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SEI DAILY INCOME TRUST
Money Market Portfolio
Prime Obligation Portfolio
Government Portfolio
Government II Portfolio
Treasury Portfolio
Treasury II Portfolio
Federal Securities Portfolio
Institutional Class Shares
Supplement dated August 3, 1995 to the Prospectus dated May 31, 1995
THIS SUPPLEMENT TO THE PROSPECTUS SUPERSEDES AND REPLACES ANY EXISTING
SUPPLEMENTS TO THE PROSPECTUS. THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL
INFORMATION BEYOND THAT CONTAINED IN THE PROSPECTUS AND SHOULD BE RETAINED IN
CONJUNCTION WITH SUCH PROSPECTUS.
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At a special meeting held on July 28, 1995, and adjourned until August 3, 1995,
shareholders of the Money Market and Prime Obligation Portfolios approved: (i)
the elimination of the fundamental policy requiring each Portfolio to invest its
assets solely in the securities listed as appropriate investments for that
Portfolio; and (ii) the elimination of the fundamental policy requiring each
Portfolio to invest in securities maturing in one year or less and to maintain
an average weighted maturity of 120 days. In addition, shareholders of the Money
Market Portfolio approved the elimination of a fundamental policy requiring the
Portfolio to concentrate its investments in obligations issued by the banking
industry, consisting of U.S. dollar denominated obligations of domestic banks
and U.S. branches of foreign banks.
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Effective August 1, 1995, the Bank of New York, 48 Wall Street, New York, NY
10286, will serve as custodian for the Money Market and Treasury Portfolios.
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Effective August 18, 1995, the Bank of New York, 48 Wall Street, New York, NY
10286, will serve as wire agent for the Money Market and Treasury portfolios.
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THE MONEY MARKET PORTFOLIO SUB-SECTION OF THE "INVESTMENT OBJECTIVES AND
POLICIES" SECTION ON PAGE 18 IS AMENDED AND RESTATED TO READ AS FOLLOWS:
The Money Market Portfolio seeks to preserve principal value and maintain a high
degree of liquidity while providing current income. Under normal conditions the
Portfolio invests in obligations denominated in U.S. dollars consisting of: (i)
commercial paper rated, at the time of investment, in one of the two highest
short-term rating categories by two or more nationally recognized statistical
rating organizations (each, an "NRSRO"), or one NRSRO if only one NRSRO has
rated the security or, if not rated, determined by the Adviser to be of
comparable quality; (ii) obligations (including certificates of deposit, time
deposits, bankers' acceptances and
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bank notes) of U.S. savings and loan and thrift institutions, U.S.
commercial banks (including foreign branches of such banks), and U.S. and London
branches of foreign banks, provided that such institutions (or, in the case of a
branch, the parent institution) have total assets of $1 billion or more as shown
on their last published financial statements at the time of investment; (iii)
short-term corporate obligations with a remaining term of not more than one year
of issuers with commercial paper of comparable priority and security meeting the
above ratings; (iv) short-term obligations issued by state and local
governmental issuers which are rated, at the time of investment, by at least two
NRSROs in one of the two highest municipal bond rating categories, or, if not
rated, determined by the Adviser to be of comparable quality, and carry yields
that are competitive with those of other types of money market instruments of
comparable quality; (v) U.S. dollar denominated obligations of foreign
governments including Canadian and Provincial Government and Crown Agency
Obligations; (vi) investments permitted for the Government II Portfolio (see
below); and (vii) repurchase agreements involving any of the foregoing
obligations.
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THE PRIME OBLIGATION PORTFOLIO SUB-SECTION OF THE "INVESTMENT OBJECTIVES AND
POLICIES" SECTION ON PAGES 18 AND 19 IS AMENDED AND RESTATED TO READ AS FOLLOWS:
The Prime Obligation Portfolio seeks to preserve principal value and maintain a
high degree of liquidity while providing current income. Under normal
conditions the Portfolio invests exclusively in obligations of U.S. issuers
(excluding foreign branches of U.S. banks or U.S. branches of foreign banks)
consisting of: (i) commercial paper rated, at the time of investment, in the
highest short-term rating category by two or more NRSROs, or one NRSRO if only
one NRSRO has rated the security or, if not rated, determined by the Adviser
to be of comparable quality; (ii) obligations (including certificates of
deposit, time deposits, bankers' acceptances and bank notes) of U.S. commercial
banks or savings and loan institutions having total assets of $500 million or
more as shown on their last published financial statements at the time of
investment and that are insured by the Federal Deposit Insurance Corporation;
(iii) corporate obligations with a remaining term of not more than one year of
issuers with commercial paper of comparable priority and security meeting the
above ratings or, if not rated, determined by the Adviser to be of comparable
quality; (iv) short-term obligations issued by state and local governmental
issuers which are rated, at the time of investment, by at least two NRSROs in
the highest municipal bond rating category, or, if not rated, determined by the
Adviser to be of comparable quality, and carry yields that are competitive with
those of other types of money market instruments of comparable quality; (v)
investments permitted for the Government II Portfolio (see below); and (vi)
repurchase agreements involving any of the foregoing obligations.
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THE THIRD SENTENCE IN THE FIRST PARAGRAPH UNDER THE "GENERAL INVESTMENT
POLICIES" SECTION ON PAGE 19 IS AMENDED AND RESTATED TO READ AS FOLLOWS:
These regulations generally require money market funds to acquire only U.S.
dollar denominated obligations maturing in 397 days or less.
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THE FIRST SENTENCE OF THE FOURTH PARAGRAPH UNDER THE "GENERAL INVESTMENT
POLICIES" SECTION ON PAGE 20 IS DELETED.
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THE LAST SENTENCE IN THE FIRST PARAGRAPH UNDER THE "INVESTMENT LIMITATIONS"
SECTION ON PAGE 20 IS DELETED.
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INVESTMENT LIMITATION NO. 2 UNDER THE "INVESTMENT LIMITATION" SECTION ON PAGE 20
IS AMENDED AND RESTATED TO READ AS FOLLOWS:
2. Purchase any securities which would cause more than 25% of the total assets
of the Portfolio to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry, provided
that this limitation does not apply to investments in (a) domestic banks and (b)
obligations issued or guaranteed by the U.S. Government or its agencies and
instrumentalities.
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THE THIRD PARAGRAPH UNDER THE "PURCHASE AND REDEMPTION OF SHARES" SECTION ON
PAGE 25 IS AMENDED AND RESTATED TO READ AS FOLLOWS:
Shareholders who wish to receive same day acceptance of investment in the Money
Market and Treasury Portfolios after 2:00 p.m. must contact the Transfer Agent
before 4:30 p.m. Eastern Time to place the trade and must obtain a security code
number for each trade. It is necessary to obtain a new security code number for
each purchase placed in the Portfolios after 2:00 p.m. Eastern Time. Security
code numbers are assigned exclusively by means of telephone communications, are
effective for one transaction only and may not be used more than once.
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THE FOLLOWING LANGUAGE IS INSERTED IN THE "DESCRIPTION OF PERMITTED INVESTMENTS
AND RISK FACTORS" SECTION ON PAGE 29 OF THE PROSPECTUS:
FOREIGN SECURITIES -- The Money Market Portfolio may invest in U.S. dollar
denominated obligations or securities of foreign governments, including Canadian
and Provincial Government and Crown Agency Obligations. The Adviser will
attempt to minimize the risks associated with investing in foreign obligations
by investing only in those instruments which satisfy the quality and maturity
restrictions applicable to the Portfolio.
MUNICIPAL SECURITIES -- Municipal securities consist of (i) debt obligations
issued by or on behalf of public authorities to obtain funds to be used for
various public facilities, for refunding outstanding obligations, for general
operating expenses, and for lending such funds to other public institutions and
facilities, and (ii) certain private activity and industrial development bonds
issued by or on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated facilities.
General obligation bonds are backed by the taxing power of the issuing
municipality. Revenue bonds are backed by the revenues of a project or facility
(tolls from a bridge, for example). Certificates of participation represent an
interest in an underlying obligation or commitment, such as an obligation issued
in connection with a leasing arrangement. The payment of principal and interest
on private activity and industrial development bonds generally is dependent
solely on the ability of a facility's user to meet its financial obligations and
the pledge, if any, of real and personal property as security for such payment.
Municipal securities include both municipal notes and municipal bonds.
Municipal notes include general obligation notes, tax anticipation notes,
revenue anticipation notes, bond anticipation notes, certificates of
indebtedness, demand notes and construction loan notes and participation
interests in municipal notes. Municipal bonds include general obligation bonds,
revenue or special obligation bonds, private activity and industrial development
bonds and participation interests in municipal bonds.
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Taxable Municipal Securities: Taxable municipal securities are municipal
securities the interest on which is not exempt from federal income tax. Taxable
municipal securities include "private activity bonds" that are issued by or on
behalf of states or political subdivisions thereof to finance privately-owned or
operated facilities for business and manufacturing, housing, sports, and
pollution control and to finance activities of and facilities for charitable
institutions. Private activity bonds are also used to finance public facilities
such as airports, mass transit systems, ports, parking, and low income housing.
The payment of the principal and interest on private activity bonds is not
backed by a pledge of tax revenues and is dependent solely on the ability of the
facility's user to meet its financial obligations, and may be secured by a
pledge of real and personal property so financed. Interest on these bonds may
not be exempt from federal income tax.
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THE SECOND SENTENCE IN THE "DESCRIPTION OF PERMITTED INVESTMENTS AND RISK
FACTORS - RESTRAINTS ON INVESTMENTS BY MONEY MARKET FUNDS" SECTION IS AMENDED
AND RESTATED TO READ AS FOLLOWS:
These regulations generally require money market funds to acquire only U.S.
dollar denominated obligations maturing in 397 days or less and to maintain a
dollar-weighted average portfolio maturity of 90 days or less.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
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SEI DAILY INCOME TRUST
SUPPLEMENT DATED AUGUST 3, 1995 TO
THE STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 31, 1995
THIS SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION SUPERSEDES AND
REPLACES ANY EXISTING SUPPLEMENTS TO THE STATEMENT OF ADDITIONAL INFORMATION.
THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED IN
THE STATEMENT OF ADDITIONAL INFORMATION AND SHOULD BE RETAINED AND READ IN
CONJUNCTION WITH SUCH STATEMENT OF ADDITIONAL INFORMATION.
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THE LAST SENTENCE OF THE FIRST PARAGRAPH ON PAGE 19 OF THE STATEMENT OF
ADDITIONAL INFORMATION IS DELETED.
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THE FOLLOWING LANGUAGE REPLACES THE SECOND AND THIRD PARAGRAPHS OF THE
"DESCRIPTION OF PERMITTED INVESTMENTS - COMMERCIAL PAPER" SECTION ON PAGE 3 OF
THE STATEMENT OF ADDITIONAL INFORMATION:
Commercial Paper Ratings. The following descriptions of commercial paper
ratings have been published by Standard & Poor's Corporation (S&P), Moody's
Investors Service, Inc. ("Moody's"), Fitch Investors Service, Inc. ("Fitch"),
Duff & Phelps, Inc. ("Duff"), Thomson BankWatch ("Thomson") and IBCA Limited and
IBCA, Inc. (together "IBCA").
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+, 1 and 2 to indicate the relative degree of safety. Issues rated
A-1+ are those with an "overwhelming degree" of credit protection. Those rated
A-1, the highest rating category, reflect a "very strong" degree of safety
regarding timely payment. Those rated A-2, the second highest rating category,
reflect a safety regarding timely payment, but not as high as A-1.
Moody's employs two designations, judged to be high grade commercial paper, to
indicate the relative repayment capacity of rated issuers as follows:
Prime-1 Superior Quality
Prime-2 Strong Quality
The rating Fitch-1 (Highest Grade) is the highest commercial paper rating
assigned by Fitch. Paper rated Fitch-1 is regarded as having the strongest
degree of assurance for timely payment. The rating Fitch-2 (Very Good Grade) is
the second highest commercial paper rating assigned by Fitch which reflects an
assurance of timely payment only slightly lower in degree than the strongest
issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff.
Paper rated Duff-1 is regarded as having very high certainty of timely payment
with excellent liquidity factors which are supported by ample asset protection.
Risk factors are minor. Paper rated Duff-2 is regarded as having good certainty
of timely payment, good access to capital markets and sound liquidity factors
and company fundamentals. Risk factors are small.
The rating TBW-1 is the highest commercial paper rating assigned by Thomson.
Paper rated TBW-1 indicates a very high likelihood that principal and interest
will be paid on a timely basis. The rating TBW-2 is the second-highest rating
assigned category by Thomson. The relative degree of safety regarding timely
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repayment of principal and interest is strong. However, the relative degree of
safety is not as high as for issues rated TBW-1.
The designation A1, the highest rating category established by IBCA, indicates
that the obligation is supported by a very strong capacity for timely repayment.
Those obligations rated A1+ are supported by the highest capacity for timely
repayment. Obligations rated A2, the second highest rating category, are
supported by a strong capacity for timely repayment, although such capacity may
be susceptible to adverse changes in business, economic or financial conditions.
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THE FOLLOWING LANGUAGE IS INSERTED IN THE "DESCRIPTION OF PERMITTED INVESTMENTS"
PRIOR TO THE REPURCHASE AGREEMENTS SECTION ON PAGE 9 OF THE STATEMENT OF
ADDITIONAL INFORMATION:
Municipal Note Ratings. Moody's highest rating for state and municipal and
other short-term notes is MIG-1 and VMIG-1. Short-term municipal securities
rated MIG-1 or VMIG-1 are of the best quality. They have strong protection from
established cash flows of funds for their servicing or from established and
broad-based access to the market for refinancing or both. Short-term municipal
securities rated MIG-2 and VMIG-2 are of high quality. Margins of protection
are ample although not so large as in the preceding group.
An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in 3 years or less will likely receive a note
rating. Notes maturing beyond 3 years will most likely receive a long-term debt
rating. The following criteria will be used in making that assessment.
. Amortization schedule (the larger the final
maturity relative to other maturities the
more likely it will be treated as a note).
. Source of Payment (the more dependent the
issue is on the market for its refinancing,
the more likely it will be treated as a
note).
Note rate symbols are as follows:
SP-1. Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2. Satisfactory capacity to pay principal and interest.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
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