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File No. 2-73948
File No. 811-3258
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 50 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 51 /X/
(Check appropriate box or boxes.)
DFA INVESTMENT DIMENSIONS GROUP INC.
-------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
1299 Ocean Avenue, 11th Floor, Santa Monica CA 90401
- ----------------------------------------------- ------
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code (310) 395-8005
--------------
Irene R. Diamant, Vice President and Secretary
DFA Investment Dimensions Group Inc.,
1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401
-------------------------------------------------------------
(Name and Address of Agent for Service)
Please send copies of all communications to:
Stephen W. Kline, Esquire
Stradley, Ronon, Stevens & Young, LLP
Great Valley Corporate Center
30 Valley Stream Parkway
Malvern, PA 19355, (610) 640-5801
It is proposed that this filing will become effective (check appropriate box):
immediately upon filing pursuant to paragraph (b).
- ---------
on (date) pursuant to paragraph (b)
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X 60 days after filing pursuant to paragraph (a)(1)
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on (date) pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a)(2) of Rule 485.
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<PAGE>
File No. 2-73948
File No. 811-3258
If appropriate, check the following box:
- ------
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Trustees and principal officers of The DFA Investment Trust Company and
Dimensional Emerging Markets Value Fund, Inc. also have executed this
registration statement.
<PAGE>
P R O S P E C T U S
MARCH __, 1999
PLEASE CAREFULLY READ THE IMPORTANT INFORMATION IT CONTAINS BEFORE INVESTING.
[LOGO]
DFA INVESTMENT DIMENSIONS GROUP INC.
---------------------------------------------
DIMENSIONAL INVESTMENT GROUP INC.
The two mutual funds described in this Prospectus offer a variety of investment
portfolios. Each of the Funds' Portfolios has its own investment objective
and policies, and is the equivalent of a separate mutual fund. DFA
International Value Portfolio is offered by Dimensional
Investment Group Inc. The other listed Portfolios are part
of DFA Investment Dimensions Group Inc.
PORTFOLIOS FOR INVESTORS SEEKING TO INVEST IN:
DOMESTIC EQUITY SECURITIES
<TABLE>
<S> <C>
U.S. Large Company Portfolio
Enhanced U.S. Large Company Portfolio U.S. 6-10 Value Portfolio
U.S. Large Cap Value Portfolio U.S. 6-10 Small Company Portfolio
Tax-Managed U.S. Marketwide Value Portfolio Tax-Managed U.S. 6-10 Small Company Portfolio
U.S. 4-10 Value Portfolio U.S. 9-10 Small Company Portfolio
Tax-Managed U.S. 5-10 Value Portfolio DFA Real Estate Securities Portfolio
</TABLE>
INTERNATIONAL EQUITY SECURITIES
<TABLE>
<S> <C>
Large Cap International Portfolio United Kingdom Small Company Portfolio
DFA International Value Portfolio Continental Small Company Portfolio
Tax-Managed DFA International Value Portfolio DFA International Small Cap Value Portfolio
International Small Company Portfolio Emerging Markets Portfolio
Japanese Small Company Portfolio Emerging Markets Value Portfolio
Pacific Rim Small Company Portfolio Emerging Markets Small Cap Portfolio
</TABLE>
FIXED INCOME SECURITIES
<TABLE>
<S> <C>
DFA One-Year Fixed Income Portfolio
DFA Two-Year Global Fixed Income Portfolio DFA Five-Year Global Fixed Income Portfolio
DFA Five-Year Government Portfolio DFA Intermediate Government Fixed Income Portfolio
</TABLE>
THE SECURITIES AND EXCHANGE COMMISSION ("SEC") DOES NOT DECIDE WHETHER ANY
MUTUAL FUNDS, INCLUDING THESE TWO (AND THEIR PORTFOLIOS), ARE GOOD INVESTMENTS.
RATHER, THE SEC TRIES TO MAKE SURE, BUT CANNOT GUARANTEE, THAT MUTUAL FUNDS
DISCLOSE IMPORTANT FACTS TO INVESTORS. IT IS ILLEGAL TO CLAIM OTHERWISE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
RISK/RETURN SUMMARY................................................................... 3
ABOUT THE PORTFOLIOS................................................................ 3
MANAGEMENT.......................................................................... 3
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS......................................... 4
OTHER RISKS......................................................................... 9
RISK AND RETURN BAR CHARTS AND TABLES............................................... 10
FEES AND EXPENSES..................................................................... 16
SECURITIES LENDING REVENUE............................................................ 20
HIGHLIGHTS............................................................................ 20
U.S. LARGE COMPANY PORTFOLIO.......................................................... 21
ENHANCED U.S. LARGE COMPANY PORTFOLIO................................................. 22
STANDARD & POOR'S--INFORMATION AND DISCLAIMERS........................................ 22
U.S. VALUE PORTFOLIOS................................................................. 23
U.S. SMALL COMPANY PORTFOLIOS......................................................... 25
DFA REAL ESTATE SECURITIES PORTFOLIO.................................................. 26
INTERNATIONAL PORTFOLIOS--COUNTRIES................................................... 28
LARGE CAP INTERNATIONAL PORTFOLIO..................................................... 30
DFA INTERNATIONAL VALUE PORTFOLIO..................................................... 30
TAX-MANAGED DFA INTERNATIONAL VALUE PORTFOLIO......................................... 31
INTERNATIONAL SMALL COMPANY PORTFOLIOS................................................ 31
SMALL COMPANY MASTER FUNDS............................................................ 34
DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO........................................... 35
EMERGING MARKETS PORTFOLIO,........................................................... 36
EMERGING MARKETS VALUE PORTFOLIO AND.................................................. 36
EMERGING MARKETS SMALL CAP PORTFOLIO.................................................. 36
FIXED INCOME PORTFOLIOS............................................................... 39
TAX MANAGEMENT STRATEGIES............................................................. 43
PORTFOLIO TURNOVER.................................................................... 44
PORTFOLIO TRANSACTIONS--ALL PORTFOLIOS................................................ 44
SECURITIES LOANS...................................................................... 44
DEVIATION FROM MARKET CAPITALIZATION WEIGHTING........................................ 44
MANAGEMENT OF THE FUNDS............................................................... 45
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES...................................... 47
PURCHASE OF SHARES.................................................................... 48
VALUATION OF SHARES................................................................... 50
EXCHANGE OF SHARES.................................................................... 52
REDEMPTION OF SHARES.................................................................. 53
THE FEEDER PORTFOLIOS................................................................. 54
FINANCIAL HIGHLIGHTS.................................................................. 55
SERVICE PROVIDERS..................................................................... 73
</TABLE>
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RISK/RETURN SUMMARY
ABOUT THE PORTFOLIOS
- -------------------
The Portfolios:
- - Are generally offered to institutional investors and clients of registered
investment advisers.
- - Do not charge sales commissions or "loads".
- - Cost less to own than most mutual funds.
- - Are designed for long-term investors.
The Portfolios are no-load and low cost.
MARKET RISK: Even a long-term investment approach cannot guarantee a profit.
Economic, political and issuer specific events will cause the value of
securities, and the Portfolios that own them, to rise or fall. Fixed income
Portfolios are particularly sensitive to changing interest rates.
SOME PORTFOLIOS HAVE SPECIAL STRUCTURES: Certain Portfolios, called "Feeder
Portfolios", do not buy individual securities directly. Instead, they invest in
corresponding mutual funds called "Master Funds". Master Funds in turn purchase
stocks, bonds and/or other securities.
POSSIBLE COMPLICATIONS: Designed to reduce costs, the Master-Feeder structure is
relatively new and more complex. As a result, a Feeder Portfolio might encounter
operational or other complications.
A Master Fund buys securities directly. A corresponding Feeder Portfolio invests
in the Master Fund's shares. The two have the same gross investment returns.
MANAGEMENT
- ------------
Dimensional Fund Advisors Inc. (the "Advisor") is the investment manager for
each non-Feeder Portfolio and all Master Funds. (A Feeder Portfolio does not
need an investment manager.) It is also the administrator for all Portfolios and
Master Funds. The Advisor has provided institutional investors with investment
management services since 1981. It manages about $28 billion.
EQUITY INVESTMENT APPROACH:
- -------------------------
The Advisor believes that equity investing should involve a long-term view and a
focus on asset class (e.g., small company stocks) selection, not stock picking.
It places priority on limiting expenses, portfolio turnover, and trading costs.
Many other investment managers concentrate on reacting to price movements and
choosing individual securities.
NO MARKET TIMING OR STOCK PICKING: In contrast to some other managers, the
Advisor does not take defensive positions in anticipation of negative investment
conditions, or try to pick potentially outperforming securities.
PORTFOLIO CONSTRUCTION: Generally, the Advisor structures a portfolio by:
1. Selecting a starting universe of securities (for example, all publicly
traded U.S. common stocks).
3
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1. Creating a sub-set of companies meeting investment guidelines.
2. Excluding certain companies after analyzing various factors (for example,
solvency).
3. Purchasing stocks so the portfolio is generally market cap weighted.
U.S. Large Company Portfolio buys a Master Fund that is managed differently.
Because this Master Fund is an index fund, its only criteria for holding a stock
is whether the stock is in the S&P 500 Index.
In contrast, the Master Fund purchased by the Enhanced Large Company Portfolio
generally invests in S&P futures contracts and fixed income securities.
FIXED INCOME INVESTMENT APPROACH:
- -------------------------------
PORTFOLIO CONSTRUCTION: Generally, the Advisor structures a portfolio by:
1. Setting a maturity range.
2. Implementing quality and eligibility guidelines.
3. Purchasing securities with a view to maximizing returns.
MARKET CAPITALIZATION MEANS the number of shares of a company's stock
outstanding times price per share.
MARKET CAPITALIZATION WEIGHTED means the amount of a stock in an index or
portfolio is keyed to that stock's market capitalization compared to all
eligible stocks. The higher the stock's relative market cap, the greater its
representation.
TAX MANAGEMENT STRATEGIES:
- ------------------------
The Advisor's tax management strategies are designed to minimize taxable
distributions to shareholders. Generally, the Advisor buys and sells a tax
managed portfolio's securities with the goals of:
1. Delaying the realization of net capital gains (e.g., appreciated stocks
might be sold later).
2. Maximizing the extent to which any realized net capital gains are long-term
in nature (i.e., taxable at lower capital gains tax rates).
3. Minimizing dividend income.
Shareholders of Tax-Managed Portfolios may save on taxes while they hold their
shares. However, they will still have to pay taxes if they sell their shares at
a profit.
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
- -----------------------------------------
DOMESTIC EQUITY PORTFOLIOS:
THE U.S. LARGE COMPANY PORTFOLIOS
- -------------------------------
U.S. LARGE COMPANY PORTFOLIO
- - INVESTMENT OBJECTIVE: Produce returns similar to those of the S&P 500 Index.
- - INVESTMENT STRATEGY: Buy shares of a Master Fund that invests in S&P 500
Index stocks in about the same proportions as they are found in the S&P 500
Index.
ENHANCED U.S. LARGE COMPANY PORTFOLIO
- - INVESTMENT OBJECTIVE: Outperform the S&P 500 Index.
- - INVESTMENT STRATEGY: Purchase shares of a Master Fund that generally invests
in S&P 500 Index futures and short-term fixed income obligations.
ABOUT THE S&P 500 INDEX: The Standard & Poor's 500 Composite Stock Price Index
is market capitalization weighted. Its performance is usually cyclical because
it reflects periods when stock prices generally rise or fall.
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THE U.S. VALUE PORTFOLIOS
- ----------------------
U.S. LARGE CAP VALUE PORTFOLIO
TAX-MANAGED U.S. MARKETWIDE VALUE PORTFOLIO
U.S. 4-10 VALUE PORTFOLIO
TAX-MANAGED U.S. 5-10 VALUE PORTFOLIO
U.S. 6-10 VALUE PORTFOLIO
- - INVESTMENT OBJECTIVE(S):
- TAX-MANAGED PORTFOLIOS: Long-term capital appreciation while minimizing
federal income taxes on returns.
- EACH OTHER PORTFOLIO: Long-term capital appreciation.
- - INVESTMENT STRATEGY:
- TAX-MANAGED U.S. 5-10 VALUE PORTFOLIO -- Purchase value stocks of United
States companies on a market capitalization weighted basis.
- EACH OTHER U.S. VALUE PORTFOLIO -- Buy a Master Fund that does so.
- - HOW THE PORTFOLIOS DIFFER: The Portfolios focus on different parts of the
value stocks universe:
- U.S. Large Cap Value and Tax-Managed U.S. Marketwide Value -- Large
capitalization stocks.
- U.S. 4-10 Value and Tax-Managed U.S. 5-10 Value -- Mid and small
capitalization issues.
- U.S. 6-10 Value -- Small cap stocks.
Only the Tax-Managed Portfolios employ the Advisor's tax management
strategies.
"VALUE STOCKS": Compared to other stocks, value stocks sell for low prices
relative to their earnings, dividends book value. Precise definitions vary.
In selecting value stocks, the Advisor primarily considers price relative to
book value.
SMALL COMPANY RISK: Securities of small firms are often less liquid than those
of large companies. As a result, small company stocks may fluctuate relatively
more in price.
THE U.S. SMALL COMPANY PORTFOLIOS
- -------------------------------
U.S. 6-10 SMALL COMPANY PORTFOLIO
TAX-MANAGED U.S. 6-10 SMALL COMPANY PORTFOLIO
U.S. 9-10 SMALL COMPANY PORTFOLIO
- - INVESTMENT OBJECTIVE(S):
- TAX-MANAGED U.S. 6-10 SMALL COMPANY PORTFOLIO: Long-term capital
appreciation while minimizing federal income taxes on returns.
- EACH OTHER PORTFOLIO: Long-term capital appreciation.
- - INVESTMENT STRATEGY:
- TAX-MANAGED U.S. 6-10 SMALL COMPANY PORTFOLIO -- Purchase small company
stocks using a market cap weighted approach.
- EACH OTHER U.S. SMALL COMPANY PORTFOLIO -- Buy a Master Fund that does so.
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- - HOW THE PORTFOLIOS DIFFER:
The Master Fund in which U.S. 6-10 Small Company Portfolio invests, and
Tax-Managed U.S. 6-10 Small Company Portfolio, hold stocks of small and very
small companies. The Master Fund employed by U.S. 9-10 Portfolio exclusively
buys stock of very small companies. Only Tax-Managed U.S. 6-10 Small Company
Portfolio employs the Advisor's tax management strategies.
DFA REAL ESTATE SECURITIES PORTFOLIO
- - INVESTMENT OBJECTIVE: Long-term capital appreciation
- - INVESTMENT STRATEGY: Invest in publicly traded real estate investment trusts
("REITS") on a market capitalization weighted basis.
RISK OF CONCENTRATING IN THE REAL ESTATE INDUSTRY: A portfolio concentrated in
an industry is riskier than a broadly diversified portfolio.
INTERNATIONAL PORTFOLIOS:
LARGE CAP INTERNATIONAL PORTFOLIO
- - INVESTMENT OBJECTIVE: Long-term capital appreciation.
- - INVESTMENT STRATEGY: Purchase stocks of large, non-U.S. companies on a market
capitalization weighted basis in each applicable country.
Most Portfolios and Master Funds do not hedge their foreign currency risks.
FOREIGN SECURITIES AND CURRENCIES RISK: Investors in foreign securities take the
risk that economic or political actions of foreign governments will hurt their
investments. Less regulated and/or liquid securities markets and foreign
currency risk (the possibility that foreign currency will fluctuate in value
against the U.S. dollar) are also of concern. The latter can be minimized by
hedging. However, doing so may be expensive.
DFA INTERNATIONAL VALUE PORTFOLIO
TAX-MANAGED DFA INTERNATIONAL VALUE PORTFOLIO
- - INVESTMENT OBJECTIVE:
- TAX-MANAGED DFA INTERNATIONAL VALUE PORTFOLIO: Long-term capital
appreciation while minimizing federal income taxes on returns.
- DFA INTERNATIONAL VALUE PORTFOLIO: Long-term capital appreciation.
- - INVESTMENT STRATEGY:
- TAX-MANAGED DFA INTERNATIONAL VALUE PORTFOLIO -- Purchase value stocks of
large non-U.S. companies on a market capitalization weighted basis in each
applicable country.
- DFA INTERNATIONAL VALUE PORTFOLIO -- Buy a Master Fund that does so.
- - HOW THE PORTFOLIOS DIFFER:
Only Tax-Managed DFA International Value Portfolio employs the Advisor's tax
management strategies.
6
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THE INTERNATIONAL SMALL COMPANY PORTFOLIOS
- ---------------------------------------
INTERNATIONAL SMALL COMPANY PORTFOLIO
JAPANESE SMALL COMPANY PORTFOLIO
PACIFIC RIM SMALL COMPANY PORTFOLIO
UNITED KINGDOM SMALL COMPANY PORTFOLIO
CONTINENTAL SMALL COMPANY PORTFOLIO
- - INVESTMENT OBJECTIVE (EACH PORTFOLIO): Long-term capital appreciation.
- - INVESTMENT STRATEGY OF THE INTERNATIONAL SMALL COMPANY PORTFOLIO: Invest in
the Master Funds employed by the other International Small Company
Portfolios.
- - INVESTMENT STRATEGY OF EACH OTHER INTERNATIONAL SMALL COMPANY PORTFOLIO:
Purchase a Master Fund that uses a market weighted approach to buy small
company stocks of a specific country or region.
THE PACIFIC RIM SMALL COMPANY PORTFOLIO IS CLOSED TO NEW INVESTMENTS.
INTERNATIONAL SMALL COMPANY PORTFOLIO STOPPED BUYING THE MASTER FUND PURCHASED
BY THAT PORTFOLIO. These actions were taken because the Malaysian government
restricted the ability of foreign investors -- including the Master Fund in
question -- to withdraw their investments from Malaysia.
DFA INTERNATIONAL SMALL CAP VALUE
- - INVESTMENT OBJECTIVE: Long-term capital appreciation.
- - INVESTMENT STRATEGY: Acquire value stocks of small non-U.S. companies on a
market capitalization weighted basis in each applicable country.
THE EMERGING MARKETS PORTFOLIOS
- -----------------------------
EMERGING MARKETS PORTFOLIO
EMERGING MARKETS VALUE PORTFOLIO
EMERGING MARKETS SMALL CAP PORTFOLIO
- - INVESTMENT OBJECTIVE (EACH PORTFOLIO): Long-term capital appreciation.
EMERGING MARKETS are countries with more developed economies not yet at the
level of the world's mature economies.
- - INVESTMENT STRATEGY: Invest in a Master Fund that buys:
- Emerging Markets Portfolio -- Stocks of larger emerging markets companies.
- Emerging Markets Small Cap Portfolio -- Stocks of smaller emerging markets
companies.
- Emerging Markets Value Fund -- Value stocks of emerging markets companies.
EMERGING MARKETS RISK: Numerous emerging countries have recently experienced
serious, and potentially continuing, economic and political problems. Stock
markets in many emerging countries are relatively small, expensive and risky.
Foreigners are often limited in their ability to invest in, and withdraw assets
from, these markets. Additional restrictions may be imposed under emergency
conditions. Risks generally associated with foreign securities and currencies
also apply.
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FIXED INCOME PORTFOLIOS:
DFA ONE-YEAR FIXED INCOME PORTFOLIO
- - INVESTMENT OBJECTIVE: Maximize total return available from a universe of high
quality fixed income investments with an average maturity of one year or
less.
- - INVESTMENT STRATEGY: Purchase shares of a Master Fund that generally acquires
high quality obligations maturing in a year or less. The Master Fund may,
however, take a large position in higher yielding securities maturing within
two years. It also intends to concentrate investments in the banking industry
in certain cases.
RISK OF BANKING CONCENTRATION: Focus on the banking industry might cause the
performance of DFA One-Year Fixed Income and/or Two-Year Global Fixed income
Portfolios to fluctuate more.
DFA TWO-YEAR GLOBAL FIXED INCOME PORTFOLIO
- - INVESTMENT OBJECTIVE: Maximize total return available from a universe of high
quality fixed income instruments maturing in two years or less.
- - INVESTMENT STRATEGY: Purchase shares of a Master Fund that buys debt
instruments with maturities of no more than two years. Issuers might include
the U.S. and other national governments, supranational organizations (e.g.,
the World Bank) and domestic and foreign corporations. The Master Fund hedges
all foreign currency risks. It also plans to invest heavily in the banking
industry if particular conditions occur.
DFA FIVE-YEAR GOVERNMENT PORTFOLIO
- - INVESTMENT OBJECTIVE: Maximize total return available from a universe of high
quality fixed income investments maturing in five years or less.
- - INVESTMENT STRATEGY: Acquire obligations of the U.S. government and its
agencies maturing within five years, and enter into repurchase agreements
backed by U.S. government securities.
DFA FIVE-YEAR GLOBAL FIXED INCOME PORTFOLIO
- - INVESTMENT OBJECTIVE: Maximize total return available from a universe of high
quality fixed income instruments maturing in five years or less.
- - INVESTMENT STRATEGY: Buy obligations of issuers that might include the U.S.
and other national governments, supranational organizations and domestic and
foreign corporations. The Portfolio hedges all foreign currency risks.
DFA INTERMEDIATE GOVERNMENT FIXED INCOME PORTFOLIO
- - INVESTMENT OBJECTIVE: Provide a market rate of return and relatively
predictable income from U.S. Treasury and government agency issues with
maturities of between five and fifteen years.
- - INVESTMENT STRATEGY: Invest in top quality, low-risk obligations of the U.S.
government and its agencies, foreign governments and supranational
organizations.
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OTHER RISKS
- -----------
DERIVATIVES:
- ----------
Derivatives are securities, such as futures contracts, whose value is derived
from that of other securities or indices. Derivatives can be used for hedging
(attempting to reduce risk by offsetting one investment position with another)
or speculation (taking a position in the hope of increasing return). DFA Two-
Year Global Fixed Income Portfolio and DFA Five-Year Global Fixed Income
Portfolio use long-term foreign currency contracts to hedge foreign currency
risks. The International Portfolios may also do so. The Enhanced U.S. Large
Company Portfolio uses index swap agreements and stock index futures to hedge
against changes in securities prices. Hedging with derivatives may increase
expenses, and there is no guarantee that a hedging strategy will work.
INTRODUCTION OF THE EURO:
- ----------------------
On January 1, 1999, The European Monetary Union ("EMU") introduced a common
currency, the Euro, replacing its members' national currencies. This development
will affect Portfolios investing directly or indirectly (through Master Funds)
in EMU countries to the extent it changes investment practices, opportunities,
risks and investor behavior or creates administrative 1 problems. The Advisor
and its global custodians are attempting to assure that Portfolios and Master
Funds will be unaffected by any transition related disruptions. However, they
cannot guarantee that their efforts will succeed completely. The relative value
of the U.S. dollar and Euro will fluctuate. Accordingly, currency risk
(discussed above) will continue to apply to Portfolio and Master Fund
investments in EMU countries.
SECURITIES LENDING:
- ----------------
Non-Feeder Portfolios and Master Funds may lend their portfolio securities to
generate additional income. If they do so, they will use various strategies (for
example, only making fully collateralized and bank guaranteed loans) to reduce
related risks.
YEAR 2000 ISSUE:
- --------------
Unless modified, many computer programs will not properly process information
from the year 2000 on. While the issue is international in scope, there is
particular concern with foreign entities. The Advisor has taken steps to ensure
that its computers and those of Portfolio and Master Fund service providers
(e.g., custodians) will operate properly. Portfolios and Master Funds may be
negatively affected if the Advisor's efforts prove inadequate, and/or Year 2000
problems hurt economic conditions generally.
RISK AND RETURN BAR CHARTS AND TABLES
- --------------------------------------
The Bar Charts and Tables below illustrate the risk/return history of each
Portfolio. Shown are changes in performance from year to year, and how
annualized 1 year, 5 year, and since inception returns compare with those of a
broad measure of market performance. Past performance is not an indication of
future results. The U.S. 4-10 Value, Tax-Managed Portfolios, Emerging Markets
Value and Emerging Markets Small Cap Portfolios have not been in operation for a
full year, so no information is available for them.
[THE BAR CHARTS AND TABLES WILL BE UPDATED IN MARCH]
- -----------------------------------------------------
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
U.S. LARGE
COMPANY PORTFOLIO
<S> <C> <C> <C>
Total Returns (%)
1991 30.12
1992 7.31
1993 9.61
1994 1.29
1995 37.08
1996 22.62
1997 33.07
January 1991-December 1997
Highest Quarter Lowest Quarter
17.37 (4/97-6/97) -3.89 (1/94-3/94)
Periods ending December 31, 1997
One Five Since 1/91
Annualized Returns (%) Year Years Inception
U.S. Large Company Portfolio 33.07 19.95 19.44
S&P 500 Index 33.37 20.24 19.76
ENHANCED U.S. LARGE
COMPANY PORTFOLIO
Total Returns (%)
1997 32.73
August 1996-December 1997
Highest Quarter Lowest Quarter
18.07 (4/97-6/97) 2.03 (1/97-3/97)
Periods ending December 31, 1997
One Since 8/96
Annualized Returns (%) Year Inception
Enhanced U.S. Large Company Portfolio 32.73 36.51
S&P 500 Index 33.37 36.81
U.S. LARGE CAP
VALUE PORTFOLIO
Total Returns (%)
1994 -4.54
1995 38.36
1996 20.22
1997 28.13
April 1993-December 1997
Highest Quarter Lowest Quarter
14.68 (4/97-6/97) -5.62 (1/94-3/94)
Periods ending December 31, 1997
One Since 4/93
Annualized Returns (%) Year Inception
U.S. Large Cap Value Portfolio 28.13 17.97
Russell 1000 Value Index 35.18 20.26
U.S. 6-10
VALUE PORTFOLIO
Total Returns (%)
1994 1.21
1995 29.29
1996 22.32
1997 30.75
April 1993-December 1997
Highest Quarter Lowest Quarter
18.15 (7/97-9/97) -4.28 (10/97-12/97)
Periods ending December 31, 1997
One Since 4/93
Annualized Returns (%) Year Inception
U.S. 6-10 Value Portfolio 30.75 20.20
Russell 2000 Value Index 31.80 18.45
</TABLE>
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
U.S. 6-10 SMALL
COMPANY PORTFOLIO
<S> <C> <C> <C>
Total Returns (%)
1993 13.66
1994 -1.34
1995 30.18
1996 17.67
1997 24.23
April 1992-December 1997
Highest Quarter Lowest Quarter
18.29 (7/97-9/97) -8.97 (4/92-6/92)
Periods ending December 31, 1997
One Five Since 4/92
Annualized Returns (%) Year Years Inception
U.S. 6-10 Small Company Portfolio 24.23 16.37 16.14
Russell 2000 Index 22.38 16.42 16.07
U.S. 9-10 SMALL COMPANY PORTFOLIO
Total Returns (%)
1988 22.87
1989 10.19
1990 -21.56
1991 44.63
1992 23.35
1993 20.98
1994 3.11
1995 34.46
1996 17.62
1997 22.78
January 1991-December 1997
Highest Quarter Lowest Quarter
28.67 (1/91-3/91) -23.22 (7/90-9/90)
Periods ending December 31, 1997
One Five Ten
Annualized Returns (%) Year Years Years
U.S. 9-10 Small Company Portfolio 22.78 19.35 16.46
CRSP 9-10 Index 23.96 18.00 15.11
DFA REAL ESTATE
SECURITIES PORTFOLIO
Total Returns (%)
1993 15.46
1994 -8.39
1995 12.07
1996 33.84
1997 19.37
January 1993-December 1997
Highest Quarter Lowest Quarter
18.44 (10/96-12/96) -3.89 (1/94-3/94)
Periods ending December 31, 1997
One Since 1/93
Annualized Returns (%) Year Inception
DFA Real Estate Securities Portfolio 19.37 13.62
Wilshire REIT-Only Index 19.66 16.82
LARGE CAP
INTERNATIONAL PORTFOLIO
Total Returns (%)
1992 -13.14
1993 25.85
1994 5.30
1995 13.05
1996 6.34
1997 5.51
August 1991-December 1997
Highest Quarter Lowest Quarter
14.64 (4/97-6/97) -13.59 (1/92-3/92)
Periods ending December 31, 1997
One Five Since 8/91
Annualized Returns (%) Year Years Inception
Large Cap International Portfolio 5.51 10.94 7.48
MSCI EAFE Index 1.78 11.39 7.45
</TABLE>
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DFA INTERNATIONAL
VALUE PORTFOLIO
<S> <C> <C> <C>
Total Returns (%)
1995 11.49
1996 7.81
1997 -3.14
March 1994-December 1997
Highest Quarter Lowest Quarter
11.56 (4/97-6/97) -9.63 (10/97-12/97)
Periods ending December 31, 1997
One Since 3/94
Annualized Returns (%) Year Inception
DFA International Value Portfolio -3.14 4.44
MSCI EAFE Index 1.78 4.79
INTERNATIONAL SMALL
COMPANY PORTFOLIO
Total Returns (%)
1997 -23.72
October 1996-December 1997
Highest Quarter Lowest Quarter
6.87 (4/97-6/97) -17.65 (10/97-12/97)
Periods ending December 31, 1997
One Since 10/96
Annualized Returns (%) Year Inception
International Small Company Portfolio -23.72 -21.83
Salomon Extended Market Index -9.41 -8.06
JAPANESE SMALL COMPANY PORTFOLIO
Total Returns (%)
1988 32.45
1989 38.51
1990 -33.36
1991 7.11
1992 -26.10
1993 14.16
1994 29.49
1995 -3.57
1996 -22.79
1997 -54.78
January 1988-December 1997
Highest Quarter Lowest Quarter
28.44 (1/94-3/94) -32.91 (7/97-9/97)
Periods ending December 31, 1997
One Five Ten
Annualized Returns (%) Year Years Years
Japanese Small Company Portfolio -54.78 -13.02 -7.05
Japanese Large
Company Stocks Index -23.49 -0.04 -2.76
PACIFIC RIM SMALL
COMPANY PORTFOLIO
Total Returns (%)
1993 92.63
1994 -12.06
1995 -2.86
1996 14.36
1997 -42.10
January 1993-December 1997
Highest Quarter Lowest Quarter
34.24 (10/93-12/93) -38.67 (10/97-12/97)
Periods ending December 31, 1997
One Since 1/93
Annualized Returns (%) Year Inception
Pacific Rim Small Company Portfolio -42.10 1.73
Pacific Rim Large Company Stock Index -30.82 7.99
</TABLE>
13
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
UNITED KINGDOM SMALL
COMPANY PORTFOLIO
<S> <C> <C> <C>
Total Returns (%)
1988 6.69
1989 -6.26
1990 -6.67
1991 14.76
1992 -13.96
1993 30.62
1994 4.64
1995 10.75
1996 29.79
1997 3.53
January 1988-December 1997
Highest Quarter Lowest Quarter
19.83 (7/91-9/91) -17.83 (7/92-9/92)
Periods ending December 31, 1997
One Five Ten
Annualized Returns (%) Year Years Year
United Kingdom Small Company Portfolio 3.53 15.26 6.49
United Kingdom Large Company
Stocks Index 18.58 18.60 14.14
CONTINENTAL SMALL
COMPANY POTFOLIO
Total Returns (%)
1989 44.69
1990 -4.07
1991 -4.12
1992 -19.84
1993 25.30
1994 11.01
1995 0.02
1996 14.33
1997 11.70
July 1988-December 1997
Highest Quarter Lowest Quarter
17.01 (7/89-9/89) -15.78 (7/90-9/90)
Periods ending December 31, 1997
One Five Since 7/88
Annualized Returns (%) Year Years Inception
Continental Small Company Portfolio 11.70 12.18 9.08
Continental Large Company
Stocks Index 25.02 20.64 15.09
DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO
Total Returns (%)
1995 1.16
1996 0.94
1997 -22.72
January 1995-December 1997
Highest Quarter Lowest Quarter
5.80 (4/97-6/97) -16.81(10/97-12/97)
Periods ending December 31, 1997
One Since 1/95
Annualized Returns (%) Year Inception
DFA International Small Cap Value Portfolio -22.72 -7.59
Salomon Extended Market Index -9.41 0.75
EMERGING MARKETS PORTFOLIO
Total Returns (%)
1995 2.15
1996 11.4
1997 -18.92
May 1994-December 1997
Highest Quarter Lowest Quarter
-19.93
18.04 (7/94-9/94) (10/97-12/97)
Periods ending December 31, 1997
One Since 7/89
Annualized Returns (%) Year Inception
Emerging Markets Portfolio -18.92 -0.91
MSCI Emerging Markets Free Index -13.42 -3.97
</TABLE>
14
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DFA ONE-YEAR FIXED
INCOME PORTFOLIO
<S> <C> <C> <C>
Total Returns (%)
1988 7.40
1989 9.60
1990 9.09
1991 8.73
1992 5.19
1993 4.41
1994 2.46
1995 7.97
1996 5.78
1997 5.99
January 1988-December 1997
Highest Quarter Lowest Quarter
2.92 (4/89-6/89 0.26 (1-94-3/94)
Periods ending December 31, 1997
One Five Ten
Annualized Returns (%) Year Years Year
DFA One-Year Fixed Income Portfolio 5.99 5.31 6.64
3-Month U.S. Treasury Bill Index 5.35 4.81 5.36
DFA TWO-YEAR GLOBAL
FIXED INCOME PORTFOLIO
Total Returns (%)
1997 5.87
March 1996-December 1997
Highest Quarter Lowest Quarter
2.40 (7/96-9/96) 1.05 (1/97-3/97)
Periods ending December 31, 1997
One Since 3/96
Annualized Returns (%) Year Inception
DFA Two-Year Fixed Income Portfolio 5.87 6.68
Merrill Lynch Governments, U.S. Treasury,
Short Term (1-2.99 Years) 6.65 6.11
DFA FIVE-YEAR GOVERNMENT PORTFOLIO
Total Returns (%)
1988 6.32
1989 9.48
1990 10.82
1991 14.62
1992 7.3
1993 8.31
1994 -3.15
1995 9.56
1996 6.61
1997 6.39
January 1988-December 1997
Highest Quarter Lowest Quarter
-2.35
5.43 (7/91-9/91) (1/94-3/94)
Periods ending December 31, 1997
One Five Ten
Annualized Returns (%) Year Year Years
DFA Five-Year Government Portfolio 6.39 5.44 7.53
Lehman Intermediate Government Index 7.72 6.39 8.13
DFA GLOBAL FIXED INCOME PORTFOLIO
Total Returns (%)
1991 12.74
1992 6.49
1993 11.56
1994 -4.33
1995 16.06
1996 10.77
1997 8.31
December 1990-December 1997
Highest Quarter Lowest Quarter
-4.11
4.96 (7/92-9/92) (1/94-3/94)
Periods ending December 31, 1997
One Five Since 1/95
Annualized Returns (%) Year Year Inception
DFA Global Fixed Income Portfolio 8.31 8.25 8.61
Lehman Intermediate
Government/Corporate Index 7.87 6.62 7.92
</TABLE>
15
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DFA INTERMEDIATE
GOVERNMENT FIXED
<S> <C> <C> <C>
INCOME PORTFOLIO
Total Returns (%)
1991 16.88
1992 7.60
1993 11.63
1994 -4.74
1995 19.08
1996 2.37
1997 9.16
November 1990-December 1997
Highest Quarter Lowest Quarter
6.87 (5/92-7/92) -3.33 (1/94-3/94)
Periods ending December 31, 1997
One Five Since 11/90
Annualized Returns (%) Year Years Inception
DFA Intermediate Government 9.16 7.19 9.04
Fixed Income Portfolio
Lehman Government Index 9.58 7.34 8.79
</TABLE>
FEES AND EXPENSES
This table describes the fees and expenses you may pay if you buy and hold
shares of the Portfolios.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT):
REIMBURSEMENT FEES (AS PERCENTAGE OF OFFERING PRICE)(1)
<TABLE>
<S> <C>
Japanese Small Company Portfolio..................................................... 0.50%
Continental Small Company Portfolio.................................................. 1.00%
Pacific Rim Small Company Portfolio.................................................. 1.00%
Emerging Markets Portfolio........................................................... 0.50%
Emerging Markets Small Cap Portfolio................................................. 1.00%
Emerging Markets Value Portfolio..................................................... 0.50%
DFA International Small Cap Value Portfolio.......................................... 0.675%
International Small Company Portfolio(2)............................................. 0.675%
</TABLE>
- ------------------------
(1) Reimbursement fees are charged to purchasers of shares and paid to these
Portfolios, except in the case of certain purchases permitted to be made by
exchange. (See "EXCHANGE OF SHARES.") They serve to offset costs incurred by
a Portfolio when investing the proceeds from the sale of its shares. (See
"VALUATION OF SHARES-Public Offering Price" for a more complete description
of reimbursement fees.) The Japanese Small Company, Continental Small
Company, Pacific Rim Small Company, Emerging Markets, Emerging Markets Small
Cap Series of the Trust and the Dimensional Emerging Markets Value Fund
charge a reimbursement fee to purchasers of shares equal to the
reimbursement fee charged by its corresponding Feeder Portfolio as set forth
above.
(2) The reimbursement fee for the International Small Company Portfolio is a
blended rate, which is based on the current target investment allocations
among the International Master Funds. Consequently, the reimbursement fee
for the International Small Company Portfolio will change from time to time
if the Portfolio changes the target investment allocation in the
International Master Funds. As of the date of this prospectus, the
reimbursement fee for the Portfolio equals 0.675% of the net asset value of
the shares of International Small Company Portfolio.
16
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM PORTFOLIO ASSETS)
Except as indicated below, the expenses in the following table are based on
those incurred by the Portfolios and the corresponding Master Funds for the
fiscal year ended November 30, 1997.
[EXPENSES WILL BE UPDATED IN MARCH.]
------------------------------------
<TABLE>
<CAPTION>
TOTAL
ANNUAL
ANNUAL FUND OPERATING EXPENSES MANAGEMENT ADMINISTRATION OTHER OPERATING
(AS A PERCENTAGE OF AVERAGE NET ASSETS) FEE FEE EXPENSES EXPENSES
- ------------------------------------------------------------- ------------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
U.S. Large Company(1)(3)..................................... 0.025% 0.215% 0.11% 0.35%
Enhanced U.S. Large Company(1)(4)............................ 0.05% 0.15% 0.34% 0.54%
U.S. Large Cap Value(1)...................................... 0.10% 0.15% 0.10% 0.35%
Tax-Managed U.S. Marketwide Value(1)(5)...................... 0.20% 0.15% 0.13% 0.48%
U.S. 4-10 Value(1)(5)........................................ 0.10% 0.40% 0.13% 0.63%
Tax-Managed U.S. 5-10 Value(5)............................... 0.50% 0.13% 0.63%
U.S. 6-10 Value(1)........................................... 0.20% 0.30% 0.10% 0.60%
U.S. 6-10 Small Company(1)................................... 0.03% 0.32% 0.10% 0.45%
Tax-Managed U.S. 6-10 Small Company(5)....................... 0.50% 0.13% 0.63%
U.S. 9-10 Small Company(1)(2)................................ 0.10% 0.40% 0.10% 0.60%
DFA Real Estate Securities(6)................................ 0.30% 0.18% 0.48%
Large Cap International...................................... 0.25% 0.22% 0.47%
DFA International Value(1)................................... 0.20% 0.20% 0.16% 0.56%
Tax-Managed DFA International Value(5)....................... 0.50% 0.45% 0.95%
International Small Company(8)............................... 0.10% 0.40% 0.25% 0.75%
Japanese Small Company(1)(7)................................. 0.10% 0.40% 0.23% 0.73%
Pacific Rim Small Company(1)(7).............................. 0.10% 0.40% 0.34% 0.84%
United Kingdom Small Company(1)(7)........................... 0.10% 0.40% 0.20% 0.70%
Continental Small Company(1)(7).............................. 0.10% 0.40% 0.22% 0.72%
DFA International Small Cap Value............................ 0.65% 0.25% 0.90%
Emerging Markets(1).......................................... 0.10% 0.40% 0.49% 0.99%
Emerging Markets Value(1)(9)................................. 0.10% 0.40% 0.55% 1.05%
Emerging Markets Small Cap(1)................................ 0.20% 0.45% 0.60% 1.25%
DFA One-Year Fixed Income(1)................................. 0.05% 0.10% 0.07% 0.22%
DFA Two-Year Global Fixed Income(1).......................... 0.05% 0.10% 0.19% 0.34%
DFA Five-Year Government..................................... 0.20% 0.09% 0.29%
DFA Five-Year Global Fixed Income............................ 0.25% 0.17% 0.42%
DFA Intermediate Government Fixed Income..................... 0.15% 0.10% 0.25%
</TABLE>
- ------------------------
(1) Feeder Portfolio
(2) Prior to November 30, 1997, the U.S. 9-10 Small Company Portfolio invested
its assets directly in stocks of small companies. The above figures have
been restated to reflect estimated aggregate annualized operating expenses
of the U.S. 9-10 Small Company Portfolio and its corresponding Master Fund
as though the Portfolio's assets had been invested in the Master Fund during
the fiscal year ended November 30, 1997.
(3) Effective December 1, 1995, pursuant to the terms of the current
administration agreement with respect to the U.S. Large Company Portfolio,
the Advisor agreed to waive its fees and/or assume the expenses of the
Portfolio to the extent (1) necessary to pay the ordinary operating expenses
of the Portfolio (except the administration fee); and (2) that the indirect
expenses the Portfolio bears as a shareholder of the Master Fund, on an
annual basis, exceed 0.025% of the Portfolio's average net
17
<PAGE>
assets. Beginning August 9, 1996, in addition to the waiver/assumption
effective on December 1, 1995, the Advisor agreed to assume expenses or
waive the fee payable by the U.S. Large Company Portfolio under the
administration agreement by an additional .09% of average assets on an
annual basis. Under this arrangement, the annualized ratio of total
operating expenses to average net assets for U.S. Large Company Portfolio
for the fiscal year ended November 30, 1997 was 0.15%.
(4) Effective August 1, 1997, the Advisor has agreed to waive its fee under the
administration agreement to the extent necessary to reduce the direct and
indirect cumulative annual expenses of the Enhanced U.S. Large Company
Portfolio to not more than 0.45% of average net assets of the Portfolio on
an annualized basis; the Portfolio's direct and indirect cumulative annual
expenses may exceed 0.45% of average net assets on an annualized basis
notwithstanding this fee waiver. This arrangement does not extend to the
fees of the Enhanced U.S. Large Company Series of the Trust. Under this
arrangement, the annualized ratio of total operating expenses to average net
assets was 0.45%.
(5) "Other Expenses" are annualized estimates based on anticipated fees and
expenses through the fiscal year ending November 30, 1998. These Portfolios
and Master Fund had not commenced operations during the period indicated.
(6) Effective December 20, 1996, the investment advisory fee payable on behalf
of the DFA Real Estate Securities Portfolio to the Advisor was reduced from
.325% of the Portfolio's average net assets on an annual basis to .30% of
the Portfolio's average net assets on an annual basis. Effective December
11, 1996, the sub-advisory agreement between DFA Investment Dimensions Group
Inc., on behalf of the Portfolio, and Aldrich, Eastman and Waltch L.P.
("AEW") terminated; pursuant to the terms of the sub-advisory agreement
previously in effect, the Portfolio paid AEW a fee equal to .175% of its
average net assets on an annual basis. The above figures have been restated
to reflect the reduction in the advisory fee and termination of the
sub-advisory agreement as though they were both in effect throughout the
fiscal year ended November 30, 1997. See "Management of the Funds."
(7) Effective August 9, 1996, the Advisor agreed to waive its administrative
fee and assume the direct expenses of the Japanese Small Company, United
Kingdom Small Company, Continental Small Company and Pacific Rim Small
Company Portfolios to the extent necessary to keep the direct annual
expenses of each Portfolio to not more than 0.47% of average net assets of
the Portfolio on an annualized basis; this arrangement does not extend to
the fees and expenses of the Master Funds. For the fiscal year ended
November 30, 1997, the Advisor was not required to waive any portion of its
fee pursuant to such agreement.
(8) With respect to International Small Company Portfolio, the amount set forth
under "Management Fee" reflects its portion of the management fee of each
corresponding International Master Fund, which is equal to 0.10% of the
average net assets of such Master Fund on an annual basis; the amounts set
forth under "Other Expenses" and "Total Operating Expenses" also reflect the
indirect payment of a portion of the expenses of the International Master
Funds. The Advisor has agreed to waive its administration fee and assume the
direct expenses of the International Small Company Portfolio to the extent
necessary to keep the administration fee and direct annual expenses of the
Portfolio to not more than 0.45% of average net assets of the Portfolio on
an annualized basis; this arrangement does not extend to the fees and
expenses of the International Master Funds. The Advisor was not required to
waive fees or assume expenses for the fiscal year ended November 30, 1997.
(9) With respect to Emerging Markets Value Portfolio, the amount set forth
under "Management Fee" reflects the management fee of its corresponding
Master Fund which is Dimensional Emerging Markets Value Fund Inc.
For purposes of waivers and expense assumptions, the annual expenses are
those expenses incurred in any period consisting of twelve consecutive months.
The Advisor retains the right, subject to notification to the Board of Directors
of the relevant Fund, to modify or eliminate the waiver of a portion of its fees
or assumption of expenses in the future.
18
<PAGE>
EXAMPLE
This Example is meant to help you compare the cost of investing in the
Portfolios with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Portfolio 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 has a 5% return each year
and that the Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
[EXAMPLE WILL BE UPDATED IN MARCH.]
------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. Large Company(1)........................................................ 36 113 197 443
Enhanced US Large Company(2)................................................. 55 173 302 677
U.S. Large Cap Value......................................................... 36 113 197 443
Tax-Managed U.S. Marketwide Value............................................ 5 15 N/A N/A
U.S. 4-10 Value.............................................................. 64 202 N/A N/A
Tax-Managed U.S. 5-10 Value.................................................. 6 20 N/A N/A
U.S. 6-10 Value.............................................................. 61 192 335 750
U.S. 6-10 Small Company...................................................... 46 144 252 567
Tax-Managed U.S. 6-10 Small Company.......................................... 6 20 N/A N/A
U.S. 9-10 Small Company...................................................... 61 192 335 750
DFA Real Estate Securities................................................... 49 154 269 604
Large Cap International...................................................... 48 151 263 591
DFA International Value...................................................... 57 179 313 701
International Small Company.................................................. 144 306 482 992
Japanese Small Company....................................................... 124 282 454 952
Pacific Rim Small Company.................................................... 185 365 561 1,127
United Kingdom Small Company................................................. 72 224 390 871
Continental Small Company.................................................... 173 328 497 986
DFA International Small Cap Value............................................ 159 353 563 1,168
Tax-Managed DFA International Value.......................................... 10 30 N/A N/A
Emerging Markets............................................................. 150 364 594 1,257
Emerging Markets Value....................................................... 157 382 N/A N/A
Emerging Markets Small Cap................................................... 226 493 N/A N/A
DFA One-Year Fixed Income.................................................... 23 71 124 280
DFA Two-Year Global Fixed Income............................................. 35 109 191 431
DFA Five-Year Government..................................................... 30 93 163 368
DFA Five-Year Global Fixed Income............................................ 43 135 235 530
DFA Intermediate Government Fixed Income..................................... 26 80 141 318
</TABLE>
- ------------------------
(1) The Example is based on gross expenses before reduction for waivers or
assumption of expenses. See footnote 3 following the table of Annual Fund
Operating Expenses.
(2) The Example is based on gross expenses before reduction for waivers or
assumption of expenses. See footnote 4 following the table of Annual Fund
Operating Expenses.
With respect to the Feeder Portfolios and International Small Company
Portfolio, the table summarizes the aggregate annual operating expenses of both
the Portfolios and the corresponding Master Funds in which the Portfolios
invest.
The Emerging Markets Small Cap, Emerging Markets Value, Tax-Managed U.S.
Marketwide Value, Tax-Managed U.S. 5-10 Value, Tax-Managed U.S. 6-10 Small
Company and Tax-Managed DFA International Value (and their corresponding Master
Funds, where applicable) and the Emerging Markets Value
19
<PAGE>
Portfolio are new and, therefore, the above example is based on estimated
expenses for their respective current fiscal years and does not extend over
five- and ten-year periods.
SECURITIES LENDING REVENUE
For the fiscal year ended November 30, 1997, the following Portfolios and
Master Funds received the following net revenue from a securities lending
program which constituted a percentage of the average daily net assets of the
Portfolio or Master Fund:
[TO BE UPDATED IN MARCH]
-------------------------
<TABLE>
<CAPTION>
PERCENTAGE
PORTFOLIO/MASTER FUND NET REVENUE OF ASSETS
- ---------------------------------------------------------------------------------------- ------------ -----------
<S> <C> <C>
U.S. Large Company Series............................................................... $ 41,000 0.01%
U.S. Large Cap Value Series............................................................. $ 132,000 0.01%
U.S. 6-10 Value Series.................................................................. $ 612,000 0.03%
U.S. 6-10 Small Company Series.......................................................... $ 251,000 0.07%
U.S. 9-10 Small Company Portfolio....................................................... $ 738,000 0.06%
DFA Real Estate Securities Portfolio.................................................... $ 17,000 0.02%
Large Cap International Portfolio....................................................... $ 56,000 0.07%
Japanese Small Company Series........................................................... $ 648,000 0.25%
Pacific Rim Small Company Series........................................................ $ 178,000 0.08%
Continental Small Company Series........................................................ $ 116,000 0.03%
DFA International Value Series.......................................................... $ 1,236,000 0.08%
DFA International Small Cap Value Portfolio............................................. $ 250,000 0.06%
</TABLE>
HIGHLIGHTS
MANAGEMENT AND ADMINISTRATIVE SERVICES
The Advisor serves as investment advisor to each of the Portfolios, except
the Feeder Portfolios, and to each Master Fund. Dimensional Fund Advisors Ltd.
serves as sub-advisor of United Kingdom and Continental Small Company Series of
the Trust. DFA Australia Limited serves as sub-advisor of Japanese and Pacific
Rim Small Company Series of the Trust. Dimensional Fund Advisors Ltd. and DFA
Australia Limited also provide consulting services to the Advisor with respect
to DFA International Small Cap Value Portfolio, Large Cap International
Portfolio, DFA International Value Series, Tax-Managed DFA International Value
Portfolio, Emerging Markets Series, Emerging Markets Small Cap Series and
Dimensional Emerging Markets Value Fund. The Advisor provides each Feeder
Portfolio and International Small Company Portfolio with certain administrative
services. (See "MANAGEMENT OF THE FUNDS.")
DIVIDEND POLICY
The Domestic and International Equity Portfolios, except the U.S. Large
Company, Enhanced U.S. Large Company, U.S. Large Cap Value, Tax-Managed U.S.
Marketwide Value and DFA International Value Portfolios, each distribute
substantially all of their own net investment income in December of each year.
U.S. Large Company, Enhanced U.S. Large Company, U.S. Large Cap Value,
Tax-Managed U.S. Marketwide Value, DFA International Value, Tax-Managed DFA
International Value, DFA Intermediate Government Fixed Income, DFA Two-Year
Global Fixed Income and DFA Five-Year Global Fixed Income Portfolios distribute
dividends from their net investment income quarterly. DFA One-Year Fixed Income
Portfolio distributes dividends from its net investment income monthly. DFA
Five-Year Government Portfolio distributes dividends from net investment income
semi-annually. The Portfolios will make any distributions from realized net
capital gains on an annual basis. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS
AND TAXES.")
20
<PAGE>
PURCHASE, VALUATION AND REDEMPTION OF SHARES
Shares of the International Equity Portfolios (except United Kingdom Small
Company, Large Cap International and DFA International Value and Tax-Managed DFA
International Value Portfolios) may be purchased at a public offering price,
which is equal to the net asset value of their shares, plus a reimbursement fee.
The reimbursement fee is paid to the Portfolio whose shares are purchased and
used to defray the costs associated with investment of the proceeds from the
sale of its shares. The shares of the remaining Portfolios are sold at net asset
value. The redemption price of the shares of all of the Portfolios is equal to
the net asset value of their shares.
The reimbursement fee for the International Small Company Portfolio is based
on its current target investment allocations among the International Master
Funds in which it invests. The reimbursement fee for the International Small
Company Portfolio will change from time to time if the Portfolio changes the
target investment allocations in the International Master Funds. No
reimbursement fee is assessed in connection with any purchase of shares by
exchange between International Small Company Portfolio and any of the Feeder
Portfolios which invest in the International Master Funds.
The value of the shares issued by each Feeder Portfolio and International
Small Company Portfolio will fluctuate in relation to the investment experience
of the Master Fund(s) in which such Portfolios invest. The value of the shares
issued by all other Portfolios will fluctuate in relation to their own
investment experience. Unlike shares of money market funds, the shares of DFA
One-Year Fixed Income Portfolio will tend to reflect fluctuations in interest
rates because the corresponding Master Fund in which the Portfolio invests does
not seek to stabilize the price of its shares by use of the "amortized cost"
method of securities valuation. (See "PURCHASE OF SHARES," "VALUATION OF SHARES"
and "REDEMPTION OF SHARES.")
U.S. LARGE COMPANY PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
U.S. Large Company Portfolio seeks, as its investment objective, to
approximate the investment performance of the S&P 500 Index, both in terms of
the price of the Portfolio's shares and its total investment return. The
Portfolio invests all of its assets in U.S. Large Company Series of the Trust
(the "U.S. Large Company Series"), which has the same investment objective and
policies as the Portfolio. U.S. Large Company Series intends to invest in all of
the stocks that comprise the S&P 500 Index in approximately the same proportions
as they are represented in the Index. The amount of each stock purchased for the
U.S. Large Company Series, therefore, will be based on the issuer's respective
market capitalization. The S&P 500 Index is comprised of a broad and diverse
group of stocks most of which are traded on the New York Stock Exchange
("NYSE"). Generally, these are the U.S. stocks with the largest market
capitalizations and, as a group, they represent approximately 70% of the total
market capitalization of all publicly traded U.S. stocks. Under normal market
conditions, at least 95% of the U.S. Large Company Series' assets will be
invested in the stocks that comprise the S&P 500 Index.
U.S. Large Company Series may also acquire stock index futures contracts and
options thereon in order to commit funds awaiting investment in stocks or
maintain cash liquidity. To the extent that this Series invests in stock index
futures contracts and options thereon for other than bona fide hedging purposes,
the Series will not purchase such futures contracts or options if as a result
more than 5% of its net assets would then consist of initial margin deposits and
premiums required to establish such contracts or options.
Ordinarily, portfolio securities will not be sold except to reflect
additions or deletions of the stocks that comprise the S&P 500 Index, including
mergers, reorganizations and similar transactions and, to the extent necessary,
to provide cash to pay redemptions of the U.S. Large Company Series' shares. For
information concerning Standard & Poor's Rating Group, a Division of The McGraw
Hill Companies ("S&P"), and disclaimers of S&P with respect to the U.S. Large
Company Portfolio and the U.S. Large Company Series, see "STANDARD &
POOR'S--INFORMATION AND DISCLAIMERS."
21
<PAGE>
ENHANCED U.S. LARGE COMPANY PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
Enhanced U.S. Large Company Portfolio seeks, as its investment objective, to
achieve a total return which exceeds the total return performance of the S&P 500
Index. The Portfolio invests all of its assets in Enhanced U.S. Large Company
Series of the Trust (the "Enhanced U.S. Large Company Series"). The Enhanced
U.S. Large Company Series will have the same investment objective and policies
as the Portfolio. Enhanced U.S. Large Company Series may invest in all of the
stocks represented in the S&P 500 Index, options on stock indices, stock index
futures, options on stock index futures, swap agreements on stock indices and
shares of investment companies that invest in stock indices. Investments by the
Series in shares of investment companies are limited by the federal securities
laws and regulations governing mutual funds. The S&P 500 Index is comprised of a
broad and diverse group of stocks most of which are traded on the NYSE.
Generally, these are the U.S. stocks with the largest market capitalizations
and, as a group, they represent approximately 70% of the total market
capitalization of all publicly traded U.S. stocks.
The Enhanced U.S. Large Company Series may, from time to time, also invest
in options on stock indices, stock index futures, options on stock index futures
and swap agreements based on indices other than, but similar to, the S&P 500
Index (such instruments whether or not based on the S&P 500 Index hereinafter
collectively referred to as "Index Derivatives"). The Enhanced U.S. Large
Company Series may invest all of its assets in Index Derivatives. Certain of
these Index Derivatives are speculative and may subject the Portfolio to
additional risks. Assets of the Enhanced U.S. Large Company Series not invested
in S&P 500 stocks or Index Derivatives may be invested in the same types of
short-term fixed income obligations as may be acquired by DFA Two-Year Global
Fixed Income Series and, to the extent allowed by the 1940 Act, shares of money
market mutual funds (collectively, "Fixed Income Investments") (See "INVESTMENT
OBJECTIVES AND POLICIES--FIXED INCOME PORTFOLIOS--Description of Investments").
The Series' investments in the securities of other investment companies may
involve duplication of certain fees and expenses.
The percentage of assets of the Enhanced U.S. Large Company Series that will
be invested at any one time in S&P 500 Index stocks, Index Derivatives and Fixed
Income Investments may vary from time to time, within the discretion of the
Advisor and according to restraints imposed by the federal securities laws and
regulations governing mutual funds. The Enhanced U.S. Large Company Series will
maintain a segregated account consisting of liquid assets (or, as permitted by
applicable interpretations, enter into offsetting positions) to cover its open
positions in Index Derivatives to avoid leveraging of the Series.
The Enhanced U.S. Large Company Series will enter into positions in futures
and options on futures only to the extent such positions are permissible with
respect to applicable rules of the Commodity Futures Trading Commission without
registering the Series or the Trust as a commodities pool operator. In addition,
the Enhanced U.S. Large Company Series may not be able to utilize Index
Derivatives to the extent otherwise permissible or desirable because of
constraints imposed by the Internal Revenue Code of 1986, as amended (the
"Code"), or by unanticipated illiquidity in the marketplace for such
instruments.
It is the position of the Securities and Exchange Commission (the "SEC")
that over-the-counter options are illiquid. Accordingly, the Enhanced U.S. Large
Company Series will invest in such options only to the extent consistent with
its 15% limit on investment in illiquid securities.
STANDARD & POOR'S--INFORMATION AND DISCLAIMERS
Neither the U.S. Large Company Portfolio or the Enhanced U.S. Large Company
Portfolio (the "Large Company Portfolios"), nor the U.S. Large Company Series or
the Enhanced U.S. Large Company Series (the "Large Company Master Funds") are
sponsored, endorsed, sold or promoted by S&P. S&P makes no representation or
warranty, express or implied, to the owners of the Large Company Portfolios or
the Large Company Master Funds or any member of the public regarding the
advisability of investing in
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securities generally or in the Large Company Portfolios or the Large Company
Master Funds particularly or the ability of the S&P 500 Index to track general
stock market performance. S&P's only relationship to the Large Company
Portfolios or the Large Company Master Funds is the licensing of certain
trademarks and trade names of S&P and of the S&P 500 Index which is determined,
composed and calculated by S&P without regard to the Large Company Portfolios or
the Large Company Master Funds. S&P has no obligation to take the needs of the
Large Company Portfolios, the Large Company Master Funds or their respective
owners into consideration in determining, composing or calculating the S&P 500
Index. S&P is not responsible for and has not participated in the determination
of the prices and amount of the Large Company Portfolios or the Large Company
Master Funds or the issuance or sale of the Large Company Portfolios or the
Large Company Master Funds or in the determination or calculation of the
equation by which the Large Company Portfolios or the Large Company Master Funds
is to be converted into cash. S&P has no obligation or liability in connection
with the administration, marketing or trading of the Large Company Portfolios or
the Large Company Master Funds.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500
INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED
THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY
OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL,
PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
U.S. VALUE PORTFOLIOS
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each of these Portfolios is to achieve long-term
capital appreciation. U.S. Large Cap Value Portfolio, U.S. 4-10 Value Portfolio,
U.S. 6-10 Value Portfolio and Tax-Managed U.S. Marketwide Value will pursue
their investment objectives by investing all of their assets in U.S. Large Cap
Value Series (the "Large Cap Value Series"), U.S. 4-10 Value Series (the "4-10
Value Series"), U.S. 6-10 Value Series (the "6-10 Value Series") and Tax-Managed
U.S. Marketwide Value Series (the "Tax-Managed Marketwide Series") of the Trust,
respectively. These series are collectively called the "Value Master Funds."
Each Value Master Fund has the same investment objective and policies as the
corresponding Value Portfolio. The Tax-Managed U.S. 5-10 Value Portfolio invests
directly in portfolio securities. Ordinarily, each of the Value Master Funds and
Tax-Managed U.S. 5-10 Value Portfolio will invest at least 80% of its assets in
a broad and diverse group of readily marketable common stocks of U.S. companies
which the Advisor believes to be value stocks at the time of purchase.
Securities are considered value stocks primarily because a company's shares have
a high book value in relation to their market value (a "book to market ratio").
Generally, a company's shares will be considered to have a high book to market
ratio if the ratio equals or exceeds the ratios of any of the 30% of companies
with the highest positive book to market ratios whose shares are listed on the
NYSE and, except as described under "Portfolio Structure," will be considered
eligible for investment. Large Cap Value will purchase common stocks of
companies whose market capitalizations equal or exceed that of the company
having the median market capitalization of companies whose shares are listed on
the NYSE. The Tax-Managed Marketwide Value Portfolio will purchase common stocks
of companies whose market capitalization equal the market capitalizations of
companies in the 1st through 8th deciles of those companies listed on the NYSE.
The 6-10 Value Series will purchase common stocks of companies whose market
capitalizations are smaller
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than such company. The 4-10 Value Series will purchase common stocks of
companies whose market capitalizations are equal to the market capitalizations
of companies in the 4th through 10th deciles of those companies listed on the
NYSE. The Tax-Managed U.S. 5-10 Value Portfolio will purchase common stocks of
companies whose market capitalizations are equal to the market capitalizations
of companies in the 5th through 10th deciles of those companies listed on the
NYSE. With respect to the 9th and 10th deciles, the 4-10 Value Series will only
purchase such common stocks when it is advantageous to do so through block
trades with the Advisor's other accounts. In measuring value, the Advisor may
consider additional factors such as cash flow, economic conditions and
developments in the issuer's industry.
PORTFOLIO STRUCTURE
The Value Master Funds and Tax-Managed U.S. 5-10 Value Portfolio will
purchase securities that are listed on the principal U.S. national securities
exchanges or traded or the over-the-counter market ("OTC"). Each of the Value
Master Funds and Tax-Managed U.S. 5-10 Value Portfolio is market capitalization
weighted. That is, each security is generally purchased based on the issuer's
relative market capitalization. In this way, the amount of a particular security
owned by a Master Fund or Portfolio is keyed to that security's market
capitalization compared to all securities eligible for purchase.
On not less than a semi-annual basis, for each Value Master Fund and
Tax-Managed U.S. 5-10 Value Portfolio, the Advisor will calculate the book to
market ratio necessary to determine those companies whose stock may be eligible
for investment. For additional information regarding the investment policies of
the Tax-Managed U.S. 5-10 Value Portfolio, including its portfolio structure and
transactions, see "TAX MANAGEMENT STRATEGIES" below.
PORTFOLIO TRANSACTIONS
The Value Master Funds and the Tax-Managed U.S. 5-10 Value Portfolio do not
intend to purchase or sell securities based on the prospects for the economy,
the securities markets or the individual issuers whose shares are eligible for
purchase. As described under "Portfolio Structure," investments will be made in
virtually all eligible securities on a market capitalization weighted basis.
Large Cap Value Series and the Tax-Managed Marketwide Series may sell
portfolio securities when the issuer's market capitalization falls substantially
below that of the issuer with the minimum market capitalization which is then
eligible for purchase by that Series. The 4-10, 6-10 Value Series and the Tax-
Managed U.S. 5-10 Value Portfolio each may sell portfolio securities when the
issuer's market capitalization increases to a level that substantially exceeds
that of the issuer with the largest market capitalization which is then eligible
for investment by those Series.
In addition, Large Cap Value Series and Tax-Managed Marketwide Series may
sell portfolio securities when their book to market ratio falls substantially
below that of the security with the lowest such ratio that is then eligible for
purchase by that Series. The 4-10 and 6-10 Value Series and the Tax-Managed U.S.
5-10 Value Portfolio may also sell portfolio securities in the same
circumstances, however, each of those Series anticipates generally to retain
securities of issuers with relatively smaller market capitalizations for longer
periods, despite any decrease in the issuer's book to market ratio.
In the case of the Tax-Managed U.S. 5-10 Value Portfolio, management
strategies which may be used by the Advisor in attempts to defer the realization
of net capital gains and to minimize dividend income may, from time to time,
cause deviation from market capitalization weighting. The Tax-Managed U.S. 5-10
Value Portfolio should not be expected to adhere to its market capitalization
weighting with the same precision as the Series. (See "TAX MANAGEMENT
STRATEGIES" below.)
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U.S. SMALL COMPANY PORTFOLIOS
INVESTMENT OBJECTIVES AND POLICIES
Each U.S. Small Company Portfolio, and the U.S. 6-10 Small Company and U.S.
9-10 Small Company Series of the Trust (the "U.S. Small Company Master Funds")
have an investment objective to achieve long-term capital appreciation. The U.S.
Small Company Portfolios provide investors with access to securities portfolios
consisting of small U.S. companies. Company size will be determined for purposes
of these Portfolios and Master Funds solely on the basis of a company's market
capitalization which will be calculated by multiplying the price of a company's
stock by the number of its shares of outstanding common stock.
Each U.S. Small Company Master Fund and Tax-Managed U.S. 6-10 Small Company
Portfolio will invest at least 80% of their assets in equity securities of U.S.
companies and will be structured to reflect reasonably the relative market
capitalizations of their portfolio companies. The Advisor believes that over the
long term the investment performance of small companies is superior to large
companies. Investors which, for a variety of reasons, may choose not to make
substantial, or any, direct investment in companies whose securities will be
held by the U.S. Small Company Master Funds and Tax-Managed U.S. 6-10 Small
Company Portfolio, may participate in the investment performance of these
companies through ownership of a Portfolio's stock. The Tax-Managed U.S. 6-10
Small Company Portfolio seeks to minimize the impact of federal taxes on returns
by managing its portfolio to seek to defer the realization of net capital gains
and may seek to minimize the receipt of dividend income in order to minimized
taxable distributions to investors. For this reason, its investment policies,
including its portfolio structure and transactions, differ slightly from the
Small Company Series. For further information on the Tax-Managed U.S. 6-10 Small
Company Portfolio's investment policies, see "TAX MANAGEMENT STRATEGIES" in this
prospectus.
U.S. 6-10 SMALL COMPANY PORTFOLIO
U.S. 6-10 Small Company Portfolio invests all of its assets in the U.S. 6-10
Small Company Series of the Trust (the "6-10 Series"), which has the same
investment objective and policies as the Portfolio. The 6-10 Series will invest
in a broad and diverse group of small U.S. companies having readily marketable
securities. References in this prospectus to a "small U.S. company" means a
company whose securities are traded in the U.S. securities markets and whose
market capitalization is not larger than the largest of those in the small
one-half (deciles 6 through 10) of companies listed on the NYSE. The 6-10 Series
will purchase common stocks of companies whose shares are listed on the NYSE,
the American Stock Exchange (the "AMEX") or traded OTC. The 6-10 Series may
invest in securities of foreign issuers which are traded in the U.S. securities
markets, but such investments may not exceed 5% of the gross assets of the
Series. It is the intention of the 6-10 Series to acquire a portion of the
common stock of each eligible NYSE, AMEX and OTC company on a market
capitalization weighted basis. (See "SMALL COMPANY MASTER FUNDS--Portfolio
Structure.") In the future, the 6-10 Series may purchase common stocks of small
U.S. companies which are listed on other U.S. securities exchanges. In addition,
the 6-10 Series is authorized to invest in private placements of
interest-bearing debentures that are convertible into common stock ("privately
placed convertible debentures"). Such investments are considered illiquid and
the value thereof together with the value of all other illiquid investments may
not exceed 15% of the value of the 6-10 Series' net assets at the time of
purchase.
The Tax-Managed U.S. 6-10 Small Company Portfolio pursues its investment
objective by investing its assets generally in a similar way as the 6-10 Series,
described above. However, the Tax-Managed U.S. 6-10 Small Company Portfolio will
seek to minimize the impact of federal taxes on returns by managing its
portfolio in a manner that will defer the realization of net capital gains and
may minimize the receipt of dividend income. (See "TAX MANAGEMENT STRATEGIES"
below.)
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U.S. 9-10 SMALL COMPANY PORTFOLIO
U.S. 9-10 Small Company Portfolio pursues its investment objective by
investing all of its assets in the U.S. 9-10 Small Company Series of the Trust
(the "9-10 Series"). The 9-10 Series will invest in a broad and diverse segment
of small U.S. companies having readily marketable stocks, and whose market
capitalization is not larger than the largest of those in the quintile of
companies listed on the NYSE having the smallest market capitalizations
(smallest 20%). The 9-10 Series will purchase stocks of companies whose shares
are listed on the NYSE or AMEX or traded OTC. The 9-10 Series may invest in
securities of foreign issuers which are traded in the U.S. securities markets,
but such investments may not exceed 5% of the gross assets of the Series. There
is some overlap in the companies in which the 9-10 Series and the 6-10 Series
invest. It is the intention of the 9-10 Series to acquire a portion of the stock
of each eligible NYSE, AMEX and OTC company on a market capitalization weighted
basis. (See "SMALL COMPANY MASTER FUNDS--Portfolio Structure.") In the future,
the 9-10 Series may include stocks of small U.S. companies which are listed on
other U.S. securities exchanges. The 9-10 Series is authorized to invest in
privately placed convertible debentures and the value thereof together with the
value of all other illiquid investments may not exceed 10% of the value of the
9-10 Series' net assets at the time of purchase.
For the discussion of portfolio structure and portfolio transactions for
U.S. Small Company Portfolios, see "SMALL COMPANY MASTER FUNDS--Portfolio
Structure" and "SMALL COMPANY MASTER FUNDS--Portfolio Transactions."
DFA REAL ESTATE SECURITIES PORTFOLIO
INVESTMENT OBJECTIVE AND PORTFOLIO
The investment objective of DFA Real Estate Securities Portfolio is to
achieve long-term capital appreciation. The Portfolio will concentrate
investments in readily marketable equity securities of companies whose principal
activities include development, ownership, construction, management, or sale of
residential, commercial or industrial real estate. Investments will include,
principally, equity securities of companies in the following sectors of the real
estate industry: certain real estate investment trusts and companies engaged in
residential construction and firms, except partnerships, whose principal
business is to develop commercial property. In the future, the Advisor may
determine to include companies in other sectors of the real estate industry in
the Portfolio.
The Portfolio will invest in shares of real estate investment trusts
("REITS"). REITS pool investors' funds for investment primarily in income
producing real estate or real estate related loans or interests. A REIT is not
taxed on income distributed to shareholders if it complies with several
requirements relating to its organization, ownership, assets, and income and a
requirement that it distribute to its shareholders at least 95% of its taxable
income (other than net capital gains) for each taxable year. REITS can generally
be classified as Equity REITS, Mortgage REITS and Hybrid REITS. Equity REITS
invest the majority of their assets directly in real property and derive their
income primarily from rents. Equity REITS can also realize capital gains by
selling properties that have appreciated in value. Mortgage REITS invest the
majority of their assets in real estate mortgages and derive their income
primarily from interest payments. Hybrid REITS combine the characteristics of
both Equity REITS and Mortgage REITS. At the present time, the Portfolio intends
to invest only in Hybrid REITS and Equity REITS.
It is anticipated that, ordinarily, at least 80% of the net value of the
Portfolio will be invested in securities of companies in the U.S. real estate
industry. The Portfolio will make equity investments only in securities traded
in the U.S. securities markets, principally on the NYSE, AMEX and OTC. In
addition, the Portfolio is authorized to lend its portfolio securities (see
"SECURITIES LOANS"), and to purchase and sell financial futures contracts and
options thereon. To the extent that the Portfolio invests in futures contracts
and options thereon for other than bona fide hedging purposes, the Portfolio
will not purchase futures contracts or options thereon, if, as a result, more
than 5% of its net assets would then consist of initial margin deposits and
premiums required to establish such positions.
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<PAGE>
PORTFOLIO STRUCTURE
The Advisor has prepared and will maintain a schedule of eligible
investments consisting of equity securities of all companies in the sectors of
the real estate industry described above as being presently eligible for
investment. It is the intention of the Portfolio to purchase a portion of the
equity securities of all of these companies on a market capitalization weighted
basis.
The Portfolio will be structured by generally basing the amount of each
security purchased on the issuer's relative market capitalization in relation to
other eligible issuers in the real estate industry. However, even though a
company's stock may meet the applicable criteria described above, it will not be
purchased by the Portfolio if, at the time of purchase, in the judgment of the
Advisor, the issuer is in extreme financial difficulty or is involved in a
merger or consolidation or is the subject of an acquisition which could result
in the company no longer being considered principally engaged in the real estate
business.
If securities must be sold in order to obtain funds to make redemption
payments, such securities may be repurchased by the Portfolio, as additional
cash becomes available to it. However, the Portfolio has retained the right to
borrow to make redemption payments and is also authorized to redeem its shares
in kind. (See "REDEMPTION OF SHARES.") Further, because the securities of
certain companies whose shares are eligible for purchase are thinly traded, the
Portfolio might not be able to purchase the number of shares that strict
adherence to market capitalization weighting might require.
Investments will not be based upon an issuer's dividend payment policy or
record. However, many of the companies whose securities will be included in the
Portfolio do pay dividends. It is anticipated, therefore, that the Portfolio
will receive dividend income. Periodically, the Advisor may expand the
Portfolio's schedule of eligible investments to include equity securities of
companies in sectors of the real estate industry in addition to those described
above as eligible for investment as of the date of this prospectus.
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<PAGE>
INTERNATIONAL PORTFOLIOS--COUNTRIES
As you read the following descriptions of the International Portfolios,
please refer to the table below to determine in what countries each Portfolio
invests. As of the date of this Prospectus, the International Master Funds and
Portfolios are invested or authorized to invest in the countries listed in the
table below. The Advisor will determine in its discretion when and whether to
invest in countries which have been authorized, depending on a number of factors
such as asset growth in a portfolio and characteristics of each country's
markets.
DEVELOPED MARKETS [UPDATE IN MARCH]
<TABLE>
<CAPTION>
DFA
INTERNATIONAL
VALUE
SERIES AND DFA
TAX- MANAGED JAPANESE PACIFIC CONTINENTAL INTERNATIONAL
LARGE CAP DFA SMALL RIM SMALL U.K. SMALL SMALL SMALL CAP
INTERNATIONAL INTERNATIONAL COMPANY COMPANY COMPANY COMPANY VALUE
COUNTRIES PORTFOLIO VALUE SERIES SERIES SERIES SERIES PORTFOLIO
<S> <C> <C> <C> <C> <C> <C> <C>
Australia........ Invested Invested NA Invested NA NA Invested
Austria.......... Approved Approved NA NA NA Approved Approved
Belgium.......... Invested Invested NA NA NA Invested Invested
Denmark.......... Invested Invested NA NA NA Invested Invested
Finland.......... Invested Invested NA NA NA Approved Invested
France........... Invested Invested NA NA NA Invested Invested
Germany.......... Invested Invested NA NA NA Invested Invested
Hong Kong........ Invested Invested NA Invested NA NA Invested
Ireland.......... Invested Approved NA NA NA Approved Approved
Italy............ Invested Invested NA NA NA Invested Invested
Japan............ Invested Invested Invested NA NA NA Invested
Malaysia*........ Invested* Invested* NA Invested* NA NA Invested*
Netherlands...... Invested Invested NA NA NA Invested Invested
New Zealand...... Invested Invested NA Invested NA NA Invested
Norway........... Invested Invested NA NA NA Approved Invested
Singapore........ Invested Invested NA Invested NA NA Invested
Spain............ Invested Invested NA NA NA Invested Invested
Sweden........... Invested Invested NA NA NA Invested Invested
Switzerland...... Invested Invested NA NA NA Invested Invested
United Kingdom... Invested Invested NA NA Invested NA Invested
</TABLE>
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<PAGE>
EMERGING MARKETS
<TABLE>
<CAPTION>
EMERGING MARKET EMERGING MARKETS VALUE EMERGING MARKETS SMALL
COUNTRIES SERIES FUND CAP
<S> <C> <C> <C>
Argentina................ Invested Invested Invested
Brazil................... Invested Invested Invested
Chile.................... Invested Invested NA
Greece................... Invested Invested Invested
Indonesia................ Invested Invested Invested
Israel................... Invested Invested Invested
Korea.................... Invested Invested Invested
Malaysia*................ Invested* Invested* Invested*
Mexico................... Invested Invested Invested
Philippines.............. Invested Invested Invested
Portugal................. Invested Invested NA
Thailand................. Invested Invested Invested
Turkey................... Invested Invested Invested
Hungary.................. Approved Approved Approved
Poland................... Approved Approved Approved
</TABLE>
* As of September 10, 1998, the Master Funds and Portfolios that invest in
Malaysian securities discontinued further investment in such securities as a
consequence of certain restrictions imposed by the Malaysian government on
the repatriation of assets by foreign investors such as the Master Funds and
Portfolios.
On September 1, 1998, the Malaysian government announced a series of capital
and foreign exchange controls on the Malaysian currency, the ringgit, and on
transactions on the Kuala Lumpur Stock Exchange, that operate to severely
constrain or prohibit foreign investors, including the corresponding Master
Funds in which certain Portfolios invest their assets, from repatriating assets.
While there is some confusion in the market concerning the interpretations of
these changes, it appears that the Portfolios and Master Funds will not be
permitted to convert the proceeds of the sale of their Malaysian investments
into U.S. dollars prior to September 1, 1999.
As a consequence of these developments, the Portfolios and Master Funds have
stopped investing additional funds in Malaysia. With respect to the current
Malaysian investments owned by the Portfolios and Master Funds, the Portfolios
and Master Funds are presently valuing the securities at the current market
prices of the Malaysian securities and discounting the U.S. dollar-ringgit
currency exchange rate. [UPDATE AT TIME OF MARCH FILING] Pending further
clarification from Malaysian regulatory authorities regarding the controls
identified above, the Portfolios and Master Funds will treat their investments
in Malaysian securities as illiquid.
As of the date of this prospectus, Malaysian securities constitute
approximately the following percentages of the net asset value of the designated
Master Funds and Portfolios: Pacific Rim Series, 26.34%; International Small
Company Portfolio, 3.86%; DFA International Small Cap Value Portfolio, 2.25%;
Emerging Markets Series, 9.60%; Dimensional Emerging Markets Value Fund Inc.
(Emerging Markets Value Portfolio), 6.09%; and Emerging Markets Small Cap
Series, 9.45%. Malaysian securities constitute less than one percent of the net
asset value of the Large Cap International Portfolio and the DFA International
Value Series. [TO BE UPDATED AT TIME OF MARCH FILING]
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<PAGE>
LARGE CAP INTERNATIONAL PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of Large Cap International Portfolio is to achieve
long-term capital appreciation by investing in the stocks of non-U.S. large
companies. The Portfolio intends to invest in the stocks of large companies in
Europe, Australia and the Far East.
Under normal market conditions, at least 65% of the Portfolio's assets will
be invested in companies organized or having a majority of their assets in or
deriving a majority of their operating income in at least three non-U.S.
countries. The Portfolio reserves the right to invest in index futures contracts
to commit funds awaiting investment or to maintain liquidity. To the extent that
the Portfolio invests in index futures contracts for other than bona fide
hedging purposes, the Portfolio will not purchase futures contracts if as a
result more than 5% of its total assets would then consist of initial margin
deposits on such contracts.
The Portfolio will be approximately market capitalization weighted. In
determining market capitalization weights, the Advisor, using its best judgment,
will seek to eliminate the effect of cross holdings on the individual country
weights. As a result, the weighting of certain countries in the Portfolio may
vary from their weighting in international indices such as those published by
The Financial Times, Morgan Stanley Capital International or Salomon/Russell.
The Advisor, however, will not attempt to account for cross holdings within the
same country. Generally, the companies whose stocks will be selected by the
Advisor for the Portfolio will be in the largest 50% in terms of market
capitalization for each country.
It is management's belief that the stocks of large companies offer, over a
long term, a prudent opportunity for capital appreciation, but, at the same
time, selecting a limited number of such issues for inclusion in the Portfolio
involves greater risk than including a large number of them. The Advisor does
not anticipate that a significant number of securities which meet the market
capitalization criteria will be selectively excluded from the Portfolio.
The Portfolio does not seek current income as an investment objective and
investments will not be based upon an issuer's dividend payment policy or
record. However, many of the companies whose securities will be included in the
Portfolio do pay dividends. It is anticipated, therefore, that the Portfolio
will receive dividend income.
DFA INTERNATIONAL VALUE PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of DFA International Value Portfolio is to achieve
long-term capital appreciation. The Portfolio invests all of its assets in the
DFA International Value Series of the Trust (the "International Value Series"),
which has the same investment objective and policies as the Portfolio. The
International Value Series seeks to achieve its objective by investing in the
stocks of large non-U.S. companies that the Advisor believes to be value stocks
at the time of purchase. Securities are considered value stocks primarily
because a company's shares have a high book value in relation to their market
value (a "book to market ratio"). In measuring value, the Advisor may consider
additional factors such as cash flow, economic conditions and developments in
the issuer's industry. Generally, the shares of a company in any given country
will be considered to have a high book to market ratio if the ratio equals or
exceeds the ratios of any of the 30% of companies in that country with the
highest positive book to market ratios whose shares are listed on a major
exchange, and, except as described below, will be considered eligible for
investment. The International Value Series intends to invest in the stocks of
large companies in countries with developed markets.
Under normal market conditions, at least 65% of the International Value
Series' assets will be invested in companies organized or having a majority of
their assets in or deriving a majority of their operating income in at least
three non-U.S. countries, and no more than 40% of the Series' assets will be
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invested in such companies in any one country. The International Value Series
reserves the right to invest in index futures contracts to commit funds awaiting
investment or to maintain liquidity. To the extent that the International Value
Series invests in futures contracts for other than bona fide hedging purposes,
the Series will not purchase futures contracts if as a result more than 5% of
its net assets would then consist of initial margin deposits required to
establish such contracts.
As of the date of this prospectus, the International Value Series intends to
invest in companies having at least $800 million of market capitalization, and
the Series will be approximately market capitalization weighted. The Advisor may
reset such floor from time to time to reflect changing market conditions. In
determining market capitalization weights, the Advisor, using its best judgment,
will seek to eliminate the effect of cross holdings on the individual country
weights. As a result, the weighting of certain countries in the International
Value Series may vary from their weighting in international indices such as
those published by The Financial Times, Morgan Stanley Capital International or
Salomon/Russell. The Advisor, however, will not attempt to account for cross
holding within the same country.
It is management's belief that the value stocks of large companies, over a
long term, a prudent opportunity for capital appreciation, but, at the same
time, selecting a limited number of such issues for inclusion in the
International Value Series involves greater risk than including a large number
of them. The Advisor does not anticipate that a significant number of securities
which meet the market capitalization criteria will be selectively excluded from
the International Value Series.
The International Value Series does not seek current income as an investment
objective and investments will not be based upon an issuer's dividend payment
policy or record. However, many of the companies whose securities will be
included in the International Value Series do pay dividends. It is anticipated,
therefore, that the International Value Series will receive dividend income.
TAX-MANAGED DFA INTERNATIONAL VALUE PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
The Tax-Managed DFA International Value Portfolio has the same investment
objective as, and investment policies that are similar to, the DFA International
Value Series. (See DFA INTERNATIONAL VALUE PORTFOLIO--Investment Objective and
Policies" above.) However, the Advisor will manage its portfolio in a manner
that will seek to defer the realization of net capital gains and may minimize
the receipt of dividend income in order to minimize taxable distributions to
investors. These tax management strategies may, from time to time, cause
deviation from market capitalization weightings. The Tax-Managed DFA
International Value Portfolio should not be expected to adhere to its market
capitalization weightings with the same precision as the other Master Funds and
Portfolios. In addition, the investment policies of the Tax-Managed DFA
International Value Portfolio, including its portfolio structure and
transactions, differ slightly from the DFA International Value Portfolio. (For
additional information regarding the investment policies applicable to the
Tax-Managed DFA International Value Portfolio, see "TAX MANAGEMENT STRATEGIES"
below.)
INTERNATIONAL SMALL COMPANY PORTFOLIOS
INVESTMENT OBJECTIVES AND POLICIES
The International Small Company Portfolio, and the Japanese Small Company,
Pacific Rim Small Company, United Kingdom Small Company and Continental Small
Company Series of the Trust (the latter four being referred to hereinafter as
the "International Small Company Master Funds") each have an investment
objective to achieve long-term capital appreciation. The International Small
Company Portfolios provide investors with access to securities portfolios
consisting of small Japanese, United Kingdom, European and Pacific Rim
companies. Company size will be determined for purposes of these Portfolios and
Master Funds solely on the basis of a company's market capitalization which will
be calculated by
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multiplying the number of outstanding shares of the company that are similar to
domestic common stocks by the price of the company's stock.
Each International Small Company Master Fund intends to invest at least 80%
of its assets in equity securities of its targeted country or region of the
world. The International Small Company Master Funds will be structured to
reflect reasonably the relative market capitalizations of their portfolio
companies. The Advisor believes that over the long term the investment
performance of small companies is superior to large companies and that
investment in the Portfolios is an effective way to improve global
diversification. Investors which, for a variety of reasons, may choose not to
make substantial, or any, direct investment in companies whose securities will
be held by the International Small Company Master Funds, may participate in the
investment performance of these companies through ownership of a Portfolio's
stock.
INTERNATIONAL SMALL COMPANY PORTFOLIO
The International Small Company Portfolio seeks to achieve its investment
objective by investing virtually all of its assets in up to four International
Small Company Master Funds in such relative portions as determined by the
Advisor from time to time. For a complete description of the investment
objectives and policies, portfolio structure and transactions for each
International Small Company Master Fund, see "INTERNATIONAL SMALL COMPANY
PORTFOLIOS--INVESTMENT OBJECTIVES AND POLICIES." The International Small Company
Portfolio is designed for investors who wish to achieve their investment
objective of capital appreciation by participating in the investment performance
of a broad range of equity securities of Japanese, United Kingdom, European and
Pacific Rim small companies.
As of the date of this prospectus, the International Small Company Portfolio
invests in the shares of the International Small Company Master Funds within the
following percentage ranges:
<TABLE>
<CAPTION>
INTERNATIONAL SMALL COMPANY MASTER FUNDS INVESTMENT RANGE
- ------------------------------------------------------------------------ -----------------
<S> <C>
Japanese Small Company.................................................. 20-45%
Pacific Rim Small Company............................................... 0-25%
United Kingdom Small Company............................................ 5-25%
Continental Small Company............................................... 20-45%
</TABLE>
The allocation of the assets of International Small Company Portfolio to be
invested in the International Small Company Master Funds will be determined by
the Advisor on at least a semiannual basis. In setting the target allocation,
the Advisor will first consider the market capitalizations of all eligible
companies in each of the International Small Company Master Funds. The Advisor
will calculate the market capitalizations for each International Small Company
Master Fund in the manner described under INTERNATIONAL SMALL COMPANY
PORTFOLIOS--INVESTMENT OBJECTIVES AND POLICIES." In determining the target
allocations, the Advisor, using its best judgment, will seek to eliminate the
effect of cross holdings between companies on a portfolio by portfolio basis and
may take into account the existence of substantial private or government
ownership of the shares of a company. The Advisor may also consider such other
factors as it deems appropriate with respect to determining the target
allocations. The Advisor expects to change the relative weights ascribed to each
International Small Company Master Fund, based on its updated market
capitalization calculations, when it determines that fundamental changes in the
relative values ascribed by market forces to each relevant geographic area have
occurred. To maintain target weights during the period, adjustments may be made
by applying future purchases by International Small Company Portfolio in
proportion necessary to rebalance the investment portfolio of the Portfolio. As
of September 10, 1998, the International Small Company Portfolio discontinued
further investment in the Pacific Rim Master Fund as a consequence of certain
restrictions imposed by the Malaysian government on the repatriation of assets
by foreign investors, such as the International Small Company Portfolio. Under
normal conditions, the target allocations for investment by the Portfolio in the
International Small Company Master Fund are: Japanese Small Company Series--25%;
United Kingdom Small Company Series--20%; Continental Small Company Series--40%;
and Pacific Rim Small Company
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Series--15%. As of the date of this prospectus, the target allocations noted
above do not reflect current allocations because the Portfolio is not investing
in the Pacific Rim Small Master Fund.
JAPANESE SMALL COMPANY PORTFOLIO
Japanese Small Company Portfolio invests all of its assets in the Japanese
Small Company Series of the Trust (the "Japanese Series"), which has the same
investment objective and policies as the Portfolio. The Japanese Series will
invest in a broad and diverse group of readily marketable stocks of Japanese
small companies which are traded in the Japanese securities markets. Generally,
reference in this prospectus to the term "Japanese small company" means a
company located in Japan whose market capitalization is not larger than the
largest of those in the smaller one-half (deciles 6 through 10) of companies
whose securities are listed on the First Section of the Tokyo Stock Exchange
("TSE").
While the Japanese Series will invest primarily in the stocks of small
companies which are listed on the TSE, it may acquire the stocks of Japanese
small companies which are traded in other Japanese securities markets as well.
It is the intention of the Japanese Series to acquire a portion of the stock of
each of these companies on a market capitalization weighted basis. (See "SMALL
COMPANY MASTER FUNDS-- Portfolio Structure.")
PACIFIC RIM SMALL COMPANY PORTFOLIO
Pacific Rim Small Company Portfolio invests all of its assets in the Pacific
Rim Small Company Series of the Trust (the "Pacific Rim Series"), which has the
same investment objective and policies as the Portfolio. The Pacific Rim Series
is authorized to invest in stocks of a broad and diverse group of small
companies located in Australia, New Zealand and Asian countries whose shares are
traded principally on the securities markets located in those countries. As of
September 10, 1998, the Pacific Rim Small Company Portfolio ceased offering its
shares to new investors as a consequence of certain restrictions imposed by the
Malaysian government on the repatriation of assets by foreign investors, such as
the Pacific Rim Series.
Company size will be determined by the Advisor in a manner that will compare
the market capitalizations of the companies in all countries in which the
Pacific Rim Series invests (i.e., on a Pacific Rim basis). The Advisor typically
will use the appropriate country indices of the Financial Times Actuaries World
Index ("FTW") converted to a common currency and aggregated, to define "small
companies." Generally, companies with publicly traded stock whose market
capitalizations are not greater than the largest of those in the smallest 30% of
companies (8th, 9th and 10th deciles) listed in the FTW as combined for the
countries in which the Pacific Rim Series invests will be considered to be
"small companies" and will be eligible for purchase by the Pacific Rim Series.
While the Advisor typically will use the aggregated FTW indices to determine
the maximum size of eligible portfolio companies, portfolio acquisitions will
not be limited to stocks listed on the FTW for any country. The Pacific Rim
Series does not intend to purchase shares of any company whose market
capitalization is less than $5,000,000. The Pacific Rim Series intends to
acquire a portion of the stock of each eligible company on a market
capitalization basis. (See "SMALL COMPANY MASTER FUNDS-- Portfolio Structure.")
UNITED KINGDOM SMALL COMPANY PORTFOLIO
United Kingdom Small Company Portfolio invests all of its assets in the
United Kingdom Small Company Series of the Trust (the "United Kingdom Series"),
which has the same investment objective and policies as the Portfolio. The
United Kingdom Series will invest in a broad and diverse group of readily
marketable stocks of United Kingdom small companies which are traded principally
on the International Stock Exchange of the United Kingdom and the Republic of
Ireland ("ISE"). Generally, reference in this prospectus to a "United Kingdom
small company" means a company organized in the United Kingdom,
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with shares listed on the ISE whose market capitalization is not larger than the
largest of those in the smaller one-half (deciles 6 through 10) of companies
included in the Financial Times Actuaries All Share Index ("FTA").
The FTA is an index of stocks traded on the ISE, which is similar to the S&P
500 Index, and is used by investment professionals in the United Kingdom for the
same purposes as investment professionals in the United States use the S&P 500
Index. While the FTA typically will be used by the United Kingdom Series to
determine the maximum market capitalization of any company whose stock the
Series will purchase, acquisitions by the United Kingdom Series will not be
limited to stocks which are included in the FTA. The United Kingdom Series will
not, however, purchase shares of any investment trust or of any company whose
market capitalization is less than $5,000,000.
It is the intention of United Kingdom Series to acquire a portion of the
stock of each eligible company on a market capitalization basis. (See "SMALL
COMPANY MASTER FUNDS--Portfolio Structure.")
CONTINENTAL SMALL COMPANY PORTFOLIO
Continental Small Company Portfolio invests all of its assets in the
Continental Small Company Series of the Trust (the "Continental Series"), which
has the same investment objective and policies as the Portfolio. The Continental
Series is authorized to invest in readily marketable stocks of a broad and
diverse group of small companies organized under the laws of certain European
countries. Company size will be determined by the Advisor in a manner that will
compare the market capitalizations of companies in all countries in which the
Continental Series invests (i.e., on a European basis). The Advisor typically
will use the appropriate country indices of the FTW converted to a common
currency, the U.S. dollar, and aggregated to define "small companies." The FTW
consists of a series of country indices which contain generally the largest
companies in the major industry sectors in proportion to their market
capitalization whose shares are available for purchase by nonresident investors.
Its constituents represent about 70% of the total market capitalization of the
respective markets. Generally, companies with publicly traded stock whose market
capitalizations are not greater than the largest of those in the smallest 20%
(9th and 10th deciles) of companies listed in the FTW as combined for the
countries in which the Continental Series invests will be considered to be
"small companies" and will be eligible for purchase by the Continental Series.
While the Advisor typically will use the aggregated FTW indices to determine
the maximum size of eligible portfolio companies, portfolio acquisitions will
not be limited to stocks listed on the FTW for any country. The Continental
Series does not intend, however, to purchase shares of any company whose market
capitalization is less than the equivalent of $5,000,000. The Continental Series
intends to acquire a portion of the stock of each eligible company on a market
capitalization basis. The Advisor may in its discretion either limit further
investments in a particular country or divest the Continental Series of holdings
in a particular country. (See SMALL COMPANY MASTER FUNDS--Portfolio Structure.")
SMALL COMPANY MASTER FUNDS
PORTFOLIO STRUCTURE
Each U.S. Small Company Master Fund and International Small Company Master
Fund (collectively the "Small Company Master Funds") is market capitalization
weighted. That is, each security is generally purchased based on the issuer's
relative market capitalization. In this way, the amount of a particular security
owned by a Small Company Master Fund is keyed to that security's market
capitalization compared to all securities eligible for purchase. The following
discussion applies to the investment policies of the Small Company Master Funds.
The decision to include or exclude the shares of an issuer will be made on
the basis of such issuer's relative market capitalization determined by
reference to other companies located in the same country,
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except that with respect to Continental and Pacific Rim Series, such
determination shall be made by reference to other companies located in all
countries in which those Series invest. Company size is measured in terms of
local currencies in order to eliminate the effect of variations in currency
exchange rates, except that Continental and Pacific Rim Series each will measure
company size in terms of a common currency. Even though a company's stock may
meet the applicable market capitalization criterion, it may not be purchased if
(i) in the Advisor's judgment, the issuer is in extreme financial difficulty,
(ii) the issuer is involved in a merger or consolidation or is the subject of an
acquisition or (iii) a significant portion of the issuer's securities are
closely held. Further, securities of real estate investment trusts will not be
acquired (except as part of a merger, consolidation or acquisition of assets.)
If securities must be sold in order to obtain funds to make redemption
payments, such securities may be repurchased, as additional cash becomes
available. In most instances, however, management would anticipate selling
securities which had appreciated sufficiently to be eligible for sale and,
therefore, would not need to repurchase such securities. (See "SMALL COMPANY
MASTER FUNDS--Portfolio Transactions.")
It is management's belief that the stocks of small companies offer, over a
long term, a prudent opportunity for capital appreciation, but, at the same
time, selecting a limited number of such issues for investment involves greater
risk than investing in a large number of them.
Generally, current income is not sought as an investment objective and
investments will not be based upon an issuer's dividend payment policy or
record. However, many of the companies whose securities will be selected for
investment do pay dividends. It is anticipated, therefore, that dividend income
will be received.
PORTFOLIO TRANSACTIONS
On a periodic basis, the Advisor will review the holdings of each Small
Company Master Fund and determine which, at the time of such review, are no
longer considered small U.S., Japanese, United Kingdom, European or Pacific Rim
companies. The present policy of the Advisor (except with respect to the 6-10
Series) is to consider portfolio securities for sale when they have appreciated
sufficiently to rank, on a market capitalization basis, more than one full
decile higher than the company with the largest market capitalization that is
eligible for purchase by the particular Small Company Master Fund as determined
periodically by the Advisor. The Advisor may, from time to time, revise that
policy if, in the opinion of the Advisor, such revision is necessary to maintain
appropriate market capitalization weighting.
DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the DFA International Small Cap Value Portfolio
is to achieve long-term capital appreciation. The Portfolio pursues its
objective by investing in the stocks of small non-U.S. companies that have a
high book to market ratio. The Investment Committee of the Advisor will
initially set the standards for determining whether the shares of a company in
any given country will be considered to be value stocks at the time of purchase.
Securities are considered value stocks primarily because a company's shares have
a high book to market ratio. Generally, such shares will be considered eligible
for investment. In measuring value, the Advisor may consider additional factors
such as cash flow, economic conditions and developments in the issuer's
industry. The Investment Committee will periodically review its standards for
determining high book to market value and will adjust the standards accordingly.
The Portfolio intends to invest in the stocks of small companies in countries
with developed markets.
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Under normal market conditions, at least 65% of the Portfolio's assets will
be invested in value stocks of small companies, as defined herein, organized or
having a majority of their assets in or deriving a majority of their operating
income in at least three non-U.S. countries. Currently no more than 40% of the
Portfolio's assets is invested in such companies in any one country, and if this
changes, a supplement to this prospectus will disclose such change. The
Portfolio reserves the right to invest in index futures contracts to commit
funds awaiting investment or to maintain liquidity. To the extent that the
Portfolio invests in futures contracts for other than bona fide hedging
purposes, the Portfolio will not purchase futures contracts if as a result more
than 5% of its net assets would then consist of initial margin deposits required
to establish such contracts.
As of the date of this prospectus, the Portfolio intends to invest in small
companies which, for purposes of this Portfolio, are defined as companies having
no more than $800 million of market capitalization. The Advisor may reset such
ceiling from time to time to reflect changing market conditions. The Advisor
believes that such maximum amount accounts for variations in company size among
countries and provides a sufficient universe of eligible companies. The
Portfolio will be approximately market capitalization weighted. In determining
market capitalization weights, the Advisor, using its best judgment, will seek
to eliminate the effect of cross holdings on the individual country weights. As
a result, the weighting of certain countries in the Portfolio may vary from
their weighting in international indices such as those published by The
Financial Times, Morgan Stanley Capital International or Salomon/Russell. The
Advisor, however, will not attempt to account for cross holding within the same
country.
It is management's belief that the stocks of small companies with high book
to market ratios offer, over a long term, a prudent opportunity for capital
appreciation, but, at the same time, selecting a limited number of such issues
for inclusion in the Portfolio involves greater risk than including a large
number of them. The Advisor does not anticipate that a significant number of
securities which meet the market capitalization criteria will be selectively
excluded from the Portfolio.
The Portfolio does not seek current income as an investment objective and
investments will not be based upon an issuer's dividend payment policy or
record. However, many of the companies whose securities will be included in the
Portfolio do pay dividends. It is anticipated, therefore, that the Portfolio
will receive dividend income.
EMERGING MARKETS PORTFOLIO,
EMERGING MARKETS VALUE PORTFOLIO AND
EMERGING MARKETS SMALL CAP PORTFOLIO
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of both the Emerging Markets Portfolio and the
Emerging Markets Small Cap Portfolio is to achieve long-term capital
appreciation. The Emerging Markets Portfolio invests all of its assets in the
Emerging Markets Series of the Trust (the "Emerging Markets Series"), which has
the same investment objective and policies as the Portfolio. The Emerging
Markets Small Cap Portfolio invests all of its assets in the Emerging Markets
Small Cap Series of the Trust (the "Emerging Markets Small Cap Series"), which
has the same investment objective and policies as the Portfolio. The investment
objective of the Dimensional Emerging Markets Value Fund Inc. ("Dimensional
Emerging Markets Value Fund") is to seek long-term capital growth through
investment primarily in emerging market equity securities. The Emerging Markets
Value Portfolio invests all of its assets in the Dimensional Emerging Markets
Value Fund, which has the same investment objective and policies as the
Portfolio. The Emerging Markets Series, the Emerging Markets Small Cap Series
and the Dimensional Emerging Markets Value Fund are referred to collectively as
the "Emerging Markets Master Funds." Each Emerging Markets Master Fund seeks to
achieve its investment objective by investing in emerging markets designated by
the Investment Committee of the Advisor ("Approved Markets"). Each Emerging
Markets Master Fund invests its assets primarily in Approved Market equity
securities listed on bona fide securities exchanges or actively traded on OTC
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markets. These exchanges or OTC markets may be either within or outside the
issuer's domicile country, and the securities may be listed or traded in the
form of International Depository Receipts ("IDRs") or American Depository
Receipts ("ADRs").
EMERGING MARKETS MASTER FUNDS CHARACTERISTICS AND POLICIES
The Emerging Markets Series of the Trust will seek a broad market coverage
of larger companies within each Approved Market. This Series will attempt to own
shares of companies whose aggregate overall share of the Approved Market's total
public market capitalization is at least in the upper 40% of such
capitalization, and can be as large as 75%. The Emerging Markets Series may
limit the market coverage in the smaller emerging markets in order to limit
purchases of small market capitalization companies.
The Emerging Markets Small Cap Series of the Trust will seek a broad market
coverage of smaller companies within each Approved Market. This Series will
attempt to own shares of companies whose market capitalization is less than $1.5
billion. On a periodic basis, the Advisor will review the holdings of the
Emerging Markets Small Cap Series and determine which, at the time of such
review, are no longer considered small emerging market companies. The present
policy is to consider portfolio securities for sale when they have appreciated
sufficiently to rank, on a market capitalization basis, 100% larger than the
largest market capitalization that is eligible for purchase as set by the
Advisor for that Approved Market.
The Dimensional Emerging Markets Value Fund seeks to achieve its objective
by investing in emerging market equity securities which are deemed by the
Advisor to be value stocks at the time of purchase. Securities are considered
value stocks primarily because they have a high book value in relation to their
market value. In measuring value, the Advisor may consider additional factors
such as cash flow, economic conditions and developments in the issuer's
industry.
The Dimensional Emerging Markets Value Fund's policy is to seek to achieve
its investment objective by investing in emerging market equity securities
across all market capitalizations, and specifically those which are deemed by
the Advisor to be value stocks at the time of purchase, as described above.
Each Emerging Markets Master Fund may not invest in all such companies or
Approved Markets described above or achieve approximate market weights, for
reasons which include constraints imposed within Approved Markets, restrictions
on purchases by foreigners, and each Emerging Markets Master Fund's policy not
to invest more than 25% of its assets in any one industry.
Under normal market conditions, the Emerging Markets Series will invest at
least 65% of its assets in Approved Market securities; the Emerging Markets
Small Cap Series will invest at least 65% of its assets in small company (as
defined above) Approved Market securities; and the Dimensional Emerging Markets
Value Fund will invest at least 65% of its assets in Approved Market equity
securities that are deemed by the Advisor to be value stocks at the time of
purchase. Approved Market securities are defined to be (a) securities of
companies organized in a country in an Approved Market or for which the
principal trading market is in an Approved Market, (b) securities issued or
guaranteed by the government of an Approved Market country, its agencies or
instrumentalities, or the central bank of such country, (c) securities
denominated in an Approved Market currency issued by companies to finance
operations in Approved Markets, (d) securities of companies that derive at least
50% of their revenues primarily from either goods or services produced in
Approved Markets or sales made in Approved Markets and (e) Approved Markets
equity securities in the form of depositary shares. Securities of Approved
Markets may include securities of companies that have characteristics and
business relationships common to companies in other countries. As a result, the
value of the securities of such companies may reflect economic and market forces
in such other countries as well as in the Approved Markets. The Advisor,
however, will select only those companies which, in its view, have sufficiently
strong exposure to economic and market forces in Approved Markets such that
their value will tend to reflect developments in Approved Markets to a greater
extent than developments in other regions. For example, the Advisor may
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invest in companies organized and located in the United States or other
countries outside of Approved Markets, including companies having their entire
production facilities outside of Approved Markets, when such companies meet the
definition of Approved Markets securities so long as the Advisor believes at the
time of investment that the value of the company's securities will reflect
principally conditions in Approved Markets.
With respect to the Emerging Markets Series and Emerging Markets Small Cap
Series, the Advisor defines the term "emerging market" to mean a country which
is considered to be an emerging market by the International Finance Corporation.
In determining what countries have emerging markets with respect to the
Dimensional Emerging Markets Value Fund, the data, analysis and classification
of countries published or disseminated by the International Bank for
Reconstruction and Development (commonly known as the World Bank) and the
International Finance Corporation, among other things, will be considered.
Approved emerging markets may not include all such emerging markets. In
determining whether to approve markets for investment, the Advisor will take
into account, among other things, market liquidity, relative availability of
investor information, government regulation, including fiscal and foreign
exchange repatriation rules and the availability of other access to these
markets by the investors of the Emerging Markets Series, the Emerging Markets
Small Cap Series and the Dimensional Emerging Markets Value Fund.
Each Emerging Markets Master Fund may invest up to 35% of its assets in
securities of issuers that are not Approved Markets securities, but whose
issuers the Advisor believes derive a substantial proportion, but less than 50%,
of their total revenues from either goods and services produced in, or sales
made in, Approved Markets.
The Emerging Markets Master Funds also may invest up to 10% of their total
assets in shares of other investment companies that invest in one or more
Approved Markets, although they intend to do so only where access to those
markets is otherwise significantly limited. In some Approved Markets, it will be
necessary or advisable for an Emerging Markets Master Fund to establish a wholly
owned subsidiary or a trust for the purpose of investing in the local markets.
PORTFOLIO STRUCTURE
The Emerging Markets Series' and Emerging Markets Small Cap Series' policy
of seeking broad market diversification means that the Advisor will not utilize
"fundamental" securities research techniques in identifying securities
selections. The decision to include or exclude the shares of an issuer will be
made primarily on the basis of such issuer's relative market capitalization
determined by reference to other companies located in the same country. Company
size is measured in terms of reference to other companies located in the same
country and in terms of local currencies in order to eliminate the effect of
variations in currency exchange rates.
Even though a company's stock may meet the applicable market capitalization
criterion for a Series or the Dimensional Emerging Markets Value Fund's
criterion for investment, it may not be included in an Emerging Markets Master
Fund for one or more of a number of reasons. For example, in the Advisor's
judgment, the issuer may be considered in extreme financial difficulty, a
material portion of its securities may be closely held and not likely available
to support market liquidity, or the issuer may be a "passive foreign investment
company" (as defined in the Code). To this extent, there will be the exercise of
discretion and consideration by the Advisor which would not be present in the
management of a portfolio seeking to represent an established index of broadly
traded domestic securities (such as the S&P 500 Index). The Advisor will also
exercise discretion in determining the allocation of capital as between Approved
Markets.
Changes in the composition and relative ranking (in terms of book to market
ratio) of the stocks which are eligible for purchase by the Dimensional Emerging
Markets Value Fund take place with every trade when the securities markets are
open for trading due primarily to price fluctuations of such
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securities. On a periodic basis, the Advisor will prepare lists of eligible
value stocks which are eligible for investment. Such list will be revised no
less than semi-annually.
It is management's belief that equity investments offer, over a long term, a
prudent opportunity for capital appreciation, but, at the same time, selecting a
limited number of such issues for inclusion in a Series involves greater risk
than including a large number of them.
The Emerging Markets Master Funds do not seek current income as an
investment objective, and investments will not be based upon an issuer's
dividend payment policy or record. However, many of the companies whose
securities will be included in an Emerging Markets Master Fund do pay dividends.
It is anticipated, therefore, that the Emerging Markets Master Funds will
receive dividend income.
FIXED INCOME PORTFOLIOS
DFA ONE-YEAR FIXED INCOME PORTFOLIO
The investment objective of DFA One-Year Fixed Income Portfolio is to
achieve a stable real value (i.e. a return in excess of the rate of inflation)
of invested capital with a minimum of risk. The DFA One-Year Fixed Income
Portfolio invests all of its assets in the DFA One-Year Fixed Income Series of
the Trust (the "One-Year Fixed Income Series"), which has the same investment
objective and policies as the Portfolio. The One-Year Fixed Income Series will
invest in U.S. government obligations, U.S. government agency obligations,
dollar-denominated obligations of foreign issuers issued in the U.S., bank
obligations, including U.S. subsidiaries and branches of foreign banks,
corporate obligations, commercial paper, repurchase agreements and obligations
of supranational organizations. Generally, the Series will acquire obligations
which mature within one year from the date of settlement, but substantial
investments may be made in obligations maturing within two years from the date
of settlement when greater returns are available. It is the Series' policy that
the weighted average length of maturity of investments will not exceed one year.
The Series principally invests in certificates of deposit, commercial paper,
bankers' acceptances, notes and bonds. The Series may concentrate its
investments in obligations of U.S. and foreign banks and bank holding companies
(see "Investments in the Banking Industry").
DFA TWO-YEAR GLOBAL FIXED INCOME PORTFOLIO
The investment objective of DFA Two-Year Global Fixed Income Portfolio is to
maximize total returns consistent with preservation of capital. The DFA Two-Year
Global Fixed Income Portfolio invests all of its assets in the DFA Two-Year
Global Fixed Income Series of the Trust (the "Two-Year Global Fixed Income
Series"). The Two-Year Global Fixed Income Series will have the same investment
objective and policies as the Portfolio. The Two-Year Global Fixed Income Series
will invest in obligations issued or guaranteed by the U.S. and foreign
governments, their agencies and instrumentalities, corporate debt obligations,
bank obligations, commercial paper, repurchase agreements, obligations of other
domestic and foreign issuers having quality ratings meeting the minimum
standards described in "Description of Investments," securities of domestic or
foreign issuers denominated in U.S. dollars but not trading in the United
States, and obligations of supranational organizations, such as the World Bank,
the European Investment Bank, European Economic Community and European Coal and
Steel Community. At the present time, the Advisor expects that most investments
will be made in the obligations of issuers which are in developed countries,
such as those countries which are members of the Organization of Economic
Cooperation and Development ("OECD"). However, in the future, the Advisor
anticipates investing in issuers located in other countries as well. Under
normal market conditions, the Series will invest at least 65% of the value of
its assets in issuers organized or having a majority of their assets in, or
deriving a majority of their operating income in, at least three different
countries, one of which may be the United States.
The Series will acquire obligations which mature within two years from the
date of settlement. Because many of the Series' investments will be denominated
in foreign currencies, the Series will also
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enter into forward foreign currency contracts solely for the purpose of hedging
against fluctuations in currency exchange rates. The Series may concentrate its
investments in obligations of U.S. and foreign banks and bank holding companies
(see "Investment in the Banking Industry").
DFA FIVE-YEAR GOVERNMENT PORTFOLIO
The investment objective of DFA Five-Year Government Portfolio is to
maximize total returns available from the universe of debt obligations of the
U.S. government and U.S. government agencies. Ordinarily, the Portfolio will
invest at least 65% of its assets in U.S. government obligations and U.S.
government agency obligations that mature within five years from the date of
settlement. The Portfolio will also acquire repurchase agreements.
DFA FIVE-YEAR GLOBAL FIXED INCOME PORTFOLIO
The investment objective of DFA Five-Year Global Fixed Income Portfolio is
to provide a market rate of return for a fixed income portfolio with low
relative volatility of returns. The Portfolio will invest primarily in
obligations issued or guaranteed by the U.S. and foreign governments, their
agencies and instrumentalities, obligations of other foreign issuers rated AA or
better, corporate debt obligations, bank obligations, commercial paper rated as
set forth in "Description of Investments" and supranational organizations, such
as the World Bank, the European Investment Bank, European Economic Community,
and European Coal and Steel Community. At the present time, the Advisor expects
that most investments will be made in the obligations of issuers which are
developed countries, such as those countries which are members of the OECD.
However, in the future, the Advisor anticipates investing in issuers located in
other countries as well. Under normal market conditions, the Portfolio will
invest at least 65% of the value of its assets in issuers organized or having a
majority of their assets in, or deriving a majority of their operating income
in, at least three different countries, one of which may be the United States.
The Portfolio will acquire obligations which mature within five years from the
date of settlement. Because many of the Portfolio's investments will be
denominated in foreign currencies, the Portfolio will also enter into forward
foreign currency contracts solely for the purpose of hedging against
fluctuations in currency exchange rates.
DFA INTERMEDIATE GOVERNMENT FIXED INCOME PORTFOLIO
The investment objective of DFA Intermediate Government Fixed Income
Portfolio is to earn current income consistent with preservation of capital.
Ordinarily, the Portfolio will invest at least 65% of its assets in non-callable
obligations issued or guaranteed by the U.S. government and U.S. government
agencies, AAA rated, dollar-denominated obligations of foreign governments,
obligations of supranational organizations, and futures contracts on U.S.
Treasury securities. Since government guaranteed mortgage backed securities are
considered callable, such securities will not be included in the Portfolio.
Generally, the Portfolio will purchase securities with maturities of between
five and fifteen years. The Portfolio will not shift the maturity of its
investments in anticipation of interest rate movements and ordinarily will have
an average weighted maturity, based upon market values, of between seven to ten
years. One of the benefits of the Portfolio is expected to be that in a period
of steeply falling interest rates, the Portfolio should perform well because of
its average weighted maturity and the high quality and non-callable nature of
its investments. The Portfolio is expected to match or exceed the returns of the
Lehman Brothers Treasury Index, without exceeding the volatility of that Index.
The Portfolio may invest more than 5% of its assets in the obligations of
foreign governments. Those obligations at the time of purchase must be either
rated in the highest rating category of a nationally recognized statistical
rating organization or, in the case of any obligation that is unrated, of
comparable quality. The Portfolio also may invest in futures contracts on U.S.
Treasury securities or options on such contracts for the purposes of remaining
fully invested and maintaining liquidity to pay redemptions.
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However, the Portfolio will not purchase futures contracts or options thereon if
as a result more than 5% of its net assets would then consist of initial margin
deposits and premiums required to establish such positions.
DESCRIPTION OF INVESTMENTS
The following is a description of the categories of investments which may be
acquired by the Fixed Income Portfolios and the One-Year Fixed Income and
Two-Year Global Fixed Income Series.
<TABLE>
<CAPTION>
PERMISSIBLE
CATEGORIES:
---------------------
<S> <C>
DFA One-Year Fixed Income Series....................................... 1-6,8
DFA Two-Year Global Fixed Income Series................................ 1-10
DFA Five-Year Government Portfolio..................................... 1,2,6
DFA Five-Year Global Fixed Income Portfolio............................ 1-10
DFA Intermediate Government Fixed Income Portfolio..................... 1,2,6,7,8
</TABLE>
1. U.S. GOVERNMENT OBLIGATIONS--Debt securities issued by the U.S. Treasury
which are direct obligations of the U.S. government, including bills, notes and
bonds.
2. U.S. GOVERNMENT AGENCY OBLIGATIONS--Issued or guaranteed by U.S.
government-sponsored instrumentalities and federal agencies, including the
Federal National Mortgage Association, Federal Home Loan Bank and the Federal
Housing Administration.
3. CORPORATE DEBT OBLIGATIONS--Nonconvertible corporate debt securities
(e.g., bonds and debentures which are issued by companies whose commercial paper
is rated Prime1 by Moody's Investors Services, Inc. ("Moody's") or A1 by S&P and
dollar-denominated obligations of foreign issuers issued in the U.S. If the
issuer's commercial paper is unrated, then the debt security would have to be
rated at least AA by S&P or Aa2 by Moody's. If there is neither a commercial
paper rating nor a rating of the debt security, then the Advisor must determine
that the debt security is of comparable quality to equivalent issues of the same
issuer rated at least AA or Aa2.
4. BANK OBLIGATIONS--Obligations of U.S. banks and savings and loan
associations and dollar-denominated obligations of U.S. subsidiaries and
branches of foreign banks, such as certificates of deposit (including marketable
variable rate certificates of deposit) and bankers' acceptances. Bank
certificates of deposit will only be acquired from banks having assets in excess
of $1,000,000,000.
5. COMMERCIAL PAPER--Rated, at the time of purchase, A1 or better by S&P or
Prime1 by Moody's, or, if not rated, issued by a corporation having an
outstanding unsecured debt issue rated AAA by Moody's or AAA by S&P, and having
a maximum maturity of nine months.
6. REPURCHASE AGREEMENTS--Instruments through which the Portfolios purchase
securities ("underlying securities") from a bank, or a registered U.S.
government securities dealer, with an agreement by the seller to repurchase the
security at an agreed price, plus interest at a specified rate. The underlying
securities will be limited to U.S. government and agency obligations described
in (1) and (2) above. The Portfolios will not enter into a repurchase agreement
with a duration of more than seven days if, as a result, more than 10% of the
value of the Portfolio's total assets would be so invested. The Portfolios will
also only invest in repurchase agreements with a bank if the bank has at least
$1,000,000,000 in assets and is approved by the Investment Committee of the
Advisor. The Advisor will monitor the market value of the securities plus any
accrued interest thereon so that they will at least equal the repurchase price.
7. FOREIGN GOVERNMENT AND AGENCY OBLIGATIONS--Bills, notes, bonds and other
debt securities issued or guaranteed by foreign governments, or their agencies
and instrumentalities.
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8. SUPRANATIONAL ORGANIZATION OBLIGATIONS--Debt securities of supranational
organizations such as the European Coal and Steel Community, the European
Economic Community and the World Bank, which are chartered to promote economic
development.
9. FOREIGN ISSUER OBLIGATIONS--Debt securities of non-U.S. issuers rated AA
or better by S&P or Aa2 or better by Moody's.
10. EURODOLLAR OBLIGATIONS--Debt securities of domestic or foreign issuers
denominated in U.S. dollars but not trading in the United States.
The categories of investments that may be acquired by each of the Fixed
Income Portfolios (other than DFA Intermediate Government Fixed Income
Portfolio) and the One-Year Fixed Income and Two-Year Global Fixed Income Series
may include both fixed and floating rate securities. Floating rate securities
bear interest at rates that vary with prevailing market rates. Interest rate
adjustments are made periodically (e.g., every six months), usually based on a
money market index such as the London Interbank Offered Rate (LIBOR) or the
Treasury bill rate.
INVESTMENTS IN THE BANKING INDUSTRY
The One-Year Fixed Income Series and Two-Year Global Fixed Income Series
will invest more than 25% of their total respective assets in obligations of
U.S. and foreign banks and bank holding companies when the yield to maturity on
these investments exceeds the yield to maturity on all other eligible portfolio
investments for a period of five consecutive days when the NYSE is open for
trading. The Feeder Portfolios that invest in the above Master Funds, the DFA
One-Year Fixed Income Portfolio and DFA Two-Year Global Fixed Income Portfolio,
each have the same policy. This policy can only be changed by a vote of
shareholders. The policy does not apply to the extent that all or substantially
all of a Portfolio's assets are invested in its respective Master Fund. When
investment in such obligations exceeds 25% of the total net assets of any of
these Master Funds, such Master Fund will be considered to be concentrating its
investments in the banking industry. As of the date of this prospectus, the
One-Year Fixed Income Series is concentrating its investment in this industry.
[UPDATE IN MARCH]
The types of bank and bank holding company obligations in which the One-Year
Fixed Income Series and DFA Two-Year Global Fixed Income Series may invest
include: dollar-denominated certificates of deposit, bankers' acceptances,
commercial paper and other debt obligations issued in the United States and
which mature within two years of the date of settlement, provided such
obligations meet each Series' established credit rating criteria as stated under
"Description of Investments." In addition, both Series are authorized to invest
more than 25% of their total assets in Treasury bonds, bills and notes and
obligations of federal agencies and instrumentalities.
PORTFOLIO STRATEGY
The One-Year Fixed Income Series and Two-Year Global Fixed Income Series
will be managed with a view to capturing credit risk premiums and term or
maturity premiums. As used herein, the term "credit risk premium" means the
anticipated incremental return on investment for holding obligations considered
to have greater credit risk than direct obligations of the U.S. Treasury, and
"maturity risk premium" means the anticipated incremental return on investment
for holding securities having maturities of longer than one month compared to
securities having a maturity of one month. The Advisor believes that credit risk
premiums are available largely through investment in high grade commercial
paper, certificates of deposit and corporate obligations. The holding period for
assets of the Series will be chosen with a view to maximizing anticipated
monthly returns, net of trading costs.
The One-Year Fixed Income Series, Two-Year Global Fixed Income Series and
DFA Five-Year Government Portfolio are expected to have high portfolio turnover
rates due to the relatively short maturities of the securities to be acquired.
The rate of portfolio turnover will depend upon market and
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other conditions; it will not be a limiting factor when management believes that
portfolio changes are appropriate. It is anticipated that the annual turnover
rate of the Two-Year Global Fixed Income Series, could be 0% to 200%. While the
Fixed Income Portfolios, the One-Year Fixed Income Series and Two-Year Global
Fixed Income Series acquire securities in principal transactions and, therefore,
do not pay brokerage commissions, the spread between the bid and asked prices of
a security may be considered to be a "cost" of trading. Such costs ordinarily
increase with trading activity. However, as stated above, securities ordinarily
will be sold when, in the Advisor's judgment, the monthly return of a Portfolio,
the One-Year Fixed Income Series or the Two-Year Fixed Income Series will be
increased as a result of portfolio transactions after taking into account the
cost of trading. It is anticipated that securities will be acquired in the
secondary markets for short term instruments.
The DFA Five-Year Global Fixed Income Portfolio will be managed with a view
to capturing maturity risk premiums. Ordinarily the Portfolio will invest
primarily in obligations issued or guaranteed by foreign governments and their
agencies and instrumentalities, obligations of other foreign issuers rated AA or
better and supranational organizations. Supranational issuers include the
European Economic Community, the European Coal and Steel Community, the Nordic
Investment Bank, the World Bank and the Japanese Development Bank. The Portfolio
will own obligations issued or guaranteed by the U.S. government and its
agencies and instrumentalities also. At times when, in the Advisor's judgement,
eligible foreign securities do not offer maturity risk premiums that compare
favorably with those offered by eligible U.S. securities, the Portfolio will be
invested primarily in the latter securities.
TAX MANAGEMENT STRATEGIES
The Tax-Managed U.S. 6-10 Small Company Portfolio, Tax-Managed Marketwide
Value Series, Tax-Managed U.S. 5-10 Value Portfolio and Tax-Managed DFA
International Value Portfolio (individually, a "Tax-Managed Portfolio or Series"
and collectively, the "Tax-Managed Portfolios and Series") seek to minimize the
impact of federal taxes on returns by managing their portfolios in a manner that
will defer the realization of net capital gains where possible and may minimize
dividend income.
When selling securities, each Tax-Managed Portfolio or Series typically will
select the highest cost shares of the specific security in order to minimize the
realization of capital gains. In certain cases, the highest cost shares may
produce a short-term capital gain. Since short-term capital gains are taxed at
higher tax rates than long-term capital gains, the highest cost shares with a
long-term holding period may be disposed of instead. Each Tax-Managed Portfolio
or Series may, when consistent with all other tax management policies, sell
securities in order to realize capital losses. Realized capital losses can be
used to offset realized capital gains, thus reducing capital gains
distributions. However, realization of capital gains is not entirely within the
Advisor's control. Capital gains distributions may vary considerably from year
to year; there will be no capital gains distributions in years when a
Tax-Managed Portfolio or Series realizes net capital losses. The timing of
purchases and sales of securities may be managed to minimize the receipt of
dividends to the extent possible. With respect to dividends that are received,
the Tax-Managed Portfolios and Series may not be eligible to flow through the
dividends received deduction attributable to holdings in U.S. equity securities
to corporate shareholders, if because of timing activities, the requisite
holding period of the dividend paying stock is not met. Portfolio holdings may
be managed to emphasize low dividend-yielding securities.
The Tax-Managed Portfolios and Series are expected to deviate from their
market capitalization weightings to a greater extent than the other Portfolios
and Master Funds. For example, the Advisor may exclude the stock of a company
that meets applicable market capitalization criteria in order to avoid dividend
income, and the Advisor may sell stock of a company that meets applicable market
capitalization criteria in order to realize a capital loss. Additionally, while
the non-Tax-Managed Portfolios and Series are managed so that securities will
generally be held for longer than one year, the Tax-Managed Portfolios and
Series may dispose of any securities whenever the Advisor determines that such
disposition would be consistent with the tax management strategies of the
Tax-Managed Portfolios and Series.
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Although the Advisor seeks to manage each Tax-Managed Portfolio or Series in
order to minimize the realization of capital gains and possible taxable dividend
income during a particular year, the Tax-Managed Portfolio or Series may
nonetheless distribute taxable gains and taxable income to shareholders from
time to time. Furthermore, shareholders may be required to pay taxes on a
Tax-Managed Portfolio's or Series' capital gains, if any, realized upon the sale
of the Tax-Managed Portfolio's or Series' assets to meet redemptions of shares
of the Tax-Managed Portfolio or Series. The redeeming shareholder will be
required to pay taxes on the shareholder's capital gains realized on a
redemption, whether paid in cash or in kind, if the amount realized on
redemption is greater than the amount the shareholder paid for the shares of the
Tax-Managed Portfolio or Series.
PORTFOLIO TURNOVER
[CONSIDER NECESSITY FOR DISCLOSURE FOR MARCH UPDATE]
PORTFOLIO TRANSACTIONS--ALL PORTFOLIOS
With respect to all Domestic and International Equity Portfolios and the
Master Funds in which such Portfolios might invest, investments will generally
be made in eligible securities on a market capitalization weighted basis.
Securities will not be purchased or sold based on the prospects for the economy,
the securities markets or the individual issuers whose shares are eligible for
purchase. Securities which have depreciated in value since their acquisition
will not be sold solely because prospects for the issuer are not considered
attractive or due to an expected or realized decline in securities prices in
general. Securities will not be sold to realize short-term profits, but when
circumstances warrant, they may be sold without regard to the length of time
held. Securities, including those eligible for purchase, may be disposed of,
however, at any time when, in the Advisor's judgment, circumstances warrant
their sale, including but not limited to tender offers, mergers and similar
transactions, or bids made for block purchases at opportune prices. Generally,
securities will be purchased with the expectation that they will be held for
longer than one year and will be held until such time as they are no longer
considered an appropriate holding in light of the investment policy of each
Portfolio.
SECURITIES LOANS
All of the Portfolios and Master Funds are authorized to lend securities to
qualified brokers, dealers, banks and other financial institutions for the
purpose of earning additional income, although inasmuch as the Feeder Portfolios
will only hold shares of a corresponding Master Fund, these Portfolios do not
intend to lend those shares. While a Portfolio or Master Fund may earn
additional income from lending securities, such activity is incidental to the
investment objective of a Portfolio or Master Fund. The value of securities
loaned may not exceed 33 1/3% of the value of a Portfolio's or Master Fund's
total assets. In connection with such loans, a Portfolio or Series will receive
collateral consisting of cash or U.S. government securities, which will be
maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. In addition, the Portfolios and Master
Funds will be able to terminate the loan at any time and will receive reasonable
interest on the loan, as well as amounts equal to any dividends, interest or
other distributions on the loaned securities. In the event of the bankruptcy of
the borrower, the Funds or the Trust could experience delay in recovering the
loaned securities. Management believes that this risk can be controlled through
careful monitoring procedures.
DEVIATION FROM MARKET CAPITALIZATION WEIGHTING
The portfolio structures of each Small Company Master Fund, the Large Cap
International Portfolio, the DFA Real Estate Securities Portfolio, each Value
Master Fund, the International Value Series, the DFA International Small Cap
Value Portfolio and the Tax-Managed Portfolios and Series involve market
capitalization weighting. That is, their investment portfolios are market
capitalization weighted. Deviation
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from strict market capitalization weighting may occur for several reasons. The
Advisor may exclude the stock of a company that meets applicable market
capitalization criterion if the Advisor determines in its best judgment that the
purchase of such stock is inappropriate given other conditions. Deviation also
will occur because the Advisor intends to purchase in round lots only.
Furthermore, the Advisor may reduce the relative amount of any security held
from the level of strict adherence to market capitalization weighting, in order
to retain sufficient portfolio liquidity. A portion, but generally not in excess
of 20% of assets may be invested in interest bearing obligations, such as money
market instruments, thereby causing further deviation from strict market
capitalization weighting. A further deviation may occur due to investments in
privately placed convertible debentures. Finally, the tax management strategies
undertaken by the Tax-Managed Portfolios and Series may cause deviation from
market capitalization weighting.
Block purchases of eligible securities may be made at opportune prices even
though such purchases exceed the number of shares which, at the time of
purchase, strict adherence to the policy of market capitalization weighting
would otherwise require. (The 4-10 Value Series intends to purchase common
stocks in the 9th and 10th deciles through block trades only.) In addition,
securities eligible for purchase or otherwise represented in a portfolio may be
acquired in exchange for the issuance of shares. (See "PURCHASE OF SHARES--In
Kind Purchases.") While such transactions might cause a temporary deviation from
market capitalization weighting, they would ordinarily be made in anticipation
of further growth of assets.
Changes in the composition and relative ranking (in terms of market
capitalization) of the stocks which are eligible for purchase take place with
every trade when the securities markets are open for trading due, primarily, to
price fluctuations of such securities. On at least a semi-annual basis, the
Advisor will prepare lists of companies eligible for investment by a portfolio.
Additional investments generally will not be made in securities which have
changed in value sufficiently to be excluded from the Advisor's then current
market capitalization requirement for eligible portfolio securities. This may
result in further deviation from strict market capitalization weighting. Such
deviation could be substantial if a significant amount of a portfolio's holdings
change in value sufficiently to be excluded from the requirement for eligible
securities, but not by a sufficient amount to warrant their sale.
MANAGEMENT OF THE FUNDS
Dimensional Fund Advisors Inc. (the "Advisor") serves as investment advisor
to each of the Portfolios, except the Feeder Portfolios, and each Master Fund.
As such, the Advisor is responsible for the management of their respective
assets. Investment decisions for all non-feeder Portfolios and all Master Funds
are made by the Investment Committee of the Advisor which meets on a regular
basis and also as needed to consider investment issues. The Investment Committee
is composed of certain officers and directors of the Advisor who are elected
annually. The Advisor provides the Portfolios (except the Feeder Portfolios and
International Small Company Portfolio) and the Master Funds and International
Master Funds with a trading department and selects brokers and dealers to effect
securities transactions. Securities transactions are placed with a view to
obtaining best price and execution. The Advisor's address is 1299 Ocean Avenue,
11th Floor, Santa Monica, CA 90401. For advisory fees that the Portfolios have
incurred for the fiscal year ended November 30, 1998, see "ANNUAL FUND OPERATING
EXPENSES."
The Funds and the Master Funds bear all of their own costs and expenses,
including: services of their independent accountants, legal counsel, brokerage
fees, commissions and transfer taxes in connection with the acquisition and
disposition of portfolio securities, taxes, insurance premiums, costs incidental
to meetings of their shareholders and directors or trustees, the cost of filing
their registration statements under the federal securities laws and the cost of
any filings required under state securities laws, reports to shareholders, and
transfer and dividend disbursing agency, administrative services and custodian
fees, except as described above with respect to waivers or reductions and with
respect to the U.S. Large Company Portfolio. Expenses allocable to a particular
Portfolio or Master Fund are so allocated. The expenses of a Fund which are not
allocable to a particular Portfolio are to be borne by each Portfolio of the
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Fund on the basis of its relative net assets. Similarly, the expenses of the
Trust which are not allocable to a particular Series are to be borne by each
Master Fund on the basis of its relative net assets.
The Advisor was organized in May 1981 and is engaged in the business of
providing investment management services to institutional investors. Assets
under management total approximately $28 billion. The Advisor owns 100% of the
outstanding shares of Dimensional Fund Advisors Ltd. ("DFAL") (see "Investment
Services--United Kingdom and Continental Small Company Series") and beneficially
owns 100% of DFA Australia Limited ("DFA Australia") (see "Investment
Services--Japanese and Pacific Rim Small Company Series").
INVESTMENT SERVICES--JAPANESE AND PACIFIC RIM SMALL COMPANY SERIES
Pursuant to Sub Advisory Agreements with the Advisor, DFA Australia, Suite
2001, Level 20 Gateway, 1 MacQuarie Place, Sydney, New South Wales 2000,
Australia, the successor to Dimensional Fund Advisors Asia Inc., has the
authority and responsibility to select brokers and dealers to execute securities
transactions for Japanese and Pacific Rim Small Company Series. DFA Australia's
duties include the maintenance of a trading desk for each Series and the
determination of the best and most efficient means of executing securities
transactions. On at least a semiannual basis, the Advisor reviews the holdings
of Japanese and Pacific Rim Small Company Series and reviews the trading process
and the execution of securities transactions. The Advisor is responsible for
determining those securities which are eligible for purchase and sale by these
Series and may delegate this task, subject to its own review, to DFA Australia.
DFA Australia maintains and furnishes to the Advisor information and reports on
Japanese and Pacific Rim small companies, including its recommendations of
securities to be added to the securities that are eligible for purchase by each
Series.
INVESTMENT SERVICES--UNITED KINGDOM AND CONTINENTAL SMALL COMPANY SERIES
Pursuant to Sub-Advisory Agreements with the Advisor, DFAL, 14 Berkeley
Street, London, W1X 5AD, England, a company that is organized under the laws of
England, has the authority and responsibility to select brokers or dealers to
execute securities transactions for United Kingdom and Continental Small Company
Series. DFAL's duties include the maintenance of a trading desk for the Series
and the determination of the best and most efficient means of executing
securities transactions. On at least a semiannual basis the Advisor reviews the
holdings of United Kingdom and Continental Small Company Series and reviews the
trading process and the execution of securities transactions. The Advisor is
responsible for determining those securities which are eligible for purchase and
sale by these Series and may delegate this task, subject to its own review, to
DFAL. DFAL maintains and furnishes to the Advisor information and reports on
United Kingdom and European small companies, including its recommendations of
securities to be added to the securities that are eligible for purchase by the
Series. DFAL is a member of the Investment Management Regulatory Organization
Limited ("IMRO"), a self-regulatory organization for investment managers
operating under the laws of England.
CONSULTING SERVICES--LARGE CAP INTERNATIONAL PORTFOLIO, DFA INTERNATIONAL VALUE
SERIES, TAX-MANAGED DFA INTERNATIONAL VALUE SERIES, DFA INTERNATIONAL SMALL
CAP VALUE PORTFOLIO, EMERGING MARKETS SERIES, EMERGING MARKETS SMALL CAP
SERIES AND DIMENSIONAL EMERGING MARKETS VALUE FUND
The Advisor has entered into a Consulting Services Agreement with DFAL and
DFA Australia, respectively. Pursuant to the terms of each Consulting Services
Agreement, DFAL and DFA Australia provide certain trading and administrative
services to the Advisor with respect to DFA International Small Cap Value
Portfolio, Large Cap International Portfolio, DFA International Value Series,
Tax-Managed DFA International Value Series, Emerging Markets Series, Emerging
Markets Small Cap Series and Dimensional Emerging Markets Value Fund.
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DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
The policy of the Domestic and International Equity Portfolios, except U.S.
Large Company Portfolio, Enhanced U.S. Large Company Portfolio, U.S. Large Cap
Value Portfolio, Tax-Managed U.S. Marketwide Value Portfolio and DFA
International Value Portfolio is to distribute substantially all of their net
investment income together with any net realized capital gains in December of
each year. Dividends from net investment income of U.S. Large Company Portfolio,
Enhanced U.S. Large Company Portfolio, U.S. Large Cap Value Portfolio,
Tax-Managed U.S. Marketwide Value Portfolio and DFA International Value
Portfolio are distributed quarterly and any net realized capital gains are
distributed annually after November 30. Net investment income, which is accrued
daily, will be distributed monthly (except for January) by DFA One-Year Fixed
Income Portfolio, quarterly by DFA Intermediate Government Fixed Income, DFA
Two-Year Global Fixed Income and DFA Five-Year Global Fixed Income Portfolios,
and semiannually by DFA Five-Year Government Portfolio. Any net realized capital
gains of the Fixed Income Portfolios will be distributed annually after the end
of the fiscal year.
Shareholders of each of the Portfolios will automatically receive all income
dividends and capital gains distributions in additional shares of the Portfolio
whose shares they hold at net asset value (as of the business date following the
dividend record date), unless as to U.S. 9-10 Small Company Portfolio, U.S. 6-10
Small Company Portfolio, Tax-Managed U.S. 6-10 Small Company Portfolio, the
Fixed Income Portfolios, DFA Real Estate Securities Portfolio, U.S. Large
Company Portfolio, and the Value Portfolios upon written notice to PFPC, the
shareholder selects one of the options listed below. While shareholders of the
Enhanced U.S. Large Company Portfolio will automatically receive all capital
gains distributions in additional shares of the Portfolio, upon written notice
to PFPC, they may receive all income dividends in cash.
Income Option--to receive income dividends in cash and capital
gains distributions in additional shares at net asset value.
Capital Gains Option--to receive capital gains distributions in
cash and income dividends in additional shares at net asset value.
Cash Option--to receive both income dividends and capital gains
distributions in cash.
Certain investments by the Portfolios (or their corresponding Master Fund)
may be subject to special rules which may affect the amount, character and
timing of the income to the investing entity. Some of these rules are referenced
in the statement of additional information. Specifically, prospective investors
should consult the statement of additional information for further information
regarding the extent to which distributions from a Portfolio may be eligible for
the dividends received deduction or whether certain foreign tax credits may be
available to an investor in a Portfolio.
Whether paid in cash or additional shares and regardless of the length of
time a Portfolio's shares have been owned by shareholders who are subject to
U.S. federal income taxes, distributions from long-term capital gains are
taxable as such. Dividends from net investment income or net short-term capital
gains will be taxable as ordinary income, whether received in cash or in
additional shares. For those investors subject to tax, if purchases of shares of
a Portfolio are made shortly before the record date for a dividend or capital
gains distribution, a portion of the investment will be returned as a taxable
distribution. Shareholders are notified annually by the Funds as to the U.S.
federal tax status of dividends and distributions paid by the Portfolio whose
shares they own.
Dividends which are declared in October, November or December to
shareholders of record in such a month, but which, for operational reasons, may
not be paid to the shareholder until the following January, will be treated for
U.S. federal income tax purposes as if paid by the Portfolio and received by the
shareholder on December 31 of the calendar year in which they are declared.
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The sale of shares of a Portfolio is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares or an exchange of shares between
two Portfolios. Any loss incurred on sale or exchange of a Portfolio's shares,
held for six months or less, will be treated as a long-term capital loss to the
extent of capital gain dividends received with respect to such shares.
In addition to federal taxes, shareholders may be subject to state and local
taxes on distributions and on sales of shares of a Portfolio. Distributions of
interest income and capital gains realized from certain types of U.S. government
securities may be exempt from state personal income taxes.
A Portfolio is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied with
IRS taxpayer identification regulations. You may avoid this withholding
requirement by certifying on the account registration form your proper Taxpayer
Identification Number and by certifying that you are not subject to backup
withholding.
The tax discussion set forth above is included for general information only.
Prospective investors should consult the statement of additional information.
Prospective investors should also consult their own tax advisers concerning the
federal, state, local or foreign tax consequences of an investment in a
Portfolio.
PURCHASE OF SHARES
CASH PURCHASES
Investors may purchase shares of any Portfolio by first contacting the
Advisor at (310) 395-8005 to notify the Advisor of the proposed investment. All
investments are subject to approval of the Advisor, and all investors must
complete and submit the necessary account registration forms in good order. The
Funds reserve the right to reject any initial or additional investment and to
suspend the offering of shares of any Portfolio.
"Good order" with respect to the purchase of shares means that (1) a fully
completed and properly signed Account Registration Form and any additional
supporting legal documentation required by the Advisor has been received in
legible form and (2) the Advisor has been notified of the purchase by telephone
and, if the Advisor so requests, also in writing, no later than the close of
regular trading on the NYSE (ordinarily 1:00 p.m. PST) on the day of the
purchase. If an order to purchase shares must be canceled due to nonpayment, the
purchaser will be responsible for any loss incurred by a Fund arising out of
such cancellation. To recover any such loss, the Funds reserve the right to
redeem shares owned by any purchaser whose order is canceled, and such purchaser
may be prohibited or restricted in the manner of placing further orders.
Investors having an account with a bank that is a member or a correspondent
of a member of the Federal Reserve System may purchase shares by first calling
the Advisor at (310) 395-8005 to notify the Advisor of the proposed investment,
then requesting the bank to transmit immediately available funds (Federal Funds)
by wire to PNC Bank, N.A. for the account of DFA Investment Dimensions Group
Inc. (specify Portfolio) or, with regard to purchases of the DFA International
Value Portfolio, for the account of Dimensional Investment Group Inc. (DFA
International Value Portfolio). Additional investments also may be made through
the wire procedure by first notifying the Advisor. Investors who wish to
purchase shares of any Portfolio (other than the DFA International Value
Portfolio) by check should send their check to DFA Investment Dimensions Group
Inc., c/o PFPC Inc., 400 Bellevue Parkway, Wilmington, Delaware 19809. To
purchase shares of the DFA International Value Portfolio investors should send
their check to Dimensional Investment Group Inc., c/o PFPC Inc., at the above
address.
Payment of the total amount due should be made in U.S. dollars. Subject to
approval by the Advisor, payment may be made in any freely convertible currency
and the necessary foreign exchange transactions will be arranged on behalf of,
and at the expense of, the applicant. Applicants settling in any currency other
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than U.S. dollars are advised that a delay in processing a purchase or
redemption may occur to allow for currency conversion.
Shares may also be purchased and sold by individuals through securities
firms which may charge a service fee or commission for such transactions. No
such fee or commission is charged on shares which are purchased or redeemed
directly from the Funds. Investors who are clients of investment advisory
organizations may also be subject to investment advisory fees under their own
arrangements with such organizations.
IN-KIND PURCHASES
If accepted by the Funds, shares of the Portfolios may be purchased in
exchange for securities which are eligible for acquisition by the Portfolios (or
their corresponding Master Funds) or otherwise represented in their portfolios
as described in this prospectus or in exchange for local currencies in which
such securities of the International Equity Portfolios, the International Value
Series, Enhanced U.S. Large Company Series, DFA Two-Year Global Fixed Income
Series and DFA Five-Year Global Fixed Income Portfolio are denominated.
Purchases in exchange for securities will not be subject to a reimbursement fee.
Securities and local currencies to be exchanged which are accepted by the Funds
and Fund shares to be issued therefore will be valued as set forth under
"VALUATION OF SHARES" at the time of the next determination of net asset value
after such acceptance. All dividends, interest, subscription, or other rights
pertaining to such securities shall become the property of the Portfolio whose
shares are being acquired and must be delivered to the Fund by the investor upon
receipt from the issuer. Investors who desire to purchase shares of the
International Equity Portfolios, DFA Two-Year Global Fixed Income Portfolio or
DFA Five-Year Global Fixed Income Portfolio with local currencies should first
contact the Advisor for wire instructions.
The Funds will not accept securities in exchange for shares of a Portfolio
unless: (1) such securities are, at the time of the exchange, eligible to be
included, or otherwise represented, in the Portfolio whose shares are to be
issued (or in its corresponding Master Fund) and current market quotations are
readily available for such securities; (2) the investor represents and agrees
that all securities offered to be exchanged are not subject to any restrictions
upon their sale by the Portfolio under the Securities Act of 1933 or under the
laws of the country in which the principal market for such securities exists, or
otherwise; and (3) at the discretion of the respective Fund, the value of any
such security (except U.S. Government securities) being exchanged together with
other securities of the same issuer owned by the Portfolio or Master Fund may
not exceed 5% of the net assets of the Portfolio or Master Fund immediately
after the transaction, however, this last limitation does not apply to DFA
Five-Year Global Fixed Income Portfolio or the International Small Company
Portfolio. The Funds will accept such securities for investment and not for
resale.
A gain or loss for federal income tax purposes will generally be realized by
investors who are subject to federal taxation upon the exchange depending upon
the cost of the securities or local currency exchanged. Investors interested in
such exchanges should contact the Advisor. Purchases of shares will be made in
full and fractional shares calculated to three decimal places. In the interest
of economy and convenience, certificates for shares will not be issued.
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VALUATION OF SHARES
NET ASSET VALUE
The net asset value per share of each Portfolio and corresponding Master
Fund is calculated as of the close of the NYSE by dividing the total market
value of the Portfolio's investments and other assets, less any liabilities, by
the total outstanding shares of the stock of the respective Portfolio or Master
Fund. The value of the shares of each Portfolio will fluctuate in relation to
its own investment experience. The value of the shares of the Feeder Portfolios
and International Small Company Portfolio will fluctuate in relation to the
investment experience of the Master Funds in which such Portfolios invest.
Securities held by the Portfolios and the Master Funds which are listed on a
securities exchange and for which market quotations are available are valued at
the last quoted sale price of the day or, if there is no such reported sale, the
9-10 Series, the 6-10 Series, Tax-Managed U.S. 6-10 Small Company Portfolio, the
U.S. Large Company Series, DFA Real Estate Securities Portfolio, the Value
Master Funds, International Value Series, Emerging Markets Series, Emerging
Markets Small Cap Series and Dimensional Emerging Markets Value Fund value such
securities at the mean between the most recent quoted bid and asked prices.
Price information on listed securities is taken from the exchange where the
security is primarily traded. Securities issued by open-end investment
companies, such as the Master Funds, are valued using their respective net asset
values for purchase orders placed at the close of the NYSE. Unlisted securities
for which market quotations are readily available are valued at the mean between
the most recent bid and asked prices. The value of other assets and securities
for which no quotations are readily available (including restricted securities)
are determined in good faith at fair value in accordance with procedures adopted
by the Board of Directors. The net asset values per share of the International
Equity Portfolios (in respect of those Portfolios that are Feeder Portfolios and
International Small Company Portfolio, the Master Funds), the International
Value Series, Two-Year Global Fixed Income Series and DFA Five-Year Global Fixed
Income Portfolio are expressed in U.S. dollars by translating the net assets of
each Portfolio, or Master Fund using the bid price for the dollar as quoted by
generally recognized reliable sources.
Provided that the transfer agent has received the investor's Account
Registration Form in good order and the custodian has received the investor's
payment, shares of the Portfolio selected will be priced at the public offering
price calculated next after receipt of the investor's funds by the custodian.
The transfer agent or the Funds may from time to time appoint a sub-transfer
agent for the receipt of purchase orders and funds from certain investors. With
respect to such investors, the shares of the Portfolio selected will be priced
at the public offering price calculated after receipt of the purchase order by
the sub-transfer agent. The only difference between a normal purchase and a
purchase through a sub-transfer agent is that if the investor buys shares
through a sub-transfer agent, the purchase price will be the public offering
price next calculated after the sub-transfer agent receives the order, rather
than on the day the custodian receives the investor's payment (provided that the
sub-transfer agent has received the investor's purchase order in good order).
The value of the shares of the Fixed Income Portfolios, the One-Year Fixed
Income Series and Two-Year Global Fixed Income Series will tend to fluctuate
with interest rates because, unlike money market funds, these Portfolios and the
Series do not seek to stabilize the value of their respective shares by use of
the "amortized cost" method of asset valuation. Net asset value includes
interest on fixed income securities which is accrued daily. Securities which are
traded OTC and on a stock exchange will be valued according to the broadest and
most representative market, and it is expected that for bonds and other fixed
income securities this ordinarily will be the OTC market. Securities held by the
Fixed Income Portfolios, the One-Year Fixed Income Series and Two-Year Global
Fixed Income Series may be valued on the basis of prices provided by a pricing
service when such prices are believed to reflect the current market value of
such securities. Other assets and securities for which quotations are not
readily available will be valued in good faith at fair value using methods
determined by the Board of Directors.
Generally, trading in foreign securities markets is completed each day at
various times prior to the close of the NYSE. The values of foreign securities
held by those Portfolios and Master Funds that invest in such securities are
determined as of such times for the purpose of computing the net asset values of
the
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Portfolios and Master Funds. If events which materially affect the value of the
investments of a Portfolio or Master Fund occur subsequent to the close of the
securities market on which such securities are primarily traded, the investments
affected thereby will be valued at "fair value" as described above.
Certain of the securities holdings of the Emerging Markets Series, Emerging
Markets Small Cap Series and the Dimensional Emerging Markets Value Fund in
Approved Markets may be subject to tax, investment and currency repatriation
regulations of the Approved Markets that could have a material effect on the
valuation of the securities. For example, such Master Funds might be subject to
different levels of taxation on current income and realized gains depending upon
the holding period of the securities. In general, a longer holding period (e.g.,
5 years) may result in the imposition of lower tax rates than a shorter holding
period (e.g., 1 year). The Master Funds may also be subject to certain
contractual arrangements with investment authorities in an Approved Market which
require a Master Fund to maintain minimum holding periods or to limit the extent
of repatriation of income and realized gains. As a result, the valuation of
particular securities at any one time may depend materially upon the assumptions
that a Master Fund makes at that time concerning the anticipated holding period
for the securities. Absent special circumstances as determined by the Board of
Directors or Trustees of the Master Fund, it is presently intended that the
valuation of such securities will be based upon the assumption that they will be
held for at least the amount of time necessary to avoid higher tax rates or
penalties and currency repatriation restrictions. However, the use of such
valuation standards will not prevent the Master Funds from selling such
securities in a shorter period of time if the Advisor considers the earlier sale
to be a more prudent course of action. Revision in valuation of those securities
will be made at the time of the transaction to reflect the actual sales proceeds
inuring to the Master Fund.
Futures contracts are valued using the settlement price established each day
on the exchange on which they are traded. The value of such futures contracts
held by a Portfolio or Master Fund are determined each day as of such close.
PUBLIC OFFERING PRICE
It is management's belief that payment of a reimbursement fee by each
investor, which is used to defray significant costs associated with investing
proceeds of the sale of their shares to such investors, will eliminate a
dilutive effect such costs would otherwise have on the net asset value of shares
held by previous investors. Therefore, the shares of certain Portfolios are sold
at an offering price which is equal to the current net asset value of such
shares plus a reimbursement fee. The amount of the reimbursement fee represents
management's estimate of the costs reasonably anticipated to be associated with
the purchase of securities by those Portfolios and Master Funds and is paid to
the Portfolios and Master Funds and used by them to defray such costs. Such
costs include brokerage commissions on listed securities, imputed commissions on
OTC securities and a .5% Stamp Duty imposed on the purchase of stocks on the
ISE. Reinvestments of dividends and capital gains distributions paid by the
Portfolios and in-kind investments are not subject to a reimbursement fee. (See
"PURCHASE OF SHARES--In-Kind Purchases" and "DIVIDENDS, CAPITAL GAINS
DISTRIBUTIONS AND TAXES.") The table in "SHAREHOLDER FEES" in this prospectus
identifies the Portfolios whose shares are sold at an offering price which is
equal to the current net asset value of such shares plus a reimbursement fee.
The reimbursement fee is expressed as a percentage of the net asset value of the
shares of the respective Portfolios.
For each Portfolio that charges a reimbursement fee, except the DFA
International Small Cap Value and the International Small Company Portfolios,
the Master Funds in which the Portfolio invests also charges a reimbursement fee
equal to that charged by the respective Portfolio.
In the case of the International Small Company Portfolio, the reimbursement
fee is equal to a blended rate of the reimbursement fees of the International
Master Funds. The blended rate is determined on a quarterly basis and is based
upon the target allocation in effect at the end of each quarter. The blended
rate will be calculated by multiplying the rate of reimbursement fee of each
International Master Funds by
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a fraction equal to the portion of the assets of the Portfolio which, at such
time, is being allocated to each International Master Funds and adding the
results thereof. If there is a change to the reimbursement fee of an
International Master Funds during a quarter, the blended rate will be
recalculated to reflect such change in the International Master Funds'
reimbursement fee.
The public offering price of shares of the Domestic Equity Portfolios,
United Kingdom Small Company Portfolio, Large Cap International Portfolio, DFA
International Value Portfolio and the Fixed Income Portfolios is the net asset
value thereof next determined after the receipt of the investor's funds by the
custodian, provided that an Account Registration Form in good order has been
received by the transfer agent; no sales charge or reimbursement fee is imposed.
EXCHANGE OF SHARES
Investors may exchange shares of one Portfolio for those of another Portfolio by
first contacting the Advisor at (310) 395-8005 to notify the Advisor of the
proposed exchange and then completing a letter of instruction and mailing it to:
DFA Investment Dimensions Group Inc. or, in the case of the DFA International
Value Portfolio, to Dimensional Investment Group Inc., as follows:
Attn: Client Operations
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
The minimum amount for an exchange is $100,000. Exchanges are accepted into
or from any of the Portfolios offered in this prospectus. Such exchange is
subject to any applicable reimbursement fee charged by a Portfolio in connection
with the sale of its shares.
Investors in any Portfolio eligible for the exchange privilege also may
exchange all or part of their Portfolio shares into certain other portfolios of
Dimensional Investment Group Inc., subject to the minimum purchase requirement
set forth in the applicable portfolio's prospectus. Investors may contact the
Advisor at the above-listed phone number for more information on such exchanges
and to request a copy of the prospectuses of other portfolios of Dimensional
Investment Group Inc.
The exchange privilege is not intended to afford shareholders a way to
speculate on short-term movements in the markets. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Portfolios or otherwise adversely affect the Funds, any
proposed exchange will be subject to the approval of the Advisor. Such approval
will depend on: (i) the size of the proposed exchange; (ii) the prior number of
exchanges by that shareholder; (iii) the nature of the underlying securities and
the cash position of the Portfolios involved in the proposed exchange; (iv) the
transaction costs involved in processing the exchange; and (v) the total number
of redemptions by exchange already made out of a Portfolio. Excessive use of the
exchange privilege is defined as any pattern of exchanges among portfolios by an
investor that evidences market timing.
The redemption and purchase prices of shares redeemed and purchased by
exchange, respectively, are the net asset values next determined after the
Advisor has received a letter of instruction in good order, plus any applicable
reimbursement fee on purchases by exchange. Exchanges with respect to
International Small Company Portfolio and any of the Feeder Portfolios which
invest in the International Master Funds are not subject to a reimbursement fee.
"Good order" means a completed a letter of instruction specifying the dollar
amount to be exchanged, signed by all registered owners of the shares; and if a
Fund does not have on file the authorized signatures for the account, proof of
authority and a guarantee of the signature of each registered owner by an
"eligible guarantor institution." Such institutions generally include national
or state banks, savings associations, savings and loan associations, trust
companies, savings banks, credit unions and members of a recognized stock
exchange. Exchanges will be accepted only if stock certificates
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have not been issued and the shares of the Portfolio being acquired are
registered in the investor's state of residence.
There is no fee imposed on an exchange. However, the Funds reserve the right
to impose an administrative fee in order to cover the costs incurred in
processing an exchange. Any such fee will be disclosed in the prospectus. An
exchange is treated as a redemption and a purchase. Therefore, an investor could
realize a taxable gain or a loss on the transaction. The Funds reserve the right
to revise or terminate the exchange privilege, waive the minimum amount
requirement, limit the amount of or reject any exchange, as deemed necessary, at
any time.
REDEMPTION OF SHARES
REDEMPTION PROCEDURE
Investors who desire to redeem shares of a Portfolio must first contact the
Advisor at (310) 395-8005. Each Portfolio will redeem shares at the net asset
value of such shares next determined, either: (1) where stock certificates have
not been issued, after receipt of a written request for redemption in good
order, by the transfer agent or (2) if stock certificates have been issued,
after receipt of the stock certificates in good order at the office of the
transfer agent. "Good order" means that the request to redeem shares must
include all necessary documentation, to be received in writing by the Advisor no
later than the close of regular trading on the NYSE (ordinarily 1:00 p.m. PST),
including: the stock certificate(s), if issued; a letter of instruction or a
stock assignment specifying the number of shares or dollar amount to be
redeemed, signed by all registered owners (or authorized representatives
thereof) of the shares; and, if a Fund does not have on file the authorized
signatures for the account, proof of authority and a guarantee of the signature
of each registered owner by an eligible guarantor institution; and any other
required supporting legal documents. A signature guarantee may be obtained from
a domestic bank or trust company, broker, dealer, clearing agency or savings
association who are participants in a medallion program recognized by the
Securities Transfer Association. The three recognized medallion programs are
Securities Transfer Agents Medallion (STAMP), Stock Exchanges Medallion Program
(SEMP) and New York Stock Exchange, Inc. Medallion Signature Program (MSP).
Signature guarantees which are not a part of these programs will not be
accepted.
Shareholders redeeming shares for which certificates have not been issued,
who have authorized redemption payment by wire in writing, may request that
redemption proceeds be paid in federal funds wired to the bank they have
designated in writing. The Funds reserve the right to send redemption proceeds
by check in their discretion; a shareholder may request overnight delivery of
such check at the shareholder's own expense. If the proceeds are wired to the
shareholder's account at a bank which is not a member of the Federal Reserve
System, there could be a delay in crediting the funds to the shareholder's bank
account. The Funds reserve the right at any time to suspend or terminate the
redemption by wire procedure after prior notification to shareholders. No fee is
charged for redemptions. The redemption of all shares in an account will result
in the account being closed. A new Account Registration Form will be required
for future investments. (See "PURCHASE OF SHARES.") In the interests of economy
and convenience, certificates for shares are not issued.
Although the redemption payments will ordinarily be made within seven days
after receipt, payment to investors redeeming shares which were purchased by
check will not be made until the Funds can verify that the payments for the
purchase have been, or will be, collected, which may take up to fifteen days or
more. Investors may avoid this delay by submitting a certified check along with
the purchase order.
REDEMPTION OF SMALL ACCOUNTS
With respect to each Portfolio, the Funds reserve the right to redeem a
shareholder's account if the value of the shares in a specific Portfolio is $500
or less, whether because of redemptions, a decline in the Portfolio's net asset
value per share or any other reason. Before a Fund involuntarily redeems shares
from
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such an account and sends the proceeds to the stockholder, the Fund will give
written notice of the redemption to the stockholder at least sixty days in
advance of the redemption date. The stockholder will then have sixty days from
the date of the notice to make an additional investment in order to bring the
value of the shares in the account for a specific Portfolio to more than $500
and avoid such involuntary redemption. The redemption price to be paid to a
stockholder for shares redeemed by a Fund under this right will be the aggregate
net asset value of the shares in the account at the close of business on the
redemption date.
IN-KIND REDEMPTIONS
When in the best interests of a Feeder Portfolio, the Feeder Portfolio may
make a redemption payment, in whole or in part, by a distribution of portfolio
securities that the Feeder Portfolio receives from the Master Fund in lieu of
cash. A Portfolio that is not a Feeder Portfolio may also make a redemption
payment, in whole or in part, by a distribution of Portfolio securities in lieu
of cash, when in the best interests of the Portfolio. Such distributions will be
made in accordance with the federal securities laws and regulations governing
mutual funds. Investors may incur brokerage charges and other transaction costs
selling securities that were received in payment of redemptions. The
International Equity, DFA Two-Year Global Fixed Income and DFA Five-Year Global
Fixed Income Portfolios reserve the right to redeem their shares in the
currencies in which their investments (and, in respect of the Feeder Portfolios
and International Small Company Portfolio, the currencies in which the
corresponding Master Funds' investments) are denominated. Investors may incur
charges in converting such securities to dollars and the value of the securities
may be affected by currency exchange fluctuations. The Tax-Managed Portfolios
and Series are authorized to make redemption payments solely by a distribution
of portfolio securities (or a combination of securities and cash) when it is
determined by the Advisor to be consistent with the tax management strategies
described in this prospectus.
THE FEEDER PORTFOLIOS
Other institutional investors, including other mutual funds, may invest in
each Master Fund, and the expenses of such other funds and, correspondingly,
their returns may differ from those of the Feeder Portfolios. Please contact The
DFA Investment Trust Company and the Dimensional Emerging Markets Value Fund
Inc. at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401, (310) 395-8005
for information about the availability of investing in a Master Fund and the
Dimensional Emerging Markets Value Fund other than through a Feeder Portfolio.
The aggregate amount of expenses for a Feeder Portfolio and the
corresponding Master Fund may be greater than it would be if the Portfolio were
to invest directly in the securities held by the corresponding Master Fund.
However, the total expense ratios for the Feeder Portfolios and the Master Funds
are expected to be less over time than such ratios would be if the Portfolios
were to invest directly in the underlying securities. This arrangement enables
various institutional investors, including the Feeder Portfolios, to pool their
assets, which may be expected to result in economies by spreading certain fixed
costs over a larger asset base. Each shareholder in a Master Fund, including a
Feeder Portfolio, will pay its proportionate share of the expenses of that
Master Fund. By investing in shares of the International Master Funds,
International Small Company Portfolio will indirectly bear its pro rata share of
the operating expenses, management expenses and brokerage costs of such Master
Fund, as well as the expense of operating the Portfolio.
The shares of the Master Funds will be offered to institutional investors
for the purpose of increasing the funds available for investment, to reduce
expenses as a percentage of total assets and to achieve other economies that
might be available at higher asset levels. Investment in a Master Fund by other
institutional investors offers potential benefits to the Master Funds, and
through their investment in the Master Funds, the Feeder Portfolios also.
However, such economies and expense reductions might not be achieved, and
additional investment opportunities, such as increased diversification, might
not be available if other
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institutions do not invest in the Master Funds. Also, if an institutional
investor were to redeem its interest in a Master Fund, the remaining investors
in that Master Fund could experience higher pro rata operating expenses, thereby
producing lower returns, and the Master Fund's security holdings may become less
diverse, resulting in increased risk. Institutional investors that have a
greater pro rata ownership interest in a Master Fund than the corresponding
Feeder Portfolio could have effective voting control over the operation of the
Master Fund.
If the Board of Directors of the relevant Fund determines that it is in the
best interest of a Feeder Portfolio, the Feeder Portfolio may withdraw its
investment in a Master Fund at any time. Upon any such withdrawal, the Board
would consider what action the Portfolio might take, including either seeking to
invest its assets in another registered investment company with the same
investment objective as the Portfolio, which might not be possible, or retaining
an investment advisor to manage the Portfolio's assets in accordance with its
own investment objective, possibly at increased cost. Shareholders of a Feeder
Portfolio will receive written notice thirty days prior to the effective date of
any change in the investment objective of its corresponding Master Fund. A
withdrawal by a Feeder Portfolio of its investment in the corresponding Master
Fund could result in a distribution in kind of portfolio securities (as opposed
to a cash distribution) to the Portfolio. Should such a distribution occur, the
Portfolio could incur brokerage fees or other transaction costs in converting
such securities to cash in order to pay redemptions. In addition, a distribution
in kind to the Portfolio could result in a less diversified portfolio of
investments and could affect adversely the liquidity of the Portfolio. Moreover,
a distribution in kind by the Master Fund corresponding to the U.S. 6-10 Small
Company, U.S. 9-10 Small Company, Enhanced U.S. Large Company, DFA One-Year
Fixed Income, DFA Two-Year Global Fixed Income, U.S. 4-10 Value, U.S. 6-10
Value, U.S. Large Cap Value, DFA International Value and Emerging Markets Value
Portfolios may constitute a taxable exchange for federal income tax purposes
resulting in gain or loss to such Portfolios. Any net capital gains so realized
will be distributed to such a Portfolio's shareholders as described in
"DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES."
FINANCIAL HIGHLIGHTS
The Financial Highlights table is meant to help you understand each
Portfolio's financial performance for the past 5 years or, if shorter, the
period of that Portfolio's operations, as indicated by the table. (The U.S. 4-10
Value, and the Tax-Managed Portfolios had not begun operations by November 30,
1998 so no information is available for them.) The total returns in the table
represent the rate that you would have earned (or lost) on an investment in the
Portfolio, assuming reinvestment of all dividends and distributions. This
information has been audited by PricewaterhouseCoopers LLP (formerly Coopers &
Lybrand L.L.P.), whose report, along with the Portfolios' financial statements,
are included in the annual report which is available upon request.
The "Transfer" transaction referred to below in footnotes to the Financial
Highlights refers to the transaction which took place on August 9, 1996, in
which four Portfolios, the Japanese Small Company Portfolio, the Pacific Rim
Small Company Portfolio, the United Kingdom Small Company Portfolio, and the
Continental Small Company Portfolio, respectively, each transferred their
investable assets in exchange for shares with equal values of a corresponding
Master Fund of the Trust.
[NOVEMBER 30, 1998 NUMBERS WILL BE ADDED FOR MARCH FILING]
- -----------------------------------------------------------
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DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE ENHANCED U.S.
LARGE COMPANY
THE U.S. LARGE COMPANY PORTFOLIO PORTFOLIO
--------------------------------------------------------------------- -----------------------
YEAR YEAR YEAR YEAR YEAR YEAR JULY 3
ENDED ENDED ENDED ENDED ENDED ENDED TO
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993 1997 1996
------------ ---------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period...................... $ 22.73 $ 18.12 $ 13.58 $ 13.91 $ 13.12 $ 11.83 $ 10.00
------------ ---------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income......... 0.42 0.41 0.35 0.37 0.36 0.54 0.12
Net Gains or Losses on
Securities (Both Realized
and Unrealized)............. 5.89 4.52 4.57 (0.22) 0.87 2.40 1.71
------------ ---------- --------- --------- --------- --------- ---------
Total From Investment
Operations.................. 6.31 4.93 4.92 0.15 1.23 2.94 1.83
------------ ---------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends (from Net Investment
Income)..................... (0.43) (0.31) (0.36) (0.37) (0.44) (0.55) --
Distributions (from Capital
Gains)...................... (0.13) (0.01) (0.02) (0.11) -- (0.61) --
------------ ---------- --------- --------- --------- --------- ---------
Total Distributions........... (0.56) (0.32) (0.38) (0.48) (0.44) (1.16) --
------------ ---------- --------- --------- --------- --------- ---------
Net Asset Value, End of
Period...................... $ 28.48 $ 22.73 $ 18.12 $ 13.58 $ 13.91 $ 13.61 $ 11.83
------------ ---------- --------- --------- --------- --------- ---------
------------ ---------- --------- --------- --------- --------- ---------
Total Return.................. 28.26% 27.49% 36.54% 1.04% 9.48% 27.22% 18.30%#
------------ ---------- --------- --------- --------- --------- ---------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period
(thousands)................. $ 343,537 $ 187,757 $97,111 $48,638 $37,830 $47,642 $29,236
Ratio of Expenses to Average
Net Assets**................ 0.15%(a) 0.21%(a) 0.24%(a) 0.24%(a) 0.24%(a) 0.52%(d) 0.65%*
Ratio of Net Income to Average
Net Assets.................. 1.66%(a) 2.10%(a) 2.29%(a) 2.75%(a) 2.48%(a) 4.51%(d) 3.44%*
Portfolio Turnover Rate....... N/A N/A N/A N/A 27.67%*(b) N/A N/A
Portfolio Turnover Rate of
Master Fund Series.......... 4.28% 14.09% 2.38% 8.52% 34.36%*(c) 193.78% 211.07%*
</TABLE>
- ----------------------------------
* Annualized
** Represents the combined ratios for the respective portfolio and its
respective pro-rata share of its Master Fund Series for the year ended
November 30, 1993 and subsequent periods.
(a) Had certain waivers and reimbursements not been in effect the ratios of
expenses to average net assets for the periods ended November 30, 1997
through 1991 would have been 0.35%, 0.45%, 0.46%, 0.66%, 0.79%, 0.53% and
0.52%, respectively, and the ratios of net investment income to average net
assets for the periods ended November 30, 1997 through 1991 would have been
1.46%, 1.85%, 2.23%, 2.64%, 2.28%, 2.44% and 2.90%, respectively.
(b) Portfolio turnover calculated for the period December 1, 1992 to February 7,
1993, respectively (through date of Exchange transaction, see respective
Master Fund Series for rate subsequent to Exchange transaction.)
(c) Master Fund Series turnover calculated for the period February 8 to November
3, 1993, respectively.
(d) Had certain waivers and reimbursements not been in effect, the ratio of
expenses to average net assets for the year ended November 30, 1997, would
have been 0.54% and the ratio of net investment income to average net assets
for the year ended November 30, 1997 would have been 4.49%.
56
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE U.S. LARGE CAP VALUE PORTFOLIO
------------------------------------------------
YEAR YEAR YEAR YEAR FEB. 19
ENDED ENDED ENDED ENDED TO
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $ 15.98 $ 13.29 $ 9.91 $ 10.60 $ 10.00
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................. 0.29 0.30 0.29 0.32 0.18
Net Gains or Losses on Securities (Both Realized
and Unrealized)................................. 3.60 2.62 3.55 (0.68) 0.59
-------- -------- -------- -------- --------
Total From Investment Operations.................. 3.89 2.92 3.84 (0.36) 0.77
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income)............ (0.30) (0.23) (0.29) (0.33) (0.17)
Distributions (from Capital Gains)................ (0.35) -- (0.17) -- --
-- -- -- -- --
-------- -------- -------- -------- --------
Total Distributions............................... (0.65) (0.23) (0.46) (0.33) (0.17)
-------- -------- -------- -------- --------
Net Asset Value, End of Period.................... $ 19.22 $ 15.98 $ 13.29 $ 9.91 $ 10.60
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total Return...................................... 25.10% 22.20% 39.13% (3.27)% 7.59%#
-------- -------- -------- -------- --------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)............. $840,003 $541,149 $280,915 $197,566 $ 90,288
Ratio of Expenses to Average Net Assets**......... 0.35% 0.36% 0.42% 0.44% 0.47%*
Ratio of Net Income to Average Net Assets......... 1.70% 2.17% 2.49% 3.50% 3.38%*
Portfolio Turnover Rate........................... N/A N/A N/A N/A N/A
Portfolio Turnover Rate of Master Fund Series..... 17.71% 20.12% 29.41% 39.33% 0.75%*
</TABLE>
- ------------------------
* Annualized
# Non-annualized.
** Represents the respective combined ratios for The U.S. Large Cap Value
Portfolio and its pro-rata share of its Master Fund Series.
57
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE U.S. 6-10 VALUE PORTFOLIO
-------------------------------------------------------------
YEAR YEAR YEAR YEAR MARCH 2
ENDED ENDED ENDED ENDED TO
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
------------ ------------ ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 17.00 $ 14.03 $ 11.13 $ 11.04 $ 10.00
------------ ------------ ---------- ---------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income....................................... 0.07 0.11 0.10 0.14 0.11
Net Gains or Losses on Securities (Both Realized and
Unrealized)............................................... 5.49 2.93 3.06 0.10 1.03
------------ ------------ ---------- ---------- ---------
Total From Investment Operations............................ 5.56 3.04 3.16 0.24 1.14
------------ ------------ ---------- ---------- ---------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income)...................... (0.11) (0.02) (0.10) (0.15) (0.10)
Distributions (from Capital Gains).......................... (0.36) (0.05) (0.16) -- --
------------ ------------ ---------- ---------- ---------
Total Distributions......................................... (0.47) (0.07) (0.26) (0.15) (0.10)
------------ ------------ ---------- ---------- ---------
Net Asset Value, End of Period.............................. $ 22.09 $ 17.00 $ 14.03 $ 11.13 $ 11.04
------------ ------------ ---------- ---------- ---------
------------ ------------ ---------- ---------- ---------
Total Return................................................ 33.57% 21.70% 28.41% 2.19% 11.39%#
------------ ------------ ---------- ---------- ---------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)....................... $ 2,098,654 $ 1,207,298 $ 609,950 $ 344,148 $ 95,682
Ratio of Expenses to Average Net Assets**................... 0.60% 0.61% 0.64% 0.66% 0.70%*
Ratio of Net Income to Average Net Assets................... 0.37% 0.78% 0.85% 1.69% 1.97%*
Portfolio Turnover Rate..................................... N/A N/A N/A N/A N/A
Portfolio Turnover Rate of Master Fund Series............... 25.47% 14.91% 20.62% 8.22% 1.07%*
</TABLE>
- ------------------------
* Annualized
# Non-annualized
** Represents the combined ratios for the portfolio and its respective pro-rata
share of its Master Fund Series.
58
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE U.S. 6-10 SMALL COMPANY PORTFOLIO
----------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $ 14.53 $ 12.64 $ 11.08 $ 11.43 $ 10.35
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................. 0.09 0.11 0.09 0.09 0.08
Net Gains or Losses on Securities (Both Realized
and Unrealized).................................. 3.42 2.20 2.81 (0.07) 1.43
---------- ---------- ---------- ---------- ----------
Total From Investment Operations.................. 3.51 2.31 2.90 0.02 1.51
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income)............ (0.12) (0.02) (0.14) (0.09) (0.11)
Distributions (from Capital Gains)................ (1.03) (0.40) (1.20) (0.28) (0.32)
---------- ---------- ---------- ---------- ----------
Total Distributions............................... (1.15) (0.42) (1.34) (0.37) (0.43)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period.................... $ 16.89 $ 14.53 $ 12.64 $ 11.08 $ 11.43
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total Return...................................... 26.12% 18.73% 28.75% 0.22% 14.72%
---------- ---------- ---------- ---------- ----------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)............. $ 337,992 $ 234,194 $ 186,644 $ 112,137 $ 136,863
Ratio of Expenses to Average Net Assets**......... 0.45% 0.48% 0.49% 0.53% 0.58%
Ratio of Net Income to Average Net Assets......... 0.48% 0.75% 0.83% 0.72% 0.70%
Portfolio Turnover Rate........................... N/A N/A N/A N/A 1.81%*(a)
Portfolio Turnover Rate of Master Fund Series..... 30.04% 32.38% 21.16% 27.65% 32.88%*(b)
</TABLE>
- ------------------------
* Annualized
** Represents the combined ratios for the respective portfolio and its
respective pro-rata share of its Master Fund Series for the year ended
November 30, 1993 and subsequent periods.
(a) Portfolio turnover calculated for the period December 1, 1992 to February 2,
1993 (through date of Exchange transaction, see respective Master Fund
Series for rate subsequent to Exchange transaction.)
(b) Master Fund Series turnover calculated for the period February 3 to November
30, 1993.
59
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE U.S. 9-10 SMALL COMPANY PORTFOLIO
--------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $ 12.14 $ 11.03 $ 8.49 $ 8.69 $ 7.75
------------ ------------ ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income......................... 0.03 0.03 0.05 0.01 0.03
Net Gains or Losses on Securities (Both
Realized and Unrealized)..................... 3.01 1.85 2.61 0.40 1.67
------------ ------------ ---------- ---------- ----------
Total From Investment Operations.............. 3.04 1.88 2.66 0.41 1.70
------------ ------------ ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income)........ (0.03) (0.01) (0.04) (0.03) (0.05)
Distributions (from Capital Gains)............ (1.16) (0.76) (0.08) (0.58) (0.71)
------------ ------------ ---------- ---------- ----------
Total Distributions........................... (1.19) (0.77) (0.12) (0.61) (0.76)
------------ ------------ ---------- ---------- ----------
Net Asset Value, End of Period................ $ 13.99 $ 12.14 $ 11.03 $ 8.49 $ 8.69
------------ ------------ ---------- ---------- ----------
------------ ------------ ---------- ---------- ----------
Total Return.................................. 27.46% 18.05% 31.37% 5.06% 23.91%
------------ ------------ ---------- ---------- ----------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)......... $ 1,509,427 $ 1,181,804 $ 925,474 $ 659,221 $ 630,918
Ratio of Expenses to Average Net Assets....... 0.60% 0.61% 0.62% 0.65% 0.70%
Ratio of Net Income to Average Net Assets..... 0.21% 0.22% 0.45% 0.16% 0.26%
Portfolio Turnover Rate....................... 27.81% 23.68% 24.65% 16.56% 9.87%
</TABLE>
60
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE DFA REAL ESTATE SECURITIES PORTFOLIO
-----------------------------------------------------
YEAR YEAR YEAR YEAR JAN. 5,
ENDED ENDED ENDED ENDED TO
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................... $ 12.65 $ 10.00 $ 9.28 $ 10.92 $ 10.00
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................................... 0.88 0.71 0.61 0.37 0.20
Net Gains or Losses on Securities (Both Realized and
Unrealized)............................................ 2.68 2.08 0.68 (1.65) 0.91
--------- --------- --------- --------- ---------
Total From Investment Operations........................ 3.56 2.79 1.29 (1.28) 1.11
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income).................. (0.68) (0.14) (0.46) (0.28) (0.19)
Distributions (from Capital Gains)...................... -- -- -- -- --
Tax Return of Capital................................... -- -- (0.11) (0.08) --
--------- --------- --------- --------- ---------
Total Distributions..................................... (0.68) (0.14) (0.57) (0.36) (0.19)
--------- --------- --------- --------- ---------
Net Asset Value, End of Period.......................... $ 15.53 $ 12.65 $ 10.00 $ 9.28 $ 10.92
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total Return............................................ 29.13% 28.24% 14.00% (11.76)% 11.08%#
--------- --------- --------- --------- ---------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)................... $ 95,072 $ 64,390 $ 43,435 $ 30,456 $ 22,106
Ratio of Expenses to Average Net Assets................. 0.48% 0.71% 0.82% 0.90% 0.88%*
Ratio of Net Income to Average Net Assets............... 5.73% 7.08% 6.76% 3.90% 2.63%*
Portfolio Turnover Rate................................. 30.73% 11.25% 0.66% 28.87% 0.55%*
Portfolio Turnover Rate of Master Fund Series........... N/A N/A N/A N/A N/A
</TABLE>
- ------------------------
* Annualized
# Non-annualized.
61
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE LARGE CAP INTERNATIONAL PORTFOLIO
-----------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................... $ 14.18 $ 12.60 $ 11.91 $ 11.26 $ 9.63
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................................... 0.23 0.21 0.15 0.09 0.15
Net Gains or Losses on Securities (Both Realized and
Unrealized)........................................... 0.15 1.39 0.95 1.11 1.72
--------- --------- --------- --------- ---------
Total From Investment Operations........................ 0.38 1.60 1.10 1.20 1.87
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income).................. (0.21) (0.02) (0.18) (0.09) (0.24)
Distributions (from Capital Gains)...................... (0.08) -- (0.23) (0.46) --
--------- --------- --------- --------- ---------
Total Distributions..................................... (0.29) (0.02) (0.41) (0.55) (0.24)
--------- --------- --------- --------- ---------
Net Asset Value, End of Period.......................... $ 14.27 $ 14.18 $ 12.60 $ 11.91 $ 11.26
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total Return............................................ 2.80% 12.68% 9.37% 10.74% 19.55%
--------- --------- --------- --------- ---------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)................... $ 87,223 $ 79,322 $ 67,940 $ 55,635 $ 78,472
Ratio of Expenses to Average Net Assets................. 0.47% 0.58% 0.57% 0.66% 0.55%(a)
Ratio of Net Income to Average Net Assets............... 1.69% 1.57% 1.84% 1.18% 1.94%(a)
Portfolio Turnover Rate................................. 2.31% 17.65% 24.44% 33.15% 0.28%
</TABLE>
- ------------------------
(a) Had certain waivers and assumptions of expenses not been in effect, the
ratios of expenses to average net assets for the periods ended November 30,
1993, 1992 and 1991 would have been 0.66%, 1.35% and 2.31%, respectively,
and the ratios of net investment income to average net assets for the
periods ended November 30, 1993, 1992 and 1991 would have been 1.83%, 0.90%
and 0.15%, respectively.
62
<PAGE>
DIMENSIONAL INVESTMENT GROUP INC.
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE INTERNATIONAL SMALL
DFA INTERNATIONAL VALUE PORTFOLIO COMPANY PORTFOLIO
---------------------------------------------------- ------------------------
YEAR YEAR YEAR FEB. 16 YEAR OCT. 1,
ENDED ENDED ENDED TO ENDED TO
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1997 1996
---------- --------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 11.90 $ 10.55 $ 10.06 $ 10.00 $ 9.96 $ 10.00
---------- --------- --------- --------- ---------- ---------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.... 0.19 0.21 0.19 0.13 0.10 0.01
Net Gain or Loss on
Securities (Both
Realized and
Unrealized)............ (0.65) 1.31 0.51 0.06 (2.22) (0.05)
---------- --------- --------- --------- ---------- ---------
Total From Investment
Operations............. (0.46) 1.52 0.70 0.19 (2.12) (0.04)
---------- --------- --------- --------- ---------- ---------
LESS DISTRIBUTIONS
Dividends (from Net
Investment Income)..... (0.21) (0.17) (0.19) (0.13) (0.02) --
Distributions (from
Capital Gains)......... (0.29) -- (0.02) -- -- --
---------- --------- --------- --------- ---------- ---------
Total Distributions...... (0.50) (0.17) (0.21) (0.13) (0.02) --
---------- --------- --------- --------- ---------- ---------
Net Asset Value, End of
Period................. $ 10.94 $ 11.90 $ 10.55 $ 10.06 $ 7.82 $ 9.96
---------- --------- --------- --------- ---------- ---------
---------- --------- --------- --------- ---------- ---------
Total Return............. (4.04)% 14.54% 6.95% 1.85%# (21.35)% (0.40)%#
---------- --------- --------- --------- ---------- ---------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period
(thousands)............ $ 370,117 $ 316,708 $ 245,243 $ 227,795 $ 230,469 $ 104,118
Ratio of Expenses to
Average Net Assets
(1).................... 0.56% 0.56%(a) 0.65%(a) 0.65%*(a) 0.75% 0.70%*(b)
Ratio of Net Investment
Income to Average Net
Assets................. 1.72% 2.22%(a) 1.79%(a) 1.80%*(a) 1.46% 0.54%*(b)
Portfolio Turnover
Rate................... N/A N/A N/A N/A N/A*** N/A***
Portfolio Turnover Rate
of Master Fund
Series................. 22.55% 12.23% 9.75% 1.90% N/A N/A
</TABLE>
- ----------------------------------
* Annualized
# Non-Annualized
(1) Represents the combined ratio for the Portfolio and its respective pro-rata
share of its Master Fund Series.
(a) Had certain waivers and assumptions of expenses not been in effect, the
ratios of expenses to average net assets for the periods ended November 30,
1996, 1995 and 1994 would have been 0.57%, 0.72% and 0.72%, respectively,
and the ratios of net investment income to average net assets for the
periods ended November 30, 1996, 1995 and 1994 would have been 2.21%, 1.71%
and 1.75, respectively.
(b) Had certain waivers and assumptions of expenses not been in effect, the
ratio of expenses to average net assets for the period ended November 30,
1996 would have been 0.79%, respectively, and the ratio of net investment
income to average net assets for the period ended November 30, 1996 would
have been 0.45%, respectively.
63
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
THE JAPANESE SMALL COMPANY PORTFOLIO
------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................................. $ 21.03 $ 22.78 $ 25.06 $ 19.96 $ 18.92
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................................................. 0.09 0.07 0.06 0.05 0.04
Net Gains or Losses on Securities (Both Realized and Unrealized)...... (10.45) (1.45) (1.65) 5.76 1.75
-------- -------- -------- -------- --------
Total From Investment Operations...................................... (10.36) (1.38) (1.59) 5.81 1.79
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income)................................ (0.06) (0.01) (0.06) (0.04) (0.05)
Distributions (from Capital Gains).................................... (1.16) (0.36) (0.63) (0.67) (0.70)
-------- -------- -------- -------- --------
Total Distributions................................................... (1.22) (0.37) (0.69) (0.71) (0.75)
-------- -------- -------- -------- --------
Net Asset Value, End of Period........................................ $ 9.45 $ 21.03 $ 22.78 $ 25.06 $ 19.96
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total Return.......................................................... (51.90)% (6.28)% (6.54)% 29.59% 9.52%
-------- -------- -------- -------- --------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)................................. $114,017 $294,120 $371,113 $330,674 $209,244
Ratio of Expenses to Average Net Assets**............................. 0.73% 0.72% 0.74% 0.76% 0.82%
Ratio of Net Income to Average Net Assets............................. 0.50% 0.24% 0.25% 0.10% 0.06%
Portfolio Turnover Rate............................................... N/A 18.52%*(a) 7.79% 10.51% 9.36%
Portfolio Turnover Rate of Master Fund Series......................... 13.17% 1.67%*(b) N/A N/A N/A
</TABLE>
- ------------------------
* Annualized
** Represents the combined ratios for the portfolio and its pro-rata share of
its Master Fund Series for the period ended November 30, 1996 and subsequent
periods.
(a) Portfolio turnover calculated for the period December 1, 1995 to August 9,
1996, (through date of Transfer transaction).
(b) Items calculated for the period August 9 to November 30, 1996.
64
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE PACIFIC RIM SMALL COMPANY PORTFOLIO
----------------------------------------------------------
YEAR YEAR YEAR YEAR JAN. 5
ENDED ENDED ENDED ENDED TO
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............................. $ 16.63 $ 14.38 $ 15.98 $ 16.45 $ 10.00
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................................ 0.32 0.27 0.34 0.23 0.11
Net Gains or Losses on Securities (Both Realized and
Unrealized)..................................................... (6.22) 2.40 (1.33) 0.47 6.46
-------- -------- -------- -------- --------
Total From Investment Operations................................. (5.90) 2.67 (0.99) 0.70 6.57
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income)........................... (0.33) (0.02) (0.34) (0.23) (0.09)
Distributions (from Capital Gains)............................... (0.88) (0.40) (0.27) (0.94) (0.03)
-------- -------- -------- -------- --------
Total Distributions.............................................. (1.21) (0.42) (0.61) (1.17) (0.12)
-------- -------- -------- -------- --------
Net Asset Value, End of Period................................... $ 9.52 $ 16.63 $ 14.38 $ 15.98 $ 16.45
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total Return..................................................... (38.07)% 19.06% (6.27)% 4.26% 65.71%#
-------- -------- -------- -------- --------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)............................ $111,320 $215,542 $193,137 $212,953 $164,623
Ratio of Expenses to Average Net Assets**........................ 0.84% 0.84% 0.83% 0.95% 1.16%*
Ratio of Net Income to Average Net Assets........................ 1.95% 1.70% 2.22% 1.47% 1.27%*
Portfolio Turnover Rate.......................................... N/A 7.05%*(a) 5.95% 26.05% 2.77%*
Portfolio Turnover Rate of Master Fund Series.................... 24.00% 8.04%(b) N/A N/A N/A
</TABLE>
- ------------------------
* Annualized
# Non-annualized
** Represents the combined ratios for the respective portfolio and its
respective pro-rata share of its Master Fund Series for the period ended
November 30, 1996 and subsequent periods.
(a) Portfolio turnover calculated for the period December 1, 1995 to August 9,
1996, (through date of Transfer transaction).
(b) Items calculated for the period August 9 to November 30, 1996.
65
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE UNITED KINGDOM SMALL COMPANY PORTFOLIO
----------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............................. $ 28.47 $ 24.09 $ 23.20 $ 21.22 $ 16.38
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................................ 0.81 0.72 0.84 0.48 0.45
Net Gains or Losses on Securities (Both Realized and
Unrealized)..................................................... 1.46 5.31 1.12 2.03 5.34
-------- -------- -------- -------- --------
Total From Investment Operations................................. 2.27 6.03 1.96 2.51 5.79
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income)........................... (0.73) (0.06) (0.76) (0.53) (0.95)
Distributions (from Capital Gains)............................... (1.32) (1.59) (0.31) -- --
-------- -------- -------- -------- --------
Total Distributions.............................................. (2.05) (1.65) (1.07) (0.53) (0.95)
-------- -------- -------- -------- --------
Net Asset Value, End of Period................................... $ 28.69 $ 28.47 $ 24.09 $ 23.20 $ 21.22
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total Return..................................................... 8.45% 26.76% 8.39% 11.85% 36.42%
-------- -------- -------- -------- --------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)............................ $130,891 $166,789 $167,730 $214,113 $181,789
Ratio of Expenses to Average Net Assets**........................ 0.70% 0.73% 0.72% 0.74% 0.78%
Ratio of Net Income to Average Net Assets........................ 2.40% 2.49% 2.51% 1.95% 2.22%
Portfolio Turnover Rate.......................................... N/A 3.72%*(a) 7.82% 10.75% 8.21%
Portfolio Turnover Rate of Master Fund Series.................... 4.26% 4.55%*(b) N/A N/A N/A
</TABLE>
- ------------------------
* Annualized
** Represents the combined ratios for the respective portfolio and its
respective pro-rata share of its Master Fund Series for the period ended
November 30, 1996 and subsequent periods.
(a) Portfolio turnover calculated for the period December 1, 1995 to August 9,
1996, (through date of Transfer transaction).
(b) Items calculated for the period August 9 to November 30, 1996.
66
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE CONTINENTAL SMALL COMPANY PORTFOLIO
----------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............................. $ 15.26 $ 14.13 $ 14.63 $ 12.62 $ 11.39
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................................ 0.29 0.30 0.29 0.18 0.23
Net Gains or Losses on Securities (Both Realized and
Unrealized)..................................................... 1.55 1.58 (0.48) 2.10 1.46
-------- -------- -------- -------- --------
Total From Investment Operations................................. 1.84 1.88 (0.19) 2.28 1.69
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income)........................... (0.29) (0.02) (0.29) (0.19) (0.44)
Distributions (from Capital Gains)............................... (0.87) (0.73) (0.02) (0.07) (0.02)
Tax Return of Capital............................................ -- -- -- (0.01) --
-------- -------- -------- -------- --------
Total Distributions.............................................. (1.16) (0.75) (0.31) (0.27) (0.46)
-------- -------- -------- -------- --------
Net Asset Value, End of Period................................... $ 15.94 $ 15.26 $ 14.13 $ 14.63 $ 12.62
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total Return..................................................... 13.02% 13.96% (1.33)% 18.19% 15.27%
-------- -------- -------- -------- --------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)............................ $232,744 $299,325 $314,116 $340,992 $266,175
Ratio of Expenses to Average Net Assets**........................ 0.72% 0.73% 0.74% 0.77% 0.83%
Ratio of Net Income to Average Net Assets........................ 1.41% 1.81% 1.69% 1.21% 1.61%
Portfolio Turnover Rate.......................................... N/A 3.67%*(a) 9.79% 10.22% 8.99%
Portfolio Turnover Rate of Master Fund Series.................... 3.46% 6.69%*(b) N/A N/A N/A
</TABLE>
- ------------------------
* Annualized
** Represents the combined ratios for the respective portfolio and its
respective pro-rata shares of its Master Fund Series for the period ended
November 30, 1996 and subsequent periods.
(a) Portfolio turnover calculated for the period December 1, 1995 to August 9,
1996 (through date of Transfer transaction).
(b) Items calculated for the period August 9 to November 30, 1996.
67
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE DFA INTERNATIONAL
SMALL CAP VALUE PORTFOLIO THE EMERGING MARKETS PORTFOLIO
------------------------------ ---------------------------------------------
YEAR YEAR DEC. 30, YEAR YEAR YEAR
ENDED ENDED 1994 TO ENDED ENDED ENDED APRIL 25
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30, TO NOV.
1997 1996 1995 1997 1996 1995 30, 1994
-------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period......... $ 10.45 $ 9.68 $ 10.00 $ 11.71 $ 10.35 $ 11.30 $ 10.00
-------- -------- -------- -------- -------- -------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.12 0.11 0.05 0.12 0.09 0.06 (0.02)
Net Gains or Losses on Securities (Both
Realized and Unrealized)................... (2.19) 0.66 (0.32) (2.13) 1.27 (0.96) 1.32
-------- -------- -------- -------- -------- -------- ---------
Total From Investment Operations............. (2.07) 0.77 (0.27) (2.01) 1.36 (0.90) 1.30
-------- -------- -------- -------- -------- -------- ---------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income)....... (0.13) -- (0.04) (0.09) -- (0.05) --
Distributions (from Capital Gains)........... (0.30) -- (0.01) -- -- -- --
-------- -------- -------- -------- -------- -------- ---------
Total Distributions.......................... (0.43) -- (0.05) (0.09) -- (0.05) --
-------- -------- -------- -------- -------- -------- ---------
Net Asset Value, End of Period............... $ 7.95 $ 10.45 $ 9.68 $ 9.61 $ 11.71 $ 10.35 $ 11.30
-------- -------- -------- -------- -------- -------- ---------
-------- -------- -------- -------- -------- -------- ---------
Total Return................................. (20.60)% 8.01% (2.73)%# (17.27)% 13.18% (7.96)% 13.00%#
-------- -------- -------- -------- -------- -------- ---------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)........ $431,257 $375,488 $147,125 $212,048 $162,025 $ 49,337 $15,731
Ratio of Expenses to Average Net Assets...... 0.90% 0.99% 1.23%* 0.99%** 1.15%** 1.58% 2.43%*
Ratio of Net Income to Average Net Assets.... 1.47% 1.38% 1.43%* 1.19% 1.14% 0.98% (0.44)%*
Portfolio Turnover Rate...................... 13.63% 14.52% 1.62%* N/A N/A N/A N/A
Portfolio Turnover Rate of Master Fund
Series..................................... N/A N/A N/A 0.54% 0.37% 8.17% 1.28%*
</TABLE>
- ------------------------------
* Annualized
# Non-annualized
** Represents the combined ratios for the portfolio and its respective pro-rata
share of its Master Fund Series for the period ended November 30, 1996 and
subsequent periods.
68
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
THE DFA TWO-YEAR
GLOBAL FIXED INCOME
THE DFA ONE-YEAR FIXED INCOME PORTFOLIO(1) PORTFOLIO
---------------------------------------------------- ---------------------
YEAR YEAR YEAR YEAR YEAR YEAR FEB. 9
ENDED ENDED ENDED ENDED ENDED ENDED TO
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993 1997 1996
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 10.24 $ 10.21 $ 10.05 $ 10.28 $ 10.35 $ 10.37 $ 10.00
-------- -------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................... 0.59 0.56 0.60 0.46 0.35 0.69 0.24
Net Gains or Losses on Securities (Both
Realized and Unrealized).............. (0.01) 0.03 0.17 (0.21) 0.11 (0.12) 0.35
-------- -------- -------- -------- -------- -------- --------
Total From Investment Operations........ 0.58 0.59 0.77 0.25 0.46 0.57 0.59
-------- -------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends (from Net Investment
Income)............................... (0.59) (0.56) (0.60) (0.46) (0.38) (0.53) (0.22)
Distributions (from Capital Gains)...... -- -- (0.01) (0.02) (0.15) (0.01) --
-------- -------- -------- -------- -------- -------- --------
Total Distributions..................... (0.59) (0.56) (0.61) (0.48) (0.53) (0.54) (0.22)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period.......... $ 10.23 $ 10.24 $ 10.21 $ 10.05 $ 10.28 $ 10.40 $ 10.37
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Total Return............................ 5.84% 5.94% 7.80% 2.48% 4.62% 5.66% 6.01%#
-------- -------- -------- -------- -------- -------- --------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)... $752,237 $854,521 $704,950 $592,226 $608,400 $418,905 $319,343
Ratio of Expenses to Average Net
Assets**.............................. 0.22% 0.21% 0.20% 0.21% 0.21% 0.34%(c) 0.33%*(c)
Ratio of Net Income to Average Net
Assets................................ 5.79% 5.39% 5.86% 4.47% 3.38% 6.70% 3.10%*
Portfolio Turnover Rate................. N/A N/A N/A N/A 61.95%(a) N/A N/A
Portfolio Turnover Rate of Master Fund
Series................................ 82.84% 95.84% 81.31% 140.82% 111.67%*(b) 119.27% 87.07%*
</TABLE>
- ------------------------------
(1) Restated to reflect 900% stock dividend as of January 2, 1996.
* Annualized
# Non-annualized
** Represents the combined ratio for the portfolio and its pro-rata share of
its Master Fund Series.
(a) Portfolio turnover calculated for period December 1, 1992 to February 7,
1993 (through date of Exchange transaction).
(b) Master Fund Series turnover calculated for the period February 8 to November
30, 1993.
69
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE DFA FIVE-YEAR GOVERNMENT PORTFOLIO
----------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $ 10.42 $ 10.05 $ 9.75 $ 10.55 $ 10.88
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................. 0.59 0.65 0.59 0.48 0.47
Net Gains or Losses on Securities (Both Realized
and Unrealized)................................. (0.06) 0.09 0.30 (0.80) 0.49
---------- ---------- ---------- ---------- ----------
Total From Investment Operations.................. 0.53 0.74 0.89 (0.32) 0.96
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income)............ (0.59) (0.37) (0.59) (0.48) (0.73)
Distributions (from Capital Gains)................ -- -- -- -- (0.56)
---------- ---------- ---------- ---------- ----------
Total Distributions............................... (0.59) (0.37) (0.59) (0.48) (1.29)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period.................... $ 10.36 $ 10.42 $ 10.05 $ 9.75 $ 10.55
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total Return...................................... 5.39% 7.51% 9.35% (3.13)% 9.46%
---------- ---------- ---------- ---------- ----------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)............. $ 204,377 $ 174,386 $ 300,921 $ 235,554 $ 164,504
Ratio of Expenses to Average Net Assets........... 0.29% 0.30% 0.28% 0.31% 0.31%
Ratio of Net Income to Average Net Assets......... 5.95% 5.63% 6.14% 5.08% 4.75%
Portfolio Turnover Rate........................... 27.78% 211.97% 398.09% 52.39% 152.10%
</TABLE>
- ------------------------
Restated to reflect a 900% stock dividend as of January 2, 1996.
70
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
THE DFA FIVE-YEAR GLOBAL FIXED INCOME PORTFOLIO
----------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $ 11.04 $ 10.51 $ 9.81 $ 10.56 $ 10.36
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................. 0.48 0.50 0.39 0.35 0.40
Net Gains or Losses on Securities (Both Realized
and Unrealized)................................. 0.33 0.61 1.08 (0.65) 0.73
---------- ---------- ---------- ---------- ----------
Total From Investment Operations.................. 0.81 1.11 1.47 (0.30) 1.13
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income)............ (0.88) (0.58) (0.77) (0.44) (0.45)
Distributions (from Capital Gains................. (0.09) -- -- (0.01) (0.48)
---------- ---------- ---------- ---------- ----------
Total Distributions............................... (0.97) (0.58) (0.77) (0.45) (0.93)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period.................... $ 10.88 $ 11.04 $ 10.51 $ 9.81 $ 10.56
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total Return...................................... 7.87% 11.13% 15.23% (2.91)% 11.42%
---------- ---------- ---------- ---------- ----------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)............. $ 250,078 $ 165,772 $ 208,166 $ 135,529 $ 101,528
Ratio of Expenses to Average Net Assets........... 0.42% 0.46% 0.46% 0.49% 0.52%
Ratio of Net Income to Average Net Assets......... 4.50% 4.88% 5.80% 5.75% 5.09%
Portfolio Turnover Rate........................... 95.12% 97.78% 130.41% 113.55% 139.57%
</TABLE>
- ------------------------
Restated to reflect a 900% stock dividend as of January 2, 1996.
71
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
FINANCIAL HIGHLIGHTS
-------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
EMERGING EMERGING
THE DFA INTERMEDIATE GOVERNMENT FIXED INCOME PORTFOLIO MARKETS MARKETS
VALUE SMALL CAP
----------------------------------------------------------- ----------- -----------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993 1998 1998
--------- --------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 11.22 $ 11.24 $ 10.22 $ 11.59 $ 11.20
--------- --------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................... 0.66 0.65 0.70 0.69 0.55
Net Gain or Losses on Securities (Both
Realized and Unrealized).............. 0.06 (0.13) 1.11 (1.22) 0.66
--------- --------- ----------- ----------- ----------- ----------- -----------
Total From Investment Operations........ 0.72 0.52 1.81 (0.53) 1.21
--------- --------- ----------- ----------- ----------- ----------- -----------
LESS DISTRIBUTIONS
Dividends (from Net Investment
Income)............................... (0.66) (0.50) (0.70) (0.68) (0.73)
Distributions (from Capital Gains)...... -- (0.04) (0.09) (0.16) (0.09)
--------- --------- ----------- ----------- ----------- ----------- -----------
Total Distributions..................... (0.66) (0.54) (0.79) (0.84) (0.82)
--------- --------- ----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period.......... $ 11.28 $ 11.22 $ 11.24 $ 10.22 $ 11.59
--------- --------- ----------- ----------- ----------- ----------- -----------
--------- --------- ----------- ----------- ----------- ----------- -----------
Total Return............................ 6.75% 4.98% 18.04% (4.72)% 12.84%
--------- --------- ----------- ----------- ----------- ----------- -----------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)... $ 136,555 $ 107,944 $ 78,087 $ 60,827 $ 53,051
Ratio of Expenses to Average Net
Assets................................ 0.25% 0.26% 0.27% 0.29% 0.32%
Ratio of Net Income to Average Net
Assets................................ 6.20% 6.22% 6.44% 6.45% 6.41%
Portfolio Turnover Rate................. 24.06% 30.84% 40.79% 27.15% 16.91%
</TABLE>
- ------------------------------
Restated to reflect 900% stock dividend as of January 2, 1996
72
<PAGE>
SERVICE PROVIDERS
<TABLE>
<S> <C>
INVESTMENT ADVISOR CUSTODIAN--DOMESTIC
DIMENSIONAL FUND ADVISORS INC. PNC BANK, N.A.
1299 Ocean Avenue, 11th Floor 200 Stevens Drive, Airport Business Center
Santa Monica, CA 90401 Lester, PA 19113
Tel. No. (310) 395-8005
SUB-ADVISORS ACCOUNTING SERVICES, DIVIDEND DISBURSING
DIMENSIONAL FUND ADVISORS LTD. AND TRANSFER AGENT
14 Berkeley Street PFPC INC.
London W1X 5AD 400 Bellevue Parkway
England Wilmington, DE 19809
Tel. No. (071) 495-2343
DFA AUSTRALIA LIMITED LEGAL COUNSEL
Suite 2001, Level 20 Gateway STRADLEY, RONON, STEVENS & YOUNG, LLP
1 MacQuarie Place 2600 One Commerce Square
Sydney, New South Wales 2000 Philadelphia, PA 19103-7098
Australia
Tel. No. (612) 9 247-7822
CUSTODIANS--INTERNATIONAL INDEPENDENT ACCOUNTANTS
CITIBANK, N.A. PRICEWATERHOUSECOOPERS LLP
111 Wall Street 2400 Eleven Penn Center
New York, NY 10005 Philadelphia, PA 19103
THE CHASE MANHATTAN BANK
4 Chase Metrotech Center
Brooklyn, NY 11245
</TABLE>
73
<PAGE>
OTHER AVAILABLE INFORMATION
You can find more information about the Funds and their Portfolios in the
Funds' Statement of Additional Information ("SAI") and Annual and Semi-Annual
Reports.
STATEMENT OF ADDITIONAL INFORMATION. The SAI supplements, and is
technically part of, this Prospectus. It includes an expanded discussion of
investment practices, risks, and fund operations.
ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. These reports focus on
Portfolio holdings and performance. The Annual Report also discusses the market
conditions and investment strategies that significantly affected the Portfolios
in their last fiscal year.
HOW TO GET THESE AND OTHER MATERIALS ABOUT THE FUNDS:
- Your investment advisor -- you are a client of an investment advisor who
has invested in the Portfolios on your behalf.
- The Fund -- you represent an institutional investor, registered investment
advisor or other qualifying investor. Call collect at (310) 395-8005.
- Access them on the SEC's Internet site--http://www.sec.gov.
- Review and copy them at the SEC's Public Reference Room in Washington D.C.
- Request copies from the Public Reference Section of the SEC, Washington,
D.C. 20549 (you will be charged a copying fee).
DIMENSIONAL FUND ADVISORS INC.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
(310) 395-8005
DFA INVESTMENT DIMENSIONS GROUP INC.--REGISTRATION NO. 811-3258
DIMENSIONAL INVESTMENT GROUP INC.--REGISTRATION NO. 811-6067
74
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
DIMENSIONAL INVESTMENT GROUP INC.
1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA 90401
TELEPHONE: (310) 395-8005
STATEMENT OF ADDITIONAL INFORMATION
MARCH 22, 1999
DFA Investment Dimensions Group Inc. ("DFAIDG") is an open-end management
investment company that offers thirty-four series of shares. Dimensional
Investment Group Inc. ("DIG") is an open-end management investment company that
offers thirteen series of shares. This statement of additional information
("SAI") relates to twenty-seven series of DFAIDG and one series of DIG
(individually, a "Portfolio" and collectively, the "Portfolios"):
DOMESTIC EQUITY PORTFOLIOS
U.S. Large Company Portfolio (FEEDER) U.S. 6-10 Value Portfolio (FEEDER)
Enhanced U.S. Large Company Portfolio U.S. 6-10 Small Company Portfolio
(FEEDER) (FEEDER)
U.S. Large Cap Value Portfolio Tax Managed U.S. 6-10 Small Company
(FEEDER) Portfolio
Tax Managed U.S. Large Cap Portfolio U.S. 9-10 Small Company Portfolio
(FEEDER) (FEEDER)
U.S. 4-10 Value Portfolio (FEEDER) DFA Real Estate Securities Portfolio
Tax Managed U.S. 4-10 Value Portfolio
INTERNATIONAL EQUITY PORTFOLIOS
Large Cap International Portfolio United Kingdom Small Company Portfolio
(FEEDER)
DFA International Value Portfolio Continental Small Company Portfolio
(FEEDER) (FEEDER)
Tax Managed DFA International Value DFA International Small Cap Value
Portfolio Portfolio
International Small Company Portfolio Emerging Markets Portfolio (FEEDER)
Japanese Small Company Portfolio Emerging Markets Value Portfolio
(FEEDER) (FEEDER)
Pacific Rim Small Company Portfolio Emerging Markets Small Cap Portfolio
(FEEDER) (FEEDER)
FIXED INCOME PORTFOLIOS
DFA One-Year Fixed Income Portfolio DFA Five-Year Global Fixed Income
(FEEDER) Portfolio
DFA Two-Year Global Fixed Income DFA Intermediate Government Fixed Income
Portfolio (FEEDER) Portfolio
DFA Five-Year Government Portfolio
This statement of additional information is not a prospectus but should be
read in conjunction with the Portfolios' prospectus dated March 22, 1999, as
amended from time to time. The audited financial statements and financial
highlights of the Funds are incorporated by reference from each Fund's annual
report to shareholders. The prospectus and the annual reports can be obtained by
writing to the above address or by calling the above telephone number.
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C>
PORTFOLIO CHARACTERISTICS AND POLICIES.........................................3
BROKERAGE COMMISSIONS..........................................................3
INVESTMENT LIMITATIONS.........................................................5
OPTIONS ON STOCK INDICES.......................................................9
FUTURES CONTRACTS.............................................................11
CASH MANAGEMENT PRACTICES.....................................................12
CONVERTIBLE DEBENTURES........................................................13
PORTFOLIO TURNOVER RATES......................................................13
DIRECTORS AND OFFICERS........................................................14
SERVICES TO THE FUNDS.........................................................16
ADVISORY FEES.................................................................20
TOTAL EXPENSES................................................................22
SHAREHOLDER RIGHTS............................................................23
PRINCIPAL HOLDERS OF SECURITIES...............................................23
PURCHASE OF SHARES............................................................27
REDEMPTION AND TRANSFER OF SHARES.............................................28
TAXATION OF THE PORTFOLIOS....................................................28
CALCULATION OF PERFORMANCE DATA...............................................30
FINANCIAL STATEMENTS..........................................................32
</TABLE>
2
<PAGE>
PORTFOLIO CHARACTERISTICS AND POLICIES
Each of the Portfolios identified as a "Feeder" (a "Feeder Portfolio") on
the cover page of this SAI seeks to achieve its investment objective by
investing all of its investable assets in a corresponding series of the DFA
Investment Trust Company (the "Trust") or in the case of the Emerging Markets
Value Portfolio, in the Dimensional Emerging Markets Value Fund Inc. The series
of the Trust and Dimensional Emerging Markets Value Fund Inc. are referred to as
the "Master Funds." Dimensional Fund Advisors Inc. (the "Advisor") serves as
investment advisor to each of the Portfolios, except the Feeder Portfolios and
each Master Fund, and provides administrative services to the Feeder Portfolios
and International Small Company Portfolio. The International Small Company
Portfolio seeks to achieve its investment objective by investing in up to four
Master Funds (the "International Master Funds"). Capitalized terms not otherwise
defined in this SAI have the meaning assigned to them in the prospectus.
The following information supplements the information set forth in the
prospectus. Unless otherwise indicated, the following information applies to all
of the Portfolios and Master Funds, including the Feeder Portfolios, through
their investment in the Master Funds.
Each of the Portfolios and the Master Funds, other than the Five-Year
Global Fixed Income Portfolio, are diversified under the federal securities laws
and regulations.
Because the structure of the Domestic Equity and International Equity
Portfolios is based on the relative market capitalizations of eligible holdings,
it is possible that the Portfolios might include at least 5% of the outstanding
voting securities of one or more issuers. In such circumstances, the Portfolio
and the issuer would be deemed affiliated persons and certain requirements under
the federal securities laws and regulations regulating dealings between mutual
funds and their affiliates might become applicable. However, based on the
present capitalizations of the groups of companies eligible for inclusion in the
Portfolios and the anticipated amount of a Portfolio's assets intended to be
invested in such securities, management does not anticipate that a Portfolio
will include as much as 5% of the voting securities of any issuer.
BROKERAGE COMMISSIONS
The following table depicts brokerage commissions paid by the Portfolios.
For the Feeder Portfolios, the amounts include commissions paid by the
corresponding Master Fund.
BROKERAGE COMMISSIONS
FISCAL YEARS ENDED NOVEMBER 30, 1997, 1996 AND 1995
[BROKERAGE COMMISSIONS - TO BE UPDATED IN MARCH]
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
U.S. Large Company Series......................................... $ 40,689 $ 72,262 $ 15,289
Enhanced U.S. Large Company Series................................ 10,284 1,650 -0-
U.S. Large Cap Value Series....................................... 929,005 934,452 410,503
U.S. 6-10 Value Series............................................ 4,591,853 2,754,009 1,027,015
U.S. 6-10 Small Company Series.................................... 855,652 473,887 361,784
U.S. 9-10 Small Company Portfolio................................. 1,641,020 1,704,251 1,120,450]
DFA Real Estate Securities Portfolio.............................. 53,646 39,007 26,084
Large Cap International Portfolio................................. 9,322 42,633 61,048
DFA International Value Portfolio................................. 1,133,787 1,251,242 542,306
Japanese Small Company Series..................................... 602,098 466,795 768,765
Pacific Rim Small Company Series.................................. 485,846 181,812 142,227
United Kingdom Small Company Series............................... 68,028 86,854 236,754
Continental Small Company Series.................................. 145,195 214,631 244,705
DFA International Small Cap Value Portfolio....................... 921,326 1,472,685 745,562
Emerging Markets Series........................................... 559,853 437,088 166,601
Emerging Markets Value Portfolio.................................. 79,005 14,699 85,081
----------- ----------- ----------
TOTAL............................................................. $12,126,609 $10,147,957 $5,869,093
</TABLE>
3
<PAGE>
The substantial increases or decreases in the amount of brokerage
commissions paid by certain Portfolios from year to year indicated in the
foregoing table resulted from increases or decreases in the amount of securities
that were bought and sold by those Portfolios.
Please note that while the following discussion relates to the policies of
the Portfolios with respect to brokerage commissions, it should be understood
that, with respect to a Feeder Portfolio and International Small Company
Portfolio, the discussion applies to the Master Fund in which the Feeder
Portfolio invests all of its assets and the International Master Funds,
respectively.
The Fixed Income Portfolios acquire and sell securities on a net basis with
dealers which are major market makers in such securities. The Investment
Committee of the Advisor selects dealers on the basis of their size, market
making and credit analysis ability. When executing portfolio transactions, the
Advisor seeks to obtain the most favorable price for the securities being traded
among the dealers with whom the Fixed Income Portfolios effect transactions.
Portfolio transactions will be placed with a view to receiving the best
price and execution. The Portfolios will seek to acquire and dispose of
securities in a manner which would cause as little fluctuation in the market
prices of stocks being purchased or sold as possible in light of the size of the
transactions being effected, and brokers will be selected with this goal in
view. The Advisor monitors the performance of brokers which effect transactions
for the Portfolios to determine the effect that their trading has on the market
prices of the securities in which they invest. The Advisor also checks the rate
of commission being paid by the Portfolios to their brokers to ascertain that
they are competitive with those charged by other brokers for similar services.
Dimensional Fund Advisors Ltd. performs these services for the United Kingdom
and Continental Small Company Series and DFA Australia Limited performs these
services for the Japanese and Pacific Rim Small Company Series. Transactions
also may be placed with brokers who provide the Advisor or the sub-advisors with
investment research, such as reports concerning individual issuers, industries
and general economic and financial trends and other research services.
The OTC companies eligible for purchase by the U.S. 9-10 Small Company
Portfolio, the U.S. 6-10 Small Company Portfolio, the U.S. 6-10 Value Portfolio,
the U.S. 4-10 Value Portfolio and the DFA Real Estate Securities Portfolio, the
Tax Managed U.S. 4-10 Value Portfolio, the Tax Managed U.S. 6-10 Small Company
Portfolio and the Tax Managed U.S. Large Cap Value Series are thinly traded
securities. Therefore, the Advisor believes it needs maximum flexibility to
effect OTC trades on a best execution basis. To that end, the Advisor places buy
and sell orders with market makers, third market brokers, Instinet and with
brokers on an agency basis when the Advisor determines that the securities may
not be available from other sources at a more favorable price. Third market
brokers enable the Advisor to trade with other institutional holders directly on
a net basis. This allows the Advisor to sometimes trade larger blocks than would
be possible by going through a single market maker.
Instinet is an electronic information and communication network whose
subscribers include most market makers as well as many institutions. Instinet
charges a commission for each trade executed on its system. On any given trade,
the U.S. 9-10 Small Company Portfolio, the U.S. 6-10 Small Company Portfolio,
the Tax Managed U.S. 6-10 Small Company Portfolio, the Value Portfolios and the
DFA Real Estate Securities Portfolio, by trading through Instinet, would pay a
spread to a dealer on the other side of the trade plus a commission to Instinet.
However, placing a buy (or sell) order on Instinet communicates to many
(potentially all) market makers and institutions at once. This can create a more
complete picture of the market and thus increase the likelihood that the
Portfolios can effect transactions at the best available prices.
During the fiscal year 1997, the Portfolios or, in the case of a Feeder
Portfolio, its corresponding Master Fund, paid commissions for securities
transactions to brokers which provided market price monitoring services, market
studies and research services to the Portfolios or Master Funds as follows:
4
<PAGE>
[TO BE UPDATED IN MARCH]
<TABLE>
<CAPTION>
VALUE OF
SECURITIES BROKERAGE
TRANSACTIONS COMMISSIONS
------------ -----------
<S> <C> <C>
U.S. Large Cap Value ....................... $ 78,961,638 $ 122,527
U.S. 6-10 Value ............................ 453,009,643 1,899,654
U.S. 6-10 Small Company .................... 153,272,761 486,637
U.S. 9-10 Small Company .................... 207,113,667 742,872
DFA Real Estate Securities ................. 16,165,969 25,440
DFA InternationalValue ..................... 4,623,558 13,922
Japanese Small Company ..................... 40,864,513 253,707
Pacific Rim Small Company .................. 8,885,178 35,584
DFA International Small Cap Value .......... 15,496,595 84,031
Emerging Markets Value ..................... -0- -0-
------------ ------------
TOTAL ...................................... $978,393,522 $ 3,664,374
</TABLE>
The investment advisory agreements permit the Advisor knowingly to pay
commissions on these transactions which are greater than another broker, dealer
or exchange member might charge if the Advisor, in good faith, determines that
the commissions paid are reasonable in relation to the research or brokerage
services provided by the broker or dealer when viewed in terms of either a
particular transaction or the Advisor's overall responsibilities to the Funds.
Research services furnished by brokers through whom securities transactions are
effected may be used by the Advisor in servicing all of its accounts and not all
such services may be used by the Advisor with respect to the Portfolios. Subject
to obtaining best price and execution, transactions may be placed with brokers
that have assisted in the sale of the Portfolios' shares.
Brokerage commissions for transactions in securities listed on the Tokyo
Stock Exchange ("TSE") and other Japanese securities exchanges are fixed. Under
the current regulations of the TSE and the Japanese Ministry of Finance, member
and non-member firms of Japanese exchanges are required to charge full
commissions to all customers other than banks and certain financial
institutions, but members and licensed non-member firms may confirm transactions
to banks and financial institution affiliates located outside Japan with
institutional discounts on brokerage commissions. The Japanese Small Company
Series has been able to avail itself of institutional discounts. The Series'
ability to effect transactions at a discount from fixed commission rates depends
on a number of factors, including the size of the transaction, the relation
between the cost to the member or the licensed non-member firm of effecting such
transaction and the commission receivable, and the law, regulation and practice
discussed above. There can be no assurance that the Series will continue to be
able to realize the benefit of discounts from fixed commissions.
A Feeder Portfolio will not incur any brokerage or other costs in
connection with its purchase or redemption of shares of the corresponding Master
Fund.
INVESTMENT LIMITATIONS
Each of the Portfolios has adopted certain limitations which may not be
changed with respect to any Portfolio without the approval of a majority of the
outstanding voting securities of the Portfolio. A "majority" is defined as the
lesser of: (1) at least 67% of the voting securities of the Portfolio (to be
affected by the proposed change) present at a meeting, if the holders of more
than 50% of the outstanding voting securities of the Portfolio are present or
represented by proxy, or (2) more than 50% of the outstanding voting securities
of such Portfolio.
The Portfolios will not:
(1) invest in commodities or real estate, including limited
partnership interests therein, except the DFA Real Estate
Securities Portfolio, although they may purchase and sell
securities of companies which deal in real estate and securities
which are secured by interests in real estate, and all Portfolios
except the U.S. 9-10 and 6-10 Small Company Portfolios, the DFA
One-Year Fixed Income Portfolio and the DFA Five-Year Government
Portfolio may purchase or sell financial futures contracts and
options
5
<PAGE>
thereon; and the Enhanced U.S. Large Company Portfolio may
purchase, sell and enter into indices-related futures contracts,
options on such futures contracts, securities-related swap
agreements and other derivative instruments;
(2) make loans of cash, except through the acquisition of repurchase
agreements and obligations customarily purchased by institutional
investors; and, with respect to the Emerging Markets Value
Portfolio, except through the acquisition of publicly-traded debt
securities and short-term money instruments;
(3) as to 75% of the total assets of a Portfolio, invest in the
securities of any issuer (except obligations of the U.S.
Government and its instrumentalities) if, as a result, more than
5% of the Portfolio's total assets, at market, would be invested
in the securities of such issuer; provided that this limitation
applies to 100% of the total assets of the U.S. 9-10 Small
Company Portfolio and the DFA Five-Year Global Fixed Income
Portfolio is not subject to this limitation;
(4) purchase or retain securities of an issuer if those officers and
directors of the Fund or the Advisor owning more than 1/2 of 1%
of such securities together own more than 5% of such securities;
provided that the U.S. 4-10 Value, Tax Managed U.S. 4-10 Value,
Tax Managed U.S. 6-10 Small Company, Tax Managed U.S. Large Cap
Value, Tax Managed DFA International Value, and Emerging Markets
Value Portfolios are not subject to this limitation;
(5) borrow, except from banks and as a temporary measure for
extraordinary or emergency purposes and then, in no event, in
excess of 5% of a Portfolio's gross assets valued at the lower of
market or cost; provided that each Portfolio, other than the U.S.
9-10 Small Company, Japanese Small Company, DFA One-Year Fixed
Income, DFA Intermediate Government Fixed Income, DFA Five-Year
Government and Emerging Markets Value Portfolios, may borrow
amounts not exceeding 33% of their net assets from banks and
pledge not more than 33% of such assets to secure such loans; and
with respect to the Emerging Markets Value Portfolio, borrow,
except in connection with a foreign currency transaction, the
settlement of a portfolio trade, as a temporary measure for
extraordinary or emergency purposes, including to meet redemption
requests, and, in no event in excess of 33% of the Fund's net
assets valued at market;
(6) pledge, mortgage, or hypothecate any of its assets to an extent
greater than 10% of its total assets at fair market value, except
as described in (5) above; provided that the U.S. 4-10 Value, Tax
Managed U.S. 4-10 Value, Tax Managed U.S. 6-10 Small Company, Tax
Managed U.S. Large Cap Value, Tax Managed DFA International
Value, and Emerging Markets Value Portfolios are not subject to
this limitation;
(7) invest more than 10% of the value of the Portfolio's total assets
in illiquid securities, which include certain restricted
securities, repurchase agreements with maturities of greater than
seven days, and other illiquid investments; provided that the
Enhanced U.S. Large Company, U.S. 4-10 Value, Tax Managed U.S.
4-10 Value, Tax Managed U.S. 6-10 Small Company, Tax Managed U.S.
Large Cap Value, Tax Managed DFA International Value, DFA
Two-Year Global Fixed Income, International Small Company,
Emerging Markets Small Cap and Emerging Markets Value Portfolios
are not subject to this limitation and the DFA Real Estate
Securities Portfolio, the U.S. 6-10 Value Portfolio, the U.S.
Large Cap Value Portfolio, the DFA International Value Portfolio,
the U.S. 6-10 Small Company Portfolio, the Emerging Markets
Portfolio and DFA International Small Cap Value Portfolio may
invest not more than 15% of their total assets in illiquid
securities;
(8) engage in the business of underwriting securities issued by
others;
6
<PAGE>
(9) invest for the purpose of exercising control over management of
any company; provided that the U.S. 9-10 Small Company, the U.S.
4-10 Value, Tax Managed U.S. 4-10 Value, Tax Managed U.S. 6-10
Small Company, Tax Managed U.S. Large Cap Value and Tax Managed
DFA International Value Portfolios are not subject to this
limitation;
(10) invest its assets in securities of any investment company, except
in connection with a merger, acquisition of assets, consolidation
or reorganization; provided that (a) the DFA Real Estate
Securities Portfolio may invest in a REIT that is registered as
an investment company; (b) each of the U.S. 4-10 Value, Enhanced
U.S. Large Company, Emerging Markets, Emerging Markets Small Cap,
Emerging Markets Value, International Small Company, U.S. 9-10
Small Company, Tax Managed 4-10 Value, Tax Managed U.S. 6-10
Small Company, Tax Managed U.S. Large Cap Value and Tax Managed
DFA International Value Portfolios may invest its assets in
securities of investment companies and units of such companies
such as, but not limited to, S&P Depository Receipts;
(11) invest more than 5% of its total assets in securities of
companies which have (with predecessors) a record of less than
three years' continuous operation; except this limitation does
not apply to the U.S. 9-10 Small Company, U.S. 4-10 Value, Tax
Managed 4-10 Value, Tax Managed U.S. 6-10 Small Company, Tax
Managed U.S. Large Cap Value, Tax Managed DFA International
Value, Emerging Markets Value and DFA Real Estate Securities
Portfolios;
(12) acquire any securities of companies within one industry if, as a
result of such acquisition, more than 25% of the value of the
Portfolio's total assets would be invested in securities of
companies within such industry; except that (a) DFA One-Year
Fixed Income and DFA Two-Year Global Fixed Income Portfolios
shall invest more than 25% of its total assets in obligations of
banks and bank holding companies in the circumstances described
in the prospectus under "Investments in the Banking Industry" and
as otherwise described under "Portfolio Strategy;" and (b) DFA
Real Estate Securities Portfolio shall invest more than 25% of
its total assets in securities of companies in the real estate
industry;
(13) write or acquire options (except as described in (1) above) or
interests in oil, gas or other mineral exploration, leases or
development programs, except that the Enhanced U.S. Large
Company, the U.S. 4-10 Value, Tax Managed 4-10 Value, Tax Managed
U.S. 6-10 Small Company, Tax Managed U.S. Large Cap Value, Tax
Managed DFA International Value, and Emerging Markets Value
Portfolios are not subject to these limitations;
(14) purchase warrants, however, the Domestic and International Equity
Portfolios may acquire warrants as a result of corporate actions
involving their holdings of other equity securities; provided
that the U.S. 4-10 Value, Tax Managed 4-10 Value, Tax Managed
U.S. 6-10 Small Company, Tax Managed U.S. Large Cap Value, Tax
Managed DFA International Value, and Emerging Markets Value
Portfolios are not subject to this limitation;
(15) purchase securities on margin or sell short; provided that the
U.S. 4-10 Value, Tax Managed 4-10 Value, Tax Managed U.S. 6-10
Small Company, Tax Managed U.S. Large Cap Value, Tax Managed DFA
International Value, and Emerging Markets Value Portfolios are
not subject to the limitation on selling securities short;
(16) acquire more than 10% of the voting securities of any issuer;
provided that (a) this limitation applies only to 75% of the
assets of the DFA Real Estate Securities Portfolio, the Value
Portfolios, the Emerging Markets Portfolio, the Emerging Markets
Small Cap Portfolio, the DFA International Small Cap Value
Portfolio and the Emerging Markets Value Portfolio; and (b) the
Tax Managed U.S. 6-10 Small Company, Tax Managed DFA
International Value and the U.S. 9-10 Small Company Portfolios
are not subject to this limitation; or
7
<PAGE>
(17) issue senior securities (as such term is defined in Section 18(f)
of the Investment Company Act of 1940 (the "1940 Act")), except
to the extent permitted by the 1940 Act.
The investment limitations described in (3), (4), (7), (9), (10), (11),
(12) and (16) above do not prohibit each Feeder Portfolio and International
Small Company Portfolio from investing all or substantially all of its assets in
the shares of another registered, open-end investment company, such as the
Master Funds or the International Master Funds, respectively. The investment
limitations of each Master Fund are the same as those of the corresponding
Feeder Portfolio.
The investment limitations described in (1) and (15) above do not prohibit
each Portfolio that may purchase or sell financial futures contracts and options
thereon from making margin deposits to the extent permitted under applicable
regulations; and the investment limitations described in (1), (13) and (15)
above do not prohibit the Enhanced U.S. Large Company Portfolio from: (i) making
margin deposits in connection with transactions in options; and (ii) maintaining
a short position, or purchasing, writing or selling puts, calls, straddles,
spreads or combinations thereof in connection with transactions in options,
futures, and options on futures and transactions arising under swap agreements
or other derivative instruments.
For purposes of (5) above, the Emerging Markets Portfolio, Emerging Markets
Small Cap Portfolio and Emerging Markets Value Portfolio (indirectly through
their investment in the corresponding Master Funds) may borrow in connection
with a foreign currency transaction or the settlement of a portfolio trade. The
only type of borrowing contemplated thereby is the use of a letter of credit
issued on such Master Funds' behalf in lieu of depositing initial margin in
connection with currency futures contracts, and the Master Funds have no present
intent to engage in any other types of borrowing transactions under this
authority.
Although (2) above prohibits cash loans, the Portfolios are authorized to
lend portfolio securities. Inasmuch as the Feeder Portfolios and International
Small Company Portfolio will only hold shares of certain Master Funds, these
Portfolios do not intend to lend those shares.
For the purposes of (7) above, DFA One-Year Fixed Income Portfolio, DFA
Two-Year Global Fixed Income Portfolio (indirectly through their investment in
the corresponding Master Funds) and DFA Five-Year Global Fixed Income Portfolio
may invest in commercial paper that is exempt from the registration requirements
of the Securities Act of 1933 (the "1933 Act") subject to the requirements
regarding credit ratings stated in the prospectus under "Description of
Investments." Further, pursuant to Rule 144A under the 1933 Act, the Portfolios
may purchase certain unregistered (i.e. restricted) securities upon a
determination that a liquid institutional market exists for the securities. If
it is decided that a liquid market does exist, the securities will not be
subject to the 10% or 15% limitation on holdings of illiquid securities stated
in (7) above. While maintaining oversight, the Board of Directors has delegated
the day-to-day function of making liquidity determinations to the Advisor. For
Rule 144A securities to be considered liquid, there must be at least two dealers
making a market in such securities. After purchase, the Board of Directors and
the Advisor will continue to monitor the liquidity of Rule 144A securities.
For purposes of (12) above, the DFA Five-Year Global Fixed Income Portfolio
will not concentrate its investments in a single industry. This means that it
will not invest more than 25% of its assets in securities of companies in any
one industry. Management does not consider securities which are issued by the
U.S. government or its agencies or instrumentalities to be investments in an
"industry." However, management currently considers securities issued by a
foreign government (but not the U.S. Government or its agencies or
instrumentalities) to be subject to the 25% limitation. Thus, not more than 25%
of the Portfolio's total assets will be invested in securities issued by any one
foreign government or supranational organization. The Portfolio might invest in
certain securities issued by companies, such as Caisse Nationale des
Telecommunication, a communications company, whose obligations are guaranteed by
a foreign government. Management considers such a company to be within a
particular industry (in this case, the communications industry) and, therefore,
the Portfolio will invest in the securities of such a company only if it can do
so under the Portfolio's policy of not being concentrated in any single
industry.
Although not a fundamental policy subject to shareholder approval: (1) the
Large Cap International and Small Company Portfolios, including the U.S. 6-10
Small Company, Tax Managed U.S. 6-10 Small Company,
8
<PAGE>
Japanese Small Company, Pacific Rim Small Company, United Kingdom Small Company
and Continental Small Company Portfolios indirectly through their investment in
the Master Funds, do not intend to purchase interests in any real estate
investment trust; and (2) the Enhanced U.S. Large Company, U.S. 4-10 Value, Tax
Managed 4-10 Value, Tax Managed U.S. 6-10 Small Company, Tax Managed U.S. Large
Cap Value, Tax Managed DFA International Value, DFA Two-Year Global Fixed
Income, International Small Company, Emerging Markets Small Cap and Emerging
Markets Value Portfolios (directly or indirectly through their investment in the
Master Funds) do not intend to invest more than 15% of their net assets in
illiquid securities.
The International Equity, DFA Two-Year Global Fixed Income and DFA
Five-Year Global Fixed Income Portfolios (directly or indirectly through their
investment in the Master Funds) may acquire and sell forward foreign currency
exchange contracts in order to hedge against changes in the level of future
currency rates. Such contracts involve an obligation to purchase or sell a
specific currency at a future date at a price set in the contract. While each
Value Portfolio, the DFA International Value Portfolio, Tax Managed DFA
International Value Portfolio and the DFA Real Estate Securities Portfolio
(directly or indirectly through their investment in the Master Funds), have
retained authority to buy and sell financial futures contracts and options
thereon, they have no present intention to do so.
Notwithstanding any of the above investment restrictions, the Emerging
Markets Series, the Emerging Markets Small Cap Series and the Dimensional
Emerging Markets Value Fund may establish subsidiaries or other similar vehicles
for the purpose of conducting their investment operations in Approved Markets,
if such subsidiaries or vehicles are required by local laws or regulations
governing foreign investors such as the Master Funds or the Dimensional Emerging
Markets Value Fund or whose use is otherwise considered by the Master Funds or
the Dimensional Emerging Markets Value Fund to be advisable. Each Master Fund or
the Dimensional Emerging Markets Value Fund would "look through" any such
vehicle to determine compliance with its investment restrictions.
Subject to future regulatory guidance, for purposes of those investment
limitations identified above that are based on total assets, "total assets"
refers to the assets that the Portfolios and Master Funds own, and does not
include assets which the Portfolios and Master Funds do not own but over which
they have effective control. For example, when applying a percentage investment
limitation that is based on total assets, a Portfolio or Master Fund will
exclude from its total assets those assets which represent collateral received
by the Portfolio or Master Fund for its securities lending transactions.
Unless otherwise indicated, all limitations applicable to the Portfolios'
and Master Funds' investments apply only at the time that a transaction is
undertaken. Any subsequent change in a rating assigned by any rating service to
a security or change in the percentage of a Portfolio's or Master Funds' assets
invested in certain securities or other instruments resulting from market
fluctuations or other changes in a Portfolio's or Master Fund's total assets
will not require a Portfolio or Master Fund to dispose of an investment until
the Advisor determines that it is practicable to sell or closeout the investment
without undue market or tax consequences. In the event that ratings services
assign different ratings to the same security, the Advisor will determine which
rating it believes best reflects the security's quality and risk at that time,
which may be the higher of the several assigned ratings.
OPTIONS ON STOCK INDICES
The Enhanced U.S. Large Company Series may purchase and sell options on
stock indices. With respect to the sale of call options on stock indices,
pursuant to published positions of the Securities and Exchange Commission (the
"Commission"), the Enhanced U.S. Large Company Series will either (1) maintain
with its custodian liquid assets equal to the contract value (less any margin
deposits); (2) hold a portfolio of stocks substantially replicating the movement
of the index underlying the call option; or (3) hold a separate call on the same
index as the call written where the exercise price of the call held is (a) equal
to or less than the exercise price of the call written, or (b) greater than the
exercise price of the call written, provided the difference is maintained by the
Series in liquid assets in a segregated account with its custodian. With respect
to the sale of put options on stock indices, pursuant to published Commission
positions, the Enhanced U.S. Large Company Series will either (1) maintain
liquid assets equal to the exercise price (less any margin deposits) in a
segregated account with its custodian; or (2) hold a put on the same index as
the put written where the exercise price of the put held is (a) equal to or
greater than the exercise price of the put written, or (b) less than the
exercise
9
<PAGE>
price of the put written, provided an amount equal to the difference is
maintained by the Series in liquid assets in a segregated account with its
custodian.
Prior to the earlier of exercise or expiration, an option may be closed out by
an offsetting purchase or sale of an option of the same series (type, exchange,
underlying index, exercise price, and expiration). There can be no assurance,
however, that a closing purchase or sale transaction can be effected when the
Enhanced U.S. Large Company Series desires.
The Enhanced U.S. Large Company Series will realize a gain from a closing
purchase transaction if the cost of the closing option is less than the premium
received from writing the option, or, if it is more, the Series will realize a
loss. The principal factors affecting the market value of a put or a call option
include supply and demand, interest rates, the current market price of the
underlying index in relation to the exercise price of the option, the volatility
of the underlying index, and the time remaining until the expiration date.
If an option written by the Enhanced U.S. Large Company Series expires, the
Series realizes a gain equal to the premium received at the time the option was
written. If an option purchased by the Enhanced U.S.Large Company Series expires
unexercised, the Series realizes a loss equal to the premium paid.
The premium paid for a put or call option purchased by the Enhanced U.S.
Large Company Series is an asset of the Series. The premium received for an
option written by the Series is recorded as a deferred credit. The value of an
option purchased or written is marked to market daily and is valued at the
closing price on the exchange on which it is traded or, if not traded on an
exchange or no closing price is available, at the mean between the last bid and
asked prices.
RISKS ASSOCIATED WITH OPTIONS ON INDICES
There are several risks associated with transactions in options on indices.
For example, there are significant differences between the securities and
options markets that could result in an imperfect correlation between these
markets, causing a given transaction not to achieve its objectives. The value of
an option position will reflect, among other things, the current market price of
the underlying index, the time remaining until expiration, the relationship of
the exercise price, the term structure of interest rates, estimated price
volatility of the underlying index and general market conditions. A decision as
to whether, when and how to use options involves the exercise of skill and
judgment, and even a well conceived transaction may be unsuccessful to some
degree because of market behavior or unexpected events.
Options normally have expiration dates of up to 90 days. The exercise price
of the options may be below, equal to or above the current market value of the
underlying index. Purchased options that expire unexercised have no value.
Unless an option purchased by the Enhanced U.S. Large Company Series is
exercised or unless a closing transaction is effected with respect to that
position, the Enhanced U.S. Large Company Series will realize a loss in the
amount of the premium paid and any transaction costs.
A position in an exchange-listed option may be closed out only on an
exchange that provides a secondary market for identical options. Although the
Enhanced U.S. Large Company Series intends to purchase or write only those
options for which there appears to be an active secondary market, there is no
assurance that a liquid secondary market will exist for any particular option at
any specific time. Closing transactions may be effected with respect to options
traded in the over the counter markets only by negotiating directly with the
other party to the option contract, or in a secondary market for the option if
such a market exists. There can be no assurance that the Enhanced U.S. Large
Company Series will be able to liquidate an over the counter option at a
favorable price at any time prior to expiration. In the event of insolvency of
the counter-party, the Series may be unable to liquidate an over the counter
option. Accordingly, it may not be possible to effect closing transactions with
respect to certain options, with the result that the Enhanced U.S. Large Series
would have to exercise those options which they have purchased in order to
realize any profit. With respect to options written by the Enhanced U.S. Large
Company Series, the inability to enter into a closing transaction may result in
material losses to the Series.
Index prices may be distorted if trading of a substantial number of
securities included in the index is interrupted causing the trading of options
on that index to be halted. If a trading halt occurred, the Enhanced U.S.
10
<PAGE>
Large Company Series would not be able to close out options which it had
purchased and may incur losses if the underlying index moved adversely before
trading resumed. If a trading halt occurred and restrictions prohibiting the
exercise of options were imposed through the close of trading on the last day
before expiration, exercises on that day would be settled on the basis of a
closing index value that may not reflect current price information for
securities representing a substantial portion of the value of the index.
The Enhanced U.S. Large Company Series' activities in the options markets
may result in higher fund turnover rates and additional brokerage costs;
however, the Series may also save on commissions by using options as a hedge
rather than buying or selling individual securities in anticipation or as a
result of market movements.
INVESTMENT LIMITATIONS ON OPTIONS TRANSACTIONS
The ability of the Enhanced U.S. Large Company Series to engage in options
transactions is subject to certain limitations. The Enhanced U.S. Large Company
Series will only invest in over-the-counter options to the extent consistent
with the 15% limit on investments in illiquid securities.
FUTURES CONTRACTS
Please note that while the following discussion relates to the policies of
certain Portfolios with respect to futures contracts, it should be understood
that with respect to a Feeder Portfolio, the discussion applies to the Master
Fund in which the Feeder Portfolio invests all of its assets and, with respect
to the International Small Company Portfolio, the International Master Funds.
All Portfolios, except the U.S. 9-10, 6-10 Small Company and Tax Managed U.S.
6-10 Portfolios, the DFA One-Year Fixed Income Portfolio and the DFA Five-Year
Government Portfolio, may enter into futures contracts and options on futures
contracts. Such Portfolios (with the exception of Enhanced U.S. Large Company
Portfolio and its corresponding Master Fund) may enter into futures contracts
and options on future contracts only for the purpose of remaining fully invested
and to maintain liquidity to pay redemptions. The Enhanced U.S. Large Company
Portfolio may use futures contracts and options thereon to hedge against
securities prices or as part of its overall investment strategy.
Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of defined securities at a specified future
time and at a specified price. Futures contracts which are standardized as to
maturity date and underlying financial instrument are traded on national futures
exchanges. The Portfolios or Master Fund will be required to make a margin
deposit in cash or government securities with a broker or custodian to initiate
and maintain positions in futures contracts. Minimal initial margin requirements
are established by the futures exchange and brokers may establish margin
requirements which are higher than the exchange requirements. After a futures
contract position is opened, the value of the contract is marked to market
daily. If the futures contract price changes to the extent that the margin on
deposit does not satisfy margin requirements, payment of additional "variation"
margin will be required. Conversely, reduction in the contract value may reduce
the required margin resulting in a repayment of excess margin to the Portfolio
or Master Fund. Variation margin payments are made to and from the futures
broker for as long as the contract remains open. The Portfolios or Master Funds
expect to earn income on their margin deposits. To the extent that a Master Fund
or Portfolio invests in futures contracts and options thereon for other than
bona fide hedging purposes, no Master Fund or Portfolio will enter into such
transactions if, immediately thereafter, the sum of the amount of initial margin
deposits and premiums required to establish such positions would exceed 5% of
the Master Fund's or Portfolio's net assets, after taking into account
unrealized profits and unrealized losses on such contracts it has
entered into; provided, however, that, in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded in
calculating the 5%. Pursuant to published positions of the Commission, the
Portfolios or Master Funds may be required to maintain segregated accounts
consisting of liquid assets, (or, as permitted under applicable interpretations,
enter into offsetting positions) in connection with its futures contract
transactions in order to cover its obligations with respect to such contracts.
Positions in futures contracts may be closed out only on an exchange which
provides a secondary market. However, there can be no assurance that a liquid
secondary market will exist for any particular futures contract at any specific
time. Therefore, it might not be possible to close a futures position and, in
the event of adverse price
11
<PAGE>
movements, the Portfolio or Master Fund would continue to be required to make
variation margin deposits. In such circumstances, if the Portfolio or Master
Fund has insufficient cash, it might have to sell portfolio securities to meet
daily margin requirements at a time when it might be disadvantageous to do so.
Management intends to minimize the possibility that it will be unable to close
out a futures contract by only entering into futures which are traded on
national futures exchanges and for which there appears to be a liquid secondary
market.
CASH MANAGEMENT PRACTICES
All Portfolios and Master Funds engage in cash management practices in
order to earn income on uncommitted cash balances. Generally cash is uncommitted
pending investment in other obligations, payment of redemptions or in other
circumstances where the Advisor believes liquidity is necessary or desirable.
For example, in the case of the Emerging Markets Master Funds, cash investments
may be made for temporary defensive purposes during periods in which market,
economic or political conditions warrant.
All the Portfolios and Master Funds may invest cash in short-term
repurchase agreements. In addition, the following cash investments are
permissible:
<TABLE>
<CAPTION>
Percentage
Portfolios and Master Funds Permissible Cash Investment Guidelines*
--------------------------- --------------------------- -----------
<S> <C> <C>
U.S. Large Company Short-term fixed income obligations same as One-
Year Fixed Income Portfolio; index futures
contracts and options thereon*** 5%
Enhanced U.S. Large Company Short-term fixed
income obligations same as Two- N.A.
Year Global Fixed Income Portfolio;
shares of money market mutual funds**;
index futures contracts and options
thereon***
U.S. and International Small Company No limitations 20%
The Value Portfolios and Master Funds High quality, highly liquid fixed income
securities such as money market instruments;
index futures contracts and options thereon*** 20%
DFA Real Estate Securities Portfolio Fixed income obligations such as money market
instruments; index futures contracts and options
thereon*** 20%
Large Cap International Portfolio Fixed income obligations such as money market
instruments; index futures contracts and options
thereon*** 20%
International Small Company Portfolio Short-term, high quality fixed income obligations Small portion
DFA International Small Cap Value Portfolio Index future contracts and options thereon*** ***
International Value Series Fixed income obligations such as money market
instruments; index futures
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
contracts and options thereon*** 20%
Emerging Markets Portfolios and Master Funds Money market instruments; highly liquid debt
securities; freely convertible currencies;
Emerging Markets Series may invest in shares of
money market mutual funds**; index futures
contracts and options thereon*** 10%
DFA Intermediate Government Future contracts on U.S. Treasury securities or
Fixed Income Portfolio options on such contracts N.A.
</TABLE>
<PAGE>
*The percentage guidelines set forth above are not absolute limitations but
the Portfolios and Master Funds do not expect to exceed these guidelines under
normal circumstances.
**Investments in money market mutual funds may involve duplication of
certain fees and expenses.
***To the extent that such Master Funds or Portfolios invest in futures
contracts and options thereon for other than bona fide hedging purposes, no
Master Fund or Portfolio will enter into such transactions if, immediately
thereafter, the sum of the amount of initial margin deposits and premiums
required to establish such positions would exceed 5% of the Master Fund's or
Portfolio's net assets, after taking into account unrealized profits and
unrealized losses on such contracts it has entered into; provided, however,
that, in the case of an option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in calculating the 5%.
CONVERTIBLE DEBENTURES
Each of the International Equity Portfolios may invest up to 5% of its
assets in convertible debentures issued by non U.S. companies located in the
countries where the Portfolios are permitted to invest. In addition, the 6-10
Series and the 9-10 Series are authorized to invest in private placements of
interest-bearing debentures that are convertible into common stock. Convertible
debentures include corporate bonds and notes that may be converted into or
exchanged for common stock. These securities are generally convertible either at
a stated price or a stated rate (that is, for a specific number of shares of
common stock or other security). As with other fixed income securities, the
price of a convertible debenture to some extent varies inversely with interest
rates. While providing a fixed income stream (generally higher in yield than the
income derived from a common stock but lower than that afforded by a
nonconvertible debenture), a convertible debenture also affords the investor an
opportunity, through its conversion feature, to participate in the capital
appreciation of the common stock into which it is convertible. As the market
price of the underlying common stock declines, convertible debentures tend to
trade increasingly on a yield basis and so may not experience market value
declines to the same extent as the underlying common stock. When the market
price of the underlying common stock increases, the price of a convertible
debenture tends to rise as a reflection of the value of the underlying common
stock. To obtain such a higher yield, a Portfolio may be required to pay for a
convertible debenture an amount in excess of the value of the underlying common
stock. Common stock acquired by a Portfolio upon conversion of a convertible
debenture will generally be held for as long as the Advisor anticipates such
stock will provide the Portfolio with opportunities which are consistent with
the Portfolio's investment objective and policies.
PORTFOLIO TURNOVER RATES
Generally, securities will be purchased with the expectation that they will
be held for longer than one year. The portfolio turnover rate for the U.S. 4-10
Value Series is anticipated to be approximately 35%. Because the relative market
capitalizations of small companies compared with larger companies generally do
not change substantially over short periods of time, the portfolio turnover
rates of the Small Company Portfolios ordinarily are anticipated to be low. The
turnover rate for the International Small Company Portfolio is not expected to
exceed 25% per year. Because the DFA Real Estate Securities Portfolio generally
will hold securities for the long-term, its turnover rate ordinarily is
anticipated to be low. The portfolio turnover rate of the Emerging Markets Small
Cap Series ordinarily is anticipated to be low and is not expected to exceed 20%
per year. The portfolio turnover rate of
13
<PAGE>
the Emerging Markets Fund is anticipated to be approximately 20%-90%, which
reflects the purchase of value stocks and the sale of non-value stocks.
[For March update, explain any significant variation in portfolio turnover rates
over the last two fiscal years or any anticipated variation from that reported
in the Financial Highlights last year.]
DIRECTORS AND OFFICERS
The Board of Directors of each Fund is responsible for establishing Fund
policies and for overseeing the management of that Fund. Each of the Directors
and officers of DFAIDG is also a Director and officer of DIG, a Trustee and
officer of the Trust and a Director and officer of the Dimensional Emerging
Markets Value Fund. The Directors of the Funds, including all of the
disinterested directors, have adopted written procedures to monitor potential
conflicts of interest that might develop between the Feeder Portfolios and the
Master Funds.
The names, locations and dates of birth of the Directors and officers of
the Funds and a brief statement of their present positions and principal
occupations during the past five years is set forth below.
DIRECTORS
David G. Booth*, (12/2/46), Director, President and Chairman-Chief
Executive Officer, Santa Monica, CA. President, Chairman-Chief Executive Officer
and Director of the following companies: Dimensional Fund Advisors Inc., DFA
Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc.,
Dimensional Investment Group Inc. and Dimensional Emerging Markets Value Fund
Inc., Trustee, President and Chairman-Chief Executive Officer of The DFA
Investment Trust Company (registered investment company). Chairman and Director,
Dimensional Fund Advisors Ltd.
George M. Constantinides, (9/22/47), Director, Chicago, IL. Leo Melamed
Professor of Finance, Graduate School of Business, University of Chicago.
Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions
Group Inc., Dimensional Investment Group Inc. and Dimensional Emerging Markets
Value Fund Inc.
John P. Gould, (1/19/39), Director, Chicago, IL. Steven G. Rothmeier
Distinguished Service Professor of Economics, Graduate School of Business,
University of Chicago. Trustee, The DFA Investment Trust Company and First
Prairie Funds (registered investment companies). Director, DFA Investment
Dimensions Group Inc., Dimensional Investment Group Inc., Dimensional Emerging
Markets Value Fund Inc. and Harbor Investment Advisors. Executive Vice
President, Lexecon Inc. (economics, law, strategy and finance consulting).
Roger G. Ibbotson, (5/27/43), Director, New Haven, CT. Professor in
Practice of Finance, Yale School of Management. Trustee, The DFA Investment
Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional
Investment Group Inc., Dimensional Emerging Markets Value Fund Inc., Hospital
Fund, Inc. (investment management services) and BIRR Portfolio Analysis, Inc.
(software products). Chairman, Ibbotson Associates, Inc., Chicago, IL
(software, data, publishing and consulting).
Merton H. Miller, (5/16/23), Director, Chicago, IL. Robert R. McCormick
Distinguished Service Professor Emeritus, Graduate School of Business,
University of Chicago. Trustee, The DFA Investment Trust Company. Director,
DFA Investment Dimensions Group Inc., Dimensional Investment Group Inc. and
Dimensional Emerging Markets Value Fund Inc. and Public Director, Chicago
Mercantile Exchange.
Myron S. Scholes, (7/1/41), Director, Greenwich, CT. Limited Partner,
Long-Term Capital Management L.P. (money manager). Frank E. Buck Professor
Emeritus of Finance, Graduate School of Business and Professor of Law, Law
School, Senior Research Fellow, Hoover Institution, (all) Stanford University.
Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions
Group Inc., Dimensional Investment Group Inc., Dimensional Emerging Markets
Value Fund Inc., Benham Capital Management Group of Investment Companies and
Smith Breeden Group of Investment Companies.
14
<PAGE>
Rex A. Sinquefield*#, (9/7/44), Director, Chairman-Chief Investment
Officer, Santa Monica, CA.
Chairman-Chief Investment Officer and Director, Dimensional Fund Advisors Inc.,
DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group
Inc., Dimensional Investment Group Inc. and Dimensional Emerging Markets Value
Fund Inc. Trustee, Chairman-Chief Investment Officer of The DFA Investment
Trust Company. Chairman, Chief Executive Officer and Director, Dimensional Fund
Advisors Ltd.
- --------------------------------------------
* Interested Director of the Funds.
OFFICERS
Each of the officers listed below hold the same office (except as otherwise
noted) in the following entities: Dimensional Fund Advisors Inc., DFA Securities
Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc., Dimensional
Investment Group Inc., The DFA Investment Trust Company, Dimensional Fund
Advisors Ltd., and Dimensional Emerging Markets Value Fund Inc.
Arthur Barlow, (11/7/55), Vice President, Santa Monica, CA.
Truman Clark, (4/8/41), Vice President, Santa Monica, CA. Consultant until
October 1995 and Principal and Manager of Product Development, Wells Fargo Nikko
Investment Advisors, San Francisco, CA from 1990-1994.
Robert Deere, (10/8/57), Vice President, Santa Monica, CA.
Irene R. Diamant, (7/16/50), Vice President and Secretary (for all entities
other than Dimensional Fund Advisors Ltd.), Santa Monica, CA.
Richard Eustice, (8/5/65), Vice President and Assistant Secretary (for all
entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA.
Eugene Fama, Jr., (1/21/61), Vice President, Santa Monica, CA.
Kamyab Hashemi-Nejad, (1/22/61), Vice President, Controller and Assistant
Treasurer, Santa Monica, CA.
Stephen P. Manus, (12/26/50), Vice President, Santa Monica, CA. Managing
Director, ANB Investment Management and Trust Company from 1985-1993; President,
ANB Investment Management and Trust Company from 1993-1997.
Karen McGinley, (3/10/66), Vice President, Santa Monica, CA.
Catherine L. Newell, (5/7/64), Vice President and Assistant Secretary (for
all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA.
Associate, Morrison & Foerster, LLP from 1989 to 1996.
David Plecha, (10/26/61), Vice President, Santa Monica, CA.
George Sands, (2/8/56), Vice President, Santa Monica, CA.
Michael T. Scardina, (10/12/55), Vice President, Chief Financial Officer
and Treasurer, Santa Monica, CA.
Jeanne C. Sinquefield, Ph.D., # (12/2/46), Executive Vice President, Santa
Monica, CA.
Scott Thornton, (3/1/63), Vice President, Santa Monica, CA.
Weston Wellington, (3/1/51), Vice President, Santa Monica, CA. Director of
Research, LPL Financial Services, Inc., Boston, MA from 1987 to 1994.
15
<PAGE>
# Rex A. Sinquefield and Jeanne C. Sinquefield are husband and wife.
Directors and officers as a group own less than 1% of each Fund's
outstanding stock.
Set forth below is a table listing, for each director entitled to receive
compensation, the compensation received from each Fund during the fiscal year
ended November 30, 1997 and the total compensation received from all four
registered investment companies for which the Advisor serves as investment
advisor during that same fiscal year.
[TO BE UPDATED IN MARCH]
<TABLE>
<CAPTION>
Director Aggregate Aggregate Total Compensation
Compensation Compensation from Fund
From DFAIDG from DIG and Fund Complex *
<S> <C> <C> <C>
George M. Constantinides........................ $15,000 $5,000 $30,000
John P. Gould................................... $15,000 $5,000 $30,000
Roger G. Ibbotson............................... $15,000 $5,000 $30,000
Merton H. Miller................................ $15,000 $5,000 $30,000
Myron S. Scholes................................ $15,000 $5,000 $30,000
</TABLE>
* The term Fund Complex refers to all registered investment companies for which
the Advisor performs advisory or administrative services and for which the
individuals listed above serve as directors on the boards of such companies.
SERVICES TO THE FUNDS
Administrative Services--The Feeder Portfolios and International Small Company
Portfolio
The Funds have entered into administration agreements with the Advisor, on
behalf of the Feeder Portfolios and International Small Company Portfolio.
Pursuant to each administration agreement, the Advisor performs various
services, including: supervision of the services provided by the Portfolio's
custodian and transfer and dividend disbursing agent and others who provide
services to the Fund for the benefit of the Portfolio; providing shareholders
with information about the Portfolio and their investments as they or the Fund
may request; assisting the Portfolio in conducting meetings of shareholders;
furnishing information as the Board of Directors may require regarding the
Master Funds, and any other administrative services for the benefit of the
Portfolio as the Board of Directors may reasonably request. For its
administrative services, the Feeder Portfolios and International Small Company
Portfolio are obligated to pay the Advisor a monthly fee equal to one-twelfth of
the percentages listed below:
<TABLE>
<S> <C>
U.S. Large Company ........................................ 0.125%(a)
Enhanced U.S. Large Company ............................... 0.15%(b)
U.S. Large Cap Value ...................................... 0.15%
U.S. 4-10 Value ........................................... 0.40%
U.S. 6-10 Value ........................................... 0.30%
U.S. 6-10 Small Company ................................... 0.32%
U.S. 9-10 Small Company ................................... 0.40%
DFA International Value ................................... 0.20%
International Small Company ............................... 0.40%(d)
Japanese Small Company .................................... 0.40%(c)
Pacific Rim Small Company ................................. 0.40%(c)
United Kingdom Small Company .............................. 0.40%(c)
Continental Small Company ................................. 0.40%(c)
Emerging Markets .......................................... 0.40%
</TABLE>
16
<PAGE>
<TABLE>
<S> <C>
Emerging Markets Value .................................... 0.40%
Emerging Markets Small Cap ................................ 0.45%
DFA One-Year Fixed Income ................................. 0.10%
DFA Two-Year Global Fixed Income .......................... 0.10%
</TABLE>
(a) Pursuant to the terms of the administration agreement between U.S. Large
Company Portfolio and the Advisor, the Advisor has agreed to waive a
portion of its administration fee and/or assume the expenses of the
Portfolio to the extent (1) necessary to pay the ordinary operating
expenses of the Portfolio (except the administration fee); and (2) that the
direct expenses the portfolio bears as a shareholder of the Master Fund, on
an annual basis, exceeds 0.025% of the Portfolio's average net assets.
Beginning August 9, 1996, in addition to the waiver/assumption effective on
December 1, 1995, the Advisor has agreed to assume expenses or waive the
fee payable by the U.S. Large Company Portfolio under the administration
agreement by an additional .09% of average assets on an annual basis. The
above fees reflect that waiver.
(b) Effective August 1, 1997, the Advisor has agreed to waive its
administration fee to the extent necessary to reduce the direct and
indirect cumulative annual expenses of the Enhanced U.S. Large Company
Portfolio to not more than 0.45% of average net assets of the Portfolio on
an annualized basis.
(c) Effective August 9, 1996, the Advisor has agreed to waive its
administration fee and assume the direct expenses of the Japanese Small
Company, United Kingdom Small Company, Continental Small Company and
Pacific Rim Small Company Portfolios to the extent necessary to keep the
direct annual expenses of each Portfolio to not more than 0.47% of average
net assets of the Portfolio on an annualized basis; this arrangement does
not extend to the fees and expenses of the Master Funds.
(d) The Advisor has agreed to waive its administration fee and assume the
direct expenses of the International Small Company Portfolio to the extent
necessary to keep the administration fee and direct annual expenses of the
Portfolio to not more than 0.45% of average net assets of the Portfolio on
an annualized basis.
For the fiscal years ended November 30, 1995, 1996 and 1997, the Portfolios
(or their corresponding Master Funds) paid administrative fees to the Advisor as
set forth in the following table:
[TO BE UPDATED IN MARCH]
<TABLE>
<CAPTION>
1997 1996 1995
(000) (000) (000)
----- ----- -----
<S> <C> <C> <C>
U.S. Large Company Portfolio ..................... $ 5721 $ 2793 $ 1625
Enhanced U.S. Large Company Portfolio (b) ........ $ 502 $ 13 $ n/a
U.S. Large Cap Value Portfolio (b) ............... $ 1,045 $ 591 $ 327
U.S. 6-10 Value Portfolio (b) .................... $ 5,061 $ 2,825 $ 1,435
U.S. 6-10 Small Company Portfolio (b) ............ $ 908 $ 728 $ 501
U.S. 9-10 Small Company Portfolio (a) ............ $ -- n/a n/a
DFA Real Estate Securities Portfolio ............. $ -- $ -- $ --
Large Cap International Portfolio ................ $ -- $ -- $ --
DFA International Value Portfolio (b) ............ $ 937 $ 751 $ 418
International Small Company Portfolio (d) ........ $ 753 $ 634 n/a
Japanese Small Company Portfolio (c) ............. $ 809 $ 403 n/a
Pacific Rim Small Company Portfolio (c) .......... $ 784 $ 252 n/a
United Kingdom Small Company Portfolio (c) ....... $ 605 $ 201 n/a
Continental Small Company Portfolio (c) .......... $ 1,134 $ 376 n/a
DFA International Small Cap Value Portfolio ...... $ -- $ -- $ --
Emerging Markets Portfolio (b) ................... $ 890 $ 443 $ 122
Emerging Markets Value Portfolio ................. n/a n/a n/a
Emerging Markets Small Cap Portfolio (b) ......... $ -- $ -- n/a
DFA One-Year Fixed Income Portfolio (b) .......... $ 768 $ 770 $ 619
DFA Two-Year Global Fixed Income Portfolio ....... $ 370 $ 216 n/a
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
1997 1996 1995
(000) (000) (000)
----- ----- -----
<S> <C> <C> <C>
DFA Five-Year Government Portfolio ............... $ -- $ -- $ --
DFA Five-Year Global Fixed Income Portfolio ...... $ -- $ -- $ --
DFA Intermediate Government Fixed Income Portfolio $ -- $ -- $ --
(1) $ 37 after waiver 4 $ 50 after waiver
(2) $ 44 after waiver 5 $115 after waiver
(3) $ 0 after waiver
</TABLE>
ADMINISTRATIVE SERVICES--ALL PORTFOLIOS
PFPC Inc. ("PFPC"), 400 Bellevue Parkway, Wilmington, DE 19809, serves as
the accounting services, dividend disbursing and transfer agent for all the
Portfolios and Master Funds. The services provided by PFPC are subject to
supervision by the executive officers and the Boards of Directors of the Funds,
and include day-to-day keeping and maintenance of certain records, calculation
of the offering price of the shares, preparation of reports, liaison with its
custodians, and transfer and dividend disbursing agency services. For its
services, each of the Portfolios listed below pays PFPC annual fees which are
set forth in the following table:
DFA REAL ESTATE SECURITIES PORTFOLIO
.10% of the first $200 million of net assets
.075% of the next $200 million of net assets
.05% of the next $200 million of net assets
.03% of the next $200 million of net assets
.02% of net assets over $800 million
The DFA Real Estate Securities Portfolio is subject to a $4,900 per month
minimum fee. PFPC has agreed to limit the minimum fee for this Portfolio from
time to time.
LARGE CAP INTERNATIONAL PORTFOLIO
DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO
TAX MANAGED DFA INTERNATIONAL VALUE PORTFOLIO
CHARGES FOR EACH PORTFOLIO:
.1230% of the first $300 million of net assets
.0615% of the next $300 million of net assets
.0410% of the next $250 million of net assets
.0205% of the net assets over $850 million
The Large Cap International Portfolio and the DFA International Small Cap Value
Portfolio are each subject to a $75,000 per year minimum fee. PFPC has agreed to
limit the minimum fee for these Portfolios from time to time.
DFA FIVE-YEAR GOVERNMENT PORTFOLIO
DFA INTERMEDIATE GOVERNMENT FIXED INCOME PORTFOLIO
Charges for each Portfolio:
.0513% of the first $100 million of net assets
.0308% of the next $100 million of net assets
.0205% of net assets over $200 million
DFA FIVE-YEAR GLOBAL FIXED INCOME PORTFOLIO
.1230% of the first $150 million of net assets
.0820% of the next $150 million of net assets
.0615% of the next $300 million of net assets
.0410% of the next $250 million of net assets
.0205% of net assets over $850 million
The DFA Five-Year Global Fixed Income Portfolio is subject to a $75,000 per year
minimum fee. PFPC has agreed to limit the minimum fee for this Portfolio from
time to time.
ENHANCED U.S. LARGE COMPANY PORTFOLIO
U.S. LARGE CAP VALUE PORTFOLIO
18
<PAGE>
U.S. 4-10 VALUE PORTFOLIO
U.S. 6-10 VALUE PORTFOLIO
U.S. 6-10 SMALL COMPANY PORTFOLIO
U.S. 9-10 SMALL COMPANY PORTFOLIO
DFA INTERNATIONAL VALUE PORTFOLIO
EMERGING MARKETS VALUE PORTFOLIO
ONE-YEAR FIXED INCOME PORTFOLIO
DFA TWO-YEAR GLOBAL FIXED INCOME PORTFOLIO
The above portfolios are feeder portfolios. PFPC's charges for its services to
feeder portfolios are based on the number of feeder portfolios investing in each
Master Fund and whether the Master Fund is organized to be taxed as a
corporation or partnership for tax purposes. PFPC's charges are allocated
amongst the feeders based on the relative net assets of the feeders. PFPC's
charges in the aggregate to a group of feeder portfolios investing in Master
Funds which are taxed as corporations are $1,000 per month multiplied by the
number of feeders. PFPC charges $2,600 per month multiplied by the number of
feeders investing in Master Funds taxed as partnerships.
U.S. LARGE COMPANY PORTFOLIO
JAPANESE SMALL COMPANY PORTFOLIO
PACIFIC RIM SMALL COMPANY PORTFOLIO
UNITED KINGDOM SMALL COMPANY PORTFOLIO
CONTINENTAL SMALL COMPANY PORTFOLIO
EMERGING MARKETS PORTFOLIO
EMERGING MARKETS SMALL CAP PORTFOLIO
TAX MANAGED U.S. LARGE CAP VALUE PORTFOLIO
These feeders invest in Master Funds taxed as partnerships. PFPC charges $2,600
per month multiplied by the number of feeders investing in Master Funds taxed as
partnerships.
INTERNATIONAL SMALL COMPANY PORTFOLIO
$2,000 per month (includes custodian fees)
TAX MANAGED U.S. 6-10 SMALL COMPANY PORTFOLIO
TAX MANAGED U.S. 4-10 VALUE PORTFOLIO
.1025% of the first $300 million of net assets .0769% of the next $300
million of net assets .0513% of the next $250 million of net assets .0205%
of net assets over $850 million
PFPC has agreed that it may from time to time limit the fee rates.
CUSTODIANS
Citibank, N.A., 111 Wall Street, New York, New York, 10005, is the global
custodian for the following Portfolios and Master Funds: DFA International
Small Cap Value Portfolio, Large Cap International Portfolio, DFA Five-Year
Global Fixed Income Portfolio, DFA International Value Series, the Japanese
Small Company Series, the Pacific Rim Small Company Series, the United Kingdom
Small Company Series, the Continental Small Company Series, DFA Two-Year Global
Fixed Income Series, and Enhanced U.S. Large Company Series (co-custodian with
PNC Bank, N.A.). The Chase Manhattan Bank, 4 Chase Metrotech Center, Brooklyn,
NY 11245, serves as the custodian for the Emerging Markets Series, Emerging
Markets Small Cap Series and Dimensional Emerging Markets Value Fund Inc., and
PNC Bank, N.A., 200 Stevens Drive, Lester, PA 19113, serves as the custodian
for all of the Feeder Portfolios and the other Master Funds.
19
<PAGE>
DISTRIBUTOR
Each Fund acts as distributor of each series of its own shares of stock.
Each Fund has, however, entered into an agreement with DFA Securities Inc., a
wholly owned subsidiary of the Advisor, pursuant to which DFA Securities Inc. is
responsible for supervising the sale of each series of shares. No compensation
is paid by the Funds to DFA Securities Inc. under these agreements.
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP serves as legal counsel to the Funds.
Its address is 2600 One Commerce Square, Philadelphia, PA 19103-7098.
ADVISORY FEES
David G. Booth and Rex A. Sinquefield, as directors and officers of the
Advisor and shareholders of the Advisor's outstanding stock, may be deemed
controlling persons of the Advisor. For the services it provides as investment
advisor to each Portfolio (or, with respect to each Feeder Portfolio, the
corresponding Master Fund), the Advisor is paid a monthly fee calculated as a
percentage of average net assets of the Portfolio (or, with respect to each
Feeder Portfolio, the corresponding Master Fund). For the fiscal years ended
November 30, 1995, 1996 and 1997, the Portfolios (or their corresponding Master
Funds) paid management fees (to the Advisor and any sub-advisor) as set forth in
the following table:
[TO BE UPDATED IN MARCH]
<TABLE>
<CAPTION>
1997 1996 1995
(000) (000) (000)
----- ----- -----
<S> <C> <C> <C>
U.S. Large Company Portfolio ..................... $ 160 $ 62 $ 19
Enhanced U.S. Large Company Portfolio ............ $ 17 $ 4 n/a
U.S. Large Cap Value Portfolio (b) ............... $ 1,255 $ 699 $ 306
U.S. 6-10 Value Portfolio (b) .................... $ 3,534 $ 1,933 $ 976
U.S. 6-10 Small Company Portfolio (b) ............ $ 102 $ 81 $ 57
U.S. 9-10 Small Company Portfolio (a) ............ $ 6,538 $ 5,511 $ 4,045
DFA Real Estate Securities Portfolio ............. $ 290 $ 251 $ 183
Large Cap International Portfolio ................ $ 211 $ 183 $ 147
DFA International Value Portfolio (b) ............ $ 2,997 $ 2,124 $ 937
International Small Company Portfolio (d) ........ $ 1,019 $ 178 n/a
Japanese Small Company Portfolio (c) ............. $ 258 $ 1,483 $ 1,704
Pacific Rim Small Company Portfolio (c) .......... $ 230 $ 772 $ 1,020
United Kingdom Small Company Portfolio (c) ....... $ 180 $ 636 $ 1,096
Continental Small Company Portfolio (c) .......... $ 351 $ 1,258 $ 1,781
DFA International Small Cap Value Portfolio ...... $ 2,783 $ 1,877 $ 299
Emerging Markets Portfolio (b) ................... $ 226 $ 111 $ 30
Emerging Markets Value Portfolio ................. $ 1,020 $ 865 $ 733
Emerging Markets Small Cap Portfolio (b) ......... $ 47 n/a n/a
DFA One-Year Fixed Income Portfolio (b) .......... $ 392 $ 386 $ 311
DFA Two-Year Global Fixed Income Portfolio ....... $ 185 $ 108 n/a
DFA Five-Year Government Portfolio ............... $ 382 $ 402 $ 427
DFA Five-Year Global Fixed Income Portfolio ...... $ 519 $ 377 $ 311
DFA Intermediate Government Fixed Income Portfolio $ 184 $ 131 $ 88
</TABLE>
(a) Prior to November 30, 1997, DFAIDG on behalf of the Portfolio had an
investment management agreement with the Advisor; the dollar amount
represents the dollar amount of investment management fees paid by the
Portfolio to the Advisor for the 1995, 1996 and 1997 fiscal years.
20
<PAGE>
(b) The Master Fund has more than one Feeder Portfolio; the dollar amount
represents the total dollar amount of management fees paid by the Master
Fund to the Advisor.
(c) Prior to August 9, 1996, DFAIDG on behalf of the Portfolio had an
investment management agreement with the Advisor; the dollar amount
represents the dollar amount of investment management fees paid to the
Advisor by the Portfolio for fiscal years 1994 and 1995 and by the
Portfolio and its corresponding Master Fund for fiscal year 1996.
(d) Each of the four International Master Funds in which the Portfolio invests
its assets has more than one Feeder Portfolio (which are also included
elsewhere in this table). The dollar amount represents the total dollar
amount of management fees paid by each International Master Funds to the
Advisor for the period October 1, 1996 (the Portfolio's commencement of
operations) to November 30, 1996 and for the 1997 fiscal year.
GENERAL INFORMATION
DFAIDG was incorporated under Maryland law on June 15, 1981. Until June
1983, DFAIDG was named DFA Small Company Fund Inc. DFAIDG commenced offering
shares of DFA International Small Cap Value Portfolio in December, 1994; DFA
Two-Year Global Fixed Income Portfolio in February, 1996; Enhanced U.S. Large
Company Portfolio in July, 1996; International Small Company Portfolio in
October, 1996; Emerging Markets Small Cap Portfolio in March, 1998; and Emerging
Markets Value Portfolio in April, 1998. The U.S. 4-10 Value and the Tax Managed
Portfolios and Series had not commenced operations as of November 30, 1998
Until September, 1995, The DFA Intermediate Government Fixed Income
Portfolio was named The DFA Intermediate Government Bond Portfolio; The DFA
Five-Year Global Fixed Income Portfolio was named The DFA Global Bond Portfolio;
The Pacific Rim Small Company Portfolio was named The Asia-Australia Small
Company Portfolio; The U.S. Large Cap Value Portfolio was named The U.S. Large
Cap High Book to Market Portfolio; The U.S. 6-10 Value Portfolio was named The
U.S. Small Cap High Book to Market Portfolio; The U.S. 9-10 Small Company
Portfolio was named the Small Company Shares; The DFA One-Year Fixed Income
Portfolio was named The DFA Fixed Income Shares; and The Continental Small
Company Portfolio was named the Continental European Portfolio. From September
1995 until December 1996, The DFA Real Estate Securities Portfolio was named
DFA/AEW Real Estate Securities Portfolio. From September, 1995 until August,
1997, the U.S. 6-10 Value Portfolio was named the U.S. Small Cap Value
Portfolio.
DIG was incorporated under Maryland law on March 19, 1990. DIG was known
as DFA U.S. Large Cap Inc. from February 1992, until it amended its Articles of
Incorporation in April 1993, to change to its present name. Prior to a February
1992, amendment to the Articles of Incorporation, it was known as DFA U.S. Large
Cap Portfolio Inc.
The DFA Investment Trust Company was organized as a Delaware business trust
on October 27, 1992. The Trust offers shares of its Master Funds only to
institutional investors in private offerings. Dimensional Emerging Markets Value
Fund was incorporated under Maryland law on January 9, 1991, and offers its
shares only to institutional investors in private offerings. On November 21,
1997, the shareholders of Dimensional Emerging Markets Value Fund approved its
conversion from a closed-end management investment company to an open-end
management investment company.
21
<PAGE>
TOTAL EXPENSES
For the fiscal year ended November 30, 1997, the total expenses of each
Portfolio were the following percentages of respective average net assets:
[TO BE UPDATED IN MARCH]
<TABLE>
<CAPTION>
PORTFOLIO TOTAL
- --------- -----
EXPENSES
--------
<S> <C>
U.S. Large Company (1).............................. 0.15%
Enhanced U.S. Large Company (2)..................... 0.52%
U.S. Large Cap Value................................ 0.35%
U.S. 6-10 Value..................................... 0.60%
U.S. 6-10 Small Company............................. 0.45%
U.S. 9-10 Small Company............................. 0.60%
DFA Real Estate Securities.......................... 0.48%
Large Cap International............................. 0.47%
DFA International Value............................. 0.56%
International Small Company (4)..................... 0.75%
Japanese Small Company (3).......................... 0.73%
Pacific Rim Small Company (3)....................... 0.84%
United Kingdom Small Company (3).................... 0.70%
Continental Small Company (3)....................... 0.72%
DFA International Small Cap Value................... 0.90%
Emerging Markets.................................... 0.99%
DFA One-Year Fixed Income........................... 0.22%
DFA Two-Year Global Fixed Income.................... 0.34%
DFA Five-Year Government............................ 0.29%
DFA Five-Year Global Fixed Income................... 0.42%
DFA Intermediate Government Fixed Income............ 0.25%
</TABLE>
- --------------------------------------
(1) For the fiscal year ended November 30, 1997, pursuant to the terms of the
current administration agreement between U.S. Large Company Portfolio and
the Advisor, the Advisor agreed to waive a portion of its administration
fee and/or assume the expenses of the Portfolio to the extent (1) necessary
to pay the ordinary operating expenses of the Portfolio (except the
administration fee); and (2) that the indirect expenses the Portfolio bears
as a shareholder of the Master Fund, on an annual basis, exceed 0.025% of
the Portfolio's average net assets. Beginning August 9, 1996, in addition
to the waiver/assumption effective on December 1, 1995, the Advisor agreed
to assume expenses or waive the fee payable by the U.S. Large Company
Portfolio under the administration agreement by an additional .09% of
average assets on an annual basis. Absent this arrangement, the annualized
ratio of total operating expenses to average net assets for U.S. Large
Company Portfolio for the fiscal year ended November 30, 1997, was 0.35%.
(2) Effective August 1, 1997, the Advisor has agreed to waive its fee under the
administration agreement to the extent necessary to reduce the direct and
indirect cumulative annual expenses of the Enhanced U.S. Large Company
Portfolio to not more than 0.45% of average net assets of the Portfolio on
an annualized basis; the Portfolio's direct and indirect cumulative annual
expenses may exceed 0.45% of its average net assets on an annualized basis
notwithstanding this fee waiver. This arrangement does not extend to the
fees of the Enhanced U.S. Large Company Series of the Trust. Absent this
arrangement, the annualized ratio of total operating expenses to average
net assets for the Enhanced U.S. Large Company Portfolio for the fiscal
year ended November 30, 1997 was 0.54%.
(3) Effective August 9, 1996, the Advisor agreed to waive its administrative
fee and assume the direct expenses of the Japanese Small Company, United
Kingdom Small Company, Continental Small Company and Pacific Rim
22
<PAGE>
Small Company Portfolios to the extent necessary to keep the direct annual
expenses of each Portfolio to not more than 0.47% of average net assets of
the Portfolio on an annualized basis; this arrangement does not extend to
the fees and expenses of the Master Funds. For the fiscal year ended
November 30, 1997, the Advisor was not required to waive any portion of its
fee pursuant to such agreement.
(4) The Advisor has agreed to waive its administration fee and assume the
direct expenses of the International Small Company Portfolio to the extent
necessary to keep the administration fee and direct annual expenses of the
Portfolio to not more than 0.45% of average net assets of the Portfolio on
an annualized basis; this arrangement does not extend to the fees and
expenses of the International Master Funds. For the fiscal year ended
November 30, 1997, the Advisor was not required to waive any portion of its
fees pursuant to such agreement.
For purposes of waivers and/or expense assumptions, the annual expenses are
those expenses incurred in any period consisting of twelve consecutive months.
The Advisor retains the right, after obtaining all appropriate and necessary
approvals, to modify or eliminate the waiver of a portion of its fees or
assumption of expenses in the future.
SHAREHOLDER RIGHTS
The shares of each Portfolio, when issued and paid for in accordance with
the Portfolio's prospectus, will be fully paid and non-assessable shares, with
equal, non-cumulative voting rights and no preferences as to conversion,
exchange, dividends, redemption or any other feature.
With respect to matters which require shareholder approval, shareholders
are entitled to vote only with respect to matters which affect the interest of
the class of shares (Portfolio) which they hold, except as otherwise required by
applicable law. If liquidation of a Fund should occur, the Fund's shareholders
would be entitled to receive on a per class basis the assets of the particular
Portfolio whose shares they own, as well as a proportionate share of Fund assets
not attributable to any particular class. Ordinarily, the Funds do not intend to
hold annual meetings of shareholders, except as required by the federal
securities laws and regulations governing mutual funds, or other applicable law.
Each Fund's bylaws provide that special meetings of shareholders shall be called
at the written request of at least 10% of the votes entitled to be cast at such
meeting. Such meeting may be called to consider any matter, including the
removal of one or more directors. Shareholders will receive shareholder
communications with respect to such matters as required by the federal
securities laws and regulations governing mutual funds, including semi-annual
and annual financial statements of the Funds, the latter being audited at least
once each year.
Whenever a Feeder Portfolio, as an investor in its corresponding Master
Fund, is asked to vote on a shareholder proposal, the relevant Fund will solicit
voting instructions from the Feeder Portfolio's shareholders with respect to the
proposal. The Directors of the Fund will then vote the Feeder Portfolio's shares
in the Master Fund in accordance with the voting instructions received from the
Feeder Portfolio's shareholders. The Directors of the Fund will vote shares of
the Feeder Portfolio for which they receive no voting instructions in accordance
with their best judgment. With regard to a Master Fund of the Trust organized as
a partnership for federal tax purposes, if a majority shareholder of the Master
Fund redeems its entire interest in the Master Fund, a majority in interest of
the remaining shareholders in the Master Fund must vote to approve the
continuing existence of the Master Fund or the Master Fund will be liquidated.
PRINCIPAL HOLDERS OF SECURITIES
As of [DATE], the following persons beneficially owned 5% or more of the
outstanding stock of the Portfolios, as set forth below:
THE U.S. LARGE COMPANY PORTFOLIO
<PAGE>
THE U.S. LARGE COMPANY PORTFOLIO
<TABLE>
<S> <C>
Charles Schwab & Company, Inc.-REIN*(1) 66.89% [THESE NUMBERS WILL BE UPDATED
Charles Schwab & Company, Inc.-CASH*(1) 13.01% AT THE TIME OF ANNUAL UPDATES]
</TABLE>
23
<PAGE>
<TABLE>
<S> <C>
Donaldson Lufkin & Jenrette Securities Corp.*(1) 5.44%
ENHANCED U.S. LARGE COMPANY PORTFOLIO
Charles Schwab & Company, Inc.-CAP*1 32.63%
Charles Schwab & Company, Inc.-REIN*1 30.65%
Misericordia Home Endowment
6300 N. Drive Avenue
Chicago, IL 60660 25.65%
U.S. LARGE CAP VALUE PORTFOLIO
Charles Schwab & Company, Inc.-REIN*1 51.22%
Charles Schwa & Company, Inc.-CASH*1 12.09%
Charles Schwab & Company, Inc.-CAP*1 6.91%
Donaldson Lufkin & Jenrette Securities Corp.*1 6.13%
U.S. 4-10 VALUE PORTFOLIO
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 100%
U.S. 6-10 VALUE PORTFOLIO
Charles Schwab & Company, Inc.-REIN*1 27.56%
Mac & Co.*
P.O. Box 320
Pittsburgh, PA 15230 7.64%
Charles Schwab & Company, Inc.-CAP*1 7.12%
United Church Board For Pension Assets Management
475 Riverside Drive
New York, NY 10115 5.57%
THE U.S. 6-10 SMALL COMPANY PORTFOLIO
McKinsey & Company Master Retirement Trust
55 E. 52nd Street
New York, NY 10055 25.53%
Charles Schwab & Company, Inc.-REIN*1 14.93%
The Charles A. Dana Foundation
745 5th Avenue, Suite 700
New York, NY 10151 11.09%
Salvation Army-ETHQ
440 W. Nyack Road
West Nyack, NY 10994 6.57%
Northern Telecom Inc.
Bankers Trust Co., Trustee
34 Exchange Place
Jersey City, NJ 07302 5.88%
</TABLE>
24
<PAGE>
<TABLE>
<S> <C>
Mac & Co.
P.O. Box 3198
Pittsburgh, PA 15230 5.75%
THE U.S. 9-10 SMALL COMPANY PORTFOLIO
Charles Schwab & Company, Inc.-REIN*
101 Montgomery Street
San Francisco, CA 94104 27.31%
State Farm Insurance Companies
One State Farm Plaza
Bloomington, IL 61710 10.18%
National Electrical Benefit Fund
1125 15th Street NW
Washington, DC 20005 7.15%
PepsiCo Inc. Master Trust
The Northern Trust Company Trustee
Chicago, IL 60675 6.86%
Charles Schwab & Company, Inc.-CASH*
101 Montgomery Street
San Francisco, CA 94104 6.40%
DFA REAL ESTATE SECURITIES PORTFOLIO
** 2 Charles Schwab & Company, Inc.-REIN*1 63.64%
Charles Schwab & Company, Inc., -CASH*1 15.38%
Donaldson Lufkin & Jenrette Securities Corp.*1 6.68%
THE LARGE CAP INTERNATIONAL PORTFOLIO
Charles Schwab & Company, Inc.-REIN*1 77.29%
Donaldson Lufkin & Jenrette Securities Corp.*
P.O. Box 2052
Jersey City, NJ 07303 6.20%
DFA INTERNATIONAL VALUE PORTFOLIO
Charles Schwab & Co.-REIN*1 63.96%
Peoples Energy Corporate Retirement
and Benefit Plans Committee
130 E. Randolph Drive
Chicago, IL 60601 9.92%
* 2 moved from here; text not shown
Donaldson, Lufkin & Jenrette Securities Corp.*1 6.55%
FTC & Co.*
P.O. Box 173736
Denver, CO 80217 5.13%
</TABLE>
25
<PAGE>
<TABLE>
<S> <C>
INTERNATIONAL SMALL COMPANY PORTFOLIO
Charles Schwab & Company, Inc.-REIN*1 58.03%
San Diego County Employees Retirement Association
1495 Pacific Highway
San Diego, CA 92101 25.68%
Donaldson Lufkin & Jenrette Securities Corp.*1 7.06%
THE JAPANESE SMALL COMPANY PORTFOLIO
BellSouth Corporation Master Pension Trust
1155 Peachtree Street, N.E
Atlanta, GA 30367 53.27%
Charles Schwab & Company, Inc.-REIN*1 22.73%
Aluminum Company of America
1501 ALCOA Building
Pittsburgh, PA 15258 5.34%
John Deere Pension Fund
John Deere Company
John Deere Road
Moline, IL 61265 5.32%
PACIFIC RIM SMALL COMPANY PORTFOLIO
BellSouth Corporation Master Pension Trust1 63.19%
Charles Schwab & Company, Inc.-REIN*1 17.79%
John Deere Pension Fund1 5.33%
THE UNITED KINGDOM SMALL COMPANY PORTFOLIO
BellSouth Corporation Master Pension Trust1 50.75%
Charles Schwab & Company, Inc.-REIN*1 29.00%
John Deere Pension Fund1 9.84%
THE CONTINENTAL SMALL COMPANY PORTFOLIO
BellSouth Corporation Master Pension Trust1 55.05%
Charles Schwab & Company, Inc.-REIN*1 29.33%
John Deere Pension Fund1 5.78%
DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO
Charles Schwab & Company, Inc.-REIN*1 62.26%
BellSouth Corporation Master Pension Trust1 19.86%
EMERGING MARKETS PORTFOLIO
Charles Schwab & Company, Inc.-REIN*1 66.93%
Donaldson Lufkin & Jenrette Securities Corp.*1 7.15%
California Institute of Technology
Mail Code 212-31
Pasadena, CA 91125 6.44%
</TABLE>
26
<PAGE>
<TABLE>
<S> <C>
EMERGING MARKETS SMALL CAP PORTFOLIO
Dimensional Fund Advisors Inc.(1) 100%
THE DFA ONE-YEAR FIXED INCOME PORTFOLIO
Charles Schwab & Company, Inc.-REIN*(1) 30.20%
Charles Schwab & Company, Inc.-CASH*(1) 12.99%
Peoples Energy Corporation Pension Trust
130 E. Randolph Dr., 24th Floor
Chicago, IL 60601 6.63%
DFA TWO-YEAR GLOBAL FIXED INCOME PORTFOLIO
Charles Schwab & Company, Inc.-REIN*(1) 44.58%
Charles Schwab & Company, Inc.-CAP*(1) 44.47%
Donaldson Lufkin & Jenrette Securities Corp.*(1) 5.37%
THE DFA FIVE-YEAR GOVERNMENT PORTFOLIO
Charles Schwab & Company, Inc.-REIN*(1) 58.41%
Charles Schwab & Company, Inc.-CASH*(1) 18.32%
FTC & CO*
P.O. Box 173736
Denver, CO 80217 5.68%
Donaldson Lufkin & Jenrette Securities Corp.*(1) 5.14%
THE DFA FIVE-YEAR GLOBAL FIXED INCOME PORTFOLIO
Charles Schwab & Company, Inc.-REIN*(1) 48.91%
Charles Schwab & Company, Inc.-CAP*(1) 19.61%
Charles Schwab & Company, Inc.-CASH*(1) 14.33%
THE DFA INTERMEDIATE GOVERNMENT FIXED INCOME PORTFOLIO
Charles Schwab & Company, Inc.-CAP*(1) 81.76%
Charles Schwab & Company, Inc.-REIN*(1) 11.63%
Charles Schwab & Company, Inc.-CASH*(1) 5.39%
</TABLE>
- ---------------------------------------
* Owner of record only.
(1) See address for shareholder previously noted above in list.
Shareholder inquiries may be made by writing or calling the Funds at the
address or telephone number appearing on the cover. Only those individuals whose
signatures are on file for the account in question may receive specific account
information or make changes in the account registration.
PURCHASE OF SHARES
The following information supplements the information set forth in the
prospectus under the caption "PURCHASE OF SHARES."
27
<PAGE>
The Funds will accept purchase and redemption orders on each day that the
New York Stock Exchange ("NYSE") is open for business, regardless of whether the
Federal Reserve System is closed. However, no purchases by wire may be made on
any day that the Federal Reserve System is closed. The Funds will generally be
closed on days that the NYSE is closed. The NYSE is scheduled to be open Monday
through Friday throughout the year except for days closed to recognize New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The Federal
Reserve System is closed on the same days as the NYSE, except that it is open on
Good Friday and closed on Columbus Day and Veterans' Day. Orders for redemptions
and purchases will not be processed if the Funds are closed.
The TSE is closed on the following days in 1998: January 1, 2, 3 and 15,
February 11, March 21, April 29, May 3, 4 and 5, July 20, September 15 and 23,
October 10, November 3 and 23 and December 23 and 31. Orders for the purchase
and redemption of shares of the Japanese Small Company Portfolio received on
those days will be priced as of the close of the NYSE on the next day that the
TSE is open for trading.
The Funds reserve the right, in their sole discretion, to suspend the
offering of shares of any or all Portfolios or reject purchase orders when, in
the judgement of management, such suspension or rejection is in the best
interest of that Fund or a Portfolio. Securities accepted in exchange for shares
of a Portfolio will be acquired for investment purposes and will be considered
for sale under the same circumstances as other securities in the Portfolio.
Reimbursement fees may be charged prospectively from time to time based
upon the future experience of the Portfolios that are currently sold at net
asset value. Any such charges will be described in the prospectus.
REDEMPTION AND TRANSFER OF SHARES
The following information supplements the information set forth in the
prospectus under the caption "REDEMPTION OF SHARES."
Each Fund may suspend redemption privileges or postpone the date of payment: (1)
during any period when the NYSE is closed, or trading on the NYSE is restricted
as determined by the Commission, (2) during any period when an emergency exists
as defined by the rules of the Commission as a result of which it is not
reasonably practicable for such Fund to dispose of securities owned by it, or
fairly to determine the value of its assets and (3) for such other periods as
the Commission may permit.
Shareholders may transfer shares of any Portfolio to another person by
making a written request to the Advisor who will transmit the request to the
Transfer Agent. The request should clearly identify the account and number of
shares to be transferred, and include the signature of all registered owners and
all stock certificates, if any, which are subject to the transfer. The signature
on the letter of request, the stock certificate or any stock power must be
guaranteed in the same manner as described in the prospectus under "REDEMPTION
OF SHARES." As with redemptions, the written request must be received in good
order before any transfer can be made.
TAXATION OF THE PORTFOLIOS
The following is a summary of some of the federal income tax consequences
of investing in the Portfolios. Unless you are invested in the Portfolios
through a retirement plan, you should consider the tax implications of investing
and consult your own tax adviser.
DISTRIBUTIONS OF NET INVESTMENT INCOME
- --------------------------------------
Each Portfolio receives income generally in the form of dividends and
interest on its investments. This income, less expenses incurred in the
operation of a Portfolio, constitutes its net investment income from which
dividends may be paid to its shareholders. Any distributions by a Portfolio from
such income will be taxable to a shareholder as ordinary income, whether they
are received in cash or in additional shares.
DISTRIBUTIONS OF CAPITAL GAINS
- ------------------------------
28
<PAGE>
A Portfolio may derive capital gains and losses in connection with sales or
other dispositions of its portfolio securities. Distributions derived from the
excess of net short-term capital gain over net long-term capital loss will be
taxable to shareholders as ordinary income. Distributions paid from long-term
capital gains realized by a Portfolio will be taxable to shareholders as
long-term capital gain, regardless of how long the shares of the Portfolio have
been held. Any net short-term or long-term capital gains realized by a Portfolio
(net of any capital loss carryovers) generally will be distributed once each
year, and may be distributed more frequently, if necessary, in order to reduce
or eliminate federal excise or income taxes on the Portfolio.
ELECTION TO BE TAXED AS A REGULATED INVESTMENT COMPANY
- ------------------------------------------------------
Each Portfolio intends to qualify each year as a regulated investment
company by satisfying certain distribution and asset diversification
requirements under the Internal Revenue Code (the "Code"). As a regulated
investment company, the Portfolios generally pay no federal income tax on the
income and gains it distributes to its shareholders. The Board reserves the
right not to maintain the qualification of a Portfolio as a regulated investment
company, if it determines that such course of action to be beneficial to
shareholders. In such case, a Portfolio will be subject to federal, and possibly
state, corporate taxes on its taxable income and gains, and distributions to
shareholders will be taxed as ordinary dividend income to the extent of a
Portfolio's available earnings and profits. Some of the Master Funds intend to
qualify each year as regulated investment companies ("RIC Series"), while others
are taxable as partnerships for federal income tax purposes.
EXCISE TAX DISTRIBUTION REQUIREMENT
- -----------------------------------
The Code requires a Portfolio to distribute at least 98% of its taxable
ordinary income earned during the calendar year and 98% of its capital gain net
income earned during the twelve month period ending October 31 (in addition to
undistributed amounts from the prior year) to you by December 31 of each year in
order to avoid federal excise taxes. Each Portfolio intends to declare and pay
sufficient dividends in December (or in January that are treated by you as
received in December) but does not guarantee and can give no assurances that its
distributions will be sufficient to eliminate all such taxes.
EFFECT OF FOREIGN INVESTMENTS ON DISTRIBUTIONS
- ----------------------------------------------
Most foreign exchange gains realized on the sale of debt instruments are
treated as ordinary income by a Portfolio. Similarly, foreign exchange losses
realized by a Portfolio on the sale of debt instruments are generally treated as
ordinary losses by such Portfolio. These gains when distributed will be taxable
to shareholders as ordinary dividends, and any losses will reduce a Portfolio's
ordinary income otherwise available for distribution to shareholders. This
treatment could increase or reduce a Portfolio's ordinary income distributions
to shareholders, and may cause some or all of a Portfolio's previously
distributed income to be classified as a return of capital.
A Portfolio which invests in foreign securities may be subject to foreign
withholding taxes on income from certain of their foreign securities. If more
than 50% in value of the total assets of a Portfolio are invested in securities
of foreign corporations, such Portfolio may elect to pass through to its
shareholders their pro rata share of foreign income taxes paid by such
Portfolio. If this election is made, shareholders will be required to include in
their gross income their pro rata share of foreign taxes paid by the Portfolio.
However, shareholders will be entitled to either deduct (as an itemized
deduction in the case of individuals) their share of such foreign taxes in
computing their taxable income or to claim a credit for such taxes against their
U.S. federal income tax, subject to certain limitations under the Code.
DIVIDENDS RECEIVED DEDUCTION
- ----------------------------
Portfolios which will receive virtually all their net investment income
from the receipt of interest income or from investments in foreign securities
are not expected to make distributions eligible for the dividends received
deduction for corporations. In the case of the other Portfolios, dividends from
net investment income will generally qualify in part for the corporate dividends
received deduction, but the portion of dividends so qualified depends on the
aggregate qualifying dividend income received by the Portfolio from domestic
(U.S.) sources.
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REDEMPTION OF PORTFOLIO SHARES
- ------------------------------
Redemptions and exchanges of Portfolio shares are taxable transactions for
federal and state income tax purposes that cause a shareholder to recognize a
gain or loss. If a shareholder holds his shares as a capital asset, the gain or
loss that he realizes will be capital gain or loss. Any loss incurred on the
redemption or exchange of shares held for six months or less will be treated as
a long-term capital loss to the extent of any long-term capital gains
distributed to the shareholder by the Portfolio on those shares.
All or a portion of any loss that a shareholder realizes upon the
redemption of a Portfolio's shares will be disallowed to the extent that the
shareholder purchases other shares in the Portfolio (through reinvestment of
dividends or otherwise) within 30 days before or after the share redemption. Any
loss disallowed under these rules will be added to the shareholder's tax basis
in the new shares purchased by the shareholder.
U.S. GOVERNMENT OBLIGATIONS
- ---------------------------
Many states grant tax-free status to dividends paid from interest earned on
direct obligations of the U.S. government, subject in some states to minimum
investment requirements that must be met by a Portfolio. Investments in
GNMA/FNMA securities, bankers' acceptances, commercial paper and repurchase
agreements collateralized by U.S. government securities do not generally qualify
for tax-free treatment. The rules on exclusion of this income are different for
corporations.
COMPLEX SECURITIES
- ------------------
A Portfolio or a Master Fund may invest in complex securities and such
investments may be subject to numerous special and complicated tax rules. These
rules could affect whether gains or losses recognized by a Portfolio or Master
Fund are treated as ordinary income or capital gain, accelerate the recognition
of income to the Portfolio or Master Fund, defer a Portfolio or Master Fund's
ability to recognize losses, and, in limited cases, subject the Portfolio or
Master Fund to U.S. federal income tax on income from certain of its foreign
investments. In turn, these rules may affect the amount, timing or character of
the income distributed to a shareholder by a Portfolio.
OTHER SPECIAL RULES APPLICABLE TO PORTFOLIOS WHICH INVEST IN MASTER FUNDS
- -------------------------------------------------------------------------
A Portfolio which invests in a Master Fund may be subject to certain
special rules depending on whether the Master Fund in which such Portfolio
invests is a RIC Series or is a Master Fund taxable as a partnership under the
Code. For example, Portfolios which invest in RIC Series will not be permitted
to passthrough foreign withholding taxes paid by such RIC Series to such
Portfolio's shareholders. These special rules may affect the amount, timing or
character of the income distributed to shareholders of such Portfolios.
INFORMATION ON THE TAX CHARACTER OF DISTRIBUTIONS
- -------------------------------------------------
The Portfolios will inform shareholders of the amount and character of
distributions at the time they are paid, and will advise shareholders of the tax
status for federal income tax purposes of such distributions shortly after the
close of each calendar year. Shareholders who have not held shares of a
Portfolio a full year may have designated and distributed to them as ordinary
income or capital gain a percentage of income that is not equal to the actual
amount of such income earned during the period of their investment in the
Portfolio.
CALCULATION OF PERFORMANCE DATA
The Portfolios and the Master Funds may disseminate reports of their
investment performance from time to time. Investment performance is calculated
on a total return basis; that is by including all net investment income and any
realized and unrealized net capital gains or losses during the period for which
investment performance is reported. If dividends or capital gains distributions
have been paid during the relevant period the calculation of investment
performance will include such dividends and capital gains distributions as
though reinvested in shares of the Portfolio or Master Fund. Standard quotations
of total return, which include deductions of any applicable reimbursement fees,
are computed in accordance with Commission Guidelines and are presented whenever
any non-standard quotations are disseminated to provide comparability to other
investment companies. Non-standardized
30
<PAGE>
total return quotations may differ from the Commission Guideline computations by
covering different time periods, excluding deduction of reimbursement fees
charged to investors and paid to the Portfolios which would otherwise reduce
returns quotations. In all cases, disclosures are made when performance
quotations differ from the Commission Guideline. Performance data is based on
historical earnings and is not intended to indicate future performances. Rates
of return expressed on an annual basis will usually not equal the sum of returns
expressed for consecutive interim periods due to the compounding of the interim
yields. The Funds' annual reports to shareholders for the fiscal year ended
November 30, 1997 contain additional performance information. Copies of the
annual reports are available upon request and without charge.
With respect to the International Equity Portfolios and DFA Five-Year
Global Fixed Income Portfolio, rates of return expressed as a percentage of U.S.
dollars will reflect applicable currency exchange rates at the beginning and
ending dates of the investment periods presented. The return expressed in terms
of U.S. dollars is the return one would achieve by investing dollars in the
Portfolio at the beginning of the period and liquidating the investment in
dollars at the end of the period. Hence, the return expressed as a percentage of
U.S. dollars combines the investment performance of the Portfolio as well as the
performance of the local currency or currencies of the Portfolio. Inasmuch as
DFA Five-Year Global Fixed Income Portfolio intends to continually hedge against
the risk of variations in currency exchange rates, the Advisor believes that the
variation of the Portfolio's investment performance in relation to fluctuations
in currency exchange rates will be minimized.
Quotations of the annualized percentage total returns for the one-, five-,
and ten-year periods ended November 30, 1997 (as applicable) are set forth in
the prospectus. Such quotations utilize the standardized method of calculation
required by the Commission, which is net of the cost of any current
reimbursement fees charged to investors and paid to the Portfolios. Also
included is a quotation of the annualized percentage total return for the DFA
Two-Year Global Fixed Income Portfolio (for the period from February 9, 1996,
the date of commencement of operations), the Enhanced U.S. Large Company
Portfolio (for the period from July 3, 1996, the date of commencement of
operations) and the International Small Company Portfolio (for the period from
October 1, 1996, the date of commencement of operations) to November 30, 1997
using the standardized method of calculation required by the Commission.
Reimbursement fees of 1%, 1.5% and 1.5% were in effect from the inception of the
Japanese, United Kingdom and Continental Small Company Portfolios, respectively,
until June 30, 1995. A reimbursement fee of 1% was in effect from the inception
of DFA International Small Cap Value Portfolio until June 30, 1995. Effective
June 30, 1995, the amount of the reimbursement fee was reduced with respect to
Continental Small Company, Pacific Rim Small Company, Japanese Small Company,
Emerging Markets and DFA International Small Cap Value Portfolios, and
eliminated with respect to the United Kingdom Small Company Portfolio. The
current reimbursement fee for each Portfolio, expressed as a percentage of the
net asset value of the shares of the Portfolios, is as follows: Continental
Small Company, Pacific Rim Small Company and Emerging Markets Small Cap
Portfolios- 1.00%; Japanese Small Company and Emerging Markets Portfolios- .50%;
DFA International Small Cap Value Portfolio- .675%; and International Small
Company Portfolio- .675%.
A reimbursement fee of 1% was charged to investors in the U.S. 9-10 Small
Company Portfolio from December 9, 1986 through June 17, 1988. A reimbursement
fee of 0.75% was charged to investors in the Large Cap International Portfolio
from the date of its inception until March 5, 1992. In addition, for those
Portfolios in effect for less than one, five, or ten years, the time periods
during which the Portfolios have been active have been substituted for the
periods stated (which in no case extends prior to the effective dates of the
Portfolios' registration statements). However, for purposes of calculating the
performance of a Feeder Portfolio, the performance of the corresponding Master
Fund may be utilized for the period prior to when the Feeder Portfolio commenced
operations, and, if applicable, restated to reflect the Feeder Portfolio's fees
and expenses.
As the following formula indicates, the average annual total return is
determined by finding the average annual compounded rates of return over the
stated time period that would equate a hypothetical initial purchase order of
$1,000 to its redeemable value (including capital appreciation/depreciation and
dividends and distributions paid and reinvested less any fees charged to a
shareholder account) at the end of the stated time period. The calculation
assumes that all dividends and distributions are reinvested at the public
offering price on the reinvestment dates during the period. The quotation
assumes the account was completely redeemed at the end of each period and the
deduction of all applicable charges and fees. According to the Commission
formula:
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<PAGE>
In addition to the standardized method of calculating performance used by
the Commission, the Portfolios and Master Funds may disseminate other
performance data and may advertise total return performance calculated on a
monthly basis.
P(1 + T)to the power of n = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the one-, five-, and ten-year periods at the end
of the one-, five-, and ten-year periods (or fractional portion
thereof).
The Portfolios may compare their investment performance to appropriate
market and mutual fund indices and investments for which reliable performance
data is available. Such indices are generally unmanaged and are prepared by
entities and organizations which track the performance of investment companies
or investment advisors. Unmanaged indices often do not reflect deductions for
administrative and management costs and expenses. The performance of the
Portfolios may also be compared in publications to averages, performance
rankings, or other information prepared by recognized mutual fund statistical
services. Any performance information, whether related to the Portfolios or to
the Advisor, should be considered in light of a Portfolio's investment
objectives and policies, characteristics and the quality of the portfolio and
market conditions during the time period indicated and should not be considered
to be representative of what may be achieved in the future.
FINANCIAL STATEMENTS
PricewaterhouseCoopers LLP, 2400 Eleven Penn Center, Philadelphia, PA
19103, are the independent accountants to each of the Funds.
PricewaterhouseCoopers LLP audits the Funds' financial statements. The audited
financial statements and financial highlights of the Funds for their fiscal year
ended November 30, 1998, as set forth in each Fund's annual report to
shareholders, including the report of PricewaterhouseCoopers LLP, is
incorporated by reference into this SAI. The audited annual reports do not
contain any data regarding the Tax Managed Portfolios and Series and the
U.S. 4-10 Value Portfolio because they had not commenced operations as of
November 30, 1998.
The audited financial statements of U.S. 6-10 Small Company, U.S. Large
Company, Enhanced U.S. Large Company, DFA One-Year Fixed Income, DFA Two-Year
Global Fixed Income, U.S. 6-10 Value, U.S. Large Cap Value, DFA International
Value, Japanese Small Company, United Kingdom Small Company, Pacific Rim Small
Company, Continental Small Company, Emerging Markets and Emerging Markets Small
Cap Series of the Trust and the audited financial statements of Dimensional
Emerging Markets Value Fund Inc. for the fiscal year ended November 30, 1998, as
set forth in the Trust's and Dimensional Emerging Markets Value Fund Inc.'s
annual reports to shareholders, including the reports of PricewaterhouseCoopers
LLP, are incorporated by reference into this SAI.
A shareholder may obtain a copy of the reports, upon request and without
charge, by contacting the Funds at the address or telephone number appearing on
the cover of this SAI.
32
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC. (50/51)
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS.
(a) Articles of Incorporation.
(1) Articles of Restatement dated August 8, 1995 as filed with
the Maryland Secretary of State on September 18, 1995.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 43/44 to the
Registrant's Registration Statement on Form
N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: October 4, 1996.
(2) Articles Supplementary dated December 21, 1995 as filed
with the Maryland Secretary of State on December 28,
1995.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 39/40 to the
Registrant's Registration Statement on Form
N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: January 30, 1996.
(3) Articles Supplementary dated May 14, 1996 as filed with
the Maryland Secretary of State on July 12, 1996.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 41/42 to the
Registrant's Registration Statement on
Form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: May 24, 1996.
(4) Articles Supplementary dated October 18, 1996 as filed
with the Maryland Secretary of State on December 5, 1996.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 44/45 to the
Registrant's Registration Statement on Form
N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: December 19, 1996.
(5) Articles of Amendment dated December 20, 1996 as filed
with the Maryland Secretary of State on December 20,
1996.
<PAGE>
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 44/45 to the
Registrant's Registration Statement on Form
N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: December 19, 1996.
(6) Articles of Amendment dated July 28, 1997 as filed with
the Maryland Secretary of State on August 1, 1997.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 46/47 to
Registrant's Registration Statement on Form
N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: September 16, 1997.
(7) Articles Supplementary dated September 16, 1997 as filed
with the Maryland Secretary of State on September 17,
1997.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 46/47 to
Registrant's Registration Statement on Form
N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: September 16, 1997.
(8) Articles Supplementary dated November 11, 1998 as filed with
the Maryland Secretary of State on November 12, 1998 ARE
ELECTRONICALLY FILED HEREWITH AS EXHIBIT EX-99.b1.1.
(9) Articles Supplementary as filed with the Maryland Secretary
of State on December 7, 1998 re: the addition of the:
* Tax-Managed U.S. 5-10 Value Portfolio;
* Tax-Managed U.S. 6-10 Small Company Portfolio;
and
* Tax-Managed DFA International Value Portfolio;
and
* Tax-Managed U.S. Marketwide Value Portfolio
ARE ELECTRONICALLY FILED HEREWITH
AS EXHIBIT EX-99.b1.2.
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<PAGE>
(b) By-Laws.
By-Laws of the Registrant, as approved through September
2, 1997.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 48/49 to
Registrant's Registration Statement on Form
N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: March 20, 1998.
(c) Instruments Defining the Rights of Securityholders.
(1) See Articles Fifth, Sixth, Eighth and Thirteenth of the
Registrant's Articles of Restatement dated August 8, 1995.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 43/44 to the
Registrant's Registration Statement on Form
N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: October 4, 1996.
(d) Investment Advisory Agreement.
(i) Investment Management Agreements.
(1) Investment Management Agreement
between the Registrant and Dimensional
Fund Advisors Inc. ("DFA") dated May 13,
1987 re: the:
* DFA Five-Year Government Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 48/49 to Registrant's
Registration Statement on
Form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: March 20, 1998.
(2) Investment Management Agreement between the
Registrant and DFA dated April 26, 1994 re: the:
* DFA Global Fixed Income Portfolio
(formerly the DFA Global Bond Portfolio).
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 48/49 to Registrant's
Registration Statement on
Form N-1A.
File Nos.: 2-73948 and 811-3258.
-3-
<PAGE>
Filing Date: March 20, 1998.
(3) Investment Management Agreement between
the Registrant and DFA dated September 24, 1990
re: the:
* DFA Intermediate Government Fixed
Income Portfolio (formerly the DFA
Intermediate Government Bond Portfolio)
IS ELECTRONICALLY FILED HEREWITH
AS EXHIBIT EX-99.b5.1.
(4) Investment Advisory Agreement between the
Registrant and DFA dated April 2, 1991 re: the:
* Large Cap International Portfolio
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b5.2.
(5) Amendment to Investment Advisory Agreement
between the Registrant and DFA dated
September 21, 1992, effective on September 21,
1992 re: the:
* DFA Real Estate Securities Portfolio
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 48/49 to Registrant's
Registration Statement on
Form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: March 20, 1998.
(6) Investment Advisory Agreement between the
Registrant and DFA dated December 20, 1994 re:
the:
* DFA International Small Cap Value
Portfolio)
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b5.3.
(7) Investment Advisory Agreement between the
Registrant and DFA dated September 8, 1995 re:
the:
* VA Large Value Portfolio (formerly known
as the DFA Global Value Portfolio)
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b5.4.
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<PAGE>
(8) Investment Advisory Agreement between the
Registrant and DFA dated September 8, 1995 re:
the:
* VA Small Value Portfolio
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b5.5.
(9) Investment Advisory Agreement between the
Registrant and DFA dated September 8, 1995 re:
the:
* VA International Value Portfolio
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b5.6.
(10) Investment Advisory Agreement between the
Registrant and DFA dated September 8, 1995 re:
the:
* VA International Small Portfolio
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b5.7.
(11) Investment Advisory Agreement between the
Registrant and DFA dated September 8, 1995 re:
the:
* VA Short-Term Fixed Portfolio
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b5.8.
(12) Investment Advisory Agreement between the
Registrant and DFA dated August 8, 1996 re:
the:
* International Small Company Portfolio IS
ELECTRONICALLY FILED HEREWITH AS EXHIBIT
EX-99.b5.9.
(13) Investment Advisory Agreement between the
Registrant and DFA dated December 7, 1998.
re: the
* Tax-Managed U.S. 5-10 Value Portfolio;
* Tax-Managed U.S. 6-10 Small Company
Portfolio; and
* Tax-Managed DFA International Value
Portfolio
IS ELECTRONICALLY FILED HEREWITH AS
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<PAGE>
EXHIBIT EX-99.b5.10.
(ii) Sub-advisory Agreements.
(1) Sub-Advisory Agreement between the Registrant,
DFA and DFA Australia Ltd. (formerly DFA
Australia Pty Limited) dated September 21, 1995 re:
the:
* VA International Small Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
37/38 to the Registrant's Registration
Statement on Form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: November 22, 1995.
(2) Sub-Advisory Agreement between the Registrant,
DFA and Dimensional Fund Advisors Ltd. dated
September 21, 1995 re: the:
* VA International Small Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
37/38 to the Registrant's Registration
Statement on Form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: November 22, 1995.
(3) Form of Consultant Services Agreement between DFA and
DFA Australia Ltd. (formerly DFA Australia Pty Limited)
IS ELECTRONICALLY FILED HEREWITH AS EXHIBIT
EX-99.b5.11.
(4) Form of Consultant Services Agreement between DFA and
Dimensional Fund Advisors Ltd., IS ELECTRONICALLY FILED
HEREWITH AS EXHIBIT EX-99.b5.12.
(e) Underwriting Contracts.
(1) Agreement between the Registrant and DFA Securities Inc.
Filing: Post-Effective Amendment No. 48/49 to
Registrant's Registration Statement on
Form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: March 20, 1998.
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<PAGE>
(f) Bonus or Profit Sharing Plans.
Not Applicable.
(g) Custodian Agreements.
(1) Form of Custodian Services Agreement between the
Registrant and PNC Bank, N.A. (formerly
Provident National Bank) dated February 8, 1996
re: the:
* Enhanced U.S. Large Company Portfolio;
* DFA Two-Year Corporate Fixed
Income Portfolio; and
* DFA Two-Year Government
Portfolio
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 37/38 to
Registration Statement of the Registrant on form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: November 22, 1995.
(2) Form of Custodian Agreement between the Registrant and
PNC Bank, N.A. (formerly Provident National
Bank) re: the:
* U.S. 9-10 Small Company Portfolio;
* U.S. Large Company Portfolio;
* DFA One-Year Fixed Income Portfolio;
* DFA Intermediate Government Fixed
Income Portfolio (formerly known as the
DFA Intermediate Government Bond
Portfolio; and
* DFA Five-Year Government Portfolio
Previously filed with this registration statement and
incorporated herein by reference
a) Addendum No. 1 IS ELECTRONICALLY FILED
HEREWITH AS EXHIBIT EX-99.b8.
(h) Other Material Contracts.
(1) Transfer Agency Agreement.
Transfer Agency Agreement between the Registrant and
PFPC Inc. (formerly Provident Financial Processing
Corporation).
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 48/49 to
the Registrant's Registration Statement on
Form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: March 20, 1998.
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<PAGE>
a) Addendum Number One IS
ELECTRONICALLY FILED HEREWITH
AS EXHIBIT EX-99.b9.1.
(2) Administration and Accounting Agreement
Administration and Accounting Services Agreement
between the Registrant and PFPC.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 48/49 to Registrant's
Registration Statement on
Form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: March 20, 1998.
a) Addendum Number One IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.2.
(3) Administration Agreements.
Administration Agreements between the Registrant and
DFA.
(1) Dated January 6, 1993 re: the
* DFA One-Year Fixed Income Portfolio
(formerly The DFA Fixed Income Shares)
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.3.
(2) Dated August 8, 1996 re: the:
* Japanese Small Company
Portfolio IS ELECTRONICALLY FILED HEREWITH AS EXHIBIT
EX-99.b9.4.
(3) Dated August 8, 1996 re: the
* United Kingdom Small
Company Portfolio IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.5.
(4) Dated August 8, 1996 re: the
* Continental Small
Company Portfolio IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.6.
(5) Dated December 1, 1995 re: the:
* U.S. Large Company
Portfolio IS ELECTRONICALLY FILED HEREWITH AS EXHIBIT
EX-99.b9.7.
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<PAGE>
(6) Dated August 8, 1996 re: the
* Pacific Rim Small Company Portfolio (The
Series became a feeder portfolio of DFA/ITC on
January 15, 1993.)
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.8.
(7) Dated January 6, 1993 re: the
* U.S. 6-10 Small Company
Portfolio IS ELECTRONICALLY FILED HEREWITH AS EXHIBIT
EX-99.b9.9.
(8) Dated January 6, 1993 re: the:
* U.S. Large Cap Value Portfolio (formerly
the U.S. Large Cap High Book to Market
Portfolio)
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.10.
(9) Dated January 6, 1993 re: the:
* U.S. 6-10 Value
Portfolio (formerly the U.S
Small Cap High Book to Market Portfolio)
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.11.
(10) Dated February 8, 1996 re: the
* RWB/DFA International High Book to
Market Portfolio (formerly DFA
International High Book to
Market Portfolio; formerly the Reinhardt
Werba Bowen International Large Stock
Portfolio)
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.12.
(11) Dated March 30, 1994 re:
* Emerging Markets Portfolios
IS ELECTRONICALLY FILED HEREWITH AS EXHIBIT
EX-99.b9.13.
(12) Dated February 8, 1996 re: the:
* Enhanced U.S. Large
Company Portfolio IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.14.
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<PAGE>
(13) Dated February 8, 1996 re: the:
* DFA Two-Year Corporate Fixed Income
Portfolio
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.15.
(14) Dated February 8, 1996 re: the
* DFA Two-Year Global Fixed Income
Portfolio
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.16.
(15) Dated February 8, 1996 re: the:
* DFA Two-Year
Government Portfolio IS ELECTRONICALLY FILED HEREWITH
AS EXHIBIT EX-99.b9.17.
(16) Dated August 8, 1996 re: the:
* International Small
Company Portfolio IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.18.
(17) Dated December 19, 1996 re: the:
* Emerging Markets
Small Cap Portfolio IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.19.
(18) Dated November 30, 1997 re: the:
* U.S. 9-10 Small
Company Portfolio IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.20.
(19) Dated November 30, 1997 re: the:
* U.S. 4-10 Value
Portfolio IS ELECTRONICALLY FILED HEREWITH AS EXHIBIT
EX-99.b9.21.
(20) Dated November 30, 1997 re: the:
* Emerging Markets
Value Portfolio IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.22.
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<PAGE>
(21) Dated December 8, 1998 re: the:
* Tax-Managed U.S. Large Cap Value Portfolio;
IS ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b9.23.
(4) Other.
(a) Marketing Agreement dated June 29, 1994 between
DFA and National Home Life Assurance Company.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
33/34 to the Registrant's Registration
Statement on Form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: June 19, 1995.
(b) Participation Agreement between DFA Investment
Dimensions Group, Inc., DFA, DFA Securities, Inc.
and National Home Life Assurance Company.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
33/34 to the Registrant's Registration
Statement on Form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: June 19, 1995.
(c) FORM OF Client Service Agent Agreement re: the:
* RWB/DFA International High Book to
Market Portfolio (formerly the DFA
International High Book to Market Portfolio
and Reinhardt Werba Bowen International
Large Stock Portfolio).
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 37/38 to the Registrant's
Registration Statement on
Form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: November 22, 1995.
(i) Legal Opinion.
Opinion of Stradley, Ronon, Stevens & Young, LLP, IS
ELECTRONICALY FILED HEREWITH AS EXHIBIT
EX-99.b10.
-11-
<PAGE>
(j) Other Opinions.
(1) Consent of PricewaterhouseCoopers LLP IS
ELECTRONICALLY FILED HEREWITH AS
EXHIBIT EX-99.b11.
(k) Omitted Financial Statements.
Not applicable.
(l) Initial Capital Agreements.
Subscription Agreement under Section 14(a)(3) of the Investment
Company Act of 1940.
Previously filed with this registration statement and
incorporated herein by reference.
(m) Rule 12b-1 Plans.
Not Applicable
(n) Financial Data Schedules.
Financial Data Schedules as of November 30, 1998 will be filed by
amendment on behalf of the following series:
(1) U.S. 9-10 Small Company Portfolio;
(2) DFA One-Year Fixed Income Portfolio;
(3) Japanese Small Company Portfolio;
(4) United Kingdom Small Company Portfolio;
(5) DFA Five-Year Government Portfolio;
(6) Continental Small Company Portfolio;
(7) U.S. Large Company Portfolio;
(8) DFA Global Fixed Income Portfolio;
(9) DFA Intermediate Government Fixed Income Portfolio;
(10) Large Cap International Portfolio;
(11) Pacific Rim Small Company Portfolio;
(12) U.S. 6-10 Small Company Portfolio;
(13) U.S. Large Cap Value Portfolio;
-12-
<PAGE>
(14) U.S. 6-10 Value Portfolio;
(15) DFA Real Estate Securities Portfolio;
(16) RWB/DFA International High Book-to-Market Portfolio;
(17) Emerging Markets Portfolio;
(18) DFA International Small Cap Value Portfolio;
(19) VA Global Bond Portfolio;
(20) VA Large Value Portfolio;
(21) VA Small Value Portfolio;
(22) VA International Value Portfolio;
(23) VA International Small Portfolio;
(24) VA Short-Term Fixed Portfolio;
(25) Enhanced U.S. Large Company Portfolio;
(26) DFA Two-Year Global Fixed Income Portfolio;
(27) International Small Company Portfolio; and
(28) Emerging Markets Small Cap Portfolio.
(o) Plans pursuant to Rule 18f-3.
Not Applicable.
(p) Powers-of-Attorney.
(1) Power-of-Attorney appointing David G. Booth, Rex A.
Sinquefield, Michael T. Scardina, Irene R. Diamant and
Stephen W. Kline, Esq. as attorney-in-fact for the
Registrant and certified resolution relating thereto on
behalf of the Registrant.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 31/32 to the
Registrant's Registration Statement on
Form N-1A.
-13-
<PAGE>
Filing Nos.: 2-73948 and 811-3258.
Filing Date: October 3, 1994.
(2) Power-of-Attorney appointing David G. Booth, Rex A.
Sinquefield, Michael T. Scardina, Irene R. Diamant and
Stephen W. Kline, Esq. as attorney-in-fact for THE DFA
INVESTMENT TRUST COMPANY ("DFA/ITC")
and certified resolution relating thereto on behalf of
DFA/ITC.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 13/14 to the
Registrant's Registration Statement of the
Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 21, 1996.
(3) Powers-of-Attorney for Registrant, DFA/ITC and
Dimensional Emerging Markets Fund Inc. dated July 18,
1997.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 47/48 to
the Registrant's Registration Statement
on Form N-1A.
File Nos.: 2-73948 and 811-3258.
Filing Date: November 30, 1997.
ITEM 24. Persons Controlled by or Under Common Control with the Fund.
None.
ITEM 25. Indemnification.
Reference is made to Section 1 of Article XI of the Registrant's
By-Laws (as approved through 10/17/96), incorporated herein by
reference, which provides for indemnification, as set forth below.
With respect to the indemnification of the Officers and Directors of
the Corporation:
(a) The Corporation shall indemnify each officer and Director
made party to a proceeding, by reason of service in such
capacity, to the fullest extent, and in the manner provided,
under Section 2-418 of the Maryland General Corporation Law: (i)
unless it is proved that the person seeking indemnification did
not meet the standard of conduct set forth in subsection (b)(1)
of such section; and (ii) provided, that the Corporation shall
not indemnify any officer or Director for any liability to the
Corporation or its security
-14-
<PAGE>
holders arising from the willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of such person's office.
(b) The provisions of clause (i) of paragraph (a) herein
notwithstanding, the Corporation shall indemnify each Officer and
Director against reasonable expenses incurred in connection with
the successful defense of any proceeding to which such officer or
Director is a party by reason of service in such capacity.
(c) The Corporation, in the manner and to the extent provided by
applicable law, shall advance to each officer and Director who is
made party to a proceeding by reason of service in such capacity
the reasonable expenses incurred by such person in connection
therewith.
ITEM 26. Business and Other Connections of the Investment Advisor.
(a) Dimensional Fund Advisors Inc., with a principal place of
business located at 1299 Ocean Drive, 11th Floor, Santa Monica,
CA 90401,the investment manager for the Registrant, is also the
investment manager for three other registered open-end investment
companies, The DFA Investment Trust Company, Dimensional
EmergingMarkets Funds Inc. and Dimensional Investment Group Inc.
The Advisor also serves as sub-advisor for certain other
registered investment companies.
The Advisor is engaged in the business of providing investment
advice primarily to institutional investors. For additional
information, please see "Management of the Fund" in PART A and
"Directors and Officers" in PART B of this Registration
Statement.
Additional information as to the Advisor and the directors and
officers of the Advisor is included in the Advisor's Form ADV
filed with the Commission (File No. 801-16283), which is
incorporated herein by reference and sets forth the officers and
directors of the Advisor and information as to any business,
profession, vocation or employment or a substantial nature
engaged in by those officers and directors during the past two
years.
-15-
<PAGE>
(b) The Sub-Advisor for the VA International Small Portfolio of the
Registrant is Dimensional Fund Advisors Ltd. ("DFAL"). DFAL
has its principal place of business is 14 Berkeley Street, London
W1X 5AD, England.
(c) The Sub-Advisor for the VA International Small Portfolio of the
Registrant is DFA Australia Limited ("DFA Australia"). DFA has
its principal placed of business is Suite 4403 Gateway, 1
MacQuarie Place, Sydney, New South Wales 2000, Australia.
ITEM 27. Principal Underwriters.
Names of investment companies for which the Registrant's principal
underwriter also acts as principal underwriter.
(a) Not applicable.
(b) Registrant distributes its own shares. It has entered into an
agreement with DFA Securities Inc. dated March 31, 1989, which
provides that DFA Securities Inc., 1299 Ocean Avenue, 11th Floor,
Santa Monica, CA 90401, will supervise the sale of Registrant's
shares.
(c) Not applicable.
ITEM 28. Location of Accounts and Records.
The accounts and records of the Registrant are located at the office
of the Registrant and at additional locations, as follows:
Name Address
DFA Investment Dimensions Group Inc. 1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
PFPC Inc. 400 Bellevue Parkway,
Wilmington, DE 19809.
ITEM 29. Management Services.
None.
ITEM 30. Undertakings.
Not Applicable.
-16-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, duly authorized, in the City of
Santa Monica and State of California on the 21st day of January, 1998.
DFA INVESTMENT DIMENSIONS GROUP INC.
(Registrant)
By: David G. Booth*
David G. Booth, President
(Signature and Title)David G. Booth
Pursuant to the requirements of the Securities Act, this registration statement
has been signed below by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
David G. Booth* Director and January 21, 1999
David G. Booth Chairman-Chief
Executive Officer
Rex A. Sinquefield* Director and January 21, 1999
Rex A. Sinquefield Chairman-Chief
Investment Officer
Michael T. Scardina* Chief Financial January 21, 1999
Michael T. Scardina Officer, Treasurer
and Vice President
George M. Constantinides* Director January 21, 1999
George M. Constantinides
John P. Gould* Director January 21, 1999
John P. Gould
Roger G. Ibbotson* Director January 21, 1999
Roger G. Ibbotson
Merton H. Miller* Director January 21, 1999
Merton H. Miller
</TABLE>
-17-
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
Myron S. Scholes* Director January 21, 1999
Myron S. Scholes
</TABLE>
* By: Irene R. Diamant
Irene R. Diamant
Attorney-in-Fact (Pursuant to a Power-of-Attorney)
-18-
<PAGE>
THE DFA INVESTMENT TRUST COMPANY consents to the filing of this Amendment to the
Registration Statement of DFA INVESTMENT DIMENSIONS GROUP INC. which is signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Santa Monica and State of California on the 21st day of January, 1999.
THE DFA INVESTMENT TRUST COMPANY
(Registrant)
By: David G. Booth*
David G. Booth, President
(Signature and Title)
The undersigned Directors and principal officers of THE DFA INVESTMENT TRUST
COMPANY consent to the filing of this Amendment to the Registration Statement of
DFA Investment Dimensions Group Inc. on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
David G. Booth* Director and January 21, 1999
David G. Booth Chairman-Chief
Executive Officer
Rex A. Sinquefield* Director and January 21, 1999
Rex A. Sinquefield Chairman-Chief
Investment Officer
Michael T. Scardina* Chief Financial January 21, 1999
Michael T. Scardina Officer, Treasurer
and Vice President
George M. Constantinides* Director January 21, 1999
George M. Constantinides
John P. Gould* Director January 21, 1999
John P. Gould
Roger G. Ibbotson* Director January 21, 1999
Roger G. Ibbotson
Merton H. Miller* Director January 21 1999
Merton H. Miller
Myron S. Scholes* Director January 21, 1999
Myron S. Scholes
</TABLE>
-19-
<PAGE>
* By: Irene R. Diamant
Irene R. Diamant
Attorney-in-Fact (Pursuant to a Power-of-Attorney)
-20-
<PAGE>
DIMENSIONAL EMERGING MARKETS VALUE FUND INC. consents to the filing of this
Amendment to the Registration Statement of DFA INVESTMENT DIMENSIONS GROUP
INC. which is signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Santa Monica and State of California on the 21st
day of January, 1999.
DIMENSIONAL EMERGING MARKETS FUND INC.
(Registrant)
By: David G. Booth*
David G. Booth, President
(Signature and Title)
The undersigned Directors and principal officers of DIMENSIONAL EMERGING
MARKETS VALUE FUND INC. consent to the filing of this Amendment to the
Registration Statement of DFA Investment Dimensions Group Inc. on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
David G. Booth* Director and January 21, 1999
David G. Booth Chairman-Chief
Executive Officer
Rex A. Sinquefield* Director and January 21, 1999
Rex A. Sinquefield Chairman-Chief
Investment Officer
Michael T. Scardina* Chief Financial January 21, 1999
Michael T. Scardina Officer, Treasurer
and Vice President
George M. Constantinides* Director January 21, 1999
George M. Constantinides
John P. Gould* Director January 21, 1999
John P. Gould
Roger G. Ibbotson* Director January 21, 1999
Roger G. Ibbotson
Merton H. Miller* Director January 21, 1999
Merton H. Miller
Myron S. Scholes* Director January 21, 1999
Myron S. Scholes
</TABLE>
-21-
<PAGE>
* By: Irene R. Diamant
Irene R. Diamant
Attorney-in-Fact (Pursuant to a Power-of-Attorney)
-22-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
N-1A EDGAR
Exhibit No. Exhibit No. Description
<S> <C> <C>
23(a)(8) EX-99.b1.1 Articles Supplementary
November 12, 1998
23(a)(9) EX-99.b1.2 Articles Supplementary
December 7, 1998
23(d)(i)(3) EX-99.b5.1 Investment Advisory
Agreement
23(d)(i)(4) EX-99.b5.2 Investment Advisory
Agreement
23(d)(i)(6) EX-99.b5.3 Investment Advisory
Agreement
23(d)(i)(7) EX-99.b5.4 Investment Advisory
Agreement
23(d)(i)(8) EX-99.b5.5 Investment Advisory
Agreement
23(d)(i)(9) EX-99.b5.6 Investment Advisory
Agreement
23(d)(i)(10) EX-99.b5.7 Investment Advisory
Agreement
23(d)(i)(11) EX-99.b5.8 Investment Advisory
Agreement
23(d)(i)(12) EX-99.b5.9 Investment Advisory
Agreement
23(d)(i)(13) EX-99.b5.10 Investment Advisory
Agreement
23(d)(ii)(3) EX-99.b5.11 Consultant Services
Agreement
23(d)(ii)(4) EX-99.b5.12 Consultant Services
Agreement
23(g)(2)(a) EX-99.b8 Addendum No. 1 to
Custodian Agreement
23(h)(1)(a) EX-99.b9.1 Addendum No. 1 to
Transfer Agency Agreement
23(h)(2)(a) EX-99.b9.2 Addendum No. 1 to
Administration and
Accounting Services
Agreement
23(h)(3)(1) EX-99.b9.3 Administration Agreement
23(h)(3)(2) EX-99.b9.4 Administration Agreement
23(h)(3)(3) EX-99.b9.5 Administration Agreement
23(h)(3)(4) EX-99.b9.6 Administration Agreement
</TABLE>
-23-
<PAGE>
<TABLE>
<CAPTION>
N-1A EDGAR
Exhibit No. Exhibit No. Description
<S> <C> <C>
23(h)(3)(5) EX-99.b9.7 Administration Agreement
23(h)(3)(6) EX-99.b9.8 Administration Agreement
23(h)(3)(7) EX-99.b9.9 Administration Agreement
23(h)(3)(8) EX-99.b9.10 Administration Agreement
23(h)(3)(9) EX-99.b9.11 Administration Agreement
23(h)(3)(10) EX-99.b9.12 Administration Agreement
23(h)(3)(11) EX-99.b9.13 Administration Agreement
23(h)(3)12) EX-99.b9.14 Administration Agreement
23(h)(3)(13) EX-99.b9.15 Administration Agreement
23(h)(3)(14) EX-99.b9.16 Administration Agreement
23(h)(3)(15) EX-99.b9.17 Administration Agreement
23(h)(3)(16) EX-99.b9.18 Administration Agreement
23(h)(3)(17) EX-99.b9.19 Administration Agreement
23(h)(3)(18) EX-99.b9.20 Administration Agreement
23(h)(3)(19) EX-99.b9.21 Administration Agreement
23(h)(3)(20) EX-99.b9.22 Administration Agreement
23(h)(3)(21) EX-99.b9.23 Administration Agreement
23(i) EX-99.b10 Legal Opinion of
Stradley, Ronon, Stevens
& Young, LLP
23(j)(1) EX-99.b11 Auditors Consent of
PricewaterhouseCoopers,
LLP
</TABLE>
-24-
<PAGE>
Exhibit 99.b1.1
DFA INVESTMENT DIMENSIONS GROUP INC.
ARTICLES SUPPLEMENTARY TO THE CHARTER
DFA INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation having its
principal office in Baltimore, Maryland (hereinafter called the "Corporation")
and registered under the Investment Company Act of 1940 as an open-end company,
hereby certifies, in accordance with the requirements of Section 2-208 and
Section 2-208.1 of the Maryland General Corporation Law, to the State Department
of Assessments and Taxation of Maryland that:
FIRST: The Corporation has authority to issue a total of Three Billion
(3,000,000,000) shares of stock, with a par value of One Cent ($.01) per share,
having an aggregate par value of $30,000,000, all of which shall be considered
common stock. The allocation of shares to each of its thirty-two existing
classes is as follows:
<TABLE>
<CAPTION>
Number of Shares of Common Stock
(par value $.01 per share)
CLASS DESIGNATION ALLOCATED
----------------- ---------
<S> <C>
The U.S. Large Company Portfolio Shares 200,000,000
The U.S. 9-10 Small Company 300,000,000
Portfolio Shares
The DFA One-Year Fixed Income 100,000,000
Portfolio Shares
The DFA Five-Year Government 100,000,000
Portfolio Shares
The United Kingdom Small Company Portfolio Shares 20,000,000
The Japanese Small Company Portfolio Shares 20,000,000
The Continental Small Company 50,000,000
Portfolio Shares
The DFA Intermediate Government Fixed 100,000,000
Income Portfolio Shares
The DFA Global Fixed Income 100,000,000
Portfolio Shares
The Pacific Rim Small Company 20,000,000
Portfolio Shares
The Large Cap International Portfolio Shares 150,000,000
The U.S. 6-10 Small Company 100,000,000
Portfolio Shares
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number of Shares of Common Stock
(par value $.01 per share)
CLASS DESIGNATION ALLOCATED
----------------- ---------
<S> <C>
The U.S. 6-10 Value Portfolio Shares 100,000,000
The U.S. Large Cap Value Portfolio Shares 100,000,000
The DFA Real Estate Securities Portfolio 100,000,000
Shares
RWB/DFA International High Book to Market 100,000,000
Portfolio Shares
The Emerging Markets Portfolio Shares 100,000,000
DFA International Small Cap Value 100,000,000
Portfolio Shares
VA Large Value Portfolio Shares 50,000,000
VA Global Bond Portfolio Shares 50,000,000
VA Small Value Portfolio Shares 50,000,000
VA International Value Portfolio Shares 50,000,000
VA International Small Portfolio Shares 50,000,000
The VA Short-Term Fixed Portfolio Shares 50,000,000
Enhanced U.S. Large Company 100,000,000
Portfolio Shares
DFA Two-Year Corporate Fixed Income 100,000,000
Portfolio Shares
DFA Two-Year Global Fixed Income 100,000,000
Portfolio Shares
DFA Two-Year Government Portfolio Shares 100,000,000
International Small Company Portfolio Shares 100,000,000
Emerging Markets Small Cap Portfolio Shares 100,000,000
U.S. 4-10 Value Portfolio Shares 100,000,000
Emerging Markets Value Portfolio Shares 100,000,000
</TABLE>
2
<PAGE>
In accordance with Section 2-105(c) of the Maryland General Corporation
Law, the Board of Directors of the Corporation has adopted a resolution
increasing the total number of shares of stock that the Corporation has
authority to issue from Three Billion (3,000,000,000) shares, with a par value
of One Cent ($.01) per share and an aggregate par value of Thirty Million
Dollars ($30,000,000), to Six Billion (6,000,000,000) shares, with a par value
of One Cent ($.01) per share and an aggregate par value of Sixty Million Dollars
($60,000,000).
The Board of Directors of the Corporation has also adopted a resolution
reclassifying One Hundred Million (100,000,000) shares of the unissued stock
(par value $.0l per share) of the Corporation previously allocated to the class
of stock designated "DFA Two-Year Corporate Fixed Income Portfolio Shares" and
reclassifying One Hundred Million (100,000,000) shares of the unissued stock
(par value $.01 per share) of the Corporation previously allocated to the class
of stock designated "DFA Two-Year Government Portfolio Shares," and by such
resolution allocated and classified such Two Hundred Million (200,000,000)
shares as follows: One Hundred Million (100,000,000) shares were allocated to
the class of stock designated "The U.S. 6-10 Value Portfolio Shares," Forty
Million (40,000,000) shares were allocated to the class of stock designated "The
DFA One-Year Fixed Income Portfolio Shares," Thirty Million (30,000,000) shares
were allocated to the class of stock designated "The Japanese Small Company
Portfolio Shares" and Thirty Million (30,000,000) shares were allocated to the
class of stock designated "The Pacific Rim Small Company Portfolio Shares."
SECOND: Following the aforesaid increase of the total number of
authorized shares of stock of the Corporation and the aforesaid
reclassifications and allocations, the total number of shares of stock which the
Corporation is authorized to issue is Six Billion (6,000,000,000) shares, with a
par value of One Cent ($.0l) per share and an aggregate par value of Sixty
Million Dollars ($60,000,000), and the allocation of shares to each of the
thirty classes (each a "Class" and, collectively, the "Classes") is as follows:
<TABLE>
<CAPTION>
Number of Shares of Common Stock
(par value $.01 per share)
CLASS DESIGNATION ALLOCATED
----------------- ---------
<S> <C>
The U.S. Large Company Portfolio Shares 200,000,000
The U.S. 9-10 Small Company 300,000,000
Portfolio Shares
The DFA One-Year Fixed Income 140,000,000
Portfolio Shares
The DFA Five-Year Government 100,000,000
Portfolio Shares
The United Kingdom Small Company 20,000,000
Portfolio Shares
The Japanese Small Company Portfolio Shares 50,000,000
The Continental Small Company 50,000,000
Portfolio Shares
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Number of Shares of Common Stock
(par value $.01 per share)
CLASS DESIGNATION ALLOCATED
----------------- ---------
<S> <C>
The DFA Intermediate Government Fixed 100,000,000
Income Portfolio Shares
The DFA Global Fixed Income 100,000,000
Portfolio Shares
The Pacific Rim Small Company 50,000,000
Portfolio Shares
The Large Cap International Portfolio Shares 150,000,000
The U.S. 6-10 Small Company 100,000,000
Portfolio Shares
The U.S. 6-10 Value Portfolio Shares 200,000,000
The U.S. Large Cap Value Portfolio Shares 100,000,000
The DFA Real Estate Securities Portfolio 100,000,000
Shares
RWB/DFA International High Book to Market 100,000,000
Portfolio Shares
The Emerging Markets Portfolio Shares 100,000,000
DFA International Small Cap Value 100,000,000
Portfolio Shares
VA Large Value Portfolio Shares 50,000,000
VA Global Bond Portfolio Shares 50,000,000
VA Small Value Portfolio Shares 50,000,000
VA International Value Portfolio Shares 50,000,000
VA International Small Portfolio Shares 50,000,000
The VA Short-Term Fixed Portfolio Shares 50,000,000
Enhanced U.S. Large Company 100,000,000
Portfolio Shares
DFA Two-Year Global Fixed Income 100,000,000
Portfolio Shares
International Small Company Portfolio Shares 100,000,000
Emerging Markets Small Cap Portfolio Shares 100,000,000
U.S. 4-10 Value Portfolio Shares 100,000,000
Emerging Markets Value Portfolio Shares 100,000,000
</TABLE>
4
<PAGE>
THIRD: A description of the shares of each Class, with the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption as set or
changed by the Board of Directors of the Corporation is as follows:
The holder of each share of each Class shall be entitled to one vote
for each full share, and a fractional vote for each fractional share of stock
then standing in his or her name on the books of the Corporation. All shares of
the Classes then issued and outstanding and entitled to vote, irrespective of
Class, shall be voted in the aggregate and not by Class, except: (1) when
otherwise expressly provided by the Maryland General Corporation Law; (2) when
required by the Investment Company Act of 1940, as amended, shares shall be
voted by Class; and (3) when a matter to be voted upon does not affect any
interest of a particular Class then only shareholders of the affected Class or
Classes shall be entitled to vote thereon.
Each share of each Class shall have the following preferences and
special rights, restrictions, and limitations:
(1) All consideration received by the Corporation for the
issue or sale of stock of a Class, together with all income, earnings,
profits, and proceeds thereof, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be,
shall irrevocably belong to such Class, subject only to the rights of
the creditors.
(2) Dividends or distributions on shares of a Class and
redemptions of such Class shall be paid only out of earnings, surplus,
or other lawfully available assets belonging to such Class.
(3) The Corporation may deduct from the proceeds of redemption
of shares of each Class the cost incurred in liquidating investment
securities to pay redemptions in cash as set forth in the By-Laws.
(4) In the event of the liquidation or dissolution of the
Corporation, holders of each Class shall be entitled to receive, as a
Class, out of the assets of the Corporation available for distribution
to shareholders, but other than general assets not belonging to any
particular Class, the assets belonging to such Class; and the assets so
distributable to such shareholders shall be distributed among such
shareholders in proportion to the asset value of such shares. In
addition, such holders shall be entitled to receive their proportionate
share of assets of the Corporation which do not belong solely to any
particular Class, as determined by the Board of Directors.
(5) The assets belonging to each Class shall be charged with
the liabilities in respect to such Class, and shall also be charged
with their share of the general liabilities of the Corporation as
determined by the Board of Directors, such determination shall be
conclusive for all purposes.
5
<PAGE>
FOURTH: The shares aforesaid have been duly classified and allocated
by the Board of Directors pursuant to authority contained in the charter of the
Corporation.
FIFTH: The undersigned Vice President hereby acknowledges these
Articles Supplementary to the charter to be the corporate act of the Corporation
and, as to all matters or facts required to be verified under oath, the
undersigned Vice President acknowledges that, to the best of his knowledge,
information and belief, these matters and facts are true in all material
respects, and that this statement is made under the penalties of perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles to be
signed in its name and on its behalf by its Vice President and attested to by
its Secretary on this 11th day of November, 1998.
ATTEST: DFA INVESTMENT DIMENSIONS GROUP INC.
/S/ IRENE R. DIAMANT By: /S/ MICHAEL T. SCARDINA
- ----------------------------- -------------------------------------------
Irene R. Diamant, Secretary Michael T. Scardina
Vice President, Chief Financial Officer and
Treasurer
6
<PAGE>
EXHIBIT 99.b1.2
DFA INVESTMENT DIMENSIONS GROUP INC.
ARTICLES SUPPLEMENTARY TO THE CHARTER
DFA INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation having its
principal office in Baltimore, Maryland (hereinafter called the "Corporation")
and registered under the Investment Company Act of 1940 as an open-end company,
hereby certifies, in accordance with the requirements of Section 2-208 and
Section 2-208.1 of the Maryland General Corporation Law, to the State Department
of Assessments and Taxation of Maryland that:
FIRST: The Corporation has authority to issue a total of Six Billion
(6,000,000,000) shares of stock, with a par value of One Cent ($.01) per share,
having an aggregate par value of $60,000,000, all of which shall be considered
common stock. The allocation of shares to each of its thirty existing classes is
as follows:
<TABLE>
<CAPTION>
Number of Shares of Common Stock
(par value $.01 per share)
CLASS DESIGNATION ALLOCATED
<S> <C>
The U.S. Large Company Portfolio Shares 200,000,000
The U.S. 9-10 Small Company 300,000,000
Portfolio Shares
The DFA One-Year Fixed Income 140,000,000
Portfolio Shares
The DFA Five-Year Government 100,000,000
Portfolio Shares
The United Kingdom Small Company 20,000,000
Portfolio Shares
The Japanese Small Company Portfolio Shares 50,000,000
The Continental Small Company 50,000,000
Portfolio Shares
The DFA Intermediate Government Fixed 100,000,000
Income Portfolio Shares
The DFA Global Fixed Income 100,000,000
Portfolio Shares
The Pacific Rim Small Company 50,000,000
Portfolio Shares
The Large Cap International Portfolio Shares 150,000,000
The U.S. 6-10 Small Company 100,000,000
Portfolio Shares
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number of Shares of Common Stock
(par value $.01 per share)
CLASS DESIGNATION ALLOCATED
<S> <C>
The U.S. 6-10 Value Portfolio Shares 200,000,000
The U.S. Large Cap Value Portfolio Shares 100,000,000
The DFA Real Estate Securities Portfolio Shares 100,000,000
RWB/DFA International High Book to Market Portfolio 100,000,000
Shares
The Emerging Markets Portfolio Shares 100,000,000
DFA International Small Cap Value 100,000,000
Portfolio Shares
VA Large Value Portfolio Shares 50,000,000
VA Global Bond Portfolio Shares 50,000,000
VA Small Value Portfolio Shares 50,000,000
VA International Value Portfolio Shares 50,000,000
VA International Small Portfolio Shares 50,000,000
The VA Short-Term Fixed Portfolio Shares 50,000,000
Enhanced U.S. Large Company 100,000,000
Portfolio Shares
DFA Two-Year Global Fixed Income 100,000,000
Portfolio Shares
International Small Company Portfolio Shares 100,000,000
Emerging Markets Small Cap Portfolio Shares 100,000,000
U.S. 4-10 Value Portfolio Shares 100,000,000
Emerging Markets Value Portfolio Shares 100,000,000
</TABLE>
The Board of Directors of the Corporation has adopted a resolution classifying
unallocated and unissued common stock (par value $.01 per share) of the
Corporation as follows: one hundred million (100,000,000) shares were allocated
to a new class of common stock designated "Tax-Managed U.S. 5-10 Value Portfolio
Shares," one hundred million (100,0000,00) shares were allocated to a new class
of common stock designated "Tax-Managed U.S. 6-10 Small Company Portfolio
Shares," one hundred million (100,000,000) shares were allocated to a new class
of common stock designated "Tax-Managed U.S. Marketwide Value Portfolio Shares,"
and one hundred million (100,000,000) shares were allocated to a new class of
common stock designated "Tax-Managed DFA International Value Portfolio Shares."
2
<PAGE>
SECOND: Following the aforesaid classifications and allocations, the
total number of shares of stock which the Corporation is authorized to issue is
Six Billion (6,000,000,000) shares, with a par value of One Cent ($.0l) per
share and an aggregate par value of Sixty Million Dollars ($60,000,000), and the
allocation of shares to each of the thirty-four classes (each a "Class" and,
collectively, the "Classes") is as follows:
<TABLE>
<CAPTION>
Number of Shares of Common Stock
(par value $.01 per share)
CLASS DESIGNATION ALLOCATED
<S> <C>
The U.S. Large Company Portfolio Shares 200,000,000
The U.S. 9-10 Small Company 300,000,000
Portfolio Shares
The DFA One-Year Fixed Income 140,000,000
Portfolio Shares
The DFA Five-Year Government 100,000,000
Portfolio Shares
The United Kingdom Small Company
Portfolio Shares 20,000,000
The Japanese Small Company Portfolio Shares 50,000,000
The Continental Small Company 50,000,000
Portfolio Shares
The DFA Intermediate Government Fixed 100,000,000
Income Portfolio Shares
The DFA Global Fixed Income 100,000,000
Portfolio Shares
The Pacific Rim Small Company 50,000,000
Portfolio Shares
The Large Cap International Portfolio Shares 150,000,000
The U.S. 6-10 Small Company 100,000,000
Portfolio Shares
The U.S. 6-10 Value Portfolio Shares 200,000,000
The U.S. Large Cap Value Portfolio Shares 100,000,000
The DFA Real Estate Securities Portfolio 100,000,000
Shares
RWB/DFA International High Book to Market 100,000,000
Portfolio Shares
The Emerging Markets Portfolio Shares 100,000,000
DFA International Small Cap Value 100,000,000
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Number of Shares of Common Stock
(par value $.01 per share)
CLASS DESIGNATION ALLOCATED
<S> <C>
Portfolio Shares
VA Large Value Portfolio Shares 50,000,000
VA Global Bond Portfolio Shares 50,000,000
VA Small Value Portfolio Shares 50,000,000
VA International Value Portfolio Shares 50,000,000
VA International Small Portfolio Shares 50,000,000
The VA Short-Term Fixed Portfolio Shares 50,000,000
Enhanced U.S. Large Company 100,000,000
Portfolio Shares
DFA Two-Year Global Fixed Income 100,000,000
Portfolio Shares
International Small Company Portfolio Shares 100,000,000
Emerging Markets Small Cap Portfolio Shares 100,000,000
U.S. 4-10 Value Portfolio Shares 100,000,000
Emerging Markets Value Portfolio Shares 100,000,000
Tax-Managed U.S. 5-10 Value Portfolio 100,000,000
Shares
Tax-Managed U.S. 6-10 Small Company 100,000,000
Portfolio Shares
Tax-Managed U.S. Marketwide Value 100,000,000
Portfolio Shares
Tax-Managed DFA International Value 100,000,000
Portfolio Shares
</TABLE>
THIRD: A description of the shares of each Class, with the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption as set or
changed by the Board of Directors of the Corporation is as follows:
4
<PAGE>
The holder of each share of each Class shall be entitled to one vote
for each full share, and a fractional vote for each fractional share of stock
then standing in his or her name on the books of the Corporation. All shares of
the Classes then issued and outstanding and entitled to vote, irrespective of
Class, shall be voted in the aggregate and not by Class, except: (1) when
otherwise expressly provided by the Maryland General Corporation Law; (2) when
required by the Investment Company Act of 1940, as amended, shares shall be
voted by Class; and (3) when a matter to be voted upon does not affect any
interest of a particular Class then only shareholders of the affected Class or
Classes shall be entitled to vote thereon.
Each share of each Class shall have the following preferences and
special rights, restrictions, and limitations:
(1) All consideration received by the Corporation for the
issue or sale of stock of a Class, together with all income, earnings,
profits, and proceeds thereof, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be,
shall irrevocably belong to such Class, subject only to the rights of
the creditors.
(2) Dividends or distributions on shares of a Class and
redemptions of such Class shall be paid only out of earnings, surplus,
or other lawfully available assets belonging to such Class.
(3) The Corporation may deduct from the proceeds of redemption
of shares of each Class the cost incurred in liquidating investment
securities to pay redemptions in cash as set forth in the By-Laws.
(4) In the event of the liquidation or dissolution of the
Corporation, holders of each Class shall be entitled to receive, as a
Class, out of the assets of the Corporation available for distribution
to shareholders, but other than general assets not belonging to any
particular Class, the assets belonging to such Class; and the assets so
distributable to such shareholders shall be distributed among such
shareholders in proportion to the asset value of such shares. In
addition, such holders shall be entitled to receive their proportionate
share of assets of the Corporation which do not belong solely to any
particular Class, as determined by the Board of Directors.
(5) The assets belonging to each Class shall be charged with
the liabilities in respect to such Class, and shall also be charged
with their share of the general liabilities of the Corporation as
determined by the Board of Directors, such determination shall be
conclusive for all purposes.
FOURTH: The shares aforesaid have been duly classified and allocated by
the Board of Directors pursuant to authority contained in the charter of the
Corporation.
5
<PAGE>
FIFTH: The undersigned Vice President hereby acknowledges these
Articles Supplementary to the charter to be the corporate act of the Corporation
and, as to all matters or facts required to be verified under oath, the
undersigned Vice President acknowledges that, to the best of his knowledge,
information and belief, these matters and facts are true in all material
respects, and that this statement is made under the penalties of perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles to be
signed in its name and on its behalf by its Vice President and attested to by
its Secretary on this 1ST day of December, 1998.
ATTEST: DFA INVESTMENT DIMENSIONS GROUP INC.
/s/ Irene R. Diamant By: /s/ Michael T. Scardina
- ------------------------------------------ --------------------------------
Irene R. Diamant, Secretary Michael T. Scardina
Vice President, Chief Financial
Officer and Treasurer
6
<PAGE>
Exhibit 99.b5.1
INVESTMENT ADVISORY AGREEMENT
-----------------------------
AGREEMENT made this 24th day of September, 1990, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund") and
DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Advisor").
1. DUTIES OF ADVISOR
The Fund hereby employs the Advisor to manage the investment and
reinvestment of the assets of The DFA Intermediate Government Bond Portfolio of
the Fund (the "Portfolio"), to continuously review, supervise and administer the
Portfolio's investment program, to determine in its discretion the securities to
be purchased or sold and the portion of the Portfolio's assets to be uninvested,
to provide the Fund with records concerning the Advisor's activities which the
Fund is required to maintain, and to render regular reports to the Fund's
officers and the Board of Directors of the Fund, all in compliance with the
objectives, policies and limitations set forth in the Fund's prospectus and
applicable laws and regulations. The Advisor accepts such employment and agrees
to provide, at its own expense, the office space, furnishings and equipment and
the personnel required by it to perform the services described herein on the
terms and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS
The Advisor is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Portfolio and is
directed to use its best efforts to obtain the best available price and most
favorable execution, except as prescribed herein. It is understood that the
Advisor will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Fund or in respect of the Portfolio, or be in breach of
any obligation owing to the Fund or in respect of the Portfolio under this
Agreement, or otherwise, solely by reason of its having caused the Portfolio to
pay a member of a securities exchange, a broker or a dealer a commission for
effecting a securities transaction for the Portfolio in excess of the amount of
commission another member of an exchange, broker or dealer would have charged if
the Advisor determines in good faith that the commission paid was reasonable in
relation to the brokerage or research services provided by such member, broker
or dealer, viewed in terms of that particular transaction or the Advisor's
overall responsibilities with respect to its accounts, including the Fund, as to
which it exercises investment discretion. The Advisor will promptly communicate
to the officers and directors of the Fund such information relating to
transaction for the Portfolio as they may reasonably request.
3. COMPENSATION OF THE ADVISOR
For the services to be rendered by the Advisor as provided in Section 1 of
this Agreement, the Fund shall pay to the Advisor at the end of each month, a
fee equal to one-twelfth
<PAGE>
of .15 percent of the net assets of the Portfolio. In the event that this
Agreement is terminated at other than a month-end, the fee for such month shall
be prorated.
4. OTHER SERVICES
At the request of the Fund, the Advisor, in its discretion may make
available to the Fund office facilities, equipment, personnel and other
services. Such office facilities, equipment, personnel and service shall be
provided for or rendered by the Advisor and billed to the Fund at the Advisor's
cost and, where applicable, the cost thereof shall be apportioned among the
several Portfolios of the Fund proportionate to their respective utilization
thereof.
5. REPORTS
The Fund and the Advisor agree to furnish to each other information with
regard to their respective affairs as each may reasonably request.
6. STATUS OF THE ADVISOR
The services of the Advisor to the Fund or in respect of the Portfolio, are
not to be deemed exclusive, and the Advisor shall be free to render similar
services to others so long as its services to the Fund or in respect of the
Portfolio, are not impaired thereby. The Advisor shall be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
7. LIABILITY OF ADVISOR
No provision of this Agreement shall be deemed to protect the Advisor
against any liability to the Fund or its shareholders to which it might
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations under this Agreement.
8. PERMISSIBLE INTERESTS
Subject to and in accordance with the charters of the Fund and the Advisor,
respectively, directors, officers, and shareholders of the Fund are or may be
interested in the Advisor (or any successor thereof) as directors, officers or
shareholders, or otherwise; directors, officers, agents and shareholders of the
Advisor are or may be interested in the Fund as directors, officers,
shareholders or otherwise; and the Advisor (or any successor) is or may be
interested in the Fund as a shareholder or otherwise and the effect of any such
interrelationships shall be governed by said charters and the provisions of the
Investment Company Act of 1940.
2
<PAGE>
9. DURATION AND TERMINATION
This Agreement shall become effective on October 9, 1990 (the "Effective
Date") and shall continue in effect until December 22, 1990, and thereafter,
only if such continuance is approved at least annually by a vote of the Fund's
Board of Directors, including the vote of a majority of the directors who are
not parties to this Agreement or interested persons of any such party, cast in
person, at a meeting called for the purpose of voting such approval. In addition
the question of continuance of this Agreement may be presented to the
shareholders of the Fund; in such event, such continuance shall be effected only
if approved by the affirmative vote the holders of a majority of the outstanding
voting securities of the Portfolio.
(a) This Agreement may at any time be terminated without payment of
any penalty either by vote of the Board of Directors of the Fund or by vote of
the holders of a majority of the outstanding voting securities of the Portfolio,
on sixty days' written notice to the Advisor,
(b) This Agreement shall automatically terminate in the event of its
assignment, and
(c) This Agreement may be terminated by the Advisor on ninety days'
written notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at any office of such party.
As used in this Section 9, the terms "assignment," "interested persons,"
and a "vote of the holders of a majority of the outstanding securities" shall
have the respective meanings set forth in Section 2(a)(4), Section 2(a)(42) of
the Investment Company Act of 1940 and Rule l8f-2 thereunder.
10. SEVERABILITY
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the 24th day of September 1990.
DIMENSIONAL FUND ADVISORS DFA INVESTMENT
INC. DIMENSIONS GROUP INC.
By /S/ REX A. SINQUEFIELD By /S/ DAVID G. BOOTH
----------------------------------- -------------------
Chairman-Chief President
Investment Officer
4
<PAGE>
Exhibit 99.b5.2
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 2nd day of April 1991, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund") and
DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Advisor").
Duties of Advisor
The Fund hereby employs the Advisor to manage the investment
and reinvestment of the assets of The Large Cap International Portfolio of the
Fund (the "Portfolio"), to continuously review, supervise and administer the
Portfolio's investment program, to determine in its discretion the securities to
be purchased or sold and the portion of the Portfolio's assets to be uninvested,
to provide the Fund with records concerning the Advisor's activities which the
Fund is required to maintain, and to render regular reports to the Fund's
officers and the Board of Directors of the Fund, all in compliance with the
objectives, policies and limitations set forth in the Fund's prospectus and
applicable laws and regulations. The Advisor accepts such employment and agrees
to provide, at its own expense, the office space, furnishings and equipment and
the personnel required by it to perform the services described herein on the
terms and for the compensation provided herein.
Portfolio Transactions
The Advisor is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities for the
Portfolio and is directed to use its best efforts to obtain the best available
price and most favorable execution, except as prescribed herein. It is
understood that the Advisor will not be deemed to have acted unlawfully, or to
have breached a fiduciary duty to the Fund or in respect of the Portfolio, or be
in breach of any obligation owing to the Fund or in respect of the Portfolio
under this Agreement, or otherwise, solely by reason of its having caused the
Portfolio to pay a member of a securities exchange, a broker or a dealer a
commission for effecting a securities transaction for the Portfolio in excess of
the amount of commission another member of an exchange, broker or dealer would
have charged if the Advisor determines in good faith that the commission paid
was reasonable in relation to the brokerage or research services provided by
such member, broker or dealer, viewed in terms of that particular transaction or
the Advisor's overall responsibilities with respect to its accounts, including
the Fund, as to which it exercises investment discretion. The Advisor will
promptly communicate to the officers and directors of the Fund such information
relating to transactions for the Portfolio as they may reasonably request.
Compensation of the Advisor
For the services to be rendered by the Advisor as provided in
Section 1 of this Agreement, the Fund shall pay to the Advisor, at the end of
each month, a fee equal to one-twelfth of .25 percent of the net assets of the
Portfolio. In the event that this Agreement is terminated at other than a
month-end, the fee for such month shall be prorated.
<PAGE>
Other Services
At the request of the Fund, the Advisor, in its discretion,
may make available to the Fund office facilities, equipment, personnel and other
services. Such office facilities, equipment, personnel and service shall be
provided for or rendered by the Advisor and billed to the Fund at the Advisor's
cost and, where applicable, the cost thereof shall be apportioned among the
several Portfolios of the Fund proportionate to their respective utilization
thereof.
Reports
The Fund and the Advisor agree to furnish to each other
information with regard to their respective affairs as each may reasonably
request.
Status of the Advisor
The services of the Advisor to the Fund or in respect of the
Portfolio, are not to be deemed exclusive, and the Advisor shall be free to
render similar services to others as long as its services to the Fund or in
respect of the Portfolio, are not impaired thereby. The Advisor shall be deemed
to be an independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
Liability of Advisor
No provision of this Agreement shall be deemed to protect the
Advisor against any liability to the Fund or its shareholders to which it might
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations under this Agreement.
Permissible Interests
Subject to and in accordance with the charters of the Fund and
the Advisor, respectively, directors, officers, and shareholders of the Fund are
or may be interested in the Advisor (or any successor thereof) as directors,
officers or shareholders, or otherwise; directors, officers, agents and
shareholders of the Advisor are or may be interested in the Fund as directors,
officers, shareholders or otherwise; and the Advisor (or any successor) is or
may be interested in the Fund as a shareholder or otherwise and the effect of
any such interrelationships shall be governed by said charters and the
provisions of the Investment Company Act of 1940.
Duration and Termination
This Agreement shall become effective on April ___, 1991 (the
"Effective Date") and shall continue in effect until December 31, 1991, and
thereafter, only if such continuance is approved at least annually by a vote of
the Fund's Board of Directors, including the vote of a majority of the directors
who are not parties to this Agreement or interested persons of any such
-2-
<PAGE>
party, cast in person, at a meeting called for the purpose of voting such
approval. In addition, the question of continuance of this Agreement may be
presented to the shareholders of the Fund; in such event, such continuance shall
be effected only if approved by the affirmative vote of the holders of a
majority of the outstanding voting securities of the Portfolio.
This Agreement may at any time be terminated without payment
of any penalty either by vote of the Board of Directors of the Fund or by vote
of the holders of a majority of the outstanding voting securities of the
Portfolio, on sixty days written notice to the Advisor.
This Agreement shall automatically terminate in the event of
its assignment, and
This Agreement may be terminated by the Advisor after ninety
days written notice to the Fund.
Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, to the other party at any office of
such party.
As used in this section 9, the terms "assignment," "interested
persons," and a "vote of the holders of a majority of the outstanding
securities" shall have the respective meanings set forth in Section 2(a)(4),
Section 2(a)(42) of the Investment Company Act of 1940 and Rule 18f-2
thereunder.
Severability
If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereby have caused this
Agreement to be executed this 2nd day of April, 1991.
DIMENSIONAL FUND DFA INVESTMENT
ADVISORS INC. DIMENSIONS GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
-------------------------- ----------------------
Chairman-Chief President
Investment Officer
-3-
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
CONSENT OF STOCKHOLDER
Pursuant to the requirements of Section 2-505 of the Maryland
Corporation Law governing actions taken by unanimous consent of stockholders,
Dimensional Fund Advisors Inc., being the sole stockholder of The Large Cap
International Portfolio of DFA Investments Dimensions Group Inc. hereby approves
the Investment Advisory Agreement between DFA Investment Dimensions Group Inc.
and Dimensional Fund Advisors Inc. relating to The Large Cap International
Portfolio, which is attached hereto.
DIMENSIONAL FUND ADVISORS INC.
By: /S/ DAVID G. BOOTH
--------------------------------
Consent given this 2nd day of April, 1991.
-4-
<PAGE>
Exhibit 99.b5.3
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 20th day of December, 1994, by and between
DFA INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund") and
DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Advisor").
DUTIES OF ADVISOR
The Fund hereby employs the Advisor to manage the investment
and reinvestment of the assets of The DFA International Small Cap Value
Portfolio (the "Portfolio"), to continuously review, supervise and administer
the Portfolio's investment program, to determine in its discretion the
securities to be purchased or sold and the portion of the Portfolio's assets to
be uninvested, to provide the Fund with records concerning the Advisor's
activities which the Fund is required to maintain, and to render regular reports
to the Fund's officers and the Board of Directors of the Fund, all in compliance
with the objectives, policies and limitations set forth in the Fund's prospectus
and applicable laws and regulations. The Advisor accepts such employment and
agrees to provide, at its own expense, the office space, furnishings and
equipment and the personnel required by it to perform the services described
herein on the terms and for the compensation provided herein.
PORTFOLIO TRANSACTIONS
The Advisor is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities for the
Portfolio and is directed to use its best efforts to obtain the best available
price and most favorable execution, except as prescribed herein. It is
understood that the Advisor will not be deemed to have acted unlawfully, or to
have breached a fiduciary duty to the Fund or in respect of the Portfolio, or be
in breach of any obligation owing to the Fund or in respect of the Portfolio
under this Agreement, or otherwise, solely by reason of its having caused the
Portfolio to pay a member of a securities exchange, a broker or a dealer, a
commission for effecting a securities transaction for the Portfolio in excess of
the amount of commission another member of an exchange, broker or dealer would
have charged if the Advisor determines in good faith that the commission paid
was reasonable in relation to the brokerage or research services provided by
such member, broker or dealer, viewed in terms of that particular transaction or
the Advisor's overall responsibilities with respect to its accounts, including
the Fund, as to which it exercises investment discretion. The Advisor will
promptly communicate to the officers and directors of the Fund such information
relating to transaction for the Portfolio as they may reasonably request.
COMPENSATION OF THE ADVISOR
For the services to be rendered by the Advisor as provided in
Section 1 of this Agreement, the Fund shall pay to the Advisor, at the end of
each month, a fee equal to one-
<PAGE>
twelfth of .65 percent of the net assets of the Portfolio. In the event that
this Agreement is terminated at other than a month-end, the fee for such month
shall be prorated.
OTHER SERVICES
At the request of the Fund, the Advisor, in its discretion may
make available to the Fund office facilities, equipment, personnel and other
services. Such office facilities, equipment, personnel and service shall be
provided for or rendered by the Advisor and billed to the Fund at the Advisor's
cost and, where applicable, the cost thereof shall be apportioned among the
several Portfolios of the Fund proportionate to their respective utilization
thereof.
REPORTS
The Fund and the Advisor agree to furnish to each other
information with regard to their respective affairs as each may reasonably
request.
STATUS OF THE ADVISOR
The services of the Advisor to the Fund or in respect of the
Portfolio, are not to be deemed exclusive, and the Advisor shall be free to
render similar services to others so long as its services to the Fund or in
respect of the Portfolio, are not impaired thereby. The Advisor shall be deemed
to be an independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
LIABILITY OF ADVISOR
No provision of this Agreement shall be deemed to protect the
Advisor against any liability to the Fund or its shareholders to which it might
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations under this Agreement.
PERMISSIBLE INTERESTS
Subject to and in accordance with the charters of the Fund and
the Advisor, respectively, directors, officers, and shareholders of the Fund are
or may be interested in the Advisor (or any successor thereof) as directors,
officers or shareholders, or otherwise; directors, officers, agents and
shareholders of the Advisor are or may be interested in the Fund as directors,
officers, shareholders or otherwise; and the Advisor (or any successor) is or
may be interested in the Fund as a shareholder or otherwise and the effect of
any such interrelationships shall be governed by said charters and the
provisions of the Investment Company Act of 1940.
2
<PAGE>
DURATION AND TERMINATION
This Agreement shall become effective on December 20, 1994
(the "Effective Date") and shall continue in effect until December 31, 1994, and
thereafter, only if such continuance is approved at least annually by a vote of
the Fund's Board of Directors, including the vote of a majority of the directors
who are not parties to this Agreement or interested persons of any such party,
cast in person, at a meeting called for the purpose of voting such approval. In
addition the question of continuance of this Agreement may be presented to the
shareholders of the Fund; in such event, such continuance shall be effected only
if approved by the affirmative vote the holders of a majority of the outstanding
voting securities of the Portfolio.
This Agreement may at any time be terminated without payment
of any penalty either by vote of the Board of Directors of the Fund or by vote
of the holders of a majority of the outstanding voting securities of the
Portfolio, on sixty days written notice to the Advisor,
This Agreement shall automatically terminate in the event of
its assignment, and
This Agreement may be terminated by the Advisor on ninety days
written notice to the Fund.
Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, to the other party at any office of
such party.
As used in this Section, the terms "assignment," "interested
persons," and a "vote of the holders of a majority of the outstanding
securities" shall have the respective meanings set forth in Section 2(a)(4),
Section 2(a)(19), Section 2(a)(42) of the Investment Company Act of 1940 and
Rule l8f-2 thereunder.
3
<PAGE>
SEVERABILITY
If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on this 20th day of December, 1994.
DIMENSIONAL FUND ADVISORS DFA INVESTMENT
INC. DIMENSIONS GROUP INC.
By /S/ REX A. SINQUEFIELD By /S/ DAVID G. BOOTH
----------------------- --------------------
Chairman-Chief President
Investment Officer
4
<PAGE>
Exhibit 99.b5.4
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 8th day of September, 1995, by and between DFA INVESTMENT
DIMENSIONS GROUP INC., a Maryland corporation (the "Fund") and DIMENSIONAL FUND
ADVISORS INC., a Delaware corporation (the "Advisor").
Duties of Advisor
The Fund hereby employs the Advisor to manage the investment and reinvestment
of the assets of VA Large Value Portfolio (the "Portfolio"), to continuously
review, supervise and administer the Portfolio's investment program, to
determine in its discretion the securities to be purchased or sold and the
portion of the Portfolio's assets to be uninvested, to provide the Fund with
records concerning the Advisor's activities which the Fund is required to
maintain, and to render regular reports to the Fund's officers and the Board of
Directors of the Fund, all in compliance with the objectives, policies and
limitations set forth in the Fund's prospectus and applicable laws and
regulations. The Advisor accepts such employment and agrees to provide, at its
own expense, the office space, furnishings and equipment and the personnel
required by it to perform the services described herein on the terms and for the
compensation provided herein.
Portfolio Transactions
The Advisor is authorized to select the brokers or dealers that will execute
the purchases and sales of portfolio securities for the Portfolio and is
directed to use its best efforts to obtain the best available price and most
favorable execution, except as prescribed herein. It is understood that the
Advisor will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Fund or in respect of the Portfolio, or be in breach of
any obligation owing to the Fund or in respect of the Portfolio under this
Agreement, or otherwise, solely by reason of its having caused the Portfolio to
pay a member of a securities exchange, a broker or a dealer a commission for
effecting a securities transaction for the Portfolio in excess of the amount of
commission another member of an exchange, broker or dealer would have charged if
the Advisor determines in good faith that the commission paid was reasonable in
relation to the brokerage or research services provided by such member, broker
or dealer, viewed in terms of that particular transaction or the Advisor's
overall responsibilities with respect to its accounts, including the Fund, as to
which it exercises investment discretion. The Advisor will promptly communicate
to the officers and directors of the Fund such information relating to
transactions for the Portfolio as they may reasonably request.
Compensation of the Advisor
For the services to be rendered by the Advisor as provided in Section 1 of
this Agreement, the Fund shall pay to the Advisor, at the end of each month, a
fee equal to one-twelfth of .25 percent of the net assets of the Portfolio. In
the event that this Agreement is terminated at other than a month-end, the fee
for such month shall be prorated.
Other Services
<PAGE>
At the request of the Fund, the Advisor, in its discretion, may make
available to the Fund office facilities, equipment, personnel and other
services. Such office facilities, equipment, personnel and service shall be
provided for or rendered by the Advisor and billed to the Fund at the Advisor's
cost and, where applicable, the cost thereof shall be apportioned among the
several Portfolios of the Fund proportionate to their respective utilization
thereof.
Reports
The Fund and the Advisor agree to furnish to each other information with
regard to their respective affairs as each may reasonably request.
Status of the Advisor
The services of the Advisor to the Fund or in respect of the Portfolio, are
not to be deemed exclusive, and the Advisor shall be free to render similar
services to others as long as its services to the Fund or in respect of the
Portfolio, are not impaired thereby. The Advisor shall be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
Liability of Advisor
No provision of this Agreement shall be deemed to protect the Advisor against
any liability to the Fund or its shareholders to which it might otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or the reckless disregard of its obligations under
this Agreement.
Permissible Interests
Subject to and in accordance with the charters of the Fund and the Advisor,
respectively, directors, officers, and shareholders of the Fund are or may be
interested in the Advisor (or any successor thereof) as directors, officers or
shareholders, or otherwise; directors, officers, agents and shareholders of the
Advisor are or may be interested in the Fund as directors, officers,
shareholders or otherwise; and the Advisor (or any successor) is or may be
interested in the Fund as a shareholder or otherwise and the effect of any such
interrelationships shall be governed by said charters and the provisions of the
Investment Company Act of 1940.
Duration and Termination
This Agreement shall become effective on September 21, 1995 (the "Effective
Date") and shall continue in effect until December 31, 1996, and thereafter,
only if such continuance is approved at least annually by a vote of the Fund's
Board of Directors, including the vote of a majority of the directors who are
not parties to this Agreement or interested persons of any such party, cast in
person, at a meeting called for the purpose of voting such approval. In
addition, the question of continuance of this Agreement may be presented to the
shareholders of the Fund; in such event, such continuance shall be effected only
if approved by the affirmative vote of the holders of a majority of the
outstanding voting securities of the Portfolio.
This Agreement may at any time be terminated without payment of any penalty
either by vote of the Board of Directors of the Fund or by vote of the holders
of a majority of the outstanding voting securities of the Portfolio, on sixty
days written notice to the Advisor,
2
<PAGE>
This Agreement shall automatically terminate in the event of its assignment,
and
This Agreement may be terminated by the Advisor after ninety days written
notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at any office of such party.
As used in this section, the terms "assignment," "interested persons," and a
"vote of the holders of a majority of the outstanding securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19), Section
2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2 thereunder.
Severability
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed this 21st day of September, 1995.
DIMENSIONAL FUND DFA INVESTMENT
ADVISORS INC. DIMENSIONS GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
---------------------- ------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b5.5
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 8th day of September, 1995, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund") and
DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Advisor").
Duties of Advisor
The Fund hereby employs the Advisor to manage the investment and
reinvestment of the assets of VA Short-Term Fixed Portfolio (the "Portfolio"),
to continuously review, supervise and administer the Portfolio's investment
program, to determine in its discretion the securities to be purchased or sold
and the portion of the Portfolio's assets to be uninvested, to provide the Fund
with records concerning the Advisor's activities which the Fund is required to
maintain, and to render regular reports to the Fund's officers and the Board of
Directors of the Fund, all in compliance with the objectives, policies and
limitations set forth in the Fund's prospectus and applicable laws and
regulations. The Advisor accepts such employment and agrees to provide, at its
own expense, the office space, furnishings and equipment and the personnel
required by it to perform the services described herein on the terms and for the
compensation provided herein.
Portfolio Transactions
The Advisor is authorized to select the brokers or dealers that will execute
the purchases and sales of portfolio securities for the Portfolio and is
directed to use its best efforts to obtain the best available price and most
favorable execution, except as prescribed herein. It is understood that the
Advisor will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Fund or in respect of the Portfolio, or be in breach of
any obligation owing to the Fund or in respect of the Portfolio under this
Agreement, or otherwise, solely by reason of its having caused the Portfolio to
pay a member of a securities exchange, a broker or a dealer a commission for
effecting a securities transaction for the Portfolio in excess of the amount of
commission another member of an exchange, broker or dealer would have charged if
the Advisor determines in good faith that the commission paid was reasonable in
relation to the brokerage or research services provided by such member, broker
or dealer, viewed in terms of that particular transaction or the Advisor's
overall responsibilities with respect to its accounts, including the Fund, as to
which it exercises investment discretion. The Advisor will promptly communicate
to the officers and directors of the Fund such information relating to
transactions for the Portfolio as they may reasonably request.
Compensation of the Advisor
For the services to be rendered by the Advisor as provided in Section 1 of
this Agreement, the Fund shall pay to the Advisor, at the end of each month, a
fee equal to one-twelfth of .25 percent of the net assets of the Portfolio. In
the event that this Agreement is terminated at other than a month-end, the fee
for such month shall be prorated.
Other Services
<PAGE>
At the request of the Fund, the Advisor, in its discretion, may make
available to the Fund office facilities, equipment, personnel and other
services. Such office facilities, equipment, personnel and service shall be
provided for or rendered by the Advisor and billed to the Fund at the Advisor's
cost and, where applicable, the cost thereof shall be apportioned among the
several Portfolios of the Fund proportionate to their respective utilization
thereof.
Reports
The Fund and the Advisor agree to furnish to each other information with
regard to their respective affairs as each may reasonably request.
Status of the Advisor
The services of the Advisor to the Fund or in respect of the Portfolio, are
not to be deemed exclusive, and the Advisor shall be free to render similar
services to others as long as its services to the Fund or in respect of the
Portfolio, are not impaired thereby. The Advisor shall be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
Liability of Advisor
No provision of this Agreement shall be deemed to protect the Advisor
against any liability to the Fund or its shareholders to which it might
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations under this Agreement.
Permissible Interests
Subject to and in accordance with the charters of the Fund and the Advisor,
respectively, directors, officers, and shareholders of the Fund are or may be
interested in the Advisor (or any successor thereof) as directors, officers or
shareholders, or otherwise; directors, officers, agents and shareholders of the
Advisor are or may be interested in the Fund as directors, officers,
shareholders or otherwise; and the Advisor (or any successor) is or may be
interested in the Fund as a shareholder or otherwise and the effect of any such
interrelationships shall be governed by said charters and the provisions of the
Investment Company Act of 1940.
Duration and Termination
This Agreement shall become effective on September 21, 1995 (the "Effective
Date") and shall continue in effect until December 31, 1996, and thereafter,
only if such continuance is approved at least annually by a vote of the Fund's
Board of Directors, including the vote of a majority of the directors who are
not parties to this Agreement or interested persons of any such party, cast in
person, at a meeting called for the purpose of voting such approval. In
addition, the question of continuance of this Agreement may be presented to the
shareholders of the Fund; in such event, such continuance shall be effected only
if approved by the affirmative vote of the holders of a majority of the
outstanding voting securities of the Portfolio.
This Agreement may at any time be terminated without payment of any penalty
either by vote of the Board of Directors of the Fund or by vote of the holders
of a majority of the outstanding voting securities of the Portfolio, on sixty
days written notice to the Advisor,
2
<PAGE>
This Agreement shall automatically terminate in the event of its assignment,
and
This Agreement may be terminated by the Advisor after ninety days written
notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at any office of such party.
As used in this section, the terms "assignment," "interested persons," and a
"vote of the holders of a majority of the outstanding securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19), Section
2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2 thereunder.
Severability
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed this 21st day of September, 1995.
DIMENSIONAL FUND DFA INVESTMENT
ADVISORS INC. DIMENSIONS GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
----------------------- --------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b5.6
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 8th day of September, 1995, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund") and
DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Advisor").
Duties of Advisor
The Fund hereby employs the Advisor to manage the investment and
reinvestment of the assets of VA International Value Portfolio (the
"Portfolio"), to continuously review, supervise and administer the Portfolio's
investment program, to determine in its discretion the securities to be
purchased or sold and the portion of the Portfolio's assets to be uninvested, to
provide the Fund with records concerning the Advisor's activities which the Fund
is required to maintain, and to render regular reports to the Fund's officers
and the Board of Directors of the Fund, all in compliance with the objectives,
policies and limitations set forth in the Fund's prospectus and applicable laws
and regulations. The Advisor accepts such employment and agrees to provide, at
its own expense, the office space, furnishings and equipment and the personnel
required by it to perform the services described herein on the terms and for the
compensation provided herein.
Portfolio Transactions
The Advisor is authorized to select the brokers or dealers that will execute
the purchases and sales of portfolio securities for the Portfolio and is
directed to use its best efforts to obtain the best available price and most
favorable execution, except as prescribed herein. It is understood that the
Advisor will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Fund or in respect of the Portfolio, or be in breach of
any obligation owing to the Fund or in respect of the Portfolio under this
Agreement, or otherwise, solely by reason of its having caused the Portfolio to
pay a member of a securities exchange, a broker or a dealer a commission for
effecting a securities transaction for the Portfolio in excess of the amount of
commission another member of an exchange, broker or dealer would have charged if
the Advisor determines in good faith that the commission paid was reasonable in
relation to the brokerage or research services provided by such member, broker
or dealer, viewed in terms of that particular transaction or the Advisor's
overall responsibilities with respect to its accounts, including the Fund, as to
which it exercises investment discretion. The Advisor will promptly communicate
to the officers and directors of the Fund such information relating to
transactions for the Portfolio as they may reasonably request.
Compensation of the Advisor
For the services to be rendered by the Advisor as provided in Section 1 of
this Agreement, the Fund shall pay to the Advisor, at the end of each month, a
fee equal to one-twelfth of .40 percent of the net assets of the Portfolio. In
the event that this Agreement is terminated at other than a month-end, the fee
for such month shall be prorated.
Other Services
<PAGE>
At the request of the Fund, the Advisor, in its discretion, may make
available to the Fund office facilities, equipment, personnel and other
services. Such office facilities, equipment, personnel and service shall be
provided for or rendered by the Advisor and billed to the Fund at the Advisor's
cost and, where applicable, the cost thereof shall be apportioned among the
several Portfolios of the Fund proportionate to their respective utilization
thereof.
Reports
The Fund and the Advisor agree to furnish to each other information with
regard to their respective affairs as each may reasonably request.
Status of the Advisor
The services of the Advisor to the Fund or in respect of the Portfolio, are
not to be deemed exclusive, and the Advisor shall be free to render similar
services to others as long as its services to the Fund or in respect of the
Portfolio, are not impaired thereby. The Advisor shall be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
Liability of Advisor
No provision of this Agreement shall be deemed to protect the Advisor
against any liability to the Fund or its shareholders to which it might
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations under this Agreement.
Permissible Interests
Subject to and in accordance with the charters of the Fund and the Advisor,
respectively, directors, officers, and shareholders of the Fund are or may be
interested in the Advisor (or any successor thereof) as directors, officers or
shareholders, or otherwise; directors, officers, agents and shareholders of the
Advisor are or may be interested in the Fund as directors, officers,
shareholders or otherwise; and the Advisor (or any successor) is or may be
interested in the Fund as a shareholder or otherwise and the effect of any such
interrelationships shall be governed by said charters and the provisions of the
Investment Company Act of 1940.
Duration and Termination
This Agreement shall become effective on September 21, 1995 (the "Effective
Date") and shall continue in effect until December 31, 1996, and thereafter,
only if such continuance is approved at least annually by a vote of the Fund's
Board of Directors, including the vote of a majority of the directors who are
not parties to this Agreement or interested persons of any such party, cast in
person, at a meeting called for the purpose of voting such approval. In
addition, the question of continuance of this Agreement may be presented to the
shareholders of the Fund; in such event, such continuance shall be effected only
if approved by the affirmative vote of the holders of a majority of the
outstanding voting securities of the Portfolio.
This Agreement may at any time be terminated without payment of any penalty
either by vote of the Board of Directors of the Fund or by vote of the holders
of a majority of the outstanding voting securities of the Portfolio, on sixty
days written notice to the Advisor,
2
<PAGE>
This Agreement shall automatically terminate in the event of its assignment,
and
This Agreement may be terminated by the Advisor after ninety days written
notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at any office of such party.
As used in this section, the terms "assignment," "interested persons," and a
"vote of the holders of a majority of the outstanding securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19), Section
2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2 thereunder.
Severability
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed this 21st day of September, 1995.
DIMENSIONAL FUND DFA INVESTMENT
ADVISORS INC. DIMENSIONS GROUP INC.
By: /S/ Rex A. Sinquefield By: /S/ David G. Booth
------------------------ -------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b5.7
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 8th day of September, 1995, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund") and
DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Advisor").
Duties of Advisor
The Fund hereby employs the Advisor to manage the investment and
reinvestment of the assets of VA International Small Portfolio (the
"Portfolio"), to continuously review, supervise and administer the Portfolio's
investment program, to determine in its discretion the securities to be
purchased or sold and the portion of the Portfolio's assets to be uninvested, to
provide the Fund with records concerning the Advisor's activities which the Fund
is required to maintain, and to render regular reports to the Fund's officers
and the Board of Directors of the Fund, all in compliance with the objectives,
policies and limitations set forth in the Fund's prospectus and applicable laws
and regulations. The Advisor accepts such employment and agrees to provide, at
its own expense, the office space, furnishings and equipment and the personnel
required by it to perform the services described herein on the terms and for the
compensation provided herein.
Portfolio Transactions
The Advisor is authorized to select the brokers or dealers that will execute
the purchases and sales of portfolio securities for the Portfolio and is
directed to use its best efforts to obtain the best available price and most
favorable execution, except as prescribed herein. It is understood that the
Advisor will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Fund or in respect of the Portfolio, or be in breach of
any obligation owing to the Fund or in respect of the Portfolio under this
Agreement, or otherwise, solely by reason of its having caused the Portfolio to
pay a member of a securities exchange, a broker or a dealer a commission for
effecting a securities transaction for the Portfolio in excess of the amount of
commission another member of an exchange, broker or dealer would have charged if
the Advisor determines in good faith that the commission paid was reasonable in
relation to the brokerage or research services provided by such member, broker
or dealer, viewed in terms of that particular transaction or the Advisor's
overall responsibilities with respect to its accounts, including the Fund, as to
which it exercises investment discretion. The Advisor will promptly communicate
to the officers and directors of the Fund such information relating to
transactions for the Portfolio as they may reasonably request.
Compensation of the Advisor
For the services to be rendered by the Advisor as provided in Section 1 of
this Agreement, the Fund shall pay to the Advisor, at the end of each month, a
fee equal to one-twelfth of .50 percent of the net assets of the Portfolio. In
the event that this Agreement is terminated at other than a month-end, the fee
for such month shall be prorated.
Other Services
<PAGE>
At the request of the Fund, the Advisor, in its discretion, may make
available to the Fund office facilities, equipment, personnel and other
services. Such office facilities, equipment, personnel and service shall be
provided for or rendered by the Advisor and billed to the Fund at the Advisor's
cost and, where applicable, the cost thereof shall be apportioned among the
several Portfolios of the Fund proportionate to their respective utilization
thereof.
Reports
The Fund and the Advisor agree to furnish to each other information with
regard to their respective affairs as each may reasonably request.
Status of the Advisor
The services of the Advisor to the Fund or in respect of the Portfolio, are
not to be deemed exclusive, and the Advisor shall be free to render similar
services to others as long as its services to the Fund or in respect of the
Portfolio, are not impaired thereby. The Advisor shall be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
Liability of Advisor
No provision of this Agreement shall be deemed to protect the Advisor
against any liability to the Fund or its shareholders to which it might
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations under this Agreement.
Permissible Interests
Subject to and in accordance with the charters of the Fund and the Advisor,
respectively, directors, officers, and shareholders of the Fund are or may be
interested in the Advisor (or any successor thereof) as directors, officers or
shareholders, or otherwise; directors, officers, agents and shareholders of the
Advisor are or may be interested in the Fund as directors, officers,
shareholders or otherwise; and the Advisor (or any successor) is or may be
interested in the Fund as a shareholder or otherwise and the effect of any such
interrelationships shall be governed by said charters and the provisions of the
Investment Company Act of 1940.
Duration and Termination
This Agreement shall become effective on September 21, 1995 (the "Effective
Date") and shall continue in effect until December 31, 1996, and thereafter,
only if such continuance is approved at least annually by a vote of the Fund's
Board of Directors, including the vote of a majority of the directors who are
not parties to this Agreement or interested persons of any such party, cast in
person, at a meeting called for the purpose of voting such approval. In
addition, the question of continuance of this Agreement may be presented to the
shareholders of the Fund; in such event, such continuance shall be effected only
if approved by the affirmative vote of the holders of a majority of the
outstanding voting securities of the Portfolio.
This Agreement may at any time be terminated without payment of any penalty
either by vote of the Board of Directors of the Fund or by vote of the holders
of a majority of the outstanding voting securities of the Portfolio, on sixty
days written notice to the Advisor,
2
<PAGE>
This Agreement shall automatically terminate in the event of its assignment,
and
This Agreement may be terminated by the Advisor after ninety days written
notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at any office of such party.
As used in this section, the terms "assignment," "interested persons," and a
"vote of the holders of a majority of the outstanding securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19), Section
2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2 thereunder.
Severability
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed this 21st day of September, 1995.
DIMENSIONAL FUND DFA INVESTMENT
ADVISORS INC. DIMENSIONS GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
----------------------- -------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b5.8
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 8th day of September, 1995, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund") and
DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Advisor").
Duties of Advisor
The Fund hereby employs the Advisor to manage the investment and
reinvestment of the assets of VA Short-Term Fixed Portfolio (the "Portfolio"),
to continuously review, supervise and administer the Portfolio's investment
program, to determine in its discretion the securities to be purchased or sold
and the portion of the Portfolio's assets to be uninvested, to provide the Fund
with records concerning the Advisor's activities which the Fund is required to
maintain, and to render regular reports to the Fund's officers and the Board of
Directors of the Fund, all in compliance with the objectives, policies and
limitations set forth in the Fund's prospectus and applicable laws and
regulations. The Advisor accepts such employment and agrees to provide, at its
own expense, the office space, furnishings and equipment and the personnel
required by it to perform the services described herein on the terms and for the
compensation provided herein.
Portfolio Transactions
The Advisor is authorized to select the brokers or dealers that will execute
the purchases and sales of portfolio securities for the Portfolio and is
directed to use its best efforts to obtain the best available price and most
favorable execution, except as prescribed herein. It is understood that the
Advisor will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Fund or in respect of the Portfolio, or be in breach of
any obligation owing to the Fund or in respect of the Portfolio under this
Agreement, or otherwise, solely by reason of its having caused the Portfolio to
pay a member of a securities exchange, a broker or a dealer a commission for
effecting a securities transaction for the Portfolio in excess of the amount of
commission another member of an exchange, broker or dealer would have charged if
the Advisor determines in good faith that the commission paid was reasonable in
relation to the brokerage or research services provided by such member, broker
or dealer, viewed in terms of that particular transaction or the Advisor's
overall responsibilities with respect to its accounts, including the Fund, as to
which it exercises investment discretion. The Advisor will promptly communicate
to the officers and directors of the Fund such information relating to
transactions for the Portfolio as they may reasonably request.
Compensation of the Advisor
For the services to be rendered by the Advisor as provided in Section 1 of
this Agreement, the Fund shall pay to the Advisor, at the end of each month, a
fee equal to one-twelfth of .25 percent of the net assets of the Portfolio. In
the event that this Agreement is terminated at other than a month-end, the fee
for such month shall be prorated.
Other Services
<PAGE>
At the request of the Fund, the Advisor, in its discretion, may make
available to the Fund office facilities, equipment, personnel and other
services. Such office facilities, equipment, personnel and service shall be
provided for or rendered by the Advisor and billed to the Fund at the Advisor's
cost and, where applicable, the cost thereof shall be apportioned among the
several Portfolios of the Fund proportionate to their respective utilization
thereof.
Reports
The Fund and the Advisor agree to furnish to each other information with
regard to their respective affairs as each may reasonably request.
Status of the Advisor
The services of the Advisor to the Fund or in respect of the Portfolio, are
not to be deemed exclusive, and the Advisor shall be free to render similar
services to others as long as its services to the Fund or in respect of the
Portfolio, are not impaired thereby. The Advisor shall be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
Liability of Advisor
No provision of this Agreement shall be deemed to protect the Advisor
against any liability to the Fund or its shareholders to which it might
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations under this Agreement.
Permissible Interests
Subject to and in accordance with the charters of the Fund and the Advisor,
respectively, directors, officers, and shareholders of the Fund are or may be
interested in the Advisor (or any successor thereof) as directors, officers or
shareholders, or otherwise; directors, officers, agents and shareholders of the
Advisor are or may be interested in the Fund as directors, officers,
shareholders or otherwise; and the Advisor (or any successor) is or may be
interested in the Fund as a shareholder or otherwise and the effect of any such
interrelationships shall be governed by said charters and the provisions of the
Investment Company Act of 1940.
Duration and Termination
This Agreement shall become effective on September 21, 1995 (the "Effective
Date") and shall continue in effect until December 31, 1996, and thereafter,
only if such continuance is approved at least annually by a vote of the Fund's
Board of Directors, including the vote of a majority of the directors who are
not parties to this Agreement or interested persons of any such party, cast in
person, at a meeting called for the purpose of voting such approval. In
addition, the question of continuance of this Agreement may be presented to the
shareholders of the Fund; in such event, such continuance shall be effected only
if approved by the affirmative vote of the holders of a majority of the
outstanding voting securities of the Portfolio.
This Agreement may at any time be terminated without payment of any penalty
either by vote of the Board of Directors of the Fund or by vote of the holders
of a majority of the outstanding voting securities of the Portfolio, on sixty
days written notice to the Advisor,
2
<PAGE>
This Agreement shall automatically terminate in the event of its assignment,
and
This Agreement may be terminated by the Advisor after ninety days written
notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at any office of such party.
As used in this section, the terms "assignment," "interested persons," and a
"vote of the holders of a majority of the outstanding securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19), Section
2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2 thereunder.
Severability
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed this 21st day of September, 1995.
DIMENSIONAL FUND DFA INVESTMENT
ADVISORS INC. DIMENSIONS GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
----------------------- -------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99-b5.9
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 8th day of August, 1996, by and between DFA INVESTMENT
DIMENSIONS GROUP INC., a Maryland corporation (the "Fund") and DIMENSIONAL FUND
ADVISORS INC., a Delaware corporation (the "Advisor").
Duties of Advisor
1. The Fund hereby employs the Advisor to manage the investment and
reinvestment of the assets of the INTERNATIONAL SMALL COMPANY PORTFOLIO of the
Fund (the "Portfolio"), to review, supervise and administer the Portfolio's
investment program by investing the assets of the Portfolio and determining the
portion of the Portfolio's assets to be uninvested, to provide the Fund with
records concerning the Advisor's activities which the Fund is required to
maintain, and to render regular reports to the Fund's officers and the Board of
Directors of the Fund, all in compliance with the objectives, policies and
limitations set forth in the Fund's prospectus and statement of additional
information relating to the Portfolio. The Advisor accepts such employment and
agrees to provide, at its own expense, the office space, furnishings and
equipment and the personnel required by it to perform the services described
herein on the terms provided herein.
Compensation of the Advisor
2. For the services to be rendered by the Advisor as provided in Section 1
of this Agreement, the Advisor shall receive no compensation.
Other Services
3. At the request of the Fund, the Advisor, in its discretion, may provide
such other services as the parties to this Agreement may agree upon at a later
time.
Reports
4. The Fund and the Advisor agree to furnish to each other information
with regard to their respective affairs as each may reasonably request.
Status of the Advisor
5. The services of the Advisor to the Fund or in respect of the Portfolio,
are not to be deemed exclusive, and the Advisor shall be free to render similar
services to others as long as its services to the Fund or in respect of the
Portfolio, are not impaired thereby. The Advisor shall be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
Liability of Advisor
6. No provision of this Agreement shall be deemed to protect the Advisor
against any liability to the Fund or its shareholders to which it might
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations under this Agreement.
<PAGE>
Permissible Interests
7. Subject to and in accordance with the charters of the Fund and the
Advisor, respectively, directors, officers, and shareholders of the Fund are or
may be interested in the Advisor (or any successor thereof) as directors,
officers or shareholders, or otherwise; directors, officers, agents and
shareholders of the Advisor are or may be interested in the Fund as directors,
officers, shareholders or otherwise; and the Advisor (or any successor) is or
may be interested in the Fund as a shareholder or otherwise and the effect of
any such interrelationships shall be governed by said charters and the
provisions of the Investment Company Act of 1940.
Duration and Termination
8. This Agreement shall become effective on August 8, 1996 (the "Effective
Date") and shall continue in effect until December 31, 1996, and thereafter,
only if such continuance is approved at least annually by a vote of the Fund's
Board of Directors, including the vote of a majority of the directors who are
not parties to this Agreement or interested persons of any such party
("Disinterested Directors"), cast in person, at a meeting called for the purpose
of voting on such approval. In addition, the question of continuance of this
Agreement may be presented to the shareholders of the Portfolio; in such event,
such continuance shall be effected if approved by the affirmative vote of the
holders of a majority of the outstanding voting securities of the Portfolio.
9. This Agreement may be amended in writing at any time by mutual
agreement of the Advisor and the Fund's Board of Directors, as provided in
paragraph 8 above; except if an amendment would provide for compensation to be
paid by the Portfolio to the Advisor, then such amendment also must be approved
by the affirmative vote of the holders of a majority of the outstanding voting
securities of the Portfolio.
10. This Agreement may be terminated at any time without payment of any
penalty by the Fund, as provided in paragraph 8 above, on sixty days written
notice to the Advisor.
11. This Agreement shall automatically terminate in the event of its
assignment.
12. This Agreement may be terminated by the Advisor after ninety days
written notice to the Fund.
13. Any notice under this Agreement shall be given in writing, addressed
and delivered, or mailed postpaid, to the other party at any office of such
party.
14. As used in this section, the terms "assignment," "interested persons,"
and a "vote of the holders of a majority of the outstanding securities" shall
have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and
Section 2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2
thereunder.
Severability
15. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed this ____ day of __________, 1996.
DIMENSIONAL FUND DFA INVESTMENT
ADVISORS INC. DIMENSIONS GROUP INC.
By: By:
-------------------- ------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b5.10
DFA INVESTMENT DIMENSIONS GROUP INC.
THE TAX-MANAGED U.S. 5-10 VALUE PORTFOLIO
THE TAX-MANAGED U.S. 6-10 SMALL COMPANY PORTFOLIO
THE TAX-MANAGED DFA INTERNATIONAL VALUE PORTFOLIO
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 7TH day of DECEMBER, 1998, by and between DFA INVESTMENT
DIMENSIONS GROUP INC., a Maryland corporation (the "Fund") and DIMENSIONAL FUND
ADVISORS INC., a Delaware corporation (the "Advisor").
1. DUTIES OF ADVISOR. The Fund hereby employs the Advisor to manage the
investment and reinvestment of the assets of:
"THE TAX-MANAGED U.S. 5-10 VALUE PORTFOLIO;"
"THE TAX-MANAGED U.S. 6-10 SMALL COMPANY PORTFOLIO;" AND THE
"THE TAX-MANAGED DFA INTERNATIONAL VALUE PORTFOLIO,"
collectively the "Tax-Managed Portfolios"), to continuously review, supervise
and administer each of the Tax-Managed Portfolios' respective investment
programs, to determine in its discretion the securities to be purchased or sold
and the portion of each of the Tax-Managed Portfolios' respective assets to be
uninvested, to provide the Fund with records concerning the Advisor's activities
which the Fund is required to maintain, and to render regular reports to the
Fund's officers and the Board of Directors of the Fund, all in compliance with
the respective objectives, policies and limitations of each portfolio set forth
in the Tax-Managed Portfolios' prospectus and applicable laws and regulations.
The Advisor accepts such employment and agrees to provide, at its own expense,
the office space, furnishings and equipment and the personnel required by it to
perform the services described herein on the terms and for the compensation
provided herein.
2. PORTFOLIO TRANSACTIONS. The Advisor is authorized to select the brokers
or dealers that will execute the purchases and sales of portfolio securities for
each of the Tax-Managed Portfolios and is directed to use its best effort to
obtain the best available prices and most favorable executions, except as
prescribed herein. It is understood that the Advisor will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the Fund or to any of
the Tax-Managed Portfolios, or be in breach of any obligation owing to the Fund
or to any of the Tax-Managed Portfolios under this Agreement, or otherwise,
solely by reason of its having caused any of the Tax-Managed Portfolios to pay a
member of a securities exchange, a broker or a dealer a commission for effecting
a securities transaction for any of the Tax-Managed Portfolios in excess of the
amount of commission another member of an exchange, broker or dealer would have
charged if the Advisor determines in good faith that the commission paid was
reasonable in relation to the brokerage or research services provided by such
member, broker or dealer, viewed in terms of that particular transaction or the
Advisor's overall responsibilities with respect to its accounts, including the
Fund, as to which it exercises investment discretion. The Advisor will promptly
communicate to the officers and directors of the Fund such information relating
to transactions for each of the Tax-Managed Portfolios as they may reasonably
request.
<PAGE>
3. COMPENSATION OF THE ADVISOR. For the services to be rendered by the
Advisor as provided in Section 1 of this Agreement, the Fund shall pay to the
Advisor, at the end of each month, a fee equal to one-twelfth of each of the
Tax-Managed Portfolios' respective net assets, as follows:
<TABLE>
<S> <C>
The Tax-Managed U.S. 5-10 Value Portfolio 0.50%
The Tax-Managed U.S. 6-10 Small Company Portfolio 0.50%
The Tax-Managed DFA International Value Portfolio 0.50%
</TABLE>
In the event that this Agreement is terminated at other than a month-end, the
fee for such month shall be prorated, as applicable.
4. OTHER SERVICES. At the request of the Fund, the Advisor, in its
discretion, may make available to the Fund office facilities, equipment,
personnel and other services. Such office facilities, equipment, personnel and
service shall be provided for or rendered by the Advisor and billed to the Fund
at the Advisor's cost and, where applicable, the cost thereof shall be
apportioned among the several Portfolios of the Fund proportionate to their
respective utilization thereof.
5. REPORTS. The Fund and the Advisor agree to furnish to each other
information with regard to their respective affairs as each may reasonably
request.
6. STATUS OF THE ADVISOR. The services of the Advisor to the Fund or with
respect to any of the Tax Portfolios, are not to be deemed exclusive, and the
Advisor shall be free to render similar services to others as long as its
services to the Fund or to any of the Tax-Managed Portfolios, are not impaired
thereby. The Advisor shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent the Fund in any way or otherwise be deemed an agent of the Fund.
7. LIABILITY OF ADVISOR. No provision of this Agreement shall be deemed to
protect the Advisor against any liability to the Fund or its shareholders to
which it might otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or the reckless disregard
of its obligations under this Agreement.
8. PERMISSIBLE INTERESTS. Subject to and in accordance with the charters
of the Fund and the Advisor, respectively, directors, officers, and shareholders
of the Fund are or may be interested in the Advisor (or any successor thereof)
as directors, officers or shareholders, or otherwise; directors, officers,
agents and shareholders of the Advisor are or may be interested in the Fund as
directors, officers, shareholders or otherwise; and the Advisor (or any
successor) is or may be interested in the Fund as a shareholder or otherwise and
the effect of any such interrelationships shall be governed by said charters and
the provisions of the Investment Company Act of 1940.
9. DURATION AND TERMINATION. This Agreement shall become effective on
DECEMBER 7, 1998 (the "Effective Date") and shall continue in effect until
DECEMBER 8, 2000, and thereafter, only if such continuance is approved at least
annually by a vote of the Fund's Board of Directors, including the vote of a
majority of the directors who are not parties to this
2
<PAGE>
Agreement or interested persons of any such party, cast in person, at a meeting
called for the purpose of voting such approval. In addition, the question of
continuance of this Agreement may be presented to the shareholders of the Fund;
in such event, such continuance shall be effected only if approved by the
affirmative vote of the holders of a majority of the respective outstanding
voting securities of any of the Tax-Managed Portfolios.
This Agreement may at any time be terminated without payment of any
penalty either by vote of the Board of Directors of the Fund or by vote of the
holders of a majority of the respective outstanding voting securities of any of
the Tax-Managed Portfolios, on sixty days written notice to the Advisor,
This Agreement shall automatically terminate in the event of its
assignment, and
This Agreement may be terminated by the Advisor after ninety days
written notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed
and delivered, or mailed postpaid, to the other party at any office of such
party.
As used in this section, the terms "assignment," "interested persons,"
and a "vote of the holders of a majority of the outstanding securities" shall
have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19),
Section 2(a)(42) of the Investment Company Act of 1940 and Rule 18f-2
thereunder.
10. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed this 7TH day of DECEMBER, 1998.
DIMENSIONAL FUND DFA INVESTMENT
ADVISORS INC. DIMENSIONS GROUP INC.
By: DAVID G. BOOTH By: IRENE R. DIAMANT
----------------------- ----------------------------
David G. Booth Irene R. Diamant
Chief Executive Officer Vice President and Secretary
3
<PAGE>
MASTER DFA AUSTRALIA LTD.
CONSULTING SERVICES AGREEMENT
This Agreement made by and between Dimensional Fund Advisors Inc., a
Delaware corporation ("DFA"), and DFA Australia Ltd., a company organized under
the laws of New South Wales, Australia ("DFAA").
W I T N E S S E T H:
WHEREAS, DFAA is engaged in the business of investment management and
administrative and trading services primarily in Asia (including Japan),
Australia and New Zealand (collectively, the "Pacific Rim countries");
WHEREAS, DFAA presently acts as sub-advisor to DFA with respect to
certain DFA investment products (the "Sub-Advisory Products") pursuant to
certain sub-advisory agreements (the "Sub-Advisory Agreements") dated as of
August 7, 1996 and also provides certain trading services for other products to
DFA pursuant to a Service Agreement dated as of December 1 1993, as amended on
December 1, 1994 (the "Service Agreement");
WHEREAS, DFA wishes to continue to engage DFAA to provide various
non-advisory services relating to certain international investment products
other than the Sub-Advisory Products managed or sponsored by DFA as set forth in
Schedule A hereto (the "Investment Products") which schedule may be amended from
time to time; and
WHEREAS, DFA wishes to modify certain provisions of the Service
Agreement further defining the overall duties and responsibilities of the
parties, and DFAA desires to so act and to provide such services as agreed to
from time to time pursuant to a consulting services agreement; and
<PAGE>
WHEREAS, DFA and certain of its officers and directors own 100% of the
outstanding shares of DFAA;
NOW, THEREFORE, in consideration of the premises and the mutual
promises set forth herein, the parties hereto agree as follows:
1. TERMINATION OF SERVICES AGREEMENT. The parties hereto agree that the
Service Agreement is hereby terminated and shall have no further effect and the
duties and responsibilities of DFA and DFAA shall be as set forth hereinafter.
2. APPOINTMENT. DFA hereby appoints DFAA, and DFAA hereby accepts such
appointment, to act on behalf of DFA with respect to such matters and to provide
such services with respect to the Investment Products as may from time to time
be agreed between the parties.
3. SERVICES TO BE PERFORMED. DFA hereby employs DFAA, subject to
supervision by DFA, to furnish the following services for the Investment
Products:
a. Execution of buy and sell programs generated by DFA and
transmitted to DFAA;
b. Selection of brokers or dealers to execute purchases and
sales of eligible securities for the Investment Products; including the
determination of the best and most efficient means of purchasing and selling
such portfolio securities; and the allocation of trades among brokers and
dealers, subject to constraints with respect to affiliated brokers and dealers
subject to Section 17 of the Investment Company Act of 1940. In carrying out its
obligations hereunder, DFAA will act with a view to the objectives of each
Investment Product as set forth in the respective prospectus and otherwise
communicated by DFA to DFAA, including the objectives of receiving best price
and execution for portfolio transactions and causing as little price fluctuation
as possible.
-2-
<PAGE>
c. DFAA may execute orders from DFA for fewer or more shares
than set forth in the buy or sell programs initiated by DFA, based on market
conditions and other factors, provided that such variances from the execution
lists are within parameters established by DFA from time to time or in specific
cases.
d. DFAA shall report the results of all trading activities,
and all other information relating to portfolio transactions for the Investment
Products, at such time and in such format as DFA may request, including
reporting to the custodians of the Investment Products, as appropriate.
e. DFAA shall review and coordinate its agency trading and
execution strategies, practices and results with DFA as frequently as reasonably
necessary.
f. DFAA may also from time to time, monitor cash balances for
the Investment products; review and bid on blocks of securities within
parameters established by DFA; handle corporate actions and vote proxies for
securities held in the Investment Products as directed by DFA; review companies
and suggest status codes; and provide DFA with data concerning equity markets in
the various countries in which the Investment Products are invested.
g. DFAA shall furnish only statistical and other factual
information and advice regarding economic factors and trends, and it is neither
intended nor required that DFAA shall furnish advice or make recommendations
regarding the purchase or sale of securities.
These duties and responsibilities of DFAA, taken individually or
collectively, shall not constitute, or be construed as constituting, investment
advice.
4. DUTIES AND RESPONSIBILITIES. DFAA shall perform its obligations and
discharge its duties hereunder, and under any or all other agreements that DFAA
may enter into with DFA
-3-
<PAGE>
from time to time, (i) solely in the best interests of DFA and the clients of
DFA with respect to or in connection with which DFAA may from time to time
provide investment or other services, and (ii) with the care, skill, prudence
and diligence that a prudent man experienced in such matters would use in
providing similar services in like circumstances. Except as expressly provided
herein or directed by DFA from time to time in writing, DFAA shall have no
authority, express or implied, to bind DFA to any contract or commitment, to
otherwise act on behalf of DFA, or to hold itself out as an agent of DFA.
5. CONDUCT OF BUSINESS. DFAA shall at all times conduct its business in
compliance with any and all applicable laws, rules and regulations including,
without limitation, the applicable laws, rules and regulations of the United
States and Australia and any governmental agency, regulatory authority or
governing body thereof.
6. REPRESENTATIONS OF DFAA. DFAA hereby represents and warrants that it
is duly licensed under the securities laws of Australia and that it is duly
licensed under the securities laws of the United States to engage in the
activities in which DFAA is engaged, including without limitation registration
as an investment adviser with the United States Securities and Exchange
Commission ("SEC"). DFAA hereby covenants to maintain in good standing all
licenses and registrations required for the conduct of its business and
performance of its duties and obligations hereunder and under any and all
agreements entered into with DFA from time to time. In addition, DFAA shall
provide DFA as promptly as practicable a copy of any and all amendments filed
with the SEC at the same time any such amendments are filed.
7. COMPENSATION. During the duration of this Agreement, in
consideration of the portfolio management and other services to be performed by
DFAA hereunder and as agreed between the parties from time to time, DFA shall
pay DFAA as follows:
-4-
<PAGE>
a. A fee in an amount equal to 110% of pretax annual operating
expenses of DFAA inclusive of fees to be paid to DFAA pursuant to the
Subadvisory Agreements subject to the following adjustment;
b. The fee due to DFAA pursuant to Section 7.a. hereof shall
be reduced by an amount equal to the revenue that DFAA earns for its investment
advisory, administrative and similar services that it performs for products that
it sponsors in Australia other than the Investment Products ("DFAA Products").
c. Fees due from DFA to DFAA shall be remitted not less than
quarterly.
8. DIRECTION BY DFA. In connection with any services to be provided
hereunder to be rendered by DFAA from time to time, DFAA shall at all times act
in accordance with the instructions of DFA as communicated from time to time and
shall prepare and provide all information and reports reasonably requested by
DFA. Attached hereto as Schedule B is a description of the reports currently
required to be furnished to DFA by DFAA and those actions for which DFAA must
obtain specific approval by DFA, which Schedule B may be amended from time to
time by DFA in its sole discretion upon reasonable notice to DFAA.
DFA shall use its best efforts to ensure that trustees, custodians,
subcustodians, subadvisors and administrative agents cooperate with DFAA thus
facilitating the provision of services by DFAA. DFA shall provide DFAA with
copies of regulatory filings made by DFA which are relevant to DFAA's agency and
subadvisory services. DFA shall also share with DFAA information which DFA
believes to be relevant to DFAA's services.
9. RECORDKEEPING AND RECORD RETENTION. DFAA shall maintain and preserve
in a safe and accessible place and shall afford representatives of DFA access to
all customer, corporate and other business records customarily maintained by
investment managers as they
-5-
<PAGE>
relate to DFAA's provision of agency and subadvisory services to DFA, all
records and reports required to be maintained by applicable laws, rules and
regulations, including, without limitation, the United States Investment
Advisers Act of 1940, and any and all such other records or reports as DFA may
from time to time reasonably require DFAA to prepare, including such records and
reports set forth on Schedule B hereto, as may be amended from time to time by
DFA in its sole discretion upon reasonable notice to DFAA.
Except as otherwise required by law or as otherwise agreed to by the
parties, all records and reports required to be prepared and preserved hereunder
shall be kept in a readily accessible place on DFAA's premises for at least two
years from the date of the record or report and in a reasonably accessible place
on or off DFAA's premises for at least four more years. If records or reports
are preserved in a form other than paper originals they shall be kept in
duplicate, stored separately, and DFAA shall maintain on its premise a means of
visual review and producing hard copies of such records and reports. DFAA's
obligation hereunder to maintain and preserve records shall survive the
termination of this Agreement.
10. INSPECTION AND EXAMINATION OF RECORDS. DFAA hereby acknowledges
that DFA has certain statutory obligations to supervise the activities of DFAA
relating to DFA portfolios and agrees to cooperate fully at all times to afford
DFA access to DFAA's books and records at anytime during normal business hours,
to answer any questions with respect to DFAA's operations, and to regularly
schedule and attend meetings as requested by DFA for purposes of reviewing
DFAA's performance under its agreements with DFA, reviewing operational matters
with trustees, custodians, subcustodians and administrative agents. DFA or its
agents or representatives may, from time to time, visit DFA for the purpose of
reviewing DFAA's operations as they relate to the provision of agency and
subadvisory services. DFA agrees to use
-6-
<PAGE>
reasonable efforts to avoid causing any undue disruption to the conduct of
DFAA's day-to-day business affairs.
11. CONFIDENTIAL AND PROPRIETARY INFORMATION. Each party acknowledges
and agrees that any and all information emanating from the other's business, in
any form, is confidential and proprietary information. Each party agrees that it
will not, during or after the term of this Agreement, permit the duplication or
disclosure of any such confidential and proprietary information to any person
(other than an employee, agent or representative of the other party who must
have such information for the performance of its obligations under its
agreements with the other party) except as required by law, unless such
duplication, use or disclosure is specifically authorized by the other party in
writing. DFAA acknowledges and agrees that all computer programs provided by DFA
("DFA Software"), including all copyright rights therein, are owned by and are
the property of DFA and that DFAA is licensed hereby to use such DFA Software
only for the terms of this Agreement and one year thereafter. At the expiration
or termination of this Agreement, DFAA agrees to return all copies of the DFA
Software to DFA within one year unless otherwise agreed. DFAA may, with the
written consent of DFA which shall not be unreasonably withheld, substitute
other computer programs to perform the activities covered by this Agreement,
provided such programs produce information and reports comparable to those
produced by the DFA Software in a magnetic machine-readable form which is
compatible with the DFA Software.
12. ALLOCATION OF CLIENT TRANSACTIONS. DFA hereby acknowledges that
DFAA renders services to clients other than DFA and DFA portfolios, including
clients for which DFAA may purchase or sell the same securities as those that
may be listed from time to time on an approved buy/sell program for a DFA
portfolio. DFAA hereby acknowledges its fiduciary obligations to
-7-
<PAGE>
treat all clients on a fair and equitable basis when effecting securities
transactions in accordance with DFA's policies.
13. INDEMNIFICATION. DFAA shall indemnify and hold harmless DFA, its
officers and directors, from any and all losses, including reasonable attorney's
fees, incurred by DFA as a result of or arising out of any breach by DFAA of its
duties under this Agreement or any other agreement between DFA and DFAA, any
violation by DFAA of any provision of this Agreement or any other agreement
between DFA and DFAA, or any action of DFAA taken on behalf of DFA or any DFA
portfolio which falls outside the scope of express authority granted hereunder
or under any other agreement between DFA and DFAA.
Notwithstanding the foregoing, DFAA shall not be liable to DFA or any
DFA portfolio with respect to actions taken or not taken on behalf thereof if
DFAA has acted pursuant to and in strict compliance with express instructions of
DFA or failed to take an action which required specific approval or direction by
DFA in the absence of such approval or direction, and DFA agrees to indemnify
and hold harmless DFAA, its officers and directors, from any and all losses,
including reasonable attorney's fees, incurred by DFAA arising out of any
actions or omissions of DFAA made in accordance with the express instructions of
DFA or out of DFAA's failure to act with respect to a matter which requires the
specific approval or direction of DFA in the absence of such approval or
direction.
14. TERM. This Agreement shall be effective as of _____________,1997
shall remain in effect until terminated as hereinafter provided. This Agreement
may be terminated by DFA or by DFAA at any time without penalty on sixty (60)
days' written notice to the other party hereto. Any fees owing to DFAA pursuant
to paragraph 5 hereof shall be pro rated to the date of termination.
-8-
<PAGE>
15. NOTICE. Any notice or other communication required to be delivered
by a party to the other party to this Agreement, by this or any other agreement
between the parties, shall be in writing and shall be deemed duly given upon
delivery via facsimile transmission or overnight delivery by Federal Express,
DHL Worldwide, or such other courier having comparable qualifications, to the
following fax number or address or such other fax number or address as shall be
communicated to the other party from time to time in accordance with the notice
requirement thereof:
IF TO DFA:
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, Suite 650
Santa Monica, California 90401
Attention: Irene R. Diamant
Vice President
FAX: (310) 395-6140
IF TO DFAA:
DFA Australia Ltd.
Suite 4403 - Level 44,
Gateway
1 Macquerie Place
Sydney, NSW 2000
Attention: Andrew Cain
Chief Operations Manager
FAX: (011) 612 9 247-7165
16. CHOICE OF LAW. This Agreement shall be administered and construed
under the laws of the State of California.
17. MISCELLANEOUS.
(a) This Agreement may be executed in two counterparts, each
of which shall be deemed an original and both of which together shall
constitute one agreement.
-9-
<PAGE>
(b) This Agreement may be amended from time to time by the
mutual agreement of the parties. (c) The captions used herein are for reference
purposes only and shall not be construed to affect the meaning or interpretation
of the provisions of this Agreement.
(d) This Agreement may not be assigned by either party.
(e) In the event any provisions of this Agreement, including
any and all schedules or exhibits hereto as in effect from time to time,
conflict or are inconsistent with, rather than being supplemental to, any terms
or provisions of any other agreement to which DFA and DFAA are both parties,
such other agreement shall control.
IN WITNESS WHEREOF, DFA and DFAA have caused this Agreement to be
executed on this ____ day of ___________________, 1997, by their respective
officers or representatives thereunto duly authorized.
DIMENSIONAL FUND ADVISORS, INC.
By:
-----------------------------
Title:
--------------------
DFA Australia Ltd.
By:
-----------------------------
Title:
--------------------
-10-
<PAGE>
SCHEDULE A
(AS LAST AMENDED ON DECEMBER 8, 1998)
INVESTMENT PRODUCTS
The DFA Investment Trust Company
* DFA International Value Series
* Emerging Markets Small Cap Series
* Emerging Markets Series
DFA Investment Dimensions Group Inc.
* DFA International Small Cap Value Portfolio
* VA International Value Portfolio
* Large Cap International Portfolio
* Tax-Managed DFA International Value Portfolio
Dimensional Emerging Markets Value Fund Inc.
<PAGE>
SCHEDULE B
DFA Australia Ltd. shall:
(a) On a weekly basis, provided to DFA (i) via an overnight delivery
service, FAA's entire database(s) (MAST.DB) for all portfolios and subtracts
("DFA portfolios") for which DFAA is acting as a subadvisor or agent pursuant to
agreements with DFA, and (ii) via facsimile transmission, cash sheets for those
DFA portfolios not administered by Provident Financial Processing Corporation
(or by such other custodian/administrative agent as DFA may hereafter notify
DFAA);
(b) Prior to execution of any buy/sell program, obtain approval of the
DFA Investment Committee after submission by DFAA of the proposed program,
including a statement of the assumptions used in generating the original list of
orders and the final list with brokers allocated;
(c) Before purchasing, for any DFA portfolio, securities of any company
not previously included on the appropriate buylist, obtain approval of the DFA
Investment Committee to add such company to the approved buy list; any such
request for approval of a new company shall be made by providing the Investment
Committee the following: (i) company name, (ii) sedol number, (iii) local
symbol, (iv) exchange, (v) current market price and (vi) number of shares
outstanding;
(d) Place buy and sell orders for execution on behalf of any DFA
portfolios only with those brokers approved for trading by the DFA Investment
Committee.
(e) Obtain approval of the DFA Investment Committee before permitting
any director or employee of DFAA to be directly involved with authorizing
trades, directing corporate actions or making comparable investment decisions on
behalf of DFA portfolios;
<PAGE>
(f) Prior to the placement of any sell order on behalf of a DFA
portfolio, confirm with the appropriate custodian the availability of the shares
intended to be sold;
(g) On a monthly basis, reconcile all share positions and prices with
the appropriate custodian for each DFA portfolio; and
(h) Maintain appropriate back-ups of all systems and records and notify
DFA on a periodic basis of any changes to the system. DFAA shall, in addition to
any other required records or reports maintain the following:
(i) Buy/sell programs, all of which must be signed and dated
by an authorized person; (ii) Documentation of all bids and offers that
are not initiated by DFAA (i.e., blocks), including the date, broker
involved, name of the stock, sedol or local symbol, bid/offer price and
the number of shares; completed trades must also be documented as to
the time of the transaction, actual shares completed and the allocation
of those shares among portfolios;
(iii) A record of each brokerage order given by or on behalf
of a DFA portfolio for, or in connection with, the purchase or sale of
securities, whether executed or unexecuted, including the name of the
broker, the name of the person who placed the order, the terms and
conditions of the order and, if any modification or cancellation
thereof, the time of entry or cancellation, the price at which
executed, and the time of receipt of report of execution;
(iv) A record of all other portfolio purchases or sales (daily
trade logs and where applicable, broker confirmations) showing details
comparable to those described in (c) above;
-2-
<PAGE>
(v) Records documenting any voluntary decision or corporate
actions;
(vi) Documentation of any proxy votes directed by DFAA,
including the name of the company, date voted and DFA portfolios
involved.
-3-
<PAGE>
Exhibit 99.b5-12
MASTER DIMENSIONAL FUND ADVISORS LTD.
CONSULTING SERVICES AGREEMENT
This Agreement made by and between Dimensional Fund Advisors Inc., a
Delaware corporation ("DFA"), and Dimensional Fund Advisors Ltd., a company
organized under the laws of England ("DFAL").
W I T N E S S E T H:
WHEREAS, DFAL is (i) engaged in the business of investment management
and administrative and trading services primarily in the United Kingdom and
Europe (collectively, the "European countries") and (ii) regulated in the
conduct of its investment, administrative and trading business by the Investment
Management Regulatory Organization ("IMRO"), a self-regulatory organization;
WHEREAS, DFAL presently acts as sub-advisor to DFA with respect to
certain DFA investment products (the "Sub-Advisory Products") pursuant to
certain sub-advisory agreements (the "Sub-Advisory Agreements") dated as of
August 7, 1996 and also provides certain trading services for other products to
DFA pursuant to a Service Agreement dated as of January 28, 1992, as amended on
September 16, 1992 (the "Service Agreement");
WHEREAS, DFA wishes to continue to engage DFAL to provide various
non-advisory services relating to certain international investment products
other than the Sub-Advisory Products managed or sponsored by DFA as set forth in
Schedule A hereto (the "Investment Products") which schedule may be amended from
time to time; and
<PAGE>
WHEREAS, DFA wishes to modify certain provisions of the Service
Agreement further defining the overall duties and responsibilities of the
parties, and DFAL desires to so act and to provide such services as agreed to
from time to time pursuant to a consulting services agreement; and
WHEREAS, DFA owns 100% of the outstanding shares of DFAL;
NOW, THEREFORE, in consideration of the premises and the mutual
promises set forth herein, the parties hereto agree as follows:
1. TERMINATION OF SERVICES AGREEMENT. The parties hereto agree that the
Service Agreement is hereby terminated and shall have no further effect and the
duties and responsibilities of DFA and DFAL shall be as set forth hereinafter.
2. APPOINTMENT. DFA hereby appoints DFAL, and DFAL hereby accepts such
appointment, to act on behalf of DFA with respect to such matters and to provide
such services with respect to the Investment Products as may from time to time
be agreed between the parties.
3. SERVICES TO BE PERFORMED. DFA hereby employs DFAL, subject to
supervision by DFA, to furnish the following services for the Investment
Products:
a. Execution of buy and sell programs generated by DFA and
transmitted to DFAL;
b. Selection of brokers or dealers to execute purchases and
sales of eligible securities for the Investment Products; including the
determination of the best and most efficient means of purchasing and selling
such portfolio securities; and the allocation of trades among brokers and
dealers, subject to constraints with respect to affiliated brokers and dealers
subject to Section 17 of the Investment Company Act of 1940. In carrying out its
obligations hereunder,
2
<PAGE>
DFAL will act with a view to the objectives of each Investment Product as set
forth in the respective prospectus and otherwise communicated by DFA to DFAL,
including the objectives of receiving best price and execution for portfolio
transactions and causing as little price fluctuation as possible.
c. DFAL may execute orders from DFA for fewer or more shares
than set forth in the buy or sell programs initiated by DFA, based on market
conditions and other factors, provided that such variances from the execution
lists are within parameters established by DFA from time to time or in specific
cases.
d. DFAL shall report the results of all trading activities,
and all other information relating to portfolio transactions for the Investment
Products, at such time and in such format as DFA may request, including
reporting to the custodians of the Investment Products, as appropriate.
e. DFAL shall review and coordinate its agency trading and
execution strategies, practices and results with DFA as frequently as reasonably
necessary.
f. DFAL may also from time to time, monitor cash balances for
the Investment Products; review and bid on blocks of securities within
parameters established by DFA; handle corporate actions and vote proxies for
securities held in the Investment Products as directed by DFA; review companies
and suggest status codes; and provide DFA with data concerning equity markets in
the various countries in which the Investment Products are invested.
3
<PAGE>
g. DFAL shall furnish only statistical and other factual
information and advice regarding economic factors and trends, and it is neither
intended nor required that DFAL shall furnish advice or make recommendations
regarding the purchase or sale of securities.
These duties and responsibilities of DFAL, taken individually or
collectively, shall not constitute, or be construed as constituting, investment
advice.
4. DUTIES AND RESPONSIBILITIES. DFAL shall perform its obligations and
discharge its duties hereunder, and under any or all other agreements that DFAL
may enter into with DFA from time to time, (i) solely in the best interests of
DFA and the clients of DFA with respect to or in connection with which DFAL may
from time to time provide investment or other services, and (ii) with the care,
skill, prudence and diligence that a prudent man experienced in such matters
would use in providing similar services in like circumstances. Except as
expressly provided herein or directed by DFA from time to time in writing, DFAL
shall have no authority, express or implied, to bind DFA to any contract or
commitment, to otherwise act on behalf of DFA, or to hold itself out as an agent
of DFA.
5. CONDUCT OF BUSINESS. DFAL shall at all times conduct its business in
compliance with any and all applicable laws, rules and regulations including,
without limitation, the applicable laws, rules and regulations of the United
States and the United Kingdom and any governmental agency, regulatory authority
or governing body thereof.
6. REPRESENTATIONS OF DFAL. DFAL hereby represents and warrants that it
is regulated in the conduct of its investment, administrative and trading
business by IMRO and that it is duly licensed under the securities laws of the
United States to engage in the activities in which DFAL is engaged, including
without limitation registration as an investment adviser with
4
<PAGE>
the United States Securities and Exchange Commission ("SEC"). DFAL hereby
covenants to maintain in good standing all licenses and registrations required
for the conduct of its business and performance of its duties and obligations
hereunder and under any and all agreements entered into with DFA from time to
time. In addition, DFAL shall provide DFA as promptly as practicable copy of any
and all amendments filed with the SEC at the same time any such amendments are
filed.
7. FEES. During the duration of this Agreement, in consideration of the
portfolio management and other services to be performed by DFAL hereunder and as
agreed between the parties from time to time, DFA shall pay DFAL a fee in an
amount equal to 110% of pretax annual operating expenses of DFAL inclusive of
fees to be paid to DFAL pursuant to the Subadvisory Agreements. Fees due from
DFA to DFAL shall be remitted not less than quarterly.
8. DIRECTION BY DFA. In connection with any services to be provided
hereunder to be rendered by DFAL from time to time, DFAL shall at all times act
in accordance with the instructions of DFA as communicated from time to time and
shall prepare and provide all information and reports reasonably requested by
DFA. Attached hereto as Schedule B is a description of the reports currently
required to be furnished to DFA by DFAL and those actions for which DFAL must
obtain specific approval by DFA, which Schedule B may be amended from time to
time by DFA in its sole discretion upon reasonable notice to DFAL.
DFA shall use its best efforts to ensure that trustees, custodians,
subcustodians, subadvisors and administrative agents cooperate with DFAL thus
facilitating the provision of services by DFAL. DFA shall provide DFAL with
copies of regulatory filings made by DFA
5
<PAGE>
which are relevant to DFAL's agency and subadvisory services. DFA shall also
share with DFAL information which DFA believes to be relevant to DFAL's
services.
9. RECORDKEEPING AND RECORD RETENTION. DFAL shall maintain and preserve
in a safe and accessible place and shall afford representatives of DFA access to
all customer, corporate and other business' records customarily maintained by
investment managers as they relate to DFAL's provision of agency and subadvisory
services to DFA, all records and reports required to be maintained by applicable
laws, rules and regulations, including, without limitation, the United States
Investment Advisers Act of 1940, and any and all such other records or reports
as DFA may from time to time reasonably require DFAL to prepare, including such
records and reports set forth on Schedule B hereto, as may be amended from time
to time by DFA in its sole discretion upon reasonable notice to DFAL.
Except as otherwise required by law or as otherwise agreed to by the
parties, all records and reports required to be prepared and preserved hereunder
shall be kept in a readily accessible place on DFAL's premises for at least two
years from the date of the record or report and in a reasonably accessible place
on or off DFAL's premises for at least four more years. If records or reports
are preserved in a form other than paper originals they shall be kept in
duplicate, stored separately, and DFAL shall maintain on its premises a means of
visual review and producing hard copies of such records and reports. DFAL's
obligation hereunder to maintain and preserve records shall survive the
termination of this Agreement.
10. INSPECTION AND EXAMINATION OF RECORDS. DFAL hereby acknowledges
that DFA has certain statutory obligations to supervise the activities of DFAL
relating to DFA portfolios and agrees to cooperate fully at all times to afford
DFA access to DFAL's books and records at
6
<PAGE>
anytime during normal business hours, to answer any questions with respect to
DFAL's operations, and to regularly schedule and attend meetings as requested by
DFA for purposes of reviewing DFAL's performance under its agreements with DFA,
reviewing operational matters with trustees, custodians' subcustodians and
administrative agents. DFA or its agents or representatives may, from time to
time, visit DFAL for the purpose of reviewing DFAL's operations as they relate
to the provision of agency and subadvisory services. DFA agrees to use
reasonable efforts to avoid causing any undue disruption to the conduct of
DFAL's day-to-day business affairs.
11. CONFIDENTIAL AND PROPRIETARY INFORMATION. Each party acknowledges
and agrees that any and all information emanating from the other's business, in
any form, is confidential and proprietary information. Each party agrees that it
will not, during or after the term of this agreement, permit the duplication or
disclosure of any such confidential and proprietary information to any person
(other than an employee, agent or representative of the other party who must
have such information for the performance of its obligations under its
agreements with the other party) except as required by law, unless such
duplication, use or disclosure is specifically authorized by the other party in
writing. DFAL acknowledges and agrees that all computer programs provided by DFA
("DFA Software"), including all copyright rights therein, are owned by and are
the property of DFA and that DFAL is licensed hereby to use such DFA Software
only for the terms of this Agreement and one year thereafter. At the expiration
or termination of this Agreement, DFAL agrees to return all copies of the DFA
Software to DFA within one year unless otherwise agreed. DFAL may, with the
written consent of DFA which shall not be unreasonably withheld, substitute
other computer programs to perform the activities covered by
7
<PAGE>
this agreement, provided such programs produce information and reports
comparable to those produced by the DFA Software in a magnetic machine-readable
form which is compatible with the DFA Software.
12. ALLOCATION OF CLIENT TRANSACTIONS. DFA hereby acknowledges that
DFAL renders services to clients other than DFA and DFA portfolios, including
clients for which DFAL may purchase or sell the same securities as those that
may be listed from time to time on an approved buy/sell program for a DFA
portfolio. DFAL hereby acknowledges its fiduciary obligations to treat all
clients on a fair and equitable basis when effecting securities transactions in
accordance with DFA's policies.
13. COMPLAINTS. Complaints by DFA in its capacity as DFAL's customer
and concerning DFAL's performance of its duties should be directed to the
Compliance Officer of DFAL either orally or in writing, sent by facsimile or
first class mail to the address provided in Section 16 hereof. Complaints may
also be made directly to IMRO's Investment Ombudsman at the following address:
8
<PAGE>
IMRO
Lloyds Chambers
1 Portsoken Street
London El 8BT
United Kingdom
Tel: 0171 390 5000
Facsimile: 0171 680 0550
14. Indemnification. DFAL shall indemnify and hold harmless DFA, its
officers and directors, from any and all losses, including reasonable attorney's
fees, incurred by DFA as a result of or arising out of any breach by DFAL of its
duties under this Agreement or any other agreement between DFA and DFAL, any
violation by DFAL of any provision of this Agreement or any other agreement
between DFA and DFAL, or any action of DFAL taken on behalf of DFA or any DFA
portfolio which falls outside the scope of express authority granted hereunder
or under any other agreement between DFA and DFAL.
Notwithstanding the foregoing, DFAL shall not be liable to DFA or any
DFA portfolio with respect to actions taken or not taken on behalf thereof if
DFAL has acted pursuant to and in strict compliance with express instructions of
DFA or failed to take an action which required specific approval or direction by
DFA in the absence of such approval or direction, and DFA agrees to indemnify
and hold harmless DFAL, its officers and directors, from any and all losses,
including reasonable attorney's fees, incurred by DFAL arising out of any
actions or omissions of DFAL made in accordance with the express instructions of
DFA or out of DFAL's failure to act with respect to a matter which requires the
specific approval or direction of DFA in the absence of such approval or
direction.
9
<PAGE>
15. TERM. This Agreement shall be effective as of ____________, 1997
shall remain in effect until terminated as hereinafter provided. This Agreement
may be terminated by DFA or by DFAL at any time without penalty on sixty (60)
days' written notice to the other party hereto. Any fees owing to DFAL pursuant
to Paragraph 5 hereof shall be pro rated to the date of termination.
16. NOTICE. Any notice or other communication required to be delivered
by a party to the other party to this Agreement, by this or any other agreement
between the parties, shall be in writing and shall be deemed duly given upon
delivery via facsimile transmission or overnight delivery by Federal Express,
DHL Worldwide, or such other courier having comparable qualifications, to the
following fax number or address or such other fax number or address as shall be
communicated to the other party from time to time in accordance with the notice
requirement thereof:
IF TO DFA:
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, Suite 650
Santa Monica, California 90401
Attention: Irene R. Diamant
Vice President
FAX: (310) 395-6140
IF TO DFAL:
Dimensional Fund Advisors Ltd.
14 Berkeley Street
London W1X 5AD
England
10
<PAGE>
Attention: Margaret East
Compliance Office
FAX: (011) 44 171 495-2354
17. CHOICE OF LAW. This Agreement shall be administered and construed
under the laws of the State of California.
18. MISCELLANEOUS.
(a) This Agreement may be executed in two
counterparts, each of which shall be deemed an original and both of which
together shall constitute one agreement.
(b) This Agreement may be amended from time to time
by the mutual agreement of the parties.
(c) The captions used herein are for reference
purposes only and shall not be construed to affect the meaning or interpretation
of the provisions of this Agreement.
(d) This Agreement may not be assigned by either
party.
(e) In the event any provisions of this Agreement,
including any and all schedules or exhibits hereto as in effect from time to
time, conflict or are inconsistent with, rather than being supplemental to, any
terms or provisions of any other agreement to which DFA and DFAL are both
parties, such other agreement shall control.
11
<PAGE>
IN WITNESS WHEREOF, DFA and DFAL have caused this
Agreement to be executed on this ____ day of ________________, 1997, by their
respective officers or representatives thereunto duly authorized.
DIMENSION FUND ADVISORS INC.
By:
--------------------------------
Title:
-----------------------------
DIMENSIONAL FUND ADVISORS LTD.
By:
--------------------------------
Title:
-----------------------------
12
<PAGE>
SCHEDULE A
(AS LAST AMENDED ON DECEMBER 8, 1998)
INVESTMENT PRODUCTS
The DFA Investment Trust Company
* DFA International Value Series
* Emerging Markets Small Cap Series
* Emerging Markets Series
DFA Investment Dimensions Group Inc.
* DFA International Small Cap Value Portfolio
* VA International Value Portfolio
* Large Cap International Portfolio
* Tax-Managed DFA International Value Portfolio
Dimensional Emerging Markets Value Fund, Inc.
<PAGE>
SCHEDULE B
Dimensional Fund Advisors Ltd. shall:
(a) On a weekly basis, provide to DFA (i) via an overnight delivery
service, DFAL's entire database(s) (MAST.DB) for all portfolios and subtrusts
("DFA portfolios") for which DFAL is acting as a subadvisor or agent pursuant to
agreements with DFA, and (ii) via facsimile transmission, cash sheets for those
DFA portfolios not administered by PFPC Inc. (or by such other
custodian/administrative agent as DFA may hereafter notify DFAL);
(b) Prior to execution of any buy/sell program, obtain approval of the
DFA Investment Committee after submission by DFAL of the proposed program,
including a statement of the assumptions used in generating the original list of
orders and the final list with brokers allocated;
(c) Before purchasing, for any DFA portfolio, securities of any company
not previously included on the appropriate buylist, obtain approval of the DFA
Investment Committee to add such company to the approved buy list; any such
request for approval of a new company shall be made by providing the Investment
Committee the following: (i) company name, (ii) sedol number, (iii) local
symbol, (iv) exchange, (v) current market price and (vi) number of shares
outstanding;
(d) Place buy and sell orders for execution on behalf of any DFA
portfolios with those brokers approved for trading by the DFA Investment
Committee.
(e) Obtain approval of the DFA Investment Committee before permitting
any director or employee of DFAL to be directly involved with authorizing
trades, directing corporate actions or making comparable investment decisions on
behalf of DFA portfolios;
<PAGE>
(f) Prior to the placement of any sell order on behalf of a DFA
portfolio, confirm with the appropriate custodian the availability of the shares
intended to be sold;
(g) On a monthly basis, reconcile all share positions and prices with
the appropriate custodian for each DFA portfolio; and
(h) Maintain appropriate back-ups of all systems and records and notify
DFA on a periodic basis of any changes to the system. DFAL shall, in addition to
any other required records or reports maintain the following:
(i) Buy/sell programs, all of which must be signed and dated
by an authorized person; (ii) Documentation of all bids and offers that
are not initiated by DFAL (i.e., blocks), including the date, broker
involved, name of the stock, sedol or local symbol, bid/offer price and
the number of shares; completed trades must also be documented as to
the time of the transaction, actual shares completed and the allocation
of those shares among portfolios;
(iii) A record of each brokerage order given by or on behalf
of a DFA portfolio for, or in connection with, the purchase or sale of
securities, whether executed or unexecuted, including the name of the
broker, the name of-the person who placed the order, the terms and
conditions of the order and, if any modification or cancellation
thereof, the time of entry or cancellation, the price at which
executed, and the time of receipt of report of execution;
2
<PAGE>
(iv) A record of all other portfolio purchases or sales (daily
trade logs and where applicable, broker confirmations) showing details
comparable to those described in (c) above;
(v) Records documenting any voluntary decision or corporate
actions;
(vi) Documentation of any proxy votes directed by DFAL,
including the name of the company, date voted and DFA portfolios
involved.
3
<PAGE>
Exhibit 99.b8
DFA INVESTMENT DIMENSIONS GROUP INC.
CUSTODIAN AGREEMENT
ADDENDUM NUMBER ONE
THIS AGREEMENT is made as of the 8th day of December, 1998 by and between
DFA INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), and
PNC BANK, N.A., formerly known as "Provident National Bank," a national banking
association ("PNC").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended, and its shares are
registered under the Securities Act of 1933, as amended; and
WHEREAS, the Fund has retained PNC to provide certain custodian services
pursuant to a Custodian Agreement dated June 19, 1989, as amended (the
"Agreement") which as of the date hereof, is in full force and effect; and
WHEREAS, PNC presently provides such services to the existing portfolios of
the Fund, including new series of the Fund, designated as Tax-Managed U.S. 5-10
Value Portfolio, Tax-Managed U.S. 6-10 Small Company Portfolio, Tax-Managed DFA
International Value Portfolio and Tax-Managed U.S. Marketwide Value Portfolio,
which are listed on Schedule A, attached hereto; and
WHEREAS, Paragraph 1. of the Agreement provides that the Fund may from time
to time issue additional portfolios and, in such event, the provisions of the
Agreement shall apply to such portfolios as may be mutual agreed upon by the
Fund and PNC;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound thereby, the parties agree:
1. The Agreement hereby is amended effective December 8, 1998 by:
(a) replacing all references to "Provident National Bank" with "PNC
Bank, N.A.";
(b) replacing all references to "Provident" with "PNC";
(c) re-stating Paragraph 1. of the Agreement, to read as follows:
"1. APPOINTMENT.
The Fund hereby appoints PNC to act as custodian of the portfolio
securities, cash and other property belonging to each series of
shares of the Fund, as listed on Schedule A, attached hereto,
(the "Covered Portfolios") for the period and on the terms
1
<PAGE>
set forth in this Agreement. PNC accepts such appointment and
agrees to furnish the services herein set forth in return for the
compensation as provided in Paragraph 21. of this Agreement. The
Fund may from time to time issue additional portfolios and, in
such event, the provisions of this Agreement shall apply to such
portfolios as may be mutually agreed by the Fund and PNC. PNC
shall identify to each Covered Portfolio the property and
liabilities belonging to such Covered Portfolio and in such
actions, records, reports, confirmations, accounts and notices to
the Fund called for under this Agreement shall identify the
Covered Portfolio to which such actions, record, account, report,
confirmation or notice pertains."
(d) re-stating Paragraph 2. of the Agreement to read as follows: "2.
DELIVERY OF DOCUMENTS. The Fund has furnished PNC with copies of
properly certified or authenticated of each of the following:
(a) Current resolutions of the Fund's Board of Directors
authorizing the appointment of PNC as custodian of the
portfolio securities, cash and other property belonging to
each Portfolio of the Fund as provided herein and approving
this Agreement;
(b) Appendix A identifying and containing the signatures of the
Fund's officers and other persons authorized to issue Oral
Instructions and to sign Written Instructions, as
hereinafter defined, on behalf of the Fund;
(c) The Fund's Articles of Incorporation, as amended;
(d) The Fund's current By-Laws, as amended;
(e) The current forms of specimen stock certificates issued on
behalf of the applicable portfolios;
(f) The current Investment Advisory Agreements between
Dimensional Fund Advisors Inc. ("DFA") and the Covered
Portfolios of the Fund;
(g) The current Sub-Advisory Agreement;
2
<PAGE>
(h) The current Facility Agreement between DFA and the Fund (the
"Facility Agreement");
(i) The current Distribution Agreement between the Fund and DFA
Securities Inc. (the "Distribution Agreement");
(j) The current Transfer Agency Agreement between PFPC Inc.
(formerly, "Provident Financial Processing Corporation")
(the "Transfer Agent") and the Fund dated as of July 12,
1991, as amended (the "Transfer Agency Agreement");
(k) The current Administration and Accounting Services Agreement
between the Transfer Agent and the Fund dated as of July 12,
1991, as amended (the "Accounting Services Agreement"); and
(l) The Fund's current Prospectuses and Statements of Additional
Information relating to each of the Covered Portfolios. The
Prospectuses and Statements of Additional Information, and
all amendments and supplements thereto are hereinafter
described as the "Prospectuses."
The Fund agrees to furnish to PNC from time to time properly
certified or authenticated copies of all amendments or
supplements to the foregoing, as applicable."
(e) re-stating Paragraph 5., Section (a)(v), to read as follows:
"(v) for the redemption of the Fund's Shares pursuant to the
procedures set forth in the Fund's current Prospectuses or
Written Instructions amending such procedures."
2. The fee schedules of PNC applicable to the Portfolios shall be as agreed
in writing from time to time.
3. This Addendum supercedes all prior Amendments to the Agreement.
4. In all other respects, the Agreement shall remain unchanged and in full
force and effect.
5. This Addendum may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Number _______ to the Agreement to be executed by their duly authorized officers
designated below on the day and year first above written.
DFA INVESTMENT DIMENSIONS GROUP INC.
By: /S/ IRENE R. DIAMANT
------------------------------------
Irene R. Diamant
Vice President
PNC BANK, N.A.
By: /S/ JOSEPH GRAMLICH
------------------------------------
Joseph Gramlich
Senior Vice President
4
<PAGE>
AMENDED AND RESTATED
DECEMBER 8, 1998
APPENDIX A
DFA INVESTMENT DIMENSIONS GROUP INC.
NAME SIGNATURE
---- ---------
5
<PAGE>
AMENDED AND RESTATED
DECEMBER 8, 1998
SCHEDULE A
SERIES OF
DFA INVESTMENT DIMENSIONS GROUP INC.
U.S. 6-10 SMALL COMPANY PORTFOLIO (3/92)
U.S. LARGE COMPANY PORTFOLIO (2/90)
U.S. 6-10 VALUE PORTFOLIO (9/92)
U.S. LARGE CAP VALUE PORTFOLIO (9/92)
ENHANCED U.S. LARGE COMPANY PORTFOLIO (2/96)
U.S. 9-10 SMALL COMPANY PORTFOLIO (12/81)
U.S. 4-10 VALUE PORTFOLIO (11/97)
RWB/DFA INTERNATIONAL HIGH BOOK TO MARKET PORTFOLIO (5/93)
EMERGING MARKETS PORTFOLIO (4/94)
JAPANESE SMALL COMPANY PORTFOLIO (1/86)
UNITED KINGDOM SMALL COMPANY PORTFOLIO (1/86)
CONTINENTAL SMALL COMPANY PORTFOLIO (4/88)
PACIFIC RIM SMALL COMPANY PORTFOLIO (4/91)
DFA ONE YEAR FIXED INCOME PORTFOLIO (6/83)
DFA TWO-YEAR GLOBAL FIXED INCOME PORTFOLIO (2/96)
EMERGING MARKETS VALUE PORTFOLIO (11/97)
DFA REAL ESTATE SECURITIES PORTFOLIO (9/92)
DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO (12/94)
LARGE CAP INTERNATIONAL PORTFOLIO (4/91)
DFA GLOBAL FIXED INCOME PORTFOLIO (7/90)
DFA INTERMEDIATE GOVERNMENT FIXED INCOME PORTFOLIO (7/90)
DFA FIVE-YEAR GOVERNMENT PORTFOLIO (5/87)
VA SMALL VALUE PORTFOLIO (9/95)
VA LARGE VALUE PORTFOLIO (4/94)
VA INTERNATIONAL VALUE PORTFOLIO (9/95)
VA INTERNATIONAL SMALL PORTFOLIO (9/95)
VA SHORT-TERM FIXED PORTFOLIO (9/95)
VA GLOBAL BOND PORTFOLIO(4/94)
INTERNATIONAL SMALL COMPANY PORTFOLIO (8/96)
EMERGING MARKETS SMALL CAP PORTFOLIO (12/96)
DFA TWO YEAR CORPORATE FIXED INCOME PORTFOLIO
DFA TWO YEAR GOVERNMENT PORTFOLIO
TAX-MANAGED U.S. 5-10 VALUE PORTFOLIO
TAX-MANAGED U.S. 6-10 SMALL COMPANY PORTFOLIO
TAX-MANAGED DFA INTERNATIONAL VALUE PORTFOLIO
TAX-MANAGED U.S. MARKETWIDE VALUE PORTFOLIO
6
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
TRANSFER AGENCY AGREEMENT
ADDENDUM NUMBER ONE
THIS AGREEMENT is made as of the 8TH day of DECEMBER, 1998 by and
between DFA INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the
"Fund"), and PFPC INC., formerly known as "Provident Financial Processing
Corporation," a Delaware corporation the ("Transfer Agent" or "PFPC").
W I T N E S S E T H :
WHEREAS, the Fund is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"), and
its shares are registered under the Securities Act of 1933, as amended ("1933
Act); and
WHEREAS, the Fund has retained the Transfer Agent to serve as the
Fund's transfer agent, registrar and dividend disbursing agent, pursuant to a
Transfer Agency Agreement dated June 19, 1989, (the "Agreement") which, as of
the date hereof, is in full force and effect; and
WHEREAS, PFPC presently provides such services to the existing series
of shares of the Fund and, including four (4) new series of the Fund, designated
as Tax-Managed U.S. 5-10 Value Portfolio, Tax-Managed U.S. 6-10 Small Company
Portfolio, Tax-Managed DFA International Value Portfolio, and Tax-Managed U.S.
Marketwide Value Portfolio, which are listed on Schedule A, attached hereto; and
WHEREAS, Paragraph 1 of the Agreement provides that PFPC shall provide
such services to any class of shares created by the Fund after the date of the
Agreement upon the mutual agreement of the Fund and the Transfer Agent;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound thereby, the parties agree:
1. The Agreement hereby is amended effective December 8, 1998 by:
(a) replacing all references to "Provident Financial
Processing Corporation" with "PFPC Inc."
(b) re-stating Paragraph 1. of the Agreement to read as
follows:
"1. APPOINTMENT.
The Fund hereby appoints the Transfer Agent
to serve as transfer agent, registrar, and dividend disbursing
agent of each of the series of shares of the Fund, as listed
on Schedule A, attached hereto, (the "Shares") for the period
and on the terms set forth in this Agreement. The Transfer
Agent shall identify to
1
<PAGE>
each such series or class property belonging to such series or
class and in such reports, records, confirmations and notices
to the Fund and other services provided hereunder shall
promptly identify the series or class to which such property,
record, report, confirmation or service pertains and shall
issue shares on a per series basis as provided in the
Prospectus. Any class of shares created by the Fund after the
date hereof shall be included hereunder upon the mutual
agreement of the Fund and the Transfer Agent.
(c) re-stating Paragraph 2 of the Agreement to read as
follows:
"2. DELIVERY OF DOCUMENTS.
The Fund has furnished the Transfer Agent
with properly certified or authenticated copies of
each of the following:
(a) Resolutions of the Fund's
Board of Directors,
authorizing the appointment
of the Transfer Agent as
transfer agent and
registrar and dividend
disbursing agent of the
Fund as provided herein and
approving this Agreement;
(b) Appendix A, identifying and
containing the signatures
of the Fund's officers
authorized to sign stock
certificates on behalf of
the applicable Portfolios
of the Fund and to execute
stock certificates
representing shares of such
portfolios;
(c) The Fund's Articles of
Incorporation, and all
amendments of hereto (such
Articles of Incorporation
as presently in effect and
as they may from time to
time be amended are herein
called the "Charter");
(d) The Fund's current By-Laws,
and all amendments thereto
(such By-Laws as presently
in effect as they shall
from time to time be
amended herein called
"By-Laws");
(e) The current forms of
specimen stock certificates
issued on behalf of the
applicable portfolios;
(f) The current investment
advisory agreements between
Dimensional Fund Advisors
Inc. (the "Advisor") and
the Shares of the Fund);
2
<PAGE>
(g) The current Distribution
Agreement between the Fund
and DFA Securities Inc.
(the "Distribution
Agreement");
(h) The current Administration
and Accounting Services
Agreement between PFPC and
the Fund dated as of July
12, 1991, as amended; (the
"Administration Agreement")
and
(i) The current Custodian
Agreement between PNC Bank,
N.A. and the Fund dated
June 19, 1989, as amended
(the "Custodian
Agreement"); and
(j) The Fund's current
Prospectuses and Statements
of Additional Information
relating to each of its
portfolios. The
Prospectuses and Statements
of Additional Information,
and all amendments and
supplements thereto, are
hereinafter described as
the "Prospectuses."
The Fund agrees to furnish to the Transfer Agent from
time to time with properly certified or authenticated
copies of all amendments or supplements to the
foregoing, if any."
(d) re-stating Paragraph 19 to read as follows:
"19. DURATION AND TERMINATION.
This Agreement shall continue in
effect from year-to-year, as long as
such Agreement is approved by the
Fund's Board of Directors. This
Agreement may be terminated by
either party on or after the first
anniversary of the investment date
upon not less than 180 days prior
written notice to the other party.
The foregoing provisions
notwithstanding, either party may
terminate this Agreement in the
event of a material breach of the
terms hereof after written notice to
the other party of such breach and a
reasonable time for cure of such
breach, unless such breach is not
curable and, in such circumstances,
this Agreement shall terminate, at
the option of the injured party,
3
<PAGE>
three months after the date such
notice is given."
2. The fee schedules of PFPC applicable to the Portfolios
shall be as agreed in writing, from time to time.
3. This Addendum supercedes all prior Amendments to the
Agreement.
4. In all other respects, the Agreement shall remain unchanged
and in full force and effect.
5. This Addendum may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum Number
One to the Agreement to be executed by their duly authorized officers designated
below on the day and year first above written.
DFA INVESTMENT DIMENSIONS GROUP INC.
By: /S/ IRENE R. DIAMANT
------------------------------------
Irene R. Diamant
Vice President
PFPC INC.
By: /S/ JOSEPH GRAMLICH
------------------------------------
Joseph Gramlich
Senior Vice President
4
<PAGE>
AMENDED AND RESTATED
DECEMBER 8, 1998
APPENDIX A
DFA INVESTMENT DIMENSIONS GROUP INC.
NAME SIGNATURE
---- ---------
5
<PAGE>
AMENDED AND RESTATED
DECEMBER 8, 1998
SCHEDULE A
SERIES OF
DFA INVESTMENT DIMENSIONS GROUP INC.
U.S. 6-10 Small Company Portfolio
U.S. Large Company Portfolio
U.S. 6-10 Value Portfolio
U.S. Large Cap Value Portfolio
Enhanced U.S. Large Company Portfolio
U.S. 9-10 Small Company Portfolio
U.S. 4-10 Value Portfolio
RWB/DFA International High Book to Market Portfolio
Emerging Markets Portfolio
Japanese Small Company Portfolio
United Kingdom Small Company Portfolio
Continental Small Company Portfolio
Pacific Rim Small Company Portfolio
DFA One Year Fixed Income Portfolio
DFA Two-Year Global Fixed Income Portfolio
Emerging Markets Value Portfolio
DFA Real Estate Securities Portfolio
DFA International Small Cap Value Portfolio
Large Cap International Portfolio
DFA Global Fixed Income Portfolio
DFA Intermediate Government Fixed Income Portfolio
DFA Five-Year Government Portfolio
VA Small Value Portfolio
VA Large Value Portfolio
VA International Value Portfolio
VA International Small Portfolio
VA Short-Term Fixed Portfolio
VA Global Bond Portfolio
International Small Company Portfolio
Emerging Markets Small Cap Portfolio
DFA Two Year Corporate Fixed Income Portfolio
DFA Two Year Government Portfolio
Tax-Managed U.S. 5-10 Value Portfolio
Tax-Managed U.S. 6-10 Small Company Portfolio
Tax-Managed DFA International Value Portfolio
Tax-Managed U.S. Marketwide Value Portfolio
6
<PAGE>
Exhibit 99.b9-2
DFA INVESTMENT DIMENSIONS GROUP INC.
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
ADDENDUM NUMBER ONE
THIS AGREEMENT is made as of the 8th day of December, 1998 by and
between DFA INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the
"Fund"), and PFPC INC., formerly known as "Provident Financial Processing
Corporation," a Delaware corporation, ("PFPC").
W I T N E S S E T H :
WHEREAS, the Fund is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended ("1940 Act") and
its shares are registered under the Securities Act of 1933, as amended ("1933
Act"); and
WHEREAS, the Fund has retained PFPC to provide certain administration
and accounting services pursuant to an Administration and Accounting Services
Agreement dated June 19, 1989, (the "Agreement") which, as of the date hereof,
is in full force and effect; and
WHEREAS, PFPC presently provides such services to the existing series
of the Fund, including four (4) new series of the Fund, designated as
Tax-Managed U.S. 5-10 Portfolio, Tax-Managed U.S. 6-10 Small Company Portfolio,
Tax-Managed DFA International Value Portfolio and Tax-Managed U.S. Marketwide
Value Portfolio which are listed on Schedule B, attached hereto; and
WHEREAS, Paragraph 1 of the Agreement provides that PFPC shall provide
such services to any portfolio organized by the Fund after the date of the
Agreement as agreed to in writing by PFPC and the Fund;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound, the parties hereto agree as
follows:
1. The Agreement hereby is amended effective December 8, 1998 by:
(a) replacing all references to "Provident Financial
Processing Corporation" with "PFPC Inc."
(b) re-stating Paragraph 1 of the Agreement to read as
follows:
"1. APPOINTMENT.
The Fund hereby appoints PFPC to provide certain
administrative and accounting services to each series of
shares of the Fund, as listed on Schedule A, attached hereto,
(the "Portfolios") for the period and on the terms set forth
in this Agreement. PFPC accepts such appointment and agrees to
furnish the services herein set forth in return for the
compensation as provided in Paragraph
<PAGE>
12 of this Agreement. The Fund may from time to time issue
additional series or classes or classify and reclassify shares
of such series or class. The records, notices, reports and
services provided by PFPC hereunder shall be prepared, kept,
maintained and furnished by PFPC in respect of each Portfolio
of the Fund existing on the date hereof, and any Portfolio
organized by the Fund after the date hereof as agreed to in
writing by the Fund and PFPC.
(c) re-stating Paragraph 2 of the Agreement to read as
follows:
"2. DELIVERY OF DOCUMENTS.
The Fund has furnished PFPC with properly
certified or authenticated copies of each of
the following:
(a) Resolutions of the Fund's
Board of Directors
authorizing the appointment
of PFPC to provide certain
administrative and
accounting services of the
Fund as provided herein and
approving this Agreement;
(b) Appendix A, identifying and
containing the signatures
of the Fund's officers and
other persons authorized to
issue Oral Instructions and
to sign Written
Instructions, as
hereinafter defined, on
behalf of the Fund;
(c) The Fund's Articles of
Incorporation and all
amendments thereto (such
Articles of Incorporation,
as presently in effect and
as it shall from time to
time be amended, are herein
called the "Charter");
(d) The Fund's current By-Laws
and all amendments thereto
(such By-Laws, as presently
in effect and as they shall
from time to time be
amended, are hereincalled
the "By-Laws);
(e) The current investment
advisory agreements between
Dimensional Fund Advisors
Inc. (the "Advisor") and
the Portfolios;
(f) The Custodian Agreement
between PNC Bank, N.A. and
the Fund dated as of
June 19, 1989 (the
"Custodian Agreement");
(g) The Transfer Agent
Agreement between PFPC and
the Fund dated as of
June 19,
2
<PAGE>
1989, (the "Transfer
Agency Agreement"); and
(h) The Fund's current
Prospectuses and Statements
of Additional Information
relating to each of its
Portfolios. The
Prospectuses and Statements
of Additional Information,
and all amendments and
supplements thereto, are
hereinafter called the
"Prospectus."
(d) The Fund will furnish PFPC from time to time with
properly certified or authenticated copies of all
amendments or supplements to the foregoing, if any."
(e) re-stating Paragraph 5 (a)(15) to read as follows:
"Consistent with the requirements of the Prospectuses
relating to each Portfolio of the Fund, or Written
Instructions which change those requirements, compute
the net asset values and, where applicable, the
public offering prices of the Portfolios and promptly
report thereon to NASDAQ and the Custodian;"
(f) re-stating Paragraph 15 to read as follows:
"15. DURATION AND TERMINATION.
This Agreement shall continue in effect from
year-to-year, as long as such Agreement is
annually approved by the Fund's Board of
Directors. This Agreement may be terminated by
either party on or after the first anniversary
of the investment date upon not less than 180
days prior written notice to the other party.
The foregoing provisions notwithstanding,
either party may terminate this Agreement in
the event of a material breach of the terms
hereof after written notice to the other party
of such breach and a reasonable time for cure
of such breach, unless such breach is not
curable and, in such circumstances, this
Agreement shall terminate, at the option of the
injured party, three months after the date such
notice is given."
(i) re-stating Paragraph 19 to read as follows:
"19. DELEGATION.
On thirty (30) days prior written
notice to the Fund, PFPC may assign
its rights and delegate its duties
hereunder to any wholly-
3
<PAGE>
owned direct or indirect subsidiary
of PNC or PNC Financial Corp
provided that: (i) the delegate
agrees with PFPC to comply with all
relevant provisions of this
Agreement and applicable law; and
(ii) PFPC and such delegate shall
promptly provide such information as
the Fund may request, and respond to
such questions as the Fund may ask,
relative to the delegation,
including (without limitation) the
capabilities of the delegate. In the
event of such delegation, PFPC shall
remain liable under this Agreement.
2. The fee schedules of PFPC applicable to the Portfolios
shall be as agreed in writing, from time to time.
3. This Addendum supercedes all prior Amendments to the
Agreement.
4. In all other respects, the Agreement shall remain unchanged
and in full force and effect.
5. This Addendum may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum Number
One to the Agreement to be executed by their duly authorized officers designated
below on the day and year first above written.
DFA INVESTMENT DIMENSIONS GROUP INC.
By: /S/ IRENE R. DIAMANT
--------------------------------------
Irene R. Diamant
Vice President
PFPC INC.
By: /S/ JOSEPH GRAMLICH
--------------------------------------
Joseph Gramlich
Senior Vice President
4
<PAGE>
AMENDED AND RESTATED
DECEMBER 8, 1998
APPENDIX A
DFA INVESTMENT DIMENSIONS GROUP INC.
I, Irene R. Diamant, Secretary of DFA Investment Dimensions Group Inc.,
a Maryland corporation (the "Fund"), do hereby certify that:
The following individuals are duly Authorized Persons to give Oral Instructions
and Written Instructions on behalf of the Fund:
NAME SIGNATURE
----- ---------
5
<PAGE>
AMENDED AND RESTATED
DECEMBER 8, 1998
SCHEDULE B
SERIES OF
DFA INVESTMENT DIMENSIONS GROUP INC.
U.S. 6-10 SMALL COMPANY PORTFOLIO
U.S. LARGE COMPANY PORTFOLIO
U.S. 6-10 VALUE PORTFOLIO
U.S. LARGE CAP VALUE PORTFOLIO
ENHANCED U.S. LARGE COMPANY PORTFOLIO
U.S. 9-10 SMALL COMPANY PORTFOLIO
U.S. 4-10 VALUE PORTFOLIO
RWB/DFA INTERNATIONAL HIGH BOOK TO MARKET PORTFOLIO
EMERGING MARKETS PORTFOLIO
JAPANCSE SMALL COMPANY PORTFOLIO
UNITED KINGDOM SMALL COMPANY PORTFOLIO
CONTINENTAL SMALL COMPANY PORTFOLIO
PACIFIC RIM SMALL COMPANY PORTFOLIO
DFA ONE YEAR FIXED INCOME PORTFOLIO
DFA TWO-YEAR GLOBAL FIXED INCOME PORTFOLIO
EMERGING MARKETS VALUE PORTFOLIO
DFA REAL ESTATE SECURITIES PORTFOLIO
DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO
LARGE CAP INTERNATIONAL PORTFOLIO
DFA GLOBAL FIXED INCOME PORTFOLIO
DFA INTERMEDIATE GOVERNMENT FIXED INCOME PORTFOLIO
DFA FIVE-YEAR GOVERNMENT PORTFOLIO
VA SMALL VALUE PORTFOLIO
VA LARGE VALUE PORTFOLIO
VA INTERNATIONAL VALUE PORTFOLIO
VA INTERNATIONAL SMALL PORTFOLIO
VA SHORT-TERM FIXED PORTFOLIO
VA GLOBAL BOND PORTFOLIO
INTERNATIONAL SMALL COMPANY PORTFOLIO
EMERGING MARKETS SMALL CAP PORTFOLIO
DFA TWO YEAR CORPORATE FIXED INCOME PORTFOLIO
DFA TWO YEAR GOVERNMENT PORTFOLIO
TAX-MANAGED U.S. 5-10 VALUE PORTFOLIO
TAX-MANAGED U.S. 6-10 SMALL COMPANY PORTFOLIO
TAX-MANAGED DFA INTERNATIONAL VALUE PORTFOLIO
TAX-MANAGED U.S. MARKETWIDE VALUE PORTFOLIO
6
<PAGE>
Exhibit 99.b9.3
DFA INVESTMENT DIMENSIONS GROUP INC.
THE DFA ONE-YEAR FIXED INCOME PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 6th day of January, 1993, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on behalf
of The DFA One-Year Fixed Income Portfolio (the "Portfolio"), a separate series
of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the
"Administrator").
WHEREAS, the Fund has been organized and operates as investment company
registered under the Investment Company Act 1940 for the purposes of investing
and reinvesting its assets in securities, as set forth in its Registration
Statement under the Investment Company Act of 1940 and the Securities Act of
1933, heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator and
to have an administrator perform various administrative and other services for
it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affair of the Portfolio, subject
to the direction of the Board of Directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. SERVICES TO BE PROVIDED TO THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative affairs
of the Fund as they pertain to the Portfolio. Specifically, the Administrator
shall:
(1) supervise the services provided to the Fund for the
benefit of the Portfolio by the Portfolio's custodian,
transfer and dividend disbursing agent, printers,
insurance carriers (as well as agents
<PAGE>
and brokers), independent accountants, legal counsel and
other persons who provide services to the Fund for the
benefit of the Portfolio;
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign securities,
tax, organizational and other laws that (i) govern-the
business of the Fund in respect of the Portfolio (except
those that govern investment of the Portfolio's assets),
(ii) regulate the offering of the Portfolio's shares and
(iii) provide for the taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they
or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the board of
directors of the Fund;
(5) furnish such information as the board of directors of
the Fund may require regarding any investment company in
whose shares the Portfolio may invest; and
(6) provide such other administrative services for the
benefit of the Portfolio as the board of directors may
reasonably request.
B. In carrying out its responsibilities under Section A
herein, to the extent the Administrator deems necessary or desirable and at the
expense of the Portfolio, the Administrator shall be entitled to consult with,
and obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the
Fund with such office facilities and equipment as may be necessary to conduct
the administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio
will pay all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be
rendered by the Administrator as provided in Section 2 of this Agreement, the
Portfolio shall pay to the Administrator, at the end of each month, a fee equal
to one twelfth of .10 percent of the net assets of the Portfolio. If this
Agreement is terminated prior to the end of any month, the fee for such month
shall be prorated.
-2-
<PAGE>
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator to the Fund r in respect of the Portfolio are not to be deemed
exclusive, and the Administrator shall be free to render similar services to
others as long as its services to the Fund or in respect of the Portfolio are
not impaired thereby
6. Liability of the Administrator. No provision of this
Agreement shall be deemed to protect the Administrator against any liability to
the Fund or its shareholders to which it might otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or the reckless disregard of its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date
written below, provided that prior to such date it shall have been approved by
the board of directors of the Fund, and shall continue in effect until
terminated by the Fund or the Administrator on 60 days written notice to the
other.
startB. Any notice under this Agreement shall be given in
writing addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
9. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and effective on the 3th day of January, 1993.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
------------------------ -------------------
Chairman-Chief President
Investment Officer
-3-
<PAGE>
Exhibit 99.b9.4
DFA INVESTMENT DIMENSIONS GROUP INC.
JAPANESE SMALL COMPANY PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 8th day of August, 1996, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on behalf
of Japanese Small Company Portfolio (the "Portfolio"), a separate series of the
Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the
"Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator and
to have an administrator perform various administrative and other services for
it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the board of directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. Services to be Provided by the Administrator.
A. The Administrator shall supervise the administrative affairs
of the Fund as they pertain to the Portfolio. Specifically, the Administrator
shall:
(1) supervise the services provided to the Fund for the
benefit of the Portfolio by the Portfolio's custodian,
transfer and dividend disbursing agent, printers,
insurance carriers (as well as agents and brokers),
independent accountants, legal counsel and other persons
who provide services to the Fund for the benefit of the
Portfolio;
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign securities,
tax, organizational and other laws that (i) govern the
business of the Fund in respect of the
<PAGE>
Portfolio (except those that govern investment of the
Portfolio's assets), (ii) regulate the offering of the
Portfolio's shares and (iii) provide for the taxation of
the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they
or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the board of
directors of the Fund;
(5) furnish such information as the board of directors of
the Fund may require regarding any investment company in
whose shares the Portfolio may invest; and
(6) provide such other administrative services for the
benefit of the Portfolio as the board of directors may
reasonably request.
B. In carrying out its responsibilities under Section A herein,
to the extent the Administrator deems necessary or desirable and at the expense
of the Portfolio, the Administrator shall be entitled to consult with, and
obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund
with such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay
all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered
by the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to
one-twelfth of 0.40 percent of the average daily net assets of the Portfolio
during the month. If this Agreement is terminated prior to the end of any month,
the fee for such month shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
to the Fund or in respect of the Portfolio are not to be deemed exclusive, and
the Administrator shall be free to render similar services to others as long as
its services to the Fund or in respect of the Portfolio are not impaired
thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement
shall be deemed to protect the Administrator against any liability to the Fund
or its shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement.
2
<PAGE>
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written
below, provided that prior to such date it shall have been approved by the board
of directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days' written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 8th day of August, 1996.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
----------------------- -------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b9.5
DFA INVESTMENT DIMENSIONS GROUP INC.
UNITED KINGDOM SMALL COMPANY PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 8th day of August, 1996, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on behalf
of United Kingdom Small Company Portfolio (the "Portfolio"), a separate series
of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the
"Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator and
to have an administrator perform various administrative and other services for
it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the board of directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. Services to be Provided by the Administrator.
A. The Administrator shall supervise the administrative affairs
of the Fund as they pertain to the Portfolio. Specifically, the Administrator
shall:
(1) supervise the services provided to the Fund for the
benefit of the Portfolio by the Portfolio's custodian,
transfer and dividend disbursing agent, printers,
insurance carriers (as well as agents and brokers),
independent accountants, legal counsel and other persons
who provide services to the Fund for the benefit of the
Portfolio;
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign securities,
tax, organizational and other laws that (i) govern the
business of the Fund in respect of the
<PAGE>
Portfolio (except those that govern investment of the
Portfolio's assets), (ii) regulate the offering of the
Portfolio's shares and (iii) provide for the taxation of
the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they
or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the board of
directors of the Fund;
(5) furnish such information as the board of directors of
the Fund may require regarding any investment company in
whose shares the Portfolio may invest; and
(6) provide such other administrative services for the
benefit of the Portfolio as the board of directors may
reasonably request.
B. In carrying out its responsibilities under Section A herein,
to the extent the Administrator deems necessary or desirable and at the expense
of the Portfolio, the Administrator shall be entitled to consult with, and
obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund
with such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay
all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered
by the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to
one-twelfth of 0.40 percent of the average daily net assets of the Portfolio
during the month. If this Agreement is terminated prior to the end of any month,
the fee for such month shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
to the Fund or in respect of the Portfolio are not to be deemed exclusive, and
the Administrator shall be free to render similar services to others as long as
its services to the Fund or in respect of the Portfolio are not impaired
thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement
shall be deemed to protect the Administrator against any liability to the Fund
or its shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement.
2
<PAGE>
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written
below, provided that prior to such date it shall have been approved by the board
of directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days' written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 8th day of August, 1996.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
----------------------- -------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b9.6
DFA INVESTMENT DIMENSIONS GROUP INC.
CONTINENTAL SMALL COMPANY PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 8th day of August, 1996, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on behalf
of Continental Small Company Portfolio (the "Portfolio"), a separate series of
the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the
"Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator and
to have an administrator perform various administrative and other services for
it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the board of directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. Services to be Provided by the Administrator.
A. The Administrator shall supervise the administrative affairs
of the Fund as they pertain to the Portfolio. Specifically, the Administrator
shall:
(1) supervise the services provided to the Fund for the
benefit of the Portfolio by the Portfolio's custodian,
transfer and dividend disbursing agent, printers,
insurance carriers (as well as agents and brokers),
independent accountants, legal counsel and other persons
who provide services to the Fund for the benefit of the
Portfolio;
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign securities,
tax, organizational and other laws that (i) govern the
business of the Fund in respect of the
<PAGE>
Portfolio (except those that govern investment of the
Portfolio's assets), (ii) regulate the offering of the
Portfolio's shares and (iii) provide for the taxation of
the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they
or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the board of
directors of the Fund;
(5) furnish such information as the board of directors of
the Fund may require regarding any investment company in
whose shares the Portfolio may invest; and
(6) provide such other administrative services for the
benefit of the Portfolio as the board of directors may
reasonably request.
B. In carrying out its responsibilities under Section A herein,
to the extent the Administrator deems necessary or desirable and at the expense
of the Portfolio, the Administrator shall be entitled to consult with, and
obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund
with such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay
all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered
by the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to
one-twelfth of 0.40 percent of the average daily net assets of the Portfolio
during the month. If this Agreement is terminated prior to the end of any month,
the fee for such month shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
to the Fund or in respect of the Portfolio are not to be deemed exclusive, and
the Administrator shall be free to render similar services to others as long as
its services to the Fund or in respect of the Portfolio are not impaired
thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement
shall be deemed to protect the Administrator against any liability to the Fund
or its shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement.
2
<PAGE>
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written
below, provided that prior to such date it shall have been approved by the board
of directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days' written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 8th day of August, 1996.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
----------------------- -------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b9.7
DFA INVESTMENT DIMENSIONS GROUP INC.
THE U.S. LARGE COMPANY PORTFOLIO
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
AGREEMENT made this 1st day of December, 1995, by and between
DFA INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on
behalf of The U.S. Large Company Portfolio (the "Portfolio"), a separate series
of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the
"Administrator").
WHEREAS, the Fund has been organized and operates as an
investment company registered under the Investment Company Act of 1940 for the
purposes of investing and reinvesting its assets in securities, as set forth in
its Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund,
desires to avail itself of the services, assistance and facilities of an
administrator and to have an administrator perform various administrative and
other services for it; and
WHEREAS, the Administrator desires to provide such services to
the Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs
the Administrator to supervise the administrative affairs of the Portfolio,
subject to the direction of the Board of Directors and the officers of the Fund
on the terms hereinafter set forth. The Administrator hereby accepts such
employment and agrees to render the services described herein for the
compensation herein provided.
2. Services to be Provided by the Administrator.
A. The Administrator shall supervise the administrative
affairs of the Fund as they pertain to the Portfolio. Specifically, the
Administrator shall:
(1) supervise the services provided to the Fund for the
benefit of the Portfolio by the Portfolio's
custodian, transfer and dividend disbursing agent,
printers, insurance carriers (as well as agents and
<PAGE>
brokers), independent accountants, legal counsel and
other persons who provide services to the Fund for
the benefit of the Portfolio;
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign
securities, tax, organizational and other laws that
(i) govern the business of the Fund in respect of the
Portfolio (except those that govern investment of the
Portfolio's assets), (ii) regulate the offering of
the Portfolio's shares and (iii) provide for the
taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of
the Portfolio, and their investment in its shares, as
they or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the board of
directors of the Fund;
(5) furnish such information as the board of directors of
the Fund may require regarding any investment company
in whose shares the Portfolio may invest; and
(6) provide such other administrative services for the
benefit of the Portfolio as the board of directors
may reasonably request.
B. In carrying out its responsibilities under Section A
herein, to the extent the Administrator deems necessary or desirable and at the
expense of the Portfolio, the Administrator shall be entitled to consult with,
and obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the
Fund with such office facilities and equipment as may be necessary to conduct
the administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the
Administrator will waive a portion of its administrative fee and reimburse the
Portfolio to the extent necessary to pay the ordinary operating expenses (except
the administrative fee provided in Section 4 below) of the Portfolio. Expenses
of the Portfolio, which are determined by the Fund's Board of Directors to be
extraordinary, will be borne by the Portfolio. In addition, the Administrator
will waive its administrative fee and/or reimburse the Portfolio to the extent
that the indirect expenses the Portfolio bears as a shareholder of The U.S.
Large Company Series of The DFA Investment Trust Company, on an annual basis,
exceed 0.025% (2.5 basis points) of the average annual net assets of the
Portfolio.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be
rendered by the Administrator as provided in Section 2 of this Agreement, the
Portfolio shall pay to the Administrator, at the end of each month, a fee equal
to one-twelfth of .215 percent of the net
2
<PAGE>
assets of the Portfolio. If this Agreement is terminated prior to the end of any
month, the fee for such month shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator to the Fund or in respect of the Portfolio are not to be deemed
exclusive, and the Administrator shall be free to render similar services to
others as long as its services to the Fund or in respect of the Portfolio are
not impaired thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this
Agreement shall be deemed to protect the Administrator against any liability to
the Fund or its shareholders to which it might otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or the reckless disregard of its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written
below, provided that prior to such date it shall have been approved by the board
of directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and effective on the 1st day of December, 1995.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
----------------------------- --------------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b9.8
DFA INVESTMENT DIMENSIONS GROUP INC.
PACIFIC RIM SMALL COMPANY PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 8th day of August, 1996, by and between
DFA INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on
behalf of Pacific Rim Small Company Portfolio (the "Portfolio"), a separate
series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation
(the "Administrator").
WHEREAS, the Fund has been organized and operates as an
investment company registered under the Investment Company Act of 1940 for the
purposes of investing and reinvesting its assets in securities, as set forth in
its Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund,
desires to avail itself of the services, assistance and facilities of an
administrator and to have an administrator perform various administrative and
other services for it; and
WHEREAS, the Administrator desires to provide such services to
the Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs
the Administrator to supervise the administrative affairs of the Portfolio,
subject to the direction of the board of directors and the officers of the Fund
on the terms hereinafter set forth. The Administrator hereby accepts such
employment and agrees to render the services described herein for the
compensation herein provided.
2. Services to be Provided by the Administrator.
A. The Administrator shall supervise the administrative
affairs of the Fund as they pertain to the Portfolio. Specifically, the
Administrator shall:
(1) supervise the services provided to the Fund for the
benefit of the Portfolio by the Portfolio's
custodian, transfer and dividend disbursing agent,
printers, insurance carriers (as well as agents and
brokers), independent accountants, legal counsel and
other persons who provide services to the Fund for
the benefit of the Portfolio;
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign
securities, tax, organizational and other laws that
(i) govern the business of the Fund in respect of the
<PAGE>
Portfolio (except those that govern investment of the
Portfolio's assets), (ii) regulate the offering of
the Portfolio's shares and (iii) provide for the
taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of
the Portfolio, and their investment in its shares, as
they or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the board of
directors of the Fund;
(5) furnish such information as the board of directors of
the Fund may require regarding any investment company
in whose shares the Portfolio may invest; and
(6) provide such other administrative services for the
benefit of the Portfolio as the board of directors
may reasonably request.
B. In carrying out its responsibilities under Section A
herein, to the extent the Administrator deems necessary or desirable and at the
expense of the Portfolio, the Administrator shall be entitled to consult with,
and obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the
Fund with such office facilities and equipment as may be necessary to conduct
the administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio
will pay all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be
rendered by the Administrator as provided in Section 2 of this Agreement, the
Portfolio shall pay to the Administrator, at the end of each month, a fee equal
to one-twelfth of 0.40 percent of the average daily net assets of the Portfolio
during the month. If this Agreement is terminated prior to the end of any month,
the fee for such month shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator to the Fund or in respect of the Portfolio are not to be deemed
exclusive, and the Administrator shall be free to render similar services to
others as long as its services to the Fund or in respect of the Portfolio are
not impaired thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this
Agreement shall be deemed to protect the Administrator against any liability to
the Fund or its shareholders to which it might otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or the reckless disregard of its obligations under this Agreement.
2
<PAGE>
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written
below, provided that prior to such date it shall have been approved by the board
of directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days' written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and effective on the 8th day of August, 1996.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ REX A. SINQUEFIELD By:/S/ DAVID G. BOOTH
---------------------- ------------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b9.9
DFA INVESTMENT DIMENSIONS GROUP INC.
THE U.S. 6-10 SMALL COMPANY PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 6th day of January 1993, by and between
DFA INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on
behalf of The U.S. 6-10 Small Company Portfolio (the "Portfolio"), a separate
series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation
(the "Administrator").
WHEREAS, the Fund has been organized and operates as an
investment company registered under the Investment Company Act of 1940 for the
purposes of investing and reinvesting its assets in securities, as set forth in
its Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the, Portfolio, as a separate series of the Fund,
desires to avail itself of the services, assistance and facilities of an
administrator and to have an administrator perform various administrative and
other services for it; and
WHEREAS, the Administrator desires to provide such services to
the Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs
the Administrator to supervise the administrative affairs of the Portfolio,
subject to the direction of the Board of Directors and the officers of the Fund
on the terms hereinafter set forth. The Administrator hereby accepts such
employment and agrees to render the services described herein for the
compensation herein provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative
affairs of the Fund as they pertain to the Portfolio. Specifically, the
Administrator shall:
(1) supervise the services provided to the Fund for the
benefit of the Portfolio by the Portfolios custodian,
transfer and dividend disbursing agent, printers,
insurance carriers (as well as agents and brokers),
independent accountants, legal counsel and other
persons who provide services to the Fund for the
benefit of the Portfolio;
<PAGE>
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign
securities, tax, organizational and other laws that
(i) govern the business of the Fund in respect of the
Portfolio (except those that govern investment of the
Portfolio's assets), (ii) regulate the offering of
the Portfolio's shares and (iii) provide for the
taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of
the Portfolio, and their investment in its shares, as
they or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the board of
directors of the Fund;
(5) furnish such information as the board of directors of
the Fund may require regarding any investment company
in whose shares the Portfolio may invest; and
(6) provide such other administrative services for the
benefit of the Portfolio as the board of directors
may reasonably request.
B. In carrying out its responsibilities under Section A
herein, to the extent the Administrator deems necessary or desirable and at the
expense of the Portfolio, the Administrator shall be entitled to consult with,
and obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the
Fund with such office facilities and equipment as may be necessary to conduct
the administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio
will pay all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be
rendered by the Administrator as provided in Section 2 of this Agreement, the
Portfolio shall pay to the Administrator, at the end of each month, a fee equal
to one-twelfth of .32 percent of the net assets of the Portfolio. If this
Agreement is terminated prior to the end of any month, the fee for such month
shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator to the Fund or in respect of the Portfolio are not to be deemed
exclusive, and the Administrator shall be
-2-
<PAGE>
free to render similar services to others as long as its services to the Fund or
in respect of the Portfolio are not impaired thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this
Agreement shall be deemed to protect the Administrator against any liability to
the Fund or its shareholders to which it might otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or the reckless disregard of its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written
below, provided that prior to such date it shall have been approved by the board
of directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and effective on the 6th day of January, 1993.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
------------------------------ --------------------------
Chairman Chief President
Investment Officer
-3-
<PAGE>
Exhibit 99.b9.10
DFA INVESTMENT DIMENSIONS GROUP INC.
THE U.S. LARGE CAP HIGH BOOK TO MARKET PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 6th day of January, 1993, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on behalf
of The U.S. Large Cap High Book to Market Portfolio (the "Portfolio"), a
separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware
corporation (the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator and
to have an administrator perform various administrative and other services for
it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the Board of Directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative affairs
of the Fund as they pertain to the Portfolio. Specifically, the Administrator
shall:
(1) supervise the services provided to the Fund for the
benefit of the Portfolio by the Portfolio's custodian,
transfer and dividend disbursing agent, printers,
insurance carriers (as well as agents and brokers),
independent accountants, legal
<PAGE>
counsel and other persons who provide services to the
Fund for the benefit of the Portfolio;
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign securities,
tax, organizational and other laws that (i) govern-the
business of the Fund in respect of the Portfolio (except
those that govern investment of the Portfolio's assets),
(ii) regulate the offering of the Portfolio's shares and
(iii) provide for the taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they
or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the board of
directors of the Fund;
(5) furnish such information as the board of directors of
the Fund may require regarding any investment company in
whose shares the Portfolio may invest; and
(6) provide such other administrative services for the
benefit of the Portfolio as the board of directors may
reasonably request.
B. In carrying out its responsibilities under Section A herein,
to the extent the Administrator deems necessary or desirable and at the expense
of the Portfolio, the Administrator shall be entitled to consult with, and
obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund
with such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. Expenses of the Fund. It is understood that the Portfolio will pay
all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered
by the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to one
twelfth of .15 percent of the net assets of the Portfolio. If this Agreement is
terminated prior to the end of any month, the fee for such month shall be
prorated.
<PAGE>
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
to the Fund or in respect of the Portfolio are not to be deemed exclusive, and
the Administrator shall be free to render similar services to others as long as
its services to the Fund or in respect of the Portfolio are not impaired
thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall
be deemed to protect the Administrator against any liability to the Fund or its
shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written
below, provided that prior to such date it shall have been approved by the board
of directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 6TH day of JANUARY, 1992.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
--------------------------- -------------------------
Chairman-Chief President
Investment Officer
<PAGE>
Exhibit 99-b9.11
DFA INVESTMENT DIMENSIONS GROUP INC.
THE U.S. SMALL CAP HIGH BOOK TO MARKET PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 6th day of January, 1993, by and between DFA INVESTMENT
DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on behalf of The
U.S. Small Cap High Book to Market Portfolio (the "Portfolio"), a separate
series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation
(the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment company
registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail
itself of the services, assistance and facilities of an administrator and to
have an administrator perform various administrative and other services for it;
and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the Board of Directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative affairs of the
Fund as they pertain to the Portfolio. Specifically, the Administrator shall:
(1) supervise the services provided to the Fund for the benefit
of the Portfolio by the Portfolio's custodian, transfer and dividend disbursing
agent, printers, insurance carriers (as well as agents and brokers), independent
accountants, legal
<PAGE>
counsel and other persons who provide services to the Fund for the benefit of
the Portfolio;
(2) assist the Fund to comply with the provisions of applicable
federal, state, local and foreign securities, tax, organizational and other laws
that (i) govern the business of the Fund in respect of the Portfolio (except
those that govern investment of the Portfolio's assets), (ii) regulate the
offering of the Portfolio's shares and (iii) provide for the taxation of the
Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the Portfolio, and their
investment in its shares, as they or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its shareholders
if and when called by the board of directors of the Fund;
(5) furnish such information as the board of directors of the
Fund may require regarding any investment company in whose shares the Portfolio
may invest; and
(6) provide such other administrative services for the benefit of
the Portfolio as the board of directors may reasonably request.
B. In carrying out its responsibilities under Section A herein, to the
extent the Administrator deems necessary or desirable and at the expense of the
Portfolio, the Administrator shall be entitled to consult with, and obtain the
assistance of, the persons described in Section A, paragraph (1) herein who
provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund with
such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all
of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by
the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to one
twelfth of .30 percent of the net assets of the Portfolio. If this Agreement is
terminated prior to the end of any month, the fee for such month shall be
prorated.
-2-
<PAGE>
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to
the Fund or in respect of the Portfolio are not to be deemed exclusive, and the
Administrator shall be free to render similar services to others as long as its
services to the Fund or in respect of the Portfolio are not impaired thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall be
deemed to protect the Administrator against any liability to the Fund or its
shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written below,
provided that prior to such date it shall have been approved by the board of
directors of the Fund, and shall continue in effect until terminated by the Fund
or the Administrator on 60 days written notice to the other.
B. Any notice under this Agreement shall be given in writing addressed
and delivered, or mailed post-paid, to the other party at the principal business
office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 6th day of January, 1993.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /s/ Rex A. Sinquefield By: /s/ David G. Booth
------------------------------- ----------------------------
Chairman-Chief President
Investment Officer
-3-
<PAGE>
Exhibit 99-b9.12
DFA INVESTMENT DIMENSIONS GROUP INC.
RWB/DFA INTERNATIONAL HIGH BOOK TO MARKET PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 8th day of February, 1996, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on behalf
of RWB/DFA International High Book to Market Portfolio (the "Portfolio"), a
separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware
corporation (the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment company
registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail
itself of the services, assistance and facilities of an administrator and to
have an administrator perform various administrative and other services for it;
and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the Board of Directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. Services to be Provided by the Administrator.
A. The Administrator shall supervise the administrative affairs of the Fund
as they pertain to the Portfolio. Specifically, the Administrator shall:
(1) supervise the services provided to the Fund for the benefit
of the Portfolio by the Portfolio's custodian, transfer and
dividend disbursing agent, printers, insurance carriers (as
well as agents and brokers), independent accountants, legal
counsel and other persons who provide services to the Fund
for the benefit of the Portfolio;
<PAGE>
(2) assist the Fund to comply with the provisions of applicable
federal, state, local and foreign securities, tax,
organizational and other laws that (i) govern the business
of the Fund in respect of the Portfolio (except those that
govern investment of the Portfolio's assets), (ii) regulate
the offering of the Portfolio's shares and (iii) provide for
the taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they or
the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its shareholders
if and when called by the board of directors of the Fund;
(5) furnish such information as the board of directors of the
Fund may require regarding any investment company in whose
shares the Portfolio may invest; and
(6) provide such other administrative services for the benefit
of the Portfolio as the board of directors may reasonably
request.
B. In carrying out its responsibilities under Section A herein, to the
extent the Administrator deems necessary or desirable and at the expense of the
Portfolio, the Administrator shall be entitled to consult with, and obtain the
assistance of, the persons described in Section A, paragraph (1) herein who
provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund with such
office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all
of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by
the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to
one-twelfth of .01 percent of the net assets of the Portfolio. If this Agreement
is terminated prior to the end of any month, the fee for such month shall be
prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to
the Fund or in respect of the Portfolio are not to be deemed exclusive, and the
Administrator shall be free to render similar services to others as long as its
services to the Fund or in respect of the Portfolio are not impaired thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall be
deemed to protect the Administrator against any liability to the Fund or its
shareholders to which
2
<PAGE>
it might otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or the reckless disregard of
its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written below,
provided that prior to such date it shall have been approved by the Board of
Directors of the Fund, and shall continue in effect until terminated by the Fund
or the Administrator on 60 days written notice to the other.
B. Any notice under this Agreement shall be given in writing addressed and
delivered, or mailed post-paid, to the other party at the principal business
office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 8th day of February, 1996.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
------------------------ -------------------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99-b9.13
DFA INVESTMENT DIMENSIONS GROUP INC.
EMERGING MARKETS PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 30th day of March, 1994, by and between DFA INVESTMENT
DIMENSIONS GROUP INC., a Maryland corporation (the "Fund") on behalf of the
Emerging Markets Portfolio (the "Portfolio"), a separate series of the Fund, and
DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment company
registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail
itself of the services, assistance and facilities of an administrator and to
have an administrator perform various administrative and other services for it;
and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the Board of Directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative affairs of the
Fund as they pertain to the Portfolio. Specifically, the Administrator shall:
(1) supervise the services provided to the Fund for the benefit
of the Portfolio by the Portfolio's custodian, transfer and
dividend disbursing agent, printers, insurance carriers (as
well as agents and brokers), independent accountants, legal
counsel and other persons who provide services to the Fund
for the benefit of the Portfolio;
<PAGE>
(2) assist the Fund to comply with the provisions of applicable
federal, state, local and foreign securities, tax,
organizational and other laws that (i) govern the business
of the Fund in respect of the Portfolio (except those that
govern investment of the Portfolio's assets), (ii) regulate
the offering of the Portfolio's shares and (iii) provide for
the taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they or
the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its shareholders
if and when called by the board of directors of the Fund;
(5) furnish such information as the board of directors of the
Fund may require regarding any investment company in whose
shares the Portfolio may invest; and
(6) provide such other administrative services for the benefit
of the Portfolio as the board of directors may reasonably
request.
B. In carrying out its responsibilities under Section A herein, to the
extent the Administrator deems necessary or desirable and at the expense of the
Portfolio, the Administrator shall be entitled to consult with, and obtain the
assistance of, the persons described in Section A, paragraph (1) herein who
provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund with
such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all
of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by
the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to one
twelfth of .40 percent of the net assets of the Portfolio. If this Agreement is
terminated prior to the end of any month, the fee for such month shall be
prorated.
<PAGE>
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to
the Fund or in respect of the Portfolio are not to be deemed exclusive, and the
Administrator shall be free to render similar services to others as long as its
services to the Fund or in respect of the Portfolio are not impaired thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall be
deemed to protect the Administrator against any liability to the Fund or its
shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written below,
provided that prior to such date it shall have been approved by the Board of
Directors of the Fund, and shall continue in effect until terminated by the Fund
or the Administrator on 60 days written notice to the other.
B. Any notice under this Agreement shall be given in writing addressed
and delivered, or nailed post-paid, to the other party at the principal business
office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and effective on the 30th day of March, 1994.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ Rex A. Sinquefield By: /S/ David G. Booth
----------------------- -----------------------------
Chairman-Chief President
Investment Officer
<PAGE>
Exhibit 99.b9.14
DFA INVESTMENT DIMENSIONS GROUP INC.
ENHANCED U.S. LARGE COMPANY PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 8th day of February, 1996, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on behalf
of the Enhanced U.S. Large Company Portfolio (the "Portfolio"), a separate
series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation
(the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment company
registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail
itself of the services, assistance and facilities of an administrator and to
have an administrator perform various administrative and other services for it;
and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the board of directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. Services to be Provided by the Administrator.
A. The Administrator shall supervise the administrative affairs of the Fund
as they pertain to the Portfolio. Specifically, the Administrator shall:
(1) supervise the services provided to the Fund for the benefit
of the Portfolio by the Portfolio's custodian, transfer and
dividend disbursing agent, printers, insurance carriers (as
well as agents and brokers), independent accountants, legal
counsel and other persons who provide services to the Fund
for the benefit of the Portfolio;
(2) assist the Fund to comply with the provisions of applicable
federal, state, local and foreign securities, tax,
organizational and other
<PAGE>
laws that (i) govern the business of the Fund in respect of
the Portfolio (except those that govern investment of the
Portfolio's assets), (ii) regulate the offering of the
Portfolio's shares and (iii) provide for the taxation of the
Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they or
the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its shareholders
if and when called by the board of directors of the Fund;
(5) furnish such information as the board of directors of the
Fund may require regarding any investment company in whose
shares the Portfolio may invest; and
(6) provide such other administrative services for the benefit
of the Portfolio as the board of directors may reasonably
request.
B. In carrying out its responsibilities under Section A herein, to the
extent the Administrator deems necessary or desirable and at the expense of the
Portfolio, the Administrator shall be entitled to consult with, and obtain the
assistance of, the persons described in Section A, paragraph (1) herein who
provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund with such
office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all
of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by
the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to
one-twelfth of 0.15 percent of the net assets of the Portfolio. If this
Agreement is terminated prior to the end of any month, the fee for such month
shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to
the Fund or in respect of the Portfolio are not to be deemed exclusive, and the
Administrator shall be free to render similar services to others as long as its
services to the Fund or in respect of the Portfolio are not impaired thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall be
deemed to protect the Administrator against any liability to the Fund or its
shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement.
2
<PAGE>
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written below,
provided that prior to such date it shall have been approved by the board of
directors of the Fund, and shall continue in effect until terminated by the Fund
or the Administrator on 60 days' written notice to the other.
B. Any notice under this Agreement shall be given in writing addressed and
delivered, or mailed post-paid, to the other party at the principal business
office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 8th day of February, 1996.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ Rex A. Sinquefield By: /S/ David G. Booth
-------------------------- -----------------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b9.15
DFA INVESTMENT DIMENSIONS GROUP INC.
DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 8th day of February, 1996, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on behalf
of DFA Two-Year Corporate Fixed Income Portfolio (the "Portfolio"), a separate
series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation
(the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator and
to have an administrator perform various administrative and other services for
it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the board of directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. Services to be Provided by the Administrator.
A. The Administrator shall supervise the administrative affairs of the
Fund as they pertain to the Portfolio. Specifically, the Administrator shall:
(1) supervise the services provided to the Fund for the benefit
of the Portfolio by the Portfolio's custodian, transfer and
dividend disbursing agent, printers, insurance carriers (as
well as agents and brokers), independent accountants, legal
counsel and other persons who provide services to the Fund
for the benefit of the Portfolio;
<PAGE>
(2) assist the Fund to comply with the provisions of applicable
federal, state, local and foreign securities, tax,
organizational and other laws that (i) govern the business
of the Fund in respect of the Portfolio (except those that
govern investment of the Portfolio's assets), (ii) regulate
the offering of the Portfolio's shares and (iii) provide for
the taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they or
the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its shareholders
if and when called by the board of directors of the Fund;
(5) furnish such information as the board of directors of the
Fund may require regarding any investment company in whose
shares the Portfolio may invest; and
(6) provide such other administrative services for the benefit
of the Portfolio as the board of directors may reasonably
request.
B. In carrying out its responsibilities under Section A herein, to the
extent the Administrator deems necessary or desirable and at the expense of the
Portfolio, the Administrator shall be entitled to consult with, and obtain the
assistance of, the persons described in Section A, paragraph (1) herein who
provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund with
such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay
all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered
by the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to
one-twelfth of 0.05 percent of the net assets of the Portfolio. If this
Agreement is terminated prior to the end of any month, the fee for such month
shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
to the Fund or in respect of the Portfolio are not to be deemed exclusive, and
the Administrator shall be free to render similar services to others as long as
its services to the Fund or in respect of the Portfolio are not impaired
thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement
shall be deemed to protect the Administrator against any liability to the Fund
or its shareholders to which
2
<PAGE>
it might otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or the reckless disregard of
its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written below,
provided that prior to such date it shall have been approved by the board of
directors of the Fund, and shall continue in effect until terminated by the Fund
or the Administrator on 60 days' written notice to the other.
B. Any notice under this Agreement shall be given in writing addressed
and delivered, or mailed post-paid, to the other party at the principal business
office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and effective on the 8th day of February, 1996.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ Rex A. Sinquefield By: /S/ David G. Booth
-------------------------- -----------------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b9-16
DFA INVESTMENT DIMENSIONS GROUP INC.
DFA TWO-YEAR GLOBAL FIXED INCOME PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 8th day of February, 1996, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on behalf
of DFA Two-Year Global Fixed Income Portfolio (the "Portfolio"), a separate
series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation
(the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator and
to have an administrator perform various administrative and other services for
it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the board of directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. Services to be Provided by the Administrator.
A. The Administrator shall supervise the administrative affairs
of the Fund as they pertain to the Portfolio. Specifically, the Administrator
shall:
(1) supervise the services provided to the Fund for the
benefit of the Portfolio by the Portfolio's custodian,
transfer and dividend disbursing agent, printers,
insurance carriers (as well as agents and brokers),
independent accountants, legal counsel and other persons
who provide services to the Fund for the benefit of the
Portfolio;
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign securities,
tax, organizational and other
<PAGE>
laws that (i) govern the business of the Fund in respect
of the Portfolio (except those that govern investment of
the Portfolio's assets), (ii) regulate the offering of
the Portfolio's shares and (iii) provide for the
taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they
or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the board of
directors of the Fund;
(5) furnish such information as the board of directors of
the Fund may require regarding any investment company in
whose shares the Portfolio may invest; and
(6) provide such other administrative services for the
benefit of the Portfolio as the board of directors may
reasonably request.
B. In carrying out its responsibilities under Section A herein,
to the extent the Administrator deems necessary or desirable and at the expense
of the Portfolio, the Administrator shall be entitled to consult with, and
obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund
with such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay
all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered
by the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to
one-twelfth of .10 percent of the net assets of the Portfolio. If this Agreement
is terminated prior to the end of any month, the fee for such month shall be
prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
to the Fund or in respect of the Portfolio are not to be deemed exclusive, and
the Administrator shall be free to render similar services to others as long as
its services to the Fund or in respect of the Portfolio are not impaired
thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement
shall be deemed to protect the Administrator against any liability to the Fund
or its shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement.
2
<PAGE>
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written
below, provided that prior to such date it shall have been approved by the board
of directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days' written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 8th day of February, 1996.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ REX A. SINQUEFIELD By: /S/ DAVID G. BOOTH
----------------------- -------------------
Chairman-Chief President
Investment Officer
3
<PAGE>
Exhibit 99.b9.17
DFA INVESTMENT DIMENSIONS GROUP INC.
DFA TWO-YEAR GOVERNMENT PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 8th day of February, 1996, by and between
DFA INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on
behalf of DFA Two-Year Government Portfolio (the "Portfolio"), a separate series
of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the
"Administrator").
WHEREAS, the Fund has been organized and operates as an
investment company registered under the Investment Company Act of 1940 for the
purposes of investing and reinvesting its assets in securities, as set forth in
its Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund,
desires to avail itself of the services, assistance and facilities of an
administrator and to have an administrator perform various administrative and
other services for it; and
WHEREAS, the Administrator desires to provide such services to
the Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Administrator. The Fund hereby employs
the Administrator to supervise the administrative affairs of the Portfolio,
subject to the direction of the board of directors and the officers of the Fund
on the terms hereinafter set forth. The Administrator hereby accepts such
employment and agrees to render the services described herein for the
compensation herein provided.
2. Services to be Provided by the Administrator.
A. The Administrator shall supervise the administrative
affairs of the Fund as they pertain to the Portfolio. Specifically, the
Administrator shall:
(1) supervise the services provided to the Fund for
the benefit of the Portfolio by the Portfolio's custodian, transfer and dividend
disbursing agent, printers, insurance carriers (as well as agents and brokers),
independent accountants, legal counsel and other persons who provide services to
the Fund for the benefit of the Portfolio;
<PAGE>
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign securities, tax, organizational and
other laws that (i) govern the business of the Fund in respect of the Portfolio
(except those that govern investment of the Portfolio's assets), (ii) regulate
the offering of the Portfolio's shares and (iii) provide for the taxation of the
Portfolio;
(3) provide the shareholders of the Portfolio with
such information regarding the operation and affairs of the Portfolio, and their
investment in its shares, as they or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the board of directors of the Fund;
(5) furnish such information as the board of
directors of the Fund may require regarding any investment company in whose
shares the Portfolio may invest; and
(6) provide such other administrative services for
the benefit of the Portfolio as the board of directors may reasonably request.
B. In carrying out its responsibilities under Section A
herein, to the extent the Administrator deems necessary or desirable and at the
expense of the Portfolio, the Administrator shall be entitled to consult with,
and obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the
Fund with such office facilities and equipment as may be necessary to conduct
the administrative affairs of the Fund in respect of the Portfolio.
3. Expenses of the Fund. It is understood that the Portfolio
will pay all of its own expenses incurred to conduct its administrative affairs.
4. Compensation of the Administrator. For the services to be
rendered by the Administrator as provided in Section 2 of this Agreement, the
Portfolio shall pay to the Administrator, at the end of each month, a fee equal
to one-twelfth of 0.05 percent of the net assets of the Portfolio. If this
Agreement is terminated prior to the end of any month, the fee for such month
shall be prorated.
5. Activities of the Administrator. The services of the
Administrator to the Fund or in respect of the Portfolio are not to be deemed
exclusive, and the Administrator shall be free to render similar services to
others as long as its services to the Fund or in respect of the Portfolio are
not impaired thereby.
6. Liability of the Administrator. No provision of this
Agreement shall be deemed to protect the Administrator against any liability to
the Fund or its shareholders to which it might otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or the reckless disregard of its obligations under this Agreement.
7. Duration and Termination.
A. This Agreement shall become effective on the date written
below, provided that prior to such date it shall have been approved by the board
of directors of
<PAGE>
the Fund, and shall continue in effect until terminated by the Fund or the
Administrator on 60 days' written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. Severability. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and effective on the 8th day of February, 1996.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ Rex A. Sinquefield By /S/ David G. Booth
Chairman-Chief President
Investment Officer
<PAGE>
Exhibit 99.b9.18
DFA INVESTMENT DIMENSIONS GROUP INC.
INTERNATIONAL SMALL COMPANY PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 8th day of August, 1996, by and between
DFA INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on
behalf of International Small Company Portfolio (the "Portfolio"), a separate
series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation
(the "Administrator").
WHEREAS, the Fund has been organized and operates as an
investment company registered under the Investment Company Act of 1940 for the
purposes of investing and reinvesting its assets in securities, as set forth in
its Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund,
desires to avail itself of the services, assistance and facilities of an
administrator and to have an administrator perform various administrative and
other services for it; and
WHEREAS, the Administrator desires to provide such services to
the Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs
the Administrator to supervise the administrative affairs of the Portfolio,
subject to the direction of the board of directors and the officers of the Fund
on the terms hereinafter set forth. The Administrator hereby accepts such
employment and agrees to render the services described herein for the
compensation herein provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative
affairs of the Fund as they pertain to the Portfolio. Specifically, the
Administrator shall:
(1) supervise the services provided to the Fund for the
benefit of the Portfolio by the Portfolio's
custodian, transfer and dividend disbursing agent,
printers, insurance carriers (as well as agents and
brokers), independent accountants, legal counsel and
other persons who provide services to the Fund for
the benefit of the Portfolio;
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign
securities, tax, organizational and other laws that
(i) govern the business of the Fund in respect of the
Portfolio (except those that govern investment of the
Portfolio's
<PAGE>
assets), (ii) regulate the offering of the
Portfolio's shares and (iii) provide for the taxation
of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of
the Portfolio, and their investment in its shares, as
they or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the board of
directors of the Fund;
(5) furnish such information as the board of directors of
the Fund may require regarding any investment company
in whose shares the Portfolio may invest; and
(6) provide such other administrative services for the
benefit of the Portfolio as the board of directors
may reasonably request.
B. In carrying out its responsibilities under Section A
herein, to the extent the Administrator deems necessary or desirable and at the
expense of the Portfolio, the Administrator shall be entitled to consult with,
and obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the
Fund with such office facilities and equipment as may be necessary to conduct
the administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio
will pay all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be
rendered by the Administrator as provided in Section 2 of this Agreement, the
Portfolio shall pay to the Administrator, at the end of each month, a fee equal
to one-twelfth of 0.40 percent of the net assets of the Portfolio. If this
Agreement is terminated prior to the end of any month, the fee for such month
shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator to the Fund or in respect of the Portfolio are not to be deemed
exclusive, and the Administrator shall be free to render similar services to
others as long as its services to the Fund or in respect of the Portfolio are
not impaired thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this
Agreement shall be deemed to protect the Administrator against any liability to
the Fund or its shareholders to which
-2-
<PAGE>
it might otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or the reckless disregard of
its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date
written below, provided that prior to such date it
shall have been approved by the board of directors of
the Fund, and shall continue in effect until
terminated by the Fund or the Administrator on 60
days' written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and effective on the 8th day of August, 1996.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: By:
------------------------------- --------------------------
Chairman-Chief President
Investment Officer
-3-
<PAGE>
Exhibit 99.b9-19
DFA INVESTMENT DIMENSIONS GROUP INC.
EMERGING MARKETS SMALL CAP PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 19th day of December, 1996, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on behalf
of Emerging Markets Small Cap Portfolio (the "Portfolio"), a separate series of
the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the
"Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator and
to have an administrator perform various administrative and other services for
it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the board of directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative affairs
of the Fund as they pertain to the Portfolio. Specifically, the Administrator
shall:
(1) supervise the services provided to the Fund for the
benefit of the Portfolio by the Portfolio's custodian,
transfer and dividend disbursing agent, printers,
insurance carriers (as well as agents and brokers),
independent accountants, legal counsel and other persons
who provide services to the Fund for the benefit of the
Portfolio;
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign securities,
tax, organizational and other laws that (i) govern the
business of the Fund in respect of the Portfolio (except
those that govern investment of the Portfolio's
<PAGE>
assets), (ii) regulate the offering of the Portfolio's
shares and (iii) provide for the taxation of the
Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they
or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the board of
directors of the Fund;
(5) furnish such information as the board of directors of
the Fund may require regarding any investment company in
whose shares the Portfolio may invest; and
(6) provide such other administrative services for the
benefit of the Portfolio as the board of directors may
reasonably request.
B. In carrying out its responsibilities under Section A herein,
to the extent the Administrator deems necessary or desirable and at the expense
of the Portfolio, the Administrator shall be entitled to consult with, and
obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund
with such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay
all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered
by the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to
one-twelfth of .45 percent of the average daily net assets of the Portfolio
during the month. If this Agreement is terminated prior to the end of any month,
the fee for such month shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
to the Fund or in respect of the Portfolio are not to be deemed exclusive, and
the Administrator shall be free to render similar services to others as long as
its services to the Fund or in respect of the Portfolio are not impaired
thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement
shall be deemed to protect the Administrator against any liability to the Fund
or its shareholders to which
-2-
<PAGE>
it might otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or the reckless disregard of
its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written
below, provided that prior to such date it shall have been approved by the board
of directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days, written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 19th day of December, 1996.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /S/ Rex A. Sinquefield By: /S/ David G. Booth
----------------------- -------------------
Chairman President
Investment Officer
-3-
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
U.S. 9-10 SMALL COMPANY PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 30th day of November, 1997 by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on
behalf of U.S. 9-10 Small Company Portfolio (the "Portfolio"), a separate
series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware
corporation (the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes
of investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator
and to have an administrator perform various administrative and other
services for it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio,
subject to the direction of the Board of Directors and the officers of the
Fund on the terms hereinafter set forth. The Administrator hereby accepts
such employment and agrees to render the services described herein for the
compensation herein provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative affairs of the
Fund as they pertain to the Portfolio. Specifically, the Administrator shall:
(1) supervise the services provided to the Fund for the benefit of
the Portfolio by the
<PAGE>
Portfolio's custodian, transfer and dividend disbursing agent,
printers, insurance carriers (as well as agents and brokers),
independent accountants, legal counsel and other persons who
provide services to the Fund for the benefit of the Portfolio;
(2) assist the Fund to comply with the provisions of applicable
federal, state, local and foreign securities, tax, organizational
and other laws that (i) govern the business of the Fund in
respect of the Portfolio (except those that govern investment of
the Portfolio's assets), (ii) regulate the offering of the
Portfolio's shares and (iii) provide for the taxation of the
Portfolio;
(3) provide the shareholders of the Portfolio with such information
regarding the operation and affairs of the Portfolio, and their
investment in its shares, as they or the Fund may reasonably
request;
(4) assist the Portfolio to conduct meetings of its shareholders if
and when called by the board of directors of the Fund;
(5) furnish such information as the board of directors of the Fund
may require regarding any investment company in whose shares
the Portfolio may invest; and
(6) provide such other administrative services for the benefit of
the Portfolio as the board of directors may reasonably request.
B. In carrying out its responsibilities under Section A herein, to the
extent the Administrator deems necessary or desirable and at the expense of
the Portfolio, the Administrator shall be entitled to consult with, and
obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The administrator, at its own expense, shall provide the Fund with
such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all
of its own expenses incurred to conduct its administrative affairs.
2
<PAGE>
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by
the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to
one-twelfth of .40 percent of the net assets of the Portfolio. If this
Agreement is terminated prior to the end of any month, the fee for such month
shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to
the Fund or in respect of the Portfolio are not to be deemed exclusive, and
the Administrator shall be free to render similar services to other as long as
its services to the Fund or in respect of the Portfolio are not impaired
thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall
be deemed to protect the Administrator against any liability to the Fund or
its shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
or the reckless disregard of its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written below,
provided that prior to such date it shall have been approved by the Board of
Directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days written notice to the other.
B. Any notice under this Agreement shall be given in writing addressed
and delivered, or mailed post-paid, to the other party at the principal
business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 30th day of November, 1997.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /s/ Rex A. Sinquefield By: /s/ David G. Booth
----------------------- --------------------------
Chairman-Chief President
Investment Officer
4
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
U.S. 4-10 VALUE PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 30th day of November, 1997, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on
behalf of U.S. 4-10 Value Portfolio (the "Portfolio"), a separate series of
the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the
"Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes
of investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator
and to have an administrator perform various administrative and other
services for it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio,
subject to the direction of the Board of Directors and the officers of the
Fund on the terms hereinafter set forth. The Administrator hereby accepts
such employment and agrees to render the services described herein for the
compensation herein provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative affairs of the
Fund as they pertain to the Portfolio. Specifically, the Administrator shall:
(1) supervise the services provided to the Fund for the benefit of
the Portfolio by the Portfolio's custodian, transfer and
dividend
<PAGE>
disbursing agent, printers, insurance carriers (as well as agents
and brokers), independent accountants, legal counsel and other
persons who provide services to the Fund for the benefit of the
Portfolio;
(2) assist the Fund to comply with the provisions of applicable
federal, state, local and foreign securities, tax,
organizational and other laws that (i) govern the business of
the Fund in respect of the Portfolio (except those that govern
investment of the Portfolio's assets), (ii) regulate the
offering of the Portfolio's shares and (iii) provide for the
taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such information
regarding the operation and affairs of the Portfolio, and their
investment in its shares, as they or the Fund may reasonably
request;
(4) assist the Portfolio to conduct meetings of its shareholders if
and when called by the board of directors of the Fund;
(5) furnish such information as the board of directors of the Fund
may require regarding any investment company in whose shares the
Portfolio may invest; and
(6) provide such other administrative services for the benefit of
the Portfolio as the board of directors may reasonably request.
B. In carrying out its responsibilities under Section A herein, to the
extent the Administrator deems necessary or desirable and at the expense of
the Portfolio, the Administrator shall be entitled to consult with, and
obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund with
such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay
all of its own expenses incurred to conduct its administrative affairs.
2
<PAGE>
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by
the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to
one-twelfth of .40 percent of the net assets of the Portfolio. If this
Agreement is terminated prior to the end of any month, the fee for such
month shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
to the Fund or in respect of the Portfolio are not to be deemed exclusive,
and the Administrator shall be free to render similar services to others as
long as its services to the Fund or in respect of the Portfolio are not
impaired thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall
be deemed to protect the Administrator against any liability to the Fund or
its shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties,
or the reckless disregard of its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written below,
provided that prior to such date it shall have been approved by the Board of
Directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days written notice to the other.
B. Any notice under this Agreement shall be given in writing addressed
and delivered, or mailed post-paid, to the other party at the principal business
office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder
of this AGreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 30th day of November, 1997.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /s/ Rex A. Sinquefield /s/ David G. Booth
-------------------------- --------------------------
Chairman-Chief President
Investment Officer
4
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
EMERGING MARKETS VALUE PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 30th day of November, 1997, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on
behalf of Emerging Markets Value Portfolio (the "Portfolio"), a separate
series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware
corporation (the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes
of investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator
and to have an administrator perform various administrative and other
services for it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio,
subject to the direction of the Board of Directors and the officers of the
Fund on the terms hereinafter set forth. The Administrator hereby accepts
such employment and agrees to render the services described herein for the
compensation herein provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative affairs of the
Fund as they pertain to the Portfolio. Specifically, the Administrator shall:
(1) supervise the services provided to the Fund for the benefit of
the Portfolio by the
<PAGE>
Portfolio's custodian, transfer and dividend disbursing agent,
printers, insurance carriers (as well as agents and brokers),
independent accountants, legal counsel and other persons who
provide services to the Fund for the benefit of the Portfolio;
(2) assist the Fund to comply with the provisions of applicable
federal, state, local and foreign securities, tax, organizational
and other laws that (i) govern the business of the Fund in
respect of the Portfolio (except those that govern investment of
the Portfolio's assets), (ii) regulate the offering of the
Portfolio's shares and (iii) provide for the taxation of the
Portfolio;
(3) provide the shareholders of the Portfolio with such information
regarding the operation and affairs of the Portfolio, and their
investment in its shares, as they or the Fund may reasonably
request;
(4) assist the Portfolio to conduct meetings of its shareholders if
and when called by the board of directors of the Fund;
(5) furnish such information as the board of directors of the Fund
may require regarding any investment company in whose shares the
Portfolio may invest; and
(6) provide such other administrative services for the benefit of the
Portfolio as the board of directors may reasonably request.
B. In carrying out its responsibilities under Section A herein, to the
extent the Administrator deems necessary or desirable and at the expense of the
Portfolio, the Administrator shall be entitled to consult with, and obtain the
assistance of, the persons described in Section A, paragraph (1) herein who
provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund with
such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all
of its own expenses incurred to conduct its administrative affairs.
-2-
<PAGE>
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by
the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to
one-twelfth of 0.40 percent of the net assets of the Portfolio. If this
Agreement is terminated prior to the end of any month, the fee for such month
shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to
the Fund or in respect of the Portfolio are not to be deemed exclusive, and
the Administrator shall be free to render similar services to others as long
as its services to the Fund or in respect of the Portfolio are not impaired
thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall
be deemed to protect the Administrator against any liability to the Fund or
its shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
or the reckless disregard of its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written below,
provided that prior to such date it shall have been approved by the Board of
Directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days written notice to the other.
B. Any notice under this Agreement shall be given in writing addressed
and delivered, or mailed post-paid, to the other party at the principal
business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 30th day of November, 1997.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By /s/ Rex A. Sinquefield By /s/ David G. Booth
---------------------- ------------------
Chairman-Chief President
Investment Officer
-4-
<PAGE>
Exhibit 99.b9.23
DFA INVESTMENT DIMENSIONS GROUP INC.
TAX-MANAGED U.S. MARKETWIDE VALUE PORTFOLIO
ADMINISTRATION AGREEMENT
THIS AGREEMENT made this 8th day of December, 1998, by and between DFA
INVESTMENT DIMENSIONS GROUP INC., a Maryland corporation (the "Fund"), on behalf
of the:
"TAX-MANAGED U.S. MARKETWIDE VALUE PORTFOLIO,"
(the "Portfolio"), a separate series of the Fund, and DIMENSIONAL FUND ADVISORS
INC., a Delaware corporation (the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator and
to have an administrator perform various administrative and other services for
it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs
the Administrator to supervise the administrative affairs of the Portfolio,
subject to the direction of the Board of Directors and the officers of the Fund
on the terms hereinafter set forth. The Administrator hereby accepts such
employment and agrees to render the services described herein for the
compensation herein provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative
affairs of the Fund as they pertain to the Portfolio. Specifically, the
Administrator shall:
(1) supervise the services provided to the Fund for the
benefit of the Portfolio by the Portfolio's
custodian, transfer and dividend disbursing agent,
printers, insurance carriers (as well as agents and
brokers), independent accountants, legal counsel and
other persons who provide services to the Fund for
the benefit of the Portfolio;
(2) assist the Fund to comply with the provisions of
applicable federal, state, local and foreign
securities, tax, organizational and other laws that:
1
<PAGE>
(i) govern the business of the Fund in respect of the
Portfolio (except those that govern investment of the
Portfolio's assets);
(ii) regulate the offering of the Portfolio's shares;
and
(iii) provide for the taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of
the Portfolio, and their investment in its shares, as
they or the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its
shareholders if and when called by the Board of
Directors of the Fund;
(5) furnish such information as the Board of Directors of
the Fund may require regarding any investment company
in whose shares the Portfolio may invest; and
(6) provide such other administrative services for the
benefit of the Portfolio as the Board of Directors
may reasonably request.
B. In carrying out its responsibilities under Section A
herein, to the extent the Administrator deems necessary or desirable and at the
expense of the Portfolio, the Administrator shall be entitled to consult with,
and obtain the assistance of, the persons described in Section A, paragraph (1)
herein who provide services to the Fund.
C. The Administrator, at its own expense, shall provide the
Fund with such office facilities and equipment as may be necessary to conduct
the administrative affairs of the Fund with respect to the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay
all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered
by the Administrator as provided in Section 2 of this Agreement, the Portfolio
shall pay to the Administrator, at the end of each month, a fee equal to
one-twelfth of 0.15 percent of the net assets of the Portfolio. If this
Agreement is terminated prior to the end of any month, the fee for such month
shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
to the Fund or in respect of the Portfolio are not to be deemed exclusive, and
the Administrator shall be free to render similar services to others as long as
its services to the Fund or with respect to the Portfolio are not impaired
thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of the Agreement shall
be deemed to protect the Administrator against any liability to the Fund or its
shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement.
2
<PAGE>
7. DURATION AND TERMINATION
A. This Agreement shall become effective on the date written
below, provided that prior to such date it shall have been approved by the Board
of Directors of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective on the 8th day of December, 1998.
DIMENSIONAL FUND DFA INVESTMENT DIMENSIONS
ADVISORS INC. GROUP INC.
By: /s/ Rex A. Sinquefeld By: /s/ David G. Booth
----------------------- -----------------------------
Rex A. Sinquefeld David G. Booth
Chairman-Chief President
Investment Officer
3
<PAGE>
Law Office
STRADLEY, RONON, STEVENS & YOUNG, LLP
30 Valley Stream Parkway
Malvern, Pennsylvania 19355-1481
(640) 640-5800
Direct Dial: (610) 640-5801
January 12, 1999
Board of Directors
DFA Investment Dimensions Group Inc.
1199 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Gentlemen:
We have examined the Articles of Incorporation ("Articles") of DFA
Investment Dimensions Group Inc. (the "Fund"), a corporation organized under
Maryland law, and its by-laws, both as amended to date, the registration
statement filed by the Fund under the Securities Act of 1933, as amended
("Registration Statement"), and such records of the corporate proceedings as we
deem material to this opinion.
As of the date hereof: (i) the Fund is authorized to issue an
aggregate of 6,000,000,000 shares of common stock, of a par value of $0.01 per
share; and (ii) in accordance with authority provided in the Articles, the board
of directors has divided the authorized shares of common stock into the
following 34 classes, and has authorized each such class to issue the number of
shares set forth below.
<TABLE>
<S> <C>
The U.S. 9-10 Small Company Portfolio Shares 300,000,000 shares;
The Japanese Small Company Portfolio Shares 50,000,000 shares;
United Kingdom Small Company Portfolio Shares 20,000,000 shares;
The DFA Five-Year Government Portfolio Shares 100,000,000 shares;
The Continental Small Company Portfolio Shares 50,000,000 shares;
The U.S. Large Company Portfolio Shares 200,000,000 shares;
The DFA Intermediate Government Fixed Income
Portfolio Shares 100,000,000 shares;
The DFA Global Fixed Income Portfolio Shares 100,000,000 shares;
The Large Cap International Portfolio Shares 150,000,000 shares;
The Pacific Rim Small Company Portfolio Shares 50,000,000 shares;
The U.S. 6-10 Small Company Portfolio Shares 100,000,000 shares;
</TABLE>
<PAGE>
<TABLE>
<S> <C>
The DFA Real Estate Securities Portfolio Shares 100,000,000 shares;
The U.S. Large Cap Value Portfolio Shares 100,000,000 shares;
The U.S. 6-10 Value Portfolio Shares 200,000,000 shares;
RWB/DFA International High Book to Market
Portfolio Shares 100,000,000 shares;
The DFA One-Year Fixed Income Portfolio Shares 140,000,000 shares;
The Emerging Markets Portfolio Shares 100,000,000 shares;
VA Large Value Portfolio Shares 50,000,000 shares;
VA Global Bond Portfolio Shares 50,000,000 shares.
DFA International Small Cap Value
Portfolio Shares 100,000,000 shares;
VA Small Value Portfolio Shares 50,000,000 shares;
VA International Value Portfolio Shares 50,000,000 shares;
VA International Small Portfolio Shares 50,000,000 shares;
The VA Short-Term Fixed Portfolio Shares 50,000,000 shares;
DFA Two-Year Global Fixed Income
Portfolio Shares 100,000,000 shares;
Enhanced U.S. Large Company Portfolio Shares 100,000,000 shares;
International Small Company Portfolio Shares 100,000,000 shares;
Emerging Markets Small Cap Portfolio Shares 100,000,000 shares;
U.S. 4-10 Value Portfolio Shares 100,000,000 shares;
Emerging Markets Value Portfolio Shares 100,000,000 shares;
Tax-Managed U.S. 5-10 Value Portfolio Shares 100,000,000 shares;
Tax-Managed U.S. 6-10 Small Company
Portfolio Shares 100,000,000 shares;
Tax-Managed U.S. Marketwide Value
Portfolio Shares 100,000,000 shares;
Tax-Managed DFA International Value
Portfolio Shares 100,000,000 shares;
</TABLE>
Based upon the above-described examination, it is our opinion that as
long as the Fund remains a corporation in good standing under the laws of the
state of Maryland, the authorized but unissued shares of each class of stock
listed above, when issued for the consideration established by the board of
directors, as described in the Registration Statement, will be, under the law of
the state of Maryland, legally issued, fully-paid, non-assessable outstanding
shares of common stock of the Fund.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to reference therein to us as counsel who have
rendered this opinion.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
By: /s/ Stephen W. Kline
------------------------------
Stephen W. Kline
SWK/cgm
<PAGE>
Exhibit 99.b11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to our firm under the captions "Financial
Highlights" in the prospectus and "Financial Statements" in the Statement of
Additional Information constituting part of the Post Amendment No. 50 (File
No. 2-73948) under the Securities Act of 1933 and Post Effective Amendment
No. 51 under the Investment Company Act of 1940 to the Registration Statement
on Form N-1A of Dimensional Investment Group Inc. (the "Fund") relating to
the following portfolios: U.S. Large Company Portfolio, Enhanced U.S. Large
Company Portfolio, U.S. Large Cap Value Portfolio, U.S. 4-10 Value Portfolio,
U.S. 6-10 Value Portfolio, U.S. 6-10 Small Company Portfolio, U.S. 9-10 Small
Company Portfolio, DFA Real Estate Securities Portfolio, Large Cap
International Portfolio, International Small Company Portfolio, Japanese
Small Company Portfolio, Pacific Rim Small Company Portfolio, United Kingdom
Small Company Portfolio, Continental Small Company Portfolio, DFA
International Small Cap Value Portfolio, Emerging Markets Portfolio, Emerging
Markets Value Portfolio, Emerging Markets Small Cap Portfolio, DFA One-Year
Fixed Income Portfolio, DFA Two-Year Global Fixed Income Portfolio, DFA
Five-Year Government Portfolio, DFA Global Fixed Income Portfolio and DFA
Intermediate Government Fixed Income Portfolio.
PricewaterhouseCoopers, LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 22, 1999
