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June 23, 1995
Dear Shareholder:
The enclosed Proxy addresses three proposals affecting the management of the SEI
Daily Income Trust's Money Market Portfolio and the Prime Obligation Portfolio.
SEI, the administrator, and Wellington Management Company (the "Adviser"), have
requested that the Board of Trustees approve these three proposals so that
Wellington Management Company can continue to most effectively manage these
funds. The Board of Trustees has reviewed the issues and recommends that the
shareholders vote in favor of each proposal.
- PROPOSAL I (Requires a vote from shareholders of both the Prime Obligation
and Money Market Portfolios)
Currently, these portfolios are limited to investing their assets solely in
securities listed as appropriate investments in the prospectus. There are other
appropriate money market investments which are not currently listed in the
prospectus which the Adviser may determine to be prudent in changing market
conditions. ANY CHANGES TO ALLOWABLE INVESTMENTS WOULD STILL REQUIRE APPROVAL
BY THE BOARD OF TRUSTEES. The removal of this fundamental policy will allow the
Board of Trustees the flexibility to change investment guidelines on behalf of
the shareholders when it is deemed to be in the best interest of the existing
shareholders. Shareholders will be notified through a prospectus supplement of
any changes to the investment policies. In addition, any changes to the
investment objectives or other fundamental policies of the portfolios would
continue to require shareholder approval.
- PROPOSAL II (Requires a vote from shareholders of both the Prime
Obligation and Money Market Portfolios)
Rule 2a-7 governs the management of all SEC registered money market funds and
was established under the Investment Company Act of 1940. Recent changes made
to the rule established new maturity restrictions for securities purchased for
money market funds. Currently, the SDIT Prime Obligation and Money Market
Portfolios may invest in securities maturing in one year or less. This
provision is actually more restrictive than Rule 2a-7. The removal of the
existing fundamental limitation would allow each portfolio to purchase
securities with remaining maturities of up to 397 days as permitted by Rule
2a-7. This policy was previously approved by the shareholders of each of the
other money market portfolios of SEI Daily Income Trust.
- PROPOSAL III (Requires a vote from shareholders of the Money Market
Portfolio)
Currently, this portfolio is required to hold 25% of its assets in bank-issued
securities. The elimination of this concentration requirement would allow the
Adviser more flexibility to respond to changing market conditions. In recent
times, having to comply with this investment requirement has become an
impediment to managing the portfolio. Often the result is having to purchase
bank securities at lower yields than other non-bank issues paper. Today's
scarcity of bank paper often makes them more expensive than comparable money
market instruments. The main reason for this scarcity is that domestic and
foreign banks now use cheaper sources of funding without issuing short-term bank
instruments. Without this requirement, the concentration in the banking sector
would
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most likely range between 5 and 25 percent of the portfolio's assets.
SEI and Wellington Management Company's investment philosophy is preservation of
the $1.00 net asset value. The objectives are safety, liquidity and then yield.
The requested changes to the fundamental objectives will allow the Adviser
continued flexibility in managing the SDIT Money Market Portfolio and Prime
Obligation funds without compromising the investment objectives. We strongly
urge you to read the enclosed proxy statement and return the proxy card.
If there are any additional questions, please do not hesitate to call myself at
(610) 254-1248 or Krista Zaccaria at (610) 254-2054. Thank you for your
assistance in this matter.
Sincerely,
Barbara J. Doyne
Product Manager
