U.S. Treasury Money Fund
PROSPECTUS
November 1, 1995
[LOGO] PHOTO
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PROSPECTUS
The 59 Wall Street U.S. Treasury Money Fund
6 St. James Avenue, Boston, Massachusetts 02116
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The 59 Wall Street U.S. Treasury Money Fund is an open-end investment
company which is a separate diversified portfolio of The 59 Wall Street Trust.
Shares of the Fund are offered by this Prospectus.
The Fund is a type of mutual fund commonly known as a money market fund. It
is designed to be a cost effective and convenient means of making substantial
investments in money market instruments. The Fund's investment objective is to
achieve as high a level of current income as is consistent with the preservation
of capital and the maintenance of liquidity. The net asset value of each of the
Fund's shares is expected to remain constant at $1.00. There can be no assurance
that the investment objective of the Fund will be achieved or that the net asset
value per share will not vary.
Investments in the Fund are neither insured nor guaranteed by the U.S.
Government. Shares of the Fund are not deposits or obligations of, or guaranteed
by, Brown Brothers Harriman & Co., and the shares are not insured by the Federal
Deposit Insurance Corporation or any other federal, state or other governmental
agency.
The Trust seeks to achieve the investment objective of the Fund by investing
only in short-term securities backed as to principal and interest payments by
the full faith and credit of the United States of America. Although investments
held for the Fund are issued by the U.S. Government, an investment in the Fund
is not insured or guaranteed by the U.S. Government.
Dividends from the Fund which are derived from interest on direct
obligations of the U.S. Government are generally expected to be exempt from
state and local income taxes in all states. However, a shareholder of the Fund
is subject to federal income tax on the dividends and capital gain distributions
received from the Fund.
Brown Brothers Harriman & Co. is the investment adviser to, and the
administrator and shareholder servicing agent of the Fund. Shares of the Fund
are offered at net asset value without a sales charge to customers of Brown
Brothers Harriman & Co. and to other investors of means.
This Prospectus, which investors are advised to read and retain for future
reference, sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. Additional information
about the Fund has been filed with the Securities and Exchange Commission in a
Statement of Additional Information, dated November 1, 1995. This information is
incorporated herein by reference and is available without charge upon request
from the Fund's distributor, 59 Wall Street Distributors, Inc., 6 St. James
Avenue, Boston, Massachusetts 02116.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is November 1, 1995.
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TABLE OF CONTENTS
Page
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Expense Table ............................................................. 3
Financial Highlights ...................................................... 4
Investment Objective and Policies ......................................... 4
Investment Restrictions ................................................... 5
Purchase of Shares ........................................................ 6
Redemption of Shares ...................................................... 7
Management of the Trust ................................................... 8
Net Asset Value ........................................................... 12
Dividends and Distributions ............................................... 12
Taxes ..................................................................... 13
Description of Shares ..................................................... 14
Additional Information .................................................... 15
TERMS USED IN THIS PROSPECTUS
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<S> <C>
Trust ............................................... The 59 Wall Street Trust
Fund ................................................ The 59 Wall Street U.S. Treasury Money Fund
Investment Adviser and Administrator................. Brown Brothers Harriman & Co.
Subadministrator..................................... 59 Wall Street Administrators, Inc.
("59 Wall Street Administrators")
Distributor.......................................... 59 Wall Street Distributors, Inc.
("59 Wall Street Distributors")
1940 Act............................................. The Investment Company Act of 1940, as amended.
</TABLE>
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EXPENSE TABLE
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The following table provides (i) a summary of estimated expenses relating
to purchases and sales of shares of the Fund, and the aggregate annual operating
expenses of the Fund, as a percentage of average net assets of the Fund, and
(ii) an example illustrating the dollar cost of such estimated expenses on a
$1,000 investment in the Fund.
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases....................................... None
Sales Load Imposed on Reinvested Dividends............................ None
Deferred Sales Load................................................... None
Redemption Fee........................................................ None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee..................................... 0.15%
12b-1 Fee................................................... None
Other Expenses
Administration Fee ....................................... 0.100%
Shareholder Servicing/Eligible Institution Fee............ 0.225
Other Expense Reimbursement Fee........................... 0.075 0.40
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Total Fund Operating Expenses............................... 0.55%
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Example 1 year 3 years 5 years 10 years
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A shareholder of the Fund would pay the following
expenses on a $1,000 investment, assuming (1)
5% annual return, and (2) redemption at the end
of each time period:........................... $6 $18 $31 $69
-- --- --- ---
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The Example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown. In connection
with the Example, please note that $1,000 is currently less than the Fund's
minimum purchase requirement. The purpose of this table is to assist investors
in understanding the various costs and expenses that shareholders of the Fund
bear directly or indirectly.
Under an agreement dated July 1, 1993, 59 Wall Street Administrators pays
the Fund's expenses, other than fees paid to Brown Brothers Harriman & Co. under
the Trust's Administration Agreement and Investment Advisory Agreement and other
than expenses relating to the organization of the Fund. Had this expense
reimbursement agreement not been in place, the total Fund operating expenses
would have been 0.58% of the Fund's average annual net assets and the
shareholder expenses in the example above would have been $6, $19, $32, and $73,
respectively. This agreement will terminate on February 1, 1996. At that time,
the Trustees of the Trust believe that, assuming the Fund's current asset level,
the total operating expenses of the Fund may increase to approximately 0.58% of
its average annual net assets. (See "Expense Reimbursement Agreement".)
For more information with respect to the expenses of the Fund see
"Management of the Trust" herein.
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FINANCIAL HIGHLIGHTS
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The following information for the fiscal years ended June 30, 1995, 1994,
1993 and 1992 and the period March 12, 1991 (commencement of operations) to June
30, 1991 has been audited by Deloitte & Touche LLP, independent auditors. This
information should be read in conjunction with the financial statements and
notes thereto, which appear in the Statement of Additional Information. The
ratios of expenses and net investment income to average net assets are not
indicative of future ratios.
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For the period
March 12, 1991
For the years ended June 30, (commencement
---------------------------------------------------- of operations)
1995 1994 1993 1992 to June 30, 1991
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Net asset value, beginning of period....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income.................... 0.05 0.03 0.03 0.04 0.02
Dividends to shareholders from net
investment income...................... (0.05) (0.03) (0.03) (0.04) (0.02)
-------- -------- --------- --------- --------
Net asset value, end of period............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ========= ========= ========
Total return*.............................. 4.67% 2.74% 2.75% 4.48% 5.45%**
Ratios/supplemental data:
Net assets, end of period (000's omitted) $144,969 $141,731 $136,584 $118,706 $70,241
Ratio of expenses to average net assets*. 0.55% 0.55% 0.55% 0.55% 0.55%**
Ratio of net investment income to
average net assets..................... 4.52% 2.72% 2.70% 4.35% 5.27%**
</TABLE>
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* Had the expense reimbursement agreement not been in place, the ratio of
expenses to average net assets, for the years ended June 30, 1995, 1994,
1993 and 1992 and the period March 12, 1991 (commencement of operations) to
June 30, 1991, would have been 0.58%, 0.57%, 0.55%, 0.56%, and 0.74%,
respectively. For the same periods, the total return of the Fund would have
been 4.64%, 2.72%, 2.75%, 4.47%, and 5.26%, respectively.
** Annualized.
INVESTMENT OBJECTIVE AND POLICIES
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The investment objective of the Fund is to achieve as high a level of
current income as is consistent with the preservation of capital and the
maintenance of liquidity.
The investment objective of the Fund is a fundamental policy and may be
changed only with the approval of the holders of a "majority of the Fund's
outstanding voting securities as defined in the 1940 Act". (See "Additional
Information" in this Prospectus.) However, the investment policies of the Fund
as described below are not fundamental and may be changed without such approval.
Investments for the Fund mature or are deemed to mature within 397 days
from the date of purchase and the average maturity of the investments held by
the Fund (on a dollar-weighted basis) is 90 days or less.
Assets of the Fund are invested only in securities backed as to principal
and interest payments by the full faith and credit of the United States of
America. These securities are issues of the U.S. Treasury, such as bills,
certificates of indebtedness, notes and bonds as well as unmatured interest
coupons of U.S. Treasury bonds and notes which have been separated and resold in
a custodial receipt program administered by the U.S. Treasury.
The Trust may, in the future, seek to achieve the Fund's investment
objective by investing all of the Fund's assets in a no-load, diversified,
open-end management investment company having substantially the same investment
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objective as the Fund. Shareholders will receive 30 days prior written notice
with respect to any such investment.
Risk Factors
Although investments held for the Fund are issued by the U.S. Government,
an investment in the Fund is not insured or guaranteed by the U.S. Government.
The portfolio is subject to interest rate risk which causes fluctuations in the
amount of daily dividends, and, in extreme cases, could cause the net asset
value per share of the Fund to deviate from $1.00 per share. Interest rate risk
refers to the price fluctuation of a debt security in response to changes in
interest rates. In general, short-term securities have relatively small
fluctuations in price in a response to general changes in interest rates.
Portfolio Brokerage
Although the Fund generally holds investments until maturity and does not
seek profits through short-term trading, it may dispose of any portfolio
security prior to its maturity if it believes such disposition advisable.
U.S. Treasury securities are generally traded on a net basis and do not
normally involve either brokerage commissions or transfer taxes. Where possible
transactions on behalf of the Fund are entered directly with the issuer or
market maker for the securities involved. Purchases from dealers serving as
market makers may include a spread between the bid and asked price. The policy
of the Fund regarding purchases and sales of securities is that primary
consideration will be given to obtaining the most favorable prices and efficient
executions of transactions. In seeking to implement the Fund's policies, the
Investment Adviser effects transactions with those brokers and dealers who the
Investment Adviser believes provide the most favorable prices and are capable of
providing efficient executions. If the Investment Adviser believes such prices
and executions are obtainable from more than one broker or dealer, it may give
consideration to placing portfolio transactions with those brokers and dealers
who furnish research and other services to the Fund and or the Investment
Adviser. Such services may include, but are not limited to, any one or more of
the following: information as to the availability of securities for purchase or
sale; statistical or factual information or opinions pertaining to investment;
and appraisals or evaluations of portfolio securities. (See "Portfolio
Transactions" in the Statement of Additional Information.)
On those occasions when Brown Brothers Harriman & Co. deems the purchase or
sale of a security to be in the best interests of the Portfolio as well as other
customers, Brown Brothers Harriman & Co., to the extent permitted by applicable
laws and regulations, may, but is not obligated to, aggregate the securities to
be sold or purchased for the Fund with those to be sold or purchased for other
customers in order to obtain best execution, including lower brokerage
commissions, if appropriate. In such event, allocation of the securities so
purchased or sold as well as any expenses incurred in the transaction are made
by Brown Brothers Harriman & Co. in the manner it considers to be most equitable
and consistent with its fiduciary obligations to its customers, including the
Fund. In some instances, this procedure might adversely affect the Fund.
INVESTMENT RESTRICTIONS
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The Statement of Additional Information for the Fund includes a listing of
the specific investment restrictions which govern the Fund's investment
policies. Certain of these investment restrictions are deemed fundamental
policies and may be changed only with the approval of the holders of a "majority
of the Fund's outstanding voting securities as defined in the 1940 Act" (see
"Additional Information" in this Prospectus), including a restriction that,
excluding the investment of all of the Fund's assets in an open-end investment
company with substantially the same investment objective, policies and
restrictions as the Fund, not more than 10% of the net assets of the Fund may be
invested in securities that are subject to legal or contractual restrictions on
resale.
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As a non-fundamental policy, money is not borrowed in an amount in excess
of 10% of the assets of the Fund. It is intended that money will be borrowed
only from banks and only either to accommodate requests for the redemption of
shares while effecting an orderly liquidation of portfolio securities or to
maintain liquidity in the event of an unanticipated failure to complete a
portfolio security transaction or other similar situations. Securities are not
purchased for the Fund at any time at which the amount of its borrowings exceed
5% of its assets.
Also, as a non-fundamental policy, up to 5% of the Fund's assets may be
invested in repurchase agreements although it is the intention of the Adviser to
do so only when other means of efficiently investing cash flows are unavailable.
All repurchase agreement transactions are collateralized by U.S. Treasury
securities and are entered into only with "primary dealers" (as designated by
the Federal Reserve Bank of New York) in U.S. Government securities. A
shareholder of the Fund is subject to state and local income taxes in most
jurisdictions on the portion of dividends received from the Fund which is
derived from income from repurchase agreements. It is the intention of the
Investment Adviser to minimize the portion of the Fund's income which is derived
from repurchase agreements to the extent practicable.
The Fund is classified as "diversified" under the 1940 Act, which means
that at least 75% of its total assets is represented by cash; securities issued
by the U.S. Government, its agencies and instrumentalities; and other securities
limited in respect of any one company to an amount no greater than 5% of the
Fund's total assets (other than securities issued by the U.S. Government, its
agencies or instrumentalities).
PURCHASE OF SHARES
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An investor may open a Fund account only through 59 Wall Street
Distributors, the Fund's exclusive Distributor. The Fund's Shareholder Servicing
Agent (see page 9) and each Eligible Institution (see page 10) may establish
and amend from time to time a minimum initial and a minimum subsequent purchase
requirement for their respective customers. The Trust reserves the right to
determine the purchase orders for Fund shares that it will accept.
Shares of the Fund are offered on a continuous basis at their net asset
value without a sales charge. Shares of the Fund may be purchased on any day the
New York Stock Exchange is open for regular trading and New York banks are open
for business if the Trust receives the purchase order and acceptable payment for
such order prior to 11:00 A.M., New York time. Purchases of Fund shares are then
executed at the net asset value per share next determined on that same day.
Dividends are earned on the day that the purchase is executed.
An investor who has a custody account with Brown Brothers Harriman & Co.
may place purchase orders for Fund shares with the Trust through Brown Brothers
Harriman & Co., which as an Eligible Institution holds such shares in its name
on behalf of that customer. For such a customer, Brown Brothers Harriman & Co.
arranges for the payment of the purchase price of Fund shares so that a purchase
order placed prior to 11:00 A.M., New York time is executed on the day it is
placed. Brown Brothers Harriman & Co. has established for its customers a
minimum initial purchase requirement for the Fund of $5,000 and a minimum
subsequent purchase requirement for the Fund of $1,000, except that the minimum
initial and minimum subsequent purchase requirements for individual retirement
accounts, 401(k) plans and defined contribution plans are $1,000.
An investor who does not have a custody account with Brown Brothers
Harriman & Co. must place purchase orders for Fund shares with the Trust through
the Fund's Shareholder Servicing Agent. Such an investor has such shares held
directly in the investor's name on the books of the Trust and is responsible for
arranging for the payment of the purchase price of Fund shares to the Trust's
account at State Street Bank and Trust Company, the Trust's custodian bank. Such
payment must be in the form of either (a) an inter-bank wire transfer of
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"available funds" prior to 11:00 A.M., New York time, in which case a purchase
order placed prior to 11:00 A.M., New York time is executed that day, or (b) a
cashier's check drawn on a U.S. bank or a check certified by a U.S. bank, in
which case a purchase order is executed after such a check has been converted
into "available" funds, generally the next business day after the check is
received for the Trust by State Street Bank and Trust Company. Brown Brothers
Harriman & Co., the Fund's Shareholder Servicing Agent, has established a
minimum initial purchase requirement for the Fund of $10,000 and a minimum
subsequent purchase requirement for the Fund of $5,000.
Inquiries regarding the manner in which purchases of Fund shares may be
effected and other matters pertaining to the Fund should be directed to Brown
Brothers Harriman & Co., an Eligible Institution and the Fund's Shareholder
Servicing Agent. (See back cover for address and phone number.)
REDEMPTION OF SHARES
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Shares held by Brown Brothers Harriman & Co. on behalf of a shareholder may
be redeemed by submitting a redemption request in good order to Brown Brothers
Harriman & Co. Proceeds from the redemption of Fund shares are credited to the
shareholder's account with Brown Brothers Harriman & Co.
Shares held directly in the name of a shareholder on the books of the Trust
may be redeemed by submitting a redemption request in good order to the Trust
through the Fund's Shareholder Servicing Agent. (See back cover for address and
phone number.) Proceeds resulting from such redemption are paid by the Trust
directly to the shareholder.
A redemption request in good order must be received by the Trust prior to
11:00 A.M., New York time on any day the New York Stock Exchange is open for
regular trading and New York banks are open for business. Such a redemption is
executed at the net asset value per share next determined on that same day.
Proceeds of a redemption are paid in "available" funds generally on the day the
redemption request is executed, and in any event within seven days.
If a redemption request is received by the Trust after 11:00 A.M., New York
time the redemption request is executed on the next business day. A shareholder
continues to receive each daily dividend declared prior to the day on which a
redemption request is executed.
A shareholder redeeming shares should be aware that the net asset value of
the Fund's shares may, in unusual circumstances, decline below $1.00 per share.
Accordingly, a redemption request may result in payment of a dollar amount which
differs from the number of shares redeemed. (See "Net Asset Value".)
Redemptions By the Trust
The Fund's Shareholder Servicing Agent (see page 9) and each Eligible
Institution (see page 10) may establish and amend from time to time for their
respective customers a minimum account size. If the value of a shareholder's
holdings in the Fund falls below that amount because of a redemption of shares,
the shareholder's remaining shares may be redeemed. If such remaining shares are
to be redeemed, the shareholder is so notified and is allowed 60 days to make an
additional investment to enable the shareholder to meet the minimum requirement
before the redemption is processed. Brown Brothers Harriman & Co., the Fund's
Shareholder Servicing Agent, has established a minimum account size of $10,000
and Brown Brothers Harriman & Co., as an Eligible Institution, has established a
minimum account size of $5,000 ($1,000 for eligible individual retirement
accounts, 401(k) plans and defined contribution plans).
Further Redemption Information
In the event a shareholder redeems all shares held in the Fund at any time
during the month, all accrued but unpaid dividends are included in the proceeds
of the redemption and future purchases of shares of the Fund by such shareholder
would be subject to the Fund's minimum initial purchase requirements.
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An investor should be aware that redemptions from the Fund may not be
processed if a completed account application with a certified taxpayer
identification number has not been received.
A shareholder's right to receive payment with respect to any redemption may
be suspended or the payment of the redemption proceeds postponed for up to seven
days and for such other periods as the 1940 Act may permit. (See "Additional
Information" in the Statement of Additional Information.)
MANAGEMENT OF THE TRUST
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Trustees and Officers
The Trustees, in addition to supervising the actions of the Administrator,
Investment Adviser and Distributor of the Fund, as set forth below, decide upon
matters of general policy. Because of the services rendered to the Trust by the
Investment Adviser and the Administrator, the Trust itself requires no employees
other than its officers, none of whom, other than the Chairman, receive
compensation from the Fund and all of whom, other than the Chairman, are
employed by 59 Wall Street Administrators. (See "Trustees and Officers" in the
Statement of Additional Information.)
The Trustees of the Trust are:
J.V. Shields, Jr.
Chairman and Chief Executive Officer of Shields & Company
Eugene P. Beard
Executive Vice President-Finance and Operations of The Interpublic
Group of Companies
David P. Feldman
Corporate Vice President--Investment Management of AT&T
Alan G. Lowy
Private Investor
Arthur D. Miltenberger
Vice President and Chief Financial Officer of
Richard K. Mellon and Sons
Investment Adviser
The Investment Adviser to the Fund is Brown Brothers Harriman & Co.,
Private Bankers, a New York limited partnership established in 1818. The firm is
subject to examination and regulation by the Superintendent of Banks of the
State of New York and by the Department of Banking of the Commonwealth of
Pennsylvania. The firm is also subject to supervision and examination by the
Commissioner of Banks of the Commonwealth of Massachusetts.
Brown Brothers Harriman & Co. provides investment advice and portfolio
management services to the Fund. Subject to the general supervision of the
Trust's Trustees, Brown Brothers Harriman & Co. makes the day-to-day investment
decisions for the Fund, places the purchase and sale orders for the portfolio
transactions of the Fund, and generally manages the Fund's investments. Brown
Brothers Harriman & Co. provides a broad range of investment management services
for customers in the United States and abroad. At June 30, 1995, it managed
total assets of approximately $20 billion.
As compensation for the services rendered and related expenses such as
salaries of advisory personnel borne by Brown Brothers Harriman & Co. under the
Investment Advisory Agreement, Brown Brothers Harriman & Co. receives from the
Fund an annual fee, computed daily and payable monthly, equal to 0.15% of the
Fund's average daily net assets. Brown Brothers Harriman & Co. also receives an
annual administration fee and shareholder servicing/eligible institution fee
from the Fund equal to 0.10% and 0.225%, respectively, of the average daily net
assets of the Fund.
The investment advisory services of Brown Brothers Harriman & Co. to the
Fund are not exclusive under the terms of the Investment Advisory Agreement.
Brown Brothers Harriman & Co. is free to and does render investment advisory
services to others, including other registered investment companies.
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Pursuant to a license agreement between the Trust and Brown Brothers
Harriman & Co. dated August 24, 1989, as amended as of December 15, 1993, the
Trust may continue to use in its name "59 Wall Street", the current and historic
address of Brown Brothers Harriman & Co. The agreement may be terminated by
Brown Brothers Harriman & Co. at any time upon written notice to the Trust upon
the expiration or earlier termination of any investment advisory agreement
between the Fund or any investment company in which a series of the Trust
invests all of its assets and Brown Brothers Harriman & Co. Termination of the
agreement would require the Trust to change its name and the name of the Fund to
eliminate all reference to "59 Wall Street".
Pursuant to license agreements between Brown Brothers Harriman & Co. and
each of 59 Wall Street Administrators and 59 Wall Street Distributors (each a
"Licensee"), dated June 22, 1993 and June 8, 1990, respectively, each Licensee
may continue to use in its name "59 Wall Street", the current and historic
address of Brown Brothers Harriman & Co., only if Brown Brothers Harriman & Co.
does not terminate the respective license agreement, which would require the
Licensee to change its name to eliminate all reference to "59 Wall Street".
Administrator
Brown Brothers Harriman & Co. acts as Administrator of the Trust. (See
"Administrator" in the Statement of Additional Information.)
In its capacity as Administrator, Brown Brothers Harriman & Co. administers
all aspects of the Trust's operations subject to the supervision of the Trust's
Trustees except as set forth below under "Distributor". In connection with its
responsibilities as Administrator and at its own expense, Brown Brothers
Harriman & Co. (i) provides the Trust with the services of persons competent to
perform such supervisory, administrative and clerical functions as are necessary
in order to provide effective administration of the Trust; (ii) oversees the
performance of administrative and professional services to the Trust by others,
including the Fund's Custodian, Transfer and Dividend Disbursing Agent; (iii)
provides the Trust with adequate office space and communications and other
facilities; and (iv) prepares and/or arranges for the preparation, but does not
pay for, the periodic updating of the Trust's registration statement and the
Fund's prospectus, the printing of such documents for the purpose of filings
with the Securities and Exchange Commission and state securities administrators,
and the preparation of tax returns for the Trust and for the Fund and reports to
the Fund's shareholders and the Securities and Exchange Commission.
For the services rendered to the Trust and related expenses borne by Brown
Brothers Harriman & Co., as Administrator, Brown Brothers Harriman & Co.
receives from the Fund an annual fee, computed daily and payable monthly, equal
to 0.10% of the Fund's average daily net assets.
Pursuant to a Subadministrative Services Agreement with Brown Brothers
Harriman & Co., 59 Wall Street Administrators performs such subadministrative
duties for the Trust as are from time to time agreed upon by the parties. The
offices of 59 Wall Street Administrators are located at 6 St. James Avenue,
Boston, Massachusetts 02116. 59 Wall Street Administrators is a wholly-owned
subsidiary of Signature Financial Group, Inc. ("SFG"). SFG is not affiliated
with Brown Brothers Harriman & Co. 59 Wall Street Administrators'
subadministrative duties may include providing equipment and clerical personnel
necessary for maintaining the organization of the Trust, participation in the
preparation of documents required for compliance by the Trust with applicable
laws and regulations, preparation of certain documents in connection with
meetings of Trustees and shareholders of the Trust, and other functions that
would otherwise be performed by the Administrator as set forth above. For
performing such subadministrative services, 59 Wall Street Administrators
receives such compensation as is from time to time agreed upon, but not in
excess of the amount paid to the Administrator from the Fund.
Shareholder Servicing Agent
The Trust has entered into a shareholder servicing agreement with Brown
Brothers Harriman & Co. pursuant to which Brown Brothers Harriman & Co., as
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agent for the Fund, among other things: answers inquiries from shareholders of
and prospective investors in the Fund regarding account status and history, the
manner in which purchases and redemptions of Fund shares may be effected and
certain other matters pertaining to the Fund; assists shareholders of and
prospective investors in the Fund in designating and changing dividend options,
account designations and addresses; and provides such other related services as
the Trust or a shareholder of or prospective investor in the Fund may reasonably
request. For these services, Brown Brothers Harriman & Co. receives from the
Fund an annual fee, computed daily and payable monthly, equal to 0.225% of the
average daily net assets of the Fund represented by shares owned during the
period for which payment was being made by shareholders who did not hold their
shares with an Eligible Institution.
Eligible Institutions
The Trust has entered into an eligible institution agreement with Brown
Brothers Harriman & Co. pursuant to which Brown Brothers Harriman & Co., as
agent for the Trust with respect to shareholders of and prospective investors in
the Fund who have a custody account with Brown Brothers Harriman & Co., among
other things: provides necessary personnel and facilities to establish and
maintain certain shareholder accounts and records enabling it to hold, as agent,
its customers' shares in its name or its nominee name on the shareholder records
of the Trust; assists in processing purchase and redemption transactions;
arranges for the wiring of funds; transmits and receives funds in connection
with customer orders to purchase or redeem shares of the Fund; provides periodic
statements showing a customer's account balance and, to the extent practicable,
integrates such information with information concerning other customer
transactions otherwise effected with or through it; furnishes, either separately
or on an integrated basis with other reports sent to a customer, monthly and
annual statements and confirmations of all purchases and redemptions of Fund
shares in a customer's account; transmits proxy statements, annual reports,
updated prospectuses and other communications from the Trust to its customers;
and receives, tabulates and transmits to the Trust proxies executed by its
customers with respect to meetings of shareholders of the Fund. For these
services, Brown Brothers Harriman & Co. receives from the Fund an annual fee,
computed daily and payable monthly, equal to 0.225% of the average daily net
assets of the Fund represented by shares owned during the period for which
payment was being made by customers for whom Brown Brothers Harriman & Co. was
the holder or agent of record.
The eligible institution agreement with Brown Brothers Harriman & Co. is
non-exclusive and the Trust expects from time to time to enter into similar
agreements with other financial institutions. At such time as any such similar
agreement is entered into, references in this Prospectus to shareholders of and
prospective investors in the Fund who have a custody account with Brown Brothers
Harriman & Co. shall include such shareholders of and prospective investors in
the Fund who have an account with the financial institution which entered into
such other agreement, except as expressly stated in this Prospectus.
Expense Reimbursement Agreement
Under an agreement dated July 1, 1993, 59 Wall Street Administrators pays
the Fund's expenses (see "Expense Table"), other than fees paid to Brown
Brothers Harriman & Co. under the Trust's Administration Agreement and
Investment Advisory Agreement and other than expenses relating to the
organization of the Fund, subject to reimbursement by the Fund. To accomplish
such reimbursement, 59 Wall Street Administrators receives an expense
reimbursement fee from the Fund such that after such reimbursement the aggregate
expenses of the Fund do not exceed an agreed upon annual rate, currently 0.55%
of the average daily net assets of the Fund. Such expense reimbursement fees are
computed daily and paid monthly. During the fiscal year ended June 30, 1995, 59
Wall Street Administrators incurred $389,200 in expenses on behalf of the Fund
including shareholder servicing/eligible institution fees of $265,828 and
received expense reimbursement fees of $344,275 from the Fund.
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The expense reimbursement fee agreement will terminate on the earlier of
either (i) February 1, 1996, or (ii) the date on which the payments made
thereunder equal the prior payment of such reimbursable expenses. Upon
termination of this agreement, the Trustees of the Trust believe that, assuming
the Fund's current asset level, the total operating expenses of the Fund may
increase to approximately 0.58% of the Fund's average annual net assets.
The expenses of the Fund paid by 59 Wall Street Administrators under the
expense reimbursement agreement include the shareholder servicing/eligible
institution fees; the compensation of the Trustees of the Trust; governmental
fees; interest charges; taxes; membership dues in the Investment Company
Institute; fees and expenses of independent auditors, of legal counsel and of
any transfer agent, custodian, registrar or dividend disbursing agent of the
Fund; insurance premiums; expenses of calculating the net asset value of shares
of the Fund; expenses of preparing, printing and mailing prospectuses, reports,
notices, proxy statements and reports to shareholders and to governmental
officers and commissions; expenses of shareholder meetings; expenses relating to
the issuance, registration and qualification of shares of the Fund; and expenses
connected with the execution, recording and settlement of portfolio security
transactions.
Distributor
59 Wall Street Distributors acts as exclusive Distributor of shares of the
Fund. Its office is located at 6 St. James Avenue, Boston, Massachusetts 02116.
59 Wall Street Distributors is a wholly-owned subsidiary of SFG. SFG and its
affiliates currently provide administration and distribution services for other
registered investment companies. The Trust pays for the preparation, printing
and filing of copies of the Trust's registration statement and the Fund's
prospectus as required under federal and state securities laws. (See
"Distributor" in the Statement of Additional Information.)
59 Wall Street Distributors holds itself available to receive purchase
orders for Fund shares.
Custodian, Transfer and
Dividend Disbursing Agent
State Street Bank and Trust Company, 225 Franklin Street, P.O. Box 351,
Boston, Massachusetts 02110, is the Fund's Custodian, Transfer and Dividend
Disbursing Agent. As Custodian, it is responsible for maintaining books and
records of the Fund's portfolio transactions and holding the Fund's portfolio
securities and cash pursuant to a custodian agreement with the Trust. Cash is
held for the Fund in demand deposit accounts at the Custodian. Subject to the
supervision of the Administrator, the Custodian maintains the Fund's accounting
and portfolio transaction records and for each day computes the Fund's net asset
value, net investment income and dividend payable. As Transfer and Dividend
Disbursing Agent it is responsible for maintaining the books and records
detailing ownership of the Fund's shares.
Independent Auditors
Deloitte & Touche LLP are the independent auditors for the Fund.
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NET ASSET VALUE
================================================================================
The Fund's net asset value per share is determined once daily at 4:00 P.M.,
New York time on each day the New York Stock Exchange is open for regular
trading and New York banks are open for business.
The determination of the Fund's net asset value per share is made by
subtracting from the value of the total assets of the Fund the amount of its
liabilities and dividing the difference by the number of shares of the Fund
outstanding at the time the determination is made. It is anticipated that the
net asset value per share of the Fund will remain constant at $1.00. No
assurance can be given that this goal can be achieved.
The Portfolio's assets are valued by using the amortized cost method of
valuation. This method involves valuing a security at its cost at the time of
purchase and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instrument. The market value of the Fund's portfolio
securities fluctuates on the basis of the creditworthiness of the issuers of
such securities and on the levels of interest rates generally. While the
amortized cost method provides certainty in valuation, it may result in periods
when the value so determined is higher or lower than the price the Fund would
receive if the security were sold. (See "Net Asset Value" in the Statement of
Additional Information.)
DIVIDENDS AND DISTRIBUTIONS
================================================================================
All the Fund's net income and short-term capital gains and losses, if any,
are declared as a dividend daily and paid monthly.
Net income of the Fund consists of (i) accrued interest, accretion of
discount and amortization of premium, (ii) plus net short-term capital gains or
losses realized on sales of portfolio securities of the Fund, and (iii) less the
accrued expenses of the Fund applicable to that dividend period. (See "Net Asset
Value".)
Determination of the Fund's net income is made immediately prior to the
determination of the net asset value per share at 4:00 P.M., New York time on
each day the New York Stock Exchange is open for regular trading and New York
banks are open for business. Net income for days other than such business days
is determined as of 4:00 P.M., New York time on the immediately preceding
business day. Dividends declared are payable to shareholders of record on the
date of determination. Shares purchased through submission of a purchase order,
prior to 11:00 A.M., New York time on such business day begin earning dividends
on that business day. Shares redeemed do not qualify for a dividend on the
business day that the redemption is executed. (See "Redemption of Shares".)
Unless a shareholder otherwise elects, dividends are automatically
reinvested in additional Fund shares without reference to the minimum subsequent
purchase requirement. In the event a shareholder redeems all shares held at any
time during the month, all accrued but unpaid dividends are included in the
proceeds of the redemption and future purchases of shares by such shareholder
will be subject to the minimum initial purchase requirements. The Trust reserves
the right to discontinue, alter or limit the automatic reinvestment privilege at
any time, but will provide shareholders prior written notice of any such
discontinuance, alteration or limitation.
A shareholder whose shares are held by Brown Brothers Harriman & Co. on
behalf of the shareholder and who elects to have dividends paid in cash has the
amount of such dividends automatically credited to the shareholder's account
with Brown Brothers Harriman & Co. Such a shareholder who elects to have
dividends reinvested is able to do so, in both whole and fractional shares.
A shareholder whose shares are held directly in the shareholder's name on
the books of the Trust and who elects to have dividends paid in cash receives a
check in the amount of such dividends. Such a shareholder who elects to have
dividends reinvested is able to do so, in both whole and fractional shares.
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<PAGE>
TAXES
================================================================================
Each year, the Trust intends to continue to qualify the Fund and elect that
the Fund be treated as a separate "regulated investment company" under the
Internal Revenue Code of 1986, as amended. Accordingly, the Fund is not subject
to federal income taxes on its net income and realized net capital gains that
are distributed to its shareholders. A 4% non-deductible excise tax is imposed
on the Fund to the extent that certain distribution requirements for the Fund
for each calendar year are not met. The Trust intends to continue to meet such
requirements.
Dividends of net income (as defined under "Dividends and Distributions")
and net short-term capital gains, if any, are taxable to shareholders of the
Fund as ordinary income, whether such dividends are paid in cash or reinvested
in additional shares. These distributions are not eligible for the
dividends-received deduction allowed to corporate shareholders.
Under U.S. Treasury regulations, the Trust and each Eligible Institution
are required to withhold and remit to the U.S. Treasury a portion (31%) of
dividends and capital gains distributions on the accounts of those shareholders
who fail to provide a correct taxpayer identification number (Social Security
Number for individuals) or to make required certifications, or who have been
notified by the Internal Revenue Service that they are subject to such
withholdings. Prospective investors should submit an IRS Form W-9 to avoid such
withholding.
State and Local Taxes
Assets of the Fund are invested in direct obligations of the U.S.
Government, the interest from which is specifically exempted from state and
local income taxes when held directly by taxpayers. All states by legislation or
regulation allow the character of interest income from direct obligations of the
U.S. Government received by a regulated investment company organized as a series
of a Massachusetts business trust, such as the Fund, to pass through to
shareholders. However, a shareholder of the Fund is subject to state and local
income taxes in most jurisdictions on the portion of dividends received from the
Fund which is derived from income from repurchase agreements. It is the
intention of the Investment Adviser to minimize the portion of the Fund's income
which is derived from repurchase agreements to the extent practicable. The Trust
intends to advise shareholders of the proportion of the Fund's dividends which
is derived from interest on direct obligations of the U.S. Government.
Dividends paid from the Fund which are derived from interest on direct
obligations of the U.S. Government are generally expected to be exempt from
income taxation in the District of Columbia and the following states:
Alabama Louisiana Ohio
Arizona Maine Oklahoma
Arkansas Maryland Oregon
Colorado Massachusetts Pennsylvania
Delaware Michigan Rhode Island
Dist. Columbia Minnesota South Carolina
Georgia Missouri Tennessee
Hawaii Mississippi Utah
Idaho Montana Vermont
Illinois Nebraska Virginia
Indiana New Hampshire West Virginia
Iowa New Mexico Wisconsin.
Kansas North Carolina
Kentucky North Dakota
Such dividends are also generally expected to be so exempt in the following
states provided that a certain minimum percentage of the Fund's assets consist
of direct obligations of the U.S. Government. It is the Trust's intention to
meet these minimum percentage requirements, none of which is greater than 80%.
California New Jersey New York.
Connecticut
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<PAGE>
There is currently no state income tax in the following states:
Alaska South Dakota Washington
Florida Texas Wyoming.
Nevada
Shareholders are urged to consult their tax advisors regarding the possible
exclusion for state and local income tax purposes of the portion of dividends
paid from the Fund which is derived from interest on direct obligations of the
U.S. Government.
Foreign Investors
The Fund is designed for investors who are either citizens of the United
States or aliens subject to United States income tax. Prospective investors who
are not citizens of the United States and who are not aliens subject to United
States income tax are subject to United States withholding tax on the entire
amount of all dividends. Therefore, such investors should not invest in the Fund
since alternative investments in money market instruments would not be subject
to United States withholding tax.
Other Information
Annual notification as to the tax status of capital gains distributions, if
any, is provided to shareholders shortly after June 30, the end of the Fund's
fiscal year. Additional tax information is mailed to shareholders in January.
This tax discussion is based on the tax laws and regulations in effect on
the date of this Prospectus, however such laws and regulations are subject to
change. Shareholders and prospective investors are urged to consult their tax
advisors regarding specific questions relevant to their particular
circumstances.
DESCRIPTION OF SHARES
================================================================================
The Trust is an open-end management investment company organized on June 7,
1983, as an unincorporated business trust under the laws of the Commonwealth of
Massachusetts. Its offices are located at 6 St. James Avenue, Boston,
Massachusetts 02116; its telephone number is (617) 423-0800.
Pursuant to the Trust's Declaration of Trust, the Trustees have authorized
the issuance of an unlimited number of full and fractional shares of each series
of the Trust, one of which is the Fund. The Trustees may divide or combine the
shares into a greater or lesser number of shares without thereby changing the
proportionate beneficial interest in the Trust and may authorize the creation of
additional series of shares, the proceeds of which would be invested in
separate, independently managed portfolios. Currently there are two series in
addition to the Fund.
The Trustees themselves have the power to alter the number and the terms of
office of the Trustees, to lengthen their own terms, or to make their terms of
unlimited duration subject to certain removal procedures, and to appoint their
own successors; provided that at least two-thirds of the Trustees have been
elected by the shareholders.
Each share of the Fund represents an equal proportional interest in the
Fund with each other share. Upon liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
Shareholders of the Fund are entitled to a full vote for each full share
held and to a fractional vote for fractional shares. The voting rights of
shareholders are not cumulative. Shares have no preemptive or conversion rights.
The rights of redemption are described elsewhere herein. Shares when issued are
fully paid and nonassessable, except as set forth below. It is the intention of
the Trust not to hold meetings of shareholders annually. The Trustees may call
meetings of shareholders for action by shareholder vote as may be required by
the 1940 Act or as may be permitted by the Declaration of Trust or By-Laws.
Shareholders have under certain circumstances (e.g., upon application and
submission of certain specified documents to the Trustees by a specified number
of shareholders) the right to communicate with other shareholders in connection
with requesting a meeting of shareholders for the purpose of removing one or
more Trustees. Shareholders also have the right to remove one or more Trustees
14
<PAGE>
without a meeting by a declaration in writing by a specified number of
shareholders.
The By-Laws of the Trust provide that the presence in person or by proxy of
the holders of record of one half of the shares of the Fund outstanding and
entitled to vote thereat shall constitute a quorum at all meetings of Fund
shareholders, except as otherwise required by applicable law. The By-Laws
further provide that all questions shall be decided by a majority of the votes
cast at any such meeting at which a quorum is present, except as otherwise
required by applicable law.
The Declaration of Trust provides that, at any meeting of shareholders of
the Fund, Brown Brothers Harriman & Co., as an Eligible Institution, may vote
any shares as to which Brown Brothers Harriman & Co. is the agent of record and
which are otherwise not represented in person or by proxy at the meeting,
proportionately in accordance with the votes cast by holders of all shares
otherwise represented at the meeting in person or by proxy as to which Brown
Brothers Harriman & Co. is the agent of record. Any shares so voted by Brown
Brothers Harriman & Co. are deemed represented at the meeting for purposes of
quorum requirements.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss because
of shareholder liability is limited to circumstances in which both inadequate
insurance existed and the Trust itself was unable to meet its obligations.
ADDITIONAL INFORMATION
================================================================================
As used in this Prospectus, the term "majority of the Fund's outstanding
voting securities as defined in the 1940 Act" currently means the vote of (i)
67% or more of the Fund's shares present at a meeting, if the holders of more
than 50% of the outstanding voting securities of the Fund are present in person
or represented by proxy; or (ii) more than 50% of the Fund's outstanding voting
securities, whichever is less.
Fund shareholders receive semi-annual reports containing unaudited
financial statements and annual reports containing financial statements audited
by independent auditors.
The Fund's "yield" and "effective yield" may be used from time to time in
shareholder reports or other communications to shareholders or prospective
investors. Both yield figures are based on historical earnings and are not
intended to indicate future performance. Performance information may include the
Fund's investment results and/or comparisons of its investment results to
various unmanaged indexes. To the extent that unmanaged indexes are so included,
the same indexes will be used on a consistent basis. The Fund's investment
results as used in such communications are calculated in the manner set forth
below. From time to time, fund rankings from various sources may be quoted.
The "yield" of the Fund refers to the income generated by an investment in
the Fund over a seven-day period (which period will be stated). This income is
then "annualized". That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The "effective yield" is slightly higher than the
"yield" because of the compounding effect of this assumed reinvestment.
This Prospectus omits certain of the information contained in the Statement
of Additional Information and the Registration Statement filed with the
Securities and Exchange Commission. The Statement of Additional Information may
be obtained from 59 Wall Street Distributors without charge and the Registration
Statement may be obtained from the Securities and Exchange Commission upon
payment of the fee prescribed by the Rules and Regulations of the Commission.
15
<PAGE>
The 59 Wall Street Trust
Investment Adviser and
Administrator
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
Distributor
59 Wall Street Distributors, Inc.
6 St. James Avenue
Boston, Massachusetts 02116
Shareholder Servicing Agent
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
(212) 493-8100
No dealer, salesman or any other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus and the Statement of Additional Information, in connection with the
offer contained in this Prospectus, and if given or made, such other information
or representations must not be relied upon as having been authorized by the
Trust or the Distributor. This Prospectus does not constitute an offer by the
Trust or by the Distributor to sell or the solicitation of any offer to buy any
of the securities offered hereby in any jurisdiction to any person to whom it is
unlawful for the Trust or the Distributor to make such offer in such
jurisdiction.
