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PROSPECTUS
The 59 Wall Street Money Market Fund
6 St. James Avenue, Boston, Massachusetts 02116
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The 59 Wall Street Money Market 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 all of the Fund's assets in the U.S. Money Market Portfolio, a
diversified open-end investment company having the same investment objective as
the Fund.
Brown Brothers Harriman & Co. is the investment adviser to the Portfolio
and the administrator and shareholder servicing agent of the Fund. Shares of the
Fund are offered at net asset value without a sales charge.
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, 1997. 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, 1997.
<PAGE>
TABLE OF CONTENTS
Page
----
Expense Table............................................................... 3
Financial Highlights........................................................ 4
Investment Objective and Policies........................................... 5
Investment Restrictions..................................................... 6
Purchase of Shares.......................................................... 7
Redemption of Shares........................................................ 7
Management of the Trust and the Portfolio .................................. 9
Net Asset Value............................................................. 13
Dividends and Distributions................................................. 14
Taxes....................................................................... 15
Description of Shares....................................................... 15
Additional Information ..................................................... 17
Appendix ................................................................... 19
TERMS USED IN THIS PROSPECTUS
Trust .................................. The 59 Wall Street Trust
Fund ................................... The 59 Wall Street Money Market Fund
Portfolio............................... U.S. Money Market Portfolio
Investment Adviser ..................... Brown Brothers Harriman & Co.
Administrator of the Trust.............. Brown Brothers Harriman & Co.
Administrator of the Portfolio.......... Brown Brothers Harriman Trust Company
(Cayman) Limited
Subadministrator of the Trust........... 59 Wall Street Administrators, Inc.
("59 Wall Street Administrators")
Subadministrator of the Portfolio....... Signature Financial Group
(Cayman) Limited
("SFG-Cayman")
Distributor............................. 59 Wall Street Distributors, Inc.
("59 Wall Street Distributors")
1940 Act................................ The Investment Company Act of 1940,
as amended.
2
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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 and the Portfolio, 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. The Trustees of the Trust believe
that the aggregate per share expenses of the Fund and the Portfolio will be less
than or approximately equal to the expenses which the Fund would incur if the
Trust retained the services of an investment adviser on behalf of the Fund and
the assets of the Fund were invested directly in the type of securities being
held by the Portfolio.
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.................................. 0.110%
Shareholder Servicing/Eligible Institution Fee ..... 0.225
Other Expenses...................................... 0.065 0.40
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Total Fund Operating Expenses......................... 0.55%
====
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*The Annual Fund Operating Expenses for the past year have been restated for
purposes of this table to reflect fees currently in effect.
Example 1 year 3 years 5 years 10 years
------- ------ ------- ------- --------
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
--- --- --- ---
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.
For more information with respect to the expenses of the Fund and the
Portfolio, see "Management of the Trust and the Portfolio" herein.
3
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FINANCIAL HIGHLIGHTS
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The following information for the five fiscal years ended June 30, 1997 has
been audited by Deloitte & Touche LLP, independent auditors. This information
should be read in conjunction with the financial statements and notes thereto,
which are incorporated by reference in the Statement of Additional Information.
The ratios of expenses and net investment income to average net assets are not
indicative of future ratios.
<TABLE>
<CAPTION>
For the years ended June 30,
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1997 1996 1995 1994 1993
-------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income ........... 0.05 0.05 0.05 0.03 0.03
Dividends to shareholders
from net investment income ...... (0.05) (0.05) (0.05) (0.03) (0.03)
-------- -------- -------- -------- ---------
Net asset value, end of year ....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== =========
Total return* ...................... 5.07% 5.33% 4.92% 2.94% 3.02%
Ratios/supplemental data**:
Net assets, end of year
(000's omitted).................. $917,536 $763,972 $624,847 $556,982 $ 684,055
Ratio of expenses to average
net assets*...................... 0.55% 0.55% 0.55% 0.55% 0.53%
Ratio of net investment income
to average net assets ........... 4.96% 5.14% 4.86% 2.88% 2.97%
<CAPTION>
For the years ended June 30,
----------------------------------------------------------------------
1992 1991 1990 1989 1988
-------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income ........... 0.05 0.07 0.08 0.08 0.07
Dividends to shareholders
from net investment income ....... (0.05) (0.07) (0.08) (0.08) (0.07)
-------- -------- -------- -------- --------
Net asset value, end of year ....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return*....................... 4.79% 7.13% 8.29% 8.65% 6.75%
Ratios/supplemental data**:
Net assets, end of year
(000's omitted)................. $596,008 $648,501 $458,792 $457,407 $374,209
Ratio of expenses to average
net assets* .................... 0.53% 0.56% 0.58% 0.59% 0.60%
Ratio of net investment income
to average net assets............ 4.70% 6.83% 7.98% 8.33% 6.48%
</TABLE>
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* Had the expense reimbursement agreement, which commenced July 1, 1993, not
been in place, the ratio of expenses to average net assets, for the years
ended June 30, 1997, 1996, 1995 and 1994, would have been 0.55%, 0.56%,
0.56% and 0.55%, respectively. For the same periods, the total return of
the Fund would have been 5.07%, 5.32%, 4.90% and 2.94%, respectively. The
expense reimbursement agreement was terminated on July 1, 1997.
** Ratios include the Fund's share of Portfolio income and expenses, as
appropriate.
4
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INVESTMENT OBJECTIVE AND POLICIES
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The investment objective of the Fund and the Portfolio 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 and the Portfolio is a fundamental
policy and may be changed only with the approval of the holders of a "majority
of the outstanding voting securities" (as defined in the 1940 Act) of the Fund
or the Portfolio, as the case may be. (See "Additional Information" in this
Prospectus.) However, the investment policies as described below which are the
same for the Fund and the Portfolio are not fundamental and may be changed
without such approval.
Investments for the Portfolio mature or are deemed to mature within 397
days from the date of purchase and the average maturity of the investments held
by the Portfolio (on a dollar-weighted basis) is 90 days or less. Currently, the
Portfolio's investment policy is to invest only in money market instruments,
including U.S. Government securities and bank obligations (such as certificates
of deposit, fixed time deposits and bankers' acceptances), commercial paper,
repurchase agreements, reverse repurchase agreements, when-issued and delayed
delivery securities, bonds issued by U.S. corporations and obligations of
certain supranational organizations. (See Appendix for more information.) The
Portfolio does not invest more than 5% of its total assets in securities of a
single issuer other than U.S. Government securities. All of the assets of the
Portfolio are invested in securities which are rated within the highest rating
category for short-term debt obligations by at least two (unless only rated by
one) nationally recognized statistical rating organizations (e.g., Moody's
Investors Service, Inc. ("Moody's") and Standard & Poor's Corporation ("S&P"))
or, if unrated, are of comparable quality as determined by or under the
direction of the Portfolio's Board of Trustees.
Risk Factors
Although the assets of the Portfolio are invested in high quality
short-term securities, the Portfolio is subject to interest rate risk and credit
risk which causes fluctuations in the amount of income accrued on the
Portfolio's investments and therefore in the daily dividend paid by the Fund
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 response to
general changes in interest rates. Credit risk refers to the likelihood that an
issuer will default on interest and principal payments. High quality securities
of short maturities generally have relatively minimal credit risk.
Portfolio Brokerage
Although the Portfolio 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.
Money market 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 Portfolio are entered directly with the issuer or
from an underwriter or market maker for the securities involved. Purchases from
underwriters of securities may include a commission or concession paid by the
issuer to the underwriter, and purchases from dealers serving as market makers
may include a spread between the bid and asked price. The policy of the
Portfolio 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 Portfolio'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
5
<PAGE>
transactions with those brokers and dealers who also furnish research and other
services to the Portfolio 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 Portfolio 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
Portfolio. In some instances, this procedure might adversely affect the
Portfolio.
Other Investment Techniques
Loans of Portfolio Securities. Loans of portfolio securities up to 30% of
the total value of the Portfolio are permitted and may be entered into for not
more than one year. These loans must be secured continuously by cash or
equivalent collateral or by an irrevocable letter of credit in favor of the
Portfolio at least equal at all times to 100% of the market value of the
securities loaned plus accrued income. By lending securities, the Portfolio's
income can be increased by its continuing to receive income on the loaned
securities as well as by the opportunity to receive interest on the collateral.
Any appreciation or depreciation in the market price of the borrowed securities
which occurs during the term of the loan inures to the Portfolio and its
investors.
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 investment policies of the
Fund and the Portfolio. 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 outstanding voting securities" (as defined in the 1940 Act)
of the Fund or the Portfolio, as the case may be. (See "Additional Information"
in this Prospectus.)
Since the investment restrictions of the Fund correspond directly to those
of the Portfolio, the following is a discussion of the various investment
restrictions of the Portfolio.
As a fundamental policy, money is not borrowed by the Portfolio in an
amount in excess of 10% of its assets. It is intended that money will be
borrowed only from banks and only either to accommodate requests for the
withdrawal of part or all of an interest 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 Portfolio at any time
at which the amount of its borrowings exceed 5% of its net assets.)
As a non-fundamental policy, the Portfolio does not purchase more than 10%
of all outstanding debt obligations of any one issuer (other than securities
issued by the U.S. Government, its agencies or instrumentalities). In addition,
except for 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 or the
Portfolio, as the case may be, may be invested in securities that are subject to
legal or contractual restrictions on resale.
6
<PAGE>
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 or 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
================================================================================
Shares of the Fund are offered on a continuous basis at their net asset
value without a sales charge. The Trust reserves the right to determine the
purchase orders for Fund shares that it will accept. 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 an account with an Eligible Institution (see page 12)
or a Financial Intermediary (see page 12) may place purchase orders for Fund
shares with the Trust through that Eligible Institution or Financial
Intermediary, which holds such shares in its name on behalf of that customer
pursuant to arrangements made between that customer and that Eligible
Institution or Financial Intermediary. Each Eligible Institution and each
Financial Intermediary may establish and amend from time to time a minimum
initial and a minimum subsequent purchase requirement for its customers. Each
Eligible Institution or Financial Intermediary arranges payment for Fund shares
on behalf of its customers. A transaction fee may be charged by an Eligible
Institution or a Financial Intermediary on the purchase of Fund shares.
An investor who does not have an account with an Eligible Institution or a
Financial Intermediary 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 "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., as the Fund's Shareholder Servicing Agent, has
established a minimum initial purchase requirement for the Fund of $100,000 and
a minimum subsequent purchase requirement for the Fund of $25,000. These minimum
purchase requirements may be amended from time to time.
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., the Fund's Shareholder Servicing Agent. (See back cover
for address and phone number.)
REDEMPTION OF SHARES
================================================================================
A redemption request 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.
7
<PAGE>
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. A
shareholder continues to receive each daily dividend declared prior to the day
on which a redemption request is executed.
Shares held by an Eligible Institution or a Financial Intermediary on
behalf of a shareholder must be redeemed through that Eligible Institution or
Financial Intermediary pursuant to arrangements made between that shareholder
and that Eligible Institution or Financial Intermediary. Proceeds of a
redemption are paid to that shareholder's account at that Eligible Institution
or Financial Intermediary. A transaction fee may be charged by an Eligible
Institution or a Financial Intermediary on the redemption of Fund shares.
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 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 11), each Eligible
Institution and each Financial Intermediary (see page 12) 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., as the Fund's Shareholder Servicing Agent, has
established a minimum account size of $100,000.
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.
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.)
8
<PAGE>
MANAGEMENT OF THE TRUST AND THE PORTFOLIO
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Trustees and Officers
The Trust's Trustees, in addition to supervising the actions of the Trust's
Administrator and Distributor, as set forth below, decide upon matters of
general policy with respect to the Trust. The Portfolio's Trustees, in addition
to supervising the actions of the Portfolio's Investment Adviser and
Administrator, as set forth below, decide upon matters of general policy with
respect to the Portfolio. The Trust's Trustees are not the same individuals as
the Portfolio's Trustees.
Because of the services rendered to the Portfolio by the Investment Adviser
and to the Trust and the Portfolio by their respective Administrators, the Trust
and the Portfolio require no employees, and their respective officers, other
than the Chairmen, receive no compensation from the Fund or the Portfolio. (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
Vice Chairman-Finance and Operations of
The Interpublic Group of Companies
David P. Feldman
Retired, Chairman and Chief Executive Officer-
AT&T Investment Management
Corporation
Alan G. Lowy
Private Investor
Arthur D. Miltenberger
Vice President and Chief Financial Officer of
Richard K. Mellon and Sons
The Trustees of the Portfolio are:
H.B. Alvord
Retired, Former Treasurer and Tax Collector
of Los Angeles County
Richard L. Carpenter
Retired, Director of Internal Investments of
the Public School Employees' Retirement System
Clifford A. Clark
Retired, Former Senior Manager of
Brown Brothers Harriman & Co.
David M. Seitzman
Retired, Physician with Seitzman, Shuman,
Kwart and Phillips
Investment Adviser
The Investment Adviser to the Portfolio 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 Portfolio. Subject to the general supervision of the
Portfolio's Trustees, Brown Brothers Harriman & Co. makes the day-to-day
investment decisions, places the purchase and sale orders for portfolio
transactions, and generally manages the Portfolio'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, 1997, it managed total
assets of approximately $25 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
Portfolio an annual fee, computed daily and payable monthly, equal to 0.15% of
the average daily net assets of the Portfolio. Brown Brothers Harriman &
9
<PAGE>
Co. and its affiliates also receive annual administration fees from the Fund
equal to 0.075% of the average daily net assets of the Fund, annual
administration fees from the Portfolio equal to 0.035% of the average daily net
assets of the Portfolio, and an annual shareholder servicing/eligible
institution fee from the Fund equal to 0.225% of the average daily net assets of
the Fund represented by shares owned during the period by customers for whom
Brown Brothers Harriman & Co. is the holder or agent of record.
The investment advisory services of Brown Brothers Harriman & Co. to the
Portfolio 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.
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 Trust 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".
Administrators
Brown Brothers Harriman & Co. acts as Administrator of the Trust and Brown
Brothers Harriman Trust Company (Cayman) Limited acts as Administrator of the
Portfolio. (See "Administrators" in the Statement of Additional Information.)
Brown Brothers Harriman Trust Company (Cayman) Limited is a wholly-owned
subsidiary of Brown Brothers Harriman Trust Company of New York, which is a
wholly-owned subsidiary of Brown Brothers Harriman & Co.
In its capacity as Administrator of the Trust, 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 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 Fund and reports to
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 of the Trust, Brown Brothers Harriman
& Co. receives from the Fund an annual fee, computed daily and payable monthly,
equal to 0.075% of the Fund's average daily net assets.
Brown Brothers Harriman Trust Company (Cayman) Limited, in its capacity as
Administrator
10
<PAGE>
of the Portfolio, administers all aspects of the Portfolio's operations subject
to the supervision of the Portfolio's Trustees except as set forth above under
"Investment Adviser". In connection with its responsibilities as Administrator
for the Portfolio and at its own expense, Brown Brothers Harriman Trust Company
(Cayman) Limited (i) provides the Portfolio 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 Portfolio,
including the maintenance of certain books and records, receiving and processing
requests for increases and decreases in the beneficial interests in the
Portfolio, notification to the Investment Adviser of available funds for
investment, reconciliation of account information and balances between the
Custodian and the Investment Adviser, and processing, investigating and
responding to investor inquiries; (ii) oversees the performance of
administrative and professional services to the Portfolio by others, including
the Custodian; (iii) provides the Portfolio 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 Portfolio's
registration statement for filing with the Securities and Exchange Commission,
and the preparation of tax returns for the Portfolio and reports to investors
and the Securities and Exchange Commission.
For the services rendered to the Portfolio and related expenses borne by
Brown Brothers Harriman Trust Company (Cayman) Limited as Administrator of the
Portfolio, Brown Brothers Harriman Trust Company (Cayman) Limited receives from
the Portfolio an annual fee, computed daily and payable monthly, equal to 0.035%
of the Portfolio'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.
Pursuant to a Subadministrative Services Agreement with Brown Brothers
Harriman Trust Company (Cayman) Limited, SFG-Cayman performs such
subadministrative duties for the Portfolio as are from time to time agreed upon
by the parties. The offices of SFG-Cayman are located at Elizabethan Square,
George Town, Grand Cayman BWI. SFG-Cayman is a wholly-owned subsidiary of SFG.
SFG-Cayman's subadministrative duties may include providing equipment and
clerical personnel necessary for maintaining the organization of the Portfolio,
participation in the preparation of documents required for compliance by the
Portfolio with applicable laws and regulations, preparation of certain documents
in connection with meetings of Trustees of and investors in the Portfolio, and
other functions that would otherwise be performed by the Administrator of the
Portfolio as set forth above. For performing such subadministrative services,
SFG-Cayman receives such compensation as is from time to time agreed upon, but
not in excess of the amount paid to the Administrator from the Portfolio.
Shareholder Servicing Agent
The Trust has entered into a shareholder servicing agreement with Brown
Brothers Harriman & Co. pursuant to which Brown Brothers Harriman
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<PAGE>
& Co., as 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.
Financial Intermediaries
From time to time, the Fund's Shareholder Servicing Agent enters into
contracts with banks, brokers and other financial intermediaries ("Financial
Intermediaries") pursuant to which a customer of the Financial Intermediary may
place purchase orders for Fund shares through that Financial Intermediary which
holds such shares in its name on behalf of that customer. Pursuant to such
contract, each Financial Intermediary as agent with respect to shareholders of
and prospective investors in the Fund who are customers of that Financial
Intermediary, 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, the Financial Intermediary receives such fees from the
Shareholder Servicing Agent as may be agreed upon from time to time between the
Shareholder Servicing Agent and such Financial Intermediary.
Eligible Institutions
The Trust enters into eligible institution agreements with banks, brokers
and other financial institutions pursuant to which that financial institution,
as agent for the Trust with respect to shareholders of and prospective investors
in the Fund who are customers of that financial institution 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
12
<PAGE>
services, each financial institution 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 the financial institution was the
holder or agent of record.
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 ("State Street" or the "Custodian"),
225 Franklin Street, P.O. Box 351, Boston, Massachusetts 02110, is the Custodian
for the Fund and the Portfolio and Transfer and Dividend Disbursing Agent for
the Fund.
As Custodian for the Fund, it is responsible for holding the Fund's assets
(i.e., cash and the Fund's interest in the Portfolio) 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 of the Trust,
the Custodian maintains the accounting records for the Fund and each day
computes the net asset value and net income per share of the Fund. As Transfer
and Dividend Disbursing Agent it is responsible for maintaining the books and
records detailing ownership of the Fund's shares.
As Custodian for the Portfolio, it is responsible for maintaining books and
records of portfolio transactions and holding the Portfolio's securities and
cash pursuant to a custodian agreement with the Portfolio. Cash is held for the
Portfolio in demand deposit accounts at the Custodian. Subject to the
supervision of the Administrator of the Portfolio, the Custodian maintains the
accounting and portfolio transaction records for the Portfolio and each day
computes the net asset value and net income of the Portfolio.
Independent Auditors
Deloitte & Touche LLP, Boston, Massachusetts are the independent auditors
for the Fund. Deloitte & Touche, Grand Cayman are the independent auditors of
the Portfolio.
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 (i.e., the value of
its investment in the Portfolio and other assets) 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 value of the Fund's investment in the Portfolio is also 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 value of the Fund's investment in the Portfolio is
made by subtracting from the value of the total assets of the Portfolio
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<PAGE>
the amount of the Portfolio's liabilities and multiplying the difference by the
percentage, effective for that day, which represents the Fund's share of the
aggregate beneficial interests in the Portfolio.
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 securities held by
the Portfolio 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 Portfolio
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) all income accrued on the assets of
the Fund (i.e., the Fund's pro rata share of the net income of the Portfolio),
less (ii) all actual and accrued expenses of the Fund. (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 of the Fund 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 a 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 whose shares are held directly in the shareholder's
name on the books of the Trust elects to have dividends paid in cash, dividends
are automatically reinvested in additional Fund shares without reference to the
minimum subsequent purchase requirement. Such shareholder who elects to have
dividends paid in cash receives a check in the amount of such dividends. 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.
Each Eligible Institution and each Financial Intermediary may establish its
own policy with respect to the reinvestment of dividends in additional Fund
shares. The net income and capital gains and losses, if any, of the Portfolio
are determined at 4:00 P.M., New York time on each business day. Net income for
days other than business days is determined as of 4:00 P.M., New York time on
the immediately preceding business day. All the net income, as defined below,
and capital gains and losses, if any, so determined are allocated pro rata among
the Fund and the other investors in the Portfolio at the time of such
determination.
For this purpose the net income of the Portfolio (from the time of the
immediately preceding determination thereof) consists of (i) accrued interest,
accretion of discount and amortization of premium on securities held by the
Portfolio, less (ii) all actual and accrued expenses of the Portfolio (including
the fees payable to the Investment Adviser and Administrator of the Portfolio).
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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. The Portfolio is also not required to pay any federal income or
excise taxes.
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
The treatment of the Fund and its shareholders in those states which have
income tax laws might differ from treatment under the federal income tax laws.
Distributions to shareholders may be subject to additional state and local
taxes. Shareholders are urged to consult their tax advisors regarding any state
or local taxes.
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 of the Trust may divide or
combine the shares into a greater or lesser number of shares without thereby
changing the proportionate
15
<PAGE>
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 of the Trust themselves have the power to alter the number and
the terms of office of the Trustees of the Trust, 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 of the Trust 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 by the Trust, except as set forth below. It is the
intention of the Trust not to hold meetings of shareholders annually. The
Trustees of the Trust 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 of the Trust 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 of the
Trust. Shareholders also have the right to remove one or more Trustees of the
Trust 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 Trust's Declaration of Trust provides that, at any meeting of
shareholders of the Fund, each Eligible Institution may vote any shares as to
which that Eligible Institution 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 that Eligible Institution is the
agent of record. Any shares so voted by an Eligible Institution 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.
The Portfolio, in which all of the assets of the Fund are invested, is
organized as a trust under the law of the State of New York. The Portfolio's
Declaration of Trust provides that the Fund and other entities investing in the
Portfolio (e.g., other investment companies, insurance company separate accounts
and common and commingled trust funds) are each liable for all obligations of
the Portfolio. However, the risk of the Fund incurring financial loss on account
of such liability is limited to circumstances in which both inadequate insurance
existed and the Portfolio itself was unable to meet its obligations.
16
<PAGE>
Accordingly, the Trustees of the Trust believe that neither the Fund nor its
shareholders will be adversely affected by reason on the investment of all of
the assets of the Fund in the Portfolio.
Each investor in the Portfolio, including the Fund, may add to or reduce
its investment in the Portfolio on each day the New York Stock Exchange is open
for regular trading and New York banks are open for business. At 4:00 P.M., New
York time on each such business day, the value of each investor's beneficial
interest in the Portfolio is determined by multiplying the net asset value of
the Portfolio by the percentage, effective for that day, which represents that
investor's share of the aggregate beneficial interests in the Portfolio. Any
additions or withdrawals, which are to be effected on that day, are then
effected. The investor's percentage of the aggregate beneficial interests in the
Portfolio is then recomputed as the percentage equal to the fraction (i) the
numerator of which is the value of such investor's investment in the Portfolio
as of 4:00 P.M., New York time on such day plus or minus, as the case may be,
the amount of any additions to or withdrawals from the investor's investment in
the Portfolio effected on such day, and (ii) the denominator of which is the
aggregate net asset value of the Portfolio as of 4:00 P.M., New York time on
such day plus or minus, as the case may be, the amount of the net additions to
or withdrawals from the aggregate investments in the Portfolio by all investors
in the Portfolio. The percentage so determined is then applied to determine the
value of the investor's interest in the Portfolio as of 4:00 P.M., New York time
on the following business day of the Portfolio.
Whenever the Trust is requested to vote on a matter pertaining to the
Portfolio, the Trust will vote its shares without a meeting of shareholders of
the Fund if the proposal is one, if which made with respect to the Fund, would
not require the vote of shareholders of the Fund as long as such action is
permissible under applicable statutory and regulatory requirements. For all
other matters requiring a vote, the Trust will hold a meeting of shareholders of
the Fund and, at the meeting of investors in the Portfolio, the Trust will cast
all of its votes in the same proportion as the votes of the Fund's shareholders
even if all Fund shareholders did not vote. Even if the Trust votes all its
shares at the Portfolio meeting, other investors with a greater pro rata
ownership in the Portfolio could have effective voting control of the operations
of the Portfolio.
ADDITIONAL INFORMATION
================================================================================
As used in this Prospectus, the term "majority of the outstanding voting
securities" (as defined in the 1940 Act) currently means the vote of (i) 67% or
more of the outstanding voting securities present at a meeting, if the holders
of more than 50% of the outstanding voting securities are present in person or
represented by proxy; or (ii) more than 50% of the 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.
Other mutual funds or institutional investors may invest in the Portfolio
on the same terms and conditions as the Fund. However, these other investors may
have different operating expenses which may generate different aggregate
performance results. Information concerning other investors in the Portfolio is
available from Brown Brothers Harriman & Co. (See the back cover for the address
and phone number.)
The Trust may withdraw the Fund's investment in the Portfolio as a result
of certain changes in the Portfolio's investment objective, policies or
restrictions or if the Board of Trustees of the Trust determines that it is
otherwise in the best interests of the Fund to do so. Upon any such withdrawal,
the Board of Trustees of the Trust would consider
17
<PAGE>
what action might be taken, including the investment of all of the assets of the
Fund in another pooled investment entity or the retaining of an investment
adviser to manage the Fund's assets in accordance with the investment policies
described below with respect to the Portfolio. In the event the Trustees of the
Trust were unable to accomplish either, the Trustees will determine the best
course of action.
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 (such as 1-month LIBOR) and to investments for which
reliable performance data is available. Performance information may also include
comparisons to averages, performance rankings or other information prepared by
recognized mutual fund statistical services. 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.
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.
18
<PAGE>
APPENDIX
================================================================================
This Appendix is intended to provide descriptions of the short-term
securities the Portfolio may purchase. However, other such securities not
mentioned below may be purchased for the Portfolio if they meet the quality and
maturity guidelines set forth in the Portfolio's investment policies.
================================================================================
U.S. Government Securities
Assets of the Portfolio may be invested in securities issued or guaranteed
by the U.S. Government, its agencies or instrumentalities. These securities,
including those which are guaranteed by federal agencies or instrumentalities,
may or may not be backed by the "full faith and credit" of the United States. In
the case of securities not backed by the full faith and credit of the United
States, it may not be possible to assert a claim against the United States
itself in the event the agency or instrumentality issuing or guaranteeing the
security for ultimate repayment does not meet its commitments. Securities which
are not backed by the full faith and credit of the United States include, but
are not limited to, securities of the Tennessee Valley Authority, the Federal
National Mortgage Association (FNMA), the U.S. Postal Service and the Resolution
Funding Corporation (REFCORP), each of which has a limited right to borrow from
the U.S. Treasury to meet its obligations, and securities of the Federal Farm
Credit System, the Federal Home Loan Banks, the Federal Home Loan Mortgage
Corporation (FHLMC) and the Student Loan Marketing Association, the obligations
of each of which may be satisfied only by the individual credit of the issuing
agency. Securities which are backed by the full faith and credit of the United
States include Treasury bills, Treasury notes, Treasury bonds and pass through
obligations of the Government National Mortgage Association (GNMA), the Farmers
Home Administration and the Export-Import Bank. There is no percentage
limitation with respect to investments in U.S. Government securities.
Bank Obligations
Assets of the Portfolio may be invested in U.S. dollar-denominated
negotiable certificates of deposit, fixed time deposits and bankers' acceptances
of banks, savings and loan associations and savings banks organized under the
laws of the United States or any state thereof, including obligations of
non-U.S. branches of such banks, or of non-U.S. banks or their U.S. or non-U.S.
branches, provided that in each case, such bank has more than $500 million in
total assets, and has an outstanding short-term debt issue rated within the
highest rating category for short-term debt obligations by at least two (unless
only rated by one) nationally recognized statistical rating organizations (e.g.,
Moody's and S&P) or, if unrated, are of comparable quality as determined by or
under the direction of the Portfolio's Board of Trustees. See "Bond, Note and
Commercial Paper Ratings" in the Statement of Additional Information. There is
no additional percentage limitation with respect to investments in negotiable
certificates of deposit, fixed time deposits and bankers' acceptances of U.S.
branches of U.S. banks and U.S. branches of non-U.S. banks that are subject to
the same regulation as U.S. banks. Since the Portfolio may contain U.S.
dollar-denominated certificates of deposit, fixed time deposits and bankers'
acceptances that are issued by non-U.S. banks and their non-U.S. branches, the
Portfolio may be subject to additional investment risks with respect to those
securities that are different in some respects from obligations of U.S. issuers,
such as currency exchange control regulations, the possibility of expropriation,
seizure or nationalization of non-U.S. deposits, less liquidity and more
volatility in non-U.S. securities markets and the impact of political, social or
diplomatic developments or the adoption of other foreign government restrictions
which might adversely affect the payment of principal and interest on securities
held by the Portfolio. If it should become necessary, greater difficulties might
be encountered in invoking legal processes abroad than would be the case in the
United
19
<PAGE>
States. Issuers of non-U.S. bank obligations may be subject to less stringent or
different regulations than are U.S. bank issuers, there may be less publicly
available information about a non-U.S. issuer, and non-U.S. issuers generally
are not subject to uniform accounting and financial reporting standards,
practices and requirements comparable to those applicable to U.S. issuers.
Income earned or received by the Portfolio from sources within countries other
than the United States may be reduced by withholding and other taxes imposed by
such countries. Tax conventions between certain countries and the United States,
however, may reduce or eliminate such taxes. All such taxes paid by the
Portfolio would reduce its net income available for distribution to investors
(i.e., the Fund and other investors in the Portfolio); however, the Investment
Adviser would consider available yields, net of any required taxes, in selecting
securities of non-U.S. issuers. While early withdrawals are not contemplated,
fixed time deposits are not readily marketable and may be subject to early
withdrawal penalties, which may vary. Assets of the Portfolio are not invested
in obligations of Brown Brothers Harriman & Co., or the Distributor, or in the
obligations of the affiliates of any such organization. Assets of the Portfolio
are also not invested in fixed time deposits with a maturity of over seven
calendar days, or in fixed time deposits with a maturity of from two business
days to seven calendar days if more than 10% of the Portfolio's net assets would
be invested in such deposits.
Commercial Paper
Assets of the Portfolio may be invested in commercial paper including
variable rate demand master notes issued by U.S. corporations or by non-U.S.
corporations which are direct parents or subsidiaries of U.S. corporations.
Master notes are demand obligations that permit the investment of fluctuating
amounts at varying market rates of interest pursuant to arrangements between the
issuer and a U.S. commercial bank acting as agent for the payees of such notes.
Master notes are callable on demand, but are not marketable to third parties.
Consequently, the right to redeem such notes depends on the borrower's ability
to pay on demand. At the date of investment, commercial paper must be rated
within the highest rating category for short-term debt obligations by at least
two (unless only rated by one) nationally recognized statistical rating
organizations (e.g., Moody's and S&P) or, if unrated, are of comparable quality
as determined by or under the direction of the Portfolio's Board of Trustees.
Any commercial paper issued by a non-U.S. corporation must be U.S.
dollar-denominated and not subject to non-U.S. withholding tax at the time of
purchase. Aggregate investments in non-U.S. commercial paper of non-U.S. issuers
cannot exceed 10% of the Portfolio's net assets. Since the Portfolio may contain
commercial paper issued by non-U.S. corporations, it may be subject to
additional investment risks with respect to those securities that are different
in some respects from obligations of U.S. issuers, such as currency exchange
control regulations, the possibility of expropriation, seizure or
nationalization of non-U.S. deposits, less liquidity and more volatility in
non-U.S. securities markets and the impact of political, social or diplomatic
developments or the adoption of other foreign government restrictions which
might adversely affect the payment of principal and interest on securities held
by the Portfolio. If it should become necessary, greater difficulties might be
encountered in invoking legal processes abroad than would be the case in the
United States. There may be less publicly available information about a non-U.S.
issuer, and non-U.S. issuers generally are not subject to uniform accounting and
financial reporting standards, practices and requirements comparable to those
applicable to U.S. issuers.
Repurchase Agreements
Repurchase agreements may be entered into for the Portfolio only with a
"primary dealer" (as designated by the Federal Reserve Bank of New York) in U.S.
Government securities. This is an agreement in which the seller (the "Lender")
of a security agrees to repurchase from the Portfolio the security sold at a
mutually agreed upon time and price. As such, it is viewed as the lending of
money to the Lender. The resale price normally is in excess of the purchase
price, reflecting an agreed upon interest rate. The rate is effective for the
period of time assets of the Portfolio are invested in the agreement and is not
related to the coupon rate on the underlying
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security. The period of these repurchase agreements is usually short, from
overnight to one week, and at no time are assets of the Portfolio invested in a
repurchase agreement with a maturity of more than one year. The securities which
are subject to repurchase agreements, however, may have maturity dates in excess
of one year from the effective date of the repurchase agreement. The Portfolio
always receives as collateral securities which are issued or guaranteed by the
U.S. Government, its agencies or instrumentalities. Collateral is marked to the
market daily and has a market value including accrued interest at least equal to
100% of the dollar amount invested on behalf of the Portfolio in each agreement
along with accrued interest. Payment for such securities is made for the
Portfolio only upon physical delivery or evidence of book entry transfer to the
account of State Street Bank and Trust Company, the Portfolio's Custodian. If
the Lender defaults, the Portfolio might incur a loss if the value of the
collateral securing the repurchase agreement declines and might incur
disposition costs in connection with liquidating the collateral. In addition, if
bankruptcy proceedings are commenced with respect to the Lender, realization
upon the collateral on behalf of the Portfolio may be delayed or limited in
certain circumstances. A repurchase agreement with more than seven days to
maturity may not be entered into for the Portfolio if, as a result, more than
10% of the Portfolio's net assets would be invested in such repurchase agreement
together with any other investment for which market quotations are not readily
available.
Reverse Repurchase Agreements
Reverse repurchase agreements may be entered into only with a "primary
dealer" (as designated by the Federal Reserve Bank of New York) in U.S.
Government securities. This is an agreement in which the Portfolio agrees to
repurchase securities sold by it at a mutually agreed upon time and price. As
such, it is viewed as the borrowing of money for the Portfolio. Proceeds of
borrowings under reverse repurchase agreements are invested for the Portfolio.
This is the speculative factor known as "leverage". If interest rates rise
during the term of a reverse repurchase agreement utilized for leverage, the
value of the securities to be repurchased for the Portfolio as well as the value
of securities purchased with the proceeds will decline. In these circumstances,
the Portfolio's entering into reverse repurchase agreements may have a negative
impact on the ability to maintain the Fund's net asset value of $1.00 per share.
Proceeds of a reverse repurchase transaction are not invested for a period which
exceeds the duration of the reverse repurchase agreement. A reverse repurchase
agreement is not entered into for the Portfolio if, as a result, more than
one-third of the market value of the Portfolio's total assets, less liabilities
other than the obligations created by reverse repurchase agreements, is engaged
in reverse repurchase agreements. In the event that such agreements exceed, in
the aggregate, one-third of such market value, the amount of the Portfolio's
obligations created by reverse repurchase agreements is reduced within three
days thereafter (not including weekends and holidays) or such longer period as
the Securities and Exchange Commission may prescribe, to an extent that such
obligations do not exceed, in the aggregate, one-third of the market value of
the Portfolio's assets, as defined above. A segregated account with the
Custodian is established and maintained for the Portfolio with liquid assets in
an amount at least equal to the Portfolio's purchase obligations under its
reverse repurchase agreements. Such a segregated account consists of liquid high
grade debt securities marked to the market daily, with additional liquid assets
added when necessary to insure that at all times the value of such account is
equal to the purchase obligations.
When-Issued and Delayed Delivery Securities
Securities may be purchased for the Portfolio on a when-issued or delayed
delivery basis. For example, delivery and payment may take place a month or more
after the date of the transaction. The purchase price and the interest rate
payable on the securities are fixed on the transaction date. The securities so
purchased are subject to market fluctuation and no interest accrues to the
Portfolio until delivery and payment take place. At the time the commitment to
purchase securities for the Portfolio on a when-issued
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or delayed delivery basis is made, the transaction is recorded and thereafter
the value of such securities is reflected each day in determining the
Portfolio's net asset value. At the time of its acquisition, a when-issued
security may be valued at less than the purchase price. Commitments for such
when-issued securities are made only when there is an intention of actually
acquiring the securities. To facilitate such acquisitions, a segregated account
with the Custodian is maintained for the Portfolio with liquid assets in an
amount at least equal to such commitments. Such a segregated account consists of
liquid high grade debt securities marked to the market daily, with additional
liquid assets added when necessary to insure that at all times the value of such
account is equal to the commitments. On delivery dates for such transactions,
such obligations are met from maturities or sales of the securities held in the
segregated account and/or from cash flow. If the right to acquire a when-issued
security is disposed of prior to its acquisition, the Portfolio could, as with
the disposition of any other portfolio obligation, incur a gain or loss due to
market fluctuation. When-issued commitments for the Portfolio may not be entered
into if such commitments exceed in the aggregate 15% of the market value of the
Portfolio's total assets, less liabilities other than the obligations created by
when-issued commitments.
Other Obligations
Assets of the Portfolio may be invested in bonds, with maturities not
exceeding one year, issued by U.S. corporations which at the date of investment
are rated within the highest rating category for such obligations by at least
two (unless only rated by one) nationally recognized statistical rating
organizations (e.g., Moody's and S&P) or, if unrated, are of comparable quality
as determined by or under the direction of the Portfolio's Board of Trustees.
Assets of the Portfolio may also be invested in obligations of the
International Bank for Reconstruction and Development which may be supported by
appropriated but unpaid commitments of its member countries, although there is
no assurance that these commitments will be undertaken in the future. However,
assets of the Portfolio may not be invested in obligations of the Inter-American
Development Bank or the Asian Development Bank.
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The 59 Wall Street Trust
Investment Adviser and
Administrator of the Trust
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
(800) 625-5759
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.
