appreciation through
investment in securities markets outside the United States.

SCHRODER EMERGING MARKETS FUND seeks long-term capital appreciation. The
Fund invests primarily in equity securities of issuers domiciled or doing
business in emerging market countries in regions such as Southeast Asia,
Latin America, and Eastern and Southern Europe.

SCHRODER INTERNATIONAL SMALLER COMPANIES FUND seeks long-term capital
appreciation through investment in securities markets outside the United
States. The Fund invests primarily in equity securities of companies with
market capitalizations of $1.5 billion or less.

SCHRODER GREATER CHINA FUND seeks long-term growth of capital. The Fund
invests primarily in common stocks and other securities of issuers domiciled
or doing business in China, Hong Kong SAR, and Taiwan.

SCHRODER U.S. DIVERSIFIED GROWTH FUND seeks growth of capital. The Fund
invests in equity securities of companies in the United States.

SCHRODER U.S. SMALLER COMPANIES FUND seeks capital appreciation. The Fund
invests in equity securities of issuers domiciled in the United States with
market capitalizations of $1.5 billion or less.

SCHRODER MICRO CAP FUND seeks long-term capital appreciation. The Fund
invests in equity securities of issuers domiciled in the United States with
market capitalizations in the bottom third of companies in the Russell 2000
Growth Index or of $300 million or less. (Shares of Schroder Micro Cap Fund
are not currently being offered to the public generally, and may be
purchased only by existing shareholders and by employees of Schroder
Investment Management North America Inc. and its affiliates.)

You can call the Trust at (800) 464-3108 to find out more about the Funds and
other funds in the Schroder family.

This Prospectus explains what you should know about the Funds 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.
<PAGE>
TABLE OF CONTENTS

<TABLE>
<S> <C>
PAGE
--------
SUMMARY INFORMATION............................ 3

Schroder International Fund.................. 3

Schroder Emerging Markets Fund............... 5

Schroder International Smaller Companies
Fund......................................... 7

Schroder Greater China Fund.................. 8

Schroder U.S. Diversified Growth Fund........ 10

Schroder U.S. Smaller Companies Fund......... 11

Schroder Micro Cap Fund...................... 12

FEES AND EXPENSES.............................. 14

OTHER INVESTMENT STRATEGIES AND RISKS.......... 16

MANAGEMENT OF THE FUNDS........................ 20

HOW THE FUNDS' SHARES ARE PRICED............... 22

HOW TO BUY SHARES.............................. 23

HOW TO SELL SHARES............................. 25

EXCHANGES...................................... 26

DIVIDENDS AND DISTRIBUTIONS.................... 26

TAXES.......................................... 27

FINANCIAL HIGHLIGHTS........................... 28

ACCOUNT APPLICATION............................ A-1
</TABLE>

2
<PAGE>
SUMMARY INFORMATION

The Funds offered by Schroder Capital Funds (Delaware) provide a broad range of
investment choices. This summary identifies each Fund's investment objective,
principal investment strategies, and principal risks. A Fund's investment
objective may not be changed without shareholder approval. The investment
policies of each Fund may, unless otherwise specifically stated, be changed by
the Trustees of the Trust without a vote of the shareholders.

SCHRODER INTERNATIONAL FUND

- - INVESTMENT OBJECTIVE. Long-term capital appreciation through investment in
securities markets outside the United States.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests at least 65% of its
total assets in equity securities of companies domiciled outside of the United
States, and will invest in securities of companies domiciled in at least three
countries other than the United States. 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
and preferred stocks.

The Fund normally invests a substantial portion of its assets in countries
included in the Morgan Stanley Capital International EAFE Index, which is a
market weighted index of companies representative of the market structure of
certain developed market countries in Europe, Australia, Asia, and the Far
East.

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. The Fund generally sells securities
when they reach fair valuation or when significantly more attractive
investment candidates become available.

The Fund also may do the following:

- Invest in securities of issuers domiciled or doing business in "emerging
market" countries.

- Invest in securities of closed-end investment companies that invest
primarily in foreign securities.

- - PRINCIPAL RISKS.

- FOREIGN SECURITIES. Investments in foreign securities entail risks not
present in domestic investments including, among others, risks related
to political or economic instability, currency exchange, and taxation.

- 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 generally or particular companies in the
portfolio.

3
<PAGE>
a substantial amount of its assets in one country, it will be more
susceptible to the political and economic developments and market
fluctuations in that country than if it invested in a more
geographically diversified portfolio.

- EMERGING MARKETS. The Fund may invest in "emerging market" countries
whose securities markets may experience heightened levels of volatility.
The risks of investing in emerging markets include greater political and
economic uncertainties than in foreign developed markets, currency
transfer restrictions, a more limited number of potential buyers, and an
emerging market country's dependence on revenue from particular
commodities or international aid. Additionally, the securities markets
and legal systems in emerging market countries may only be in a
developmental stage and may provide few, or none, of the advantages or
protections of markets or legal systems available in more developed
countries. Emerging market countries may experience extremely high
levels of inflation, which may adversely affect those countries'
economies, currencies, and securities markets.

SCHRODER INTERNATIONAL FUND -- INVESTOR SHARES

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR END
<S> <C>
Annual Return
1990 -11.41%
1991 4.62%
1992 -4.01%
1993 45.72%
1994 -0.27%
1995 11.57%
1996 9.93%
1997 3.34%
1998 13.52%
1999 30.99%
</TABLE>

During the periods shown above, the highest quarterly return was 21.57% for the
quarter ended
December 31, 1999, and the lowest was -19.79% for the quarter ended September
30, 1990.

<TABLE>
AVERAGE ANNUAL TOTAL RETURNS ONE FIVE TEN
(FOR PERIODS ENDED DECEMBER 31, 1999) YEAR YEARS YEARS
<S> <C> <C> <C>
Schroder International Fund 30.99% 13.51% 9.32%
Morgan Stanley Capital International EAFE Index* 27.06% 12.96% 7.19%
</TABLE>

* The Morgan Stanley Capital International EAFE Index is a market weighted index
composed of companies representative of the market structure of certain
developed market countries in Europe, Australia, Asia, and the Far East, and
reflects dividends net of non-recoverable withholding tax.

4
<PAGE>
SCHRODER EMERGING MARKETS FUND

- - INVESTMENT OBJECTIVE. To seek long-term capital appreciation.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests at least 65% of its
total assets in equity securities of companies determined by Schroder to be
"emerging market" issuers. The Fund may invest the remaining 35% of its assets
in securities of issuers located anywhere in the world. 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 and preferred stocks.

The Fund invests primarily in equity securities of issuers domiciled or doing
business in "emerging market" countries in regions such as Southeast Asia,
Latin America, and Eastern and Southern Europe. "Emerging market" countries
are countries not included at the time of investment in the Morgan Stanley
International World Index of major world economies. Countries currently in the
Index (and therefore generally NOT considered to be "emerging market"
countries) include: Australia, Austria, Belgium, Canada, Denmark, Finland,
France, Germany, Hong Kong, Ireland, Italy, Japan, the Netherlands, New
Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United
Kingdom, and the United States. Schroder may at times determine based on its
own analysis that an economy included in the Index should nonetheless be
considered an emerging market country, in which case that country would
constitute an emerging market country for purposes of the Fund's investments.
The Fund normally will invest in at least three countries other than the
United States.

The Fund invests in issuers and countries 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
considers the risk of local political and/or economic instability associated
with particular countries and regions and the liquidity of local markets. The
Fund generally sells securities when they reach fair valuation or when
significantly more attractive investment candidates become available.

The Fund also may do the following:

- Invest in securities of closed-end investment companies that invest
primarily in foreign securities, including securities of emerging market
issuers.

- Invest up to 35% of its assets in debt securities, including lower
quality, high yielding debt securities (commonly known as "junk bonds"),
which entail certain risks.

- Invest up to 5% of its assets in sovereign debt securities that are in
default.

- - PRINCIPAL RISKS.

- GEOGRAPHIC CONCENTRATION. There is no limit on the amount of the Fund's
assets that may be invested in securities of issuers domiciled in any
one country, although the Fund will normally

5
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invest in at least three countries other than the United States. To the
extent that the Fund invests a substantial amount of its assets in one
country, it will be more susceptible to the political and economic
developments and market fluctuations in that country than if it invested
in a more geographically diversified portfolio.

- NON-DIVERSIFIED MUTUAL FUND. The Fund is a "non-diversified" mutual
fund, and will invest its assets in a more limited number of issuers
than may diversified investment companies. To the extent the Fund
focuses on fewer issuers, its risk of loss increases if the market value
of a security declines or if an issuer is not able to meet its
obligations.

- DEBT SECURITIES. The Fund may invest 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).

- JUNK BONDS. Securities rated below investment grade ("junk bonds") lack
outstanding investment characteristics and have speculative
characteristics and are subject to greater credit and market risks than
higher-rated securities. The lower ratings of junk bonds reflect a
greater possibility that adverse changes in the financial condition of
the issuer or in general economic conditions, or an unanticipated rise
in interest rates, may impair the ability of the issuer to make payments
of interest and principal. If this were to occur, the values of
securities held by the Fund may become more volatile.

SCHRODER EMERGING MARKETS FUND -- INVESTOR SHARES

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR END
<S> <C>
Annual Return
1998 -16.53%
1999 79.87%
</TABLE>

During the periods shown above, the highest quarterly return was 29.54% for the
quarter ended June 30, 1999, and the lowest was -21.26% for the quarter ended
June 30, 1998.

<TABLE>
LIFE OF FUND
AVERAGE ANNUAL TOTAL RETURNS ONE (SINCE
(FOR PERIODS ENDED DECEMBER 31, 1999) YEAR 10/30/97)
<S> <C> <C>
Schroder Emerging Markets Fund 79.87% 20.87%
Morgan Stanley Capital International Emerging Markets Free
Index* 66.41% 13.11%
</TABLE>

* The Morgan Stanley Capital International Emerging Markets Free Index is an
unmanaged, market capitalization index of companies representative of the
market structure of 25 emerging countries in Europe, Latin America, and the
Pacific Basin. The Index reflects actual buyable opportunities for the
non-domestic investor by taking into account local market restrictions on
share ownership by foreigners. For periods prior to November 30, 1998, returns
represent the MSCI EMF Index (ex-Malaysia).

6
<PAGE>
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND

- - INVESTMENT OBJECTIVE. Long-term capital appreciation through investment in
securities markets outside the United States.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests at least 65% of its
total assets in equity securities of smaller companies (with market
capitalizations of $1.5 billion or less at the time of investment) domiciled
outside the United States. 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 and preferred stocks.

In selecting investments for the Fund, Schroder considers a number of factors,
including the company's potential for long-term growth, financial condition,
sensitivity to cyclical factors, the relative value of the company's
securities (compared to that of other companies and to the market as a whole),
and the extent to which the company's management owns equity in the company.
The Fund will invest in securities of issuers domiciled in at least three
countries other than the United States, and may, although it does not
currently, invest in the securities of issuers domiciled or doing business in
emerging market countries. The Fund generally sells securities when they reach
fair valuation or when significantly more attractive investment candidates
become available.

The Fund invests in small capitalization companies that Schroder believes
offer the potential for capital growth. In doing so, Schroder considers, among
other things, an issuer's likelihood of above average earnings growth, the
securities' attractive relative valuation, and whether the issuer has any
proprietary advantages.

The Fund also may do the following:

- Invest in closed-end investment companies that invest primarily in
foreign securities.

- Invest in securities of issuers domiciled or doing business in emerging
market countries.

- - PRINCIPAL RISKS.

- SMALL COMPANIES. The Fund invests primarily in small companies, 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.

- GEOGRAPHIC CONCENTRATION. There is no limit on the amount of the Fund's
assets that may be invested in securities of issuers domiciled in any
one country, although the Fund will normally invest in at least three
countries other than the United States. To the extent that the Fund
invests a substantial amount of its assets in one country, it will be
more susceptible to the political and economic developments and market
fluctuations in that country than if it invested in a more
geographically diversified portfolio.

7
<PAGE>

SCHRODER INTERNATIONAL SMALLER COMPANIES FUND -- INVESTOR SHARES

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR END
<S> <C>
Annual Return
1997 -14.13%
1998 25.98%
1999 90.29%
</TABLE>

During the periods shown above, the highest quarterly return was 26.32% for the
quarter ended
December 31, 1999, and the lowest was -15.41% for the quarter ended September
30, 1998.

<TABLE>
LIFE OF FUND
AVERAGE ANNUAL TOTAL RETURNS ONE (SINCE
(FOR PERIODS ENDED DECEMBER 31, 1999) YEAR 11/4/96)
<S> <C> <C>
Schroder International Smaller Companies Fund 90.29% 25.35%
Salomon Smith Barney Extended Market Index (EPAC)* 22.97% 7.43%
</TABLE>

* The Salomon Smith Barney Extended Market Index (Europe Pacific Basin
Countries) (EMI EPAC) is an unmanaged index representing the portion of the
Salomon Smith Barney Broad Market Index related to companies with small index
capitalization in approximately 22 European and Pacific Basin countries. The
Salomon Smith Barney EMI EPAC represents the smallest companies in each
country based on total market capital having in the aggregate 20% of the
cumulative available market capital in such country.

SCHRODER GREATER CHINA FUND

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

- - PRINCIPAL INVESTMENT STRATEGIES. 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 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 also may 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.

8
<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 value 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 value 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.

- 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.

- 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 more geographically diversified portfolio.

NOTE: THE FUND DOES NOT YET HAVE A FULL CALENDAR YEAR OF PERFORMANCE AND, THUS,
THERE IS NO BAR CHART OR TOTAL RETURN TABLE SHOWN FOR THE FUND.

9
<PAGE>
SCHRODER U.S. DIVERSIFIED GROWTH FUND
(FORMERLY, SCHRODER U.S. EQUITY FUND)

- - INVESTMENT OBJECTIVE. To seek growth of capital.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests substantially all
of its assets in equity securities of companies in the United States. The Fund
invests in a variety of equity securities including common and preferred
stocks and warrants to purchase common and preferred stocks. The Fund normally
invests in securities of companies with market capitalizations of more than $3
billion (at the time of investment).

The Fund may invest in companies that Schroder believes offer the potential
for capital growth. For example, the Fund may invest in companies whose
earnings are believed to be in a relatively strong growth trend, companies
with a proprietary advantage, or companies that are in industry segments that
are experiencing rapid growth. The Fund also may invest in companies in which
significant further growth is not anticipated but whose market value per share
is thought to be undervalued. The Fund may invest in relatively less
well-known companies that meet any of these characteristics or other
characteristics identified by Schroder.

- - PRINCIPAL RISKS.

- EQUITY SECURITIES. The principal risks of investing in the Fund include
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 U.S. equities markets generally or particular
companies in the portfolio.

SCHRODER U.S. DIVERSIFIED GROWTH FUND -- INVESTOR SHARES

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR END
<S> <C>
Annual Return
1990 -4.00%
1991 38.28%
1992 15.23%
1993 12.50%
1994 -5.21%
1995 28.03%
1996 21.48%
1997 23.33%
1998 21.94%
1999 30.91%
</TABLE>

During the periods shown above, the highest quarterly return was 26.48% for the
quarter ended
December 31, 1998, and the lowest was -15.40% for the quarter ended September
30, 1998.

<TABLE>
AVERAGE ANNUAL TOTAL RETURNS ONE FIVE TEN
(FOR PERIODS ENDED DECEMBER 31, 1999) YEAR YEARS YEARS
<S> <C> <C> <C>
Schroder U.S. Diversified Growth Fund 30.91% 25.08% 17.45%
Standard & Poor's 500 Index* 21.04% 28.55% 17.89%
</TABLE>

* The Standard & Poor's 500 Index is a market value weighted composite index of
500 large capitalization U.S. companies and reflects the reinvestment of
dividends.

10
<PAGE>
SCHRODER U.S. SMALLER COMPANIES FUND

- - INVESTMENT OBJECTIVE. Capital appreciation.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund invests at least 65% of its total
assets in equity securities of companies in the United States that have (at
the time of investment) market capitalizations of $1.5 billion or less. The
Fund also may invest in equity securities of larger companies and in debt
securities, if Schroder believes such investments are consistent with the
Fund's investment objective. 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 and preferred
stocks.

In selecting investments for the Fund, Schroder seeks to identify securities
of companies with strong management that it believes can generate above
average earnings growth, and are selling at favorable prices in relation to
book values and earnings. The Fund intends to invest no more than 25% of its
total assets in securities of small companies that, together with their
predecessors, have been in operation for less than three years.

- - PRINCIPAL RISKS.

- SMALL COMPANIES. The Fund invests primarily in small companies, 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 less frequently 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 price of the securities to
reflect the full value of their issuers' earnings potential or assets.

- 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 U.S. equities markets generally or particular companies
in the portfolio.

SCHRODER U.S. SMALLER COMPANIES FUND -- INVESTOR SHARES

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR END
<S> <C>
Annual Return
1994 4.45%
1995 49.08%
1996 22.29%
1997 26.86%
1998 -9.23%
1999 13.10%
</TABLE>

During the periods shown above, the highest quarterly return was 18.60% for the
quarter ended June 30, 1997, and the lowest was -23.27% for the quarter ended
September 30, 1998.

<TABLE>
LIFE OF
FUND
AVERAGE ANNUAL TOTAL RETURNS ONE FIVE (SINCE
(FOR PERIODS ENDED DECEMBER 31, 1999) YEAR YEARS 8/6/93)
<S> <C> <C> <C>
Schroder U.S. Smaller Companies Fund 13.10% 18.88% 17.29%
Russell 2000 Index* 21.26% 16.69% 12.41%
</TABLE>

* The Russell 2000 Index is a market capitalization weighted broad based index
of 2000 small capitalization U.S. companies.

11
<PAGE>
SCHRODER MICRO CAP FUND

SHARES OF SCHRODER MICRO CAP FUND ARE NOT CURRENTLY BEING OFFERED TO THE PUBLIC
GENERALLY, AND MAY BE PURCHASED ONLY BY EXISTING SHAREHOLDERS AND BY EMPLOYEES
OF SCHRODER AND ITS AFFILIATES. SCHRODER MAY RECOMMEND AT ANY TIME THAT A MORE
GENERAL OFFERING OF THE FUND'S SHARES BE RESUMED.

- - INVESTMENT OBJECTIVE. Long-term capital appreciation.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests at least 65% of its
total assets in equity securities of micro cap companies domiciled in the
United States. A micro cap company is a company with, at the time of initial
investment, a market capitalization in the bottom one-third of companies in
the Russell 2000 Growth Index (measured by capitalization), or with a market
capitalization of $300 million or less. 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
and preferred stocks.

Schroder seeks to identify securities of companies that it believes offer the
potential for long-term capital appreciation, based on novel, superior or
niche products or services, operating characteristics, quality of management,
an entrepreneurial management team, companies that have gone public in recent
years, opportunities provided by mergers, divestitures or new management, or
other factors. The Fund may invest in securities of small, unseasoned
companies, as well as securities of more established companies. Up to 35% of
the Fund's assets may comprise other investments, including equity securities
of larger capitalization companies, if Schroder believes that such investments
are warranted to achieve the Fund's investment objective.

The Fund also may do the following:

- Invest, to a limited degree, in non-convertible debt securities, when
Schroder believes that such investments are warranted to achieve the
Fund's investment objective.

- Sell securities short and then borrow those same securities from a
broker or other institution to complete the sale (a "short sale").

- Engage in a variety of transactions involving the use of options and
futures contracts, including index options and index futures contracts,
primarily for hedging purposes.

- Invest in closed-end investment companies that invest primarily in micro
cap securities.

- Purchase securities of a company in the company's initial public
offering of securities.

- - PRINCIPAL RISKS.

- SMALL COMPANIES. The Fund invests primarily in micro cap companies and
is therefore particulary sensitive to the risks associated with small
companies. Small companies 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 less frequently 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' earning
potential or assets.

- 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 U.S. equities markets generally or particular companies
in the portfolio.

12
<PAGE>

- INITIAL PUBLIC OFFERINGS (IPOS). The Fund may purchase securities of
companies in initial public offerings of their securities. Such
investments are subject generally to the risks described above under
"Small Companies." Such securities have no trading history, and
information about such companies may be available for very limited
periods. Only a small portion of the securities being offered in an
initial public offering may be made available to the Fund, which may be
less than the Fund might otherwise wish to buy. Under certain market
conditions, very few, if any, companies may determine to make initial
public offerings of their securities. The investment performance of the
Fund during periods when it is unable to invest significantly or at all
in initial public offerings may be lower than during periods when the
Fund is able to do so. The prices of securities sold in initial public
offerings can be highly volatile. During the periods covered in the bar
chart and table below, the Fund invested in a significant number of
IPOs.

SCHRODER MICRO CAP FUND -- INVESTOR SHARES

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR END
<S> <C>
Annual Return
1998 63.04%
1999 94.92%
</TABLE>

During the periods shown above, the highest quarterly return was 26.99% for the
quarter ended June 30, 1999, and the lowest was -2.85% for the quarter ended
September 30, 1998.

<TABLE>
LIFE OF FUND
AVERAGE ANNUAL TOTAL RETURNS ONE (SINCE
(FOR PERIODS ENDED DECEMBER 31, 1999) YEAR 10/15/97)
<S> <C> <C>
Schroder Micro Cap Fund 94.92% 74.40%
Russell 2000 Index* 21.26% 4.01%
</TABLE>

* The Russell 2000 Index is a market capitalization weighted broad based index
of 2000 small capitalization U.S. companies.

13
<PAGE>
FEES AND EXPENSES

THESE TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
INVESTOR SHARES OF THE FUNDS.

SHAREHOLDER FEES (paid directly from your investment):

<TABLE>
<S> <C>
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
</TABLE>

ANNUAL FUND OPERATING EXPENSES

(expenses that are deducted from Fund assets):

<TABLE>
<CAPTION>
SCHRODER SCHRODER
SCHRODER INTERNATIONAL U.S. SCHRODER
SCHRODER EMERGING SMALLER SCHRODER DIVERSIFIED U.S. SMALLER SCHRODER
INTERNATIONAL MARKETS COMPANIES GREATER GROWTH COMPANIES MICRO CAP
FUND FUND FUND CHINA FUND FUND FUND FUND
------------- --------- ------------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees(1)............ 0.69%(3) 1.25% 1.10% 1.15% 0.75% 0.75% 1.50%
Distribution (12b-1) Fees..... None None None None None None None
Other Expenses................ 0.37 6.59 1.64 12.16 1.24 0.60 1.03
------- ------- ------- -------- ------- ------- -------
Total Annual Fund Operating
Expenses..................... 1.06 7.84 2.74 13.31 1.99 1.35 2.53
Fee Waiver and/or Expense
Limitation................... 0.07(2) 6.14(2) 1.24(2) 11.31(2) 0.49(2) N/A 0.53(2)
------- ------- ------- -------- ------- ------- -------
Net Expenses.................. 0.99(2) 1.70(2) 1.50(2) 2.00(2) 1.50(2) 1.35 2.00(2)
</TABLE>

(1) Management Fees include all fees payable to Schroder and its affiliates for
investment advisory and fund administration services.

(2) The Net Expenses shown above reflect the effect of contractually imposed
expense limitations and/or fee waivers, in effect through October 31, 2000,
on the Total Annual Fund Operating Expenses of the Funds.

(3) The expense information for Schroder International Fund has been restated
to reflect current Management Fees. Prior to June 1, 1999, the Fund paid
Management Fees of 0.675%.

14
<PAGE>
EXAMPLE

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

The Example assumes that you invest $10,000 in Investor Shares of a 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 on the previous page (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 5 YEARS 10 YEARS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Schroder International Fund* $ 109 $ 339 $ 587 $1,299
Schroder Emerging Markets Fund* $ 804 $2,338 $3,781 $7,022
Schroder International Smaller Companies Fund* $ 281 $ 861 $1,467 $3,102
Schroder Greater China Fund* $1,364 $3,749 $5,740 $9,393
Schroder U.S. Diversified Growth Fund* $ 204 $ 630 $1,082 $2,334
Schroder U.S. Smaller Companies Fund $ 138 $ 430 $ 744 $1,632
Schroder Micro Cap Fund* $ 259 $ 797 $1,361 $2,893
</TABLE>

* Assuming that each of these Fund's operating expenses remain the same as
Net Expenses set forth on the previous page, based on the other assumptions
described above, your costs would be as follows for 1 year, 3 years, 5
years, and 10 years, respectively:

Schroder International Fund -- $101, $317, $549, and $1,217.

Schroder Emerging Markets Fund -- $174, $540, $930, and $2,021.

Schroder International Smaller Companies Fund -- $154, $477, $824, and
$1,801.

Schroder Greater China Fund -- $205, $633, $1,087, and $2,345.

Schroder U.S. Diversified Growth Fund -- $154, $477, $824, and $1,801.

Schroder Micro Cap Fund -- $205, $633, $1,087, and $2,345.

15
<PAGE>
OTHER INVESTMENT STRATEGIES AND RISKS

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

RISKS OF INVESTING IN THE FUNDS

- FOREIGN SECURITIES AND CURRENCIES. Except as otherwise noted in this
Prospectus, there is no limit on the amount of a Fund's assets that may
be invested in foreign securities. Investments in foreign securities
entail certain risks. 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
a Fund's investments in certain foreign countries. Since foreign
securities normally are denominated and traded in foreign currencies,
the value 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 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 a 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, a Fund may have limited
recourse available to it. The laws of some foreign countries may limit a
Fund's ability to invest in securities of certain issuers located in
those countries.

If a 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. Officials in foreign countries
may from time to time take actions in respect of their currencies which
could significantly affect the value of a Fund's assets denominated in
those currencies or the liquidity of such investments. For example, a
foreign government may unilaterally devalue its currency against other
currencies, which would typically have the effect of reducing the U.S.
dollar value of investments denominated in that currency. A foreign
government may also limit the convertibility or repatriation of its
currency or assets denominated in its currency, which would adversely
affect the U.S. dollar value and liquidity of investments denominated in
that currency. In addition, although at times most of a 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 a 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 than it would have had
to convert at the time the Fund incurred the expense. A Fund may, but is
not required to, buy or sell foreign currencies and options and futures
contracts on foreign currencies for hedging purposes in connection with
its foreign investments.

16
<PAGE>

Special tax considerations apply to foreign securities. In determining
whether to invest a Fund's assets 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 and/or gains received
by a 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 a Fund will reduce its income
available for distribution to shareholders. In certain circumstances, a
Fund may be able to pass through to shareholders credits for foreign
taxes paid.

- DEBT SECURITIES. To varying extents, all of the Funds 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. Also, to
varying extents, all of the Funds may invest in junk bonds, which are
lower-quality, high-yielding debt securities rated below Baa or BBB by
Moody's Investors Service, Inc. or Standard & Poor's Ratings Services
(or, if they are unrated, determined by Schroder to be of comparable
quality). See the Statement of Additional Information for further
descriptions of securities ratings assigned by Moody's and Standard &
Poor's. Lower-rated debt securities are predominantly speculative and
tend to be more susceptible than other debt securities to adverse
changes in the financial condition of the issuer, general economic
conditions, or an unanticipated rise in interest rates, which may affect
an issuer's ability to pay interest and principal. This would likely
make the values of the securities held by a Fund more volatile and could
limit the Fund's ability to liquidate its securities. Changes in the
ratings of any fixed-income security and in the perceived ability of an
issuer to make payments of interest and principal also may affect the
value of these investments.

- U.S. GOVERNMENT SECURITIES. U.S. Government securities include a variety
of securities that differ in their interest rates, maturities, and dates
of issue. Securities issued or guaranteed by agencies or
instrumentalities of the U.S. Government may or may not be supported by
the full faith and credit of the United States or by the right of the
issuer to borrow from the U.S. Treasury.

- RISKS OF SMALLER CAPITALIZATION COMPANIES. Shroder Emerging Markets
Fund, Schroder International Smaller Companies Fund, Schroder Greater
China Fund, Schroder U.S. Smaller Companies Fund, and Schroder Micro Cap
Fund invest in companies that are smaller and less well-known than
larger, more widely held companies. Micro, small, and mid-cap companies
may offer greater opportunities for capital appreciation than larger
companies, but may also involve 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 Funds
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 take longer for the prices of the securities to
reflect the full value of their issuers' earnings potential or assets.

17
<PAGE>
OTHER INVESTMENT STRATEGIES AND TECHNIQUES

In addition to the principal investment strategies described in the Summary
Information section above, the Funds may at times, but are not required to, 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 Funds. 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. A
Fund may engage in currency exchange transactions to protect against
unfavorable fluctuations in exchange rates.

In particular, a 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, a 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"). A 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 Funds 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.

A Fund incurs foreign exchange expenses in converting assets from one
currency to another. Although there is no limit on the amount of any
Fund's assets that may be invested in foreign currency exchange and
foreign currency forward contracts, each Fund may enter into such
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 a Fund will utilize hedging transactions at any time.

- SECURITIES LOANS, REPURCHASE AGREEMENTS, AND FORWARD COMMITMENTS. Each
Fund (other than Schroder International Fund and Schroder U.S.
Diversified Growth Fund) may lend portfolio securities to broker-dealers
up to one-third of the Fund's total assets. Each Fund (other than
Schroder U.S. Diversified Growth Fund) may also enter into repurchase
agreements without limit. These transactions must be fully
collateralized at all times, but involve some risk to a Fund if the
other party should default on its obligation and the Fund is delayed or
prevented from recovering the collateral. Each Fund may also enter into
contracts to purchase securities for a

18
<PAGE>
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.

- SHORT SALES (SCHRODER MICRO CAP FUND). When Schroder anticipates that
the price of a security will decline, it may sell the security short and
borrow the same security from a broker or other institution to complete
the sale. The Fund may make a profit or incur a loss depending upon
whether the market price of the security decreases or increases between
the date of the short sale and the date on which the Fund must replace
the borrowed security. An increase in the value of a security sold short
by the Fund over the price at which it was sold short will result in a
loss to the Fund, and there can be no assurance that the Fund will be
able to close out the position at any particular time or at an
acceptable price.

- INVESTMENT IN OTHER INVESTMENT COMPANIES. Each Fund (other than Schroder
U.S. Diversified Growth 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, a Fund may pay a premium above such
investment company's net asset value per share. As a shareholder in an
investment company, a 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 INSTRUMENTS. To the extent permitted by a Fund's investment
policies as set forth in this Prospectus or listed in the Statement of
Additional Information, instead of investing directly in the types of
portfolio securities described in the Summary Information section above,
a Fund may buy or sell a variety of "derivative" instruments to gain
exposure to particular securities or markets, in connection with hedging
transactions, and to increase total return. These may include options,
futures, and indices, for example. Derivatives involve the risk that
they may not work as intended due to unanticipated developments in
market conditions or other causes. 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. Each Fund which may invest in debt securities 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. A Fund investing in zero-coupon
bonds is required to distribute the income on these securities as the
income accrues, even though the Fund is not receiving the income in cash
on a current basis. Thus, the Fund may have to sell other investments,
including when it may not be advisable to do so, to make income
distributions.

- PORTFOLIO TURNOVER. The length of time a Fund has held a particular
security is not generally a consideration in investment decisions. The
investment policies of a 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 a Fund is known as "portfolio
turnover." Portfolio turnover generally involves some expense to a 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 Funds, on which shareholders may pay
tax.

19
<PAGE>

- TEMPORARY DEFENSIVE STRATEGIES. At times, Schroder may judge that
conditions in the securities markets make pursuing a 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 a Fund's assets. In implementing these "defensive" strategies,
the Fund would invest in high-quality fixed income 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, a 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 Funds 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 Funds 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
Funds.

MANAGEMENT OF THE FUNDS

The Trust is governed by a Board of Trustees, which has retained Schroder to
manage the investments of each Fund. Subject to the control of the Trustees,
Schroder also manages the Funds' other affairs and business.

Schroder (itself and its predecessors) has been an investment manager since
1962, and currently serves as investment adviser to the Funds, other mutual
funds, and a broad range of institutional investors. Schroder's ultimate parent,
Schroders plc, and its affiliates currently engage in the investment banking and
asset management businesses, and as of June 30, 1999, had in the aggregate
assets under management of approximately $208 billion. In January 2000,
Schroders plc agreed to sell its worldwide investment banking business to
Salomon Smith Barney. The transaction, which is expected to be completed by May
2000, is subject to regulatory approvals and satisfaction of closing conditions.
Schroders plc will retain its asset management businesses.

Subject to the direction and control of Schroder, Schroder Investment Management
International Limited (SIMIL), an affiliate of Schroder, serves as subadviser to
Schroder International Smaller Companies Fund pursuant to an Investment
Subadvisory Agreement among Schroder, SIMIL, and that Fund. SIMIL has been
registered as a U.S. investment adviser since 1998 and provides investment
management services to U.S. and foreign clients.

- INVESTMENT ADVISORY FEES. For the fiscal year ended October 31, 1999,
SCHRODER U.S. DIVERSIFIED GROWTH FUND and SCHRODER MICRO CAP FUND paid
investment advisory fees to Schroder at the annual rate of 0.26% and
0.72%, respectively, of the Fund's average daily net assets. The
contractual investment advisory fee rate payable by SCHRODER GREATER
CHINA FUND, which has not been in operation for a full fiscal year, is
0.90% of the Fund's average daily net assets.

Prior to June 1, 1999, each of the other Funds invested substantially
all of its investible assets in a separate portfolio (each a "Former
Related Portfolio") of Schroder Capital Funds. During this time, each of
these Funds paid investment advisory fees indirectly at the Former
Related Portfolio level, and did not pay investment advisory fees
directly to Schroder. Since June 1, 1999, each such Fund has paid
investment advisory fees directly to Schroder. For the fiscal year ended
October 31, 1999, these Funds paid investment advisory fees to Schroder
(both directly and indirectly through the Former Related Portfolio) at
the following annual rates (based on the average daily net assets of
each Fund taken separately): SCHRODER INTERNATIONAL FUND -- 0.38%;

20
<PAGE>

SCHRODER U.S. SMALLER COMPANIES FUND -- 0.50%; and SCHRODER EMERGING
MARKETS FUND and SCHRODER INTERNATIONAL SMALLER COMPANIES FUND paid no
investment advisory fees during the period.

The rate of advisory fees indicated above as paid by each Fund, other
than Schroder U.S. Smaller Companies Fund, reflects expense limitations
and/or fee waivers described below.

Pursuant to the Investment Subadvisory Agreement for Schroder
International Smaller Companies Fund, Schroder pays SIMIL a fee at the
annual rate of 0.25% of the average daily net assets of that Fund.

- INVESTMENT ADVISORY FEE BREAKPOINTS. The following Funds have
breakpoints included in their contractual advisory fee schedules. The
contractual annual fee rate for each of Schroder U.S. Smaller Companies
Fund and Schroder International Fund is 0.50% of the Fund's average
daily net assets up to $100 million, 0.40% of the next $150 million of
such assets, and 0.35% of such assets in excess of $250 million; and for
Schroder U.S. Diversified Growth Fund is 0.75% of the Fund's average
daily net assets up to $100 million, and 0.50% of such assets in excess
of $100 million.

- EXPENSE LIMITATIONS AND WAIVERS. In order to limit the Funds' expenses,
Schroder is contractually obligated to reduce its compensation (and, if
necessary, to pay certain other Fund expenses) until October 31, 2000 to
the extent that each Fund's total operating expenses attributable to its
Investor Shares exceed the following annual rates (based on the average
daily net assets of each Fund taken separately): SCHRODER INTERNATIONAL
FUND -- 0.99%; SCHRODER EMERGING MARKETS FUND -- 1.70%; SCHRODER
INTERNATIONAL SMALLER COMPANIES FUND -- 1.50%; SCHRODER GREATER CHINA
FUND -- 2.00%; SCHRODER U.S. DIVERSIFIED GROWTH FUND -- 1.50%; SCHRODER
U.S. SMALLER COMPANIES FUND -- 1.49%; and SCHRODER MICRO CAP FUND --
2.00%. Schroder has contractually agreed that the advisory fees paid to
it by Schroder International Fund through October 31, 2000 will be
limited to 0.45% of the Fund's average daily net assets, and the
advisory fees paid to it by Schroder U.S. Diversified Growth Fund
through May 31, 2000 will be limited to 0.65% of the Fund's average
daily net assets. Schroder is contractually obligated through
October 31, 2000 to waive 0.10% of the advisory fees payable by Schroder
International Smaller Companies Fund.

- PORTFOLIO MANAGERS. Schroder's investment decisions for each of the
Funds are generally made by an investment manager or an investment team,
with the assistance of an investment committee; all investment decisions
for Schroder International Smaller Companies Fund are made by an
investment committee. The following portfolio managers have had primary
responsibility for making investment decisions for the Funds since the
years shown below. Their recent professional experience is also shown.

21
<PAGE>

Heather Crighton Inception (1997) Employed as an investment
professional at Schroder since
1993. Ms. Crighton is a
Director and a Senior Vice
President of Schroder.

Mark Bridgeman Inception (1997) Employed as an investment
professional at Schroder since
1990. Mr. Bridgeman is a First
Vice President of Schroder.

Schroder Greater Heather Crighton Inception (1998) See above.
China Fund

Schroder U.S. Paul Morris 1997 Employed as an investment
Diversified Growth Fund professional at Schroder since
1997. Mr. Morris is a Director
and Managing Director of
Schroder. Prior to joining
Schroder, Mr. Morris was a
Principal and Senior Portfolio
Manager at Weiss Peck & Greer,
L.L.C., and a Managing
Director, Equity Division, of
UBS Asset Management.

Schroder U.S. Smaller Ira L. Unschuld 1997 (sole manager since Employed as an investment
Companies Fund 1998) professional at Schroder since
1990. Mr. Unschuld is a Vice
President of the Trust and a
Director and Senior Vice
President of Schroder.

Schroder Micro Cap Fund Ira L. Unschuld Inception (1997) See above.
</TABLE>

HOW THE FUNDS' SHARES ARE PRICED

Each 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 than 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 Funds value their portfolio securities for which market
quotations are readily available at market value.

22
<PAGE>

Short-term investments that will mature in 60 days or less are stated at
amortized cost, which approximates market value. The Funds value securities and
assets for which market values are not ascertainable at their fair values as
determined in accordance with procedures adopted by the Board of Trustees. All
assets and liabilities of a Fund denominated in foreign currencies are
translated into U.S. dollars based on the mid-market price of such currencies
against the U.S. dollar at the time when last quoted. Because certain of the
securities in which the Funds may invest may trade on days when the Funds do not
price their Investor Shares, the net asset value of a 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 a Fund's Investor Shares will generally
differ from that of its Advisor Shares due to the variance in dividends paid on
each class of shares and differences in the expenses of Investor Shares and
Advisor Shares.

HOW TO BUY SHARES

Through Schroder Fund Advisors Inc., the distributor of the Trust's shares, the
Trust sells Investor Shares of the Funds 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 select.

You may purchase Investor Shares of each Fund by completing the Account
Application included with this Prospectus, and sending payment by check or wire
as described below. Additional Account Applications may be obtained from the
Trust's transfer agent, Boston Financial Data Services, Inc. (the "Transfer
Agent"), at the addresses listed below under "Purchases by Check", or by calling
the Trust at (800) 464-3108. The Trust or the Transfer Agent may request and
delay acceptance of your order pending receipt of additional documentation, such
as copies of corporate resolutions and instruments of authority, from
corporations, administrators, executors, personal representatives, directors, or
custodians.

Investor Shares of each of the Funds 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 investments for initial and additional purchases of Investor Shares
of each Fund are as follows:

<TABLE>
<CAPTION>
INITIAL ADDITIONAL
INVESTMENT INVESTMENTS
---------- -----------
<S> <C> <C>
Regular Accounts $10,000 $1,000
Traditional IRAs $ 2,000 $ 250
</TABLE>

The Trust may, in its sole discretion, accept smaller initial or subsequent
investments. None of the Funds issues share certificates.

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 at least the minimum investment amount applicable to a
particular Fund, or more, in Investor Shares of a 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 Trust reserves the right to redeem your
shares in a Fund if you do not invest at least the minimum initial investment
amount applicable to your account by the end of the Statement of Intention
period (taking into account amounts you redeem during the period).

The Trust is authorized to reject any purchase order and to suspend the offering
of its shares for any period of time. The Trust may also change any investment
minimum from time to time.

23
<PAGE>
PURCHASES BY CHECK

You may purchase shares of a Fund by mailing a check (in U.S. dollars) payable
to (i) Schroder Capital Funds (Delaware), if you are purchasing shares of two or
more Funds, accompanied by written instructions as to how the check amount
should be allocated among the Funds whose shares you are purchasing, or
(ii) the name of the Fund to be purchased (I.E., Schroder International Fund) if
you are purchasing shares of a single Fund. Third-party checks will not be
accepted.

For initial purchases, your check must be accompanied by a completed Account
Application in proper form. You should direct your check and your completed
Account Application as follows:

<TABLE>
<S> <C>
REGULAR MAIL OVERNIGHT OR EXPRESS MAIL
- ------------------------------------------------------------ ------------------------------------
Schroder Mutual Funds Boston Financial Data Services, Inc.
P.O. Box 8507 Attn: Schroder Mutual Funds
Boston, MA 02266 66 Brooks Drive
Braintree, MA 02184
</TABLE>

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 next determined as of the end of that day. Wire
orders received after that time will be processed at the net asset value next
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. In
order to purchase shares by telephone, you must complete the appropriate section
of the Account Application. 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
Attn: Schroder Mutual Funds
DDA No.: 9904-650-0
FBO: Account Registration
A/C:Mutual Fund Account Number
Name of Fund

The wire order must specify the name of the Fund, the share 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.

24
<PAGE>

If six months have passed since correspondence to the shareholder's address of
record is returned then, unless the Transfer Agent determines the shareholder's
new address, dividends and other distributions that have been returned to the
Transfer Agent will be reinvested in the applicable Fund(s), and the checks will
be canceled.

AUTOMATIC PURCHASES

You can make regular investments of $100 or more per month or quarter in
Investor Shares of a Fund through automatic deductions from your bank account.
Please complete the appropriate section of the Account Application if you would
like to utilize this option. For more information, please call (800) 464-3108.

OTHER PURCHASE INFORMATION

Investor Shares of each 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. Investors interested in purchases through
exchange should telephone the Trust at (800) 464-3108.

Schroder reserves the right to reject any investment. A pattern of purchases and
redemptions of Fund shares characteristic of "market timing" strategies may be
deemed by Schroder to be detrimental to the Trust or a particular Fund.
Currently, the Trust limits the number of "round trip" purchases an investor may
make. An investor makes a "round trip" purchase when the investor purchases
shares of a particular Fund, subsequently redeems those shares (including in
connection with exchanges for other Schroder funds), and then again purchases
shares of the original Fund. If an investor completes four round trip purchases
in any twelve-month period, the Trust may refuse any subsequent purchase or
exchange order by that investor.

Schroder Fund Advisors Inc., Schroder, or their affiliates may, at their own
expense and out of their own assets, provide compensation to dealers or other
intermediaries in connection with sales of Trust shares or shareholder
servicing. In some instances, this compensation may be made available only to
certain dealers or other intermediaries who have sold or are expected to sell
significant amounts of shares of the Trust. If you purchase or sell shares
through an intermediary, the intermediary may charge a separate fee for its
services. Consult your intermediary for information.

HOW TO SELL SHARES

You may sell your Investor Shares back to a Fund on any day the New York Stock
Exchange is open 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 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. Unless otherwise agreed to by the Trust,
the telephone redemption privilege may only be exercised to redeem shares worth
$1,000 or more and not more than $25,000. 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, or those acting through powers of
attorney or similar delegation.

25
<PAGE>
The Trust will pay you for your redemptions as promptly as possible and in any
event 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.

If, because of your redemptions, your account balance falls below a minimum
amount set by the Trustees (presently $2,000) of any Fund, the Trust may choose
to redeem your shares in that 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 any 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 ("SEC") 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 most
other funds 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 tax. For a listing of the
Schroder funds available for exchange and to exchange shares, please call the
Trust at (800) 464-3108. In order to exchange shares by telephone, you must
complete the appropriate section of the Account Application. The Trust reserves
the right to change or suspend the exchange privilege at any time. Shareholders
would be notified of any such change or suspension.

DIVIDENDS AND DISTRIBUTIONS

Each 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 your Fund;

- Receive distributions from net investment income in cash while
reinvesting capital gain distributions in additional Investor Shares of
your Fund;

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

- Receive all distributions in cash.

26
<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 a Fund will be reinvested in Investor Shares of that 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. 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 your 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 a Fund before you invested (and thus were included in the price
you paid for your shares). Distributions of gains from investments that a Fund
owned for more than 12 months will be taxable as long-term 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 Funds.

TAXES WHEN YOU SELL OR EXCHANGE YOUR SHARES. Any gain resulting from the sale or
exchange of your shares in the Funds will also generally be subject to federal
income tax at either short-term or long-term capital gain rates depending on how
long you have owned your shares.

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

Each 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 a Fund. You should
consult your tax advisor for more information on your own tax situation,
including possible state and local tax liability.

27
<PAGE>
FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the financial
performance of each of the Funds for the past 5 years or since the Fund
commenced operations, whichever is shorter. Certain information reflects
financial results for a single Fund share. The total returns represent the total
return for an investment in Investor Shares of a Fund, assuming reinvestment of
all dividends and distributions.

The financial highlights presented below have been audited by
PricewaterhouseCoopers LLP, independent accountants to the Funds. The audited
financial statements for the Funds and the related independent accountants'
reports are contained in the Trust's Annual Report and are incorporated by
reference into the Statement of Additional Information. Copies of the Annual
Report may be obtained without charge by writing the Trust at P.O. Box 8507,
Boston, Massachusetts 02266 (regular mail) or at 66 Brooks Drive, Braintree,
Massachusetts 02184 (overnight or express mail), or by calling (800) 464-3108.

SCHRODER INTERNATIONAL FUND

Selected per share data and ratios for an Investor Share outstanding throughout
each period:

<TABLE>
<CAPTION>
For the Year Ended October 31,
-------------------------------------------------------------------
1999 1998 1997 1996(A) 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $17.10 $18.37 $20.01 $20.91 $23.17
------ ------ ------ ------ ------
Investment Operations:(b)
Net Investment Income 0.07 0.23 0.14 0.15 0.46
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency Transactions 3.20 0.34 1.31 1.74 (0.18)
------ ------ ------ ------ ------
Total from Investment Operations 3.27 0.57 1.45 1.89 0.28
------ ------ ------ ------ ------
Distributions from:
Net Investment Income (0.18) (0.29) (0.46) (0.47) --
Net Realized Gain on Investments and Foreign Currency
Transactions (3.17) (1.55) (2.63) (2.32) (2.54)
------ ------ ------ ------ ------
Total Distributions (3.35) (1.84) (3.09) (2.79) (2.54)
------ ------ ------ ------ ------
Net Asset Value, End of Period $17.02 $17.10 $18.37 $20.01 $20.91
====== ====== ====== ====== ======
Total Return(c) 21.82% 3.82% 8.33% 10.05% 2.08%
Ratios and Supplementary Data:
Net Assets at End of Period (in thousands) $157,620 $129,955 $191,219 $202,735 $212,330
Ratios to Average Net Assets:(b)
Expenses including reimbursement/waiver of fees 0.99% 0.99% 0.99% 0.99% 0.91%
Expenses excluding reimbursement/waiver of fees 1.06% 1.08% 1.06% 1.04% N/A
Net investment income including reimbursement/waiver of
fees 0.60% 1.14% 0.67% 0.86% 0.99%
Portfolio Turnover Rate(d) 85% 53% 36% 56% 61%
</TABLE>

(a) On November 1, 1995, the Fund converted to a master-feeder structure. See
Note 1 to the Trust's financial statements.

(b) From the period November 1, 1995 to May 31, 1999, the Fund recognized its
proportionate share of income, expenses and gains/ losses of the underlying
portfolio, Schroder International Equity Portfolio. Commencing June 1, 1999,
the income, expenses and gains/losses were directly accrued to the Fund.

(c) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown (See Note 3 to the Trust's
financial statements).

(d) The portfolio turnover rates for the years after October 31, 1995 through
October 31, 1998 represent the turnover of the underlying Portfolio,
Schroder International Equity Fund. For the year ending October 31, 1999,
the rate represents the period from November 1, 1998 through May 31, 1999
during which time the Fund invested in the Portfolio and from June 1, 1999
through October 31, 1999 during which time the Fund held direct investments
in a portfolio of securities.

28
<PAGE>
SCHRODER EMERGING MARKETS FUND

Selected per share data and ratios for an Investor Share outstanding throughout
each period:

<TABLE>
<CAPTION>
FOR THE PERIOD For the Year For the Period
ENDED Ended Ended
OCTOBER 31, 1999(a) May 31, 1999 May 31, 1998(f)
------------------- ------------ ---------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $10.62 $ 9.04 $10.00
------ ------ ------
Investment Operations:(b)
Net Investment Income (Loss) (0.03) 0.03 0.02
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions 1.59 1.58 (0.98)
------ ------ ------
Total from Investment Operations 1.56 1.61 (0.96)
------ ------ ------
Distributions from:
Net Investment Income -- (0.03) --
Net Asset Value, End of Period $12.18 $10.62 $ 9.04
====== ====== ======
Total Return(c) 14.69% 17.88% (9.60)%
Ratios and Supplementary Data
Net Assets at End of Period (in thousands) $3,162 $2,218 $18
Ratios to Average Net Assets:(b)
Expenses including reimbursement/waiver of fees 1.70%(d) 1.65% 1.70%(d)
Expenses excluding reimbursement/waiver of fees 7.84%(d) 10.74% --(e)
Net investment income (loss) including
reimbursement/waiver of fees (0.59)%(d) 0.51% 1.72%(d)
Portfolio Turnover Rate(g) 160% 177% 23%
</TABLE>

(a) Effective October 31, 1999, the Fund changed its fiscal year end from May 31
to October 31. See also Note 1 to the Trust's financial statements.

(b) Prior to September 17, 1999, the Fund recognized its proportionate share of
income, expenses and gains/losses of the underlying Portfolio, Schroder EM
Core Portfolio. Commencing September 20, 1999, the income, expenses and
gains/losses were directly accrued to the Fund.

(c) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown. (See Note 3 to the Trust's
financial statements). Total return calculations for a period of less than
one year are not annualized.

(d) Annualized.

(e) Amount is not meaningful due to short period of operations.

(f) The Fund commenced operations on October 31, 1997.

(g) The portfolio turnover rates for the period ending May 31, 1998 and the year
ended May 31, 1999 represent the turnover of the underlying Portfolio,
Schroder EM Core Portfolio. For the period ended October 31, 1999, the rate
represents the period from June 1, 1999 through September 17, 1999 during
which time the Fund invested in the Portfolio and from September 20, 1999
through October 31, 1999 during which time the Fund held direct investments
in a portfolio of securities.

29
<PAGE>
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND

Selected per share data and ratios for an Investor Share outstanding throughout
each period:

<TABLE>
<CAPTION>
For the Year Ended
October 31, FOR THE
--------------------- PERIOD ENDED
1999 1998 OCTOBER 31, 1997(A)
--------- --------- -------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.35 $ 9.22 $10.00
------ ------ ------
Investment Operations:(b)
Net Investment Income 0.06 0.05 0.02
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions 5.62 0.60 (0.79)
------ ------ ------
Total from Investment Operations 5.68 0.65 (0.77)
------ ------ ------
Distributions from:
Net Investment Income (0.04) (0.01) (0.01)
Net Realized Gain on Investments and Foreign
Currency Transactions (0.70) (0.51) --
------ ------ ------
Total Distributions (0.74) (0.52) (0.01)
------ ------ ------
Net Asset Value, End of Period $14.29 $ 9.35 $ 9.22
====== ====== ======
Total Return(c) 65.27% 7.88% (7.73)%
Ratios and Supplementary Data
Net Assets at End of Period (in thousands) $9,836 $4,165 $6,836
Ratios to Average Net Assets:(b)
Expenses including reimbursement/waiver of fees 1.50% 1.50% 1.50%(d)
Expenses excluding reimbursement/waiver of fees 2.74% 5.26% 3.93%(d)
Net investment income including reimbursement/waiver
of fees 0.53% 0.33% 0.21%(d)
Portfolio Turnover Rate(e) 81% 82% 32%
</TABLE>

(a) For the period November 4, 1996 (Commencement of Operations) through
October 31, 1997.

(b) Prior to June 1, 1999, the Fund recognized its proportionate share of
income, expenses and gains/losses of the underlying portfolio, Schroder
International Smaller Companies Portfolio. Commencing June 1, 1999, the
income, expenses and gains/losses were directly accrued to the Fund.

(c) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown (See Note 3 to the Trust's
financial statements). Total return calculations for a period of less than
one year are not annualized.

(d) Annualized.

(e) The portfolio turnover rates for the period ending October 31, 1997 and year
ended October 31, 1998 represent the turnover of the underlying portfolio,
Schroder International Smaller Companies Portfolio. For the year ending
October 31, 1999, the rate represents the period from November 1, 1998
through May 31, 1999 during which time the Fund invested in the Portfolio
and from June 1, 1999 through October 31, 1999 during which time the Fund
held direct investments in a portfolio of securities.

30
<PAGE>
SCHRODER GREATER CHINA FUND

Selected per share data and ratios for an Investor Share outstanding throughout
the period:

<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED
OCTOBER 31, 1999(a)
-------------------
<S> <C>
Net Asset Value, Beginning of Period $10.00
------
Investment Operations:
Net Investment Income 0.10
Net Realized and Unrealized Gain on Investments and
Foreign Currency Transactions 2.62
------
Total from Investment Operations 2.72
------
Distributions from:
Net Investment Income --
Net Realized Gain on Investments and Foreign Currency
Transactions --
------
Total Distributions --
------
Net Asset Value, End of Period $12.72
======
Total Return(b) 27.20%
Ratios and Supplementary Data:
Net Assets at End of Period (in thousands) $1,288
Ratios to Average Net Assets:
Expenses including reimbursement/waiver of fees 2.00%(c)
Expenses excluding reimbursement/waiver of fees 13.31%(c)
Net investment income including reimbursement/waiver of
fees 1.00%(c)
Portfolio Turnover Rate 140%
</TABLE>

(a) For the period January 4, 1999 (commencement of operations) through
October 31, 1999.

(b) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown. (See Note 3 to the Trust's
financial statements). Total return calculations for a period of less than
one year are not annualized.

31
<PAGE>

SCHRODER U.S. DIVERSIFIED GROWTH FUND

Selected per share data and ratios for an Investor Share outstanding throughout
each period:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 7.79 $ 9.82 $ 9.76 $ 9.41 $ 8.52
------ ------ ------ ------ ------
Investment Operations:
Net Investment Income (Loss) (0.06) (0.06) (0.01) 0.04 0.07
Net Realized and Unrealized Gain
(Loss) on Investments 2.00 0.78 2.20 1.62 1.33
------ ------ ------ ------ ------
Total from Investment Operations 1.94 0.72 2.19 1.66 1.40
------ ------ ------ ------ ------
Distributions from:
Net Investment Income -- -- (0.02) (0.07) (0.05)
Net Realized Gain on Investments (3.00) (2.75) (2.11) (1.24) (0.46)
------ ------ ------ ------ ------
Total Distributions (3.00) (2.75) (2.13) (1.31) (0.51)
------ ------ ------ ------ ------
Net Asset Value, End of Period $ 6.73 $ 7.79 $ 9.82 $ 9.76 $ 9.41
====== ====== ====== ====== ======
Total Return(a) 30.95% 8.87% 26.49% 19.45% 17.68%
Ratios and Supplementary Data:
Net Assets at End of Period
(in thousands) $14,110 $12,540 $13,861 $17,187 $19,688
Ratios to Average Net Assets:
Expenses including
reimbursement/ waiver of fees 1.50% 1.50% 1.50% 1.40% 1.40%
Expenses excluding
reimbursement/waiver of fees 1.99% 1.85% 1.68% 1.43% N/A
Net investment income (loss)
including reimbursement/waiver
of fees (0.93)% (0.71)% (0.09)% 0.43% 0.78%
Portfolio Turnover Rate 87% 209% 44% 57% 57%
</TABLE>

(a) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown (see Note 3 to the Trust's
financial statements).

32
<PAGE>
SCHRODER U.S. SMALLER COMPANIES FUND

Selected per share data and ratios for an Investor Share outstanding throughout
each period:

<TABLE>
<CAPTION>
FOR THE For the
PERIOD For the Year Ended Period
ENDED May 31, Ended For the Year Ended October 31,
OCTOBER 31, ----------------------- May 31, ------------------------------------
1999(b) 1999 1998 1997(g) 1996(a) 1995 1994
----------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 12.80 $14.76 $13.26 $17.23 $15.14 $11.81 $10.99
------- ------ ------ ------ ------ ------ ------
Investment
Operations:(c)
Net Investment Loss (0.03) (0.09) (0.06) (0.02) (0.06) (0.04) (0.07)
Net Realized and
Unrealized Gain
(Loss) on
Investments 0.02 (1.84) 2.82 1.88 4.10 3.78 0.97
------- ------ ------ ------ ------ ------ ------
Total from Investment
Operations (0.01) (1.93) 2.76 1.86 4.04 3.74 0.90
------- ------ ------ ------ ------ ------ ------
Distributions from:
Net Realized Gain
on Investments -- (0.03) (1.26) (5.83) (1.95) (0.41) (0.08)
------- ------ ------ ------ ------ ------ ------
Net Asset Value, End
of Period $ 12.79 $12.80 $14.76 $13.26 $17.23 $15.14 $11.81
======= ====== ====== ====== ====== ====== ======
Total Return(d) (0.08)% (13.08)% 21.63% 14.73% 29.35% 32.84% 8.26%
Ratios and
Supplementary Data:
Net Assets at End of
Period
(in thousands) $42,177 $47,870 $51,679 $26,104 $13,743 $15,287 $13,324
Ratios to Average Net
Assets:(c)
Expenses including
reimbursement/
waiver of fees 1.35%(e) 1.42% 1.37% 1.49%(e) 1.49% 1.49% 1.45%
Expenses excluding
reimbursement/
waiver of fees 1.35%(e) 1.45% 1.37% 1.87%(e) N/A N/A N/A
Net investment
income (loss)
including
reimbursement/
waiver of fees (0.54)%(e) (0.65)% (0.51)% (0.42)%(e) (0.35)% (0.30)% (0.58)%
Portfolio Turnover
Rate(f) 52% 119% 55% 34% 59% 93% 71%
</TABLE>

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

(a) On August 15, 1996, the Fund converted to a master-feeder structure. See
Note 1 to the Trust's financial statements.

(b) Effective October 31, 1999, the Fund changed its fiscal year end from May 31
to October 31. See also Note 1 to the Trust's financial statements.

(c) From November 1, 1995 to May 31, 1999, the Fund recognized its proportionate
share of income, expenses and gains/losses of the underlying portfolio,
Schroder U.S. Smaller Companies Portfolio. Commencing June 1, 1999, the
income, expenses and gains/losses were directly accrued to the Fund.

(d) Total returns would have been lower had certain expenses not been limited
during the periods shown (See Note 3 to the Trust's financial statements).
Total return calculations for a period of less than one year are not
annualized.

(e) Annualized.

(f) The portfolio turnover rates for the years after October 31, 1995 through
May 31, 1999, represent the turnover of the underlying Portfolio, Schroder
U.S. Smaller Companies Portfolio.

(g) Effective May 31, 1997, the Fund changed its fiscal year end from
October 31 to May 31.

33
<PAGE>
SCHRODER MICRO CAP FUND

Selected per share data and ratios for an Investor Share outstanding throughout
each period:

<TABLE>
<CAPTION>
FOR THE PERIOD For the Year For the Period
ENDED Ended Ended
OCTOBER 31, 1999(a) May 31, 1999 May 31, 1998(d)
------------------- ------------ ---------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $20.18 $14.26 $10.00
------ ------ ------
Investment Operations:
Net Investment Loss (0.06) (0.13) (0.04)
Net Realized and Unrealized Gain on Investments 4.47 8.28 4.50
------ ------ ------
Total from Investment Operations 4.41 8.15 4.46
------ ------ ------
Distributions from Net Realized Gain on
Investments -- (2.23) (0.20)
------ ------ ------
Net Asset Value, End of Period $24.59 $20.18 $14.26
====== ====== ======
Total Return(b) 21.85% 64.56% 45.41%
Ratios and Supplementary Data
Net Assets at End of Period (in thousands) $20,596 $14,317 $6,340
Ratios to Average Net Assets:
Expenses including reimbursement/waiver of fees 2.00%(c) 2.00% 2.00%(c)
Expenses excluding reimbursement/waiver of fees 2.53%(c) 3.27% 6.02%(c)
Net investment loss including
reimbursement/waiver of fees (0.73)%(c) (1.10)% (0.77)%(c)
Portfolio Turnover Rate 173% 341% 166%
</TABLE>

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

(a) Effective October 31, 1999, the Fund changed its fiscal year end from May 31
to October 31. See also Note 1 to the Trust's financial statements.

(b) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown (See Note 3 to the Trust's
financial statements). Total return calculations for a period of less than
one year are not annualized.

(d) The Fund commenced operations on October 15, 1997.

34
<PAGE>
[LOGO]

<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 GREATER CHINA FUND SCHRODER INVESTMENT GRADE INCOME FUND
SCHRODER U.S. DIVERSIFIED GROWTH FUND SCHRODER SHORT-TERM INVESTMENT FUND
SCHRODER U.S. SMALLER COMPANIES FUND
SCHRODER MICRO CAP FUND

SCHRODER SERIES TRUST II
SCHRODER ALL-ASIA FUND
</TABLE>

35
<PAGE>

[Schroders Logo]

ACCOUNT APPLICATION

SCHRODER CAPITAL FUNDS (DELAWARE) INVESTOR SHARES

1. INITIAL INVESTMENT ________________________________________________________

The minimum initial CHECK ONE CHECK ONE
investment in each / / Schroder International Fund / / Check enclosed for
Fund is $10,000. / / Schroder Emerging Markets Fund $___________
/ / Schroder International Smaller / / Wire transfer
Companies Fund (see instructions
/ / Schroder Greater China Fund on Page A-3)
/ / Schroder U.S. Diversified Initial wire
Growth Fund amount $__________
/ / Schroder U.S. Smaller / / Statement of
Companies Fund Intention*
/ / Schroder Micro Cap Fund Investment amount
$___________

*Subject to Prospectus disclosure
regarding Statement of Intention

2. ACCOUNT REGISTRATION_______________________________________________________

For individual: 1.
Use item 1 ___________________ ____ __________________________________
First Name M.I. Last Name

__ __ __-__ __-__ __ __ __ ________________________________
Social Security Number Date of Birth

_____________________________________________________________
Employer Name

_____________________________________________________________
Employer Address

_____________________________________________________________
Occupation

For joint account: 2.
Use items 1 & 2 ___________________ ____ __________________________________
First Name M.I. Last Name

__ __ __-__ __-__ __ __ __ ________________________________
Social Security Number In the case of two or more
co-owners, the account will be
registered "Joint Tenants with
Rights of Survivorship" unless
otherwise specified above.

For a minor: 3.
Use item 3 _______________________ ____ ____________________________
First Name of Custodian M.I. Last Name of Custodian

Custodian for
________________________ ____ ____________________________
Minor's First Name M.I. Last Name

__ __ __-__ __-__ __ __ __ Under the_____________Uniform
Minor's Social Security Name of State
Number Gifts/Transfers for Minors Act.

For a Trust: 4.
(including __________________________ ________________________________
Pension Plans): Name of Trustee Trust Agreement Date (mandatory)
Use item 4
__________________________ ________________________________
Trust Beneficiary Taxpayer's I.D. Number

For a corporation, 5.
partnership or ___________________________________ ______________________
other entity: Name of Corporation or Other Entity Taxpayer's I.D. Number
Use item 5
___________________________________ ______________________
Name of Officer Title of Officer

A-1

<PAGE>

3. ACCOUNT DESCRIPTION ________________________________________________________

/ /Individual-Taxable / /Defined Benefit / /Foundation/Endowment / /Trust
/ /Individual Plan / /401(k) Plan / /Other
Custodian/IRA* / /Defined
/ /Pension Plan Contribution Plan
(*Additional application required)

4. MAILING ADDRESS ____________________________________________________________

____________________________________________ ______________
Street1 Apt. No.

____________________________________________________________
Street2

__________________________________ __________ ____________
City State Zip

_________________________________ __________________________
Daytime Phone Number Evening Phone Number

5. DUPLICATE STATEMENT ADDRESS (OPTIONAL)______________________________________

____________________________________________________________
Name of Individual / Company

____________________________________________________________
Street

__________________________________ __________ ____________
City State Zip

_____________________________________________________________
Daytime Phone Number

6. DEALER INFORMATION (FOR BROKER/DEALER USE ONLY)_____________________________

_______________________________ ____________________________
Name of Dealer Dealer Number

_____________________________________________________________
Branch Address

__________________________________ __________ ____________
City State Zip

____________________________ _______________________________
Phone Number Registered Rep Name and Number

7. DISTRIBUTIONS_______________________________________________________________

Please indicate how you 1. / /Dividends and capital gains reinvested in
would like to receive additional shares.
distributions. If you 2. / /Dividends and capital gains mailed to your
do not choose an option, address in Section 4.
your distribution will 3. / /Dividends mailed to your address in Section 4
be invested in and capital gains reinvested.
accordance with 4. / /Capital gains mailed to your address in
Option 1. Section 4 and dividends reinvested.
5. / /Dividends and capital gains automatically
deposited to your bank account. Please
complete Section 8.
6. / /Dividends automatically deposited to your bank
account and capital gains reinvested. Please
complete Section 8.
7. / /Capital gains automatically deposited to your
bank account and dividends reinvested.
Please complete Section 8.

A-2

<PAGE>

8. BANK ACCOUNT DESIGNATION ___________________________________________________
ACCOUNT NAME MUST MATCH THE NAME IN SECTION 2.
This section must be PLEASE ATTACH A BLANK/VOIDED CHECK FOR
completed to permit ACCOUNT AND BANK INFORMATION.
certain options
chosen in Sections 7
and 9.
________________________ ________________________
Name of Bank Branch
________________ ________________ ______ ______
Bank Address City State Zip
_________________________________ ________________
Type of Account (Checking/Savings) Account Number

9. SYSTEMATIC INVESTMENT___________________________________________________

Amounts (minimum $100 per Authorization Form
transaction) will be drawn
automatically on your bank Invest automatically the amount of $_______ in the
account and invested in ____________ Fund on or about the ____ day of each
your Schroder Capital month. Purchases will be made monthly unless
Funds (Delaware) you wish to elect quarterly by checking this
account. Minimum initial box / / in which event the amount specified will
investment of $10,000 be invested automatically on or about
also applies. the ____ day of the first month in each quarter.
Funds will be drawn from the bank account
you designate in Section 8. Your first
automatic monthly investment will occur no sooner
than two weeks after the receipt of your
application.

10. TELEPHONE EXCHANGE_________________________________________________________

By telephone instruction, / / By checking this box, I authorize the Trust and
an amount (minimum $1,000 its agents to act upon instructions to exchange
per transaction) will be my shares in any qualified Fund for shares in any
exchanged from one Fund other qualified Fund, if those instructions are
to another Fund within received by telephone from (i) me or (ii) any person
the Trust. purporting to be me or to act as my representative
and who can provide the Trust with my account
registration. The telephone exchange privilege may
only be exercised to exchange shares worth $1,000 or
more. I understand and agree that neither the Trust
nor any person acting on its behalf will have
any liability to me or anyone else in respect of
telephone instructions meeting the description
set forth here but not made or authorized by me.

11. TELEPHONE REDEMPTION ______________________________________________________

By telephone instruction, / / By checking this box, I authorize the
an amount (minimum $1,000/ Trust and its agents to act upon instructions
maximum $25,000 per received by telephone from (i) me or (ii) any
transaction) will be person purporting to be me or to act as my
redeemed from the Funds. representative and who can provide the Trust with my
account registration. Redemptions will be sent only
to me at an address on record with the Trust for at
least 30 days. Unless otherwise agreed to by
the Trust, the telephone redemption privilege may
only be exercised to redeem shares worth $1,000 or
more and not more than $25,000. I understand and
agree that neither the Trust nor any person acting
on its behalf will have any liability to me or
anyone else in respect of telephone instructions
meeting the description set forth here but not
made or authorized by me.

12. MAILING INSTRUCTIONS ______________________________________________________

Please send this
application with your
check to:

REGULAR MAIL OVERNIGHT OR EXPRESS MAIL
Schroder Mutual Funds Boston Financial Data Services, Inc.
P.O. Box 8507 66 Brooks Drive
Boston, Mass 02266 Braintree, MA 02184
Attn: Schroder Mutual Funds

13. WIRING INSTRUCTIONS _______________________________________________________

If making your initial State Street Bank and Trust Company
investment by bank wire, 225 Franklin Street
call the Transfer Agent, Boston, MA 02101
Boston Financial Data ABA: 011000028
Services, at (800) 464-3108 Attn: Schroder Mutual Funds
to obtain an account number. DDA: 9904-650-0
Then instruct your bank to FBO: Account Registration
wire Federal Funds to: A/C: Mutual Fund Account Number
Name of Fund

Complete the account application and mail
it to the address listed in Section 12 above.

A-3
<PAGE>

14. ACKNOWLEDGMENT, CERTIFICATION & SIGNATURES _______________________________

This section must be TAXPAYER IDENTIFICATION NUMBER CERTIFICATION
signed in order to 1. Under the penalties of perjury, the undersigned
open a Schroder certifies: (Check Appropriate Box, If Applicable)
Capital Funds / / That the number shown on this form is my correct
(Delaware) Account. taxpayer identification number ant that I am not
subject to backup withholding because (a) I am exempt
from backup withholding, (b) I have not been notified
by the Internal Revenue Service that I am subject to
backup withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has notified
me that I am no longer subject to backup withholding.

-or-

/ / That I have not provided a taxpayer identification
number because I have not been issued a number, but I
have applied for one or will do so in the near future.
I understand that if I do not provide my number to the
Fund within 60 days, the Fund will be required to begin
backup withholding.

2. Under the penalties of perjury, the undersigned
certifies:

That he/she is a citizen of / / the United States or
/ / __________ (provide name of country).

3. By signing this Application, the undersigned
(1) certifies that he/she has received, reviewed
and accepts this Application (including the
services described herein) and the current prospectus
of Schroder Capital Funds (Delaware); and (2) agrees
that all statements in this Application apply to shares
of any Fund of Schroder Capital Funds (Delaware) into
which his/her shares are transferred.

4. The undersigned certifies that he/she
(1) was not offered any advice or recommendations
on investing in any Fund by any representative of
Schroder Capital Funds (Delaware) and (2) understands
that the undersigned must make his/her own investment
decisions and assumes all risk of loss - including
possible loss of principal - resulting from decisions
to purchase, exchange or sell shares of any Fund(s).

______________________________________________________
Signature of Investor/Trustee Date
______________________________________________________
Signature of Joint Investor/Co-Trustee Date
(if any)
______________________________________________________
Signature of Individual, Custodian, Date
Trustee or Officer
______________________________________________________
Signature of Corporate Officer Date

A-4

<PAGE>
INVESTMENT ADVISER
Schroder Investment Management North America Inc.
787 Seventh Avenue, 34th Floor
New York, New York 10019

SUBADVISER TO SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
Schroder Investment Management International Limited
31 Gresham Street
London, United Kingdom EC2V 7QA

ADMINISTRATOR AND DISTRIBUTOR
Schroder Fund Advisors Inc.
787 Seventh Avenue, 34th Floor
New York, New York 10019

SUBADMINISTRATOR AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110

TRANSFER AND DIVIDEND DISBURSING AGENT
Boston Financial Data Services, Inc.
66 Brooks Drive
Braintree, Massachusetts 02184
(800) 464-3108

COUNSEL
Ropes & Gray
One International Place
Boston, Massachusetts 02110

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, Massachusetts 02109
<PAGE>
- --------------------------------------------------------------------------------

SCHRODER CAPITAL FUNDS (DELAWARE)

Schroder Capital Funds (Delaware)'s statement of additional information (SAI)
and annual and semi- annual reports to shareholders include additional
information about the Funds. The SAI and the financial statements included in
the Trust's most recent annual reports to shareholders are incorporated by
reference into this Prospectus, which means they are part of this Prospectus for
legal purposes. The Trust's annual reports discuss the market conditions and
investment strategies that significantly affected each Fund's performance during
its last fiscal year. You may get free copies of these materials, request other
information about a Fund, or make shareholder inquiries by calling 800-464-3108.

You may review and copy information about the Trust, including its SAI, at the
Securities and Exchange Commission's public reference room in Washington, D.C.
You may call the Commission at 1-800-SEC-0330 for information about the
operation of the public reference room. You may also access reports and other
information about the Trust 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)
P.O. Box 8507
Boston, MA 02266
800-464-3108

SF300IP

File No. 811-1911
<PAGE>
[LOGO]

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

PROSPECTUS

MARCH 1, 2000

SCHRODER CAPITAL FUNDS (DELAWARE)
ADVISOR SHARES

This Prospectus describes six mutual funds offered by Schroder Capital Funds
(Delaware). Schroder Investment Management North America Inc. ("Schroder")
manages the Funds.

SCHRODER INTERNATIONAL FUND seeks long-term capital appreciation through
investment in securities markets outside the United States. (Advisor Shares
of Schroder International Fund are not currently available for investment.)

SCHRODER U.S. DIVERSIFIED GROWTH FUND seeks growth of capital. The Fund
invests in equity securities of companies in the United States.

SCHRODER U.S. SMALLER COMPANIES FUND seeks capital appreciation. The Fund
invests in equity securities of issuers domiciled in the United States with
market capitalizations of $1.5 billion or less.

You can call the Trust at (800) 464-3108 to find out more about these Funds and
other funds in the Schroder family.

This Prospectus explains what you should know about the Funds before you invest.
Please read it carefully.

<TABLE>
<S> <C>
PAGE
--------
SUMMARY INFORMATION............................ 3
Schroder International Fund.................. 3
Schroder Emerging Markets Fund............... 5
Schroder International Smaller Companies
Fund......................................... 7
Schroder Greater China Fund.................. 8
Schroder U.S. Diversified Growth Fund........ 10
Schroder U.S. Smaller Companies Fund......... 11
FEES AND EXPENSES.............................. 12
OTHER INVESTMENT STRATEGIES AND RISKS.......... 14
MANAGEMENT OF THE FUNDS........................ 17
HOW THE FUNDS' SHARES ARE PRICED............... 20
HOW TO BUY SHARES.............................. 20
HOW TO SELL SHARES............................. 22
ADDITIONAL INFORMATION ABOUT ADVISOR SHARES.... 23
EXCHANGES...................................... 24
DIVIDENDS AND DISTRIBUTIONS.................... 24
TAXES.......................................... 25
FINANCIAL HIGHLIGHTS........................... 26
</TABLE>

2
<PAGE>
SUMMARY INFORMATION

The summary for each Fund (other than Schroder Greater China Fund which has not
had shares outstanding for a full calendar year) includes a bar chart that shows
how the investment returns of the Fund have varied from year to year by setting
forth returns for each full calendar year since the Fund commenced operations
(except as noted below). The table following each bar chart shows how the Fund's
average annual returns for the last year, for the last five years, and for the
last ten years or the life of the Fund (as applicable) compare to a broad-based
securities market index. The bar chart and table provide some indication of the
risks of investing in the Fund by showing the variability of its returns and
comparing the Fund's performance to a broad measure of market performance.
Schroder U.S. Smaller Companies Fund is the only Fund that has had Advisor
Shares outstanding for at least a full calendar year. For that reason, the bar
chart and the table for that Fund show performance of its Advisor Shares.
(Advisor Shares have not been outstanding for the full life of that Fund; the
bar chart and table reflect the Fund's performance only for the periods when
Advisor Shares were outstanding.) The other Funds do not have a full calendar
year of performance to show for Advisor Shares or do not have any Advisor Shares
outstanding. Accordingly, the bar chart and table for each of those Funds show
performance of the Fund's Investor Shares since the inception of the Fund.
(Performance of a Fund's Investor Shares is normally higher than that of its
Advisor Shares because the Investor Shares are subject to lower expenses.) PAST
PERFORMANCE IS NOT NECESSARILY AN INDICATION OF FUTURE PERFORMANCE. It is
possible to lose money on investments in the Funds.

SCHRODER INTERNATIONAL FUND

- INVESTMENT OBJECTIVE. Long-term capital appreciation through investment in
securities markets outside the United States.

- PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests at least 65% of
its total assets in equity securities of companies domiciled outside of the
United States, and will invest in securities of companies domiciled in at
least three countries other than the United States. 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 and 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. The Fund generally sells
securities when they reach fair valuation or when significantly more
attractive investment candidates become available.

The Fund also may do the following:

- Invest in securities of issuers domiciled or doing business in
"emerging market" countries.

- Invest in securities of closed-end investment companies that invest
primarily in foreign securities.

3
<PAGE>
- PRINCIPAL RISKS.

- FOREIGN SECURITIES. Investments in foreign securities entail risks not
present in domestic investments including, among others, risks related to
political or economic instability, currency exchange, and taxation.

- 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 generally or particular companies in the portfolio.

- GEOGRAPHIC CONCENTRATION. There is no limit on the amount of the Fund's
assets that may be invested in securities of issuers domiciled in any one
country, although the Fund will normally invest in at least three
countries other than the United States. To the extent that the Fund
invests a substantial amount of its assets in one country, it will be
more susceptible to the political and economic developments and market
fluctuations in that country than if it invested in a more geographically
diversified portfolio.

- EMERGING MARKETS. The Fund may invest in "emerging market" countries
whose securities markets may experience heightened levels of volatility.
The risks of investing in emerging markets include greater political and
economic uncertainties than in foreign developed markets, currency
transfer restrictions, a more limited number of potential buyers, and an
emerging market country's dependence on revenue from particular
commodities or international aid. Additionally, the securities markets
and legal systems in emerging market countries may only be in a
developmental stage and may provide few, or none, of the advantages or
protections of markets or legal systems available in more developed
countries. Emerging market countries may experience extremely high levels
of inflation, which may adversely affect those countries' economies,
currencies, and securities markets.

SCHRODER INTERNATIONAL FUND -- INVESTOR SHARES*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN
<S> <C>
1990 -11.41%
1991 4.62%
1992 -4.01%
1993 45.72%
1994 -0.27%
1995 11.57%
1996 9.93%
1997 3.34%
1998 13.52%
1999 30.99%
Calendar Year End
</TABLE>

During the periods shown above, the highest quarterly return was 21.57% for
the quarter ended December 31, 1999, and the lowest was -19.79% for the
quarter ended September 30, 1990.

4
<PAGE>

<TABLE>
AVERAGE ANNUAL TOTAL RETURNS ONE FIVE TEN
(FOR PERIODS ENDED DECEMBER 31, 1999) YEAR YEARS YEARS
<S> <C> <C> <C>
Schroder International Fund* 30.99% 13.51% 9.32%
Morgan Stanley Capital International EAFE Index** 27.06% 12.96% 7.19%
</TABLE>

* The bar chart and table show performance of the Fund's Investor Shares,
which are offered in a different prospectus. Although Advisor Shares and
Investor Shares represent interests in the same portfolio of securities,
Advisor Share performance would normally be lower than Investor Share
performance because of the higher expenses paid by Advisor Shares.

** The Morgan Stanley Capital International EAFE Index is a market weighted
index composed of companies representative of the market structure of
certain developed market countries in Europe, Australia, Asia, and the Far
East, and reflects dividends net of non-recoverable withholding tax.

SCHRODER EMERGING MARKETS FUND

- INVESTMENT OBJECTIVE. To seek long-term capital appreciation.

- PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests at least 65% of
its total assets in equity securities of companies determined by Schroder to
be "emerging market" issuers. The Fund may invest the remaining 35% of its
assets in securities of issuers located anywhere in the world. 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 and preferred stocks.

The Fund invests primarily in equity securities of issuers domiciled or
doing business in "emerging market" countries in regions such as Southeast
Asia, Latin America, and Eastern and Southern Europe. "Emerging market"
countries are countries not included at the time of investment in the Morgan
Stanley International World Index of major world economies. Countries
currently in the Index (and therefore generally NOT considered to be
"emerging market" countries) include: Australia, Austria, Belgium, Canada,
Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, the
Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden,
Switzerland, the United Kingdom, and the United States. Schroder may at
times determine based on its own analysis that an economy included in the
Index should nonetheless be considered an emerging market country, in which
case that country would constitute an emerging market country for purposes
of the Fund's investments. The Fund normally will invest in at least three
countries other than the United States.

The Fund invests in issuers and countries 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 considers the risk of local political and/or economic
instability associated with particular countries and regions and the
liquidity of local markets. The Fund generally sells securities when they
reach fair valuation or when significantly more attractive investment
candidates become available.

The Fund also may do the following:

- Invest in securities of closed-end investment companies that invest
primarily in foreign securities, including securities of emerging
market issuers.

- Invest up to 35% of its assets in debt securities, including
lower-quality, high yielding debt securities (commonly known as "junk
bonds"), which entail certain risks.

- Invest up to 5% of its assets in sovereign debt securities that are in
default.

- PRINCIPAL RISKS.

5
<PAGE>

transfer restrictions, a more limited number of potential buyers, and an
emerging market country's dependence on revenue from particular
commodities or international aid. Additionally, the securities markets
and legal systems in emerging market countries may only be in a
developmental stage and may provide few, or none, of the advantages or
protections of markets or legal systems available in more developed
countries. Emerging market countries may experience extremely high levels
of inflation, which may adversely affect those countries' economies,
currencies, and securities markets. Also, emerging market issuers are
often smaller and less well-known than larger, more widely held companies
and involve certain special risks associated with smaller capitalization
companies.

- FOREIGN SECURITIES. Investments in foreign securities entail risks not
present in domestic investments including, among others, risks related to
political or economic instability, currency exchange, and taxation.

- GEOGRAPHIC CONCENTRATION. There is no limit on the amount of the Fund's
assets that may be invested in securities of issuers domiciled in any one
country, although the Fund will normally invest in at least three
countries other than the United States. To the extent that the Fund
invests a substantial amount of its assets in one country, it will be
more susceptible to the political and economic developments and market
fluctuations in that country than if it invested in a more geographically
diversified portfolio.

- NON-DIVERSIFIED MUTUAL FUND. The Fund is a "non-diversified" mutual fund,
and will invest its assets in a more limited number of issuers than may
diversified investment companies. To the extent the Fund focuses on fewer
issues, its 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 generally or particular companies in the portfolio.

- JUNK BONDS. Securities rated below investment grade ("junk bonds") lack
outstanding investment characteristics and have speculative
characteristics and are subject to greater credit and market risks than
higher-rated securities. The lower ratings of junk bonds reflect a
greater possibility that adverse changes in the financial condition of
the issuer or in general economic conditions, or an unanticipated rise in
interest rates, may impair the ability of the issuer to make payments of
interest and principal. If this were to occur, the values of securities
held by the Fund may become more volatile.

SCHRODER EMERGING MARKETS FUND -- INVESTOR SHARES*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN
<S> <C>
1998 -16.53%
1999 79.87%
Calendar Year End
</TABLE>

During the periods shown above, the highest quarterly return was 29.54% for
the quarter ended June 30, 1999, and the lowest was -21.26% for the quarter
ended June 30, 1998.

6
<PAGE>

<TABLE>
LIFE OF FUND
AVERAGE ANNUAL TOTAL RETURNS ONE (SINCE
(FOR PERIODS ENDED DECEMBER 31, 1999) YEAR 10/30/97)
<S> <C> <C>
Schroder Emerging Markets Fund* 79.87% 20.87%
Morgan Stanley Capital International Emerging Markets Free
Index** 66.41% 13.11%
</TABLE>

** The Morgan Stanley Capital International Emerging Markets Free Index is an
unmanaged, market capitalization index of companies representative of the
market structure of 26 emerging countries in Europe, Latin America, and the
Pacific Basin. The Index reflects actual buyable opportunities for the
non-domestic investor by taking into account local market restrictions on
share ownership by foreigners. For periods prior to November 30, 1998,
returns represent the MSCI EMF Index (ex-Malaysia).

SCHRODER INTERNATIONAL SMALLER COMPANIES FUND

- INVESTMENT OBJECTIVE. Long-term capital appreciation through investment in
securities markets outside the United States.

- PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests at least 65% of
its total assets in equity securities of smaller companies (with market
capitalizations of $1.5 billion or less at the time of investment) domiciled
outside the United States. 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 and
preferred stocks.

In selecting investments for the Fund, Schroder considers a number of
factors, including the company's potential for long-term growth, financial
condition, sensitivity to cyclical factors, the relative value of the
company's securities (compared to that of other companies and to the market
as a whole), and the extent to which the company's management owns equity in
the company. The Fund will invest in securities of issuers domiciled in at
least three countries other than the United States, and may, although it
does not currently, invest in the securities of issuers domiciled or doing
business in emerging market countries. The Fund generally sells securities
when they reach fair valuation or when significantly more attractive
investment candidates become available.

The Fund invests in small capitalization companies that Schroder believes
offer the potential for capital growth. In doing so, Schroder considers,
among other things, the issuer's likelihood of above average earnings
growth, the securities' attractive relative valuation, and whether the
issuer has any proprietary advantages.

The Fund also may do the following:

- Invest in closed-end investment companies that invest primarily in
foreign securities.

- Invest in securities of issuers domiciled or doing business in
emerging market countries.

- PRINCIPAL RISKS.

- FOREIGN SECURITIES. Investments in foreign securities entail risks not
present in domestic investments including, among others, risks related to
political or economic instability, currency exchange, and taxation.

- SMALL COMPANIES. The Fund invests primarily in small companies, 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.

7
<PAGE>
- 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 generally or particular companies in the portfolio.

- GEOGRAPHIC CONCENTRATION. There is no limit on the amount of the Fund's
assets that may be invested in securities of issuers domiciled in any one
country, although the Fund will normally invest in at least three
countries other than the United States. To the extent that the Fund
invests a substantial amount of its assets in one country, it will be
more susceptible to the political and economic developments and market
fluctuations in that country than if it invested in a more geographically
diversified portfolio.

SCHRODER INTERNATIONAL SMALLER COMPANIES FUND -- INVESTOR SHARES*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN
<S> <C>
1997 -14.13%
1998 25.98%
1999 90.29%
Calendar Year End
</TABLE>

During the periods shown above, the highest quarterly return was 26.32% for
the quarter ended December 31, 1999, and the lowest was -15.41% for the
quarter ended September 30, 1998.

<TABLE>
LIFE OF FUND
AVERAGE ANNUAL TOTAL RETURNS ONE (SINCE
(FOR PERIODS ENDED DECEMBER 31, 1999) YEAR 11/4/96)
<S> <C> <C>
Schroder International Smaller Companies Fund* 90.29% 25.35%
Salomon Smith Barney Extended Market Index (EPAC)** 22.97% 7.43%
</TABLE>

** The Salomon Smith Barney Extended Market Index (Europe Pacific Basin
Countries) (EMI EPAC) is an unmanaged index representing the portion of the
Salomon Smith Barney Broad Market Index related to companies with small
index capitalization in approximately 22 European and Pacific Basin
countries. The Salomon Smith Barney EMI EPAC represents the smallest
companies in each country based on total market capital having in the
aggregate 20% of the cumulative available market capital in such country.

SCHRODER GREATER CHINA FUND

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

- PRINCIPAL INVESTMENT STRATEGIES. 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 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.

8
<PAGE>

above average earnings growth, the securities' attractive relative
valuation, and whether the issuer has any proprietary advantages. The Fund
generally sells securities when they reach fair valuation or when
significantly more attractive investment candidates become available.

The Fund also may 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.

- 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.

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 value of the Fund's investments in both countries.

- 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.

- NON-DIVERSIFIED MUTUAL FUND. The Fund is a "non-diversified" mutual fund,
and will invest its assets in a more limited number of issuers than may
other diversified investment companies. To the extent the Fund focuses on
fewer issuers, its risk of loss increases if the market value of a
security declines or if an issuer is not able to meet its obligations.

9
<PAGE>

- 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 generally or particular companies in the portfolio.

NOTE: THE FUND DOES NOT YET HAVE A FULL CALENDAR YEAR OF PERFORMANCE AND, THUS,
THERE IS NO BAR CHART OR TOTAL RETURN TABLE SHOWN FOR THE FUND.

SCHRODER U.S. DIVERSIFIED GROWTH FUND
(FORMERLY, SCHRODER U.S. EQUITY FUND)

- INVESTMENT OBJECTIVE. To seek growth of capital.

- PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests substantially all
of its assets in equity securities of companies in the United States. The
Fund invests in a variety of equity securities including common and
preferred stocks and warrants to purchase common and preferred stocks. The
Fund normally invests in securities of companies with market capitalizations
of more than $3 billion (at the time of investment).

The Fund may invest in companies that Schroder believes offer the potential
for capital growth. For example, the Fund may invest in companies whose
earnings are believed to be in a relatively strong growth trend, companies
with a proprietary advantage, or companies that are in industry segments
that are experiencing rapid growth. The Fund also may invest in companies in
which significant further growth is not anticipated but whose market value
per share is thought to be undervalued. The Fund may invest in relatively
less well-known companies that meet any of these characteristics or other
characteristics identified by Schroder.

- PRINCIPAL RISKS.

- EQUITY SECURITIES. The principal risks of investing in the Fund include
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 U.S. equity markets generally or particular
companies in the portfolio.

SCHRODER U.S. DIVERSIFIED GROWTH FUND -- INVESTOR SHARES*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN
<S> <C>
1990 -4%
1991 38.28%
1992 15.23%
1993 12.50%
1994 -5.21%
1995 28.03%
1996 21.48%
1997 23.33%
1998 21.94%
1999 30.91%
Calendar Year End
</TABLE>

During the periods shown above, the highest quarterly return was 26.48% for
the quarter ended December 31, 1998, and the lowest was -15.40% for the
quarter ended September 30, 1998.

<TABLE>
AVERAGE ANNUAL TOTAL RETURNS ONE FIVE TEN
(FOR PERIODS ENDED DECEMBER 31, 1999) YEAR YEARS YEARS
<S> <C> <C> <C>
Schroder U.S. Diversified Growth Fund* 30.91% 25.08% 17.45%
Standard & Poor's 500 Index** 21.04% 28.55% 17.89%
</TABLE>

** The Standard & Poor's 500 Index is a market value weighted composite index
of 500 large capitalization U.S. companies and reflects the reinvestment of
dividends.

10
<PAGE>
SCHRODER U.S. SMALLER COMPANIES FUND

- INVESTMENT OBJECTIVE. Capital appreciation.

- PRINCIPAL INVESTMENT STRATEGIES. The Fund invests at least 65% of its total
assets in equity securities of companies in the United States that have (at
the time of investment) market capitalizations of $1.5 billion or less. The
Fund also may invest in equity securities of larger companies and in debt
securities, if Schroder believes such investments are consistent with the
Fund's investment objective. 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 and
preferred stocks.

- PRINCIPAL RISKS.

- SMALL COMPANIES. The Fund invests primarily in small companies, 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 less frequently 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.

- EQUITY SECURITIES. The principal risks of investing in the Fund include
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 U.S. equity markets generally or particular
companies in the portfolio.

SCHRODER U.S. SMALLER COMPANIES FUND -- ADVISOR SHARES

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN
<S> <C>
1997 26.60%
1998 -9.39%
1999 12.92%
Calendar Year End
</TABLE>

During the periods shown above, the highest quarterly return was 18.53% for
the quarter ended June 30, 1997, and the lowest was -23.22% for the quarter
ended September 30, 1998.

<TABLE>
SINCE
INCEPTION OF
ADVISOR
AVERAGE ANNUAL TOTAL RETURNS ONE SHARES
(FOR PERIODS ENDED DECEMBER 31, 1999) YEAR (12/23/96)
<S> <C> <C>
Schroder U.S. Smaller Companies Fund 12.92% 9.41%
Russell 2000 Index* 21.26% 13.75%
</TABLE>

* The Russell 2000 Index is a market capitalization weighted broad based index
of 2000 small capitalization U.S. companies.

11
<PAGE>
FEES AND EXPENSES

THESE TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
ADVISOR SHARES OF THE FUNDS.

SHAREHOLDER FEES (paid directly from your investment):

ANNUAL FUND OPERATING EXPENSES

(expenses that are deducted from Fund assets):

<TABLE>
<CAPTION>
SCHRODER SCHRODER
SCHRODER INTERNATIONAL U.S. SCHRODER
SCHRODER EMERGING SMALLER SCHRODER DIVERSIFIED U.S. SMALLER
INTERNATIONAL MARKETS COMPANIES GREATER GROWTH COMPANIES
FUND FUND FUND CHINA FUND FUND FUND
------------- --------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Management Fees(1)....................... 0.69%(4) 1.25% 1.10% 1.15% 0.75% 0.75%
Distribution (12b-1) Fees(2)............. None None None None None None
Other Expenses (includes a
0.25% shareholder
servicing fee)(2)....................... 0.62 6.84 1.89 12.41 1.49 1.49
----- ----- ----- ------ ----- -----
Total Annual Fund Operating Expenses..... 1.31 8.09 2.99 13.56 2.24 2.24
Fee Waiver and/or Expense
Limitation(3)........................... 0.07 6.14 1.24 11.31 0.49 0.50
----- ----- ----- ------ ----- -----
Net Expenses(3).......................... 1.24 1.95 1.75 2.25 1.75 1.74
</TABLE>

(1) Management Fees include all fees payable to Schroder and its affiliates for
investment advisory and fund administration services.

(2) Each 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. Under the Plans, each 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. Although the Trustees have not currently authorized payments under
the Distribution Plan, payments by a Fund under its Shareholder Servicing
Plan, which will not exceed the annual rate of 0.25% of a Fund's average
daily net assets attributable to its Advisor Shares, 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, 2000,
on the Total Annual Fund Operating Expenses of the Funds.

(4) The expense information for Schroder International Fund has been restated
to reflect current Management Fees. Prior to June 1, 1999, the Fund paid
Management Fees of 0.675%.

12
<PAGE>
EXAMPLE

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

The Example assumes that you invest $10,000 in Advisor Shares of a 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 on the previous page (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 5 YEARS 10 YEARS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Schroder International Fund* $ 134 $ 418 $ 722 $1,587
Schroder Emerging Markets Fund* $ 829 $2,407 $3,882 $7,116
Schroder International Smaller Companies Fund* $ 306 $ 937 $1,593 $3,346
Schroder Greater China Fund* $1,390 $3,810 $5,818 $9,469
Schroder U.S. Diversified Growth Fund* $ 230 $ 708 $1,212 $2,597
Schroder U.S. Smaller Companies Fund* $ 230 $ 708 $1,212 $2,597
</TABLE>

* Assuming that each of the Fund's operating expenses remain the same as Net
Expenses set forth on the previous page, based on the other assumptions
described above, your costs would be as follows for 1 year, 3 years, 5 years,
and 10 years, respectively:

Schroder International Fund -- $127, $396, $685, and $1,507.

Schroder Emerging Markets Fund -- $200, $618, $1,061, and $2,291.

Schroder International Smaller Companies Fund -- $179, $556, $956, and $2,076.

Schroder Greater China Fund -- $231, $711, $1,217, and $2,607.

Schroder U.S. Diversified Growth Fund -- $179, $556, $956, and $2,076.

Schroder U.S. Smaller Companies Fund -- $178, $552, $951, and $2,065.

13
<PAGE>
OTHER INVESTMENT STRATEGIES AND RISKS

RISKS OF INVESTING IN THE FUNDS

- FOREIGN SECURITIES AND CURRENCIES. Except as otherwise noted in this
Prospectus, there is no limit on the amount of a Fund's assets that may
be invested in foreign securities. Investments in foreign securities
entail certain risks. 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 a
Fund's investments in certain foreign countries. Since foreign securities
normally are denominated and traded in foreign currencies, the value 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
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 a Fund's assets held abroad) and expenses not present in
the settlement of domestic investments.

If a 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. Officials in foreign countries may from time
to time take actions in respect of their currencies which could
significantly affect the value of a Fund's assets denominated in those
currencies or the liquidity of such investments. For example, a foreign
government may unilaterally devalue its currency against other currencies,
which would typically have the effect of reducing the U.S. dollar value of
investments denominated in that currency. A foreign government may also
limit the convertibility or repatriation of its currency or assets
denominated in its currency, which would adversely affect the U.S. dollar
value and liquidity of investments denominated in that currency. In
addition, although at times most of a 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 a 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 than it would have had to convert at the time the Fund incurred the
expense. A Fund may, but is not required to, buy or sell foreign
currencies and options and futures contracts on foreign currencies for
hedging purposes in connection with its foreign investments.

14
<PAGE>

Special tax considerations apply to foreign securities. In determining
whether to invest a Fund's assets 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 and/or gains received
by a 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 a Fund will reduce its income available
for distribution to shareholders. In certain circumstances, a Fund may be
able to pass through to shareholders credits for foreign taxes paid.

- DEBT SECURITIES. To varying extents, all of the Funds 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. Also, to varying
extents, all of the Funds may invest in junk bonds, which are
lower-quality, high-yielding debt securities rated below Baa or BBB by
Moody's Investors Service, Inc. or Standard & Poor's Ratings Services
(or, if they are unrated, determined by Schroder to be of comparable
quality). See the Statement of Additional Information for further
descriptions of securities ratings assigned by Moody's and Standard &
Poor's. Lower-rated debt securities are predominantly speculative and
tend to be more susceptible than other debt securities to adverse changes
in the financial condition of the issuer, general economic conditions, or
an unanticipated rise in interest rates, which may affect an issuer's
ability to pay interest and principal. This would likely make the values
of the securities held by a Fund more volatile and could limit the Fund's
ability to liquidate its securities. Changes in the ratings of any
fixed-income security and in the perceived ability of an issuer to make
payments of interest and principal also may affect the value of these
investments.

- RISKS OF SMALLER CAPITALIZATION COMPANIES. Schroder Emerging Markets
Fund, Schroder International Smaller Companies Fund, Schroder Greater
China Fund, and Schroder U.S. Smaller Companies Fund invest 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 involve
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 Funds 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 take longer
for the prices of the securities to reflect the full value of their
issuers' earnings potential or assets.

OTHER INVESTMENT STRATEGIES AND TECHNIQUES

- 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

15
<PAGE>

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. A Fund may engage in currency exchange transactions to protect
against unfavorable fluctuations in exchange rates.

In particular, a 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, a 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"). A 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 Funds 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.

A Fund incurs foreign exchange expenses in converting assets from one
currency to another. Although there is no limit on the amount of any
Fund's assets that may be invested in foreign currency exchange and
foreign currency forward contracts, each Fund may enter into such
transactions only to the extent necessary to effect the hedging
transaction described above. Suitable foreign currency hedging
transactions may not be available in all circumstances and there can be no
assurance that a Fund will utilize hedging transactions at any time.

- SECURITIES LOANS, REPURCHASE AGREEMENTS, AND FORWARD COMMITMENTS. Each
Fund (other than Schroder International Fund and Schroder U.S.
Diversified Growth Fund) may lend portfolio securities to broker-dealers
up to one-third of the Fund's total assets. Each Fund (other than
Schroder U.S. Diversified Growth Fund) may also enter into repurchase
agreements without limit. These transactions must be fully collateralized
at all times, but involve some risk to a Fund if the other party should
default on its obligation and the Fund is delayed or prevented from
recovering the collateral. Each 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. Each Fund (other than Schroder
U.S. Diversified Growth 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, a Fund may pay a premium above such investment
company's net asset value per share. As a shareholder in an investment
company, a 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.

16
<PAGE>

connection with hedging transactions, and to increase total return. These
may include options, futures, and indices, for example. Derivatives
involve the risk that they may not work as intended due to unanticipated
developments in market conditions or other causes. 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. Each Fund which may invest in debt securities 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. A Fund investing in zero-coupon bonds
is required to distribute the income on these securities as the income
accrues, even though the Fund is not receiving the income in cash on a
current basis. Thus, the Fund may have to sell other investments,
including when it may not be advisable to do so, to make income
distributions.

- PORTFOLIO TURNOVER. The length of time a Fund has held a particular
security is not generally a consideration in investment decisions. The
investment policies of a 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 a Fund is known as "portfolio turnover."
Portfolio turnover generally involves some expense to a 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 Funds, on which shareholders may pay tax.

- TEMPORARY DEFENSIVE STRATEGIES. At times, Schroder may judge that
conditions in the securities markets make pursuing a 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 a Fund's assets. In implementing these "defensive" strategies,
the Fund would invest in high-quality fixed-income 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, a 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 Funds 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 Funds 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 Funds.
MANAGEMENT OF THE FUNDS

Schroder (itself and its predecessors) has been an investment manager since
1962, and currently serves as investment adviser to the Funds, other mutual
funds, and a broad range of institutional investors. Schroder's ultimate parent,
Schroders plc, and its affiliates currently engage in the investment banking and
asset management businesses, and as of June 30, 1999, had in the aggregate
assets under management of approximately $208 billion. In January 2000,
Schroders plc agreed to sell its worldwide investment banking business to
Salomon Smith Barney. The transaction, which is expected to be completed by
May 2000, is subject to regulatory approvals and satisfaction of closing
conditions. Schroders plc will retain its asset management businesses.

17
<PAGE>

pursuant to an Investment Subadvisory Agreement among Schroder, SIMIL, and that
Fund. SIMIL has been registered as a U.S. investment adviser since 1998 and
provides investment management services to U.S. and foreign clients.

- INVESTMENT ADVISORY FEES. For the fiscal year ended October 31, 1999,
SCHRODER U.S. DIVERSIFIED GROWTH FUND paid investment advisory fees to
Schroder at the annual rate of 0.26% of the Fund's average daily net
assets. The contractual investment advisory fee rate payable by SCHRODER
GREATER CHINA FUND, which has not been in operation for a full fiscal
year, is 0.90% of the Fund's average daily net assets.

Prior to June 1, 1999, each of the other Funds invested substantially all
of its investible assets in a separate portfolio (each a "Former Related
Portfolio") of Schroder Capital Funds. During this time, each of these
Funds paid investment advisory fees indirectly at the Former Related
Portfolio level, and did not pay investment advisory fees directly to
Schroder. Since June 1, 1999, each such Fund has paid investment advisory
fees directly to Schroder. For the fiscal year ended October 31, 1999,
these Funds paid investment advisory fees to Schroder (both directly and
indirectly through the Former Related Portfolio) at the following annual
rates (based on the average daily net assets of each Fund taken
separately): SCHRODER INTERNATIONAL FUND -- 0.38%; SCHRODER U.S. SMALLER
COMPANIES FUND -- 0.50%; and SCHRODER EMERGING MARKETS FUND and SCHRODER
INTERNATIONAL SMALLER COMPANIES FUND paid no investment advisory fees
during the period.

The rate of advisory fees indicated above as paid by each Fund, other
than Schroder U.S. Smaller Companies Fund, reflects expense limitations
and/or fee waivers described below.

Pursuant to the Investment Subadvisory Agreement for Schroder
International Smaller Companies Fund, Schroder pays SIMIL a fee at the
annual rate of 0.25% of the average daily net assets of that Fund.

- INVESTMENT ADVISORY FEE BREAKPOINTS. The following Funds have breakpoints
included in their contractual advisory fee schedules. The contractual
annual fee rate for each of Schroder U.S. Smaller Companies Fund and
Schroder International Fund is 0.50% of the Fund's average daily net
assets up to $100 million, 0.40% of the next $150 million of such assets,
and 0.35% of such assets in excess of $250 million; and for Schroder U.S.
Diversified Growth Fund is 0.75% of the Fund's average daily net assets
up to $100 million, and 0.50% of such assets in excess of $100 million.

- EXPENSE LIMITATIONS AND WAIVERS. In order to limit the Funds' expenses,
Schroder is contractually obligated to reduce its compensation (and, if
necessary, to pay certain other Fund expenses) until October 31, 2000 to
the extent that each Fund's total operating expenses attributable to its
Advisor Shares exceed the following annual rates (based on the average
daily net assets of each Fund taken separately): SCHRODER INTERNATIONAL
FUND -- 1.24%; SCHRODER EMERGING MARKETS FUND -- 1.95%; SCHRODER
INTERNATIONAL SMALLER COMPANIES FUND -- 1.75%; SCHRODER GREATER CHINA
FUND -- 2.25%; SCHRODER U.S. DIVERSIFIED GROWTH FUND -- 1.75%; and
SCHRODER U.S. SMALLER COMPANIES FUND -- 1.74%. Schroder has contractually
agreed that the advisory fees paid to it by Schroder International Fund
through October 31, 2000 will be limited to 0.45% of the Fund's average
daily net assets, and the advisory fees paid to it by Schroder U.S.
Diversified Growth Fund through May 31, 2000 will be limited to 0.65% of
the Fund's average daily net assets. Schroder is contractually obligated
through October 31, 2000 to waive 0.10% of the advisory fees payable by
Schroder International Smaller Companies Fund. In addition, Schroder and
its affiliates have voluntarily undertaken, until further notice, to
limit their fees or to pay a portion of the expenses incurred by Schroder
U.S. Smaller Companies Fund in respect of its Advisor Shares so that the
Net Expenses of the Fund's Advisor Shares will not exceed the Net
Expenses of the Fund's Investor Shares by more than 0.25%.

18
<PAGE>

- PORTFOLIO MANAGERS. Schroder's investment decisions for each of the Funds
are generally made by an investment manager or an investment team, with
the assistance of an investment committee; all investment decisions for
Schroder International Smaller Companies Fund are made by an investment
committee. The following portfolio managers have had primary
responsibility for making investment decisions for the Funds since the
years shown below. Their recent professional experience is also shown.

<TABLE>
<CAPTION>
FUND PORTFOLIO MANAGER SINCE RECENT PROFESSIONAL EXPERIENCE
- ---- ------------------------ ------------------------ ------------------------------
<S> <C> <C> <C>
Schroder International Michael Perelstein 1997 Employed as an investment
Fund professional at Schroder since
1997. Mr. Perelstein is also
Vice President of the Trust
and of Schroder Capital Funds,
and a Director and Senior
Investment Officer of
Schroder. Prior to joining
Schroder, Mr. Perelstein was
a Managing Director at
MacKay-Shields Financial Corp.
from March 1993 to
November 1996.
Schroder Emerging John Troiano Inception (1997) Employed as an investment
Markets Fund professional at Schroder since
1986. Mr. Troiano is the Chief
Executive and a Director of
Schroder, and a Vice President
of the Trust, Schroder Capital
Funds, and Schroder Series
Trust.
Heather Crighton Inception (1997) Employed as an investment
professional at Schroder since
1993. Ms. Crighton is a
Director and a Senior Vice
President of Schroder.
Mark Bridgeman Inception (1997) Employed as an investment
professional at Schroder since
1990. Mr. Bridgeman is a First
Vice President of Schroder.
Schroder Greater China Heather Crighton Inception (1998) See above.
Fund
Schroder U.S. Paul Morris 1997 Employed as an investment
Diversified Growth Fund professional at Schroder since
1997. Mr. Morris is a Director
and Managing Director of
Schroder. Prior to joining
Schroder, Mr. Morris was a
Principal and Senior Portfolio
Manager at Weiss Peck & Greer,
L.L.C., and a Managing
Director, Equity Division, of
UBS Asset Management.
Schroder U.S. Smaller Ira L. Unschuld 1997 (sole manager since Employed as an investment
Companies Fund 1998) professional at Schroder since
1990. Mr. Unschuld is a Vice
President of the Trust and a
Director and Senior Vice
President of Schroder.
</TABLE>

19
<PAGE>
HOW THE FUNDS' SHARES ARE PRICED

Each 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 than 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 Funds value their 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 Funds value securities and assets for which market values are
not ascertainable at their fair values as determined in accordance with
procedures adopted by the Board of Trustees. All assets and liabilities of a
Fund denominated in foreign currencies are translated into U.S. dollars based on
the mid-market price of such currencies against the U.S. dollar at the time when
last quoted. Because certain of the securities in which the Funds may invest may
trade on days when the Funds do not price their Advisor Shares, the net asset
value of a 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 a
Fund's Advisor Shares will generally differ from that of its Investor Shares due
to the variance in 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 each Fund directly from the Trust (through
Schroder Fund Advisors Inc., the distributor of the Trust's shares), or through
a service organization such as a bank, trust company, broker-dealer, or other
financial organization (a "Service Organization") having an arrangement with
Schroder Fund Advisors Inc. If you do not have a Service Organization, Schroder
Fund Advisors Inc. can provide you with a list of available firms. Your Service
Organization is responsible for forwarding all of the necessary documentation to
the Trust, and may charge you separately for its services.

Advisor Shares of each of the Funds 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 regular trading on the New York Stock Exchange.

If the Advisor Shares you purchase will be held in your own name (rather than in
the name of your Service Organization), your payment for the shares must be
accompanied by a completed Account Application in proper form. An Account
Application is included with this Prospectus. Additional Account Applications
may be obtained from the Trust's Transfer Agent, Boston Financial Data Services,
Inc. (the "Transfer Agent"), at the addresses listed below under "Purchases by
Check", by calling the Trust at (800) 464-3108, or from your Service
Organization. The Trust or the Transfer Agent may request and delay acceptance
of your order pending receipt of additional documentation, such as copies of
corporate resolutions and instruments of authority, from corporations,
administrators, executors, personal representatives, directors or custodians.

INVESTMENT MINIMUMS

The minimum investments for initial and additional purchases of Advisor Shares
of each Fund are as follows:

<TABLE>
<CAPTION>
INITIAL ADDITIONAL
INVESTMENT INVESTMENTS
---------- -----------
<S> <C> <C>
Regular Accounts $2,500 $250
Traditional IRAs $2,000 $250
</TABLE>

The Trust may, in its sole discretion, accept smaller initial or subsequent
investments. None of the Funds issues share certificates.

20
<PAGE>

You also may meet the minimum initial investment requirement based on cumulative
purchases by means of a written Statement of Intention, expressing your
intention to invest at least the minimum investment amount applicable to a
particular Fund, or more, in Advisor Shares of a 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 Trust reserves the right to redeem your
shares in a Fund if you do not invest at least the minimum initial investment
amount applicable to your account by the end of the Statement of Intention
period (taking into account amounts you redeem during the period).

The Trust is authorized to reject any purchase order and to suspend the offering
of its shares for any period of time. The Trust may also change any investment
minimum from time to time.

PURCHASES BY CHECK

You may purchase shares of a Fund by mailing a check (in U.S. dollars) payable
to (i) Schroder Capital Funds (Delaware), if you are purchasing shares of two or
more Funds, accompanied by written instructions as to how the check amount
should be allocated among the Funds whose shares you are purchasing or (ii) the
name of the Fund to be purchased (I.E., Schroder Emerging Markets Fund) if you
are purchasing shares of a single Fund. Third-party checks will not be accepted.

For initial purchases, your check must be accompanied by a completed Account
Application in proper form. You should direct your check and your completed
Account Application as follows:

<TABLE>
<S> <C>
REGULAR MAIL OVERNIGHT OR EXPRESS MAIL
- --------------------------- ------------------------------------
Schroder Mutual Funds Boston Financial Data Services, Inc.
P.O. Box 8507 Attn: Schroder Mutual Funds
Boston, MA 02266 66 Brooks Drive
Braintree, MA 02184
</TABLE>

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

PURCHASES BY BANK WIRE/TELEPHONE

Once you have an account number, you may purchase Advisor Shares through your
Service Organization, or directly from the Trust 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. In order to
purchase shares by telephone, you must complete the appropriate section of the
Account Application. Your purchase will not be processed until the Trust has
received the wired funds.

Federal Reserve Bank wire instructions are as follows:

21
<PAGE>

The wire order must specify the name of the Fund, the share 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.

AUTOMATIC PURCHASES

If you purchase shares directly from the Trust and the shares are held in your
own name, you can make regular investments of $100 or more per month or quarter
in Advisor Shares of a Fund through automatic deductions from your bank account.
Please complete the appropriate section of the Account Application if you would
like to utilize this option. For more information, please call the Trust at
(800) 464-3108. If you purchase shares through a Service Organization, your firm
may also provide automatic purchase options. Please contact your Service
Organization for details.

OTHER PURCHASE INFORMATION

Advisor Shares of each 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. Investors interested in purchases through
exchange should telephone the Trust at (800) 464-3108.

Schroders reserves the right to reject any investment. A pattern of purchases
and redemptions of Fund shares characteristic of "market timing" strategies may
be deemed by Schroder to be detrimental to the Trust or a particular Fund.
Currently, the Trust limits the number of "round trip" purchases an investor may
make. An investor makes a "round trip" purchase when the investor purchases
shares of a particular Fund, subsequently redeems those shares (including in
connection with exchanges for other Schroder funds), and then again purchases
shares of the original Fund. If an investor completes four round trip purchases
in any twelve-month period, the Trust may refuse any subsequent purchase or
exchange order by that investor.

HOW TO SELL SHARES

You may sell your Advisor Shares back to a Fund on any day the New York Stock
Exchange is open, either through your Service Organization or directly to the
Fund. If your shares are held in the name of a Service Organization, you may
only sell the shares through that Service Organization. The Service Organization
may charge you for its services. If you choose to sell your shares directly to
the Fund, you may do so 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 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

22
<PAGE>

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. Unless otherwise agreed to by the Trust,
the telephone redemption privilege may only be exercised to redeem shares worth
$1,000 or more and not more than $25,000. 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, or those acting through powers of
attorney or similar delegation.

If you redeem shares through your Service Organization, your Service
Organization is responsible for ensuring that the Transfer Agent receives your
redemption request in proper form and at the appropriate time. If your Service
Organization receives Federal Reserve wires, you may instruct that your
redemption proceeds be forwarded by wire to your account with your Service
Organization; you may also instruct that your redemption proceeds be forwarded
to you by a wire transfer. Please indicate your Service Organization's or your
own complete wiring instructions. Your Service Organization may charge you
separately for this service.

The Trust will pay you for your redemptions as promptly as possible and in any
event 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 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.

ADDITIONAL INFORMATION ABOUT
ADVISOR SHARES

The Trust sells Advisor Shares of the Funds 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 select. You also receive the full value of your Advisor
Shares when you sell them back to a Fund, without any deferred sales charge.

23
<PAGE>

SHAREHOLDER SERVICING PLAN. The Trust has adopted a Shareholder Servicing Plan
(the "Service Plan") for the Advisor Shares of each Fund. Under the Service
Plan, each 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 Organization is the holder 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 a 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 Funds' Advisor Shares.

DISTRIBUTION PLANS. Each 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 Plans, each 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 a Fund under the Service Plan 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 any
distribution plan, they would be paid out of a Fund's assets attributable to its
Advisor Shares on an ongoing basis, would increase the cost of your investment,
and, in the long run, 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 most
other funds 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 tax. For a listing of the Schroder
funds available for exchange and to exchange shares, please contact your Service
Organization or call the Trust directly at (800) 464-3108. In order to exchange
shares by telephone, you must complete the appropriate section of the Account
Application. The Trust reserves the right to change or suspend the exchange
privilege at any time. Shareholders would be notified of any such change or
suspension.

DIVIDENDS AND DISTRIBUTIONS

Each 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 your Fund;

- Receive distributions from net investment income in cash while
reinvesting capital gain distributions in additional Advisor Shares of
your Fund;

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

- Receive all distributions in cash.

24
<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 a Fund will be reinvested in Advisor Shares of that Fund. You
will receive a statement confirming reinvestment of distributions in additional
Fund shares promptly following the period in which the reinvestment occurs.

TAXES

25
<PAGE>
FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the financial
performance of Schroder U.S. Smaller Companies Fund since the Fund began
offering Advisor Shares. No other Fund has Advisor Shares outstanding. Certain
information reflects financial results for a single Fund share. The total
returns represent the total return for an investment in Advisor Shares of the
Fund, assuming reinvestment of all dividends and distributions.

The financial highlights presented below for Schroder U.S. Smaller Companies
Fund have been audited by PricewaterhouseCoopers LLP, independent accountants to
the Fund. The audited financial statements for the Fund and the related
independent accountants' report are contained in the Trust's Annual Report and
are incorporated by reference into the Statement of Additional Information.
Copies of the Annual Report may be obtained without charge by writing the Trust
at P.O. Box 8507, Boston, Massachusetts 02266 (regular mail) or at 66 Brooks
Drive, Braintree, Massachusetts 02184 (overnight or express mail), or by calling
(800) 464-3108.

SCHRODER U.S. SMALLER COMPANIES FUND

Selected per share data and ratios for an Advisor Share outstanding throughout
each period:

<TABLE>
<CAPTION>
FOR THE
FOR THE PERIOD FOR THE FOR THE PERIOD ENDED
ENDED YEAR ENDED YEAR ENDED MAY 31,
OCTOBER 31, 1999(A) MAY 31, 1999 MAY 31, 1998 1997(B)
-------------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $12.74 $14.72 $13.24 $11.89
------- ------- ------ ------
Investment Operations:(c)
Net Investment Loss (0.04) (0.12) (0.05) (0.03)
Net Realized and Unrealized
Gain (Loss) on Investments 0.02 (1.83) 2.79 1.38
------- ------- ------ ------
Total from Investment Operations (0.02) (1.95) 2.74 1.35
------- ------- ------ ------
Distributions from Net Realized
Gain on Investments -- (0.03) (1.26) --
------- ------- ------ ------
Net Asset Value, End of Period $ 12.72 $ 12.74 $14.72 $13.24
======= ======= ====== ======
Total Return(d) (0.16)% (13.25)% 21.50% 11.35%
Ratios and Supplementary Data
Net Assets at End of Period (in
thousands) $ 4,807 $4,883 $4,544 $81
Ratios to Average Net Assets:(c)
Expenses including
reimbursement/waiver of fees 1.60%(e) 1.69% 1.58% 1.74%(e)
Expenses excluding
reimbursement/waiver of fees 2.24%(e) 2.52% 3.88% 57.02%(e)
Net investment income (loss)
including
reimbursement/waiver of fees (0.79)%(e) (0.95)% (0.78)% (0.67)%(e)
Portfolio Turnover Rate(f) 52% 119% 55% 34%
</TABLE>

(a) Effective October 31, 1999, the Fund changed its fiscal year end from May 31
to October 31. See also Note 1 to the Trust's financial statements.

(b) Advisor Shares were first issued on December 23, 1996.

(c) Prior to June 1, 1999, the Fund recognized its proportionate share of
income, expenses and gains/losses of the underlying portfolio, Schroder U.S.
Smaller Companies Portfolio. Commencing June 1, 1999, the income, expenses
and gain/losses were directly accrued to the Fund.

(d) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the period shown (see Note 3 to the Trust's
financial statements). Total return calculation for a period of less than
one year are not annualized.

(e) Annualized.

(f) The portfolio turnover rates for the periods through May 31, 1999 represent
the turnover of the underlying Portfolio, Schroder U.S. Smaller Companies
Portfolio.

26
<PAGE>
[LOGO]

SCHRODER SERIES TRUST II
SCHRODER ALL-ASIA FUND
</TABLE>

27
<PAGE>
INVESTMENT ADVISER
Schroder Investment Management North America Inc.
787 Seventh Avenue, 34th Floor
New York, New York 10019

SUBADVISER TO SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
Schroder Investment Management International Limited
31 Gresham Street
London, United Kingdom EC2V 7QA

ADMINISTRATOR AND DISTRIBUTOR
Schroder Fund Advisors Inc.
787 Seventh Avenue, 34th Floor
New York, New York 10019

SUBADMINISTRATOR AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110

TRANSFER AND DIVIDEND DISBURSING AGENT
Boston Financial Data Services, Inc.
66 Brooks Drive
Braintree, Massachusetts 02184
(800) 464-3108

COUNSEL
Ropes & Gray
One International Place
Boston, Massachusetts 02110

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, Massachusetts 02109
<PAGE>
- --------------------------------------------------------------------------------

SCHRODER CAPITAL FUNDS (DELAWARE)

Schroder Capital Funds (Delaware)'s statement of additional information (SAI)
and annual and semi- annual reports to shareholders include additional
information about the Funds. The SAI and the financial statements included in
the Trust's most recent annual report to shareholders are incorporated by
reference into this prospectus, which means they are part of this Prospectus for
legal purposes. The Trust's annual report discusses the market conditions and
investment strategies that significantly affected each Fund's performance during
its last fiscal year. You may get free copies of these materials, request other
information about a Fund, or make shareholder inquiries by calling 800-464-3108.

You may review and copy information about the Trust, 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 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)
P.O. Box 8507
Boston, MA 02266
800-464-3108

SF300AP

File No. 811-1911
\+
<PAGE>

SCHRODERS

PROSPECTUS

March 1, 2000

SCHRODER CAPITAL FUND (DELAWARE)

SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO

INVESTOR SHARES

This Prospectus describes Schroder Emerging Markets Fund Institutional
Portfolio, a series of shares of Schroder Capital Funds (Delaware) (the
"Trust"). The Fund seeks long-term capital appreciation through direct or
indirect investment in equity and debt securities of issuers domiciled or doing
business in emerging market countries in regions such as Southeast Asia, Latin
America, and Eastern and Southern Europe.

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

This Prospectus explains what you should know about the Fund before you invest.
Please read it carefully.

<PAGE>

TABLE OF CONTENTS

Page
----
SUMMARY INFORMATION 1

FEES AND EXPENSES 4

OTHER INVESTMENT STRATEGIES AND RISKS 5

MANAGEMENT OF THE FUND 10

HOW THE FUND'S SHARES ARE PRICED 11

HOW TO BUY SHARES 11

HOW TO SELL SHARES 14

DIVIDENDS AND DISTRIBUTIONS 15

TAXES 16

FINANCIAL HIGHLIGHTS 17

<PAGE>

SUMMARY INFORMATION

This summary identifies the investment objective, principal investment
strategies, and principal risks of Schroder Emerging Markets Fund Institutional
Portfolio. 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 Trustees of the Trust without a vote of
the Fund's shareholders.

The summary for the Fund includes a bar chart that shows how the investment
returns of the Fund's Investor Shares have varied from year to year. The bar
chart shows returns for each full calendar year since the Fund commenced
operations. The table following the bar chart shows how the Fund's average
annual returns for the last year and for the life of the Fund compare to a
broad-based securities market index. The bar chart and table provide some
indication of the risks of investing in the Fund by showing the variability
of its returns and by comparing the Fund's performance to a broad measure of
market performance. PAST PERFORMANCE IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE. It is possible to lose money on an investment in the Fund.

- - INVESTMENT OBJECTIVE. To seek long-term capital appreciation through direct
or indirect investment in equity and debt securities of issuers domiciled
or doing business in emerging market countries in regions such as Southeast
Asia, Latin America, and Eastern and Southern Europe.

- - PRINCIPAL INVESTMENTS STRATEGIES. The Fund normally invests at least 65% of
its total assets in securities of companies determined by Schroder to be
"emerging market" issuers. The Fund may invest the remaining 35% of its
total assets in securities of issuers located anywhere in the world. The
Fund may invest in equity or debt securities of any kind.

The Fund invests primarily in equity securities of issuers domiciled or
doing business in "emerging market" countries in regions such as Southeast
Asia, Latin America, Eastern and Southern Europe, and Africa. "Emerging
market" countries are countries not included at the time of investment in
the Morgan Stanley International World Index of major world economies.
Countries currently in the Index (and therefore generally NOT considered to
be "emerging market" countries) include: Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy,
Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain,
Sweden, Switzerland, the United Kingdom, and the United States. Schroder
may at times determine based on its own analysis that an economy included
in the Index should nonetheless be considered an emerging market country,
in which case that country would constitute an emerging market country for
purposes of the Fund's investments. There is no limit on the amount of the
Fund's assets that may be invested in securities of issuers domiciled in
any one emerging market country.

The Fund invests in issuers and countries 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 considers the risk of local political and/or economic
instability associated with particular countries and regions and the
liquidity of local markets. The Fund generally sells securities when they
reach fair valuation or when significantly more attractive investment
candidates become available.

The Fund also may do the following:

- Invest in securities of closed-end investment companies that invest
primarily in foreign securities, including securities of emerging
market issuers.

<PAGE>

- Invest up to 35% of its assets in debt securities, including
lower-quality, high yielding debt securities (commonly known as "junk
bonds"), which entail certain risks.

- - PRINCIPAL RISKS.

- EMERGING MARKETS. The Fund may invest in "emerging market" countries
whose securities markets may experience heightened levels of
volatility. The risks of investing in emerging markets include greater
political and economic uncertainties than in foreign developed
markets, currency transfer restrictions, a more limited number of
potential buyers, and an emerging market country's dependence on
revenue from particular commodities or international aid.
Additionally, the securities markets and legal systems in emerging
market countries may only be in a developmental stage and may provide
few, or none, of the advantages or protections of markets or legal
systems available in more developed countries. Emerging market
countries may experience extremely high levels of inflation, which may
adversely affect those countries' economies, currencies, and
securities markets. Also, emerging market issuers are often smaller
and less well-known than larger, more widely held companies and
involve certain special risks associated with smaller capitalization
companies.

- GEOGRAPHIC CONCENTRATION. There is no limit on the amount of the
Fund's assets that may be invested in securities of issuers domiciled
in any one country, although the Fund will normally invest in at least
three countries other than the United States. To the extent that the
Fund invests a substantial amount of its assets in one country, it
will be more susceptible to the political and economic developments
and market fluctuations in that country than if it invested in a more
geographically diversified portfolio.

- NON-DIVERSIFIED MUTUAL FUND. The Fund is a "non-diversified" mutual
fund, and will invest its assets in a more limited number of issuers
than may diversified investment companies. To the extent the Fund
focuses on fewer issuers, its risk of loss increases if the market
value of a security declines or if an issuer is not able to meet its
obligations.

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

- JUNK BONDS. Securities rated below investment grade ("junk bonds")
lack outstanding investment characteristics and have speculative
characteristics and are subject to greater credit and market risks
than higher-rated securities. The lower ratings of junk bonds reflect
a greater possibility that adverse changes in the financial condition
of the issuer or in general economic conditions, or an unanticipated
rise in interest rates, may impair the ability of the issuer to make
payments of interest and principal. If this were to occur, the values
of securities held by the Fund may become more volatile.

<PAGE>

The bar chart below does not reflect the purchase or redemption charges
imposed on purchases and redemptions of the Fund's Shares. If the bar chart
did reflect these charges, returns would be less than those shown.

SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO
INVESTOR SHARES

<TABLE>
<CAPTION>
Calendar Annual
Year End Return
<S> <C>
1996 7.93%
1997 -5.21%
1998 -25.29%
1999 62.62%
</TABLE>

During the periods shown above, the highest quarterly return was 27.35% for the
quarter ended December 31, 1999, and the lowest was -21.96% for the quarter
ended September 30, 1998.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS* LIFE OF FUND

(FOR PERIODS ENDING DECEMBER 31, 1999) ONE YEAR SINCE 3/31/95)
- --------------------------------------------------------------------------------
<S> <C> <C>
Schroder Emerging Markets Fund 61.00% 6.09%
Institutional Portfolio
- --------------------------------------------------------------------------------
Morgan Stanley Capital International 66.41% 7.50%
Emerging Markets Free Index**
- --------------------------------------------------------------------------------
</TABLE>

* Unlike the bar chart, the Fund's average annual total returns shown in the
table above reflect the subject of a 0.50% Purchase Charge at the time of
purchase and a 0.50% Redemption Charge deducted at the end of each period.
The Index to which the Fund's average annual returns are compared do not
reflect the imposition of such charges.

** The Morgan Stanley Capital International Emerging Markets Free Index is an
unmanaged, market capitalization index of companies representative of the market
structure of 25 emerging countries in Europe, Latin America, and the Pacific
Basin. The Index represents actual buyable opportunities for the non-domestic
investor by taking into account local market restrictions on share ownership by
foreigners. For periods prior to November 30, 1998, returns represent the MSCI
EMF Index (ex-Malaysia).

<PAGE>

FEES AND EXPENSES

THESE TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
INVESTOR SHARES OF THE FUND.

<TABLE>
<CAPTION>
SHAREHOLDER FEES (paid directly from your investment):
<S> <C>
Maximum Sales Load Imposed on Purchases None
Maximum Deferred Sales Load None
Maximum Sales Load Imposed on Reinvested Dividends None
Purchase Charge (based on amount invested)(1) 0.50%
Redemption Charge (as a percentage of the net asset value
of shares redeemed)(1) 0.50%

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

Management Fees(2) 1.10%
Distribution (12b-1) Fees None
Other Expenses 0.23%
Total Annual Fund Operating Expenses 1.33%
Fee Waiver and/or Expense Limitation(3) 0.15%
Net Expenses(3) 1.18%
</TABLE>

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

(1) The Purchase and Redemption Charges are collected and retained by the Fund
to compensate the other investors in the Fund for expenses incurred in
connection with purchases and sales of portfolio securities.

(2) Management Fees include all fees payable to Schroder and its affiliates for
investment advisory and fund administration services.

(3) The Net Expenses shown above reflect the effect of contractually imposed
expense limitations and/or fee waivers, in effect through October 31, 2000, on
the Total Annual Fund Operating Expenses of the Fund.

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 either retain all of your shares or redeem all
of your shares at the end of those periods. The Example assumes that you pay
a 0.50% Purchase Charge at the time of purchase and a 0.50% Redemption Charge
at the time of redemption. 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 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Assuming no redemption* $186 $472 $780 $1,652
Assuming full redemption
at end of period* $238 $528 $839 $1,723
</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, 3 years, 5 years, and 10 years,
respectively: $171, $425, $699, and $1,481 (assuming no redemption) or $222,
$481, $759, and $1,553 (assuming full redemption at end of period).

OTHER INVESTMENT STRATEGIES AND RISKS

<PAGE>

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
or yield. It is possible to lose money by investing in the Fund.

RISKS OF INVESTING IN THE FUND

- EMERGING MARKETS. The Fund intends to invest primarily in
securities of "emerging market" issuers, which are those
domiciled or doing business in emerging market countries.
Specifically, an issuer will be considered to be an emerging
market issuer if Schroder determines that: (1) it is organized
under the laws of an emerging market country; (2) its primary
securities trading market is in an emerging market country; (3)
at least 50% of the issuer's revenues or profits are derived from
goods produced or sold, investments made, or services performed
in emerging market countries; or (4) at least 50% of its assets
are situated in emerging market countries.

The prices of securities of issuers in emerging market countries
are subject to greater volatility than those of issuers in more
developed countries. Investments in emerging market countries may
present market, credit, currency, liquidity, legal, political,
and other risks different from, or greater than, the risks of
investing in developed foreign countries. See "Foreign
Securities" below. For example, the securities markets and legal
systems in emerging market countries may only be in a
developmental stage and may provide few, or none, of the
advantages or protections of markets or legal systems available
in more developed countries. Although many of the securities in
which the Fund may invest are traded on securities exchanges,
they may trade in limited volume, and the exchanges may not
provide all of the conveniences or protections provided by
securities exchanges in more developed markets. The Fund may also
invest a substantial portion of its assets in securities traded
in the over-the-counter markets in emerging market countries and
not on any exchange, which may affect the liquidity of the
investment and expose the Fund to the credit risk of its
counterparties in trading those investments. Emerging market
countries may experience extremely high rates of inflation, which
may adversely affect those countries' economies and securities
markets.

Certain Asian markets have experienced devaluation and/or
significant volatility during the past several years. To the
extent that the Fund focuses its investments in any Asian
countries, the Fund's investment performance will be
particularly sensitive to political, economic, market, and
other factors affecting these countries and issues in these
countries.

- FOREIGN SECURITIES AND CURRENCIES. Except as otherwise noted in
this Prospectus, 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. 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

<PAGE>

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.

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. Officials in foreign countries may from time to
time take actions in respect of their currencies, which could
significantly affect the value of a Fund's assets denominated in
those currencies or the liquidity of such investments. For
example, a foreign government may unilaterally devalue its
currency against other currencies, which would typically have the
effect of reducing the U.S. dollar value of investments
denominated in that currency. A foreign government may also limit
the convertibility or repatriation of its currency or assets
denominated in its currency, which would adversely affect the
U.S. dollar value and liquidity of investments denominated in
that currency. 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 than it would have
had to convert at the time the Fund incurred the expense. The
Fund may, but is not required to, 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 the Fund's assets 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 and/or gains 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.

<PAGE>

rated below Baa or BBB by Moody's Investors Service, Inc. or
Standard & Poor's Ratings Services (or, if they are unrated,
determined by Schroder to be of comparable quality). See the
Statement of Additional Information for further descriptions of
securities ratings assigned by Moody's and Standard & Poor's.
Lower-rated debt securities are predominantly speculative and
tend to be more susceptible than other debt securities to adverse
changes in the financial condition of the issuer, general
economic conditions, or an unanticipated rise in interest rates,
which may affect an issuer's ability to pay interest and
principal. This would likely make the values of the securities
held by the Fund more volatile and could limit the Fund's ability
to liquidate its securities. Changes by recognized rating
services in their ratings of any fixed-income security and in the
perceived ability of an issuer to make payments of interest and
principal also may affect the value of these investments.

- U.S. GOVERNMENT SECURITIES. U.S. Government securities include a
variety of securities that differ in their interest rates,
maturities, and dates of issue. Securities issued or guaranteed
by agencies or instrumentalities of the U.S. Government may or
may not be supported by the full faith and credit of the United
States or by the right of the issuer to borrow from the U.S.
Treasury.

- RISK OF SMALLER CAPITALIZATION COMPANIES. The Fund may invest 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 involved certain special risks. They are
more likely than larger companies to have limited product line,
markets or financial resources, or to depend on a small,
inexperienced management group. Securities of smaller companies
may offer greater opportunities for capital appreciation than
larger companies, but may also involve 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 its 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 take longer for the prices of the securities to
reflect the full value of their issuers' 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.

- 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

<PAGE>

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.

The Fund 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 enter into such 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.

<PAGE>

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 INSTRUMENTS. To the extent permitted by the
Fund's investment policies as set forth in this Prospectus
or listed in the Statement of Additional Information,
instead of investing directly in the types of portfolio
securities described in the Summary Information section
above, the Fund may buy or sell a variety of "derivative"
instruments to gain exposure to particular securities or
markets, in connection with hedging transactions, and to
increase total return. These may include options, futures,
and indices, for example. Derivatives involve the risk that
they may not work as intended due to unanticipated
developments in market conditions or other causes. Also,
derivatives often involve the risk that the other party to
the transaction 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.
A Fund investing in zero-coupon bonds is required to
distribute the income on these securities as the income
accrues, even though the Fund is not receiving the income in
cash on a current basis. Thus, the Fund may have to sell
other investments, including when it may not be advisable to
do so, to make income distributions.

- 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 may 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" strategies, the
Fund would invest in high-quality fixed-income 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, which 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

<PAGE>

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 (itself and its predecessors) has been an investment manager since
1962, and currently serves as investment adviser to the Fund, other mutual
funds, and a broad range of institutional investors. Schroder's ultimate
parent, Schroders plc, and its affiliates currently engage in the investment
banking and asset management businesses, and as of June 30, 1999, had in the
aggregate assets under management of approximately $208 billion. In January
2000, Schroders plc agreed to sell its worldwide investment banking business
to Salomon Smith Barney. The transaction, which is expected to be completed
by May 2000, is subject to regulatory approvals and satisfaction of closing
conditions. Schroders plc will retain its asset management business.

- INVESTMENT ADVISORY FEES. Prior to June 1, 1999, the Fund
invested substantially all of its investible assets in Schroder
Emerging Markets Fund Institutional Portfolio (the "Portfolio"),
a separate portfolio of Schroder Capital Funds, an investment
company also managed by Schroder. During this time, the Fund paid
investment advisory fees indirectly at the Portfolio level, and
did not pay advisory fees directly to Schroder. Since June 1,
1999, the Fund has paid investment advisory fees directly to
Schroder according to the same contractual fee rate previously
paid at the Portfolio level. For the fiscal year ended October
31, 1999, the Fund paid investment advisory fees to Schroder
(both directly and indirectly through the Portfolio) at the
annual rate of .88%, based on the average daily net assets of the
Fund. The amount paid by the Fund reflects the effect of the
expense limitations and/or fee waivers in place for the Fund
described below.

- PORTFOLIO MANAGERS. Schroder's investment decisions for the Fund
are made by the investment team listed below, with the assistance
of an investment committee. The following portfolio managers have
had primary responsibility for making investment decisions for
the Fund and the Portfolio in which the Fund previously invested
since inception. Their recent professional experience is also
shown.

<TABLE>
<CAPTION>
PORTFOLIO MANAGER SINCE RECENT PROFESSIONAL
----------------- ----- -------------------
EXPERIENCE
----------
<S> <C> <C>
John Troiano Inception (1995) Employed as an investment
professional at Schroder
since 1986. Mr. Troiano is
the Chief Executive and a
Director of Schroder, and a
Vice President of the
Trust, Schroder Capital
Funds, and Schroder Series
Trust

<PAGE>

Heather Crighton Inception (1995) Employed as an investment
professional at Schroder
since 1993. Ms. Crighton
is a Director and a Senior
Vice President of Schroder.

Mark Bridgeman Inception (1995) Employed as an investment
professional at Schroder
since 1990. Mr. Bridgeman
is a First Vice President
of Schroder.
</TABLE>

HOW THE FUND'S SHARES ARE PRICED

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 than 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 securities and assets for which market values are
not ascertainable 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 translated into U.S. dollars based on
the mid-market price of such currencies against the U.S. dollar at the time when
last quoted. 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 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 (through
Schroder Fund Advisors Inc., the distributor of the Trust's shares), or through
a service organization such as a bank, trust company, broker-dealer, or other
financial organization (a "Service Organization") having an arrangement with
Schroder Fund Advisors Inc. If you do not have a Service Organization, Schroder
Fund Advisors Inc. can provide you with a list of available firms. Your Service
Organization is responsible for forwarding all of the necessary documentation to
the Trust, and may charge you separately for its services.

Investor Shares of the Fund are sold at their net asset value next determined
after the Trust receives your order, plus a purchase charge of 0.50% of the
amount invested. The purchase charge, which is not a sales charge, is assessed
and retained by the Fund to compensate other investors in the Fund for expenses
incurred in purchasing securities due to an investment in the Fund. The purchase
charge is not assessed on the reinvestment of dividends or distributions or on
purchases through an in-kind subscription. In order for you to receive the
Fund's next determined net asset value, the Trust must receive your order before
the close of regular trading on the New York Stock Exchange.

If the Investor Shares you purchase will be held in your own name (rather than
in the name of your Service Organization), your payment for the shares must be
accompanied by a completed Account Application in proper form. The Trust or the
Trust's Transfer Agent, Boston Financial Data Services,

<PAGE>

Inc. (the "Transfer Agent") may request and delay acceptance of your order
pending receipt of additional documentation, such as copies of corporate
resolutions and instruments of authority, from corporations, administrators,
executors, personal representatives, directors, or custodians. You may obtain
Account Applications from the Transfer Agent at the address listed below
under "Purchases by Check", by calling the Trust at (800) 464-3108, or your
Service Organization.

INVESTMENT MINIMUMS

The minimum investments for initial and additional purchases of Investor Shares
of the Fund are as follows:

<TABLE>
<CAPTION>
Initial Additional
Investment Investments
---------- -----------
<S> <C> <C>
Regular Accounts $1,000,000 No minimum
</TABLE>

The Trust may, in its sole discretion, accept smaller initial or subsequent
investments. The Trust does not issue share certificates.

You also may meet the minimum initial investment requirement based on cumulative
purchases by means of a written Statement of Intention, expressing your
intention to invest at least the minimum investment amount applicable to the
Fund, or more, in Investor Shares 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 Trust reserves the right to redeem your shares in the Fund
if you do not invest at least the minimum initial investment amount applicable
to your account by the end of the Statement of Intention period (taking into
account amounts you redeem during the period).

The Trust is authorized to reject any purchase order and to suspend the offering
of its shares for any period of time. The Trust may also change any
investment minimum from time to time.

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. You should direct your check and your completed
Account Application as follows:

REGULAR MAIL OVERNIGHT OR EXPRESS MAIL
------------ -------------------------
Schroder Mutual Funds Boston Financial Data Services, Inc.
P.O. Box 8507 Attn: Schroder Mutual Funds
Boston, MA 02266 66 Brooks Road
Braintree, MA 02184

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

PURCHASES BY BANK WIRE/TELEPHONE

<PAGE>

Once you have an account number, you may purchase Investor Shares through your
Service Organization, or directly from the Trust 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. In order to
purchase shares by telephone, you must complete the appropriate section of the
Account Application. Your purchase will not be processed until the Trust has
received the wired funds.

Federal Reserve Bank wire instructions are as follows:

AUTOMATIC PURCHASES

If you purchase shares directly from the Trust and the shares are held in your
own name, you can make regular investments of $100 or more per month or quarter
in Investor Shares of the Fund through automatic deductions from your bank
account. Please complete the appropriate section of the Account Application if
you would like to utilize this option. For more information, please call the
Trust at (800) 464-3108. If you purchase shares through a Service Organization,
your firm may also provide automatic purchase options. Please contact your
Service Organization for details.

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. Investors interested in purchases through
exchange should telephone Schroder at (800) 464-3108.

Schroder reserves the right to reject any particular investment. A pattern of
purchases and redemption of the Fund's shares characteristics of "market
timing" strategies may be deemed by Schroder to be detrimental to the Trust
or the Fund. Currently, the Trust limits the number of "round trip" purchases
an investor may make. An investor makes a "round trip" purchase when the
investor purchases shares of the Fund, subsequently redeems those shares, and
then again purchases shares of the Fund. If an investor completes four round
trip purchases in any twelve-month period, the Trust may to refuse any
subsequent purchase order by that investor.

<PAGE>

Schroder Fund Advisors Inc., Schroder, or their affiliates may, at their own
expense and out of their own assets, provide compensation to dealers or other
intermediaries in connection with sales of Trust shares or shareholder
servicing. In some instances, this compensation may be made available only to
certain dealers or other intermediaries who have sold or are expected to sell
significant amounts of shares of the Fund. If you purchase or sell shares
through an intermediary, the intermediary may charge a separate fee for its
services. Consult your intermediary for information.

HOW TO SELL SHARES

You may sell your Investor Shares back to the Fund on any day the New York Stock
Exchange is open, either through your Service Organization or directly to the
Fund. If your shares are held in the name of a Service Organization, you may
only sell the shares through that Service Organization. The Service Organization
may charge you for its services. If you choose to sell your shares directly to
the Fund, you may do so 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 is the net asset value next determined after receipt of your
redemption request in good order, minus a redemption charge of 0.50% of the
amount redeemed. The redemption charge, which is not a sales charge, is assessed
and retained by the Fund to compensate the other investors in the Fund for
expenses incurred in connection with sales of portfolio securities. The
redemption charge is not assessed on shares acquired through the reinvestment of
dividends or distributions or on redemptions in kind. For purposes of computing
the redemption charge, redemptions by a shareholder are deemed to be made in the
following order: (i) from Investor Shares purchased through the reinvestment of
dividends and distributions (with respect to which no redemption charge is
applied) and (ii) from Investor Shares for which the redemption charge is
applicable, on a first-purchased, first-redeemed basis.

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. Unless otherwise agreed by the Trust, the telephone redemption
privilege may only be exercised to redeem shares worth $1,000 or more and not
more than $25,000. 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, or those acting through powers of attorney or similar
delegation.

<PAGE>

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.

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 ("SEC") 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.

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 gain 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. For federal income tax purposes,
distributions of investment income are taxable as ordinary income. Taxes on
distributions of capital gains are determined by how

<PAGE>

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
long-term 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 YOUR SHARES. Any gain resulting from the sale of your shares
in the Fund will also generally be subject to federal income tax at either
short-term or long-term capital gain rates depending on how long you have owned
your shares.

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 tax liability.

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table on the following page is intended to help you
understand the financial performance of the Fund since the Fund commenced
operations. Certain information reflects financial results for a single Fund
share. The total returns represent the total return for an investment in
Investor Shares of the Fund, assuming reinvestment of all dividends and
distributions. The financial highlights presented below have been audited by
PricewaterhouseCoopers LLP, independent accountants to the Fund. The audited
financial statements for the Fund and the related independent accountants'
report are contained in the Fund's Annual Report and are incorporated by
reference into the Statement of Additional Information. Copies of the Fund's
Annual Report may be obtained without charge by writing the Trust at P.O. Box
8507, Boston, Massachusetts 02266 (regular mail) or at 66 Brooks Drive,
Braintree, Massachusetts 02184 (overnight or express mail), or by calling
(800) 464-3108.

<PAGE>

SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO - INVESTOR SHARES

(For an Investor Share outstanding throughout the period.)

For the Period
For the Year Ended October 31, Ended
------------------------------------------------ October 31,
-------------

1999 1998 1997 1996 1995(1)
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $7.77 $11.08 $11.06 $10.63 $10.00
----- ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS: (2)
Net Investment Income 0.06 0.12 0.06 0.02 0.02
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency 2.75 (3.39) (0.03) 0.43 0.61
---- ------ ------ ---- ----
TOTAL FROM INVESTMENT OPERATIONS 2.81 (3.27) 0.03 0.45 0.63
---- ------ ---- ---- ----
LESS DISTRIBUTIONS:
From Net Investment Income (0.05) (0.04) (0.01) (0.02) 0.00
------ ------ ------ ------ ----
Total Distributions (0.05) (0.04) (0.01) (0.02) 0.00
------ ------ ------ ------ ----
NET ASSET VALUE AT END OF PERIOD $10.53 $7.77 $11.08 $11.06 $10.63
------ ----- ------ ------ ------
------ ----- ------ ------ ------
TOTAL RETURN (3) 36.27% (29.64)% 0.27% 4.22% 6.30%
RATIOS & SUPPLEMENTARY DATA
Net Assets at End of Period (in thousands) $212,859 $111,463 $179,436 $167,570 $18,423
Ratios to Average Net Assets: (2)
Expenses including reimbursement/ 1.27% 1.36% 1.41% 1.60% 1.58% (4)
waiver of fees
Expenses excluding reimbursement/ 1.33% 1.64% 1.62% 1.71% 2.45% (4)
waiver of fees
Net investment income including
reimbursement/waiver of fees 0.85% 1.11% 0.51% 0.36% 0.46% (4)
Portfolio Turnover Rate (5) 77% 67% 43% 103% 44%
</TABLE>

(1) For the period March 31, 1995 (Commencement of Operations) through October
31, 1995. The Fund converted to a master/feeder structure on November 1,
1995.

(2) From November 1, 1995 to May 31, 1999, the Fund recognized its
proportionate share of income, expenses and gains/losses of the underlying
portfolio, Schroder Emerging Markets Fund Institutional Portfolio
(Portfolio). Commencing June 1, 1999, income, expenses and gains/losses
were directly accrued to the Fund.

(3) Total return calculation do not reflect the payment of purchase or
redemption fees of 0.50%, respectively. Total returns would have been lower
had certain Fund expenses not been limited during the periods shown. (See
Note 3 to the Fund's financial statements). Total return calculations for a
period of less than one year are not annualized.

(4) Annualized.

(5) The portfolio turnover rates for the years after October 31, 1995 through
October 31, 1998 represent the turnover of the underlying portfolio,
Schroder Emerging Markets Fund Institutional Portfolio (Portfolio). For the
year ended October 31, 1999, the rate represents a combination of the
portfolio turnover rate of the Portfolio for the period from November 1,
1998 through May 31, 1999, during which time the Fund invested in the
Portfolio, and the portfolio turnover rate of the Fund for the period June
1, 1999 through October 31, 1999, during which time the Fund held direct
investments in a portfolio of securities.

<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 SERIES TRUST II
SCHRODER ALL-ASIA FUND

=================================================================================================
</TABLE>

<PAGE>

INVESTMENT ADVISER
Schroder Investment Management North America 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

SUBADMINISTRATOR AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110

TRANSFER AND DIVIDEND DISBURSING AGENT
Boston Financial Data Services, Inc.
66 Brooks Drive
Braintree, Massachusetts 02184
(800) 464-3108

COUNSEL
Ropes & Gray
One International Place
Boston, Massachusetts 02110

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, Massachusetts 02109

<PAGE>

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

SCHRODER CAPITAL FUNDS (DELAWARE)

SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO

The Fund's statement of additional information (SAI) and annual and semi-annual
reports to shareholders include additional information about the Fund. The SAI
and the financial statements included in the Fund's most recent annual report to
shareholders are incorporated by reference into this Prospectus, which means
they are part of this Prospectus for legal purposes. The Fund's annual report
discusses the market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year. 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)
P.O. Box 8507
Boston, MA 02266
800-464-3108

File No. 811-1911

<PAGE>

SCHRODERS

PROSPECTUS

March 1, 2000

SCHRODER CAPITAL FUNDS (DELAWARE)

SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO

ADVISOR SHARES

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

This Prospectus explains what you should know about the Fund before you invest.
Please read it carefully.

<PAGE>

TABLE OF CONTENTS
Page
----

SUMMARY INFORMATION 1

FEES AND EXPENSES 4

OTHER INVESTMENT STRATEGIES AND RISKS 5

MANAGEMENT OF THE FUND 9

HOW THE FUND'S SHARES ARE PRICED 11

HOW TO BUY SHARES 11

HOW TO SELL SHARES 14

ADDITIONAL INFORMATION ABOUT ADVISOR SHARES 15

DIVIDENDS AND DISTRIBUTIONS 15

TAXES 16

FINANCIAL HIGHLIGHTS 17

<PAGE>

SUMMARY INFORMATION

The summary for the Fund includes a bar chart that shows how the investment
returns of the Fund's Advisor Shares have varied from year to year. The bar
chart shows returns for each full calendar year since the Fund has had Advisor
Shares outstanding. The table following the bar chart shows how the Fund's
average annual returns for the last year and since inception of the Advisor
Shares compare to a broad-based securities market index. The bar chart and
table provide some indication of the risks of investing in the Fund by
showing the variability of its returns and by comparing the Fund's
performance to a broad measure of market performance. (Performance of the
Fund's Investor Shares is normally higher than that of its Advisor Shares
because the Investor Shares are subject to lower expenses.) PAST PERFORMANCE
IS NOT NECESSARILY AN INDICATION OF FUTURE PERFORMANCE. It is possible to
lose money on an investment in the Fund.

The Fund invests in issuers and countries 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 considers the risk of local political and/or economic
instability associated with particular countries and regions and the
liquidity of local markets. The Fund generally sells securities when they
reach fair valuation or when significantly more attractive investment
candidates become available.

The Fund also may do the following:

- Invest in securities of closed-end investment companies that invest
primarily in foreign securities, including securities of emerging
market issuers.

- Invest up to 35% of its assets in debt securities, including
lower-quality, high yielding debt securities (commonly known as "junk
bonds"), which entail certain risks.

<PAGE>

- PRINCIPAL RISKS.

- EMERGING MARKETS. The Fund may invest in "emerging market"
countries whose securities markets may experience heightened
levels of volatility. The risks of investing in emerging markets
include greater political and economic uncertainties than in
foreign developed markets, currency transfer restrictions, a more
limited number of potential buyers, and an emerging market
country's dependence on revenue from particular commodities or
international aid. Additionally, the securities markets and legal
systems in emerging market countries may only be in a
developmental stage and may provide few, or none, of the
advantages or protections of markets or legal systems available
in more developed countries. Emerging market countries may
experience extremely high levels of inflation, which may
adversely affect those countries' economies, currencies, and
securities markets. Also, emerging market issuers are often
smaller and less well-known than larger, more widely held
companies and involve certain special risks associated with
smaller capitalization companies.

- FOREIGN SECURITIES. Investments in foreign securities entail
risks not present in domestic investments including, among
others, risks related to political or economic instability,
currency exchange, and taxation.

- GEOGRAPHIC CONCENTRATION. There is no limit on the amount of the
Fund's assets that may be invested in securities of issuers
domiciled in any one country, although the Fund will normally
invest in at least three countries other than the United States.
To the extent that the Fund invests a substantial amount of its
assets in one country, it will be more susceptible to the
political and economic developments and market fluctuations in
that country than if it invested in a more geographically
diversified portfolio.

- NON-DIVERSIFIED MUTUAL FUND. The Fund is a "non-diversified"
mutual fund, and will invest its assets in a more limited number
of issuers than may diversified investment companies. To the
extent the Fund focuses on fewer issuers, its 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 generally or particular
companies in the portfolio.

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

- JUNK BONDS. Securities rated below investment grade ("junk
bonds") lack outstanding investment characteristics and have
speculative characteristics and are subject to greater credit and
market risks than higher-rated securities. The lower ratings of
junk bonds reflect a greater possibility that adverse changes in
the financial condition of the issuer or in general economic
conditions, or an unanticipated rise in interest rates, may
impair the ability of the issuer to make payments of interest and
principal. If this were to occur, the values of securities held
by the Fund may become more volatile.

<PAGE>

<TABLE>
<CAPTION>
Calendar Year End Annual Return
<S> <C>
1997 -5.41%
1998 -25.46%
1999 62.32%
</TABLE>

SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO

ADVISOR SHARES

During the periods shown above, the highest quarterly return was 27.27 % for the
quarter ended December 31, 1999, and the lowest was -22.09% for the quarter
ended September 30, 1998.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL ONE YEAR SINCE INCEPTION OF ADVISOR SHARES
RETURNS* (11/21/96)
(FOR PERIODS ENDING DECEMBER
31, 1999)
-----------------------------------------------------------------------------------------------
<S> <C> <C>
Schroder Emerging Markets Fund 60.77% 9.27%
Institutional Portfolio

-----------------------------------------------------------------------------------------------
Morgan Stanley Capital 66.41% 3.79%
International Emerging Markets
Free Index**

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

<PAGE>

** Unlike the bar chart, the Fund's average annual total returns shown in
the table above reflect the impact of a 0.50% Purchase Charge at the
time of purchase and a 0.50% Redemption Charge deducted at the end of
each period. The Index to which the Fund's average annual returns are
compared do not reflect the imposition of such charges.

* The Morgan Stanley Capital International Emerging Markets Free Index is an
unmanaged, market capitalization index of companies representative of the
market structure of 25 emerging countries in Europe, Latin America, and the
Pacific Basin. The Index represents actual buyable opportunities for the
non-domestic investor by taking into account local market restrictions on
share ownership by foreigners. For periods prior to November 30, 1998,
returns represent the MSCI EMF Index (ex-Malaysia).

<PAGE>

FEES AND EXPENSES

THESE TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
ADVISOR SHARES OF THE FUND.

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets):
Management Fees(2) 1.10%
Distribution (12b-1) Fees(3) 0%
Other Expenses (includes a 0.25% 0.50%
shareholder servicing fee)(3)
Total Annual Fund Operating Expenses 1.60%
Fee Waiver and/or Expense Limitation(4) 0.17%
Net Expenses(4) 1.43%
</TABLE>

(2) Management Fees include all fees payable to Schroder and its affiliates for
investment advisory and fund administration services.

(3) 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 attributable to its Advisor Shares, 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.

(4) The Net Expenses shown above reflect the effect of contractually imposed
expense limitations and/or fee waivers, in effect through October 31, 2000, on
the Total Annual Fund Operating Expenses of the Fund.

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 either retain all of your shares or redeem all
of your shares at the end of those periods. The Example assumes that you pay
a 0.50% Purchase Charge at the time of purchase and a 0.50% Redemption Charge
at the time of redemption. 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 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Assuming no redemption* $214 $557 $923 $1,952
Assuming full redemption
at end of period* $265 $611 $982 $2,022
</TABLE>

- --------------
* Assuming that the Fund's operating expenses remain the same as Net Expenses
set forth above, based on the other assumptions described above, your costs
would be as follows for 1 year, 3 years, 5 years, and 10 years, respectively:
$196, $504, $833, and $1,764 (assuming no redemption) or $248, $559, $892 and
$1,834 (assuming full redemption at end of period).

OTHER INVESTMENT STRATEGIES AND RISKS

<PAGE>

RISKS OF INVESTING IN THE FUND

- EMERGING MARKETS. The Fund intends to invest primarily in securities
of "emerging market" issuers, which are those domiciled or doing
business in emerging market countries. Specifically, an issuer will be
considered to be an emerging market issuer if Schroder determines
that: (1) it is organized under the laws of an emerging market
country; (2) its primary securities trading market is in an emerging
market country; (3) at least 50% of the issuer's revenues or profits
are derived from goods produced or sold, investments made, or services
performed in emerging market countries; or (4) at least 50% of its
assets are situated in emerging market countries.

The prices of securities of issuers in emerging market countries are
subject to greater volatility than those of issuers in more developed
countries. Investments in emerging market countries may present
market, credit, currency, liquidity, legal, political, and other risks
different from, or greater than, the risks of investing in developed
foreign countries. See "Foreign Securities" below. For example, the
securities markets and legal systems in emerging market countries may
only be in a developmental stage and may provide few, or none, of the
advantages or protections of markets or legal systems available in
more developed countries. Although many of the securities in which the
Fund may invest are traded on securities exchanges, they may trade in
limited volume, and the exchanges may not provide all of the
conveniences or protections provided by securities exchanges in more
developed markets. The Fund may also invest a substantial portion of
its assets in securities traded in the over-the-counter markets in
emerging market countries and not on any exchange, which may affect
the liquidity of the investment and expose the Fund to the credit risk
of its counterparties in trading those investments. Emerging market
countries may experience extremely high rates of inflation, which may
adversely affect those countries' economies and securities markets.

Certain Asian markets have experienced devaluation and/or significant
volatility during the past several years. To the extent that the Fund
focuses its investments in any Asian countries, Fund's investment
performance will be particularly sensitive to political, economic,
market, and other factors affecting those countries and issuers in
those countries.

- FOREIGN SECURITIES AND CURRENCIES. Except as otherwise noted in this
Prospectus, 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. 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 States. Foreign settlement procedures and trade regulations may
involve certain risks (such as delay in payment or

<PAGE>

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. Officials in foreign
countries may from time to time take actions in respect of their
currencies, which could significantly affect the value of a Fund's
assets denominated in those currencies or the liquidity of such
investments. For example, a foreign government may unilaterally
devalue its currency against other currencies, which would typically
have the effect of reducing the U.S. dollar value of investments
denominated in that currency. A foreign government may also limit the
convertibility or repatriation of its currency or assets denominated
in its currency, which would adversely affect the U.S. dollar value
and liquidity of investments denominated in that currency. 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 than it would have
had to convert at the time the Fund incurred the expense. The Fund
may, but is not required to, 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 the Fund's assets 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 and/or
gains 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.

- 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. Additionally, the Fund
may invest in junk bonds, which are lower-quality, high-yielding debt
securities rated below Baa or BBB by Moody's Investors Service, Inc.
or Standard & Poor's Ratings Services (or, if they are unrated,
determined by Schroder to be of comparable quality). See the Statement
of Additional Information for further descriptions of securities
ratings assigned by Moody's and Standard & Poor's. Lower-rated debt

<PAGE>

securities are predominantly speculative and tend to be more
susceptible than other debt securities to adverse changes in the
financial condition of the issuer, general economic conditions, or an
unanticipated rise in interest rates, which may affect an issuer's
ability to pay interest and principal. This would likely make the
values of the securities held by the Fund more volatile and could
limit the Fund's ability to liquidate its securities. Changes by
recognized rating services in their ratings of any fixed-income
security and in the perceived ability of an issuer to make payments of
interest and principal also may affect the value of these investments.

- U.S. GOVERNMENT SECURITIES. U.S. Government securities include a
variety of securities that differ in their interest rates, maturities,
and dates of issue. Securities issued or guaranteed by agencies or
instrumentalities of the U.S. Government may or may not be supported
by the full faith and credit of the United States or by the right of
the issuer to borrow from the U.S. Treasury.

- RISK OF SMALLER CAPITALIZATION COMPANIES. The Fund may invest 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 involved certain special risks. They are more likely than larger
companies to have limited product line, markets or financial
resources, or to depend on a small, inexperienced management group.
Securities of smaller companies may offer greater opportunities for
capital appreciation than larger companies, but may also involve
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 its
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 take longer for the prices of the
securities to reflect the full value of their issuers' 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 involves 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.

<PAGE>

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.

The Fund 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 enter into such
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.

<PAGE>

transactions, and, to increase total return. These may include
options, futures, and indices, for example. Derivatives involve the
risk that they may not work as intended due to unanticipated
developments in market conditions or other causes. Also, derivatives
often involve the risk that the other party to the transaction 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. A Fund investing in zero-coupon bonds is required to
distribute the income on these securities as the income accrues, even
though the Fund is not receiving the income in cash on a current
basis. Thus, the Fund may have to sell other investments, including
when it may not be advisable to do so, to make income distributions.

- 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 may 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"
strategies, the Fund would invest in high-quality fixed-income
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, which 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

<PAGE>

January 2000, Schroders plc agreed to sell its worldwide investment banking
business to Salomon Smith Barney. The transaction, which is expected to be
completed by May 2000, is subject to regulatory approvals and satisfaction of
closing conditions. Schroders plc will retain its asset management business.

- INVESTMENT ADVISORY FEES. Prior to June 1, 1999, the Fund invested
substantially all of its investible assets in Schroder Emerging
Markets Fund Institutional Portfolio (the "Portfolio"), a separate
portfolio of Schroder Capital Funds, an investment company also
managed by Schroder. During this time, the Fund paid investment
advisory fees indirectly at the Portfolio level, and did not pay
advisory fees directly to Schroder. Since June 1, 1999, the Fund has
paid investment advisory fees directly to Schroder according to the
same contractual fee rate previously paid at the Portfolio level. For
the fiscal year ended October 31, 1999, the Fund paid investment
advisory fees to Schroder (both directly and indirectly through the
Portfolio) at the annual rate of .88%, based on the average daily net
assets of the Fund. The amount paid by the Fund reflects the effect of
a 0.15% annual waiver of the advisory fees paid by the Portfolio and
the expense limitations and/or fee waivers in place for the Fund
described below.

- 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, 2000 to the extent that the Fund's total operating
expenses attributable to its Advisor Shares exceed the annual rate of
1.43%. Prior to June 1, 1999, Schroder observed an expense limitation
for the Fund's Advisor Shares at the annual rate of 1.70%. In
addition, Schroder and its affiliates have voluntarily undertaken,
until further notice, to limit their fees or to pay a portion of the
expenses incurred by the Fund in respect of its Advisor Shares so that
the Net Expenses of the Fund's Advisor Shares will not exceed the Net
Expenses of the Fund's Investor Shares by more than 0.25%.

- PORTFOLIO MANAGERS. Schroder's investment decisions for the Fund are
made by the investment team listed below, with the assistance of an
investment committee. The following portfolio managers have had
primary responsibility for making investment decisions for the Fund
and the Portfolio in which the Fund previously invested since the
inception. Their recent professional experience is also shown.

PORTFOLIO MANAGER SINCE RECENT PROFESSIONAL
----------------- ----- -------------------
EXPERIENCE
----------
<S> <C> <C>
John Troiano Inception (1995) Employed as an investment
professional at Schroder
since 1986. Mr. Troiano is
the Chief Executive and a
Director of Schroder, and a
Vice President of the
Trust, Schroder Capital
Funds, and Schroder Series
Trust.

Heather Crighton Inception (1995) Employed as an investment
professional at Schroder
since 1993. Ms. Crighton
is a Director and Senior
Vice President of Schroder.

<PAGE>

Mark Bridgeman Inception (1995) Employed as an investment
professional at Schroder
since 1990. Mr. Bridgeman
is a First Vice President
of Schroder.
</TABLE>

HOW THE FUND'S SHARES ARE PRICED

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 than 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 securities and assets for which market values are not ascertainable 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 translated into U.S. dollars based on the mid-market price of
such currencies against the U.S. dollar at the time when last quoted. 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
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 (through
Schroder Fund Advisors Inc., the distributor of the Trust's shares) or through a
service organization such as a bank, trust company, broker-dealer, or other
financial organization (a "Service Organization") having an arrangement with
Schroder Fund Advisors Inc. If you do not have a Service Organization, Schroder
Fund Advisors Inc. can provide you with a list of available firms. Your Service
Organization is responsible for forwarding all of the necessary documentation to
the Trust, and may charge you separately for its services.

Advisor Shares of the Fund are sold at their net asset value next determined
after the Trust receives your order, plus a purchase charge of 0.50% of the
amount invested. The purchase charge, which is not a sales charge, is assessed
and retained by the Fund to compensate other investors in the Fund for expenses
incurred in purchasing securities due to an investment in the Fund. The purchase
charge is not assessed on the reinvestment of dividends or distributions or on
purchases through an in-kind subscription. In order for you to receive the
Fund's next determined net asset value, the Trust must receive your order before
the close of regular trading on the New York Stock Exchange.

If the Advisor Shares you purchase will be held in your own name (rather than in
the name of your Service Organization), your payment for the shares must be
accompanied by a completed Account Application in proper form. The Trust or the
Trust's Transfer Agent, Boston Financial Data Services, Inc. may request and
delay acceptance of your order pending receipt of additional documentation, such
as

<PAGE>

copies of corporate resolutions and instruments of authority, from corporations,
administrators, executors, personal representatives, directors, or custodians.
You may obtain account Applications from the Transfer Agent at the address
listed below under "Purchases by Check", by calling the Trust at (800) 464-3108,
or from your Service Organization.

INVESTMENT MINIMUMS

The minimum investments for initial and additional purchases of Advisor Shares
of the Fund are as follows:

<TABLE>
<CAPTION>
Initial Additional
Investment Investments
---------- -----------
<S> <C> <C>
Regular Accounts $1,000,000 No minimum
</TABLE>

The Trust may, in its sole discretion, accept smaller initial or subsequent
investments. The Trust does not issue share certificates.

You also may meet the minimum initial investment requirement based on cumulative
purchases by means of a written Statement of Intention, expressing your
intention to invest at least the minimum investment amount applicable to the
Fund, or more, in Advisor Shares 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 Trust reserves the right to redeem your shares in the Fund
if you do not invest at least the minimum initial investment amount applicable
to your account by the end of the Statement of Intention period (taking into
account amounts you redeem during this period).

The Trust is authorized to reject any purchase order and to suspend the offering
of its shares for any period of time. The Trust may also change any
investment minimum from time to time.

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. You should direct your check and your completed
Account Application as follows:

<TABLE>
<CAPTION>
REGULAR MAIL OVERNIGHT OR EXPRESS MAIL
------------ -------------------------
<S> <C>
Schroder Mutual Funds Boston Financial Data Services, Inc.
P.O. Box 8507 Attn: Schroder Mutual Funds
Boston, MA 02266 66 Brooks Road
Braintree, MA 02184
</TABLE>

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

<PAGE>

PURCHASES BY BANK WIRE/TELEPHONE

Federal Reserve Bank wire instructions are as follows:

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. If six months have passed since
correspondence to the shareholder's address of record is returned then, unless
the Transfer Agent determines the shareholder's new address, dividends and other
distributions that have been returned to the Transfer Agent will be reinvested
in the Fund, and the checks will be canceled.

AUTOMATIC PURCHASES

If you purchase shares directly from the Trust and the shares are held in your
own name, you can make regular investments of $100 or more per month or quarter
in Advisor Shares of the Fund through automatic deductions from your bank
account. Please complete the appropriate section of the Account Application if
you would like to utilize this option. For more information, please call the
Trust at (800) 464-3108. If you purchase shares through a Service Organization,
your firm may also provide automatic purchase options. Please contact your
Service Organization for details.

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. Investors interested in purchases through
exchange should telephone Schroder at (800) 464-3108.

Schroder reserves the right to reject any particular investment.

<PAGE>

A pattern of purchases and redemption of the Fund's shares characteristics of
"market timing" strategies may be deemed by Schroder to be detrimental to the
Trust or the Fund. Currently, the Trust limits the number of "round trip"
purchases an investor may make. An investor makes a "round trip" purchase
when the investor purchases shares of the Fund, subsequently redeems those
shares and then again purchases shares of the Fund. If an investor completes
four round trip purchases in any twelve-month period, the Trust may refuse
any subsequent purchase order by that investor.

<PAGE>

HOW TO SELL SHARES

You may sell your Advisor Shares back to the Fund on any day the New York Stock
Exchange is open, either through your Service Organization or directly to the
Fund. If your shares are held in the name of a Service Organization, you may
only sell the shares through that Service Organization. The Service Organization
may charge you for its services. If you choose to sell your shares directly to
the Fund, you may do so 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 is the net asset value next determined after receipt of your
redemption request in good order, minus a redemption charge of 0.50% of the
amount redeemed. The redemption charge, which is not a sales charge, is assessed
and retained by the Fund to compensate the other investors in the Fund for
expenses incurred in connection with sales of portfolio securities. The
redemption charge is not assessed on shares acquired through the reinvestment of
dividends or distributions or on redemptions in kind. For purposes of computing
the redemption charge, redemptions by a shareholder are deemed to be made in the
following order: (i) from Advisor Shares purchased through the reinvestment of
dividends and distributions (with respect to which no redemption charge is
applied) and (ii) from Advisor Shares for which the redemption charge is
applicable, on a first-purchased, first-redeemed basis.

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. Unless otherwise agreed by the Trust, the telephone redemption
privilege may only be exercised to redeem shares worth $1,000 or more and not
more than $25,000. 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, or those acting through powers of attorney or similar
delegation.

<PAGE>

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 ("SEC") 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.

ADDITIONAL INFORMATION ABOUT ADVISOR SHARES

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 the Fund for which the Service 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 Service Plan 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 any
distribution 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, in the long run, may cost you more than paying other types of
sales charges imposed by other funds.

DIVIDENDS AND DISTRIBUTIONS

<PAGE>

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 gain 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.

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. 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 long-term 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.

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table on the following page is intended to help you
understand the financial performance of the Fund since the initial offering date
of the Fund's Advisor shares. Certain information reflects financial results for
a single Fund share. The total returns represent the total return for an
investment in Advisor Shares of the Fund, assuming reinvestment of all
dividends and distributions. The financial highlights presented below have
been audited by PricewaterhouseCoopers LLP, independent accountants to the
Fund. The audited financial statements for the Fund and the related
independent accountants' report are contained in the Fund's Annual Report and
are incorporated by reference into the Statement of Additional Information.
Copies of the Fund's Annual Report may be obtained without charge by writing
the Trust at P.O. Box 8507, Boston, Massachusetts 02266 (regular mail) or at
66 Brooks Drive, Braintree, Massachusetts 02184 (overnight or express mail),
or by calling (800) 464-3108.

<PAGE>

SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO - ADVISOR SHARES

(For an Advisor Share outstanding throughout the period.)

<TABLE>
<CAPTION>
PERIOD ENDED
FOR THE YEAR ENDED OCTOBER 31, OCTOBER 31,
------------------------------ -----------
<S> <C> <C> <C>
1999 1998 1997(1)
---- ---- -------
NET ASSET VALUE AT BEGINNING OF PERIOD $7.79 $11.11 $11.28
----- ------ ------
INCOME FROM INVESTMENT OPERATIONS:(2)
Net Investment Income 0.05 0.08 0.03
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency 2.75 (3.39) (0.19)
---- ------ ------
TOTAL FROM INVESTMENT OPERATIONS 2.80 (3.31) (0.16)
---- ------ ------
LESS DISTRIBUTIONS:
From Net Investment Income (0.01) (0.01) (0.01)
------ ------ ------
Total Distributions (0.01) (0.01) (0.01)
------ ------ ------
NET ASSET VALUE AT END OF PERIOD $10.58 $7.79 $11.11
====== ===== ======

TOTAL RETURN (3) 36.05% (29.81)% (1.42)%
RATIOS & SUPPLEMENTARY DATA
Net Assets at End of Period (in thousands) $35,637 $20,472 $25,280
Ratios to Average Net Assets: (2)
Expenses including reimbursement/ 1.52% 1.61% 1.66%(4)
waiver of fees
Expenses excluding reimbursement/ 1.60% 1.97% 2.03%(4)
waiver of fees
Net investment income including
reimbursement/waiver of fees 0.70% 0.82% 0.27%(4)
Portfolio Turnover Rate(5)- 77% 67% 43%(6)
</TABLE>

(1) Advisor Shares were first issued on November 21, 1996.

(2) Prior to June 1, 1999, the Fund recognized its proportionate share of
income, expenses and gains/losses of the underlying portfolio, Schroder
Emerging Markets Fund Institutional Portfolio (Portfolio). Commencing
June 1, 1999, income, expenses and gains/losses were directly accrued
to the Fund.

(3) Total return calculations do not reflect the payment of purchase or
redemption fees of 0.50%, respectively. Total returns would have been
lower had certain expenses not been reduced during the periods shown.
(See Note 3 to the Fund's financial statements). Total return
calculations for a period of less than one year are not annualized.

(4) Annualized.

(5) The portfolio turnover rates for the periods through October 31, 1998
represent the turnover of the underlying portfolio, Schroder Emerging
Markets Fund Institutional Portfolio (Portfolio). For the year ended
October 31, 1999, the rate represents a combination of the portfolio
turnover of the Portfolio for the period from November 1, 1998 through
May 31, 1999, during which time the Fund invested in the Portfolio and
the portfolio turnover rate of the Fund for the period June 1, 1999
through October 31, 1999, during which time the Fund held direct
investments in a portfolio of securities.

(6) Represents the Portfolio's portfolio turnover rate for the entire
fiscal year ended October 31, 1997.

<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 SERIES TRUST II
SCHRODER ALL-ASIA FUND

=======================================================================================================
</TABLE>

<PAGE>

INVESTMENT ADVISER
Schroder Investment Management North America 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

SUBADMINISTRATOR AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110

TRANSFER AND DIVIDEND DISBURSING AGENT
Boston Financial Data Services, Inc.
66 Brooks Drive
Braintree, Massachusetts 02184
(800) 464-3108

COUNSEL
Ropes & Gray
One International Place
Boston, Massachusetts 02110

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, Massachusetts 02109

<PAGE>

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

SCHRODER CAPITAL FUNDS (DELAWARE)

SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO

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)
P.O. Box 8507
Boston, MA 02266
800-464-3108

File No. 811-1911

<PAGE>

SCHRODER CAPITAL FUNDS (DELAWARE)

SCHRODER INTERNATIONAL FUND
SCHRODER EMERGING MARKETS FUND
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
SCHRODER GREATER CHINA FUND
SCHRODER U.S. DIVERSIFIED GROWTH FUND
SCHRODER U.S. SMALLER COMPANIES FUND
SCHRODER MICRO CAP FUND

FORM N-1A
PART B

STATEMENT OF ADDITIONAL INFORMATION

March 1, 2000

This Statement of Additional Information (SAI) is not a prospectus and is only
authorized for distribution when accompanied or preceded by a Prospectus for the
Funds, as amended or supplemented from time to time. This SAI relates to the
Funds' Investor Shares and Advisor Shares. Investor Shares and Advisor Shares
are offered through separate Prospectuses, each dated March 1, 2000. 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 800-464-3108.

Certain disclosure has been incorporated by reference into this SAI from the
Funds' annual report. For a free copy of the annual report, please call
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 15
TRUSTEES AND OFFICERS 23
SCHRODER AND ITS AFFILIATES 26
INVESTMENT ADVISORY AGREEMENTS 26
ADMINISTRATIVE SERVICES 29
DISTRIBUTOR 31
BROKERAGE ALLOCATION AND OTHER PRACTICES 32
DETERMINATION OF NET ASSET VALUE 35
REDEMPTIONS IN KIND 36
TAXES 37
PRINCIPAL HOLDERS OF SECURITIES 38
PERFORMANCE INFORMATION 38
CUSTODIAN 41
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT 41
INDEPENDENT ACCOUNTANTS 41
LEGAL COUNSEL 41
SHAREHOLDER LIABILITY 41
FINANCIAL STATEMENTS 41

APPENDIX A: HOLDERS OF OUTSTANDING SHARES A-1
APPENDIX B: RATINGS OF CORPORATE DEBT INSTRUMENTS B-1

<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. Schroder Investment Management North America Inc. ("Schroder") and its
corporate predecessors have served as investment adviser to the Trust since its
inception.

FUND CLASSIFICATION

The Trust currently offers shares of beneficial interest of eight series with
separate investment objectives and policies. Seven funds (the "Funds") are
offered pursuant to the Prospectuses and this SAI. Each Fund is an open-end,
management investment company registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"). Each Fund other than Schroder
Emerging Markets Fund and Schroder Greater China Fund is a "diversified"
investment company under the Investment Company Act. For a diversified
investment company, this means that with respect to 75% of a Fund's total
assets, the Fund may not invest in securities of any issuer if, immediately
after such investment, more than 5% of the total assets of the Fund (taken at
current value) would be invested in the securities of that issuer (this
limitation does not apply to investments in U.S. Government securities). None of
the diversified Funds is subject to this limitation with respect to the
remaining 25% of its total assets. Each of Schroder Emerging Markets Fund and
Schroder Greater China Fund is a "non-diversified" investment company under the
Investment Company Act, and therefore may invest its assets in a more limited
number of issuers than may diversified investment companies. To the extent a
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. Each Fund's shares (except Schroder Micro Cap Fund) are
presently divided into two classes, Investor Shares and Advisor Shares, although
Schroder International Fund does not currently offer 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 a
Fund's Investor Shares will normally be more favorable than that of the Fund's
Advisor Shares over the same time period. A Fund may suspend the sale of shares
at any time.

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 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 a 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, a Fund's dividends and other
distributions

<PAGE>

will normally differ between the two classes.

MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS

In addition to the principal investment strategies and the principal risks of
the Funds described in the Prospectuses, each Fund may employ other investment
practices and may be subject to additional risks, which are described below.
Because the following is a combined description of investment strategies and
risks for all the Funds, certain strategies or risks described below may not
apply to your Fund. Unless a strategy or policy described below is specifically
prohibited by the investment restrictions listed in the Prospectuses, under
"Investment Restrictions" in this SAI, or by applicable law, a Fund may engage
in each of the practices 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, to the extent permitted under "Investment
Restrictions" below and in the Prospectuses, each 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 a Fund for hedging purposes
or, to the extent permitted by applicable law, to increase its current return.
The Funds may also engage in derivative transactions involving foreign
currencies. See "Foreign Currency Transactions."

OPTIONS

Each 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. A Fund may write covered call options on its portfolio
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 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.

A Fund may terminate a call option that it has written before it expires by
entering into a closing purchase transaction. A 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.

<PAGE>

COVERED PUT OPTIONS. A 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.

A 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. A 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.

A 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.

A Fund may also purchase put and call options to enhance its current return. A
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. A 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 a 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 a 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, a Fund may be

<PAGE>

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 Funds' 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 Funds and other clients
of Schroder may be considered such a group. These position limits may restrict
the Funds' ability to purchase or sell options on particular securities.

As described below, each Fund generally expects that its options transactions
will be conducted on recognized exchanges. In certain instances, however, a 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
a Fund. Furthermore, over-the-counter options are not subject to the protection
afforded purchasers of exchange-traded options by The Options Clearing
Corporation. A 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. A Fund
will treat over-the-counter options (and, in the case of options sold 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, each Fund that
may invest in debt securities 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, each Fund that may invest in
equity securities may purchase and sell stock index futures to hedge against
changes in stock market prices. Each 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
a 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 -- a 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 a Fund will usually be
liquidated in this manner, a 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

<PAGE>

with the exchange on which futures are traded assumes responsibility for such
closing transactions and guarantees that a 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. A 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.

On other occasions, a 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 a 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 a
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.

A 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. A 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 a 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 a 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. A 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 a Fund
enters into and terminates an index futures transaction, the Fund may realize a
gain or loss. The following example

<PAGE>

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 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 a 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).

A 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 a Fund's investments successfully using futures contracts and
related options, a 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 portfolio
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, each of the Funds 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".

A 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. A 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 a 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.

<PAGE>

A 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 a 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 a Fund upon termination of the contract, assuming a 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 a 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 a 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 each 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, a 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.

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 a 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 a 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 a 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 a 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 a Fund's
portfolio securities sought to be hedged.

<PAGE>

Successful use of futures contracts and options by a 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 a 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 a Fund may invest (including
markets located in foreign countries) are relatively new and still developing
and may be subject to regulatory restraints, a 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 a Fund will engage in such transactions at any time or from time to time. A
Fund's ability to engage in hedging transactions may also be limited by certain
regulatory and tax considerations.

OTHER RISKS. Each Fund will incur brokerage fees in connection with its futures
and options transactions. In addition, while futures contracts and options on
futures may be purchased and sold to reduce certain risks, those transactions
themselves entail certain other risks. Thus, while a 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

Each 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 a 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, a Fund may dispose of a commitment prior to
settlement if Schroder deems it appropriate to do so. A Fund may realize
short-term profits or losses upon the sale of forward commitments.

REPURCHASE AGREEMENTS
<PAGE>

Each Fund (other than Schroder U.S. Diversified Growth 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,
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 a 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, a 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, a Fund may incur delay and costs in selling the
underlying security or may suffer a loss of principal and interest if a Fund is
treated as an unsecured creditor and required to return the underlying
collateral to the seller's estate.

WHEN-ISSUED SECURITIES

Each 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 a Fund and no interest accrues to the Fund. To the extent that assets of
a Fund are held in cash pending the settlement of a purchase of securities, that
Fund would earn no income. While a Fund may sell its right to acquire
when-issued securities prior to the settlement date, a Fund intends actually to
acquire such securities unless a sale prior to settlement appears desirable for
investment reasons. At the time a 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. Each 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

Each Fund (other than Schroder International Fund and Schroder U.S. Diversified
Growth) 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 a
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, a
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. A Fund will not lend portfolio securities
to borrowers affiliated with that Fund.

FOREIGN SECURITIES

<PAGE>

Each Fund may invest in securities principally traded in foreign markets.
Schroder International Fund, Schroder Emerging Markets Fund, Schroder
International Smaller Companies Fund, and Schroder Greater China Fund invest
primarily in foreign securities. Each Fund (other than Schroder Greater China
Fund) may also invest in Eurodollar certificates of deposit and other
certificates of deposit issued by United States branches of foreign banks and
foreign branches of United States banks.

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 a Fund's assets held abroad) 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 a Fund's
assets may be affected favorably or unfavorably by currency exchange rates and
exchange control regulations, and a 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 a 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 for a Fund
seeking current income, Schroder will consider the likely impact of foreign
taxes on the net yield available to the Fund and its shareholders. Income
received by a 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 a 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 a Fund will reduce its net
income available for distribution to shareholders.

EMERGING MARKET SECURITIES

Certain Funds, and particularly Schroder Emerging Markets Fund and Schroder
Greater China Fund, invest in securities of companies determined by Schroder
to be "emerging market" issuers. The risks of investing in foreign securities
are particularly high when securities of issuers based in developing or
emerging market countries are involved. Investing in emerging market
countries involves certain risks not typically associated with investing in
U.S. securities, and imposes risks greater than, or in addition to, risks of
investing in foreign, developed countries. These risks include: greater risks
of nationalization or expropriation of assets or confiscatory taxation;
currency devaluations and other currency exchange rate fluctuations; greater
social, economic and political uncertainty and instability (including the
risk of war); more substantial government involvement in the economy; less
government supervision and regulation of the securities markets and
participants in those markets; controls on foreign investment and limitations
on repatriation of invested capital and on a Fund's ability to exchange local
currencies for U.S. dollars; unavailability of currency hedging techniques in
certain emerging market countries; the fact that companies in emerging market
countries may be smaller, less seasoned and newly organized companies; the
difference in, or lack of, auditing and financial reporting standards, which
may result in unavailability of

<PAGE>

material information about issuers; the risk that it may be more difficult to
obtain and/or enforce a judgment in a court outside the United States; and
greater price volatility, substantially less liquidity, and significantly
smaller market capitalization of securities markets. Also, any change in the
leadership or politics of emerging market countries, or the countries that
exercise a significant influence over those countries, may halt the expansion
of or reverse the liberalization of foreign investment policies now occurring
and adversely affect existing investment opportunities.

In addition, a number of emerging market countries restrict, to various degrees,
foreign investment in securities. Furthermore, high rates of inflation and rapid
fluctuations in inflation rates have had, and may continue to have, negative
effects on the economies and securities markets of certain emerging market
countries.

FOREIGN CURRENCY TRANSACTIONS

Each 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. A Fund may engage in both "transaction hedging" and
"position hedging".

When it engages in transaction hedging, a Fund enters into foreign currency
transactions with respect to specific receivables or payables of that Fund
generally arising in connection with the purchase or sale of its portfolio
securities. A Fund will engage in transaction hedging when it desires to "lock
in" the U.S. dollar price of a security it has agreed to purchase or sell, or
the U.S. dollar equivalent of a dividend or interest payment in a foreign
currency. By transaction hedging, a Fund will attempt to protect against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the applicable foreign currency during the period between the
date on which the security is purchased or sold or on which the dividend or
interest payment is declared, and the date on which such payments are made or
received.

A Fund may purchase or sell a foreign currency on a spot (or cash) basis at the
prevailing spot rate in connection with transaction hedging. A Fund may also
enter into contracts to purchase or sell foreign currencies at a future date
("forward contracts") and purchase and sell foreign currency futures contracts.

For transaction hedging purposes, a Fund may also 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 a Fund the right
to assume a short position in the futures contract until expiration of the
option. A put option on currency gives a 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 a Fund the right to assume a long position in the futures
contract until the expiration of the option. A call option on currency gives a
Fund the right to purchase a currency at the exercise price until the expiration
of the option. A 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.

When it engages in position hedging, a Fund enters into foreign currency
exchange transactions to protect against a decline in the values of the foreign
currencies in which securities held by a Fund are denominated or are quoted in
their principal trading markets or an increase in the value of currency for
securities which a Fund expects to purchase. In connection with position
hedging, a 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. A Fund may also purchase or sell foreign currency on
a spot basis.

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 a Fund's
portfolio securities at the expiration

<PAGE>

or maturity of a forward or futures contract. Accordingly, it may be
necessary for a 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 a 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 a Fund if
the market value of such security or securities exceeds the amount of foreign
currency a Fund is obligated to deliver.

To offset some of the costs to a Fund of hedging against fluctuations in
currency exchange rates, a 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 a 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 a Fund will
utilize hedging transactions at any time or from time to time.

A 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 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, a 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 a 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, a Fund
would continue to be required to make daily cash payments of

<PAGE>

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

WARRANTS TO PURCHASE SECURITIES

Certain Funds may invest in warrants to purchase securities. Bonds issued with
warrants attached to purchase equity securities have many characteristics of
convertible bonds and their prices may, to some degree, reflect the performance
of the underlying stock. Bonds also may be issued with warrants attached to
purchase additional fixed income securities at the same coupon rate. A decline
in interest rates would permit the Fund to buy additional bonds at the favorable
rate or to sell the warrants at a profit. If interest rates rise, the warrants
would generally expire with no value.

ZERO-COUPON SECURITIES

Zero-coupon securities in which a 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 a 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.

<PAGE>

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, a
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.

SHORT SALES

To the extent permitted under "Investment Restrictions" below and in the
Prospectuses, a Fund may engage in "short sales", whereby a Fund sells a
borrowed security and has a corresponding obligation to the lender to return the
identical security. A Fund also may engage in short sales if, at the time of the
short sale, it owns or has the right to obtain, at no additional cost, an equal
amount of the security being sold short. This investment technique is known as a
short sale "against-the-box." In such a short sale, a seller does not
immediately deliver the securities sold and is said to have a short position in
those securities until delivery occurs. If a Fund engages in a short sale, the
collateral for the short position is maintained by the Fund's custodian or a
qualified sub-custodian. While the short sale is open, a Fund maintains in a
segregated account an amount of securities equal in kind and amount to the
securities sold short or securities convertible into or exchangeable for such
equivalent securities. These securities constitute the Fund's long position. A
Fund does not engage in short sales against-the-box for speculative purposes but
may, however, make a short sale as a hedge, when Schroder believes that the
price of a security may decline, causing a decline in the value of a security
owned by the Fund (or a security convertible or exchangeable for such security).
There are certain additional transaction costs associated with short sales
against-the-box, but Schroder endeavors to offset these costs with the income
from the investment of the cash proceeds of short sales. Under the Taxpayer
Relief Act of 1997, activities by a Fund which lock-in gain on an appreciated
financial instrument generally will be treated as a "constructive sale" of such
instrument which will trigger gain (but not loss) for federal income tax
purposes. Such activities may create taxable income in excess of the cash they
generate.

TEMPORARY DEFENSIVE STRATEGIES

As described in the Prospectuses, Schroder may at times judge that conditions
in the securities markets make pursuing a 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 a 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,
a Fund will use these alternate strategies. One risk of taking such temporary
defensive positions is that the Fund may not achieve its investment objective.

<PAGE>

INVESTMENT RESTRICTIONS

The Trust has adopted the following fundamental and non-fundamental investment
restrictions for each Fund. Each Fund's fundamental investment restrictions may
not be changed without the affirmative vote of a "majority of the outstanding
voting securities" of the affected Fund, which is defined in the Investment
Company 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 may be changed by the Trustees without shareholder
approval.

SCHRODER INTERNATIONAL FUND

Schroder International Fund will not:

FUNDAMENTAL POLICIES:

1. Invest more than 5% of its assets in the securities of any single
issuer. This restriction does not apply to securities issued by
the U.S. Government, its agencies or instrumentalities.

2. Purchase more than 10% of the voting securities of any one issuer.

3. Invest more than 10% of its assets in "illiquid securities" (securities
that cannot be disposed of within seven days at their then-current
value). For purposes of this limitation, "illiquid securities"
includes, except in those circumstances described below: (1)
"restricted securities", which are securities than cannot be resold to
the public without registration under federal securities law; and (2)
securities of issuers (together with all predecessors) having a record
of less than three years of continuous operation.

4. Invest 25% or more of the value of its total assets in any one
industry.

5. Borrow money, except from banks for temporary emergency purposes, and
then only in an amount not exceeding 5% of the value of the total
assets of the Fund.

6. Pledge, mortgage or hypothecate its assets to an extent greater than
10% of the value of its total assets.

7. Purchase securities on margin or sell short.

8. Make investments for the purpose of exercising control or management.

9. Purchase or sell real estate (provided that the Fund may invest in
securities issued by companies that invest in real estate or
interests therein).

10. Make loans to other persons (provided that for purposes of this
restriction, entering into repurchase agreements, acquiring corporate
debt securities and investing in U.S. Government obligations,
short-term commercial paper, certificates of deposit and bankers'
acceptances shall not be deemed to be the making of a loan).

11. Invest in commodities, commodity contracts other than foreign currency
forward contracts, or oil, gas and other mineral resource, lease, or
arbitrage transactions.

12. Write, purchase or sell options, puts, calls, straddles, spreads, or
combinations thereof.

<PAGE>

13. Underwrite securities issued by other persons (except to the extent
that, in connection with the disposition of its portfolio investments,
it may be deemed to be an underwriter under U.S. securities laws).

14. Invest in warrants, valued at the lower of cost or market, to more than
5% of the value of the Fund's net assets. Included within that amount,
but not to exceed 2% of the value of the Fund's net assets, may be
warrants that are not listed on the New York or American Stock
Exchange. Warrants acquired by the Fund in units or attached to
securities may be deemed to be without value.

15. Purchase more than 3% of the outstanding securities of any closed-end
investment company. Any such purchase of securities issued by a
closed-end investment company will otherwise be made in full compliance
with Sections 12(d)(1)(a)(i), (ii) and (iii) of the Investment Company
Act.

NON-FUNDAMENTAL POLICY:

Schroder International Fund will not invest in restricted securities. This
policy does not include restricted securities eligible for resale to qualified
institutional purchasers pursuant to Rule 144A under the Securities Act of 1933,
as amended, that are determined to be liquid by Schroder pursuant to guidelines
adopted by the Board of Trustees of Schroder Capital Funds. Such guidelines take
into account trading activity for such securities and the availability of
reliable pricing information, among other factors. If there is a lack of trading
interest in particular Rule 144A securities, these securities may be illiquid.

SCHRODER EMERGING MARKETS FUND

Schroder Emerging Markets Fund will not:

FUNDAMENTAL POLICIES:

1. Purchase a security if, as a result, more than 25% of the Fund's total
assets would be invested in securities of issuers conducting their
principal business activities in the same industry. For purposes of
this limitation, there is no limit on: (1) investments in U.S.
Government securities, in repurchase agreements covering U.S.
Government securities, in securities issued by the states, territories
or possessions of the United States or in foreign government
securities; or (2) investment in issuers domiciled in a single
jurisdiction. Notwithstanding anything to the contrary, to the extent
permitted by the Investment Company Act, the Fund may invest in one or
more investment companies; provided that, except to the extent that it
invests in other investment companies pursuant to Section 12(d)(1)(A)
of the Investment Company Act, the Fund treats the assets of the
investment companies in which it invests as its own for purposes of
this policy.

2. Borrow money if, as a result, outstanding borrowings would exceed an
amount equal to one-third of the Fund's total assets.

3. Purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the Fund
from investing in securities or other instruments backed by real estate
or securities of companies engaged in the real estate business).

4. Make loans to other parties. For purposes of this limitation, entering
into repurchase agreements, lending securities and acquiring any debt
security are not deemed to be the making of loans.

5. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the Fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities).

<PAGE>

6. Underwrite (as that term is defined in the Securities Act of 1933, as
amended) securities issued by other persons except, to the extent that
in connection with the disposition of its assets, the Fund may be
deemed to be an underwriter.

7. Issue any class of senior securities except to the extent consistent
with the Investment Company Act.

NONFUNDAMENTAL POLICIES:

1. The Fund is "non-diversified" as that term is defined in the Investment
Company Act. To the extent required to qualify as a regulated
investment company under the Internal Revenue Code of 1986, as amended,
the Fund may not purchase a security (other than a U.S. Government
security or a security of an investment company) if, as a result: (1)
with respect to 50% of its assets, more than 5% of the Fund's total
assets would be invested in the securities of any single issuer; (2)
with respect to 50% of its assets, the Fund would own more than 10% of
the outstanding securities of any single issuer; or (3) more than 25%
of the Fund's total assets would be invested in the securities of any
single issuer.

2. For purposes of the limitation on borrowing, the following are not
treated as borrowings to the extent they are fully collateralized: (1)
the delayed delivery of purchase securities (such as the purchase of
when-issued securities); (2) reverse repurchase agreements; (3)
dollar-roll transactions; and (4) the lending of securities.

3. Invest more than 15% of its net assets in "illiquid securities", which
include: (1) securities that cannot be disposed of within seven days at
their then-current value; (2) repurchase agreements not entitling the
holder to payment of principal within seven days; and (3) securities
subject to restrictions on the sale of the securities to the public
without registration under the Securities Act of 1933, as amended,
("restricted securities") that are not readily marketable. The Fund may
treat certain restricted securities as liquid pursuant to guidelines
adopted by the Board of Trustees of the Trust or the Board of Schroder
Capital Funds, as the case may be.

4. Make investments for the purpose of exercising control of an issuer.
Investments by the Fund in entities created under the laws of foreign
countries solely to facilitate investment in securities in that country
will not be deemed the making of investments for the purpose of
exercising control.

5. Invest in securities of another investment company, except to the
extent permitted by the Investment Company Act.

6. Sell securities short, unless it owns or has the right to obtain
securities equivalent in kind and amount to the securities sold short
(short sales "against-the-box"), and provided that transactions in
futures contracts and options are not deemed to constitute selling
securities short.

7. Purchase securities on margin, except that the Fund may use short-term
credit for the clearance of its portfolio's transactions, and provided
that initial and variation margin payments in connection with futures
contracts and options on futures contracts shall not constitute
purchasing securities on margin.

8. Lend a security if, as a result, the amount of loaned securities would
exceed an amount equal to one-third of the Fund's total assets.

<PAGE>

SCHRODER INTERNATIONAL SMALLER COMPANIES FUND

Schroder International Smaller Companies Fund will not:

<PAGE>

FUNDAMENTAL POLICIES:

1. With respect to 75% of it assets, purchase a security other than a
security issued or guaranteed by the U.S. Government, its agencies or
instrumentalities or a security of an investment company if, as a
result, more than 5% of the Fund's total assets would be invested in
the securities of a single issuer or the Fund would own more than 10%
of the outstanding voting securities of any single issuer.

2. Concentrate investments in any particular industry; therefore, the Fund
will not purchase the securities of companies in any one industry if,
thereafter, 25% or more of the Fund's total assets would consist of
securities of companies in that industry. This restriction does not
apply to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. An investment of more than 25% of the
Fund's assets in the securities of issuers located in one country does
not contravene this policy.

3. Borrow money in excess of 33 1/3% of its total assets taken at market
value (including the amount borrowed) and then only from a bank as a
temporary measure for extraordinary or emergency purposes, including to
meet redemptions or to settle securities transactions that may
otherwise require untimely dispositions of portfolio securities.

4. Purchase or sell real estate, provided that the Fund may invest in
securities issued by companies which invest in real estate or
interests therein.

5. Make loans to other persons, provided that for purposes of this
restriction, entering into repurchase agreements or acquiring any
otherwise permissible debt securities or engaging in securities loans
shall not be deemed to be the making of a loan.

6. Invest in commodities or commodity contracts other than forward foreign
currency exchange contracts.

7. Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments,
it may be deemed to be an underwriter under U.S. securities laws.

8. Issue senior securities except to the extent permitted by the
Investment Company Act.

NON-FUNDAMENTAL POLICY:

1. As a non-fundamental policy, the Fund will not invest more than 15% of
its assets in securities determined by Schroder to be illiquid. Certain
securities that are restricted as to resale may nonetheless be resold
by the Fund in accordance with Rule 144A under the Securities Act of
1933, as amended. Such securities may be determined by Schroder to be
liquid for purposes of compliance with the limitation on the Fund's
investment in illiquid securities.

SCHRODER GREATER CHINA FUND

Schroder Greater China Fund will not:

<PAGE>

FUNDAMENTAL POLICIES:

(1) 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.

(2) Acquire more than 10% of the voting securities of any issuer.

<PAGE>

(3) 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.

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

(5) 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.)

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

(7) 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.

(8) 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.

NON-FUNDAMENTAL POLICIES:

1. 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).

SCHRODER U.S. DIVERSIFIED GROWTH FUND

Schroder U.S. Diversified Growth Fund will not:

FUNDAMENTAL POLICIES:

1. Issue senior securities except that: (1) it may borrow money from a
bank on its promissory note or other evidence of indebtedness (any such
borrowing may not exceed one-third of the Fund's total assets after the
borrowing); (2) if at any time such borrowing exceeds such one-third
limitation, the Fund would within three days thereafter (not including
Sundays or holidays) or such longer period as the Securities and
Exchange Commission may prescribe by rules and regulations, reduce its
borrowings to the limitation; and (3) might or might not be secured
and, if secured, all or any part of the Fund's assets could be pledged.
To comply with such limitations, the Fund might be required to dispose
of certain assets when it might be disadvantageous to do so. Any such
borrowings would be subject to Federal Reserve Board regulations. (As a
non-fundamental policy, the Fund does not borrow for investment
purposes.)

2. Effect short sales, purchase any security on margin or write or
purchase put and call options.

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

<PAGE>

4. Invest 25% or more of the value of its total assets in any one
industry.

5. Engage in the purchase and sale of illiquid interests in real estate,
including illiquid interests in real estate investment trusts.

6. Engage in the purchase and sale of commodities or commodity contracts.

7. Invest in companies for the purpose of exercising control or
management.

8. Underwrite securities of other issuers, except that the Fund may
acquire portfolio securities, not in excess of 10% of the value of its
total assets, under circumstances where if sold it might be deemed to
be an underwriter for the purposes of the Securities Act of 1933,
as amended.

9. Make loans to other persons except that it may purchase evidences of
indebtedness of a type distributed privately to financial institutions
but not in excess of 10% of the value of its total assets.

10. Acquire securities described in the two immediately preceding
fundamental policies which in the aggregate exceed 10% of the value of
the Fund's total assets.

11. Invest in other investment companies.

NON-FUNDAMENTAL POLICIES:

1. Invest more than 10% of its total assets in illiquid securities,
including securities described in items 8 and 9 above and repurchase
agreements maturing more than seven days after they are entered
into.

2. Engage in writing, buying or selling of stock index futures, options
on stock index futures, financial futures contracts or options thereon.

SCHRODER U.S. SMALLER COMPANIES FUND

Schroder U.S. Smaller Companies Fund will not:

FUNDAMENTAL POLICIES:

1. Borrow money, except that the Fund may borrow from banks or by entering
into reverse repurchase agreements, provided that such borrowings do
not exceed 33 1/3% of the value of the Portfolio's total assets
(computed immediately after the borrowing).

2. Underwrite securities of other companies (except insofar as the Fund
might be deemed to be an underwriter in the resale of any securities
held in its portfolio).

3. Invest in commodities or commodity contracts (other than covered call
options, put and call options, stock index futures, and options on
stock index futures and broadly-based stock indices, all of which are
referred to as Hedging Instruments, which it may use as permitted by
any of its other fundamental policies, whether or not any such Hedging
Instrument is considered to be a commodity or a commodity contract).

4. Purchase securities on margin; however, the Fund may make margin
deposits in connection with any Hedging Instruments, which it may use
as permitted by any of its other fundamental policies.

5. Purchase or write puts or calls except as permitted by any of its other
fundamental policies.

6. Lend money except in connection with the acquisition of that portion of
publicly-distributed debt

<PAGE>

securities which the Fund's investment policies and restrictions
permit it to purchase; the Fund may also make loans of portfolio
securities and enter into repurchase agreements.

7. Pledge, mortgage or hypothecate its assets to an extent greater than
10% of the value of the total assets of the Fund; however, this does
not prohibit the escrow arrangements contemplated by the put and call
activities of the Fund or other collateral or margin arrangements in
connection with any of the Hedging Instruments, which it may use as
permitted by any of its other fundamental policies.

8. Invest in companies for the purpose of acquiring control or management
thereof.

9. Invest in interests in oil, gas or other mineral exploration or
development programs (but may purchase readily marketable securities of
companies which operate, invest in, or sponsor such programs).

10. Invest in real estate or in interests in real estate, but may purchase
readily marketable securities of companies holding real estate or
interests therein.

NON-FUNDAMENTAL POLICY:

SCHRODER MICRO CAP FUND

Schroder Micro Cap Fund will not:

FUNDAMENTAL POLICIES:

1. Underwrite securities of other companies (except insofar as the Fund
might be deemed to be an underwriter in the resale of any securities
held in its portfolio).

2. Invest in commodities or commodity contracts (other than Hedging
Instruments, which it may use as permitted by any of its other
fundamental policies, whether or not any such Hedging Instrument is
considered to be a commodity or a commodity contract).

3. Purchase securities on margin; however, the Fund may make margin
deposits in connection with any Hedging Instruments, which it may
use as permitted by any of its other fundamental policies.

4. Purchase or write puts or calls except as permitted by any of its other
fundamental policies.

5. Lend money except in connection with the acquisition of that portion of
publicly-distributed debt securities that the Fund's investment
policies and restrictions permit it to purchase; the Fund may also make
loans of portfolio securities and enter into repurchase agreements.

6. Pledge, mortgage or hypothecate its assets to an extent greater than
10% of the value of the total assets of the Fund; however, this does
not prohibit the escrow arrangements contemplated by the put and call
activities of the Fund or other collateral or margin arrangements in
connection with

<PAGE>

any of the Hedging Instruments, which it may use as permitted by any
of its other fundamental policies.

7. Invest in companies for the purpose of acquiring control or management
thereof, except that the Fund may invest in other investment companies
to the extent permitted under the Investment Company Act or by rule or
exemption thereunder.

8. Invest in interests in oil, gas or other mineral exploration or
development programs (but may purchase readily marketable securities
of companies that operate, invest in, or sponsor such programs).

9. Invest in real estate or in interests in real estate, but may
purchase readily marketable securities of companies holding real estate
or interests therein.

NON-FUNDAMENTAL POLICY:

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 Investment Management North America Inc. ("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
Funds' 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. The mailing
address for each of the Officers and Trustees is 787 Seventh Avenue, New
York, New York 10019.

(*) Nancy A. Curtin, Trustee and Chairman of the Trust. 42. Trustee and
Chairman, Schroder Capital Funds, Schroder Series Trust, and Schroder Series
Trust II. Managing Director, Schroder. Director, Schroder Investment Management
North America Limited. Vice Chairman and Director, Schroder Fund Advisors Inc.
Formerly, Director, Barings Asset Management.

David N. Dinkins, Trustee. 72. Trustee, Schroder Capital Funds,
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.

John I. Howell, Trustee. 83. Trustee, Schroder Capital Funds,
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. 49. Trustee, Schroder Capital Funds, and
Schroder Series Trust. Partner, Wunder, Knight, Levine, Thelen & Forscey.
Director, Comsat Corp., Medicis Pharmaceutical

<PAGE>

Corp., and Whitman Education Group, Inc. Formerly, Campaign Manager,
Clinton/Gore '96.

Peter E. Guernsey, Trustee. 78. Trustee, Schroder Capital Funds,
Schroder Series Trust, and Schroder Series Trust II. Formerly, Senior Vice
President, Marsh & McLennan, Inc.

(*) Sharon L. Haugh, Trustee. 53. Trustee, Schroder Capital Funds,
and Schroder Series Trust. Director and Chairman, Schroder. Director and
Chairman, Schroder Fund Advisors Inc.

William L. Means, Trustee. 64. Trustee, Schroder Capital Funds,
Schroder Series Trust, and Schroder Series Trust II. Formerly, Chief
Investment Officer, Alaska Permanent Fund Corporation.

Clarence F. Michalis, Trustee. 78. Trustee, Schroder Capital
Funds, and Schroder Series Trust. Chairman of the Board of Directors,
Josiah Macy, Jr. Foundation.

Hermann C. Schwab, Trustee. 80. Trustee, Schroder Capital Funds,
and Schroder Series Trust. Trustee, St. Luke's/Roosevelt Hospital Center.
Formerly, consultant to Schroder Capital Management International Inc.

Alexandra Poe, President of the Trust. 39. First Vice President,
Schroder. Senior Vice President, Secretary and General Counsel, Schroder
Fund Advisors, Inc. President, Schroder Capital Funds and Schroder Series
Trust. Assistant Secretary, Schroder Series Trust II. Formerly, Attorney,
Gordon , Altman, Butowsky, Weitzen, Shalov & Wein and Vice President and
Counsel, Citibank, N.A.

Mark J. Astley, Vice President of the Trust. 36. First Vice
President, Schroder. Formerly, employed by various affiliates of Schroder in
various positions in the investment research and portfolio management areas.

Robert G. Davy, Vice President of the Trust. 38. 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.

Margaret H. Douglas-Hamilton, Vice President of the Trust. 58.
Director, Senior Vice President and Secretary, Schroder.

Richard R. Foulkes, Vice President of the Trust. 54. Director and
Deputy Chairman, Schroder. Director and Executive Vice President of Schroder
Investment Management North America Limited.

Michael Perelstein, Vice President of the Trust. 44. Director and
Senior Investment Officer, Schroder. Formerly, Managing Director of MacKay -
Shields Financial Corp.

Catherine A. Mazza, Vice President of the Trust. 40. Director and
Senior Vice President, Schroder. Executive Vice President and Director,
Schroder Fund Advisors Inc. Vice President, Schroder Capital Funds, and
Schroder Series Trust. Formerly, Vice President, Alliance Capital Management
L.P.

Jane P. Lucas, Vice President of the Trust. 38. Senior Vice
President, Schroder.

Alan Mandel, Secretary, Treasurer, and Chief Financial Officer of
the Trust. 42. Secretary, Schroder Capital Funds and Clerk, Schroder Series
Trust. Treasurer and Chief Financial Officer, Schroder Capital Funds and
Schroder Series Trust. Assistant Treasurer, Schroder Series Trust II. First
Vice President, Schroder. Formerly, Director of Mutual Fund Administration
for Salomon Brothers Asset

<PAGE>

Management, and prior thereto, Chief Financial Officer and Vice President of
Hyperion Capital Management.

Fergal Cassidy, Assistant Treasurer of the Trust. 30. Assistant
Treasurer, Schroder Capital Funds and Schroder Series Trust. Treasurer and
Chief Financial Officer, Schroder Series Trust II. Vice President and
Treasurer, Schroder. Treasurer and Chief Financial Officer, Schroder Fund
Advisors Inc. Formerly, Senior Accountant, Concurrency Management Corp.

John A. Troiano, Vice President of the Trust. 41 Director and
Chief Executive, Schroder. Formerly, employed by affiliates of Schroder in
various positions in the investment research and portfolio management areas.

Ira L. Unschuld, Vice President of the Trust. 34. Director and
Senior Vice President, Schroder.

Carin Muhlbaum, Assistant Secretary of the Trust. 37. Assistant
Secretary, Schroder Capital Funds and Assistant Clerk, Schroder Series Trust.
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. 36. Assistant
Secretary, Schroder Capital Funds and Assistant Clerk, Schroder Series Trust.
Associate, Schroder. Assistant Vice President, Schroder Fund Advisors Inc.
Formerly, Mutual Fund Specialist, Wilkie Farr & Gallagher and Fund
Administrator, Furman Selz LLC.

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 Investment Company
Act) of the Trust, Schroder, or Schroder Fund Advisors Inc. ("Disinterested
Trustees") receive an annual retainer of $11,000 for their services as Trustees
of all open-end investment companies distributed by Schroder Fund Advisors Inc.
with the exception of Schroder Series Trust II, and $1,250 per meeting attended
in person or $500 per meting attended by telephone. Members of an Audit
Committee for one or more of such investment companies receive an additional
$1,000 per year. Payment of the annual retainer is allocated among such
investment companies based on their relative net assets. Payments of meeting
fees are allocated only among those investment companies to which the meeting
relates.

The table below sets forth information regarding compensation paid for the
fiscal year ended October 31, 1999 to the Disinterested Trustees by the Trust
and other funds in the Schroder "Fund Complex" (as defined below).

<TABLE>
<CAPTION>
COMPENSATION TABLE

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

Aggregate Total Compensation from Trust
Name of Compensation and Fund Complex
Trustee from Trust Paid to Trustees*
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
David N. Dinkins $7,267 $16,250
- -----------------------------------------------------------------------------------------------------------
Peter E. Guernsey $7,570 $26,500
- -----------------------------------------------------------------------------------------------------------
John I. Howell $9,426 $29,000
- -----------------------------------------------------------------------------------------------------------
Peter S. Knight $7,570 $17,000
- -----------------------------------------------------------------------------------------------------------

<PAGE>

William L. Means** $7,570 $26,500
- -----------------------------------------------------------------------------------------------------------
Clarence F. Michalis $7,570 $17,000
- -----------------------------------------------------------------------------------------------------------
Hermann C. Schwab $7,570 $17,000
- -----------------------------------------------------------------------------------------------------------
</TABLE>

* The Total Compensation listed in column (3) for each Trustee includes
compensation for services as 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. SCF II
ceased operations and was substantially liquidated in July 1999.

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

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.

SCHRODER AND ITS AFFILIATES

Schroder (together with its predecessors) has served as the investment adviser
for each of the Funds since their 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 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
worldwide investment banking and investment management businesses, and as of
June 30, 1999, had under management assets of approximately $208 billion.
Schroder's address is 787 Seventh Avenue, New York, New York 10019.

In January 2000, Schroders plc agreed to sell its worldwide investment banking
business to Salomon Smith Barney. The transaction, which is expected to be
completed by May 2000, is subject to regulatory approvals and satisfaction of
closing conditions. Schroders plc will retain its asset management businesses.
Schroder Fund Advisors Inc., the Trust's principal underwriter, is a
wholly-owned subsidiary of Schroder Investment Management North America Inc.

INVESTMENT ADVISORY AGREEMENTS

Under Amended and Restated Investment Advisory Agreements (the "Advisory
Agreements") between the Trust and Schroder, Schroder, at its expense, provides
the Funds 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
each Fund.

Under the Advisory Agreements, Schroder is required to regularly provide the
Funds with investment research, advice, and supervision and furnishes
continuously investment programs consistent with the investment objectives and
policies of the various Funds, and determines, for the various Funds, what
securities shall be purchased, what securities shall be held or sold, and what
portion of a Fund's assets shall be held uninvested, subject always to the
provisions of the Trust's Trust Instrument and By-laws, and of the Investment
Company Act, and to a Fund's investment objectives, policies, and restrictions,
and subject

<PAGE>

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 Agreements, 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 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
Funds' 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 Agreements may be reduced in any year
if a 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 Agreements provide that Schroder shall not be subject to any
liability for any error of judgment or mistake of law or for any loss suffered
by the Trust in connection with rendering service to the Trust in the absence of
willful misfeasance, bad faith, gross negligence, or reckless disregard of its
duties.

The Advisory Agreements may be terminated without penalty by vote of the
Trustees as to any Fund, by the shareholders of that Fund, or by Schroder on 60
days' written notice. Each Advisory Agreement also terminates without payment of
any penalty in the event of its assignment. In addition, each Advisory Agreement
may be amended only by a vote of the shareholders of the affected Fund(s), and
each 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 a 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 Investment Company Act.

Subject to the discretion and control of Schroder, Schroder Invesment Management
International Limited ("SIMI"), an affiliate of Schroder, serves as subadviser
to Schroder International Smaller Companies Fund pursuant to an Investment
Subadvisory Agreement among Schroder, SIMIL, and the Fund.

THE FORMER RELATED PORTFOLIOS. Prior to June 1, 1999 (or September 20, 1999 with
respect to Schroder Emerging Markets Fund), each Fund (other than Schroder U.S.
Diversified Growth Fund, Schroder Greater China Fund, and Schroder Micro Cap
Fund) invested all of its assets in a related portfolio (each, a "Former Related
Portfolio" and collectively the "Former Related Portfolios") having the same
investment objectives and substantially the same investment policies as the
relevant Fund. As long as a Fund remained completely invested in a portfolio (or
any other investment company), Schroder was not entitled to receive any
investment advisory fee from the Fund.

Schroder was the investment advisor to each of the Former Related Portfolios
pursuant to investment advisory agreements (each a "Portfolio Advisory
Agreement") between Schroder and Schroder Capital Funds, on behalf of the Former
Related Portfolio. Schroder received an investment advisory fee with

<PAGE>

respect to each Former Related Portfolio. Each Portfolio Advisory Agreement
was the same in all material respects as the Advisory Agreements, except that
the annual advisory fee payable to Schroder by the Former Related Portfolio
of Schroder International Fund was 0.45% of the Portfolio's average daily net
assets and the annual advisory fee payable to Schroder by Schroder
International Fund under its Advisory Agreement is 0.50% up to $100 million,
0.40% of the next $150 million, and 0.35% in excess of $250 million, with
respect to the Fund's average daily net assets. Schroder has contractually
agreed that the annual advisory fee paid to it by Schroder International Fund
through October 31, 2000 will be limited to 0.45% of the Fund's average daily
net assets. Each of the Funds that invested in a Former Related Portfolio
bore a proportionate part of the investment advisory fees paid by such
portfolio (based on the percentage of that portfolio's assets attributable to
the Fund).

RECENT INVESTMENT ADVISORY FEES. In June of 1999, Schroder Emerging Markets
Fund, Schroder U.S. Smaller Companies Fund, and Schroder Micro Cap Fund changed
their fiscal year end from May 31 to October 31. The following table sets forth
the investment advisory fees paid by each of these Funds during three most
recent fiscal years ended May 31, and for the period June 1, 1999 through
October 31, 1999. In the case of Schroder Emerging Markets Fund and Schroder
U.S. Smaller Companies Fund, these fees include fees paid indirectly through the
Former Related Portfolios (for periods through September 20, 1999 and May 31,
1999, respectively) and directly to Schroder (since September 20, 1999 and June
1, 1999, respectively). The fees listed in the following table reflect
reductions pursuant to expense limitations and/or fee waivers in effect during
such periods.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Investment
Advisory Fees Investment Investment Investment
Paid for the Advisory Fees Advisory Fees Advisory Fees
Period 6/1/99 Paid for Fiscal Paid for Fiscal Paid for Fiscal
through Year Ended Year Ended Year Ended
Fund 10/31/99 5/31/99 5/31/98 5/31/97
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Schroder Emerging $0 $0 $2 N/A
Markets Fund
- --------------------------------------------------------------------------------------------------------
Schroder U.S. Smaller $76,803 $350,140 $254,728 $49,878
Companies Fund
- --------------------------------------------------------------------------------------------------------
Schroder Micro Cap $49,655 $30,004 $0 N/A
Fund
- --------------------------------------------------------------------------------------------------------
</TABLE>

The following table sets forth the investment advisory fees paid by each of the
remaining Funds during the three most recent fiscal years, including fees paid
indirectly through the Former Related Portfolios (for periods through May 31,
1999) and directly to Schroder (since June 1, 1999). The fees listed in the
following table reflect reductions pursuant to expense limitations and/or fee
waivers in effect during such periods.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Investment Investment Investment
Advisory Fees Advisory Fees Advisory Fees
Paid for Fiscal Paid for Paid for Fiscal
Year Ended Fiscal Year Year Ended
Fund 10/31/99 Ended 10/31/98 10/31/97
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Schroder International Fund $565,892 $718,360 $844,215
- -------------------------------------------------------------------------------------
Schroder International $0 $0 $0
Smaller Companies Fund
- -------------------------------------------------------------------------------------

<PAGE>

- -------------------------------------------------------------------------------------
Schroder U.S. Diversified $101,331 $60,203 $90,466
Growth Fund
- -------------------------------------------------------------------------------------
Schroder Greater China Fund $0 N/A N/A
- -------------------------------------------------------------------------------------
</TABLE>

WAIVED FEES. For the periods shown above, a portion of the advisory fees payable
to Schroder (including fees payable by the Former Related Portfolio) were waived
in the following amounts pursuant to expense limitations and/or fee waivers
observed by Schroder for the noted Fund during such periods.

<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Fees Waived
During the Fees Waived Fees Waived Fees Waived
Period 6/1/99 During Fiscal During Fiscal During Fiscal
Fund through 10/31/99 Year Ended Year Ended Year Ended
5/31/99 5/31/98 5/31/97
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Schroder Emerging Markets $65,719 $10,953 $20 N/A
Fund
- ------------------------------------------------------------------------------------------------------
Schroder U.S. Smaller $29,847 $0 $0 $10,038
Companies Fund
- ------------------------------------------------------------------------------------------------------
Schroder Micro Cap Fund $37,550 $72,211 $26,896 N/A
- ------------------------------------------------------------------------------------------------------

<CAPTION>
- -------------------------------------------------------------------------------------
Fees Waived Fees Waived Fees Waived
During Fiscal During Fiscal During Fiscal
Year Ended Year Ended Year Ended
Fund 10/31/99 10/31/98 10/31/97
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Schroder International Fund $73,657 $38,224 $47,444
- -------------------------------------------------------------------------------------
Schroder International $71,451 $51,558 $60,033
Smaller Companies Fund
- -------------------------------------------------------------------------------------
Schroder U.S. Diversified $60,451 $40,931 $28,422
Growth Fund
- -------------------------------------------------------------------------------------
Schroder Greater China Fund $102,172 N/A N/A
- -------------------------------------------------------------------------------------
</TABLE>

ADMINISTRATIVE SERVICES

On behalf of each Fund (except Schroder U.S. Diversified Growth 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 Funds, 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 Funds, 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 following annual rates (based upon
each Fund's average daily net assets): 0.225% with respect to Schroder
International Fund; and 0.25% with respect to Schroder Emerging Markets Fund,
Schroder International Smaller Companies Fund, Schroder U.S. Smaller
Companies Fund, Schroder Greater China Fund and Schroder Micro Cap Fund. The
administration agreement is terminable with respect to the Funds 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.

Effective June 1, 1999, the Trust entered into a subadministration agreement
with State Street Bank and

<PAGE>

Trust Company ("State Street"). Under that agreement, the Trust, together
with all mutual funds managed by Schroder and certain related entities, pay
fees to State Street based on the combined average daily net assets of all
the funds in the Schroder complex, according to the following annual rates:
0.06% on the first $1.7 billion of such assets; 0.04% on the next $1.7
billion of such assets; and 0.02% of such assets in excess of $3.4 billion,
subject to certain minimum charges. Each Fund pays its pro rata portion of
such expenses. The subadministration agreement is terminable with respect to
the Fund without penalty, at any time, by the Trust upon 60 days' written
notice to State Street or by State Street upon 60 days' written notice to the
Trust. Prior to June 1, 1999, Forum Administrative Services, LLC ("FAdS")
provided certain administrative services to the Funds according to a
different fee schedule than the schedule currently payable to Schroder Fund
Advisors Inc. and State Street.

State Street also provides certain accounting services to the Trust. The Trust
compensates State Street on a basis approved by the Trustees.

RECENT ADMINISTRATIVE FEES. During the three most recent fiscal years (and the
additional period listed for Schroder Emerging Markets Fund, Schroder U.S.
Smaller Companies Fund, and Schroder Micro Cap Fund, each of which changed their
fiscal year end from May 31 to October 31 in June of 1999) the Funds paid the
following fees to Schroder Fund Advisors Inc. and FAdS pursuant to the
administration agreements in place during such periods. The fees listed in the
following table reflect reductions pursuant to fee waivers and expense
limitations in effect during such periods.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Administration
Fees Paid for Administration Administration Administration
the Period Fees Paid for Fees Paid for Fees Paid for
Fund 6/1/99 through Fiscal Year Fiscal Year Ended Fiscal Year
10/31/99 Ended 5/31/99 5/31/98 Ended 5/31/97
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Schroder Emerging Schroder Fund Schroder Fund Schroder Fund N/A
Markets Fund Advisors Inc. Advisors Inc. Advisors Inc.
$0 $0 $2

FAdS $847 FAdS $4
- ------------------------------------------------------------------------------------------------------
Schroder U.S. Smaller Schroder Fund Schroder Fund Schroder Fund Schroder Fund
Companies Fund Advisors Inc. Advisors Inc. Advisors Inc. Advisors Inc.
$53,348 $139,898 $106,075 $25,060

FAdS $41,969 FAdS $63,663 FAdS $15,007

- ------------------------------------------------------------------------------------------------------
Schroder Micro Cap Fund Schroder Fund Schroder Fund Schroder Fund N/A
Advisors Inc. Advisors Inc. Advisors Inc.
$17,441 $20,443 N/A

FAdS $8,177 FAdS $2,152
- ------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Administration Fees
Paid for Fiscal Administration Fees Administration Fees
Fund Year Ended 10/31/99 Paid for Fiscal Year Paid for Fiscal Year
Ended 10/31/98 Ended 10/31/97
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Schroder International Schroder Fund Schroder Fund Schroder Fund
Fund Advisors Inc. Advisors Inc. Advisors Inc.
$199,346 $280,443 $348,301

FAdS $38,815 FAdS $210,164 FAdS $247,591
- ----------------------------------------------------------------------------------------------
Schroder International Schroder Fund Schroder Fund Schroder Fund
Smaller Companies Fund Advisors Inc. $0 Advisors Inc. $0 Advisors Inc. $0

FAdS $2,349 FAdS $9,085 FAdS $10,595
- ----------------------------------------------------------------------------------------------
Schroder U.S. Schroder Fund Schroder Fund Schroder Fund
Diversified Growth Fund Advisors Inc. Advisors Inc. $0 Advisors Inc. $0
$13,767
FAdS $13,485 FAdS $15,853
FAdS $7,845
- ----------------------------------------------------------------------------------------------
Schroder Greater China N/A N/A
Fund Schroder Fund
Advisors Inc. $0

FAdS $402
- ----------------------------------------------------------------------------------------------
</TABLE>

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 any Fund. Please see "Schroder and its Affiliates" for ownership
information regarding the Distributor.

DISTRIBUTION PLAN FOR ADVISOR SHARES. Each Fund has adopted a Distribution Plan
under Rule 12b-1 of the Investment Company Act pursuant to which the Fund may
pay the Distributor compensation in an amount limited in any fiscal year to the
annual rate of 0.50% (or, with respect to Schroder Greater China Fund, 0.25%) of
the Fund's average daily net assets attributable to Advisor Shares. The Trustees
have not authorized any payments under the Distribution Plans, although they may
at any time authorize payments at an annual rate of up to 0.50% (or, with
respect to Greater China Fund, 0.25%) of a Fund's average daily net assets
attributable to Advisor Shares. The Distribution Plans also relate to payments
made pursuant to the Trust's Shareholder Servicing Plan for Advisor Shares
(which will not exceed the annual rate of 0.25% of a Fund's average daily net
assets attributable to the Advisor Shares), to the extent such payments may be
deemed to be primarily intended to result in the sale of a 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 Plans 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

<PAGE>

banks, trust companies, broker-dealers (other than the Distributor) or other
financial organizations.

A 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 relevant Fund. Any other material
amendment to a 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 Investment Company 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. Each 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. Each 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. Each Fund has also adopted a
Shareholder Servicing Plan (the "Service Plan") for its Advisor Shares (except
for Schroder Micro Cap Fund which does not offer Advisor Shares). Under the
Service Plan, each 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 each 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.

Schroder U.S. Smaller Companies Fund is the only Fund that has made payments
under the Service Plan to date. [NOTE: CONFIRM] In June 1999, that Fund changed
its fiscal year end from May 31 to October 31. For the period June 1, 1999
through October 31, 1999, and for the fiscal years ended May 31, 1999, 1998, and
1997, the Fund paid $5,209, $11,960, $4,871, and $70, respectively, to the
Distributor under the Service Plan. All such payments were, in turn, repaid by
the Distributor to Service Organizations.

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

<PAGE>

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.

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 a Fund. The
investment advisory fee paid by a 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 (the "Securities Exchange Act"), and by the Advisory Agreements,
Schroder may cause a Fund to pay a broker that provides brokerage and research
services to Schroder an amount of disclosed commission for effecting a
securities transaction for a Fund in excess of the commission which another
broker would have charged for effecting that transaction. Schroder's authority
to cause a 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 Funds may engage in brokerage
transactions with Schroder & Co. Inc. ("Schroder & Co."), which is an
affiliate of Schroder, or with unaffiliated brokers who trade or clear
through Schroder & Co. or Lewco Securities Corp. ("Lewco"), another affiliate
of Schroder, to effect securities transactions on the U.S. exchanges, 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 Investment Company Act, the
Funds have adopted procedures which are reasonably designed to provide that
any commissions or other remuneration the Funds pay to any affiliated broker
do not exceed the usual and customary broker's commission. The procedures
require periodic review of these transactions by the Trustees. In addition,
the Funds will adhere to the rule, under the Securities Exchange Act,
governing floor trading. This rule permits the Funds to effect, but not
execute, exchange listed securities transactions with an affiliated broker
that pays a portion of the brokerage commissions it receives from a Fund to
the brokers executing the transactions.

<PAGE>

Also, due to securities law limitations, the Funds may be required to limit
purchases of securities in a public offering if Schroder & Co., Lewco, or
Schroder Securities or one of their affiliates is a member of the syndicate
for that offering

None of the Funds has any understanding or arrangement to direct any specific
portion of its brokerage to Schroder & Co., Lewco, or Schroder Securities, and
none will direct brokerage to Schroder & Co., Lewco, or Schroder Securities in
recognition of research services.

The following tables show the aggregate brokerage commissions paid for the
three most recent fiscal years (and the other periods shown) with respect to
each Fund that incurred brokerage costs. For each Fund that invested in a
Former Related Portfolio, the amounts listed represent aggregate brokerage
commissions paid by such Portfolio.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Brokerage
Commissions Paid Brokerage Brokerage Brokerage
During the Period Commissions Paid Commissions Paid Commissions Paid
6/1/99 through During Fiscal Year During Fiscal Year During Fiscal Year
Fund 10/31/99(a) Ended 5/31/99 Ended 5/31/98 Ended 5/31/97
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Schroder Emerging $73,524 $149,918 $92,986 N/A
Markets Fund
- ----------------------------------------------------------------------------------------------------------------
Schroder U.S. $81,772 $1,069,409 $491,278 $167,043
Smaller Companies
Fund
- ----------------------------------------------------------------------------------------------------------------
Schroder Micro Cap $44,541 $49,558 $11,185 $2,966(b)
Fund
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Effective October 31, 1999, each of these Funds changed its fiscal year from
May 31 to October 31.
(b) Period Ended November 30, 1997.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Brokerage Brokerage Brokerage
Commissions Paid Commissions Paid Commissions Paid
During Fiscal Year During Fiscal Year During Fiscal Year
Fund Ended 10/31/99 Ended 10/31/98 Ended 10/31/97
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$421,129
Schroder International Fund $424,870 $430,627
- ---------------------------------------------------------------------------------------------------------
Schroder International Smaller $28,729 $25,266 $37,223
Companies Fund
- ---------------------------------------------------------------------------------------------------------
Schroder U.S. Diversified Growth $18,215 $40,509 $20,510
Fund
- ---------------------------------------------------------------------------------------------------------
Schroder Greater China Fund $11,898 N/A N/A
- ---------------------------------------------------------------------------------------------------------
</TABLE>

During their most recent fiscal years (and the other periods shown),
the total brokerage commissions paid by the Funds to brokers and dealers in
transactions identified for execution on the basis of research and other
services provided to the Funds are summarized below.

<PAGE>

<TABLE>
<CAPTION>
(which amount represented the
following approximate % of the total
Fund Commissions brokerage commissions paid by the
- ---- ----------- Fund during the period)
<S> <C> <C>
Schroder Emerging Markets Fund
(period 6/1/99 - 10/31/99)* $0 0%
(fiscal year ended 5/31/99) $0 0%

Schroder U.S. Smaller Companies Fund
(period 6/1/99 - 10/31/99)* $1,695.90 2.04%
(fiscal year ended 5/31/99) $[ ? ] [ ? ]%

Schroder Micro Cap Fund
(period 6/1/99 - 10/31/99)* $0 0%
(fiscal year ended 5/31/99) $0 0%

Schroder International Fund $95,274.66 22.40%

Schroder International Smaller $94.03 0.30%
Companies Fund

Schroder U.S. Diversified Growth Fund $0 0%

Schroder Greater China Fund $88.30 0.90%
</TABLE>

* Effective October 31, 1999, each of these Funds changed its fiscal year
from May 31 to October 31.

[The Funds paid no brokerage commissions to Schroder & Co., Lewco, or Schroder
Securities in the three most recent fiscal years.]

DETERMINATION OF NET ASSET VALUE

The net asset value per share of each class of shares of each 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.

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

Equities listed or traded on a domestic or foreign stock exchange (including
the National Association of Securities Dealers' Automated Quotation System
("NASDAQ")) 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, such securities are valued at the mean of closing
bid and ask prices ("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.) Securities purchased in an initial public offering and which have not
commenced trading in a secondary market are valued at cost. Unlisted
securities for which over-the-counter market quotations are readily available
generally are valued at the most recently reported mid-market prices. Fixed
income securities with remaining maturities of more than 60 days are valued on
the basis of valuations provided by pricing services that determine valuations
for normal institutional size trading units of fixed income securities, or
through obtaining independent quotes from market makers. Short-term fixed
income securities with remaining maturities of 60 days or less are valued at
amortized cost, which approximates market value, unless Schroder believes
another valuation is more appropriate. Securities for which current market
quotations are not readily available are valued at fair value pursuant to
procedures established by the Trustees.

<PAGE>

All assets and liabilities of a Fund denominated in foreign currencies are
translated into U.S. dollars based on the mid-market price of such currencies
against the U.S. dollar at the time when last quoted.

Long-term corporate bonds and notes, certain preferred stocks, tax-exempt
securities and certain foreign securities may be 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.

If any securities held by a 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) shall 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 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 each 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 such Fund, and
constitute the underlying assets of that Fund. The underlying assets of each
Fund will be segregated on the Trust's books of account, and will be charged
with the liabilities in respect of such Fund and with a share of the general
liabilities of the Trust. Each 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

The Trust had agreed to redeem shares of each 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. In consideration of the best interests of the remaining
shareholders, the Trust may pay any redemption proceeds exceeding this amount in
whole or in part by a distribution in kind of securities held by a Fund in lieu
of cash. 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

<PAGE>

Each 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, a 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," a 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).

If a 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 a 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 a Fund in January of a year
generally is deemed to have been paid by that 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.
Each 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, a 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.

A 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 a Fund as deriving from net gains on capital assets held for
more than one year will be taxable to you as long-term caital 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 each of the Funds for the preceding
year. Dividends and distributions on a Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of a particular shareholder's investment.
Such distributions are likely to occur in respect of shares purchased at a
time when a Fund's net asset value reflects gains that are either unrealized,
or realized but not distributed. Such realized gains may be required to be
distributed even when a Fund's net asset value also reflects unrealized
losses.

Upon the disposition of shares of a 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. In addition, any loss realized on a sale or exchange of shares
will be disallowed to the extent that you replace the disposed of shares with
shares of the same or another Fund within a period of 61 days beginning 30
days before and ending 30 days after the date of disposition.

<PAGE>

With respect to investment income and gains received by a 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 a 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. In addition, a
Fund's investments in foreign securities or foreign currencies may increase
or accelerate the Fund's recognition of ordinary income and may affect the
timing or amount of the Fund's distributions.

If a Fund engages in hedging transactions, including hedging transactions in
options, futures contracts, and straddles, or other similar transactions, it
will be subject to special tax rules (including constructive sale,
mark-to-market, straddle, wash sale, and short sale rules), the effect of
which may be to accelerate income to the Fund, defer losses to the Fund, cause
adjustments in the holding periods of the Fund's securities, or convert
short-term capital losses into long-term capital losses. These rules could
therefore affect the amount, timing and character of distributions to
shareholders. Each Fund will endeavor to make any available elections
pertaining to such transactions in a manner believed to be in the best
interests of the Fund.

Under federal income tax law, a portion of the difference between the purchase
price of zero-coupon securities in which a 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.

A Fund may be required to withhold 31% of certain of your dividends if you
have not provided the Fund with your correct taxpayer identification number
(normally your Social Security number), or if you are otherwise subject to
back-up withholding.

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. The
foregoing is primarily a summary of certain federal tax consequences of
investing in the Fund. You should consult your tax advisor for more information
about your own tax situation, including possible state and local taxes.

PRINCIPAL HOLDERS OF SECURITIES

To the knowledge of the Trust, as of February 18, 2000, no other person owned
beneficially more than 25% of the outstanding voting securities of any Fund,
except as follows indicated in Appendix A hereto. [These persons may be deemed
to control the noted Funds. The Trust is not aware of any other person that
may control a Fund.

As of February 18, 2000, the Trustees of the Trust and the officers of the
Trust, as a group, owned less than 1% of the outstanding shares of either class
of each Fund.

To the knowledge of the Trust, as of February __, 2000, no other person owned
or record or beneficially more than 5% of the outstanding Investor or Advisor
Shares of a Fund other than as set forth on Appendix A to this Statement.
Because these shareholders hold a substantial number of shares, they may be
able to require that the Trust hold special shareholder meetings and may be
able to determine the outcome of any shareholder vote.

PERFORMANCE INFORMATION

Average annual total return of a class of shares of a Fund for one-, five-,
and ten-year periods (or for such shorter periods as shares of that class of
shares of the Fund have been offered) is determined by calculating the actual
dollar amount of investment return on a $1,000 investment in that class of
shares at the beginning of the period, and then calculating the annual
compounded rate of return which would produce that amount.

<PAGE>

Total return for a period of one year or less is equal to the actual return
during that period. Total return calculations assume reinvestment of all Fund
distributions at net asset value on their respective reinvestment dates.
Total return may be presented for other periods.

ALL PERFORMANCE DATA IS BASED ON PAST INVESTMENT RESULTS AND DOES NOT PREDICT
FUTURE PERFORMANCE. Investment performance of a particular class of a Fund's
shares, which will vary, is based on many factors, including market
conditions, the composition of the Fund's portfolio, and the Fund's operating
expenses attributable to that class of shares. Investment performance also
often reflects the risks associated with a Fund's investment objectives and
policies. Quotations of yield or total return for any period when an expense
limitation is in effect will be greater than if the limitation had not been in
effect. These factors should be considered when comparing the investment
results of a Fund's shares to those of various classes of other mutual funds
and other investment vehicles. Performance for each Fund's shares may be
compared to various indices.

The table on the next page sets forth the average annual total return of
Investor Shares of the Funds for the one-, five-, and ten-year periods (or for
such periods as a Fund has been in operation) ended October 31, 1999. The
table also sets forth average annual total return information for a Fund's
Advisor Shares, which includes estimated pro forma information based on the
performance of the Fund's Investor Shares for periods prior to the inception
date of Advisor Shares. Such prior performance has been recalculated to
reflect the actual fees and expenses attributable to Advisor Shares. BECAUSE
THE EXPENSES ATTRIBUTABLE TO A FUND'S ADVISOR SHARES ARE HIGHER THAN THOSE
ATTRIBUTABLE TO ITS INVESTOR SHARES, THE PERFORMANCE OF THE FUND'S ADVISOR
SHARES WILL NORMALLY BE LESS THAN THE PERFORMANCE OF ITS INVESTOR SHARES OVER
THE SAME PERIOD.

<PAGE>

AVERAGE ANNUAL TOTAL RETURN FOR ANNUAL PERIODS ENDED OCTOBER 31, 1999

- -----------------------------------------------------------------------------------------------------------------
SINCE
INCEPTION INCEPTION INCEPTION
1 YEAR 5 YEAR 10 YEAR OF FUND DATE OF DATE OF
FUND CLASS (ANNUALIZED) FUND CLASS
- -----------------------------------------------------------------------------------------------------------------
<S> <S> <C> <C> <C> <C> <C> <C>
Schroder Emerging Investor 66.19% N/A N/A 10.58% 10/31/97 10/31/97
Markets Fund Shares

Advisor N/A N/A N/A N/A N/A
Shares
- -----------------------------------------------------------------------------------------------------------------
Schroder U.S. Investor N/A
Smaller Companies Shares 8.91% % 15.67% 8/06/93 8/06/93
Fund
Advisor N/A
Shares (1) 8.69% 15.70% 15.51% 12/23/96
- -----------------------------------------------------------------------------------------------------------------
Schroder Micro Cap Investor 90.84% N/A N/A 68.70% 10/15/97 10/15/97
Fund Shares
- -----------------------------------------------------------------------------------------------------------------
Schroder Investor 21.82% 8.90% 8.50% 11.98% 12/19/85 12/19/85
International Fund Shares

Advisor N/A N/A N/A N/A 1/21/98
Shares
- -----------------------------------------------------------------------------------------------------------------
Schroder Investor 65.27% N/A N/A 18.10% 11/4/96 11/4/96
International Shares
Smaller Companies
Fund Advisor N/A N/A N/A N/A N/A
Shares
- -----------------------------------------------------------------------------------------------------------------
Schroder U.S. Investor 30.95% 20.46% 16.02% 11.83% 10/31/70 10/31/70
Diversified Growth Shares
Fund N/A N/A N/A N/A
Advisor N/A
Shares
- -----------------------------------------------------------------------------------------------------------------
Schroder Greater Investor N/A N/A N/A N/A 1/4/99 1/4/99
China Fund Shares

Adviser N/A N/A N/A N/A N/A
Shares
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Total return for Advisor Shares of Schroder U.S. Smaller Companies Fund
reflects pro forma information (based on Investor Share performance)
through December 22, 1996, and actual total return from December 23,
1996 (the inception date of Advisor Shares of the Fund) through October
31, 1999. The actual annualized total return of Advisor Shares of the
Fund from December 23, 1996 through October 31, 1999 was [ ]%.

<PAGE>

From time to time, Schroder, State Street or any of their affiliates that
provide services to the Fund may reduce their compensation or assume expenses
of a Fund in order to reduce the Fund's expenses, as described in the Trust's
current Prospectuses. Any such waiver or assumption would increase a Fund's
total return for each class of shares during the period of the waiver or
assumption.

CUSTODIAN

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

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Boston Financial Data Services, Inc., 66 Brooks Drive, Braintree Massachusetts
02184, is the Trust's registrar, transfer agent and dividend disbursing agent.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, the Trust's independent accountants, provide audit
services, and tax return preparation services. 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

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 a
Fund's property for all loss and expense of any shareholder held personally
liable for the obligations of a Fund. Thus the risk of a shareholder's
incurring financial loss on account of shareholder liability is limited to
circumstances in which a Fund would be unable to meet its obligations.

FINANCIAL STATEMENTS

The Reports of Independent Accountants, financial highlights, and financial
statements in respect of each Fund are included in the Trust's Annual Report
to Shareholders for the fiscal year ended October 31, 1999 on Form N-30D
under the Investment Company Act, filed electronically with the Securities
and Exchange Commission on December 30, 1999, (File No. 811-1911; Accession
No. 0000912057-99-011065). That information is incorporated by reference into
this Statement of Additional Information.

<PAGE>

APPENDIX A

HOLDERS OF OUTSTANDING SHARES

To the knowledge of the Trust, as of February 18, 2000, no other person owned
of record or beneficially 5% or more of the outstanding Investor or Advisor
Shares of any Fund, except as set forth below.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
CLASS Percentage of Outstanding Shares
OF CLASS OWNED
RECORD OR BENEFICIAL OWNER

- -----------------------------------------------------------------------------------------------------------
SCHRODER U.S. SMALLER COMPANIES FUND
- -----------------------------------------------------------------------------------------------------------
<S> <C>
BALSA & Co. Investor 9.50%
C/o Chase Manhattan Bank
PO Box 1768
Grand Central Station
New York NY 10163-1768
- -----------------------------------------------------------------------------------------------------------
Charles Schwab & Co Inc. Investor 7.15%
Special Cust AC BOC
Attn: Mutual Funds
101 Montgomery Street
San Francisco CA 94104
- -----------------------------------------------------------------------------------------------------------
First American Trust Co. Investor 56.38%
The FBO Managed Omnibus Reinvest
421 N. Main Street
Santa Ana, CA 92701-4699
- -----------------------------------------------------------------------------------------------------------
National Investors Services Corp Advisor 6.10
For the Exclusive Benefit of our
Customers
55 Water Street
New York, NY 10041-0001
- -----------------------------------------------------------------------------------------------------------
American Express Trust Co. for the Advisor 92.16
Benefit of American Express Trust
Retired Service Plan
P.O. Box 534
Minneapolis MN 55440
- -----------------------------------------------------------------------------------------------------------
SCHRODER INTERNATIONAL FUND
- -----------------------------------------------------------------------------------------------------------
SeaAlaska Corporation Investor 17.44%
Permanent Fund
Attn: Barbara A. Searls/Patrick
Duke
1 SeaAlaska Plaza, Suite 400
Juneau, AK 99801-1245
- -----------------------------------------------------------------------------------------------------------
Mac & Co. Investor 16.30%
Mutual Fund Operations
PO Box 3198
Pittsburgh PA 15230-3198
- -----------------------------------------------------------------------------------------------------------

A-
<PAGE>

- -----------------------------------------------------------------------------------------------------------
State Street Bank Cutodian for Investor 14.34%
Union College
C/O Specialized Trust Services
200 Newport Avenue
North Quincy, MA 02171-2145
- -----------------------------------------------------------------------------------------------------------
Norwest Bank Minnesota NA Investor 9.49%
FBO Norwest Foundation NIM
P.O. Box 1533
Minneapolis, MN 55480-1533
- -----------------------------------------------------------------------------------------------------------
Northern Trust Company , Trustee Investor 15.23%
FBO Paine Webber
P.O. Box 92956
Chicago, IL 60675-2956
- -----------------------------------------------------------------------------------------------------------
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
- -----------------------------------------------------------------------------------------------------------
Schroder Investment Management Investor 35.82%
Client Account
33 Gutter Lane
London EC2V 8AS
United Kingdom
- -----------------------------------------------------------------------------------------------------------
Charles Schwab & Co Inc. Investor 39.27%
Special Customer Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
- -----------------------------------------------------------------------------------------------------------
Hudson-Webber Foundation Investor 13.82%
333 West Fort Street, Suite 1310
Detroit, MI 48226-3149
- -----------------------------------------------------------------------------------------------------------
National Investors Services Corp. Investor 5.52%
55 Water Street
New York, NY 10041-0098
- -----------------------------------------------------------------------------------------------------------
SCHRODER U.S. DIVERSIFIED GROWTH FUND
- -----------------------------------------------------------------------------------------------------------
Wendel & Co. A/C 178075 Investor 11.78%
c/o The Bank of New York
Mutual Fund/Reorg. Dept.
PO Box 1066
Wall Street Station
New York NY 10268
- -----------------------------------------------------------------------------------------------------------
Security Nominees Inc. Investor 8.80%
1 State Street
New York NY 10004-1417
- -----------------------------------------------------------------------------------------------------------
Fox & Co. Investor 6.35%
PO Box 976
New York NY 10268-0976
- -----------------------------------------------------------------------------------------------------------
Wendel & Co. A/C 056391 Investor 5.78%
c/o The Bank of New York
Mutual Fund/Reorg. Dept.
PO Box 1066
Wall Street Station
New York NY 10268
- -----------------------------------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND

A-
<PAGE>

- -----------------------------------------------------------------------------------------------------------
Investor 25.46
State Street Bank Successor Trustee
Attn: Yvonne Lee
Defined Contribution Services
105 Rosemont Road, # Wesin
Westwood, MA 02090-2318
- -----------------------------------------------------------------------------------------------------------
Charles Schwab & Co. Inc. Investor 15.10
Special Cust Account FBO
Attn: Mutual Funds
101 Montgomery Street
San Francisco CA 94104-4122
- -----------------------------------------------------------------------------------------------------------
State Street Bank & Trust Co. Investor 56.18
Trustee
The Hallmark Cards Master Trust
105 Rosemont Avenue
Westwood, MA 02090-2318
- -----------------------------------------------------------------------------------------------------------
SCHRODER MICRO CAP FUND
- -----------------------------------------------------------------------------------------------------------
Charles Schwab & Co. Inc. Investor 38.61%
Special Cust AC for the Benefit of
Customer
ATTN Mutual Funds
101 Montgomery Street
San Francisco CA 94104
- -----------------------------------------------------------------------------------------------------------
Schroder Capital Management Investor 5.43
International Inc.
(Acct. No. 295779-5)
ATTN: Fergal Cassidy
787 7th Avenue, 34th Floor
New York NY 10019
- -----------------------------------------------------------------------------------------------------------
Schroder Capital Management Investor 8.54
International Inc.
(Acct. No. 362506-8)
ATTN: Fergal Cassidy
787 7th Avenue, 34th Floor
New York NY 10019
- -----------------------------------------------------------------------------------------------------------
Wexford Clearing Services Corp. FBO Investor 9.47
Tom Juda Nancy Juda Co-Ttees
410 S. Lucerne Blvd.
Los Angeles, CA 90020-4749
- -----------------------------------------------------------------------------------------------------------
SCHRODER GREATER CHINA FUND
- -----------------------------------------------------------------------------------------------------------
Schroder U.S. Holdings Inc. Investor 98.69
ATTN: Sharlene Louie
1633 Broadway, Floor 9
New York NY 10019-6708
- -----------------------------------------------------------------------------------------------------------
</TABLE>

A-
<PAGE>

APPENDIX B

RATINGS OF CORPORATE DEBT INSTRUMENTS

MOODY'S INVESTORS SERVICE INC. ("MOODY'S")

FIXED-INCOME SECURITY RATINGS

"Aaa" Fixed-income securities which are rated "Aaa" are judged to be of the
best quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edge". Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of
such issues.

"Aa" Fixed-income securities which are rated "Aa" are judged to be of high
quality by all standards. Together with the "Aaa" group they comprise what are
generally known as high grade fixed-income securities. They are rated lower
than the best fixed-income securities because margins of protection may not be
as large as in "Aaa" securities or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in "Aaa" securities.

"A" Fixed-income securities which are rated "A" possess many favorable
investment attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are considered
adequate, but elements may be present which suggest a susceptibility to
impairment sometime in the future.

"Baa" Fixed-income securities which are rated "Baa" are considered as medium
grade obligations; i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such fixed-income securities lack
outstanding investment characteristics and in fact have speculative
characteristics as well.

Fixed-income securities rated "Aaa", "Aa", "A" and "Baa" are
considered investment grade.

"Ba" Fixed-income securities which are rated "Ba" are judged to have
speculative elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate, and
therefore not well safeguarded during both good and bad times in the future.
Uncertainty of position characterizes bonds in this class.

"B" Fixed-income securities which are rated "B" generally lack
characteristics of the desirable investment. Assurance of interest and
principal payments or of maintenance of other terms of the contract over any
long period of time may be small.

"Caa" Fixed-income securities which are rated "Caa" are of poor standing.
Such issues may be in default or there may be present elements of danger with
respect to principal or interest.

"Ca" Fixed-income securities which are rated "Ca" present obligations
which are speculative in a high degree. Such issues are often in default or
have other marked shortcomings.

"C" Fixed-income securities which are rated "C" are the lowest rated
class of fixed-income securities, and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment
standing.

B-
<PAGE>

Rating Refinements: Moody's may apply numerical modifiers, "1", "2",
and "3" in each generic rating classification from "Aa" through "B" in its
municipal fixed-income security rating system. The modifier "1" indicates
that the security ranks in the higher end of its generic rating category; the
modifier "2" indicates a mid-range ranking; and a modifier "3" indicates that
the issue ranks in the lower end of its generic rating category.

COMMERCIAL PAPER RATINGS

Moody's Commercial Paper ratings are opinions of the ability to repay
punctually promissory obligations not having an original maturity in excess of
nine months. The ratings apply to Municipal Commercial Paper as well as
taxable Commercial Paper. Moody's employs the following three designations,
all judged to be investment grade, to indicate the relative repayment capacity
of rated issuers: "Prime-1", "Prime-2", "Prime-3".

Issuers rated "Prime-1" have a superior capacity for repayment of
short-term promissory obligations. Issuers rated "Prime-2" have a strong
capacity for repayment of short-term promissory obligations; and Issuers rated
"Prime-3" have an acceptable capacity for repayment of short-term promissory
obligations. Issuers rated "Not Prime" do not fall within any of the Prime
rating categories.

STANDARD & POOR'S RATING SERVICES ("STANDARD & POOR'S")

FIXED-INCOME SECURITY RATINGS

A Standard & Poor's fixed-income security rating is a current assessment of
the creditworthiness of an obligor with respect to a specific obligation.
This assessment may take into consideration obligors such as guarantors,
insurers, or lessees.

The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. The
ratings are based, in varying degrees, on the following considerations: (1)
likelihood of default-capacity and willingness of the obligor as to the timely
payment of interest and repayment of principal in accordance with the terms of
the obligation; (2) nature of and provisions of the obligation; and (3)
protection afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.

Standard & Poor's does not perform an audit in connection with any rating and
may, on occasion, rely on unaudited financial information. The ratings may
be changed, suspended or withdrawn as a result of changes in, or
unavailability of, such information, or for other reasons.

"AAA" Fixed-income securities rated "AAA" have the highest rating assigned
by Standard & Poor"s. Capacity to pay interest and repay principal is
extremely strong.

"AA" Fixed-income securities rated "AA" have a very strong capacity to pay
interest and repay principal and differs from the highest-rated issues only
in small degree.

"A" Fixed-income securities rated "A" have a strong capacity to pay interest
and repay principal although they are somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
fixed-income securities in higher-rated categories.

"BBB" Fixed-income securities rated "BBB" are regarded as having an adequate
capacity to pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest
and repay principal for fixed-income securities in this category than for
fixed-income securities in higher-rated categories.

B-
<PAGE>

Fixed-income securities rated "AAA", "AA", "A" and "BBB" are considered
investment grade.

"BB" Fixed-income securities rated "BB" have less near-term vulnerability to
default than other speculative grade fixed-income securities. However, it
faces major ongoing uncertainties or exposure to adverse business, financial
or economic conditions which could lead to inadequate capacity or willingness
to pay interest and repay principal.

"B" Fixed-income securities rated "B" have a greater vulnerability to
default but presently have the capacity to meet interest payments and
principal repayments. Adverse business, financial or economic conditions
would likely impair capacity or willingness to pay interest and repay
principal.

"CCC" Fixed-income securities rated "CCC" have a current identifiable
vulnerability to default, and the obligor is dependent upon favorable
business, financial and economic conditions to meet timely payments of
interest and repayments of principal. In the event of adverse business,
financial or economic conditions, it is not likely to have the capacity to pay
interest and repay principal.

"CC" The rating "CC" is typically applied to fixed-income securities
subordinated to senior debt which is assigned an actual or implied "CCC"
rating.

"C" The rating "C" is typically applied to fixed-income securities
subordinated to senior debt which is assigned an actual or implied "CCC-"
rating.

"CI" The rating "CI" is reserved for fixed-income securities on which no
interest is being paid.

"NR" Indicates that no rating has been requested, that there is
insufficient information on which to base a rating or that Standard & Poor"s
does not rate a particular type of obligation as a matter of policy.

Fixed-income securities rated "BB", "B", "CCC", "CC" and "C" are regarded as
having predominantly speculative characteristics with respect to capacity
to pay interest and repay principal. "BB" indicates the least degree of
speculation and "C" the highest degree of speculation. While such
fixed-income securities will likely have some quality and protective
characteristics, these are out-weighed by large uncertainties or major
risk exposures to adverse conditions.

Plus (+) or minus (-): The rating from "AA" TO "CCC" may be modified by the
addition of a plus or minus sign to show relative standing with the major
ratings categories.

COMMERCIAL PAPER RATINGS

Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days. The commercial paper rating is not a recommendation to purchase
or sell a security. The ratings are based upon current information furnished
by the issuer or obtained by Standard & Poor's from other sources it considers
reliable. The ratings may be changed, suspended, or withdrawn as a result of
changes in or unavailability of such information. Ratings are graded into
group categories, ranging from "A" for the highest quality obligations to "D"
for the lowest. Ratings are applicable to both taxable and tax-exempt
commercial paper.

Issues assigned "A" ratings are regarded as having the greatest capacity for
timely payment. Issues in this category are further refined with the
designation "1", "2", and "3" to indicate the relative degree of safety.

"A-1" Indicates that the degree of safety regarding timely payment is very
strong.

"A-2" Indicates capacity for timely payment on issues with this designation
is strong. However, the relative degree of safety is not as overwhelming as
for issues designated "A-1".

B-
<PAGE>

"A-3" Indicates a satisfactory capacity for timely payment. Obligations
carrying this designation are, however, somewhat more vulnerable to the
adverse effects of changes in circumstances than obligations carrying the
higher designations.

B-
<PAGE>

SCHRODER CAPITAL FUNDS (DELAWARE)

SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO

FORM N-1A
PART B

STATEMENT OF ADDITIONAL INFORMATION

MARCH 1, 2000

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 Emerging Markets Fund Institutional Portfolio, 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 March 1, 2000. 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 800-464-3108.

Certain disclosure has been incorporated by reference into this SAI from the
Fund's annual report. For a free copy of the annual report, please call
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 21
INVESTMENT ADVISORY AGREEMENT 21
ADMINISTRATIVE SERVICES 23
DISTRIBUTOR 24
BROKERAGE ALLOCATION AND OTHER PRACTICES 26
DETERMINATION OF NET ASSET VALUE 28
REDEMPTIONS IN KIND 29
TAXES 29
PRINCIPAL HOLDERS OF SECURITIES 31
PERFORMANCE INFORMATION 33
CUSTODIAN 34
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT 34
INDEPENDENT ACCOUNTANTS 34
LEGAL COUNSEL 34
SHAREHOLDER LIABILITY 34
FINANCIAL STATEMENTS 34
APPENDIX A - RATINGS OF CORPORATE DEBT INSTRUMENTS A-1

<PAGE>

SCHRODER CAPITAL FUNDS (DELAWARE)

SCHRODER EMERGING MARKETS FUND INSTITUTIONAL PORTFOLIO

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. Schroder Investment Management North
America Inc. ("Schroder") and its corporate predecessors have served as
investment adviser to the Trust since its inception.

FUND CLASSIFICATION

The Trust currently offers shares of beneficial interest of eight
series with separate investment objectives and policies, one of which,
Schroder Emerging Markets Fund Institutional Portfolio (the "Fund"), is
covered in this SAI. The Fund is an open-end, management investment company
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"). Shares of the Fund are offered pursuant to the Prospectuses and this
SAI. The Fund is a "non-diversified" investment company under the Investment
Company 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 will normally 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.

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

<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.

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. Unless a strategy or policy described below is specifically
prohibited by the investment restrictions listed in the Prospectuses, under
"Investment Restrictions" in this SAI, or by applicable law, the Fund may
engage in each of the practices 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. To the extent permitted under "Investment
Restrictions" below and in the Prospectuses, 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
portfolio 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

<PAGE>

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 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

<PAGE>

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.

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

<PAGE>

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 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 United States
Internal Revenue Code of 1986, as amended, may also restrict the Fund'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

<PAGE>

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.

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

<PAGE>

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 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 portfolio 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

<PAGE>

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 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".

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

<PAGE>

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.

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,

<PAGE>

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.

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 may 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

<PAGE>

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 Fund'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, 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.

<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

The Fund may invest without limit in securities principally traded
in foreign markets. The Fund may also invest without limit in Eurodollar
certificates of deposit and other certificates of deposit issued by United
States branches of foreign banks and foreign branches of United States banks.

<PAGE>

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) 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.

EMERGING MARKET SECURITIES

The Fund invests primarily in securities of companies determined by
Schroder to be "emerging market" issuers. The risks of investing in foreign
securities are particularly high when securities of issuers based in
developing or emerging market countries are involved. Investing in emerging
market countries involves certain risks not typically associated with
investing in U.S. securities, and imposes risks greater than, or in addition
to, risks of investing in foreign, developed countries. These risks include:
greater risks of nationalization or expropriation of assets or confiscatory
taxation; currency devaluations and other currency exchange rate
fluctuations; greater social, economic and political uncertainty and
instability (including the risk

<PAGE>

of war); more substantial government involvement in the economy; less
government supervision and regulation of the securities markets and
participants in those markets; controls on foreign investment and limitations
on repatriation of invested capital and on the Fund's ability to exchange
local currencies for U.S. dollars; unavailability of currency hedging
techniques in certain emerging market countries; the fact that companies in
emerging market countries may be smaller, less seasoned and newly organized
companies; the difference in, or lack of, auditing and financial reporting
standards, which may result in unavailability of material information about
issuers; the risk that it may be more difficult to obtain and/or enforce a
judgment in a court outside the United States; and greater price volatility,
substantially less liquidity, and significantly smaller market capitalization
of securities markets. Also, any change in the leadership or politics of
emerging market countries, or the countries that exercise a significant
influence over those countries, may halt the expansion of or reverse the
liberalization of foreign investment policies now occurring and adversely
affect existing investment opportunities.

In addition, a number of emerging market countries restrict, to
various degrees, foreign investment in securities. Furthermore, high rates of
inflation and rapid fluctuations in inflation rates have had, and may
continue to have, negative effects on the economies and securities markets of
certain emerging market countries.

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".

When it engages in transaction hedging, the Fund enters into foreign
currency transactions with respect to specific receivables or payables of the
Fund generally arising in connection with the purchase or sale of its
portfolio securities. The Fund will engage in transaction hedging when it
desires to "lock in" the U.S. dollar price of a security it has agreed to
purchase or sell, or the U.S. dollar equivalent of a dividend or interest
payment in a foreign currency. By transaction hedging, the Fund will attempt
to protect against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the applicable foreign currency
during the period between the date on which the security is purchased or sold
or on which the dividend or interest payment is declared, and the date on
which such payments are made or received.

The Fund may purchase or sell a foreign currency on a spot (or cash)
basis at the prevailing spot rate in connection with transaction hedging. The
Fund may also enter into contracts to purchase or sell foreign currencies at
a future date ("forward contracts") and purchase and sell foreign currency
futures contracts.

For transaction hedging purposes, the Fund may also 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

<PAGE>

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.

When it engages in position hedging, the Fund enters into foreign
currency exchange transactions to protect against a decline in the values of
the foreign currencies in which securities held by the Fund are denominated
or are quoted in their principal trading markets or an increase in the value
of currency for securities which the Fund expects to purchase. 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. The Fund may also purchase
or sell foreign currency on a spot basis.

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.

<PAGE>

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 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.

<PAGE>

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

WARRANTS TO PURCHASE SECURITIES

The Fund may invest in warrants to purchase securities. Bonds issued
with warrants attached to purchase equity securities have many
characteristics of convertible bonds and their prices may, to some degree,
reflect the performance of the underlying stock. Bonds also may be issued
with warrants attached to purchase additional fixed income securities at the
same coupon rate. A decline in interest rates would permit the Fund to buy
additional bonds at the favorable rate or to sell the warrants at a profit.
If interest rates rise, the warrants would generally expire with no value.

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 series of the Trust and other mutual funds
investing in securities making current distributions of interest and having
similar maturities.

<PAGE>

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.

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. One risk of taking such temporary defensive positions
is that the Fund may not achieve its investment objective.

<PAGE>

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
Investment Company 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:

1. Underwrite securities of other companies (except insofar as the Fund might
be deemed to be an underwriter in the resale of any securities held in its
portfolio);

2. Invest in commodities or commodity contracts (other than hedging
instruments, which it may use as permitted by any of its other fundamental
policies, whether or not any such hedging instrument is considered to be
a commodity or a commodity contract);

3. Purchase securities on margin; however, the Fund may make margin deposits
in connection with any hedging instruments which it may use as permitted
by any of its other fundamental policies;

4. Purchase or write puts or calls except as permitted by any of its other
fundamental policies;

5. Lend money except in connection with the acquisition of debt securities
that the Fund's investment policies and restrictions permit it to
purchase. The Fund may make loans of portfolio securities and enter into
repurchase agreements;

6. As a non-fundamental policy, invest in or hold securities of any issuer if
officers or Trustees of the Trust or Schroder individually owning more
than 0.5% of the securities of such issuer together own more than 5% of
the securities of such issuer;

7. As a non-fundamental policy, invest more than 5% of the value of its total
assets in securities of issuers having a record, together with
predecessors, of less than three years of continuous operation;

<PAGE>

8. Make short sales of securities;

10. Invest in real estate or in interests in real estate (but may purchase
readily marketable securities of companies holding real estate or
interests therein);

11. As a non-fundamental policy, the Fund will not invest more than 15% of its
assets in securities determined by Schroder to be illiquid. Certain
securities that are restricted as to resale may nonetheless be resold by
the Fund in accordance with Rule 144A under the Securities Act of 1933, as
amended. Such securities may be determined by Schroder to be liquid for
purposes of compliance with the limitation on the Fund's investment in
illiquid securities.

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.

<PAGE>

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 the 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. The
mailing address of each of the officers and Trustees is 787 Seventh Avenue,
New York, New York 10019.

(*) Nancy A. Curtin, Trustee and Chairman of the Trust. 42. Trustee and
Chairman, Schroder Capital Funds, Schroder Series Trust, and Schroder Series
Trust II. Managing Director, Schroder. Director, Schroder Investment Management
North America Limited. President and Director, Schroder Fund Advisors Inc.
Formerly, Director, Barings Asset Management.

David N. Dinkins, Trustee. 72. Trustee, Schroder Capital Funds 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.

John I. Howell, Trustee. 83. Trustee, Schroder Capital Funds, 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. 49. Trustee, Schroder Capital Funds 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. 78. Trustee, Schroder Capital Funds,
Schroder Series Trust, and Schroder Series Trust II. Formerly, Senior Vice
President, Marsh & McLennan, Inc.

(*) Sharon L. Haugh, Trustee. 54. Trustee, Schroder Capital Funds and
Schroder Series Trust. Director and Chairman, Schroder. Director and Chairman,
Schroder Fund Advisors Inc.

<PAGE>

William L. Means, Trustee. 64. Trustee, Schroder Capital Funds,
Schroder Series Trust, and Schroder Series Trust II. Formerly, Chief Investment
Officer, Alaska Permanent Fund Corporation.

Clarence F. Michalis, Trustee. 78. Trustee, Schroder Capital Funds and
Schroder Series Trust. Chairman of the Board of Directors, Josiah Macy, Jr.
Foundation.

Hermann C. Schwab, Trustee. 80. Trustee, Schroder Capital Funds and
Schroder Series Trust. Trustee, St. Luke's/Roosevelt Hospital Center. Formerly,
consultant to Schroder Capital Management International Inc.

Alexandra Poe, President of the Trust. 39. First Vice President,
Schroder. Senior Vice President, Secretary, and General Counsel, Schroder Fund
Advisors Inc. President, Schroder Capital Funds and Schroder Series Trust.
Assistant Secretary, Schroder Series Trust II. Formerly, Attorney, Gordon,
Altman, Butowsky, Weitzen, Shalov & Wein and Vice President and Counsel,
Citibank, N.A.

Mark J. Astley, Vice President of the Trust. 36. First Vice President,
Schroder. Formerly, employed by various affiliates of Schroder in various
positions in the investment research and portfolio management areas.

Robert G. Davy, Vice President of the Trust. 39. 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.

Margaret H. Douglas-Hamilton, Vice President of the Trust. 58.
Director, Senior Vice President and Secretary, Schroder.

Richard R. Foulkes, Vice President of the Trust. 54. Director and
Deputy Chairman, Schroder. Director and Executive Vice President of Schroder
Investment Management North America Limited.

Michael Perelstein, Vice President of the Trust. 44. Director and
Senior Investment Officer, Schroder. Formerly, Managing Director of MacKay -
Shields Financial Corp.

Catherine A. Mazza, Vice President of the Trust. 40. Director and
Senior Vice President, Schroder. Executive Vice President and Director, Schroder
Fund Advisors Inc. Vice President, Schroder Capital Funds, Schroder Series
Trust, and Schroder Series Trust II. Formerly, Vice President, Alliance Capital
Management L.P.

<PAGE>

Jane P. Lucas, Vice President of the Trust. 39. Senior Vice President,
Schroder.

Alan Mandel, Secretary, Treasurer, and Chief Financial Officer of the
Trust. 42. Secretary, Schroder Capital Funds and Clerk, Schroder Series Trust.
Treasurer and Chief Financial Officer, Schroder Capital Funds and Schroder
Series Trust. Assistant Treasurer, Schroder Series Trust II. First Vice
President, Schroder. Formerly, Director of Mutual Fund Administration for
Salomon Brothers Asset Management, and prior thereto, Chief Financial Officer
and Vice President of Hyperion Capital Management.

Fergal Cassidy, Assistant Treasurer of the Trust. 30. Assistant
Treasurer, Schroder Capital Funds and Schroder Series Trust. Treasurer and Chief
Financial Officer, Schroder Series Trust II. Vice President and Treasurer,
Schroder. Treasurer and Chief Financial Officer, Schroder Fund Advisors Inc.
Formerly, Senior Accountant, Concurrency Management Corp.

John A. Troiano, Vice President of the Trust. 40. Director and Chief
Executive, Schroder. Formerly, employed by affiliates of Schroder in various
positions in the investment research and portfolio management areas.

Ira L. Unschuld, Vice President of the Trust. 33. Director and Senior
Vice President, Schroder.

Nicholas Rossi, Assistant Secretary of the Trust. 36. Assistant
Secretary, Schroder Capital Funds and Assistant Clerk, Schroder Series Trust.
Associate, Schroder. Assistant Vice President, Schroder Fund Advisors Inc.
Formerly, Mutual Fund Specialist, Willkie Farr & Gallagher and Fund
Administrator, Furman Selz LLC.

<PAGE>

- --------------------
(*) Trustee who is an "interested person" (as defined in the Investment
Company Act) of the Trust, Schroder, or Schroder Fund Advisors Inc.

<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
Investment Company Act) of the Trust, Schroder, or Schroder Fund Advisors
Inc. ("Disinterested Trustees") receive an annual retainer of $11,000 for
their services as Trustees of all open-end investment companies distributed
by Schroder Fund Advisors Inc. with the exception of Schroder Series Trust
II, and $1,250 per meeting attended in person or $500 per meeting attended by
telephone. Members of an Audit Committee for one or more of such investment
companies receive an additional $1,000 per year. Payment of the annual
retainer is allocated among such investment companies based on their relative
net assets. Payments of meeting fees are allocated only among those
investment companies to which the meeting relates.

The table below sets forth information regarding compensation paid for
the fiscal year ended October 31, 1999 to the Disinterested Trustees by the
Trust and other funds in the Schroder "Fund Complex" (as defined below).

<PAGE>

<TABLE>
<CAPTION>
COMPENSATION TABLE

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

(1) (2) (3)

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

- -------------------------------------------------------------------------
<S> <C> <C>
DAVID N. DINKINS $7,267 $16,250
- -------------------------------------------------------------------------
PETER E. GUERNSEY $7,570 $26,500
- -------------------------------------------------------------------------
JOHN I. HOWELL $9,426 $29,000
- -------------------------------------------------------------------------
PETER S. KNIGHT $7,570 $17,000
- -------------------------------------------------------------------------
WILLIAM L. MEANS** $7,570 $26,500
- -------------------------------------------------------------------------
CLARENCE F. MICHALIS $7,570 $17,000
- -------------------------------------------------------------------------
HERMANN C. SCHWAB $7,570 $17,000
- -------------------------------------------------------------------------
</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 ("SST II"). The Trust, SCF, SCF II, SST, and SST II
are considered part of the same "Fund Complex" for these purposes. SCF II ceased
operations and was substantially liquidated in July 1999.

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

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.

SCHRODER AND ITS AFFILIATES

Schroder (together with its predecessors) 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 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 worldwide investment banking and
investment management businesses, and as of June 30, 1999, had under
management assets of approximately $208 billion. Schroder's address is 787
Seventh

<PAGE>

Avenue, New York, New York 10019.

Schroder Fund Advisors Inc., the Trust's principal underwriter, is a
wholly owned subsidiary of Schroder.

INVESTMENT ADVISORY AGREEMENT

Under an Amended and Restated Investment Advisory Agreement (the
"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.

Under the Advisory Agreement, Schroder is required to regularly provide
the Fund with investment research, advice, and supervision and furnishes
continuously an investment program consistent with the investment objectives and
policies of the Fund, and determines, for the Fund, 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 of the Investment Company Act, and to the
Fund's investment objectives, 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 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

<PAGE>

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 provides that Schroder shall not be subject to
any liability for any error of judgement or mistake of law or for any loss
suffered by the Trust in connection with rendering service to the Trust in the
absence of willful misfeasance, bad faith, gross negligence, or reckless
disregard of it duties.

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 Investment Company Act.

THE FORMER RELATED PORTFOLIO

Prior to June 1, 1999, the Fund invested all of its assets in a related
portfolio (the "Former Related Portfolio") having the same investment objective
and substantially the same investment policies as the Fund. As long as the Fund
remained completely invested in the Former Related Portfolio (or any other
investment company), Schroder was not entitled to receive any investment
advisory fee directly from the Fund.

Schroder was the investment adviser to the Former Related Portfolio
pursuant to an investment advisory agreement (the "Portfolio Advisory
Agreement") between Schroder and Schroder Capital Funds, on behalf of the
Portfolio. Schroder received an investment advisory fee with respect to the
Former Related Portfolio. The Portfolio Advisory Agreement was the same in all
material respects as the Advisory Agreement between the Trust on behalf of the
Fund and Schroder. The Fund bore a proportionate part of the investment advisory
fees paid by the Former Related Portfolio (based on the percentage of the Former
Related Portfolio's assets attributable to the Fund's investment).

RECENT INVESTMENT ADVISORY FEES.

The following table sets forth the investment advisory fees paid by the
Fund during the three most recent fiscal years, including fees paid indirectly
through the Former Related Portfolio (for periods through May 31, 1999) and
directly to Schroders (since June 1, 1999). The fees listed in the table reflect
reductions pursuant to expense limitations and/or fee waivers in effect during
such periods.

<PAGE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------

Investment Advisory Fees Investment Advisory Fees Investment Advisory Fees
Paid for Fiscal Year Ended Paid for Fiscal Year Ended Paid for Fiscal Year
10/31/99 10/31/98 Ended 10/31/97
- ---------------------------------------------------------------------------------------
<S> <C> <C>
$1,768,367 $1,265,439 $1,778,645
- ---------------------------------------------------------------------------------------
</TABLE>

FEE WAIVERS

For the periods shown above, portion of the advisory fees payable to
Schroder (including fees payable by the Former Related Portfolio prior to June
1, 1999) were waived in the following amounts during the three most recent
fiscal years pursuant to expense limitations and/or waivers observed by Schroder
for the Fund during such periods.

<PAGE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------

Fees Waived During Fiscal Fees Waived During Fiscal Fees Waived During Fiscal
Year Ended 10/31/99 Year Ended 10/31/98 Year Ended 10/31/97
- ---------------------------------------------------------------------------------------
<S> <C> <C>

$396,154 $496,353 $472,493
- ---------------------------------------------------------------------------------------
</TABLE>

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 0.10% of the Fund's
average daily net assets. The administration 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.

Effective June 1, 1999, the Trust entered into a subadministration
agreement with State Street Bank and Trust Company ("State Street"). Under that
agreement, the Trust, together with all mutual funds managed by Schroder and
certain related entities, pay fees to State Street based on the combined average
daily net assets of all the funds in the Schroder complex, according to the
following annual rates: 0.06% on the first $1.7 billion of such assets; 0.04% on
the next $1.7 billion of such assets; and 0.02% of such assets in excess of $3.4
billion, subject to certain minimum charges. Each Fund pays its pro rata portion
of such expenses. The subadministration agreement is terminable with respect to
the Fund without penalty, at any time, by the Trust upon 60 days' written notice
to State Street or by State Street upon 60 days' written notice to the Trust.
Prior to June 1, 1999, Forum Administrative Services, LLC ("FAdS") provided
certain administrative services to the Funds according to a different fee
schedule than the schedule currently payable to Schroder Fund Advisors Inc. and
State Street.

State Street also provides certain accounting services to the Trust.
The Trust compensates State Street on a basis approved by the Trustees.

Prior to June 1, 1999, Forum Administrative Services, LLC ("FAdS")
provided certain administrative services to the Funds. During the three most
recent fiscal years, the Fund paid the following fees to Schroder Fund
Advisors Inc., State Street, and FAdS pursuant to the administration
agreement and the subadministration agreements. The fees listed in the
following table reflect reductions pursuant to fee waivers and expense
limitations in effect

<PAGE>

during such periods.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------

Administration Fees Paid for Administration Fees Paid Administration Fees Paid
Fiscal Year Ended 10/31/99 for Fiscal Year Ended for Fiscal Year Ended
10/31/98 10/31/97
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Schroder Fund Advisors Inc. Schroder Fund Advisors Schroder Fund Advisors
$183,235 Inc. Inc. $225,571
$176,172
FAdS $126,867
FAdS $264,261 FAdS $325,948
State Street $93,727
N/A N/A
- ---------------------------------------------------------------------------------------
</TABLE>

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 "Schroder and its Affiliates" for
ownership information regarding the Distributor.

DISTRIBUTION PLAN FOR ADVISOR SHARES. The Fund has adopted a
Distribution Plan under Rule 12b-1 of the Investment Company 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
(which will not exceed the annual rate of 0.25% of the Fund's average daily net
assets attributable to 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.

<PAGE>

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 a 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 Investment Company 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 following table shows the aggregate amounts paid by the Fund to
the Distributor under the Service Plan during the three most recent fiscal
years. All of such amounts were, in turn, repaid by the Distributor to
Service Organizations.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Fees Paid Pursuant to Fees Paid Pursuant to Fees Paid Pursuant to
Service Plan During Fiscal Service Plan During Fiscal Service Plan During
Year Ended 10/31/99 Year Ended 10/31/98 Fiscal Year Ended 10/31/97
- ---------------------------------------------------------------------------------------
<S> <C> <C>
- ---------------------------------------------------------------------------------------
$70,375 $58,775 $43,522
- ---------------------------------------------------------------------------------------
</TABLE>

<PAGE>

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 Fund and other clients,
provided that it shall always seek best price and execution with respect to
transactions. Certain investments may be appropriate for the Fund and for other
clients advised by Schroder. Investment decisions for the Fund 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 Fund. Purchase and sale orders for the Fund may be
combined with those of other clients of Schroder in the interest of achieving
the most favorable net results for the Fund.

BROKERAGE AND RESEARCH SERVICES. Transactions on U.S. stock exchanges
and other agency transactions involve the payment by the Fund 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 Fund usually includes an undisclosed dealer commission or mark-up. In
underwritten offerings, the price paid by the Fund 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

<PAGE>

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.

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
Fund), 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 (the "Securities Exchange Act"), 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.") or Lewco Securities
Corp. ("Lewco"), each of which is an affiliate of Schroder, or with unaffiliated
brokers who trade or clear through Schroder & Co. or Lewco, to effect securities
transactions on U.S. exchanges, 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 Investment Company Act, the Fund has adopted procedures which are reasonably
designed to provide that any commissions or other remuneration the Funds pay to
Schroder & Co., Lewco, and Schroder Securities do not exceed the usual and
customary broker's commission. The procedures require periodic review of these
transactions by the Trustees. In addition, the Fund will adhere to the rule,
under the Securities Exchange Act, governing floor trading. This rule permits
the Fund to effect, but not execute, exchange listed securities transactions
with Schroder & Co. and Lewco, each of which 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., Lewco, 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., Lewco, or Schroder
Securities, and will not direct brokerage

<PAGE>

to Schroder & Co., Lewco, or Schroder Securities in recognition of research
services.

The following table shows the aggregate brokerage commissions paid by
the Fund for the three most recent fiscal years. The amounts listed represent
aggregate brokerage commissions paid by the Former Related Portfolio and the
Fund. The Fund paid no brokerage commission to Schroder & Co., Lewco, or
Schroder Securities in the most recent fiscal years.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Brokerage Commissions Paid Brokerage Commissions Paid Brokerage Commissions
During Fiscal Year Ended During Fiscal Year Ended Paid During Fiscal Year
10/31/99 10/31/98 Ended 10/31/97
- ---------------------------------------------------------------------------------------
<S> <C> <C>
$1,056,676 $1,013,671 $1,413,998
- ---------------------------------------------------------------------------------------
</TABLE>

For the fiscal year ended October 31, 1999, the Fund paid [$ ] in
brokerage commissions to brokers and dealers in transactions identified as
having been executed on the basis of research and other services provided by
the broker or dealer, which amount represented approximately [ ]% of the
total brokerage commissions paid by the Fund.

DETERMINATION OF NET ASSET VALUE

The net asset value per share of each class of shares of the Fund are
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.

<PAGE>

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

Equities listed or traded on a domestic or foreign stock exchange
(including the National Association of Securities Dealers' Automated Quotation
System ("NASDAQ")) 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, such securities are valued at the mean of closing
bid and ask prices ("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.) Securities purchased in an initial public offering and which have not
commenced trading in a secondary market are valued at cost. Unlisted securities
for which over-the-counter market quotations are readily available generally are
valued at the most recently reported mid-market prices. Fixed income securities
with remaining maturities of more than 60 days are valued on the basis of
valuations provided by pricing services that determine valuations for normal
institutional size trading units of fixed income securities, or through
obtaining independent quotes from market makers. Short-term fixed income
securities with remaining maturities of 60 days or less are valued at amortized
cost, which approximates market value, unless Schroder believes another
valuation is more appropriate. Securities for which current market quotations
are not readily available are valued at fair value pursuant to procedures
established by the Trustees.

All assets and liabilities of a Fund denominated in foreign
currencies are translated into U.S. dollars based on the mid-market price
of such currencies against the U.S. dollar at the time when last quoted.

Long-term corporate bonds and notes, certain preferred stocks,
tax-exempt securities, and certain foreign securities may be 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.

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) shall 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.

<PAGE>

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 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 Fund'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 Fund's books of account. Expenses with respect to any
two or more series of the Trust or classes may be allocated in proportion to the
net asset values of the respective series or classes except where allocations of
direct expenses can otherwise be fairly made to a specific series or class.

REDEMPTIONS IN KIND

The Trust had agreed to redeem 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. In consideration of the best interests of the remaining
shareholders, the Trust may pay any redemption proceeds exceeding this amount in
whole or in part by a distribution in kind of securities held by the Fund in
lieu of cash. 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

<PAGE>

(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).

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.
Dividends and distributions on the Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of a particular shareholder's investment.
Such distributions are likely to occur in respect of shares purchased at a time
when the Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed. Such realized gains may be required to be
distributed even when the Fund's net asset value also reflects unrealized
losses.

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. In addition,
any loss realized on a sale or exchange of shares will be disallowed to the
extent that you replace the disposed of shares with shares of the same or

<PAGE>

another Fund within a period of 61 days beginning 30 days before and ending 30
days after the date of disposition.

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 to 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. In addition, the Fund's investments in foreign securities or foreign
currencies may increase or accelerate the Fund's recognition of ordinary
income and may affect the timing or amount of the Fund's distributions.

If the Fund engages in hedging transactions, including hedging
transactions in options, futures contracts, and straddles, or other similar
transactions, it will be subject to special tax rules (including constructive
sale, mark to market, straddle, wash sale, and short sale rules), the effect of
which may be to accelerate income to the Fund, defer losses to the Fund, cause
adjustments in the holding periods of the Fund's securities, or convert short
term capital losses into long term capital losses. These rules could therefore
affect the amount, timing and character of distributions to shareholders. The
Fund will endeavor to make any available elections pertaining to such
transactions in a manner believed to be in the best interests of the Fund.

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.

The Fund may be required to withhold 31% of certain of your
dividends if you have not provided the Fund with your correct taxpayer
identification number (normally your Social Security number), or if you
are otherwise subject to back up withholding.

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. The foregoing is primarily a summary of certain federal tax consequences
of investing in the Fund. You should consult your tax advisor for more
information about your own tax situation, including possible state and local
taxes.

PRINCIPAL HOLDERS OF SECURITIES

To the knowledge of the Trust, as of February 18, 2000, no person
owned beneficially 25% or more of the outstanding voting securities of
the Fund, the Trust is not aware of any other person that may control the
Fund.

<PAGE>

As of February 18, 2000, the Trustees of the Trust and the officers of
the Trust, as a group, owned less than 1% of the outstanding shares of either
class of the Fund. [NOTE:CONFIRM]

To the knowledge of the Trust, as of February 18, 2000, no other
person owned of record or beneficially more than 5% of the outstanding
Investor or Advisor Shares of the Fund, except as set forth below.

<TABLE>
<CAPTION>
PERCENTAGE OF OUTSTANDING
RECORD OR BENEFICIAL OWNER CLASS SHARES OF CLASS OWNED
- -------------------------- ----- --------------------------
<S> <C> <C>
The Robert Wood Johnson Foundation Investor 22.82%
Attn: John Gilliam
P.O. Box 2316
College Road at Rt. One
Princeton, NJ 08543-2316

University of Chicago Investor 18.12%
ATTN KATHY HSU
450 N Cityfront Plaza Drive
Suite 440
Chicago, IL 60611-5508

State Street Bank & Trust Co. Investor 6.19%
The Merck Company Foundation
One Merck Drive
PO Box 300 WS 3AF-05
Whitehouse Station, NJ 08889-0100

The California Endowment Investor 31.27%
ATTN ALEX HSIAO
21650 Oknard Street
Suite 1200
Woodland Hills, CA 91367-7815

<PAGE>

Banc of America Securities LLC Advisor 89.03%
ATTN: MUTUAL FUND DEPT.
600 Montgomery Street
San Francisco, CA 94111-2702

Jupiter & Co Advisor 10.06%
C/o Investors Bank & Trust
PO Box 9130 FPG90
Boston, MA 02117-9130
</TABLE>

PERFORMANCE INFORMATION

Average annual total return of a class of shares of the Fund for one-,
five-, and ten-year periods (or for such shorter periods as shares of that class
of shares of the Fund have been offered) is determined by calculating the actual
dollar amount of investment return on a $1,000

<PAGE>

investment in that class of shares at the beginning of the period, and then
calculating the annual compounded rate of return which would produce that
amount. Total return for a period of one year or less is equal to the actual
return during that period. Total return calculations assume reinvestment of
all Fund distributions at net asset value on their respective reinvestment
dates. Total return may be presented for other periods.

ALL PERFORMANCE DATA IS BASED ON PAST INVESTMENT RESULTS AND DOES
NOT PREDICT FUTURE PERFORMANCE. Investment performance of a particular class
of the Fund's shares, which will vary, is based on many factors, including
market conditions, the composition of the Fund's portfolio, and the Fund's
operating expenses attributable to that class of shares. Investment
performance also often reflects the risks associated with the Fund's
investment objectives and policies. Quotations of yield or total return for
any period when an expense limitation is in effect will be greater than if
the limitation had not been in effect. These factors should be considered
when comparing the investment results of the Fund's shares to those of
various classes of other mutual funds and other investment vehicles.
Performance for the Fund's shares may be compared to various indices.

The table below sets forth the average annual total return of Investor
Shares of the Fund for the one-year period ended October 31, 1999, and for the
period from the commencement of the Fund's operations until October 31, 1999.
The table also sets forth average annual total return information for the
Fund's Advisor Shares, which includes estimated pro forma information based on
the performance of the Fund's Investor Shares for periods prior to the
inception date of Advisor Shares. Such prior performance has been recalculated
to reflect the actual fees and expenses attributable to Advisor Shares.
BECAUSE THE EXPENSES ATTRIBUTABLE TO THE FUND'S ADVISOR SHARES ARE HIGHER THAN
THOSE ATTRIBUTABLE TO ITS INVESTOR SHARES, THE PERFORMANCE OF THE FUND'S
ADVISOR SHARES WILL NORMALLY BE LESS THAT THE PERFORMANCE OF ITS INVESTOR
SHARES OVER THE SAME PERIOD.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 1999

- ------------------------------------------------------------------------------------------------
SINCE INCEPTION INCEPTION DATE
OF FUND INCEPTION DATE OF CLASS
CLASS 1 YEAR (ANNUALIZED) OF FUND
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investor Shares 36.27% 1,42% 3/31/95 3/31/95

Advisor Shares* % 1.51% 11/21/96

36.05%
- ------------------------------------------------------------------------------------------------
</TABLE>

* Total return for Advisor Shares of the Fund reflects pro forma
information (based on Investor Share performance) through November 20, 1996,
and actual total return from November 21, 1996 (the inception date of Advisor
Shares of the Fund) through October 31, 1999. The actual

<PAGE>

total return of Advisor Shares of the Fund from November 21, 1996 through
October 31, 1999 was 2.06%.

From time to time, Schroder, State Street or any of their affiliates
that provide services to the Fund may reduce their compensation or assume
expenses of the Fund in order to reduce the Fund's expenses, as described in
the Fund's current Prospectuses. Any such waiver or assumption would increase
the Fund's total return for each class of shares during the period of the
waiver or assumption.

CUSTODIAN

State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, is the 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.

<PAGE>

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Boston Financial Data Services, Inc., 66 Brooks Drive, Braintree,
Massachusetts 02184, is the Trust's registrar, transfer agent and dividend
disbursing agent.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, the Trust's independent accountants,
provide audit services and tax return preparation services. 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

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.

<PAGE>

FINANCIAL STATEMENTS

The Report of Independent Accountants, financial highlights, and
financial statements of the Fund are included in the Fund's Annual Report to
Shareholders for the fiscal year ended October 31, 1999 on Form N-30D under
the Investment Company Act, filed electronically with the Securities and
Exchange Commission on December 30, 1999 (File No. 811-1911; Accession
Number: 0000912057-99-011046). That information is incorporated by reference
into this Statement of Additional Information.

A-
<PAGE>

APPENDIX A

RATINGS OF CORPORATE DEBT INSTRUMENTS

A-
<PAGE>

MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")

FIXED-INCOME SECURITY RATINGS

"Aa" Fixed-income securities which are rated "Aa" are judged to be of
high quality by all standards. Together with the "Aaa" group they
comprise what are generally known as high grade fixed-income securities.
They are rated lower than the best fixed-income securities because
margins of protection may not be as large as in "Aaa" securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in "Aaa" securities.

"Baa" Fixed-income securities which are rated "Baa" are considered as medium
grade obligations; i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
fixed-income securities lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Fixed-income securities rated "Aaa", "Aa", "A" and "Baa" are considered
investment grade.

"Caa" Fixed-income securities which are rated "Caa" are of poor standing.
Such issues may be in default or there may be present elements of danger with
respect to principal or interest.

A-

<PAGE>

"Ca" Fixed-income securities which are rated "Ca" present obligations which
are speculative in a high degree. Such issues are often in default or have
other marked shortcomings.

Rating Refinements: Moody's may apply numerical modifiers, "1", "2", and
"3" in each generic rating classification from "Aa" through "B" in its
municipal fixed-income security rating system. The modifier "1" indicates
that the security ranks in the higher end of its generic rating category;
the modifier "2" indicates a mid-range ranking; and a modifier "3"
indicates that the issue ranks in the lower end of its generic rating
category.

COMMERCIAL PAPER RATINGS

Moody's Commercial Paper ratings are opinions of the ability to repay
punctually promissory obligations not having an original maturity in excess of
nine months. The ratings apply to Municipal Commercial Paper as well as
taxable Commercial Paper. Moody's employs the following three designations,
judged to be investment grade, to indicate the relative repayment capacity
of rated issuers: "Prime-1", "Prime-2", "Prime-3".

Issuers rated "Prime-1" have a superior capacity for repayment of short-term
promissory obligations. Issuers rated "Prime-2" have a strong capacity for
repayment of short-term promissory obligations; and Issuers rated "Prime-3"
have an acceptable capacity for repayment of short-term promissory
obligations. Issuers rated "Not Prime" do not fall within any of the Prime
rating categories.

STANDARD & POOR'S RATINGS SERVICES ("STANDARD & POOR'S")

FIXED-INCOME SECURITY RATINGS

Standard & Poor's does not perform an audit in connection with any rating and
may, on occasion, rely on unaudited financial information. The ratings may be
changed, suspended or withdrawn as a result of changes in, or unavailability
of, such information, or for other reasons.

"AAA" Fixed-income securities rated "AAA" have the highest rating assigned
by Standard & Poor's. Capacity to pay interest and repay principal is
extremely strong.

"AA" Fixed-income securities rated "AA" have a very strong capacity to pay
interest and repay principal and differs from the highest-rated issues only
in small degree.

"A" Fixed-income securities rated "A" have a strong capacity to pay interest
and repay principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than

A-

<PAGE>

fixed-income securities in higher-rated categories.

Fixed-income securities rated "AAA", "AA", "A" and "BBB" are
considered investment grade.

"B" Fixed-income securities rated "B" have a greater vulnerability to default
but presently have the capacity to meet interest payments and principal
repayments. Adverse business, financial or economic conditions would likely
impair capacity or willingness to pay interest and repay principal.

"CC" The rating "CC" is typically applied to fixed-income securities
subordinated to senior debt which is assigned an actual or implied "CCC"
rating.

"C" The rating "C" is typically applied to fixed-income securities
subordinated to senior debt which is assigned an actual or implied "CCC-"
rating.

"CI" The rating "CI" is reserved for fixed-income securities on which no
interest is being paid.

"NR" Indicates that no rating has been requested, that there is
insufficient information on which to base a rating or that Standard &
Poor's does not rate a particular type of obligation as a matter of policy.

Fixed-income securities rated "BB", "B", "CCC", "CC" and "C" are
regarded as having predominantly speculative characteristics with respect
to capacity to pay interest and repay principal. "BB" indicates the least
degree of speculation and "C" the highest degree of speculation. While such
fixed-income securities will likely have some quality and protective
characteristics, these are out-weighed by large uncertainties or major risk
exposures to adverse conditions.

Plus (+) or minus (-): The rating from "AA" TO "CCC" may be modified
by the addition of a plus or minus sign to show relative standing with the
major ratings categories.

COMMERCIAL PAPER RATINGS

Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days. The commercial paper rating is not a recommendation to
purchase or sell a security. The ratings are based upon current information
furnished by the issuer or obtained by Standard & Poor's from other sources
it considers reliable. The ratings may be changed, suspended, or withdrawn as
a result of changes in or unavailability of such information. Ratings are
graded into group categories, ranging from "A" for the highest quality
obligations to "D" for the lowest. Ratings are applicable to both taxable
and

A-
<PAGE>

tax-exempt commercial paper.

"A-1" Indicates that the degree of safety regarding timely payment is very
strong.

"A-2" Indicates capacity for timely payment on issues with this designation
is strong. However, the relative degree of safety is not as overwhelming as
for issues designated "A-1".

"AA-3" Indicates a satisfactory capacity for timely payment. Obligations
carrying this designation are, however, somewhat more vulnerable to the
adverse effects of changes in circumstances than obligations carrying the
higher designations.

<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) Form of Amended and Restated Investment Advisory Agreement between the
Trust and Schroder Investment Management North America Inc. ("SIM N.A.")
dated as of September 15, 1999 with respect to Schroder Greater China Fund
and Schroder Cash Reserves Fund (see Note 7).

(2) Form of Amended and Restated Investment Advisory Agreement between the
Trust and SIM N.A. dated as of September 15, 1999, with respect to Schroder
U.S. Diversified Growth Fund (see Note 7).

(3) Form of Amended and Restated Investment Advisory Agreement between the
Trust and SIM N.A. dated as of September 15, 1999, with respect to Schroder
U.S. Smaller Companies Fund, Schroder Latin America Fund and Schroder
International Equity Fund (see Note 7).

(4) Form of Amended and Restated Investment Advisory Agreement between the
Trust and SIM N.A. dated as of September 15, 1999, with respect to Schroder
International Smaller Companies Fund and Schroder Global Asset Allocation
Fund (see Note 7).

(5) Form of Amended and Restated Investment Advisory Agreement between the
Trust and SIM N.A. dated as of September 15, 1999, with respect to Schroder
Emerging Markets Fund Institutional Portfolio (see Note 7).

(6) Form of Amended and Restated Investment Advisory Agreement between the
Trust and SIM N.A. dated as of September 15, 1999, with respect to Schroder
Micro Cap Fund (see Note 7).

C-1

<PAGE>

(7) Form of Amended and Restated Investment Advisory Agreement between the
Trust and SIM N.A. dated as of September 15, 1999, with respect to Schroder
Emerging Markets Fund (see Note 7).

(8) Form of Amended and Restated Investment Sub-Advisory Agreement among
the Trust, SIM N.A. and Schroder Investment Management International Ltd.
dated as of September 15, 1999, with respect to Schroder International
Smaller Companies Fund (see Note 7).

(e) Form of Distribution Agreement between the Trust and Schroder Fund Advisors
Inc. dated as of September 15, 1999 (see Note 7).

(f) Not Applicable.

(g) Custodian Contract between the Trust and State Street Bank and Trust
Company dated as of May 31, 1999 (see Note 6).

(h) (1) Administration Agreement between the Trust and Schroder Fund Advisors
Inc. is filed herewith.

(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 (see Note 6).

(3) Transfer Agency and Service Agreement between the Trust and State
Street Bank and Trust Company dated as of May 28, 1999 (see Note 6).

(4) Shareholder Service Plan adopted by the Trust with respect to Schroder
Greater China Fund (see Note 4).

(i) Opinion of Morris, Nichols, Arsht & Tunnell is filed herewith.

(j) (1) Consent of PricewaterhouseCoopers LLP is filed herewith.

(2) Consent of PricewaterhouseCoopers LLP for Schroder Emerging Markets
Fund Institutional Portfolio is filed herewith.

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

(l) Not Applicable.

C-2

<PAGE>

(m) Distribution Plan with respect to Advisor Shares (see Note 3).

(n) Multiclass (Rule 18f-3) Plan adopted by Trust (see Note 5).

(o) Power of Attorney for Nancy A. Curtin, David N. Dinkins, Peter E. Guernsey,
Sharon L. Haugh, John I. Howell, Peter S. Knight, Alan M. Mandel, William
L. Means, Clarence F. Michalis, Hermann C. Schwab (see Note 7).

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. 67
via EDGAR on July 17, 1998, accession number 001004402-98-000399.

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

C-3

<PAGE>

6. Exhibit incorporated by reference as filed on Post-Effective Amendment No.
74 via EDGAR on July 12, 1999, accession number 0001047469-99-027251.

7. Exhibit incorporated by reference as filed on Post-Effective Amendment No.
75 via EDGAR on September 30, 1999, accession number 0001047469-99-037395.

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 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

C-4

<PAGE>

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 directors and officers
of Schroder Investment Management North America Inc. ("SIM N.A.") have been
engaged during the past two fiscal years in no business, vocation or employment
of a substantial nature other than as directors, officers or employees of SIM
N.A. or certain of its corporate affiliates, except the following, whose
principal occupations during that period, other than as directors or officers of
SIM N.A. or certain of its corporate affiliates are as follows: Stefan Bottcher,
Director of SIM N.A., who was Director, Robert Fleming; Robert R. Coby, Director
of SIM N.A., who was President and Chief Operating Officer at Lynch & Mayer;
Nancy A. Curtin, Managing Director and Senior Vice President of SIM N.A., who
was Director, Barings Asset Management; Barbara Brooke Manning, First Vice
President and Chief Compliance Officer of SIM N.A., who was

C-5

<PAGE>

Senior Manager, Ernst & Young LLP; and Robert C. Michele, Director and Managing
Director of SIM N.A., who was Managing Director, BlackRock Financial Management.
The address of SIM N.A. and Schroder Fund Advisors is 787 Seventh Avenue, 34th
Floor, New York, NY 10019.

The addresses of certain corporate affiliates of SIM N.A. are as follows:
Schroder Ltd. and Schroders plc. are located at 31 Gresham St., London EC2V 7QA,
United Kingdom. Each of Schroder Investment Management Limited, Schroder
Investment Management (UK) Limited, Schroder Investment Management (Europe),
Korea Schroder Fund Management 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.

(b) Schroder Investment Management International Ltd. The directors and officers
of Schroder Investment Management International Ltd. ("SIMIL") have been engaged
during the past two fiscal years in no business, vocation or employment of a
substantial nature other than as directors, officers or employees of SIMIL or
certain of its corporate affiliates. The addresses of certain corporate
affiliates of SIM N.A. are as follows: Each of Schroder Investment Management
Limited, Schroder Investment Management (UK) Limited, Schroder Investment
Management (Europe), Korea Schroder Fund Management 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.

C-6

<PAGE>

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 Trust's shares:

<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 and Director Vice President
- --------------------------------------------------------------------------------------------------
Sharon L. Haugh Chairman and Director Trustee
- --------------------------------------------------------------------------------------------------
Fergal Cassidy Treasurer and Chief Financial Officer None
- --------------------------------------------------------------------------------------------------
Alexandra Poe General Counsel, Senior Vice President
President, Secretary and Director
- --------------------------------------------------------------------------------------------------
Alan M. Mandel Senior Vice President and Director Treasurer and Secretary
- --------------------------------------------------------------------------------------------------
Frances Selby Senior Vice President and Director None
- --------------------------------------------------------------------------------------------------
David Robertson Senior Vice President and Director None
- --------------------------------------------------------------------------------------------------
</TABLE>

The principal business address for each person is 787 Seventh Avenue, New York,
New York 10019 except for Nancy A. Curtin, 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

C-7

<PAGE>

are maintained at State Street Bank and Trust Company, 2 Avenue de Lafayette,
Boston, Massachusetts 02111 and Two 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-8

<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 76 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 February 29, 2000.

Schroder Capital Funds (Delaware)
By: /s/ Alexandra Poe
Name: Alexandra Poe
Title: President

C-9

<PAGE>

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 in the capacities indicated on February 29, 2000.

By: /s/ Alexandra Poe
Name: Alexandra Poe
Title: President

By: /s/ Alan M. Mandel
Name: Alan M. Mandel
Title: 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/ Alexandra Poe
Alexandra Poe Attorney-in-Fact*

* Pursuant to power of attorney filed as Other Exhibit to this registration
statement.

C-10

<PAGE>

EXHIBIT LIST

<TABLE>
<CAPTION>
Exhibit
Number Description
----- -----------
<S> <C>
(h)(1) Administration Agreement

(i) Opinion of Morris, Nichols, Arsht & Tunnell

(j)(1) Consent of PricewaterhouseCoopers LLP

(j)(2) Consent of PricewaterhouseCoopers LLP for Schroder
Emerging Markets Fund Institutional Portfolio
</TABLE>

C-11

<PAGE>

SCHRODER CAPITAL FUNDS (DELAWARE)
AMENDED AND RESTATED ADMINISTRATION AGREEMENT

AGREEMENT made this 26th day of November, 1996, as amended and restated
as of this 1st day of June, 1999, between Schroder Capital Funds (Delaware) (the
"Trust"), a business Trust organized under the laws of the State of Delaware
with its principal place of business at 787 7th Avenue, 34th Floor, New York,
New York 10019, and Schroder Fund Advisors Inc. ("Schroder"), a corporation
organized under the laws of the State of Maryland.

WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company
and is authorized to issue shares of beneficial interest in separate series and
classes;

WHEREAS, the Trust has entered into various Investment Advisory
Agreements with Schroder Investment Management North America Inc. (the
"Adviser"), pursuant to which the Adviser provides investment advisory services
to the Trust;

WHEREAS, the Trust desires that Schroder perform certain administrative
services for each series of the Trust as listed in APPENDIX A hereto (each a
"Series") and each class of shares of each Series (each a "Class") and Schroder
is willing to provide those services on the terms and conditions set forth in
this Agreement;

NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Trust and Schroder agree as follows:

SECTION 1. APPOINTMENT.

The Trust hereby appoints Schroder as administrator of the Trust and of
each Series and any Class thereof and Schroder hereby accepts such appointment,
all in accordance with the terms and conditions of this Agreement. In connection
therewith, the Trust has delivered to Schroder copies of its Trust Instrument
and Bylaws, the Trust's Registration Statement and all amendments thereto filed
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), or
the 1940 Act (the "Registration Statement"), and the current prospectus and
statement of additional information of each Class of each Series (collectively,
as currently in effect and as amended or supplemented, the "Prospectus"), all in
such manner and to such extent as may from time to time be authorized by the
Trust's Board of Trustees (the "Board"), and shall promptly furnish Schroder
with all amendments of or supplements to the foregoing.

SECTION 2. FURNISHING OF EXISTING ACCOUNTS AND RECORDS.

The Trust shall promptly turn over to Schroder such of the accounts and
records previously maintained by or for it as are necessary for Schroder to
perform its functions under this Agreement. The Trust authorizes Schroder to
rely on such accounts and records turned over to it and hereby indemnifies and
will hold Schroder, its successors and assigns, harmless of and from any and all
expenses, damages, claims, suits, liabilities, actions, demands and losses
whatsoever arising out of or in connection with any error, omission, inaccuracy
or other deficiency of such accounts and records or in the failure of the Trust
to provide any portion of such or to provide any information needed by Schroder
to knowledgeably perform its functions.

SECTION 3. ADMINISTRATIVE DUTIES

1
<PAGE>

(a) Subject to the direction and control of the Board and in
cooperation with the Adviser, Schroder shall provide, or oversee, as applicable,
administrative services necessary for the Trust's operations with respect to
each Series except those services that are the responsibility of the Adviser or
the Series' custodian or transfer agent, all in such manner and to such extent
as may be authorized by the Board.

(b) With respect to the Trust, each Series and each Class thereof, as
applicable, Schroder shall:

(i) oversee (A) the preparation and maintenance by the
Adviser and the Trust's subadministrator, custodian, transfer
agent, shareholder recordkeeper, dividend disbursing agent and
fund accountant in such form, for such periods and in such
locations as may be required by applicable law, of all documents
and records relating to the operation of the Trust required to be
prepared or maintained by the Trust or its agents pursuant to
applicable law; (B) the reconciliation of account information and
balances among the Adviser and the Trust's custodian, transfer
agent, shareholder recordkeeper, dividend disbursing agent and
fund accountant; (C) the transmission of purchase and redemption
orders for Shares; (D) the notification to the Adviser of
available funds for investment; and (E) the performance of fund
accounting, including the calculation of the net asset value of
the shares;

(ii) oversee the performance of administrative and
professional services rendered to the Trust by others, including
its sub-administrator, custodian, transfer agent and dividend
disbursing agent as well as legal, auditing and shareholder
servicing and other services performed for each Series or Class;

(iii) oversee the preparation and the printing of the periodic
updating of the Registration Statement and Prospectus, tax
returns, and reports to shareholders, the Securities and Exchange
Commission (the "SEC") and state securities commissions;

(iv) oversee the preparation of proxy and information
statements and any other communications to shareholders;

(v) at the request of the Board, provide the Trust with
adequate general office space and facilities and provide persons
suitable to the Board to serve as officers of the Trust;

(vi) provide the Trust, at the Trust's request, with the
services of persons who are competent to perform such supervisory
or administrative functions as are necessary for effective
operation of the Trust;

(vii) oversee the preparation, filing and maintenance of the
Trust's governing documents, including the Trust Instrument and
minutes of meetings of Trustees and shareholders;

(viii) oversee with the cooperation of the Trust's counsel, the
Adviser, and other relevant parties, preparation and
dissemination of materials for meetings of the Board;

2
<PAGE>

(ix) monitor sales of shares and ensure that such shares are
properly and duly registered with the SEC and applicable state
securities commissions;

(x) oversee the calculation of performance data for
dissemination to information services covering the investment
company industry, for sales literature of the Trust and other
appropriate purposes;

(xi) oversee the determination of the amount of, and supervise
the declaration of, dividends and oilier distributions to
shareholders as necessary to, among other things, maintain the
qualification of each Series as a regulated investment company
under the Internal Revenue Code of 1986, as amended, and prepare
and distribute to appropriate parties notices announcing the
declaration of dividends and other distributions to shareholders;
and

(xii) advise the Trust and its Board on matters concerning the
Trust and its affairs.

(c) Schroder shall oversee the preparation and maintenance, or cause
to be prepared and maintained, records in such form for such periods and in such
locations as may be required by applicable regulations, all documents and
records relating to the services provided to the Trust pursuant to this
Agreement required to be maintained pursuant to the 1940 Act, rules and
regulations of the SEC, the Internal Revenue Service and any other national,
state or local government entity with jurisdiction over the Trust. The accounts
and records pertaining to the Trust which are in possession of Schroder, or an
entity subcontracted by Schroder, shall be the property of the Trust. The Trust,
or the Trust's authorized representatives, shall have access to such accounts
and records at all times during Schroder's, or its subcontractor's, normal
business hours. Upon the reasonable request of the Trust, copies of any such
accounts and records shall be provided promptly by Schroder to the Trust or the
Trust's authorized representatives. In the event the Trust designates a
successor to any of Schroder's obligations under this agreement, Schroder shall,
at the expense and direction of the Trust, transfer to such successor all
relevant books, records and other data established or maintained by Schroder, or
its subcontractor, under this Agreement.

SECTION 4. STANDARD OF CARE

(a) Schroder, in performing under the terms and conditions of this
Agreement, shall use its best judgment and efforts in rendering the services
described herein, and shall incur no liability for its status under this
agreement or for any reasonable actions taken or omitted in good faith. As an
inducement to Schroder's undertaking to render these services, the Trust hereby
agrees to indemnify and hold harmless Schroder, its employees, agents, officers
and directors, from any and all loss, liability and expense, including any legal
expenses, arising out of Schroder's performance under this Agreement, or status,
or any act or omission of Schroder, its employees, agents, officers and
directors; provided that this indemnification shall not apply to Schroder's
actions taken or failures to act in cases of Schroder's own bad faith, willful
misconduct or gross negligence in the performance of its duties under this
Agreement; and further provided, that Schroder shall give the Trust notice and
reasonable opportunity to defend against any such loss, claim, damage, liability
or expense in the name of the Trust or Schroder, or both. The Trust will be
entitled to assume the defense of any suit brought to enforce any such claim or
demand, and to retain counsel of good standing chosen by the Trust and approved
by Schroder, which approval

3
<PAGE>

shall not be withheld unreasonably. In the event the Trust does elect to assume
the defense of any such Suit and retain counsel of good standing approved by
Schroder, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case the
Trust does not elect to assume the defense of any such suit, or in case Schroder
does not approve of counsel chosen by the Trust or Schroder has been advised
that it may have available defenses or claims which are not available or
conflict with those available to the Trust, the Trust will reimburse Schroder,
its employees, agents, officers and directors for the fees and expenses of any
one law firm retained as counsel by Schroder or them. Schroder may, at any time,
waive its right to indemnification under this agreement and assume its own
defense. The provisions of paragraphs (b) through (d) of this Section 4 should
not in any way limit the foregoing:

(b) Schroder may rely upon the advice of the Trust or of
counsel, who may be counsel for the Trust or counsel for Schroder, and upon
statements of accountants, brokers and other persons believed by it in good
faith to be expert in the matters upon which they are consulted, and Schroder
shall not be liable to anyone for any actions taken in good faith upon such
statements.

(c) Schroder may act upon any oral instruction which it receives and
which it believes in good faith was transmitted by the person or persons
authorized by the Board of the Trust to give such oral instruction. Schroder
shall have no duty or obligation to make any inquiry or effort of certification
of such oral instruction.

(d) Schroder shall not be liable for any action taken in good faith
reliance upon any written instruction or certified copy of any resolution of the
Board of the Trust, and Schroder may rely upon the genuineness of any such
document or copy thereof reasonably believed in good faith by Schroder to have
been validly executed.

(e) Schroder may rely and shall be protected in acting upon any
signature, instruction, request, letter of transmittal, certificate, opinion of
counsel, statement, instrument, report, notice,consent, order, or other paper
document believed by it to be genuine and to have been signed or presented by
the purchaser, Trust or other proper party or parties.

SECTION 5. EXPENSES

(a) Subject to any agreement by Schroder or other person to reimburse
any expenses of the Trust that relate to any Series, the Trust shall be
responsible for and assume the obligation for payment of all of its expenses,
including: (a) the fee payable under Section 6 hereof; (b) any fees payable to
the Adviser; (c) any fees payable to Schroder; (d) expenses of issue, repurchase
and redemption of Shares; (e) interest charges, taxes and brokerage fees and
commissions; (f) premiums of insurance for the Trust, its Trustees and officers
and fidelity bond premiums; (g) fees, interest charges and expenses of third
parties, including the Trust's custodian, transfer agent, dividend disbursing
agent and fund accountant; (h) fees of pricing, interest, dividend, credit and
other reporting services; (i) costs of membership in trade associations; (j)
telecommunications expenses; (k) funds transmission expenses; (l) auditing,
legal and compliance expenses; (m) costs of forming the Trust and maintaining
its existence; (n) to the extent permitted by the 1940 Act, costs of preparing
and printing the Prospectuses, subscription application forms and shareholder
reports and delivering them to existing shareholders; (o) expenses of meetings
of shareholders and proxy solicitations therefore; (p) costs of maintaining
books of original entry for portfolio and fund

4
<PAGE>

accounting and other required books and accounts, of calculating the net asset
value of shares of the Trust and of preparing tax returns; (q) costs of
reproduction, stationery and supplies; (r) fees and expenses of the Trust's
Trustees; (s) compensation of the Trust's officers and employees who are not
employees of the Adviser or Schroder or their respective affiliated persons and
costs of other personnel (who may be employees of the Adviser, Schroder or their
respective affiliated persons) performing services for the Trust; (t) costs of
Trustee meetings; (u) SEC registration fees and related expenses; (v) state or
foreign securities laws registration fees and related expenses; and (w) all fees
and expenses paid by the Trust in accordance with any distribution plan adopted
pursuant to Rule 12b-l under the 1940 Act or under any shareholder service plan
or agreement.

(b) If the aggregate expenses of every character incurred by, or
allocated to, a Series in any fiscal year, other than interest, taxes, brokerage
commissions and other portfolio transaction expenses, other expenditures which
are capitalized in accordance with generally accepted accounting principles and
any extraordinary expense (including, without limitation, litigation and
indemnification expense), but including the fees provided for in Section 6 and
under an Advisory Agreement with respect to a Series ("includable expenses"),
shall exceed the expense limitations applicable to that Series imposed by state
securities law or regulations thereunder, as these limitations may be raised or
lowered from time to time, Schroder shall pay that Series an amount equal to a
percentage of that excess ("Schroder's reimbursement"), such Schroder's
reimbursement to be in an amount set forth with respect to the Series in
APPENDIX A to this Agreement. With respect to portions of a fiscal year in which
this Agreement shall be in effect, the foregoing limitations shall be prorated
according to the proportion which that portion of the fiscal year bear to the
full fiscal year. At the end of each month of the Trust's fiscal year, Schroder
will review the includable expenses accrued during that fiscal year to the end
of the period and shall estimate the contemplated includable expenses for the
balance of that fiscal year. If as a result of that review and estimation, it
appears likely that the includable expenses will exceed the limitations referred
to in this Section 5(b) for a fiscal year, the monthly fees payable to Schroder
under this contract for such month shall be reduced, subject to a later
reimbursement to reflect actual expenses, by an amount equal to a percentage
(which shall be equal to Schroder's reimbursement) of a pro rata portion
prorated on the basis of the remaining months of the fiscal year, including the
month just ended) of the amount by which the includable expenses for the fiscal
year (less an amount equal to the aggregate of actual reductions made pursuant
to this provision with respect to prior months of the fiscal year) are expected
to exceed the limitations provided in this Section 5(b). For purposes of the
foregoing, the value of the net assets of each Series shall be computed in the
manner specified in Section 6, and any payments required to be made by Schroder
shall be made once a year promptly after the end of the Trust's fiscal year.

SECTION 6. COMPENSATION

(a) In consideration of the services performed by Schroder under this
Agreement, the Trust will pay Schroder, with respect to each Series, a fee at
the annual rate, as listed in APPENDIX B hereto. Such fee shall be accrued by
the Trust daily and shall be payable monthly in arrears on the first day of each
calendar month for services performed under this agreement during the prior
calendar month. If the fees payable pursuant to this provision begin to accrue
before the end of any month or if this Agreement terminates before the end of
any month, the fees for the period from that date to the end of that month or
from the beginning of that month to the date of termination, as the case may be,
shall be prorated according to the proportion that the period bears to the full
month in which the effectiveness or termination occurs. Upon the termination of
this Agreement, the Trust shall pay to Schroder such compensation as shall be
payable prior to the effective date of such termination.

5
<PAGE>

(b) In the event that this Agreement is terminated, Schroder shall be
reimbursed for reasonable charges and disbursements associated with promptly
transferring to its successor as designated by the Trust the original or copies
of all accounts and records maintained by Schroder under this agreement, and
cooperating with, and providing reasonable assistance to its successor in the
establishment of the accounts and records necessary to carry out the successor's
or other person's responsibilities.

(c) Notwithstanding anything in this Agreement to the contrary,
Schroder and its affiliated persons may receive compensation or reimbursement
from the Trust with respect to (i) the provision of services on behalf of the
Series in accordance with any distribution plan adopted by the Trust pursuant to
Rule 12b-l under the 1940 Act or (ii) the provision of shareholder support or
other services, including fund accounting services.

SECTION 7. EFFECTIVENESS, DURATION AND TERMINATION

(a) This Agreement shall become effective on the date first above
written with respect to each Series of the Trust then existing and shall relate
to every other Series as of the later of the date on which the Trust's
Registration Statement relating to the shares of such Series becomes effective
or the Series commences operations.

(b) This Agreement shall continue in effect for twelve months and,
thereafter, shall be automatically renewed each year for an additional term
of one year.

(c) This Agreement may be terminated with respect to a Series at any
time, without the payment of any penalty, (i) by the Board on 60 days' written
notice to Schroder or (ii) by Schroder on 60 days' written notice to the Trust.
Upon receiving notice of termination by Schroder, the Trust shall use its best
efforts to obtain a successor administrator. Upon receipt of written notice from
the Trust of the appointment of a successor, and upon payment to Schroder of all
fees owed through the effective termination date, and reimbursement for
reasonable charges and disbursements, Schroder shall promptly transfer to the
successor administrator the original or copies of all accounts and records
maintained by Schroder under this agreement including, in the case of records
maintained on computer systems, copies of such records in machine-readable form,
and shall cooperate with, and provide reasonable assistance to, the successor
administrator in the establishment of the accounts and records necessary to
carry out the successor administrator's responsibilities. For so long as
Schroder continues to perform any of the services contemplated by this Agreement
after termination of this Agreement as agreed to by the Trust and Schroder, the
provisions of Sections 4 and 6 hereof shall continue in full force and effect.

SECTION 8. ACTIVITIES OF SCHRODER

(a) Except to the extent necessary to perform Schroder's obligations
under this Agreement, nothing herein shall be deemed to limit or restrict the
right of Schroder, or any affiliate of Schroder, or any employee of the
Schroder, to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association.

(b) Schroder may subcontract any or all of its functions or
responsibilities pursuant

6
<PAGE>

to this Agreement to one or more corporations, trusts, firms, individuals or
associations, which may be affiliates of Schroder, who agree to comply with the
terms of this Agreement. Schroder may pay those persons for their services, but
no such payment will increase Schroder's compensation from the Trust.

SECTION 9. COOPERATION WITH INDEPENDENT ACCOUNTANTS.

Schroder shall cooperate, if applicable, with the Trust's independent
public accountants and shall take reasonable action to make all necessary
information available to such accountants for the performance of their duties.

SECTION 10. SERVICE DAYS.

Nothing contained in this Agreement is intended to or shall require
Schroder, in any capacity under this agreement, to perform any functions or
duties on any day other than a business day of the Trust or of a Series.
Functions or duties normally scheduled to be performed on any day which is not a
business day of the Trust or of a Series shall be performed on, and as of, the
next business day, unless otherwise required by law.

SECTION 11. NOTICES.

Any notice or other communication required by or permitted to be given
in connection with this Agreement shall be in writing and shall be delivered in
person, or by first-class mail, postage prepaid, or by overnight or two-day
private mail service to the respective party. Notice to the Trust shall be given
as follows or at such other address as the Trust may designate in writing:

Schroder Capital Funds (Delaware)
787 Seventh Avenue, 34th Floor
New York, New York 10019

Notice to Schroder shall be given as follows or at such other address
as Schroder may designate in writing:

Schroder Fund Advisors Inc.
787 Seventh Avenue, 34th Floor
New York, New York 10019

Notices and other communications received by the parties at the
addresses listed above shall be deemed to have been properly given.

SECTION 12. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY

The Trustees of the Trust and the shareholders of each Series shall not
be liable for any obligations of the Trust or of the Series under this
Agreement, and Schroder agrees that, in asserting any rights or claims under
this Agreement, it shall look only to the assets and property of the Trust or
the Series to which Schroder's rights or claims relate in settlement of such
rights or claims, and not to the Trustees of the Trust or the shareholders of
the

7
<PAGE>

Series.

SECTION 13. MISCELLANEOUS

(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.

(b) This Agreement may be executed in two or more counterparts, each
of which, when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.

(c) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.

(d) Section and Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement

(e) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Trust without the written
consent of Schroder or by Schroder, without the written consent of the Trust
authorized or approved by a resolution of the Board.

(f) This Agreement shall be governed by the laws of the State of New
York.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.

SCHRODER CAPITAL FUNDS (DELAWARE)

/s/ Alexandra Poe
----------------------------------
Name: Alexandra Poe
Title: President

SCHRODER FUND ADVISORS INC.

/s/ Catherine A. Mazza
----------------------------------
Name: Catherine A. Mazza
Title: Executive Vice President

8
<PAGE>

APPENDIX A
Series of the Trust

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 Greater China Fund
Schroder Japan Fund
Schroder Asia Fund

9
<PAGE>

APPENDIX B
ADMINISTRATION FEES

<TABLE>
<CAPTION>
Series of the Trust Fee As % of the Average Annual
- ------------------- Daily Net Assets of the Series
------------------------------
<S> <C>
Schroder International Fund 0.225%

Schroder Asia Fund 0.05%

Schroder Japan Fund 0.05%

Schroder U.S. Smaller Companies Fund 0.25%

Schroder Emerging Markets Fund
Institutional Portfolio 0.10%

Schroder Emerging Markets Fund 0.25%

Schroder International Smaller
Companies Fund 0.25%

Schroder Micro Cap Fund 0.25%

Schroder Greater China Fund 0.25%
</TABLE>

<PAGE>

February 22, 2000

Schroder Capital Funds (Delaware)
P.O. Box 8507
Boston, Massachusetts 02266

Re: SCHRODER CAPITAL FUNDS (DELAWARE)
---------------------------------

Ladies and Gentlemen:

We have acted as special Delaware counsel to Schroder Capital Funds
(Delaware), a Delaware business trust (the "Trust"), in connection with certain
matters relating to the issuance of Shares of the Trust. Capitalized terms used
herein and not otherwise herein defined are used as defined in the Trust
Instrument of the Trust dated as of September 6, 1995, as amended on September
17, 1996, and as restated on March 13, 1998 (as so amended and restated, the
"Governing Instrument").

In rendering this opinion, we have examined copies of the following
documents, each in the form provided to us: the Certificate of Trust of the
Trust as filed in the Office of the Secretary of State of Delaware (the "State
Office") on January 9, 1996; the Governing Instrument; the Minutes of the
Meeting of the Board of Directors/Trustees of the Trust dated as of September
13, 1995; Minutes of the Meetings of the Board of Trustees of the Trust dated as
of March 15, 1996, November 26, 1996, June 4, 1997, June 15, 1998 and September
14, 1998; a Consent and Action in Lieu of Meeting of the Trust dated May 3,
1996; the By-laws of the Trust dated as of September 8, 1995 (the "By-laws" and,
together with the Governing Instrument and all of the foregoing actions by the
Trustees of the Trust, the "Governing Documents"); the Trust's Notification of
Registration Filed Pursuant to Section 8(a) of the Investment Company Act of
1940 on Form N-8A as filed with the Securities and Exchange Commission on
January 8, 1996; and a certification of good standing of the Trust obtained as
of a recent date from the State Office. In such examinations, we have assumed
the genuineness of all signatures, the conformity to original documents of all
documents submitted to us as copies or drafts of documents to be executed, and
the legal capacity of natural

<PAGE>

Schroder Capital Funds (Delaware)
February 22, 2000
Page 2

persons to complete the execution of documents. We have further assumed for the
purpose of this opinion: (i) the due formation or organization, valid existence
and good standing of each entity (other than the Trust) that is a party to any
of the documents reviewed by us under the laws of the jurisdiction of its
respective formation or organization; (ii) the due adoption, authorization,
execution and delivery by, or on behalf of, each of the parties thereto of the
above-referenced resolutions, instruments, certificates and other documents, and
of all documents contemplated by the Governing Documents to be executed by
investors acquiring Shares; (iii) the payment of consideration for Shares, and
the application of such consideration, as provided in the Governing Documents,
and compliance with the other terms, conditions and restrictions set forth in
the Governing Documents in connection with the issuance of Shares (including,
without limitation, the taking of all appropriate action by the Trustees to
designate Series of Shares and the rights and preferences attributable thereto
as contemplated by the Governing Instrument); (iv) that appropriate notation of
the names and addresses of, the number of Shares held by, and the consideration
paid by, Shareholders will be maintained in the appropriate registers and other
books and records of the Trust in connection with the issuance, redemption or
transfer of Shares; (v) that no event has occurred subsequent to the filing of
the Certificate that would cause a termination or reorganization of the Trust
under Section 11.04 or Section 11.05 of Article XI of the Governing Instrument;
(vi) that the Trust became, prior to or within 180 days following the first
issuance of beneficial interests therein, a registered investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); (vii) that the
activities of the Trust have been and will be conducted in accordance with the
terms of the Governing Instrument and the Delaware Business Trust Act, 12 DEL.
C. Sections 3801 et seq. (the "Delaware Act"); and (viii) that each of the
documents examined by us is in full force and effect and has not been amended,
supplemented or otherwise modified except as herein referenced. No opinion is
expressed herein with respect to the requirements of, or compliance with,
federal or state securities or blue sky laws. Further, we have not participated
in the preparation of any offering documentation relating to the Trust or the
Shares and we assume no responsibility for their contents. As to any facts
material to our opinion, other than those assumed, we have relied without
independent investigation on the above-referenced documents and on the accuracy,
as of the date hereof, of the matters therein contained.

Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:

1. The Trust is a duly formed and validly existing business trust in good
standing under the laws of the State of Delaware.

2. When issued to Shareholders in accordance with the terms, conditions,
requirements and procedures and for the consideration set forth in the Governing
Documents, the Shares will constitute legally issued, fully paid and
non-assessable Shares of beneficial interest in the Trust.

We hereby consent to the filing of a copy of this opinion with
the Securities and Exchange Commission as a post-effective amendment to the
Trust's Registration Statement on

<PAGE>

Schroder Capital Funds (Delaware)
February 22, 2000
Page 3

Form N-1A as filed with the Securities and Exchange Commission. In giving this
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as provided in this paragraph, the opinion set forth above is
expressed solely for the benefit of the addressee hereof in connection with the
matters contemplated hereby and may not be relied upon for any other purpose or
by any other person or entity without our prior written consent. This opinion
speaks only as of the date hereof and is based on our understandings and
assumptions as to present facts, and on the application of Delaware law as the
same exists on the date hereof, and we undertake no obligation to update or
supplement this opinion after the date hereof for the benefit of any person or
entity with respect to any facts or circumstances that may hereafter come to our
attention or any changes in facts or law that may hereafter occur or take
effect.

Sincerely,

MORRIS, NICHOLS, ARSHT & TUNNELL

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------

We hereby consent to the incorporation by reference in Post-Effective
Amendment No. 76 to the Registration Statement on Form N-1A (File No. 2-34215)
of our report dated December 17, 1999, relating to the financial statements
and financial highlights which appear in the October 31, 1999 Annual Report
to Shareholders of Schroder International Fund, Schroder Emerging Markets
Fund, Schroder International Smaller Companies Fund, Schroder Greater China
Fund Schroder U.S. Diversified Growth Fund, Schroder U.S. Smaller Companies
Fund, and Schroder Micro Cap Fund, each a series of the Schroder
Capital Funds (Delaware), which are also incorporated by reference into the
Registration Statement. We also consent to the reference to us under the
headings "Financial Highlights", "Independent Accountants" and "Financial
Statements" in such Registration Statement.

PricewaterhouseCoopers LLP

Boston, Massachusetts
February 29, 2000

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------

We hereby consent to the incorporation by reference in Post-Effective Amendment
No.76 to the Registration Statement on Form N-1A (File No. 2-34215) of our
report dated December 17, 1999, relating to the financial statements and
financial highlights which appear in the October 31, 1999 Annual Report to
Shareholders of Schroder Emerging Markets Fund Institutional Portfolio, a
series of Schroder Capital Funds (Delaware), which are also incorporated by
reference into the Registration Statement. We also consent to the references
to us under the headings "Financial Highlights", "Independent Accountants"
and "Financial Statements" in such Registration Statement.

PricewaterhouseCoopers LLP

Boston, Massachusetts
February 29, 2000