<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 29, 1997.
FILE NO. 2-97111
FILE NO. 811-4283
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 20 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 22 /X/
------------------------
SEI INDEX FUNDS
(Exact Name of Registrant as Specified in Charter)
C/O CT CORPORATION
2 OLIVER STREET
BOSTON, MASSACHUSETTS 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (800) 932-7781
DAVID G. LEE
C/O SEI INVESTMENTS COMPANY
OAKS, PENNSYLVANIA 19456
(Name and Address of Agent for Service)
------------------------
COPIES TO:
RICHARD W. GRANT, ESQUIRE JOHN H. GRADY, JR., ESQUIRE
Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP
2000 One Logan Square 1800 M Street, N.W.
Philadelphia, Pennsylvania 19103 Washington, D.C. 20036
------------------------
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
PROPOSED MAXIMUM AMOUNT OF
AMOUNT BEING OFFERING PRICE AGGREGATE
TITLE OF SECURITIES BEING REGISTERED REGISTERED PER UNIT OFFERING PRICE(1)
<S> <C> <C> <C>
Shares of Beneficial Interest............................ $30,260,207 $29.71 $30,260,207
</TABLE>
(1) Registrant has calculated the maximum aggregate offering price pursuant to
Rule 24e-2 under the Investment Company Act of 1940 (the "1940 Act") for
fiscal year ended March 31, 1997. Registrant had actual aggregate
redemptions of $352,404,661 for its fiscal year ended March 31, 1997; has
used $322,144,454 of available redemptions for reductions pursuant to Rule
24f-2(c) under the 1940 Act and has previously used no available redemptions
for reductions pursuant to Rule 24e-2(a) of the 1940 Act during the current
year. Registrant elects to use redemptions in the aggregate amount of
$30,260,207 for reductions in its current amendment.
------------------------
/X/ immediately upon filing pursuant to paragraph (b)
/ / on [date] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on [date] pursuant to paragraph (a) of Rule 485.
------------------------
REGISTRANT HAS ELECTED TO MAINTAIN REGISTRATION OF AN INDEFINITE NUMBER OF
SHARES PURSUANT TO RULE 24f-2 UNDER THE INVESTMENT COMPANY ACT OF 1940.
REGISTRANT'S RULE 24f-2 NOTICE FOR FISCAL YEAR ENDED MARCH 31, 1997 WAS FILED ON
MAY 21, 1997.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SEI INDEX FUNDS
CROSS REFERENCE SHEET
POST-EFFECTIVE AMENDMENT NO. 20
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
<C> <S> <C>
PART A--S&P 500 INDEX AND BOND INDEX PORTFOLIOS
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Annual Operating Expenses
Item 3. Condensed Financial Information.................. Financial Highlights
Item 4. General Description of Registrant................ The Trust; Investment Objectives and Policies;
General Investment Policies; General
Information; Investment Limitations;
Description of Permitted Investments and Risk
Factors
Item 5. Management of the Fund........................... General Information; The Advisers; The Manager;
Distribution and Shareholder Servicing
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... Taxes; General Information;
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
PART A--S&P 500 INDEX PORTFOLIO CLASS E
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Annual Operating Expenses
Item 3. Condensed Financial Information.................. Financial Highlights
Item 4. General Description of Registrant................ The Trust; Investment Objectives and Policies;
General Investment Policies; General
Information; Investment Limitations;
Description of Permitted Investments and Risk
Factors
Item 5. Management of the Fund........................... General Information; The Adviser; The Manager;
Distribution and Shareholder Servicing
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... Taxes; General Information
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
PART B--ALL PORTFOLIOS
Item 10. Cover Page....................................... Cover Page
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
<C> <S> <C>
Item 11. Table of Contents................................ Table of Contents
Item 12. General Information and History.................. The Trust
Item 13. Investment Objectives and Policies............... Description of Permitted Investments; Investment
Limitations
Item 14. Management of the Registrant..................... Trustees and Officers of the Trust; The Advisers
Item 15. Control Persons and Principal Holders of
Securities..................................... Trustees and Officers of the Trust; 5%
Shareholders
Item 16. Investment Advisory and Other Services........... The Advisers; Distributor and Shareholder
Servicing; Experts; The Manager and The
Transfer Agent; Custodian and Independent
Public Accountant
Item 17. Brokerage Allocation............................. Portfolio Transactions; Trading Practices and
Brokerage
Item 18. Capital Stock and Other Securities............... Description of Shares
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered.................................. Purchase and Redemption of Shares; Description of
Shares; Determination of Net Asset Value
Item 20. Tax Status....................................... Taxes
Item 21. Underwriters..................................... Distribution and Shareholder Servicing
Item 22. Calculation of Yield Quotations.................. Performance
Item 23. Financial Statements............................. Financial Information
PART C
Information required to be included in Part C is set forth under the appropriate item, so numbered, in Part C of
the Registration Statement.
</TABLE>
- ------------------------
*Not Applicable
**Information required by Item 5A is contained in the Annual Report for the
fiscal year ending March 31, 1997.
ii
<PAGE>
SEI INDEX FUNDS
JULY 31, 1997
- --------------------------------------------------------------------------------
S&P 500 INDEX PORTFOLIO
- --------------------------------------------------------------------------------
This Prospectus concisely sets forth information about the above-referenced
Portfolio that an investor needs to know before investing. Please read this
Prospectus carefully, and keep it on file for future reference.
A Statement of Additional Information dated July 31, 1997, has been filed with
the Securities and Exchange Commission, and is available upon request and
without charge by writing the Distributor, SEI Investments Distribution Co.,
Oaks, Pennsylvania 19456, or by calling 1-800-342-5734. The Statement of
Additional Information is incorporated by reference into this Prospectus.
SEI Index Funds (the "Trust") is an open-end management investment company,
certain classes of which offer financial institutions a convenient means of
investing their own funds, or funds for which they act in a fiduciary, agency or
custodial capacity, in professionally managed diversified portfolios of
securities. Each Portfolio may offer separate classes of shares that differ from
each other primarily in the allocation of certain shareholder servicing
expenses. This Prospectus offers Class E shares of the Trust's S&P 500 Index
Portfolio (the "Portfolio").
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION. NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THE TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) CLASS E
SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P 500
INDEX
---------
<S> <C> <C>
Management/Advisory Fees (AFTER FEE WAIVER) (1) .19%
12b-1 Fees None
Total Other Expenses .06%
Shareholder Servicing Expenses (after fee waiver) (2) .00%
- --------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (AFTER FEE WAIVERS) (3) .25%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) THE MANAGER HAS WAIVED, ON A VOLUNTARY BASIS, A PORTION OF ITS FEE, AND THE
MANAGEMENT/ADVISORY FEES SHOWN REFLECT THIS VOLUNTARY WAIVER. THE MANAGER
RESERVES THE RIGHT TO TERMINATE ITS WAIVER AT ANY TIME IN ITS SOLE
DISCRETION. ABSENT SUCH FEE WAIVER, MANAGEMENT/ADVISORY FEES FOR THE
PORTFOLIO WOULD BE .25%.
(2) THE DISTRIBUTOR HAS WAIVED, ON A VOLUNTARY BASIS, ALL OF ITS SHAREHOLDER
SERVICING FEE, AND THE SHAREHOLDER SERVICING EXPENSES SHOWN REFLECT THIS
WAIVER. THE DISTRIBUTOR RESERVES THE RIGHT TO TERMINATE ITS WAIVER AT ANY
TIME IN ITS SOLE DISCRETION. ABSENT SUCH WAIVER, SHAREHOLDER SERVICING
EXPENSES WOULD BE .25% FOR THE PORTFOLIO.
(3) ABSENT FEE WAIVERS, TOTAL OPERATING EXPENSES FOR THE PORTFOLIO WOULD BE
.55%. ADDITIONAL INFORMATION MAY BE FOUND UNDER "THE ADVISER" AND "THE
MANAGER."
EXAMPLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YR. 3 YRS. 5 YRS. 10 YRS.
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
An investor in a Portfolio would pay the following expenses on a $1,000
investment assuming (1) a 5% annual return and (2) redemption at the end of
each time period: $ 3 $ 8 $ 14 $ 32
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE PURPOSE
OF THE EXPENSE TABLE AND EXAMPLE IS TO ASSIST THE INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT MAY BE DIRECTLY OR INDIRECTLY BORNE BY INVESTORS
IN CLASS E SHARES OF THE PORTFOLIO. A PERSON WHO PURCHASES SHARES THROUGH A
FINANCIAL INSTITUTION MAY BE CHARGED SEPARATE FEES BY THAT INSTITUTION. THE
PORTFOLIO ALSO OFFERS CLASS A SHARES, WHICH ARE SUBJECT TO THE SAME EXPENSES,
EXCEPT THERE ARE DIFFERENT SHAREHOLDER SERVICING COSTS. ADDITIONAL INFORMATION
MAY BE FOUND UNDER "THE MANAGER," "THE ADVISER" AND "DISTRIBUTION AND
SHAREHOLDER SERVICING."
2
<PAGE>
FINANCIAL HIGHLIGHTS
______________________________________________________________
The following information has been audited by Arthur Andersen LLP, the Trust's
independent accountants, as indicated in their report dated May 2, 1997, on the
Trust's financial statements as of March 31, 1997, which are incorporated by
reference into the Trust's Statement of Additional Information. The Trust's
financial statements and additional performance information are set forth in the
1997 Annual Report to Shareholders, which is available upon request and without
charge by calling 1-800-342-5734. This table should be read in conjunction with
the Trust's financial statements and notes thereto.
<TABLE>
<CAPTION>
FOR A CLASS E SHARE OUTSTANDING THROUGHOUT THE PERIOD INCOME FROM
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
---------------------------- -------------------------------------
NET ASSET NET REALIZED AND DIVIDENDS
VALUE NET UNREALIZED GAIN TOTAL FROM FROM NET DISTRIBUTIONS RETURNS
BEGINNING INVESTMENT (LOSS) INVESTMENT INVESTMENT FROM CAPITAL OF
OF PERIOD INCOME ON INVESTMENTS OPERATIONS INCOME GAINS CAPITAL
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
- --------------------------
S&P 500 INDEX PORTFOLIO**
- --------------------------
For the periods ended March 31,
1997 $ 20.88 $0.46 $ 3.54 $ 4.00 $(0.45) $(0.33) --
1996 16.40 0.44 4.72 5.16 (0.37) (0.31) --
1995 15.07 0.42 1.79 2.21 (0.42) (0.46) --
1994 15.80 0.43 (0.22) 0.21 (0.42) (0.52) --
1993 14.17 0.40 1.69 2.09 (0.40) (0.06) --
1992 13.43 0.40 1.01 1.41 (0.41) (0.26) --
1991 12.45 0.43 1.24 1.67 (0.43) (0.26) --
1990 10.88 0.42 1.64 2.06 (0.43) (0.06) --
1989 9.63 0.39 1.26 1.65 (0.40) -- --
1988 12.68 0.43 (1.65) (1.22) (0.45) (1.38) --
1987 12.45 0.42 2.63 3.05 (0.38) (2.44) --
1986(1) 10.00 0.29 2.37 2.66 (0.21) -- --
<CAPTION>
NET ASSET
TOTAL VALUE, END
DISTRIBUTIONS OF PERIOD
<S> <C>
- -----------------------------------
- --------------------------
S&P 500 INDEX PORTFOLIO**
- --------------------------
For the periods ended March 31,
1997 $ (.78) $ 24.10
1996 (0.68) 20.88
1995 (0.88) 16.40
1994 (0.94) 15.07
1993 (0.46) 15.80
1992 (0.67) 14.17
1991 (0.69) 13.43
1990 (0.49) 12.45
1989 (0.40) 10.88
1988 (1.83) 9.63
1987 (2.82) 12.68
1986(1) (0.21) 12.45
<CAPTION>
RATIOS AND SUPPLEMENTAL DATA
FOR A CLASS E SHARE OUTSTANDING THR --------------------------------------------------------------------
RATIO OF RATIO OF NET
EXPENSES INVESTMENT
TO AVERAGE NET INCOME TO
RATIO OF NET ASSETS INVESTMENT AVERAGE NET
NET ASSETS EXPENSES (EXCLUDING INCOME TO ASSETS PORTFOLIO
TOTAL END OF TO AVERAGE FEE AVERAGE NET (EXCLUDING TURNOVER
RETURN PERIOD (000) NET ASSETS WAIVERS) ASSETS FEE WAIVERS) RATE
- -----------------------------------
- --------------------------
S&P 500 INDEX PORTFOLIO**
- --------------------------
For the periods ended March 31,
1997 19.46% $ 835,889 0.25% 0.54% 2.03% 1.74% 2%
1996 31.88 630,566 0.25 0.35 2.31 2.21 3
1995 15.26 458,012 0.25 0.35 2.69 2.59 4
1994 1.19 424,647 0.25 0.33 2.57 2.49 23
1993 14.97 675,484 0.25 0.35 2.75 2.65 1
1992 10.71 470,847 0.25 0.34 2.99 2.90 1
1991 14.18 261,165 0.25 0.32 3.56 3.49 40
1990 19.02 192,154 0.25 0.36 3.58 3.47 10
1989 17.60 125,714 0.25 0.39 4.03 3.89 47
1988 (9.35) 105,473 0.25 0.43 3.74 3.56 77
1987 25.96 103,468 0.23 0.44 3.29 3.08 145
1986(1) 40.43* 94,224 0.20* 0.44* 4.10* 3.86* 66
<CAPTION>
FOR A CLASS E SHARE OUTSTANDING THR
AVERAGE
COMMISSION
RATE+
- -----------------------------------
- --------------------------
S&P 500 INDEX PORTFOLIO**
- --------------------------
For the periods ended March 31,
1997 $.0197
1996 n/a
1995 n/a
1994 n/a
1993 n/a
1992 n/a
1991 n/a
1990 n/a
1989 n/a
1988 n/a
1987 n/a
1986(1) n/a
</TABLE>
* ANNUALIZED
** EFFECTIVE JULY 31, 1997, THE FORMER CLASS A SHARES WERE RENAMED CLASS E
SHARES.
+ AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES
DURING THE PERIOD. PRESENTATION OF THE RATE IS ONLY REQUIRED FOR THE FISCAL
YEARS BEGINNING AFTER SEPTEMBER 1, 1995.
(1) CLASS E SHARES (FORMERLY CLASS A SHARES) COMMENCED OPERATIONS ON 8/1/85.
3
<PAGE>
THE TRUST
__________________________________________________________________________
SEI INDEX FUNDS (the "Trust") is an open-end management investment company that
offers units of beneficial interest ("shares") in two separate diversified
investment portfolios. This prospectus offers Class E shares of the Trust's S&P
500 Index Portfolio (the "Portfolio"). The S&P 500 Index Portfolio has Class A
and Class E shares. Class A shares of the S&P 500 Index Portfolio and the Bond
Index Portfolio are offered by a separate prospectus. Additional information
pertaining to the Trust may be obtained by writing SEI Investments Distribution
Co., Oaks, Pennsylvania 19456, or by calling 1-800-342-5734.
INVESTMENT OBJECTIVES
AND POLICIES
___________________________________________________________________________
S&P 500 INDEX PORTFOLIO
The S&P 500 Index Portfolio seeks to provide investment
results that correspond to the aggregate price and dividend
performance of the securities in the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500 Index"), which is
comprised of 500 selected common stocks, most which are
listed on the New York Stock Exchange.
The Portfolio's ability to duplicate the performance
of the S&P 500 Index will depend to some extent on the size
and timing of cashflows into and out of the Portfolio, as
well as on the level of the Portfolio's expenses.
Adjustments made to accommodate cash flows will track
the S&P 500 Index to the maximum extent possible, and may
result in brokerage expenses for the Portfolio. Over time,
the correlation between the performance of the Portfolio
and the S&P 500 Index is expected to be over 0.95. A
correlation of 1.00 would indicate perfect correlation,
which would be achieved when the net asset value of the
Portfolio, including the value of its dividend and capital
gains distributions, increased or decreased in exact
proportion to changes in the S&P 500 Index.
The Portfolio will normally be invested in all of the
stocks which comprise the S&P 500 Index, except when
changes are made to the S&P 500 Index itself. The
Portfolio's policy is to be fully invested in common
stocks, and it is expected that cash reserve items would
normally be less than 10% of net assets. Accordingly, an
investment in shares of the Portfolio involves risks
similar to those of investing in a portfolio consisting of
the common stocks of some or all of the companies included
in the S&P 500 Index.
The weightings of stocks in the S&P 500 Index are
based on each stock's relative total market value, i.e.,
market price per share times the number of shares
outstanding. Because of this weighting, approximately 50%
of the S&P 500 Index is currently composed of stocks of the
50 largest companies in the S&P 500 Index, and the S&P 500
Index currently represents over 65% of the market value of
all U.S. common stocks listed on the New York Stock
Exchange.
World Asset Management ("World"), the Portfolio's
investment adviser, makes no attempt to "manage" the
Portfolio in the traditional sense (i.e. by using economic,
financial or market analyses). The adverse financial
situation of a company usually will not
4
<PAGE>
result in the elimination of a stock from the Portfolio.
However, an investment may be removed from the Portfolio
if, in the judgment of World, the merit of the investment
has been substantially impaired by extraordinary events or
adverse financial conditions. Furthermore, administrative
adjustments may be made in the Portfolio from time to time
because of mergers, changes in the composition of the S&P
500 Index and similar reasons. In certain circumstances,
World may exercise discretion in determining whether to
exercise warrants or rights issued in respect to portfolio
securities or whether to tender portfolio securities
pursuant to a tender or exchange offer.
The Portfolio is not sponsored, endorsed, sold or
promoted by Standard & Poor's Corporation ("S&P"). S&P
makes no representation or warranty, implied or express, to
the purchasers of the Portfolio or any member of the public
regarding the advisability of investing in index funds or
the Portfolio or the ability of the Index to track general
stock market performance.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE
COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN. S&P
MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE
OBTAINED BY THE PORTFOLIO, OWNERS OF THE PORTFOLIO, OR ANY
DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED
WARRANTIES, AND HEREBY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN.
S&P'S ONLY RELATIONSHIP TO THE PORTFOLIO IS THE LICENSING
OF THE S&P MARKS AND THE INDEX, WHICH IS DETERMINED,
COMPOSED, AND CALCULATED BY S&P WITHOUT REGARD TO THE
LICENSEE OR THE PORTFOLIO.
The equity securities in which the Portfolio invests
are common stocks, preferred stocks, securities convertible
into common stock and American Depositary Receipts
("ADRs").
The Portfolio may enter into stock index futures
contracts, to maintain adequate liquidity to meet its
redemption demands while maximizing the level of the
Portfolio's assets which are tracking the performance of
the S&P 500 Index, provided that the value of these
contracts does not exceed 20% of the Portfolio's total
assets. The Portfolio may only purchase those stock index
futures contracts--such as futures contracts on the S&P 500
Index--that are likely to closely duplicate the performance
of the S&P 500 Index. The Portfolio also can sell such
futures contracts in order to close out a previously
established position. The Portfolio will not enter into any
stock index futures contract for the purpose of
speculation, and will only enter into contracts traded on
national securities exchanges with standardized maturity
dates.
The Portfolio may invest cash reserves in securities
issued by the U.S. Government, its agencies or
instrumentalities, bankers' acceptances, commercial paper
rated at least A-1 by S&P and/or Prime-1 by Moody's
Investors Services, Inc. ("Moody's"), certificates of
deposit and repurchase agreements involving such
obligations. Such investments will not be used for
defensive purposes.
5
<PAGE>
There can be no assurance that the Portfolio will
achieve its investment objective. For a description of the
above ratings, see the Statement of Additional Information.
GENERAL
INVESTMENT
POLICIES
___________________________________________________________________________
The Portfolio may lend up to 20% of its assets to qualified
institutions for the purpose of realizing additional
income, however the Portfolio has no present intention to
lend its securities. The Portfolio may invest in illiquid
securities; however, not more than 10% of the total assets
of the Portfolio will be invested in such instruments. The
Portfolio may enter into forward commitments, or purchase
securities on a when-issued or delayed delivery basis.
For additional information regarding the Portfolio's
permitted investments see "Description of Permitted
Investments and Risk Factors" in this Prospectus and in the
Statement of Additional Information.
INVESTMENT LIMITATIONS
________________________________________________________________________
The investment objective and certain of the investment
limitations are fundamental policies of the Portfolio.
Fundamental policies cannot be changed with respect to the
Trust or a Portfolio without the consent of the holders of
a majority of the Trust's or that Portfolio's outstanding
shares.
THE PORTFOLIO MAY NOT:
1. Purchase securities of any issuer (except securities
issued or guaranteed by the United States Government,
its agencies or instrumentalities) if, as a result,
more than 5% of the Portfolio's total assets would be
invested in the securities of such issuer. This
restriction applies to 75% of the Portfolio's total
assets.
2. Purchase any securities which would cause more than 25%
of the Portfolio's total assets to be invested in the
securities of one or more issuers conducting their
principal business activities in the same industry,
provided that this limitation does not apply to
investments in obligations issued or guaranteed by the
United States Government or its agencies and
instrumentalities.
3. Borrow money, except for temporary or emergency
purposes and then only in an amount not exceeding 10%
of the value of the total assets of the Portfolio. This
borrowing provision is included solely to facilitate
the orderly sale of portfolio securities to accommodate
substantial redemption requests if they should occur,
and is not for investment purposes. All borrowings will
be repaid before making additional investments for the
Portfolio, and any interest paid on such borrowings
will reduce the Portfolio's income.
6
<PAGE>
4. Make loans, except that the Portfolio: (i) may enter
into repurchase agreements, provided that repurchase
agreements and time deposits maturing in more than
seven days, and other illiquid securities, including
securities which are not readily marketable or are
restricted, are not to exceed, in the aggregate, 10% of
the Portfolio's total assets, (ii) may engage in
securities lending as described in this Prospectus, and
(iii) may purchase or hold debt instruments in
accordance with its investment objectives and policies.
The foregoing percentage limitations (except the limitation
on borrowings) will apply at the time of the purchase of a
security. Additional fundamental investment limitations are
set forth in the Statement of Additional Information.
THE MANAGER
______________________________________________________________________
SEI Fund Management ("SEI Management") provides the Trust
with overall management services, regulatory reporting, all
necessary office space, equipment, personnel and
facilities, and acts as dividend disbursing agent and
shareholder servicing agent. SEI Management also serves as
transfer agent (the "Transfer Agent") to certain classes of
the Trust.
For its management services, SEI Management is
entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .22% of the average daily net
assets of the Portfolio. SEI Management may from time to
time waive all or a portion of its fee in order to limit
the operating expenses of the Portfolio. Any such waiver is
voluntary and may be terminated at any time in its sole
discretion.
For the fiscal year ended March 31, 1997, the
Portfolio paid management fees, after fee waivers, of .16%
of its average daily net assets.
THE ADVISER
_______________________________________________________________________
World Asset Management ("World") serves as investment
adviser to the S&P 500 Index Portfolio.
World is a general partnership organized by Munder
Capital Management ("MCM"), a general partnership formed in
December, 1994, which engages in investment management and
advisory services. As of December 31, 1996 total assets
under management of World were $11.0 billion and assets
under management of MCM were $37.0 billion. The principal
business address for World is 255 Brown Street Centre, 2nd
Floor, Birmingham, Michigan 48009.
Under the terms of this Advisory Agreement, World
provides certain record keeping and management services in
connection with the Portfolio including monitoring the
indexing systems and determining which securities to
purchase and sell in order to keep the Portfolio in balance
with its index.
World is entitled to a fee, which is calculated daily
and paid monthly, at an annual rate of .03% of the average
daily net assets of the Portfolio. For the fiscal year
ended
7
<PAGE>
March 31, 1997, the Portfolio paid World an advisory fee of
.03% of its average daily net assets.
DISTRIBUTION
AND SHAREHOLDER
SERVICING
__________________________________________________________________________
SEI Investments Distribution Co. (the "Distributor"), a
wholly-owned subsidiary of SEI Investments Company ("SEI"),
serves as the Portfolio's distributor pursuant to a
distribution agreement (the "Distribution Agreement") with
the Trust. The Portfolio has also adopted a shareholder
servicing plan for its Class A shares (the "Class A Service
Plan") which is similar to the plan described below.
The Portfolio has adopted a shareholder servicing
plan for Class E shares (the "Service Plan") under which
the Distributor is entitled to receive a shareholder
servicing fee of up to .25% of average daily net assets
attributable to Class E shares. Under the Service Plan, the
Distributor may perform, or may compensate other service
providers for performing, the following shareholder and
administrative services; maintaining client accounts;
arranging for bank wires; responding to client inquiries
concerning services provided on investments; assisting
clients in changing dividend options, account designations
and addresses; sub-accounting; providing information on
share positions to clients; forwarding shareholder
communications to clients; processing purchase, exchange
and redemption orders; and processing dividend payments.
Under the Service Plan, the Distributor may retain as a
profit any difference between the fee it receives and the
amount it pays to third parties.
It is possible that an institution may offer
different classes of shares to its customers and thus
receive different compensation with respect to different
classes. These financial institutions may also charge
separate fees to their customers.
The Trust may execute brokerage or other agency
transactions through the Distributor for which the
Distributor may receive compensation.
The Distributor may, from time to time and at its own
expense, provide promotional incentives, in the form of
cash or other compensation, to certain financial
institutions whose representatives have sold or are
expected to sell significant amounts of the Portfolio's
shares.
PURCHASE AND
REDEMPTION OF SHARES
____________________________________________________________________________
Financial institutions may acquire shares of the Portfolio
for their own account, or as a record owner on behalf of
fiduciary, agency or custody accounts, by placing orders
with the Transfer Agent (or its authorized agent).
Institutions that use certain SEI proprietary systems may
place orders electronically through those systems.
Financial institutions may
8
<PAGE>
impose an earlier cut-off time for receipt of purchase
orders directed through them to allow for processing and
transmittal of these orders to the Transfer Agent for
effectiveness on the same day. Financial institutions which
purchase shares for the accounts of their customers may
impose separate charges on these customers for account
services.
Shares of the Portfolio may be purchased or redeemed
on days on which the New York Stock Exchange is open for
business ("Business Days"). However, shares cannot be
purchased by Federal Reserve wire on federal holidays
restricting wire transfers. The minimum initial investment
for the Class E shares of the Portfolio is $5,000,000;
however, the minimum investment may be waived at the
Distributor's discretion. All subsequent purchases must be
at least $1,000.
Shareholders who desire to purchase shares for cash
must place their orders with the Transfer Agent (or its
authorized agent) prior to 4:00 p.m. Eastern time on any
Business Day for the order to be accepted on that Business
Day. Generally, cash investments must be transmitted or
delivered in federal funds to the wire agent on the next
Business Day following the day the order is placed. The
Trust reserves the right to reject a purchase order when
the Distributor determines that it is not in the best
interest of the Trust or shareholders to accept such
purchase order.
Purchases will be made in full and fractional shares
of the Portfolio calculated to three decimal places. The
Trust will send shareholders a statement of shares owned
after each transaction. The purchase price of shares is the
net asset value next determined after a purchase order is
received and accepted by the Trust. The net asset value per
share of the Portfolio is determined by dividing the total
market value of the Portfolio's investment and other
assets, less any liabilities, by the total number of
outstanding shares of the Portfolio. Net asset value per
share is determined daily as of the close of business of
the New York Stock Exchange (currently, 4:00 p.m. Eastern
time) on any Business Day.
Information about the market value of each Portfolio
security may be obtained by SEI Management from an
independent pricing service. Fixed Income securities having
maturities of 60 days or less at the time of purchase will
be valued using the amortized cost method (described in the
Statement of Additional Information), which approximates
the securities' market value. The pricing service may use a
matrix system to determine valuations of fixed income
securities. This system considers such factors as security
prices, yields, maturities, call features, ratings and
developments relating to specific securities in arriving at
valuations. The pricing service may also provide market
quotations. The procedures of the pricing service and its
valuations are reviewed by the officers of the Trust under
the general supervision of the Trustees. Portfolio
securities for which market quotations are available are
valued at the last quoted sale price on each Business Day
or, if there is no such reported sale, at the most recently
quoted bid price.
Shareholders who desire to redeem shares of the
Portfolio must place their redemption orders with the
Transfer Agent (or its authorized agent) prior to 4:00 p.m.
Eastern time on any Business Day. The redemption price is
the net asset value per share of
9
<PAGE>
the Portfolio next determined after receipt by the Transfer
Agent (or its authorized agent) of the redemption order.
Payment on redemption will be made as promptly as possible
and, in any event, within seven days after the redemption
order is received.
Purchase and redemption orders may be placed by
telephone. Neither the Trust nor the Transfer Agent (or its
authorized agent) will be responsible for any loss,
liability, cost or expense for acting upon wire
instructions or upon telephone instructions that it
reasonably believes to be genuine. The Trust and the
Transfer Agent (or its authorized agent) will each employ
reasonable procedures to confirm that instructions
communicated by telephone are genuine, including requiring
a form of personal identification prior to acting upon
instructions received by telephone and recording telephone
instructions.
If market conditions are extraordinarily active, or
other extraordinary circumstances exist, shareholders may
experience difficulties placing redemption orders by
telephone, and may wish to consider placing orders by other
means.
PERFORMANCE
______________________________________________________________________
From time to time, the Portfolio may advertise yield and
total return. These figures will be based on historical
earnings and are not intended to indicate future
performance. No representation can be made concerning
actual future yields or returns. The yield of a Portfolio
refers to the income generated by a hypothetical investment
in the Portfolio over a thirty day period. This income is
then "annualized," i.e., the income over thirty days is
assumed to be generated over one year, and is shown as a
percentage of the investment.
The total return of the Portfolio refers to the
average compounded rate of return on a hypothetical
investment for designated time periods, assuming that the
entire investment is redeemed at the end of each period and
assuming the reinvestment of all dividend and capital gain
distributions.
The Portfolio may periodically compare its
performance to the performance of: other mutual funds
tracked by mutual fund rating services (such as Lipper
Analytical); financial and business publications and
periodicals; broad groups of comparable mutual funds;
unmanaged indices which may assume investment of dividends
but generally do not reflect deductions for administrative
and management costs; or to other investment alternatives.
The Portfolio may quote Morningstar, Inc., a service that
ranks mutual funds on the basis of risk-adjusted
performance. The Portfolio may use long-term performance of
these capital markets to demonstrate general long-term risk
versus reward scenarios and could include the value of a
hypothetical investment in any of the capital markets. The
Portfolio may also quote financial and business
publications and periodicals as they relate to fund
management, investment philosophy and investment
techniques.
The Portfolio may quote various measures of
volatility and benchmark correlation in advertising, and
may compare these measures to those of other funds.
Measures of volatility attempt to compare historical share
price fluctuations or total returns to a benchmark while
measures of benchmark correlation indicate how valid a
comparative
10
<PAGE>
benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot
be calculated precisely.
The performance of Class E shares will normally be
higher than that of the Class A shares of the S&P 500 Index
Portfolio because of the different shareholder servicing
expenses actually charged to Class A shares.
TAXES
______________________________________________________________________________
The following summary of federal income tax consequences is
based on current tax laws and regulations, which may be
changed by legislative, judicial or administrative action.
No attempt has been made to present a detailed explanation
of the federal, state or local income tax treatment of the
Portfolio or its shareholders. In addition, state and local
tax consequences of an investment in the Portfolio may
differ from the federal income tax consequences described
below. Accordingly, shareholders are urged to consult their
tax advisers regarding specific questions as to federal,
state and local taxes. Additional information concerning
taxes is set forth in the Statement of Additional
Information.
TAX STATUS
OF THE PORTFOLIO
The Portfolio is treated as a separate entity for federal
income tax purposes and is not combined with the Trust's
other portfolios. The Portfolio intends to qualify for the
special tax treatment afforded regulated investment
companies ("RICs") under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), so as to be
relieved of federal income tax on net investment company
taxable income and net capital gains (the excess of net
long-term capital gain over net short-term capital losses)
distributed to the Portfolio's shareholders.
TAX STATUS
OF DISTRIBUTIONS
The Portfolio will distribute substantially all of its net
investment income (including net short-term capital gains)
to its shareholders. Dividends from the Portfolio's net
investment company taxable income are taxable to its
shareholders as ordinary income (whether received in cash
or in additional shares) to the extent of the Portfolio's
earnings and profits. Dividends paid by the Portfolio to
corporate shareholders will qualify for the
dividends-received deduction to the extent attributable to
dividends received by the Portfolio from domestic
corporations. Long-term capital gains realized by the
Portfolio will be distributed by the Portfolio to its
shareholders at least annually and will be taxable to the
shareholders as long-term capital gains regardless of how
long the shareholder has held shares and regardless of
whether the distributions are received in cash or in
additional shares. Distributions from net capital gains do
not qualify for the dividends-received deduction. The
Portfolio will provide annual reports to the Portfolio's
shareholders of the federal income tax status of all
distributions.
Dividends declared by the Portfolio in October,
November or December of any year and payable to
shareholders of record on a date in such a month will be
deemed to have been paid by the Portfolio and received by
the shareholders on December 31 of the year declared if
paid by the Portfolio at any time during the following
January.
11
<PAGE>
Investment income received directly by the Portfolio
on direct U.S. government obligations is exempt from income
tax at the state level and may be exempt, depending on the
state, when received by a shareholder as income dividends
provided certain state-specific conditions are satisfied.
Interest received on repurchase agreements collateralized
by U.S. government obligations normally is not exempt from
state tax. The Portfolio will inform its shareholders
annually of the percentage of income and distributions
derived from direct U.S. obligations. Shareholders should
consult their tax advisers to determine whether any portion
of income dividends received from the Portfolio is
considered tax-exempt in their state.
The Portfolio intends to make sufficient
distributions prior to the end of each calendar year to
avoid liability for the federal excise tax applicable to
RICs.
Each sale, exchange or redemption of Portfolio shares
is a taxable transaction to the shareholder.
GENERAL INFORMATION
______________________________________________________________
THE TRUST
The Trust was organized as a Massachusetts business trust
under a Declaration of Trust dated March 6, 1985. The
Declaration of Trust permits the Trust to offer separate
series of shares and different classes of the Portfolio. In
addition to the Portfolio, the Trust consists of the Bond
Index Portfolio. All consideration received by the Trust
for shares of any class of any Portfolio, and all assets of
such Portfolio or class, belong to that Portfolio or class,
respectively, and would be subject to the liabilities
related thereto.
The Trust pays its expenses, including fees of its
service providers, audit and legal expenses, expenses of
preparing prospectuses, proxy solicitation materials and
reports to shareholders, costs of custodial services and
registering the shares under federal and state securities
laws, pricing, insurance expenses, litigation and other
extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses.
TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by
the Trustees under the laws of the Commonwealth of
Massachusetts. The Trustees have approved contracts under
which, as described above, certain companies provide
essential management services to the Trust.
VOTING RIGHTS
Each share held entitles the shareholder of record to one
vote. Shareholders of each Portfolio or class will vote
separately on matters pertaining solely to that Portfolio
or class, such as any distribution plan. As a Massachusetts
business trust, the Trust is not required to hold annual
meetings of shareholders, but approval will be sought for
certain changes in the operation of the Trust and for the
election of Trustees under certain circumstances. In
addition, a Trustee may be removed by the remaining
Trustees or by shareholders at a special meeting called
upon written request of shareholders owning at least 10% of
the outstanding shares of the Trust. In the event that such
a meeting is requested, the Trust will provide appropriate
assistance and information to the shareholders requesting
the meeting.
12
<PAGE>
REPORTING
The Trust issues an unaudited report semi-annually and
audited financial statements annually. The Trust furnishes
proxy statements and other reports to shareholders of
record.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to SEI Fund
Management, Oaks, Pennsylvania 19456.
DIVIDENDS
Substantially all of the net investment income (exclusive
of capital gains) of the Portfolio is periodically declared
and paid as a dividend. Dividends are paid currently on a
quarterly basis. Currently, net capital gains (the excess
of net long-term capital gain over net short-term capital
loss) realized, if any, will be distributed at least
annually.
Shareholders automatically receive all income
dividends and capital gain distributions in additional
shares at the net asset value next determined following the
record date, unless the shareholder has elected to take
such payment in cash. Shareholders may change their
election by providing written notice to SEI Management at
least 15 days prior to the distribution.
Dividends and capital gains of the Portfolio are paid
on a per-share basis. The value of each share will be
reduced by the amount of any such payment. If shares are
purchased shortly before the record date for a dividend or
capital gains distributions, a shareholder will pay the
full price for the share and receive some portion of the
price back as a taxable dividend or distribution.
The dividends on Class E shares of the Portfolio are
normally higher than those on the Class A shares because of
the different shareholder servicing expenses actually
charged to Class A shares.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
Arthur Andersen LLP serves as the independent public
accountants of the Trust.
CUSTODIAN AND WIRE AGENT
Comerica Bank, 411 W. Lafayette, Detroit, Michigan 48226
(the "Custodian"), acts as custodian of the Trust's assets.
The Custodian holds cash, securities and other assets of
the Trust as required by the Investment Company Act of 1940
(the "1940 Act"). CoreStates Bank, N.A., Broad and Chestnut
Streets, P.O. Box 7618, Philadelphia, Pennsylvania 19101,
acts as wire agent of the Trust's assets.
DESCRIPTION OF
PERMITTED
INVESTMENTS
AND RISK FACTORS
_________________________________________________________________
The following is a description of certain of the permitted
investment practices for the Portfolio, and the associated
risk factors:
AMERICAN DEPOSITARY RECEIPTS ("ADRS")
ADRs are securities, typically issued by a U.S. financial
institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a
foreign issuer and deposited with the depositary. ADRs may
be available through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by
the issuer of the
13
<PAGE>
security underlying the receipt and a depositary, whereas
an unsponsored facility may be established by a depositary
without participation by the issuer of the receipt's
underlying security.
EQUITY SECURITIES
Equity securities represent ownership interests in a
company or corporation, and include common stock, preferred
stock, and warrants and other rights to acquire such
instruments.
ILLIQUID SECURITIES
Illiquid securities are securities which cannot be disposed
of within seven business days at approximately the price at
which they are being carried on the Portfolio's books.
Illiquid securities include demand instruments with demand
notice periods exceeding seven days, securities for which
there is no active secondary market, and repurchase
agreements with durations (or maturities) over seven days
in length.
MONEY MARKET
INSTRUMENTS
Money market instruments are high-quality,
dollar-denominated, short-term debt instruments. They
consist of: (i) bankers' acceptances, certificates of
deposits, notes and time deposits of highly-rated U.S.
banks and U.S. branches of foreign banks; (ii) U.S.
Treasury obligations and obligations issued by the agencies
and instrumentalities of the U.S. Government; (iii)
high-quality commercial paper issued by U.S. and foreign
corporations; (iv) debt obligations with a maturity of one
year or less issued by corporations that issue high-quality
commercial paper; and (v) repurchase agreements involving
any of the foregoing obligations entered into with
highly-rated banks and broker-dealers.
REPURCHASE AGREEMENTS
Agreements by which the Portfolio obtains a security and
simultaneously commits to return the security to the seller
at an agreed upon price (including principal and interest)
on an agreed upon date within a number of days from the
date of purchase. Repurchase agreements are considered
loans under the 1940 Act.
STOCK INDEX FUTURES
A stock index futures contract is a bilateral agreement
pursuant to which two parties agree to take or make
delivery of an amount of cash equal to a specified dollar
amount times the difference between the stock index value
at the close of trading of the contract and the price at
which the futures contract is originally struck. No
physical delivery of the securities comprising the index is
made; generally contracts are closed out prior to the
expiration date of the contract.
In order to avoid leveraging and related risks, when
the Portfolio purchases futures contracts, it will
collateralize its position by depositing an amount of cash
or liquid securities equal to the market value of the
futures positions held, less margin deposits, in a
segregated account. Collateral equal to the current market
value of the futures position will be marked to market on a
daily basis.
A Portfolio may enter into futures contracts and
options on futures contracts traded on an exchange
regulated by the Commodities Futures Trading Commission
("CFTC"), so long as, to the extent that such transactions
are not for "bona fide hedging
14
<PAGE>
purposes," the aggregate initial margin and premiums on
such positions (excluding the amount by which such options
are in the money) do not exceed 5% of the Portfolio's net
assets. A Portfolio may buy and sell futures contracts and
related options to manage its exposure to changing interest
rates and securities prices. Some strategies reduce a
Portfolio's exposure to price fluctuations, while others
tend to increase its market exposure. Futures and options
on futures can be volatile instruments and involve certain
risks that could negatively impact a Portfolio's return.
There are risks associated with these activities,
including the following: (1) the success of a hedging
strategy may depend on an ability to predict movements in
the prices of individual securities, fluctuations in
markets and movements in interest rates; (2) there may be
an imperfect or no correlation between the changes in
market value of the securities held by the Portfolio and
the prices of futures and options on futures; (3) there may
not be a liquid secondary market for a futures contract or
option; (4) trading restrictions or limitations may be
imposed by an exchange; and (5) government regulations may
restrict trading in futures contracts and on options
futures.
U.S. GOVERNMENT
AGENCY OBLIGATIONS
Obligations issued or guaranteed by agencies of the U.S.
Government including, among others, the Federal Farm Credit
Bank, the Federal Housing Administration and the Small
Business Administration and obligations issued or
guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage
Corporation, the Federal Land Banks and the U.S. Postal
Service. Some of these securities are supported by the full
faith and credit of the U.S. Treasury (e.g., Government
National Mortgage Association securities), and others are
supported by the right of the issuer to borrow from the
Treasury (e.g., Federal Farm Credit Bank securities), while
still others are supported only by the credit of the
instrumentality (e.g., Fannie Mae securities).
U.S. TREASURY OBLIGATIONS
U.S. Treasury obligations consist of bills, notes and bonds
issued by the U.S. Treasury, as well as separately traded
interest and principal component parts of such obligations
known as Separately Traded Registered Interest and
Principal Securities ("STRIPS") that are transferable
through the Federal book-entry system.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
When-issued or delayed delivery transactions involve the
purchase of an instrument with payment and delivery taking
place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the
purchase commitment. The Portfolio will maintain a separate
account with liquid securities or cash in an amount at
least equal to these commitments. The interest rate
realized on these securities is fixed as of the purchase
date, and no interest accrues to the Portfolio before
settlement.
Additional information on other permitted investments can
be found in the Statement of Additional Information.
15
<PAGE>
TABLE OF CONTENTS
_________________________________________________________________
<TABLE>
<S> <C>
Annual Operating Expenses........................ 2
Financial Highlights............................. 3
The Trust........................................ 4
Investment Objectives and Policies............... 4
General Investment Policies...................... 6
Investment Limitations........................... 6
The Manager...................................... 7
The Adviser...................................... 7
Distribution and Shareholder Servicing........... 8
Purchase and Redemption of Shares................ 8
Performance...................................... 10
Taxes............................................ 11
General Information.............................. 12
Description of Permitted Investments and Risk
Factors......................................... 13
</TABLE>
16
<PAGE>
SEI INDEX FUNDS
JULY 31, 1997
- --------------------------------------------------------------------------------
S&P 500 INDEX PORTFOLIO
BOND INDEX PORTFOLIO
- --------------------------------------------------------------------------------
This Prospectus concisely sets forth information about the above-referenced
Portfolios that an investor needs to know before investing. Please read this
Prospectus carefully, and keep it on file for future reference.
A Statement of Additional Information dated July 31, 1997, has been filed with
the Securities and Exchange Commission, and is available upon request and
without charge by writing the Distributor, SEI Investments Distribution Co.,
Oaks, Pennsylvania 19456, or by calling 1-800-342-5734. The Statement of
Additional Information is incorporated by reference into this Prospectus.
SEI Index Funds (the "Trust") is an open-end management investment company,
certain classes of which offer financial institutions a convenient means of
investing their own funds, or funds for which they act in a fiduciary, agency or
custodial capacity, in professionally managed diversified portfolios of
securities. This Prospectus offers Class A shares of the portfolios (each a
"Portfolio" and, together, the "Portfolios") listed above.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THE TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) CLASS A
SHARES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P 500
INDEX BOND INDEX
---------- ----------
<S> <C> <C>
Management/Advisory Fees (AFTER FEE WAIVER) (1) .19% .32%
12b-1 Fees None None
Total Other Expenses .21% .06%
Shareholder Servicing Expenses (AFTER FEE WAIVERS, IF APPLICABLE) .15% .00%(2)
- ------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (AFTER FEE WAIVERS) (3) .40% .38%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) THE MANAGER HAS WAIVED, ON A VOLUNTARY BASIS, A PORTION OF ITS FEE, AND THE
MANAGEMENT/ADVISORY FEES SHOWN REFLECT THIS VOLUNTARY WAIVER. THE MANAGER
RESERVES THE RIGHT TO TERMINATE ITS WAIVER AT ANY TIME IN ITS SOLE
DISCRETION. ABSENT SUCH WAIVER, MANAGEMENT/ADVISORY FEES WOULD BE .25% FOR
THE S&P 500 INDEX PORTFOLIO AND .42% FOR THE BOND INDEX PORTFOLIO.
(2) THE DISTRIBUTOR HAS WAIVED, ON A VOLUNTARY BASIS, ALL OF ITS SHAREHOLDER
SERVICING FEE FOR THE BOND INDEX PORTFOLIO, AND THE SHAREHOLDER SERVICING
EXPENSES SHOWN FOR THE BOND INDEX PORTFOLIO REFLECT THIS WAIVER. THE
DISTRIBUTOR RESERVES THE RIGHT TO TERMINATE ITS WAIVER AT ANY TIME IN ITS
SOLE DISCRETION. ABSENT SUCH WAIVER, SHAREHOLDER SERVICING EXPENSES WOULD BE
.25% FOR THE BOND INDEX PORTFOLIO.
(3) ABSENT THESE FEE WAIVERS, TOTAL OPERATING EXPENSES WOULD BE .45% FOR THE S&P
500 INDEX PORTFOLIO AND .73% FOR THE BOND INDEX PORTFOLIO. ADDITIONAL
INFORMATION MAY BE FOUND UNDER "THE ADVISER" AND "THE MANAGER."
EXAMPLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YR. 3 YRS. 5 YRS. 10 YRS.
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
An investor in a Portfolio would pay the following expenses on a $1,000
investment assuming (1) a 5% annual return and (2) redemption at the end of
each time period:
S&P 500 Index $ 4 $ 13 $ 22 $ 51
Bond Index $ 4 $ 12 $ 21 $ 48
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
THE PURPOSE OF THE EXPENSE TABLE AND EXAMPLE IS TO ASSIST THE INVESTOR IN
UNDERSTANDING THE VARIOUS COSTS AND EXPENSES THAT MAY BE DIRECTLY OR INDIRECTLY
BORNE BY INVESTORS IN CLASS A SHARES OF THE PORTFOLIOS. THE S&P 500 INDEX
PORTFOLIO ALSO OFFERS CLASS E SHARES, WHICH ARE SUBJECT TO THE SAME EXPENSES,
EXCEPT THAT THERE ARE DIFFERENT SHAREHOLDER SERVICING COSTS. A PERSON WHO
PURCHASES SHARES THROUGH A FINANCIAL INSTITUTION MAY BE CHARGED SEPARATE FEES BY
THAT INSTITUTION. ADDITIONAL INFORMATION MAY BE FOUND UNDER "THE MANAGER," "THE
ADVISER" AND "DISTRIBUTION AND SHAREHOLDER SERVICING."
2
<PAGE>
FINANCIAL HIGHLIGHTS
______________________________________________________________
The following information has been audited by Arthur Andersen LLP, the Trust's
independent accountants, as indicated in their report dated May 2, 1997, on the
Trust's financial statements as of March 31, 1997, which are incorporated by
reference into the Trust's Statement of Additional Information. The Trust's
financial statements and additional performance information are set forth in the
1997 Annual Report to Shareholders, which is available upon request and without
charge by calling 1-800-342-5734. This table should be read in conjunction with
the Trust's financial statements and notes thereto.
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT
OPERATIONS
-------------------------
NET REALIZED LESS DISTRIBUTIONS
AND -------------------------------------------
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAIN (LOSS) TOTAL FROM FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT FROM CAPITAL RETURNS OF TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS CAPITAL DISTRIBUTIONS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT THE PERIOD
- --------------
S&P 500 INDEX PORTFOLIO+
- --------------
For the periods ended March 31,
1997 $ 20.87 $ 0.48 $ 3.47 $ 3.95 $ (0.43) $ (0.33) -- $ 0.76
1996(1) 20.82 -- 0.05 0.05 -- -- -- --
<CAPTION>
----------------------------------------------------------
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES TO RATIO OF NET INCOME TO
RATIO OF AVERAGE NET INVESTMENT AVERAGE NET
NET ASSET NET ASSETS EXPENSES TO ASSETS INCOME TO ASSETS
VALUE, END END OF AVERAGE NET (EXCLUDING AVERAGE NET (EXCLUDING
OF PERIOD TOTAL RETURN PERIOD (000) ASSETS FEE WAIVERS) ASSETS FEE WAIVERS)
<S> <C> <C>
- --------------
FOR A CLASS A
- --------------
S&P 500 INDEX PORTFOLIO+
- --------------
For the periods ended March 31,
1997 $ 24.06 19.22% $ 108,770 0.40% 0.46% 1.84% 1.78%
1996(1) 20.87 0.24* $ 3.077 0.46 0.58 0.97 0.85
<CAPTION>
PORTFOLIO AVERAGE
TURNOVER COMMISSION
RATE RATE**
- --------------
FOR A CLASS A
- --------------
S&P 500 INDEX PORTFOLIO+
- --------------
For the periods ended March 31,
1997 2% $ 0.197
1996(1) 3 n/a
</TABLE>
+ EFFECTIVE JULY 31, 1997, THE FORMER CLASS E SHARES WERE RENAMED CLASS A
SHARES.
* TOTAL RETURN HAS NOT BEEN ANNUALIZED
** AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES
DURING THE PERIOD. PRESENTATION OF THE RATE IS ONLY REQUIRED FOR THE FISCAL
YEARS BEGINNING AFTER SEPTEMBER 1, 1995.
(1) S&P 500 INDEX CLASS A SHARES (FORMERLY CLASS E SHARES) WERE OFFERED
BEGINNING FEBRUARY 28, 1996. ALL RATIOS FOR THAT PERIOD HAVE BEEN
ANNUALIZED.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------
BOND INDEX PORTFOLIO
- ---------
For the periods ended March 31,
1997 $ 10.26 $ 0.64 $ (0.21) $ 0.43 $ (0.68) $ -- -- $ (0.68) $ 10.01 4.36%
1996 (2) 9.90 0.64 0.36 1.00 (0.64) -- -- (0.64) 10.26 10.31
1995 10.09 0.63 (0.20) 0.43 (0.62) -- -- (0.62) 9.90 4.54
1994 10.43 0.56 (0.33) 0.23 (0.57) -- -- (0.57) 10.09 2.10
1993 9.87 0.66 0.56 1.22 (0.66) -- -- (0.66) 10.43 12.73
1992 9.73 0.73 0.15 0.88 (0.74) -- -- (0.74) 9.87 9.48
1991 9.46 0.80 0.28 1.08 (0.81) -- -- (0.81) 9.73 11.92
1990 9.19 0.81 0.27 1.08 (0.81) -- -- (0.81) 9.46 12.04
1989 9.62 0.82 (0.43) 0.39 (0.82) -- -- (0.82) 9.19 4.21
1988 10.22 0.85 (0.55) 0.30 (0.82) (0.08) -- (0.90) 9.62 3.39
1987 (1) 10.00 0.74 0.14 0.88 (0.66) -- -- (0.66) 10.22 9.69*
<CAPTION>
For the periods ended March 31,
1997 $ 35,691 0.38% 0.71% 6.26% 5.93% 46% n/a
1996 (2) 51,185 0.38 0.48 6.20 6.10 59 n/a
1995 45,643 0.38 0.48 6.33 6.23 21 n/a
1994 56,161 0.38 0.47 5.35 5.26 55 n/a
1993 56,032 0.38 0.45 6.49 6.42 115 n/a
1992 38,449 0.38 0.51 7.45 7.32 99 n/a
1991 22,602 0.38 0.61 8.52 8.29 26 n/a
1990 12,106 0.38 0.72 8.43 8.09 56 n/a
1989 11,457 0.38 0.80 8.62 8.20 31 n/a
1988 14,413 0.38 0.68 8.48 8.18 138 n/a
1987 (1) 34,157 0.38* 0.80* 7.98 7.56 96 n/a
</TABLE>
* ANNUALIZED
(1) COMMENCED OPERATIONS ON 5/19/86
(2) THE INVESTMENT ADVISER WAS CHANGED FROM WORLD ASSET MANAGEMENT TO MELLON
BOND ASSOCIATES EFFECTIVE 10/2/95.
3
<PAGE>
THE TRUST
__________________________________________________________________________
SEI INDEX FUNDS (the "Trust") is an open-end management investment company that
offers units of beneficial interest ("shares") in two separate, diversified
investment portfolios. This prospectus offers Class A shares of the Trust's S&P
500 Index and Bond Index Portfolios (each a "Portfolio" and, together, the
"Portfolios"). Each Portfolio may have separate classes of shares. The S&P 500
Index Portfolio has Class A and Class E shares, which provide for variations in
shareholder servicing expenses. Class E shares of the S&P 500 Index Portfolio
are offered by a separate prospectus. Additional information pertaining to the
Trust may be obtained by writing SEI Investments Distribution Co., Oaks,
Pennsylvania 19456, or by calling 1-800-342-5734.
INVESTMENT OBJECTIVES
AND POLICIES
___________________________________________________________________________
S&P 500 INDEX PORTFOLIO
The S&P 500 Index Portfolio seeks to provide investment
results that correspond to the aggregate price and dividend
performance of the securities in the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500 Index"), which is
comprised of 500 selected common stocks, most which are
listed on the New York Stock Exchange.
The Portfolio's ability to duplicate the performance
of the S&P 500 Index will depend to some extent on the size
and timing of cashflows into and out of the Portfolio, as
well as on the level of the Portfolio's expenses.
Adjustments made to accommodate cash flows will track
the S&P 500 Index to the maximum extent possible, and may
result in brokerage expenses for the Portfolio. Over time,
the correlation between the performance of the Portfolio
and the S&P 500 Index is expected to be over 0.95. A
correlation of 1.00 would indicate perfect correlation,
which would be achieved when the net asset value of the
Portfolio, including the value of its dividend and capital
gains distributions, increased or decreased in exact
proportion to changes in the S&P 500 Index.
The Portfolio will normally be invested in all of the
stocks which comprise the S&P 500 Index, except when
changes are made to the S&P 500 Index itself. The
Portfolio's policy is to be fully invested in common
stocks, and it is expected that cash reserves or other
non-Index securities would normally be less than 10% of net
assets. Accordingly, an investment in shares of the
Portfolio involves risks similar to those of investing in a
portfolio consisting of the common stocks of some or all of
the companies included in the S&P 500 Index.
The weightings of stocks in the S&P 500 Index are
based on each stock's relative total market value, i.e.,
market price per share times the number of shares
outstanding. Because of this weighting, approximately 50%
of the S&P 500 Index is currently composed of stocks of the
50 largest companies in the S&P 500 Index, and the S&P 500
Index currently represents over 65% of the market value of
all U.S. common stocks listed on the New York Stock
Exchange.
4
<PAGE>
World Asset Management ("World"), the Portfolio's
investment adviser, makes no attempt to "manage" the
Portfolio in the traditional sense (i.e., by using
economic, financial or market analyses). The adverse
financial situation of a company usually will not result in
the elimination of a stock from the Portfolio. However, an
investment may be removed from the Portfolio if, in the
judgment of World, the merit of the investment has been
substantially impaired by extraordinary events or adverse
financial conditions. Furthermore, administrative
adjustments may be made in the Portfolio from time to time
because of mergers, changes in the composition of the S&P
500 Index and similar reasons. In certain circumstances,
World may exercise discretion in determining whether to
exercise warrants or rights issued in respect to portfolio
securities or whether to tender portfolio securities
pursuant to a tender or exchange offer.
The Portfolio is not sponsored, endorsed, sold or
promoted by Standard & Poor's Corporation ("S&P"). S&P
makes no representation or warranty, implied or express, to
the purchasers of the Portfolio or any member of the public
regarding the advisability of investing in index funds or
the Portfolio or the ability of the Index to track general
stock market performance.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE
COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN. S&P
MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE
OBTAINED BY THE PORTFOLIO, OWNERS OF THE PORTFOLIO, OR ANY
DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED
WARRANTIES, AND HEREBY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN.
S&P'S ONLY RELATIONSHIP TO THE PORTFOLIO IS THE LICENSING
OF THE S&P MARKS AND THE INDEX, WHICH IS DETERMINED,
COMPOSED, AND CALCULATED BY S&P WITHOUT REGARD TO THE
LICENSEE OR THE PORTFOLIO.
The equity securities in which the Portfolio invests
are common stocks, preferred stocks, securities convertible
into common stock and American Depository Receipts
("ADRs").
The Portfolio may enter into stock index futures
contracts, to maintain adequate liquidity to meet its
redemption demands while maximizing the level of the
Portfolio's assets which are tracking the performance of
the S&P 500 Index, provided that the value of these
contracts does not exceed 20% of the Portfolio's total
assets. The Portfolio may only purchase those stock index
futures contracts-- such as futures contracts on the S&P
500 Index--that are likely to closely duplicate the
performance of the S&P 500 Index. The Portfolio also can
sell such futures contracts in order to close out a
previously established position. The Portfolio will not
enter into any stock index futures contract for the purpose
of speculation, and will only enter into contracts traded
on national securities exchanges with standardized maturity
dates.
The Portfolio may invest cash reserves in securities
issued by the U.S. Government, its agencies or
instrumentalities, bankers' acceptances, commercial paper
rated at least A-1
5
<PAGE>
by S&P and/or Prime-1 by Moody's Investors Services, Inc.
("Moody's"), certificates of deposit and repurchase
agreements involving such obligations. Such investments
will not be used for defensive purposes.
BOND INDEX PORTFOLIO
The Bond Index Portfolio currently seeks to provide
investment results that correspond to the aggregate price
and interest performance of the Lehman Aggregate Bond Index
(the "Lehman Index"), which tracks the performance of debt
securities. The Lehman Index is made up of the
Government/Corporate Index, the Mortgage-Backed Securities
Index and the Asset-Backed Securities Index. The Lehman
Index includes fixed rate debt issues rated investment
grade or higher by one or more nationally recognized
statistical ratings organizations ("NRSROs"). All issues
have at least one year to maturity and an outstanding par
value of at least $100 million. Lehman Brothers, Inc. is
neither a sponsor of nor in any other way affiliated with
the Trust. Inclusion of a security in the Lehman Index in
no way implies an opinion of Lehman Brothers, Inc. as to
its attractiveness or appropriateness as an investment.
In seeking to generate results that correspond to the
performance of the Lehman Index, the Portfolio will invest
in the following obligations: (i) debt obligations issued
or guaranteed by the United States Government or its
agencies or instrumentalities; (ii) investment-grade debt
obligations issued by U.S. corporations; (iii) debt
obligations issued or guaranteed by foreign sovereign
governments, municipalities, governmental agencies or
international agencies; (iv) mortgage-backed securities,
including conventional 15- and 30-year fixed rate
mortgages, graduated payment mortgages, balloon mortgages
and adjustable rate mortgages; (v) asset-backed securities;
and (vi) any other issues that are included in the Lehman
Index.
Fixed income securities in which the Portfolio may
invest must be rated BBB or better by S&P or Baa or better
by Moody's at the time of purchase. Debt securities rated
BBB or Baa lack outstanding investment characteristics and
have speculative characteristics as well. In the event that
a security held by the Portfolio is downgraded below
investment grade, the adviser will promptly review the
situation and take appropriate action.
If an obligation which is included in the Lehman
Index on the first day of the month ceases to meet any of
the qualifications for inclusion in the Lehman Index during
that month, the obligation remains in the Lehman Index
through the end of that month and then is eliminated from
the Lehman Index. Mellon Bond Associates ("MBA"), the
Portfolio's investment adviser, will monitor portfolio
securities in order to determine whether any of these
obligations have ceased to qualify for inclusion in the
Lehman Index. If an obligation has ceased to qualify for
inclusion in the Lehman Index as a result of: (i) a lowered
investment rating, (ii) an aggregate outstanding principal
amount of less than $100 million, or (iii) a remaining
maturity that no longer exceeds one year (collectively,
"Ineligible Obligations"), the investment adviser may
either undertake to sell such Ineligible Obligations as
quickly as is financially prudent, which may be prior to or
later than the time that obligation is removed from the
Lehman Index, or may determine to retain the
6
<PAGE>
security. To the extent that the investment adviser
determines to retain Ineligible Obligations, such
Ineligible Obligations, together with cash and money market
instruments, will not exceed 20% of the Portfolio's net
assets. Although the Portfolio retains the right to invest
up to 20% of its net assets in Ineligible Obligations, cash
and money market instruments, these items are expected to
constitute less than 10% of the net assets of the
Portfolio. Obligations held by the Portfolio that became
Ineligible Obligations as a result of being rated below
investment grade (which securities are often referred to as
"junk bonds") will not constitute more than 5% of the
Portfolio's net assets. In addition, cash holdings will not
exceed 5% of the Portfolio's net assets. In addition,
obligations that become eligible for inclusion in the
Lehman Index during a particular month generally will not
actually be included in the Lehman Index until the next
month. However, the Portfolio may elect to purchase any
such obligation and deem it to be included in the Lehman
Index once it becomes eligible.
The Portfolio generally will not hold all of the
individual issues which comprise the Lehman Index because
of the large number of securities involved. Instead, the
Portfolio will hold a representative sample of the
securities in the Index, selecting issues to represent
entire "classes" or types of securities in the Lehman
Index. Obligations included in the Lehman Index have been
categorized by MBA into sectors which have been organized
on the basis of type of issuer, and then further classified
by quality and remaining maturities. The percentage of the
Portfolio's assets to be invested in the aggregate
obligations included in a particular sector of the Lehman
Index will approximate, to the maximum extent feasible, the
percentage such sector represents in the Lehman Index. The
Portfolio's ability to duplicate the performance of the
Lehman Index will depend to some extent on the size and
timing of cash flows into and out of the Portfolio, as well
as on the level of the Portfolio's expenses, and the
capability of MBA to select a representative sample of the
securities included in the Lehman Index. To the extent that
the size of the Portfolio's assets limits the number of
issues that the Portfolio can purchase, there is more
potential for deviation from the Lehman Index's performance
than at larger asset levels.
The Portfolio may invest in restricted securities,
including Rule 144A securities, included in the Lehman
Index.
There can be no assurance that the Portfolios will
achieve their respective investment objectives.
GENERAL INVESTMENT
POLICIES
___________________________________________________________________________
Each Portfolio may lend up to 20% of its assets to
qualified institutions for the purpose of realizing
additional income, however neither Portfolio has any
present intention to lend its securities. Each Portfolio
may invest in illiquid securities; however, not more than
10% of the total assets of each Portfolio will be invested
in such instruments. The Portfolios may
7
<PAGE>
enter into forward commitments, or purchase securities on a
when-issued or delayed delivery basis.
For additional information regarding the Portfolios'
permitted investments see "Description of Permitted
Investments and Risk Factors" in this Prospectus and in the
Statement of Additional Information.
INVESTMENT LIMITATIONS
________________________________________________________________________
The investment objective and certain of the investment
limitations are fundamental policies of the Portfolios.
Fundamental policies cannot be changed with respect to the
Trust or a Portfolio without the consent of the holders of
a majority of the Trust's or that Portfolio's outstanding
shares.
Each Portfolio may not:
1. Purchase securities of any issuer (except securities
issued or guaranteed by the United States Government, its
agencies or instrumentalities) if, as a result, more than
5% of the Portfolio's total assets would be invested in
the securities of such issuer. This restriction applies
to 75% of each Portfolio's total assets.
2. Purchase any securities which would cause more than 25%
of the Portfolio's total assets to be invested in the
securities of one or more issuers conducting their
principal business activities in the same industry,
provided that this limitation does not apply to
investments in obligations issued or guaranteed by the
United States Government or its agencies and
instrumentalities.
3. Borrow money, except for temporary or emergency purposes
and then only in an amount not exceeding 10% of the value
of the total assets of that Portfolio. This borrowing
provision is included solely to facilitate the orderly
sale of portfolio securities to accommodate substantial
redemption requests if they should occur, and is not for
investment purposes. All borrowings will be repaid before
making additional investments for that Portfolio, and any
interest paid on such borrowings will reduce the
Portfolio's income.
4. Make loans, except that each Portfolio (i) may enter
into repurchase agreements, provided that repurchase
agreements and time deposits maturing in more than seven
days, and other illiquid securities, including securities
which are not readily marketable or are restricted, are
not to exceed, in the aggregate, 10% of the Portfolio's
total assets, (ii) may engage in securities lending as
described in this Prospectus, and (iii) may purchase or
hold debt instruments in accordance with its investment
objectives and policies.
The foregoing percentage limitations (except the limitation
on borrowings) will apply at the time of the purchase of a
security. Additional fundamental investment limitations are
set forth in the Statement of Additional Information.
8
<PAGE>
THE MANAGER
______________________________________________________________________
SEI Fund Management ("SEI Management") provides the Trust
with overall management services, regulatory reporting, all
necessary office space, equipment, personnel and
facilities, and acts as dividend disbursing agent and
shareholder servicing agent. SEI Management also serves as
transfer agent (the "Transfer Agent") to certain classes of
the Trust.
For its management services, SEI Management is
entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .22% of the average daily net
assets of the S&P 500 Index Portfolio and .35% of the
average daily net assets of the Bond Index Portfolio. SEI
Management may from time to time waive all or a portion of
its fee in order to limit the operating expenses of a
Portfolio. Any such waiver is voluntary and may be
terminated at any time in its sole discretion.
For the fiscal year ended March 31, 1997, the S&P 500
Index and Bond Index Portfolios paid management fees, after
fee waivers, of .16% and .25%, respectively, of their
average daily net assets.
THE ADVISERS
______________________________________________________________________
WORLD ASSET MANAGEMENT
World Asset Management ("World") serves as investment
adviser to the S&P 500 Index Portfolio.
World is a general partnership organized by Munder
Capital Management ("MCM"), a general partnership formed in
December, 1994, which engages in investment management and
advisory services. As of December 31, 1996 total assets
under management of World were $11.0 billion and assets
under management of MCM were $37.0 billion. The principal
business address for World is 255 Brown Street Centre, 2nd
Floor, Birmingham, Michigan 48009.
Under the terms of the Advisory Agreement, World
provides certain record keeping and management services in
connection with the S&P 500 Index Portfolio, including
monitoring the indexing systems and determining which
securities to purchase and sell in order to keep the S&P
500 Index Portfolio in balance with its index.
For its services, World is entitled to a fee, which
is calculated daily and paid monthly, at an annual rate of
.03% of the average daily net assets of the S&P 500 Index
Portfolio. For the fiscal year ended March 31, 1997, the
S&P 500 Index Portfolio paid World an advisory fee of .03%
of its average daily net assets.
MELLON BOND ASSOCIATES
Mellon Bond Associates ("MBA") serves as the investment
adviser to the Bond Index Portfolio.
MBA is a Pennsylvania business trust. MBA's sole
beneficiary is MBC Investment Corporation, a wholly-owned
subsidiary of Mellon Bank Corporation. MBA was established
in October, 1986, as a spin-off of the Institutional Bond
Management division of Mellon Bank's Trust and Investment
Department. As of May 31, 1997, total assets under
9
<PAGE>
management of MBA were $42 billion. The principal business
address for MBA is One Mellon Bank Center, Suite 4135,
Pittsburgh, Pennsylvania 15258.
For its services, MBA is entitled to a fee, which is
calculated daily and paid monthly, at the annual rate of
.07% of the average daily net assets of the Bond Index
Portfolio. For the fiscal year ended March 31, 1997, the
Bond Index Portfolio paid MBA an advisory fee of .07% of
its average daily net assets.
DISTRIBUTION AND
SHAREHOLDER SERVICING
__________________________________________________________________________
SEI Investments Distribution Co. (the "Distributor"), a
wholly-owned subsidiary of SEI Investments Company ("SEI"),
serves as each Portfolio's distributor pursuant to a
distribution agreement with the Trust. The S&P 500 Index
Portfolio has adopted a shareholder servicing plan similar
to the plan described below for its Class E shares (the
"Class E Plan").
The Portfolios have adopted a shareholder servicing
plan for Class A shares (the "Service Plan") under which
the Distributor is entitled to receive a shareholder
servicing fee of up to .25% of average daily net assets
attributable to Class A shares of the Bond Index Portfolio
and up to 15% of average daily net assets attributable to
Class A shares of the S&P 500 Index Portfolio. Under the
Service Plan, the Distributor may perform, or may
compensate other service providers for performing, the
following shareholder and administrative services:
maintaining client accounts; arranging for bank wires;
responding to client inquiries concerning services provided
on investments; assisting clients in changing dividend
options, account designations and addresses;
sub-accounting; providing information on share positions to
clients; forwarding shareholder communications to clients;
processing purchase, exchange and redemption orders; and
processing dividend payments. Under the Service Plan, the
Distributor may retain as a profit any difference between
the fee it receives and the amount it pays to third
parties.
It is possible that an institution may offer
different classes of shares to its customers and thus
receive different compensation with respect to different
classes. These financial institutions may also charge
separate fees to their customers.
The Trust may also execute brokerage or other agency
transactions through the Distributor for which the
Distributor may receive usual and customary compensation.
In addition, the Distributor may, from time to time
and at its own expense, provide promotional incentives, in
the form of cash or other compensation, to certain
financial institutions whose representatives have sold or
are expected to sell significant amounts of the Portfolios'
shares.
10
<PAGE>
PURCHASE AND
REDEMPTION OF SHARES
____________________________________________________________________________
Financial institutions may acquire shares of the Portfolios
for their own account, or as a record owner on behalf of
fiduciary, agency or custody accounts, by placing orders
with the Transfer Agent (or its authorized agent).
Institutions that use certain SEI proprietary systems may
place orders electronically through those systems.
Financial institutions may impose an earlier cut-off time
for receipt of purchase orders directed through them to
allow for processing and transmittal of these orders to the
Transfer Agent for effectiveness on the same day. Financial
institutions which purchase shares for the accounts of
their customers may impose separate charges on these
customers for account services.
Shares of each Portfolio may be purchased or redeemed
on days on which the New York Stock Exchange is open for
business ("Business Days"). However, shares cannot be
purchased by Federal Reserve wire on Federal holidays
restricting wire transfers. The minimum initial investment
in the Class A shares of each Portfolio is $100,000;
however, the minimum investment may be waived at the
Distributor's discretion. All subsequent purchases must be
at least $1,000.
Shareholders who desire to purchase shares for cash
must place their orders with the Transfer Agent (or its
authorized agent) prior to 4:00 p.m. Eastern time on any
Business Day for the order to be accepted on that Business
Day. Generally, cash investments must be transmitted or
delivered in federal funds to the wire agent on the next
Business Day following the day the order is placed. The
Trust reserves the right to reject a purchase order when
the Distributor determines that it is not in the best
interest of the Trust or shareholders to accept such
purchase order.
Purchases will be made in full and fractional shares
of the Portfolios calculated to three decimal places. The
Trust will send shareholders a statement of shares owned
after each transaction. The purchase price of shares is the
net asset value next determined after a purchase order is
received and accepted by the Trust. The net asset value per
share of each Portfolio is determined by dividing the total
market value of the Portfolio's investment and other
assets, less any liabilities, by the total number of
outstanding shares of that Portfolio. Net asset value per
share is determined daily as of the close of business of
the New York Stock Exchange (currently, 4:00 p.m. Eastern
time) on any Business Day.
Information about the market value of each portfolio
security may be obtained by SEI Management from an
independent pricing service. Fixed Income securities having
maturities of 60 days or less at the time of purchase will
be valued using the amortized cost method (described in the
Statement of Additional Information), which approximates
the securities' market value. The pricing service may use a
matrix system to determine valuations of fixed income
securities. This system considers such factors as security
prices, yields, maturities, call features, ratings and
developments relating to specific securities in arriving at
valuations. The pricing service may also provide market
quotations. The
11
<PAGE>
procedures of the pricing service and its valuations are
reviewed by the officers of the Trust under the general
supervision of the Trustees. Portfolio securities for which
market quotations are available are valued at the last
quoted sale price on each Business Day or, if there is no
such reported sale, at the most recently quoted bid price.
Shareholders who desire to redeem shares of the
Portfolios must place their redemption orders with the
Transfer Agent (or its authorized agent) prior to 4:00 p.m.
Eastern time on any Business Day. The redemption price is
the net asset value per share of the Portfolio next
determined after receipt by the Transfer Agent (or its
authorized agent) of the redemption order. Payment on
redemption will be made as promptly as possible and, in any
event, within seven days after the redemption order is
received.
Purchase and redemption orders may be placed by
telephone. Neither the Trust nor the Transfer Agent (or its
authorized agent) will be responsible for any loss,
liability, cost or expense for acting upon wire
instructions or upon telephone instructions that it
reasonably believes to be genuine. The Trust and the
Transfer Agent (or its authorized agent) will each employ
reasonable procedures to confirm that instructions
communicated by telephone are genuine, including requiring
a form of personal identification prior to acting upon
instructions received by telephone and recording telephone
instructions.
If market conditions are extraordinarily active, or
other extraordinary circumstances exist, shareholders may
experience difficulties placing redemption orders by
telephone, and may wish to consider placing orders by other
means.
PERFORMANCE
______________________________________________________________________
From time to time, each Portfolio may advertise yield and
total return. These figures will be based on historical
earnings and are not intended to indicate future
performance. No representation can be made concerning
actual future yields or returns. The yield of a Portfolio
refers to the income generated by a hypothetical investment
in such Portfolio over a thirty day period. This income is
then "annualized," i.e., the income over thirty days is
assumed to be generated over one year, and is shown as a
percentage of the investment.
The total return of a Portfolio refers to the average
compounded rate of return on a hypothetical investment for
designated time periods, assuming that the entire
investment is redeemed at the end of each period and
assuming the reinvestment of all dividend and capital gain
distributions.
A Portfolio may periodically compare its performance
to the performance of: other mutual funds tracked by mutual
fund rating services (such as Lipper Analytical); financial
and business publications and periodicals; broad groups of
comparable mutual funds; unmanaged indices which may assume
investment of dividends but generally do not reflect
deductions for administrative and management costs; or to
other investment alternatives. A Portfolio may quote
Morningstar, Inc., a service that ranks mutual funds on the
basis of risk-adjusted performance. A Portfolio may use
long-term performance of these capital
12
<PAGE>
markets to demonstrate general long-term risk versus reward
scenarios and could include the value of a hypothetical
investment in any of the capital markets. A Portfolio may
also quote financial and business publications and
periodicals as they relate to fund management, investment
philosophy and investment techniques.
A Portfolio may quote various measures of volatility
and benchmark correlation in advertising and may compare
these measures to those of other funds. Measures of
volatility attempt to compare historical share price
fluctuations or total returns to a benchmark while measures
of benchmark correlation indicate how valid a comparative
benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot
be calculated precisely.
The performance of Class E shares of the S&P 500
Index Portfolio will normally be higher than that of the
Class A shares of the S&P 500 Index Portfolio because of
the different shareholder servicing expenses actually
charged to Class A shares.
TAXES
______________________________________________________________________________
The following summary of federal income tax consequences is
based on current tax laws and regulations, which may be
changed by legislative, judicial or administrative action.
No attempt has been made to present a detailed explanation
of the federal, state or local income tax treatment of the
Portfolios or their shareholders. In addition, state and
local tax consequences of an investment in a Portfolio may
differ from the federal income tax consequences described
below. Accordingly, shareholders are urged to consult their
tax advisers regarding specific questions as to federal,
state and local taxes. Additional information concerning
taxes is set forth in the Statement of Additional
Information.
TAX STATUS OF THE PORTFOLIOS
Each Portfolio is treated as a separate entity for federal
income tax purposes and is not combined with the Trust's
other portfolios. The Portfolios intend to qualify for the
special tax treatment afforded regulated investment
companies ("RICs") under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), so as to be
relieved of federal income tax on net investment company
taxable income and net capital gains (the excess of net
long-term capital gain over net short-term capital losses)
distributed to shareholders.
TAX STATUS OF DISTRIBUTIONS
Each Portfolio will distribute substantially all of its net
investment income (including net short-term capital gains)
to shareholders. Dividends from a Portfolio's net
investment company taxable income are taxable to its
shareholders as ordinary income (whether received in cash
or in additional shares) to the extent of a Portfolio's
earnings and profits. Dividends paid by the S&P 500 Index
Portfolio to corporate shareholders will qualify for the
dividends-received deduction to the extent attributable to
dividends received by a Portfolio from domestic
corporations. Dividends paid by the Bond Index Portfolio
will not qualify for the dividends-received deduction.
Long-term capital gains realized by a Portfolio will
be distributed to shareholders at least annually and will
be taxable to shareholders of such Portfolio as long-term
capital
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<PAGE>
gains regardless of how long the shareholder has held
shares and regardless of whether the distributions are
received in cash or in additional shares. Distributions
from net capital gains do not qualify for the dividends
received deduction. Each Portfolio will provide annual
reports to the Portfolio's shareholders of the federal
income tax status of all distributions.
Dividends declared by a Portfolio in October,
November or December of any year and payable to
shareholders of record on a date in such a month will be
deemed to have been paid by the Portfolio and received by
the shareholders on December 31 of the year declared if
paid by the Portfolio at any time during the following
January.
Certain securities purchased by a Portfolio (such as
STRIPS, defined in "Description of Permitted Investments
and Risk Factors--U.S. Treasury Obligations") are sold with
original issue discount and thus do not make periodic cash
interest payments. Each Portfolio will be required to
include as part of its current income the imputed interest
on such obligations even though the Portfolio has not
received any interest payments on such obligations during
the period. Because each Portfolio will distribute
substantially all of its net investment income to its
shareholders, a Portfolio may have to sell portfolio
securities to distribute such imputed income, which may
occur at a time when the Adviser would not have chosen to
sell such securities and which may result in a taxable gain
or loss.
Investment income received directly by a Portfolio on
direct U.S. government obligations is exempt from income
tax at the state level and may be exempt, depending on the
state, when received by a shareholder as income dividends
provided certain state-specific conditions are satisfied.
Interest received on repurchase agreements collateralized
by U.S. government obligations normally is not exempt from
state tax. Each Portfolio will inform the Portfolio's
shareholders annually of the percentage of income and
distributions derived from direct U.S. obligations.
Shareholders should consult their tax advisers to determine
whether any portion of income dividends received from a
Portfolio is considered tax-exempt in their state.
Each Portfolio intends to make sufficient
distributions prior to the end of each calendar year to
avoid liability for the federal excise tax applicable to
RICs.
Investment income received by the Bond Index
Portfolio from sources within foreign countries may be
subject to foreign income taxes withheld at the source. The
Bond Index Portfolio will not be able to elect to treat its
shareholders as having paid their proportionate share of
such taxes for foreign tax credit purposes.
Each sale, exchange or redemption of Portfolio shares
is a taxable transaction to the shareholder.
GENERAL INFORMATION
______________________________________________________________
THE TRUST
The Trust was organized as a Massachusetts business trust
under a Declaration of Trust dated March 6, 1985. The
Declaration of Trust permits the Trust to offer separate
series of shares and different classes of each Portfolio.
All consideration received by the Trust for
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<PAGE>
shares of any class of any Portfolio, and all assets of
such Portfolio or class, belong to that Portfolio or class,
respectively, and would be subject to the liabilities
related thereto.
The Trust pays its expenses, including fees of its
service providers, audit and legal expenses, expenses of
preparing prospectuses, proxy solicitation materials and
reports to shareholders, costs of custodial services and
registering the shares under federal and state securities
laws, pricing, insurance expenses, litigation and other
extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses.
TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by
the Trustees under the laws of the Commonwealth of
Massachusetts. The Trustees have approved contracts under
which, as described above, certain companies provide
essential management services to the Trust.
VOTING RIGHTS
Each share held entitles the shareholder of record to one
vote. Shareholders of each Portfolio or class will vote
separately on matters pertaining solely to that Portfolio
or class, such as any distribution plan. As a Massachusetts
business trust, the Trust is not required to hold annual
meetings of shareholders, but approval will be sought for
certain changes in the operation of the Trust and for the
election of Trustees under certain circumstances. In
addition, a Trustee may be removed by the remaining
Trustees or by shareholders at a special meeting called
upon written request of shareholders owning at least 10% of
the outstanding shares of the Trust. In the event that such
a meeting is requested, the Trust will provide appropriate
assistance and information to the shareholders requesting
the meeting.
REPORTING
The Trust issues an unaudited report semi-annually and
audited financial statements annually. The Trust furnishes
proxy statements and other reports to shareholders of
record.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to SEI Fund
Management, Oaks, Pennsylvania 19456.
DIVIDENDS
Substantially all of the net investment income (not
including capital gains) of the S&P 500 Index Portfolio is
distributed in the form of quarterly dividends and that of
the Bond Index Portfolio is distributed in the form of
monthly dividends.
Shareholders automatically receive all income
dividends and capital gain distributions in additional
shares at the net asset value next determined following the
record date, unless the shareholder has elected to take
such payment in cash. Shareholders may change their
election by providing written notice to SEI Management at
least 15 days prior to the distribution.
Dividends and capital gains of each Portfolio are
paid on a per-share basis. The value of each share will be
reduced by the amount of any such payment. If shares are
purchased shortly before the record date for a dividend or
capital gains distributions, a shareholder will pay the
full price for the share and receive some portion of the
price back as a taxable dividend or distribution.
15
<PAGE>
The dividends on Class E shares of the S&P 500 Index
Portfolio are normally higher than those on the Class A
shares because of the different shareholder servicing
expenses actually charged to Class A shares.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
Arthur Andersen LLP serves as the independent public
accountants of the Trust.
CUSTODIAN AND WIRE AGENT
Comerica Bank, 411 W. Lafayette, Detroit, Michigan 48226
(the "Custodian"), acts as custodian of the Portfolios'
assets. The Custodian holds cash, securities and other
assets of the Trust as required by the Investment Company
Act of 1940 (the "1940 Act") CoreStates Bank, N.A., Broad
and Chestnut Streets, P.O. Box 7618, Philadelphia,
Pennsylvania 19101, acts as wire agent of the Trust's
assets.
DESCRIPTION OF
PERMITTED INVESTMENTS
AND RISK FACTORS
____________________________________________________________________________
The following is a description of certain of the permitted
investment practices for the Portfolios, and the associated
risk factors:
AMERICAN DEPOSITARY RECEIPTS ("ADRS")
ADRs are securities, typically issued by a U.S. financial
institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a
foreign issuer and deposited with the depositary. ADRs may
be available through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by
the issuer of the security underlying the receipt and a
depositary, whereas an unsponsored facility may be
established by a depositary without participation by the
issuer of the receipt's underlying security.
ASSET-BACKED SECURITIES (NON-MORTGAGE)
Asset-backed securities consist of securities secured by
company receivables, truck and auto loans, leases and
credit card receivables. Such securities are generally
issued as pass-through certificates, which represent
undivided fractional ownership interests in the underlying
pools of assets. Such securities also may be debt
instruments, which are also known as collateralized
obligations and are generally issued as the debt of a
special purpose entity, such as a trust or corporation,
organized solely for purpose of owning such assets and
issuing such debt. A Fund may invest in other asset-backed
securities that may be created in the future if the Advisor
determines they are suitable.
EQUITY SECURITIES
Equity securities represent ownership interests in a
company or corporation, and include common stock, preferred
stock, and warrants and other rights to acquire such
instruments.
FIXED INCOME SECURITIES
Fixed income securities are debt obligations issued by
corporations, municipalities and other borrowers. While
securities with longer maturities tend to produce higher
yields, the
16
<PAGE>
prices of longer maturity securities are also subject to
greater market fluctuations as a result of changes in
interest rates.
ILLIQUID SECURITIES
Illiquid securities are securities that cannot be disposed
of within seven business days at approximately the price at
which they are being carried on the Portfolio's books.
Illiquid securities include demand instruments with demand
notice periods exceeding seven days, securities for which
there is no active secondary market, and repurchase
agreements with durations (or maturities) over seven days
in length.
JUNK BONDS
Bonds rated below investment grade are often referred to as
"junk bonds." Such securities involve greater risk of
default or price declines than investment grade securities
due to changes in the issuer's creditworthiness and the
outlook for economic growth. The market for these
securities may be less active, causing market price
volatility and limited liquidity in the secondary market.
This may limit a Portfolio's ability to sell such
securities at their market value. In addition, the market
for these securities may also be adversely affected by
legislative and regulatory developments. Credit quality in
the junk bond market can change suddenly and unexpectedly,
and even recently issued credit ratings may not fully
reflect the actual risks imposed by a particular security.
MONEY MARKET INSTRUMENTS
Money market instruments are high-quality,
dollar-denominated, short-term debt instruments. They
consist of: (i) bankers' acceptances, certificates of
deposits, notes and time deposits of highly-rated U.S.
banks and U.S. branches of foreign banks; (ii) U.S.
Treasury obligations and obligations issued by the agencies
and instrumentalities of the U.S. Government; (iii)
high-quality commercial paper issued by U.S. and foreign
corporations; (iv) debt obligations with a maturity of one
year or less issued by corporations that issue high-quality
commercial paper; and (v) repurchase agreements involving
any of the foregoing obligations entered into with
highly-rated banks and broker-dealers.
MORTGAGE-BACKED SECURITIES
Mortgage-backed securities are instruments that entitle the
holder to a share of all interest and principal payments
from mortgages underlying the security. The mortgages
backing these securities include conventional fifteen- and
thirty-year fixed-rate mortgages, graduated payment
mortgages, adjustable rate mortgages and balloon mortgages.
During periods of declining interest rates, prepayment of
mortgages underlying mortgage-backed securities can be
expected to accelerate. Prepayment of mortgages which
underlie securities purchased at a premium often results in
capital losses, while prepayment of mortgages purchased at
a discount often results in capital gains. Because of these
unpredictable prepayment characteristics, it is often not
possible to predict accurately the average life or realized
yield of a particular issue.
GOVERNMENT PASS-THROUGH SECURITIES These are
securities that are issued or guaranteed by a U.S.
Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these
mortgage-backed securities are GNMA, Fannie Mae and FHLMC.
GNMA, Fannie Mae and FHLMC guarantee timely distributions
of
17
<PAGE>
interest to certificate holders. GNMA and Fannie Mae also
guarantee timely distributions of scheduled principal.
FHLMC generally guarantees only the ultimate collection of
principal of the underlying mortage loan. Fannie Mae and
FHLMC obligations are not backed by the full faith and
credit of the U.S. Government as GNMA certificates are, but
Fannie Mae and FHLMC securities are supported by the
instrumentalities' right to borrow from the U.S. Treasury.
Government and private guarantees do not extend to the
securities' value, which is likely to vary inversely with
fluctuations in interest rates.
PRIVATE PASS-THROUGH SECURITIES These are
mortgage-backed securities issued by a non-governmental
entity, such as a trust or corporate entity. These
securities include collateralized mortgage obligations
("CMOs") and real estate mortgage investment conduits
("REMICs"). While they are generally structured with one or
more types of credit enhancement, private pass-through
securities typically lack a guarantee by an entity having
the credit status of a governmental agency or
instrumentality.
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS") CMOs
are debt obligations or multiclass pass-through
certificates issued by agencies or instrumentalities of the
U.S. Government or by private originators or investors in
mortgage loans. Principal payments on the underlying
mortgage assets may cause CMOs to be retired substantially
earlier then their stated maturities or final distribution
dates, resulting in a loss of all or part of any premium
paid.
REMICS A REMIC is a CMO that qualifies for special
tax treatment under the Internal Revenue Code and invests
in certain mortgages principally secured by interests in
real property. Investors may purchase beneficial interests
in REMICs, which are known as "regular" interests, or
"residual" interests. Guaranteed REMIC pass-through
certificates ("REMIC Certificates") issued by Fannie Mae or
FHLMC represent beneficial ownership interests in a REMIC
trust consisting principally of mortgage loans or Fannie
Mae, FHLMC or GNMA-guaranteed mortgage pass-through
certificates.
STRIPPED MORTGAGE-BACKED SECURITIES ("SMBS") SMBs
are usually structured with two classes that receive
specified proportions of the monthly interest and principal
payments from a pool of mortgage securities. One class may
receive all of the interest payments and is thus termed an
interest-only class ("IO"), while the other class may
receive all of the principal payments and is thus termed
the principal-only class ("PO"). The value of IOs tends to
increase as rates rise and decrease as rates fall; the
opposite is true of POs. During times when interest rates
are experiencing fluctuations, such securities can be
difficult to price on a consistent basis. The market for
SMBs is not as fully developed as other markets; SMBs,
therefore, may be illiquid.
REPURCHASE AGREEMENTS
Agreements by which a Portfolio obtains a security and
simultaneously commits to return the security to the seller
at an agreed upon price (including principal and interest)
on an agreed upon date within a number of days from the
date of purchase. Repurchase agreements are considered
loans under the 1940 Act.
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<PAGE>
STOCK INDEX FUTURES
A stock index futures contract is a bilateral agreement
pursuant to which two parties agree to take or make
delivery of an amount of cash equal to a specified dollar
amount times the difference between the stock index value
at the close of trading of the contract and the price at
which the futures contract is originally struck. No
physical delivery of the securities comprising the index is
made; generally contracts are closed out prior to the
expiration date of the contract.
In order to avoid leveraging and related risks, when
a Portfolio purchases futures contracts, it will
collateralize its position by depositing an amount of cash
or liquid securities equal to the market value of the
futures positions held, less margin deposits, in a
segregated account. Collateral equal to the current market
value of the futures position will be marked to market on a
daily basis.
A Portfolio may enter into futures contracts and
options on futures contracts traded on an exchange
regulated by the Commodities Futures Trading Commission
("CFTC"), so long as, to the extent that such transactions
are not for "bona fide hedging purposes," the aggregate
initial margin and premiums on such positions (excluding
the amount by which such options are in the money) do not
exceed 5% of the Portfolio's net assets. A Portfolio may
buy and sell futures contracts and related options to
manage its exposure to changing interest rates and
securities prices. Some strategies reduce a Portfolio's
exposure to price fluctuations, while others tend to
increase its market exposure. Futures and options on
futures can be volatile instruments and involve certain
risks that could negatively impact a Portfolio's return.
There are risks associated with these activities,
including the following: (1) the success of a hedging
strategy may depend on an ability to predict movements in
the prices of individual securities, fluctuations in
markets and movements in interest rates; (2) there may be
an imperfect or no correlation between the changes in
market value of the securities held by the Portfolio and
the prices of futures and options on futures; (3) there may
not be a liquid secondary market for a futures contract or
option; (4) trading restrictions or limitations may be
imposed by an exchange; and (5) government regulations may
restrict trading in futures contracts and on options
futures.
U.S. GOVERNMENT AGENCY OBLIGATIONS
Obligations issued or guaranteed by agencies of the U.S.
Government including, among others, the Federal Farm Credit
Bank, the Federal Housing Administration and the Small
Business Administration and obligations issued or
guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage
Corporation, the Federal Land Banks and the U.S. Postal
Service. Some of these securities are supported by the full
faith and credit of the U.S. Treasury (e.g., Government
National Mortgage Association securities), and others are
supported by the right of the issuer to borrow from the
Treasury (e.g., Federal Farm Credit Bank securities), while
still others are supported only by the credit of the
instrumentality (e.g., Fannie Mae securities).
U.S. TREASURY OBLIGATIONS
U.S. Treasury obligations consist of bills, notes and bonds
issued by the U.S. Treasury, as well as separately traded
interest and principal component parts of such obligations,
19
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known as Separately Traded Registered Interest and
Principal Securities ("STRIPS") that are transferable
through the Federal book-entry system.
VARIABLE AND FLOATING RATE INSTRUMENTS
Certain obligations may carry variable or floating rates of
interest and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates
which are not fixed, but which vary with changes in
specified market rates or indices. The interest rates on
these securities may be reset daily, weekly, quarterly or
at some other interval, and may have a floor or ceiling on
interest rate changes.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
When-issued or delayed delivery transactions involve the
purchase of an instrument with payment and delivery taking
place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the
purchase commitment. A Portfolio will maintain a separate
account with liquid securities or cash in an amount at
least equal to these commitments. The interest rate
realized on these securities is fixed as of the purchase
date, and no interest accrues to a Portfolio before
settlement.
Additional information on other permitted investments can
be found in the Statement of Additional Information.
20
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TABLE OF CONTENTS
_________________________________________________________________
<TABLE>
<S> <C>
Annual Operating Expenses........................ 2
Financial Highlights............................. 3
The Trust........................................ 4
Investment Objectives and Policies............... 4
General Investment Policies...................... 7
Investment Limitations........................... 8
The Manager...................................... 9
The Advisers..................................... 9
Distribution and Shareholder Servicing........... 10
Purchase & Redemption of Shares.................. 11
Performance...................................... 12
Taxes............................................ 13
General Information.............................. 14
Description of Permitted Investments and Risk
Factors......................................... 16
</TABLE>
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<PAGE>
SEI INDEX FUNDS
Manager:
SEI Fund Management
Distributor:
SEI Investments Distribution Co.
Investment Advisers:
World Asset Management
Mellon Bond Associates
This STATEMENT OF ADDITIONAL INFORMATION is not a Prospectus. It is intended
to provide additional information regarding the activities and operations of the
Trust and should be read in conjunction with the Trust's Prospectuses dated July
31, 1997. Prospectuses may be obtained without charge by writing the Trust's
distributor, SEI Investments Distribution Co., Oaks, Pennsylvania 19456, or by
calling 1-800-342-5734. Unless otherwise defined herein, capitalized terms used
herein but not defined herein shall have the respective meanings set forth in
the Prospectus.
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Trust................................................................. S-2
Description of Certain Permitted Investments.............................. S-2
Investment Limitations.................................................... S-6
The Manager and Transfer Agent............................................ S-7
The Advisers.............................................................. S-8
Distribution and Shareholder Servicing.................................... S-9
Trustees and Officers of the Trust........................................ S-10
Performance............................................................... S-12
Purchase and Redemption of Shares......................................... S-13
Taxes..................................................................... S-14
Portfolio Transactions.................................................... S-16
Description of Shares..................................................... S-17
Limitation of Trustees' Liability......................................... S-18
Shareholder Liability..................................................... S-18
5% Shareholders........................................................... S-18
Custodian................................................................. S-19
Experts................................................................... S-19
Financial Statements...................................................... S-19
</TABLE>
July 31, 1997
<PAGE>
THE TRUST
SEI Index Funds (the "Trust") is a diversified, open-end management
investment company established as a Massachusetts business trust pursuant to a
Declaration of Trust dated March 6, 1985. The Declaration of Trust permits the
Trust to offer separate series of units of beneficial interest ("shares") and
separate classes of series. Except for differences between Class A and Class E
shares of the S&P 500 Index Portfolio pertaining to shareholder service plans,
each share of each portfolio represents an equal proportionate interest in that
portfolio with each other share of that portfolio. This Statement of Additional
Information relates to the Trust's S&P 500 Index Portfolio and the Bond Index
Portfolio (the "Portfolios").
The S&P 500 Index Portfolio is not sponsored, endorsed, sold or promoted by
Standard & Poor's Corporation ("S&P"). S&P makes no representation or warranty,
express or implied, to the purchasers of the Portfolio or any member of the
public regarding the advisability of investing in index funds or the Portfolio
or the ability of the S&P 500 Composite Stock Price Index (the "S&P 500 Index")
to track general stock market performance. S&P's only relationship to the
licensee, the Trust, is the licensing of certain trademarks and trade names of
S&P and of the S&P 500 Index which is determined, composed and calculated by S&P
without regard to the licensee or the Portfolio. S&P has no obligation to take
the needs of the licensee or the owners of the Portfolio into consideration in
determining, composing or calculating the S&P 500 Index. S&P is not responsible
for and has not participated in the determination of, the timing of, prices at,
or quantities of the Portfolio to be issued or in the determination or
calculation of the equation by which the Portfolio is to be converted into cash.
S&P has no obligation or liability in connection with the administration,
marketing or trading of the Portfolio.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500
INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY THE PORTFOLIO, OWNERS OF THE PORTFOLIO, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED
THEREIN IN CONNECTION WITH THE RIGHTS LICENSED HEREUNDER OR FOR ANY OTHER USE.
S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY DISCLAIMS ALL WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO
THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.
DESCRIPTION OF CERTAIN PERMITTED INVESTMENTS
The following information supplements the information about permitted
investments set forth in the corresponding Prospectus for the relevant
Portfolio.
AMERICAN DEPOSITARY RECEIPTS--Holders of unsponsored depositary receipts
generally bear all the costs of the unsponsored facility. The depositary of an
unsponsored facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to pass
through, to the holders of the receipts, voting rights with respect to the
deposited securities.
BANK OBLIGATIONS--The Portfolios may invest in bank obligations of U.S.
commercial banks or savings and loan institutions, including certificates of
deposit, time deposits and bankers' acceptances. A time deposit is an account
containing a currency balance pledged to remain at a particular bank for a
specified period in return for payment of interest. A bankers' acceptance is a
bill of exchange guaranteed by a bank or trust company for payment within one to
six months. Bankers' acceptances are used to provide manufacturers and exporters
with capital to operate between the time of manufacture or export and payment by
the purchaser. A certificate of deposit is an interest-bearing instrument with a
specific
S-2
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maturity issued by a bank or savings and loan institution in exchange for the
deposit of funds that normally can be traded in the secondary market prior to
maturity.
EQUITY SECURITIES--Investments in equity securities are subject to market
risks that may cause their prices to fluctuate over time. The value of
convertible equity securities is also affected by prevailing interest rates, the
credit quality of the issuer and any call provisions. Fluctuations in the value
of equity securities will not necessarily affect cash income derived from these
securities, but will affect a Portfolio's net asset value.
FIXED INCOME SECURITIES--The market value of the fixed income investments
will generally change in response to interest rate changes and other factors.
During periods of falling interest rates, the values of outstanding fixed income
securities generally rise. Conversely, during periods of rising interest rates,
the values of such securities generally decline.
Changes by recognized agencies in the rating of any fixed income security
and in the ability of an issuer to make payments of interest and principal also
affect the value of these investments. Changes in the value of these securities
will not necessarily affect cash income derived from these securities but will
affect a Portfolio's net asset value.
MORTGAGE PASS-THROUGH SECURITIES--The Bond Index Portfolio may purchase
securities representing interests in mortgage pools guaranteed by U.S.
Government agencies or instrumentalities, including Government National Mortgage
Association ("GNMA"), Fannie Mae and Federal Home Loan Mortgage Corporation
("FHLMC"), conventional mortgage-pass through obligations, and Federal Housing
Administration-insured mortgage pools.
GNMA is a wholly-owned U.S. Government corporation which guarantees the
timely payment of principal and interest. The market value and interest yield of
these instruments can vary due to market interest rate fluctuations and early
prepayments of underlying mortgages. These securities represent ownership in a
pool of federally insured mortgage loans. GNMA certificates consist of
underlying mortgages with a maximum maturity of 30 years. However, due to
scheduled and unscheduled principal payments, GNMA certificates have a shorter
average maturity and, therefore, less principal volatility than a comparable
30-year bond. Since prepayment rates vary widely, it is not possible to predict
accurately the average maturity of a particular GNMA pool. The scheduled monthly
interest and principal payments relating to mortgages in the pool will be
"passed through" to investors. GNMA securities differ from conventional bonds in
that principal is paid back to the certificate holders over the life of the loan
rather than at maturity. As a result, the Portfolio will receive monthly
scheduled payments of principal and interest. In addition, the Portfolio may
receive unscheduled principal payments representing prepayments on the
underlying mortgages. Any prepayments will be reinvested at the then prevailing
interest rate.
Mortgage-backed securities issued by Fannie Mae include Fannie Mae
Guaranteed Mortgage Pass-Through Certificates (also known as "Fannie Maes") that
are solely the obligations of Fannie Mae and are not backed by or entitled to
the full faith and credit of the United States. Fannie Mae is a government-
sponsored organization owned entirely by private stockholders. Fannie Maes are
guaranteed as to timely payment of the principal and interest by Fannie Mae.
Mortgage-backed securities issued by the FHLMC include FHLMC Mortgage
Participation Certificates (also known as "Freddie Macs" or "PC's"). The FHLMC
is a corporate instrumentality of the United States, created pursuant to an Act
of Congress, which is owned entirely by Federal Home Loan Banks. Freddie Macs
are not guaranteed by the United States or by any Federal Home Loan Banks and do
not constitute a debt or obligation of the United States or of any Federal Home
Loan Bank. Freddie Macs entitle the holder to timely payment of interest, which
is guaranteed by the FHLMC. The FHLMC guarantees either ultimate collection or
timely payment of all principal payments on the underlying mortgage loans. When
the FHLMC does not guarantee timely payment of principal, FHLMC may remit the
amount due on account of its guarantee of ultimate payment of principal at any
time after default on an underlying mortgage, but in no event later than one
year after it becomes payable.
S-3
<PAGE>
In a CMO, series of bonds or certificates are usually issued in multiple
classes. Principal and interest paid on the underlying mortgage assets may be
allocated among the several classes of a series of a CMO in a variety of ways.
Each class of a CMO, often referred to as a "tranche," is issued with a specific
fixed or floating coupon rate and has a stated maturity or final distribution
date.
For FHLMC REMIC Certificates, FHLMC guarantees the timely payment of
interest and also guarantees the payment of principal as payments are required
to be made on the underlying mortgage participation certificates.
REPURCHASE AGREEMENTS--Repurchase agreements are agreements under which
securities are acquired from a securities dealer or bank subject to resale on an
agreed upon date and at an agreed upon price which includes principal and
interest. A Portfolio bears a risk of loss in the event that the other party to
a repurchase agreement defaults on its obligations and the Portfolio is delayed
or prevented from exercising its rights to dispose of the collateral securities.
A portfolio may enter into repurchase agreements only with financial
institutions that its adviser deems to present minimal risk of bankruptcy during
the term of the agreement, based on guidelines that are periodically reviewed by
the Board of Trustees. These guidelines currently permit each Portfolio to enter
into repurchase agreements only with approved banks and primary securities
dealers, as recognized by the Federal Reserve Bank of New York, which have
minimum net capital of $100 million, or with a member bank of the Federal
Reserve System. Repurchase agreements are considered to be loans collateralized
by the underlying security. Repurchase agreements entered into by a Portfolio
will provide that the underlying security at all times shall have a value at
least equal to 102% of the price stated in the agreement. This underlying
security will be marked to market daily. Each adviser will monitor compliance
with this requirement. Under all repurchase agreements entered into by a
Portfolio, the Custodian or its agent must take possession of the underlying
collateral. However, if the seller defaults, a Portfolio could realize a loss on
the sale of the underlying security to the extent the proceeds of the sale are
less than the resale price. In addition, even though the Bankruptcy Code
provides protection for most repurchase agreements, if the seller should be
involved in bankruptcy or insolvency proceedings, a Portfolio may incur delay
and costs in selling the security and may suffer a loss if the Portfolio is
treated as an unsecured creditor.
The Portfolio or its agent will have actual or constructive possession of
the securities held as collateral for the repurchase agreement. Collateral must
be maintained at a value at least equal to 100% of the purchase price. A
Portfolio bears a risk of loss in the event the other party defaults on its
obligations and the Portfolio is delayed or prevented from exercising its right
to dispose of the collateral securities or if the Portfolio realizes a loss on
the sale of the collateral securities. A Portfolio will enter into repurchase
agreements only with financial institutions deemed to present minimal risk of
bankruptcy during the term of the agreement based on guidelines established and
periodically reviewed by the Trustees.
SECURITIES LENDING--In order to generate additional income, a Portfolio may
lend its securities pursuant to agreements requiring that the loans be
continuously secured by cash, securities of the U.S. Government or its agencies,
or any combination of cash and such securities, in an amount at least equal to
the market value of the loaned securities. Loans are made only to borrowers
deemed by the advisers to be in good standing and when, in the judgment of the
advisers, the consideration that can be earned currently from such loaned
securities justifies the attendant risk. Any loan may be terminated by either
party upon reasonable notice to the other party. Each of the Portfolios may use
the Distributor as a broker in these transactions.
STOCK INDEX FUTURES--The S&P 500 Index Portfolio may invest in stock index
futures. The nature of initial and variation margin in futures transactions is
different from that of margin in security transactions in that futures contract
margin does not involve the borrowing of funds to finance the transactions.
Rather, the margin is in the nature of a performance bond or good-faith deposit
on the contract that is returned to the Portfolio upon termination of the
contract, assuming all contractual obligations have been satisfied. Positions in
futures contracts may be closed only on an exchange or board
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of trade providing a secondary market for such futures contracts. The value of
the contract usually will vary in direct proportion to the total face value.
Market value of a stock index futures position is defined as the closing value
of the Index multiplied by 500 times the number of contracts held.
The Portfolio's ability to effectively utilize futures contracts depends on
several factors. First, it is possible that there will not be a perfect price
correlation between the futures contracts and their underlying stock index. In
addition, the purchase of a futures contract involves the risk that the
Portfolio could lose more than the original margin deposit required to initiate
a futures transaction.
In considering the proposed use of futures contracts, particular note should
be taken that futures contracts relate to the anticipated levels at some point
in the future not to the current level of the underlying instrument; thus, for
example, trading of stock index futures may not reflect the trading of the
securities which are used to formulate an index or even actual fluctuations in
the relevant index itself. There is, in addition, a risk that movements in the
price of futures contracts will not correlate with the movement in prices of the
stock index being tracked. There may be several reasons unrelated to the value
of the underlying securities which causes this situation to occur. First, all
participants in the futures market are subject to initial and variation margin
requirements. If, to avoid meeting additional margin deposit requirements or for
other reasons, investors choose to close a significant number of futures
contracts through offsetting transactions, distortions in the normal price
relationship between the securities markets and the futures markets may occur.
Second, because the deposit requirements in the futures market are less onerous
than margin requirements in the securities market, there may be increased
participation by speculators in the futures market which may also cause
temporary price distortions.
The Portfolio has undertaken to restrict its futures contract trading as
follows: First, the Portfolio will not engage in transactions in futures
contracts for speculative purposes. Second, the Portfolio will not market itself
to the public as a commodity pool or otherwise as a vehicle for trading in the
commodities futures or commodity options markets. Third, the Portfolio will
disclose to all prospective shareholders the purpose of and limitations on its
commodity futures trading. Fourth, the Portfolio will submit to the Commodity
Futures Trading Commission ("CFTC") special calls for information. Accordingly,
registration as a commodities pool operator with the CFTC is not expected to be
required.
No price is paid upon entering into futures contracts. Instead, a Portfolio
is required to deposit an amount of cash or U.S. Treasury securities known as
"initial margin." Subsequent payments, call "variation margin," to and from the
broker, would be made on a daily basis as the value of the futures position
varies (a process known as "marking to market"). The margin is in the nature of
a performance bond or good-faith deposit on a futures contract.
In considering the proposed use of futures contracts, particular note should
be taken that futures contracts relate to the anticipated levels at some point
in the future, not to the current level of the underlying instrument. Thus
trading of stock index futures may not reflect the trading of the securities
which are used to formulate an index or even actual fluctuations in the relevant
index itself. There is, in addition, a risk that movements in the price of
futures contracts will not correlate with the movement in prices of the stock
index being tracked.
U.S. GOVERNMENT AGENCY OBLIGATIONS--Guarantees of principal by agencies or
instrumentalities of the U.S. Government may be a guarantee of payment at the
maturity of the obligation so that in the event of a default prior to maturity
there might not be a market and thus no means of realizing on the obligation
prior to maturity. Guarantees as to the timely payment of principal and interest
do not extend to the value or yield of these securities nor to the value of the
Portfolios' shares.
U.S. GOVERNMENT SECURITIES--The Portfolios may invest in U.S. Government
Securities, which include bills, notes and bonds issued by the United States
Treasury, obligations issued or guaranteed by agencies of the United States
Government including, among others, Export Import Bank of the United States,
Farmers Home Administration, Federal Farm Credit Bank, Federal Housing
Administration,
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Maritime Administration, Small Business Administration, and The Tennessee Valley
Authority and obligations issued or guaranteed by instrumentalities of the
United States Government including, among others, Federal Home Loan Banks,
FHLMC, Federal Intermediate Credit Banks, Federal Land Banks, Fannie Mae and the
United States Postal Service. Some of these securities are supported by the full
faith and credit of the United States Treasury (E.G., GNMA securities), others
are supported by the right of the issuer to borrow from the Treasury (E.G.,
Federal Farm Credit Bank securities) and still others are supported only by the
credit of the instrumentality (E.G., Fannie Mae securities). Guarantees of
principal by agencies or instrumentalities of the United States Government may
be a guarantee of payment at the maturity of the obligation so that, in the
event of a default prior to maturity, there might not be a market and thus no
means of realizing on the obligation prior to maturity. Guarantees as to the
timely payment of principal and interest do not extend to the value or yield of
these securities nor to the value of the Portfolio's shares.
VARIABLE AND FLOATING RATE INSTRUMENTS--There is a risk that the current
interest rate on such obligations may not accurately reflect existing market
interest rates. A demand instrument with a demand notice exceeding seven days
may be considered illiquid if there is no secondary market for such security.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES--The Bond Index Portfolio may
purchase debt obligations on a when-issued basis, in which case delivery and
payment normally take place within 45 days after the date of the commitment to
purchase. The Portfolio will only make commitments to purchase obligations on a
when-issued basis with the intention of actually acquiring the securities, but
may sell them before the settlement date if it is deemed advisable. The
when-issued securities are subject to market fluctuation, and no interest
accrues to the purchaser during the period prior to settlement. The payment
obligation and the interest rate that will be received on the securities are
each fixed at the time the purchaser enters into the commitment. Purchasing
obligations on a when-issued basis is a form of leveraging, and can involve a
risk that the yields available in the market when the delivery takes place may
actually be higher than those obtained in the transaction itself, in which case
there could be an unrealized loss at the time of delivery.
The Portfolio will establish a segregated account and maintain liquid assets
in an amount at least equal in value to the Portfolio's commitments to purchase
when-issued securities. If the value of these assets declines, the Portfolio
will place additional liquid assets in the account on a daily basis so that the
value of the assets in the account is equal to the amount of such commitments.
These securities are subject to market fluctuation due to changes in market
interest rates, and it is possible that the market value at the time of
settlement could be higher or lower than the purchase price if the general level
of interest rates has changed. Although a Portfolio generally purchases
securities on a when-issued or forward commitment basis with the intention of
actually acquiring such securities, a Portfolio may dispose of a when-issued
security or forward commitment prior to settlement if the adviser deems it
appropriate to do so.
INVESTMENT LIMITATIONS
Neither Portfolio may:
1. Pledge, mortgage or hypothecate assets except to secure temporary borrowings
as described in the Prospectus in aggregate amounts not to exceed 10% of the
net assets of the Portfolio taken at current value at the time of the
incurrence of such loan and, as to the S&P 500 Index Portfolio, in
connection with stock index futures trading as provided in the Prospectus
and this Statement of Additional Information.
2. Invest in companies for the purpose of exercising control.
3. Purchase or sell real estate, real estate limited partnership interests,
physical commodities or commodities contracts. However, subject to its
permitted investments, a Portfolio may purchase
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(i) obligations issued by companies which invest in real estate, commodities
or commodities contracts, and (ii) commodities contracts related to
financial instruments, such as financial futures contracts.
4. Make short sales of securities, maintain a short position or purchase
securities on margin, except that the Trust may obtain short-term credits as
necessary for the clearance of security transactions.
5. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
6. Purchase securities of other investment companies except as permitted by the
Investment Company Act of 1940 and the rules and regulations thereunder and
may only purchase securities of money market funds.
7. Issue senior securities (as defined in the Investment Company Act of 1940)
except in connection with permitted borrowings as described in the
Prospectus and this Statement of Additional Information or as permitted by
rule, regulation or order of the Securities and Exchange Commission ("SEC").
8. Purchase or retain securities of an issuer if, to the knowledge of the
Trust, an officer, trustee, partner or director of the Trust or any
investment adviser of the Trust owns beneficially more than 1/2 of 1% of the
shares or securities of such issuer and all such officers, trustees,
partners and directors owning more than 1/2 of 1% of such shares or
securities together own more than 5% of such shares or securities.
9. Purchase securities of any company which has (with predecessors) a record of
less than three years continuing operations if, as a result, more than 5% of
the total assets (taken at current value) would be invested in such
securities.
10. Purchase warrants, puts, calls, straddles, spreads or combinations thereof.
11. Invest in interests in oil, gas or other mineral exploration or development
programs.
12. Purchase restricted securities (securities which must be registered under
the Securities Act of 1933 before they may be offered or sold to the public)
or other illiquid securities except as described in the Prospectus and this
Statement of Additional Information.
The foregoing percentages will apply at the time of the purchase of a
security and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of a purchase of such
security. These investment limitations and the investment limitations in the
Prospectus are fundamental policies of the Trust and may not be changed without
shareholder approval.
THE MANAGER AND TRANSFER AGENT
The Management Agreement provides that the Manager, SEI Fund Management
("SEI Management"), shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Trust in connection with the matters to
which the Management Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Manager in the
performance of its duties or from reckless disregard of its duties and
obligations thereunder.
The continuance of the Management Agreement must be specifically approved at
least annually (i) by the vote of a majority of the Trustees or by the vote of a
majority of the outstanding voting securities of the Portfolio, and (ii) by the
vote of a majority of the Trustees of the Trust who are not parties to the
Management Agreement or an "interested person" (as that term is defined in the
Investment Company Act of 1940) of any party thereto, cast in person at a
meeting called for the purpose of voting on such approval. The Management
Agreement is terminable at any time without penalty by the Trustees of the
Trust, by a vote of a majority of the outstanding shares of a Portfolio or by
the Manager on not less than 30 days' nor more than 60 days' written notice.
This Agreement shall not be assignable by either party without the written
consent of the other party.
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SEI Management, a Delaware business trust, has its principal business
offices at Oaks, Pennsylvania 19456. SEI Investments Management Corporation
("SIMC"), a wholly-owned subsidiary of SEI Investments Company ("SEI"), is the
owner of all beneficial interest in SEI Management. Alfred P. West, Jr., Carmen
V. Romeo, and Henry H. Greer constitute the Board of Directors of SIMC. Mr. West
serves as Chairman of the Board of Directors and Chief Executive Officer of SIMC
and SEI, Mr. Greer serves as President and Chief Operating Officer of SIMC and
SEI, and Chief Financial Officer of SEI, and Mr. Romeo serves as Executive Vice
President and Treasurer of SEI. SEI and its subsidiaries and affiliates,
including SEI Management, are leading providers of funds evaluation services,
trust accounting systems, and brokerage and information services to financial
institutions, institutional investors, and money managers. SEI Management and
its affiliates also serve as administrator to the following other mutual funds:
The Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund,
ARK Funds, Bishop Street Funds, CoreFunds, Inc., CrestFunds, Inc., CUFUND, The
Expedition Funds, FMB Funds, Inc., First American Funds, Inc., First American
Investment Funds, Inc., First American Strategy Funds, Inc., HighMark Funds,
Marquis Funds-Registered Trademark-, Monitor Funds, Morgan Grenfell Investment
Trust, The PBHG Funds, Inc., The Pillar Funds, Profit Funds Investment Trust,
Rembrandt Funds-Registered Trademark-, Santa Barbara Group of Mutual Funds,
Inc., Boston 1784 Funds-Registered Trademark-, SEI Asset Allocation Trust, SEI
Daily Income Trust, SEI International Trust, SEI Institutional Investments
Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt
Trust, STI Classic Funds, STI Classic Variable Trust, and TIP Funds.
If operating expenses of either Portfolio exceed applicable limitations, the
Manager will pay such excess. The Manager will not be required to bear expenses
of the Portfolios to an extent which would result in the Portfolio's inability
to qualify as a regulated investment company under provisions of the Internal
Revenue Code of 1986, as amended (the "Code"). The term "expenses" is defined in
such laws or regulations, and generally excludes brokerage commissions,
distribution expenses, taxes, interest and extraordinary expenses.
For the fiscal years ended March 31, 1995, 1996 and 1997, the Portfolios
paid fees to the Manager as follows:
<TABLE>
<CAPTION>
MANAGEMENT FEES PAID MANAGEMENT FEES
(REIMBURSED) (000) WAIVED (000)
---------------------- ------------------
PORTFOLIO 1995 1996 1997 1995 1996 1997
- ------------------------------------------ ------ ------ ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
S&P 500 Index Portfolio................... $ 934 $ 658 $1,271 $404 $524 $ 446
Bond Index Portfolio...................... $ 175 $ 111 $ 114 $ 50 $ 45 $ 46
</TABLE>
THE ADVISERS
Each Investment Advisory Agreement provides that the adviser shall not be
protected against any liability to the Trust or its shareholders by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard of its obligations or
duties thereunder.
The continuance of each Investment Advisory Agreement after the first two
(2) years must be specifically approved at least annually (i) by the vote of a
majority of the outstanding shares of the Portfolios or by the Trustees, and
(ii) by the vote of a majority of the Trustees who are not parties to such
Investment Advisory Agreement or "interested persons" of any party thereto, cast
in person at a meeting called for the purpose of voting on such approval. The
Investment Advisory Agreement will terminate automatically in the event of its
assignment, and is terminable at any time without penalty by the Trustees of the
Trust or, with respect to the Portfolio, by a majority of the outstanding shares
of the Portfolio, on not less than 30 days' nor more than 60 days' written
notice to the adviser, or by the adviser on 90 days' written notice to the
Trust.
World Asset Management, the adviser to the S&P 500 Index Portfolio, is a
general partnership organized by Munder Capital Management, a general
partnership formed in December, 1994, which engages in investment management and
advisory services.
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World is entitled to a fee for its investment advisory services, which is
calculated daily and paid monthly, at an annual rate of .03% of the average
daily net assets of each Portfolio. No monthly payment to World shall exceed the
payment actually made to the Manager pursuant to the current Management
Agreement between the Manager and the Trust.
For the fiscal years ended March 31, 1995, 1996 and 1997, World received
fees of $127,331, $161,179 and $234,127, respectively, from the S&P 500 Index
Portfolio, and for the fiscal years ended March 31, 1995, World received fees of
$14,969 from the Bond Index Portfolio. For the period from March 31, 1995 to
October 2, 1995, World received a fee of $6,597 from the Bond Index Portfolio.
Mellon Bond Associates ("MBA") serves as the investment adviser to the Bond
Index Portfolio. MBA has been serving as the adviser to the Bond Index Portfolio
since October 2, 1995.
For its services, MBA is entitled to a fee, which is calculated daily and
paid monthly, at the annual rate of .07% of the average daily net assets of the
Bond Index Portfolio. For the period from October 2, 1995 to March 31, 1996 and
for the fiscal year ended March 31, 1997, MBA received a fee of $12,342 and
$32,040, respectively, from the Bond Index Portfolio.
DISTRIBUTION AND SHAREHOLDER SERVICING
The Distribution Agreement is renewable annually and may be terminated by
the Distributor, a majority vote of the Disinterested Trustees or by a majority
vote of the outstanding securities of the Trust upon not more than 60 days'
written notice by either party. No compensation is paid to the Distributor under
the Distribution Agreement. The Distributor, SEI Investments Distribution Co.,
is a wholly-owned subsidiary of SEI.
The Portfolios have adopted shareholder servicing plans for the Class A and
Class E shares (the "Service Plans"). Under these Plans, the Distributor may
perform, or may compensate other service providers for performing, the following
shareholder and administrative services: maintaining client accounts; arranging
for bank wires; responding to client inquiries concerning services provided on
investments; assisting clients in changing dividend options, account
designations and addresses; sub-accounting; providing information on share
positions to clients; forwarding shareholder communications to clients;
processing purchase, exchange and redemption orders; and processing dividend
payments. Under the Service Plans, the Distributor may retain as a profit any
difference between the fee it receives and the amount it pays to third parties.
Certain institutions may also charge separate fees for related services. It
is possible that an institution may offer different classes of shares to its
customers and thus receive compensation with respect to different classes.
Certain Class A and Class E shareholders offering shares to their customers may
be required to register as dealers pursuant to state laws.
For the fiscal year ended March 31, 1995, the S&P 500 Index Portfolio and
the Bond Index Portfolio incurred distribution expenses of $201,693 and $25,212
under the Plan or .05% of net assets, respectively, during such period. These
expenditures included $134,725 and $14,686, respectively, for sales expenses;
$32,836 and $6,763, respectively, for printing and mailing costs; and $34,132
and $3,763, respectively, for costs associated with registration fees.
For the fiscal year ended March 31, 1996, the Class A (formerly Class E) S&P
500 Index Portfolio, Class E (formerly Class A) S&P 500 Index Portfolio and the
Class A Bond Index Portfolio incurred distribution expenses of $70, $283,605 and
$22,472 under the Plan or .20%, .05% and .05% of net assets, respectively,
during such period. These expenditures included $12, $184,195 and $10,681,
respectively, for sales expenses; $6, $63,981 and $7,784, respectively, for
printing and mailing costs; and $2, $35,429 and $4,007, respectively, for costs
associated with registration fees. In addition, the Class E S&P Index Portfolio
paid $50 to 3rd parties by SEI Investments Distribution Co. for Distributor
related services.
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For the fiscal year ended March 31, 1997, the Class A (formerly Class E) S&P
500 Index Portfolio, Class E (formerly Class A) S&P 500 Index Portfolio and the
Class A Bond Index Portfolio incurred distribution expenses of $9,455, $147,498
and $10,637 under the Plan or .0038%, .03% or .03% of net assets, respectively,
during such period. These expenditures included $6,596, $90,404 and $5,623,
respectively, for printing and mailing costs; $2,690, $43,114 and $4,014,
respectively, for costs associated with registration fees; and $169, $14,799 and
$1,021, respectively, paid to third parties by SEI Investments Distribution Co.
for Distributor related services.
TRUSTEES AND OFFICERS OF THE TRUST
The Trustees and Executive Officers of the Trust, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with the named companies during that
period. Unless otherwise noted, the business address of each Trustee and each
Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain
officers of the Trust also serve as officers of some or all of the following:
The Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund,
ARK Funds, Bishop Street Funds, Boston 1784 Funds-Registered Trademark-,
CoreFunds, Inc., CrestFunds, Inc., CUFUND, The Expedition Funds, FMB Funds,
Inc., First American Funds, Inc., First American Investment Funds, Inc., First
American Strategy Funds, Inc., HighMark Funds, Marquis
Funds-Registered Trademark-, Monitor Funds, Morgan Grenfell Investment Trust,
The PBHG Funds, Inc., The Pillar Funds, Profit Funds Investment Trust, Rembrandt
Funds-Registered Trademark-, Santa Barbara Group of Mutual Funds, Inc., SEI
Asset Allocation Trust, SEI Daily Income Trust, SEI International Trust, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid
Asset Trust, SEI Tax Exempt Trust, STI Classic Funds, STI Classic Variable Trust
and TIP Funds, each of which is an open-end management investment company
managed by SEI Fund Management or its affiliates and, except for Profit Funds
Investment Trust, Rembrandt Funds-Registered Trademark-, and Santa Barbara Group
of Mutual Funds, Inc., are distributed by SEI Investments Distribution Co.
ROBERT A. NESHER (DOB 08/17/46)--Chairman of the Board of Trustees*--Retired
since 1994. Executive Vice President of SEI, 1986-1994. Director and Executive
Vice President of the Manager and the Distributor, 1981-1994. Trustee of the
Arbor Fund, Marquis Funds-Registered Trademark-, The Advisors' Inner Circle
Fund, The Expedition Funds, SEI Liquid Asset Trust, SEI Daily Income Trust, SEI
Tax Exempt Trust, SEI International Trust, SEI Asset Allocation Trust, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, Boston 1784
Funds-Registered Trademark-, Pillar Funds, and Rembrandt
Funds-Registered Trademark-.
WILLIAM M. DORAN (DOB 05/26/40)--Trustee*--2000 One Logan Square,
Philadelphia, PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm), counsel
to the Trust, Manager and Distributor, Director and Secretary of SEI and
Secretary of the Manager and Distributor. Trustee of The Arbor Fund, Marquis
Funds-Registered Trademark-, The Advisors' Inner Circle Fund, The Expedition
Funds, SEI Liquid Asset Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI
International Trust, SEI Asset Allocation Trust, SEI Institutional Investments
Trust, and SEI Institutional Managed Trust.
F. WENDELL GOOCH (DOB 12/03/32)--Trustee**--P.O. Box 190, Paoli, IN 47454.
President, Orange County Publishing Co., Inc. since October 1981. Retired;
Publisher of the Paoli News and the Paoli Republican and Editor of the Paoli
Republican from January 1981 to 1997. President, H&W Distribution, Inc., since
July 1984. Executive Vice President, Trust Department, Harris Trust and Savings
Bank and Chairman of the Board of Directors of The Harris Trust Company of
Arizona before January 1981. Trustee of STI Classic Funds, STI Classic Variable
Trust, SEI Liquid Asset Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI
International Trust, SEI Asset Allocation Trust, SEI Institutional Managed Trust
and SEI Institutional Investments Trust.
FRANK E. MORRIS (DOB 12/30/23)--Trustee**--105 Walpole Street, Dover, MA
02030. Retired since 1990. Peter Drucker Professor of Management, Boston
College, 1989-1990. President, Federal Reserve Bank of Boston, 1968-1988.
Trustee of The Arbor Fund, Marquis Funds-Registered Trademark-, The Advisors'
Inner Circle Fund, The Expedition Funds, SEI Liquid Asset Trust, SEI Daily
Income Trust, SEI Tax Exempt
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Trust, SEI International Trust, SEI Asset Allocation Trust, SEI Institutional
Managed Trust and SEI Institutional Investments Trust.
JAMES M. STOREY (DOB 04/12/31)--Trustee**--Retired; Partner, Dechert Price &
Rhoads, from September 1987-December 1993; Trustee of The Arbor Fund, Marquis
Funds-Registered Trademark-, The Advisors' Inner Circle Fund, The Expedition
Funds, SEI Liquid Asset Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI
International Trust, SEI Asset Allocation Trust, SEI Institutional Investments
Trust, and SEI Institutional Managed Trust.
GEORGE J. SULLIVAN, JR. (DOB 11/13/42)--Trustee**--General Partner, Teton
Partners, L.P., since 1991; Chief Financial Officer, Noble Partners, L.P., since
1991; Treasurer and Clerk, Peak Asset Management, Inc., since 1991; Trustee,
Navigator Securities Lending Trust, since 1995. Trustee of SEI Liquid Asset
Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI International Trust,
SEI Asset Allocation Trust, SEI Institutional Investments Trust, and SEI
Institutional Managed Trust.
EDWARD W. BINSHADLER (DOB )--Trustee Emeritus--Indian Point Lane,
Riverside, CT 06878. Retired since 1979. Trustee of SEI Daily Income Trust, SEI
Index Funds, SEI Institutional Managed Trust, SEI International Trust, SEI
Liquid Asset Trust, and SEI Tax Exempt Trust, 19__-1994. Formerly, a
Director/Partner, Management Consulting Department of Arthur Young & Co.
(certified public accountants), 1963-1979.
DAVID G. LEE (DOB 04/16/52)--President and Chief Executive Officer--Senior
Vice President of the Manager and Distributor since 1993. Vice President of the
Manager and Distributor, 1991-1993. President, GW Sierra Trust Funds before
1991.
SANDRA K. ORLOW (DOB 10/18/53)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of the Manager and Distributor since 1988.
KEVIN P. ROBINS (DOB 04/15/61)--Vice President and Assistant
Secretary--Senior Vice President, General Counsel and Assistant Secretary of
SEI, Senior Vice President, General Counsel and Secretary of the Manager and
Distributor since 1994. Vice President and Assistant Secretary of SEI, the
Adviser, Manager and Distributor, 1992-1994. Associate, Morgan, Lewis & Bockius
LLP (law firm), 1988-1992.
RICHARD W. GRANT (DOB 10/25/45)--Secretary--2000 One Logan Square,
Philadelphia, PA 19103, Partner, Morgan, Lewis & Bockius LLP (law firm), counsel
to the Trust, SEI, the Manager and Distributor.
KATHRYN L. STANTON (DOB 11/19/58)--Vice President and Assistant
Secretary--Vice President, Deputy General Counsel, Vice President and Assistant
Secretary of SEI, Manager and Distributor since 1994. General Counsel,
Investment Systems and Services, since 1997. Associate, Morgan, Lewis & Bockius
LLP (law firm), 1989-1994.
MARK E. NAGLE (DOB 10/20/59)--Controller and Chief Financial Officer--Vice
President of Fund Accounting and Administration for SEI Fund Resources and the
Manager since 1996. Vice President of Fund Accounting, BISYS Fund Services
1995-1996. Senior Vice President and Site Manager, Fidelity Investments
(1981-1995).
TODD CIPPERMAN (DOB 02/14/66)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI, Manager and the Distributor since
1995. Associate, Dewey Ballantine (law firm) (1994-1995). Associate, Winston &
Strawn (law firm) (1991-1994).
BARBARA A. NUGENT (DOB 06/18/56)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of SEI, Manager and
Distributor since 1996. Associate, Drinker, Biddle & Reath (law firm). Assistant
Vice President/Administration, Delaware Service Company, Inc. (1992-1993),
Assistant Vice President--Operations, Delaware Service Company, Inc.
(1988-1992).
MARC H. CAHN (DOB 06/19/57)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI, the Manager and Distributor since
1996. Associate General Counsel, Barclays Bank
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PLC (1995-1996). ERISA counsel, First Fidelity Bancorporation (1994-1995),
Associate, Morgan, Lewis & Bockius LLP (1989-1994).
- ------------------------
*Messrs. Nesher and Doran are Trustees who may be deemed to be "interested
persons" of the Trust as the term is defined in the 1940 Act.
**Messrs. Gooch, Storey, Morris and Sullivan serve as members of the Audit
Committee of the Trust.
The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust.
Compensation of officers and affiliated Trustees of the Trust is paid by the
Manager. The Trust pays the fees for unaffiliated Trustees. For the fiscal year
ended March 31, 1997, the Trust paid the following amounts to the Trustees.
<TABLE>
<CAPTION>
AGGREGATE PENSION OR
COMPENSATION FROM RETIREMENT BENEFITS ESTIMATED ANNUAL TOTAL COMPENSATION FROM REGISTRANT
REGISTRANT FOR FYE ACCRUED AS PART OF BENEFITS UPON AND FUND COMPLEX PAID TO DIRECTORS
NAME OF PERSON AND POSITION 3/31/97 FUND EXPENSES RETIREMENT FOR FYE 3/31/97
- --------------------------------- ------------------ ------------------- ---------------- -----------------------------------
<S> <C> <C> <C> <C>
Robert A. Nesher, Trustee........ $ 0 $0 $0 $0 for services on 8 boards
William M. Doran, Trustee........ $ 0 $0 $0 $0 for services on 8 boards
F. Wendell Gooch, Trustee........ $ 4,723 $0 $0 $92,250 for services on 8 boards
Frank E. Morris, Trustee......... $ 4,723 $0 $0 $92,250 for services on 8 boards
James M. Storey, Trustee*........ $ 4,723 $0 $0 $92,250 for services on 8 boards
George J. Sullivan, Trustee...... $ 3,430 $0 $0 $69,750 for services on 8 boards
</TABLE>
- ------------------------
* Mr. Storey received a portion of such amount as compensation for service as
an Honorary Trustee for the Trust prior to being elected as a Trustee on
August 14, 1996.
PERFORMANCE
From time to time, a Portfolio may advertise yield. These figures will be
based on historical earnings and are not intended to indicate future
performance. The yield of a Portfolio refers to the annualized income generated
by an investment in such Portfolio over a specified 30-day period. The yield is
calculated by assuming that the income generated by the investment during that
period is generated over a one year and is shown as a percentage of the
investment. In particular, yield will be calculated according to the following
formula:
Yield = 2[(a-b/cd + 1)(6) - 1], where a = dividends and interest earned
during the period; b = expenses accrued for the period (net of
reimbursement); c = the current daily number of shares outstanding during
the period that were entitled to receive dividends; and d = the maximum
offering price per share on the last day of the period.
Actual yield will depend on such variables as asset quality, average asset
maturity, the type of instruments a Portfolio invests in, changes in interest
rates on money market instruments, changes in the expenses of the Portfolio and
other factors. For the 30-day period ending March 31, 1996, the yield for the
Class A S&P 500 Index Portfolio was 2.16% and the yield for the Class A Bond
Index Portfolio was 6.16%.
From time to time, each Portfolio may advertise total return. The total
return of a Portfolio refers to the average compounded rate of return to a
hypothetical investment for designated time periods (including, but not limited
to, the period from which the Portfolio commenced operations through the
specified date), assuming that the entire investment is redeemed at the end of
each period. In particular, total return will be calculated according to the
following formula:
S-12
<PAGE>
P(1 + T)(n) = ERV, where P = a hypothetical initial payment of $1,000; T
= average annual total return; n = number of years; and ERV = ending
redeemable value of a hypothetical $1,000 payment made at the beginning of
the designated time period as of the end of such period.
Based on the foregoing, the average annual total return for the Portfolios
from inception through March 31, 1997, and for the one, five and ten year
periods ended March 31, 1997 were as follows:
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------------------------------
SINCE
PORTFOLIO CLASS ONE YEAR FIVE YEAR TEN YEAR INCEPTION
- ----------------------------------------- --------------------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
S&P 500 Index Portfolio A (formerly Class E)....... 19.46% 16.14% 12.99% 15.55%
E (formerly Class A)....... 19.22% N/A N/A 17.80%
Bond Index Portfolio A.......................... 4.36% 6.73% 7.44% 7.62%
</TABLE>
PURCHASE AND REDEMPTION OF SHARES
The purchase and redemption price of shares is the net asset value of each
share. A Portfolio's securities are valued by SEI Management pursuant to
valuations provided by an independent pricing service (generally the last quoted
sale price). Portfolio securities listed on a securities exchange for which
market quotations are available are valued at the last quoted sale price on each
Business Day (defined as days on which the New York Stock Exchange is open for
business ("Business Day")) or, if there is no such reported sale, at the most
recently quoted bid price. Unlisted securities for which market quotations are
readily available are valued at the most recently quoted bid price. The pricing
service may also use a matrix system to determine valuations. This system
considers such factors as security prices, yields, maturities, call features,
ratings and developments relating to specific securities in arriving at
valuations. The procedures of the pricing service and its valuations are
reviewed by the officers of the Trust under the general supervision of the
Trustees.
Shares of a Portfolio may be purchased in exchange for securities included
in the Portfolio subject to SEI Management's determination that the securities
are acceptable. Securities accepted in an exchange will be valued at the market
value. All accrued interest and subscription of other rights which are reflected
in the market price of accepted securities at the time of valuation become the
property of the Trust and must be delivered by the Shareholder to the Trust upon
receipt from the issuer.
SEI Management will not accept securities for a Portfolio unless: (1) such
securities are appropriate in the Portfolio at the time of the exchange; (2)
such securities are acquired for investment and not for resale; (3) the
Shareholder represents and agrees that all securities offered to the Trust for
the Portfolio are not subject to any restrictions upon their sale by the
Portfolio under the Securities Act of 1933, or otherwise; (4) such securities
are traded on the American Stock Exchange, the New York Stock Exchange or on
NASDAQ in an unrelated transaction with a quoted sales price on the same day the
exchange valuation is made or, if not listed on such exchanges or on NASDAQ,
have prices available from an independent pricing service approved by the
Trust's Board of Trustees; and (5) the securities may be acquired under the
investment restrictions applicable to the Portfolio.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period during which trading
on the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or evaluation of the portfolio securities is not reasonably
practicable, or for such other periods as the SEC may by order permit. The Trust
also reserves the right to suspend sales of shares of the Portfolio for any
period during which the New York Stock Exchange, the Manager, the Administrator,
the Distributor and/or the Custodians are not open for business. The New York
Stock Exchange will not open in observance of the following holidays: New Year's
Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
S-13
<PAGE>
It is currently the Trust's policy to pay for all redemptions in cash. The
Trust retains the right, however, to alter this policy to provide for
redemptions in whole or in part by a distribution in kind of securities held by
a Portfolio in lieu of cash. Shareholders may incur brokerage charges on the
sale of any such securities so received in payment of redemptions. However, a
shareholder will at all times be entitled to aggregate cash redemptions from the
Portfolio of the Trust during any 90-day period of up to the lesser of $250,000
or 1% of the Trust's net assets in cash. A gain or loss for federal income tax
purposes would be realized by a shareholder subject to taxation upon an in-kind
redemption depending upon the shareholder's basis in the shares of the Portfolio
redeemed.
TAXES
The following discussion of federal income tax consequences is based on the
Internal Revenue Code of 1986, as amended (the "Code") and the regulations
issued thereunder as in effect on the date of this Statement of Additional
Information. Certain legislation proposed at the time of writing, as well as
administrative changes or court decisions, may significantly change the
conclusions expressed herein and may have a retroactive effect with respect to
the transactions contemplated herein.
QUALIFICATION AS A RIC
Each Portfolio intends to qualify as a "regulated investment company"
("RIC") as defined under Subchapter M of the Code. By following such a policy,
each Portfolio expects to eliminate or reduce to a nominal amount the federal
income taxes to which such Portfolio may be subject. In order to qualify for
treatment as a RIC under the Code, a Portfolio must distribute annually to its
shareholders at least 90% of its investment company taxable income (generally,
net investment income, including net short-term capital gain) and 90% of its net
interest exempt income, if any (the excess of its tax-exempt interest income
over certain deductions attributable to that income), ("Distribution
Requirement") and must meet several additional requirements. Among these
requirements are the following: (i) at least 90% of a Portfolio's gross income
each taxable year must be derived from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stocks
or securities or certain other income (including gains from options, futures or
forward contracts) derived with respect to its business of investing in stocks
or securities; (ii) less than 30% of a Portfolio's gross income each taxable
year may be derived from the sale or other disposition of any of the following
investments that were held for less than three months: (a) stock or securities
(as defined in Section 2(a)(30) of the Investment Company Act); (b) options,
futures, or forward contracts (other than options, futures, or forward contracts
on foreign currencies); and (c) foreign currencies (or options, futures, or
forward contracts on foreign currencies) but only if such currencies (or
options, futures, or forward contracts) are not directly related to the
Portfolio's principal business of investing in stock or securities; (iii) at the
close of each quarter of a Portfolio's taxable year, at least 50% of the value
of its total assets must be represented by cash and cash items, U.S. Government
securities, securities of other RICs and other securities, with such other
securities limited, in respect of any one issuer, to an amount that does not
exceed 5% of the value of the Portfolio's total assets and that does not
represent more than 10% of the outstanding voting securities of the issuer; and
(iv) at the close of each quarter of a Portfolio's taxable year, not more than
25% of the value of its total assets may be invested in securities (other than
U.S. Government securities or the securities of other RICs) of any one issuer,
or of two or more issuers that are engaged in the same, similar or related
trades or businesses, if the Portfolio owns at least 20% of the voting power of
such issuers.
Notwithstanding the Distribution Requirement described above, a Portfolio
will be subject to a nondeductible 4% federal excise tax to the extent it fails
to distribute to its shareholders by the end of any calendar year 98% of its
ordinary income for that year and 98% of its capital gain net income (the excess
of short and long-term capital gains over short and long-term capital losses)
for the one-year period ending on October 31 of that year (and any retained
amount from the prior calendar year).
S-14
<PAGE>
Although each Portfolio intends to distribute substantially all of its net
investment income and capital gains for any taxable (I.E., fiscal) year, a
Portfolio will be subject to Federal income taxation to the extent any such
income or gains are not distributed. If for any taxable year a Portfolio does
not qualify as a RIC, all of its taxable income will be subject to tax at
regular corporate rates without any deduction for distributions to shareholders.
In such case, distributions (including capital gains distributions) will be
taxable as ordinary dividends to the extent of the Portfolio's current and
accumulated earnings and profits.
TAX STATUS OF DISTRIBUTIONS
Dividends from a Portfolio's net investment income will be taxable to
shareholders as ordinary income (whether received in cash or in additional
shares) to the extent of the Portfolio's earnings and profits. Dividends paid by
the S&P 500 Index Portfolio will be eligible for the dividends-received
deduction allowed to corporate shareholders to the extent they are derived from
dividends from domestic corporations, subject to certain limitations; however,
dividends received by a corporate shareholder which qualify for the
dividends-received deduction may be subject to the alternative minimum tax.
Each Portfolio may either retain or distribute to shareholders its excess of
net long-term capital gains over net short-term capital losses ("net capital
gains"). If a Portfolio distributes its net capital gains to shareholders, such
gains will not qualify for the dividends received deduction, and they are
taxable to shareholders as long-term capital gains, regardless of the length of
time the shareholder has held shares. Conversely, if a Portfolio elects to
retain its net capital gains, such Portfolio will be taxed thereon (except to
the extent of any available capital loss carryovers) at the applicable corporate
capital gains tax rate. In this event, it is expected that a Portfolio will
elect to have its shareholders treated as having received a distribution of such
gains, with the result that they will be required to report such gains on their
federal income tax returns as long-term capital gains, will receive a tax credit
for their allocable share of capital gains tax paid by the Portfolio on the
gains, and will increase the tax basis for their shares by an amount equal to
the deemed distribution less the tax credit.
Generally, gains or losses on the sale or exchange of a share will be
long-term capital gains or losses if the share is held for more than one year.
However, if a shareholder realizes a loss on the sale, exchange or redemption of
a share held for six months or less and has previously received a capital gains
distribution with respect to the share (or there are undistributed net capital
gains of a Portfolio with respect to such share which have been included in
determining the shareholder's long-term capital gains), the shareholder must
treat the loss as a long-term capital loss to the extent of the amount of the
prior capital gains distribution (or any undistributed net capital gains of the
Portfolio which have been included in determining such investor's long-term
capital gains). In addition, any loss realized on a sale or other disposition of
shares will be disallowed to the extent the shareholder repurchases (or enters
into a contract or option to repurchase) shares within a period of 61 days
(beginning 30 days before and ending 30 days after the disposition of the
shares). Investors should particularly note that this loss disallowance rule
will apply to shares received through the reinvestment of dividends during the
61-day period.
A Portfolio will be required in certain cases to withhold and remit to the
United States Treasury 31% of distributions payable to any individual or
non-corporate shareholder who (1) has provided either an incorrect tax
identification number or no number at all, (2) who is subject to backup
withholding by the Internal Revenue Service for failure to properly report
payments of interest or dividends, or (3) who has failed to certify to the
Portfolio that such shareholder is not subject to backup withholding.
The S&P 500 Index Portfolio may invest in stock index futures. The use of
stock index futures contracts involves specialized and complex income tax rules
that will determine the character and timing of recognition of the income
received in connection therewith by the Portfolio and thereby affect the amount
and proportion of income that will be available for distribution as dividends or
capital gain distributions.
Stock index futures contracts held by the Portfolio at the end of each
taxable year will be required to be "marked to market" for Federal income tax
purposes (that is, treated as having been sold at that time at
S-15
<PAGE>
market value). Any unrealized gain or loss taxed pursuant to this rule will be
added to realized gains and losses recognized on other futures contracts sold by
the Portfolio during the year, and the resulting gain or loss will be deemed to
consist of 60% long-term capital gain or loss and 40% short-term capital gain or
loss. The Portfolio may elect to exclude certain hedging transactions from the
mark-to-market rule. Gain from hedging transactions is treated as ordinary
income.
The Trust has obtained a private letter ruling from the Internal Revenue
Service confirming that the income and assets attributable to transactions in
stock index futures contracts qualify under the above-described income and asset
tests applicable to RICs.
For purposes of the Distribution Requirement (as well as for other purposes)
the Bond Index Portfolio will be required to treat any recognized market
discount on debt obligations which it holds as interest income. Generally,
market discount is the amount by which the stated redemption price of a bond
exceeds the amount paid by a purchaser of the bond (most common where the value
of a bond decreases after original issue as a result of a decline in the
creditworthiness of the issuer or an increase in prevailing interest rates).
Generally, market discount is recognized on the disposition, or receipt of any
principal payment, with respect to a bond bearing market discount, by treating a
portion of the proceeds as interest income. The application of these rules (and
the rules regarding original issue discount) to debt obligations held by the
Bond Index Portfolio could affect (i) the amount and timing of distributions to
shareholders and (ii) the ability of the Portfolio to satisfy the Distribution
Requirement.
STATE TAXES
Neither Portfolio is liable for any income or franchise tax in Massachusetts
if it qualifies as a RIC for Federal income tax purposes. Distributions by the
Portfolios to shareholders and the ownership of shares may be subject to state
and local taxes. Since state and local tax consequences may differ from the
federal income tax consequences discussed above, shareholders are urged to
consult their tax advisers on state and local tax matters.
PORTFOLIO TRANSACTIONS
The Trust has no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to policies
established by the Trustees, each Administrator is responsible for placing
orders to execute portfolio transactions. In placing orders, it is the Trust's
policy to seek to obtain the best net results taking into account such factors
as price (including the applicable dealer spread), size, type and difficulty of
the transaction involved, the firm's general execution and operational
facilities, and the firm's risk in positioning the securities involved. While
each Administrator generally seeks reasonably competitive spreads or
commissions, the Trust will not necessarily be paying the lowest spread or
commission available. The Trust's policy of investing in securities with short
maturities will result in high portfolio turnover. The Trust will not purchase
portfolio securities from any affiliated person acting as principal except in
conformity with the regulations of the SEC.
The Trust does not expect to use one particular dealer, but, subject to the
Trust's policy of seeking the best net results, dealers who provide supplemental
investment research to an Administrator may receive orders for transactions by
the Trust. Information so received will be in addition to and not in lieu of the
services required to be performed by the Administrator under the Administration
Agreement, and the expenses of the Administrator will not necessarily be reduced
as a result of the receipt of such supplemental information.
The money market securities in which the Portfolios invest are traded
primarily in the over-the-counter market generally do not involve either
brokerage commissions or transfer taxes. Bonds and debentures are usually traded
over-the-counter, but may be traded on an exchange. Where possible, each
Administrator will deal directly with the dealers who make a market in the
securities involved except in those circumstances where better prices and
execution are available elsewhere. Such dealers usually are
S-16
<PAGE>
acting as principal for their own account. On occasion, securities may be
purchased directly from the issuer. The cost of executing portfolio securities
transactions of the Portfolio will primarily consist of dealer spreads and
underwriting commissions.
Each Portfolio may execute brokerage or other agency transactions through
the Distributor, a registered broker-dealer, for a commission, in conformity
with the Investment Company Act of 1940, the Securities Exchange Act of 1934 and
the rules and regulations thereunder. Under these provisions, the Distributor is
permitted to receive and retain compensation for effecting portfolio
transactions for a Portfolio on an exchange if a written contract is in effect
between the Distributor and the Trust expressly permitting the Distributor to
receive and retain such compensation. These provisions further require that
commissions paid to the Distributor by the Trust for exchange transactions not
exceed "usual and customary" brokerage commissions. The rules define "usual and
customary" commissions to include amounts which are "reasonable and fair
compared to the commission, fee or other remuneration received or to be received
by other brokers in connection with comparable transactions involving similar
securities being purchased or sold on a securities exchange during a comparable
period of time." The Trustees, including those who are not "interested persons"
of the Trust, have adopted procedures for evaluating the reasonableness of
commissions paid to the Distributor and will review these procedures
periodically.
Since the Trust does not market its shares through intermediary brokers or
dealers, it is not the Trust's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. However, the Administrator may place portfolio orders with qualified
broker-dealers who recommend the Trust to clients, and may, when a number of
brokers and dealers can provide best price and execution on a particular
transaction, consider such recommendations by a broker or dealer in selecting
among broker-dealers.
It is expected that the Portfolio turnover rate will normally not exceed
100% for any Portfolio. A Portfolio turnover rate would exceed 100% if all of
its securities, exclusive of U.S. Government securities and other securities
whose maturities at the time of acquisition are one year or less, are replaced
in the period of one year. Turnover rates may vary from year to year and may be
affected by cash requirements for redemptions and by requirements which enable a
Portfolio to receive favorable tax treatment.
The portfolio turnover rate for the S&P 500 Index Portfolio for the fiscal
years ending March 31, 1995, 1996 and 1997 were 4%, 3% and 2%, respectively. The
portfolio turnover rate for the Bond Index Portfolio for the fiscal years ending
March 31, 1995, 1996 and 1997 were 21%, 59% and 46%, respectively.
For the fiscal years ended March 31, 1995, 1996 and 1997, the S&P 500 Index
Portfolio paid $33,285, $36,384 and $99,663, respectively, for brokerage
commissions. For the fiscal years ended March 31, 1995, 1996 and 1997, the Bond
Index Portfolio paid no brokerage commissions.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of each Portfolio, each of which represents an equal proportionate
interest in such Portfolio. Each share upon liquidation entitles a shareholder
to a pro rata share in the net assets of the Portfolio. Shareholders have no
preemptive rights. The Declaration of Trust provides that the Trustees of the
Trust may create additional portfolios of shares or classes of portfolios. Share
certificates representing the shares will not be issued.
S-17
<PAGE>
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for
his own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or administrators, shall not be liable
for any neglect or wrongdoing of any such person. The Declaration of Trust also
provides that the Trust will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with actual or threatened
litigation in which they may be involved because of their offices with the Trust
unless it is determined in the manner provided in the Declaration of Trust that
they have not acted in good faith in the reasonable belief that their actions
were in the best interests of the Trust. However, nothing in the Declaration of
Trust shall protect or indemnify a Trustee against any liability for his wilful
misfeasance, bad faith, gross negligence or reckless disregard of his duties.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a Trust could,
under certain circumstances, be held personally liable as partners for the
obligations of the Trust. Even if, however, the Trust were held to be a
partnership, the possibility of the shareholders' incurring financial loss for
that reason appears remote because the Trust's Declaration of Trust contains an
express disclaimer of shareholder liability for obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by or on behalf of the Trust or the
Trustees, and because, the Declaration of Trust provides for indemnification out
of the Trust property for any shareholders held personally liable for the
obligations of the Trust.
5% SHAREHOLDERS
As of July 1, 1997, the following persons were the only persons who were
record owners (or to the knowledge of the Trust, beneficial owners) of 5% or
more of the shares of the Portfolios. The Trust believes that most of the shares
referred to above were held by the above persons in accounts for their
fiduciary, agency, or custodial customers.
<TABLE>
<CAPTION>
ADDRESS NUMBER OF SHARES PERCENTAGE
- ------------------------------------------------------------------------- ----------------- -----------
<S> <C> <C>
S&P 500 INDEX PORTFOLIO:
Nationwide Life Insurance Company........................................ 1,915,385.1460 5.29%
Nationwide GPVA
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029
BOND INDEX PORTFOLIO:
Pershing Division of DLJ................................................. 185,331.1470 5.14%
Attn: Rich Boulanger
P.O. Box 2052
Jersey City, NJ 07303-2052
RRO & Co................................................................. 186,828.3460 5.18%
c/o First State Bank of Denton
Attn: Karen Atchinson
P.O. Box 100
Denton, TX 76202-0100
</TABLE>
S-18
<PAGE>
<TABLE>
<CAPTION>
ADDRESS NUMBER OF SHARES PERCENTAGE
- ------------------------------------------------------------------------- ----------------- -----------
<S> <C> <C>
Nabank & Co.............................................................. 297,604.4770 8.25%
Attn: Record Keeping
P.O. Box 2180
Tulsa, OK 74101-2180
The Fulton Company....................................................... 190,220.4470 5.27%
c/o Fulton Bank Trust Dept
Attn: Dennis Patrick
One Penn Square
Lancaster, PA 17602-2853
New Haven Savings Bank................................................... 428,381.8410 11.87%
Attn: Laura Vitelli
195 Church Street
New Haven, CT 06510-2009
Transco & Company........................................................ 326,084.5470 9.04%
c/o Intrust Bank, N.A.
Attn: Pat Wills
P..O. Box 48698
Wichita, KS 67201-8698
SEI Trust Company........................................................ 387,971.9990 10.75%
Attn: Jacqueline Esposito
Oaks, PA 19456
</TABLE>
CUSTODIAN
Comerica Bank, the custodian for the Portfolios, holds cash, securities and
other assets of the Trust as required by the Investment Company Act of 1940. The
principal business address of Comerica Bank is 411 W. Lafayette, Detroit,
Michigan 48226.
EXPERTS
The financial statements incorporated by reference into this Statement of
Additional Information have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
FINANCIAL STATEMENTS
The Trust's financial statements for the fiscal year ended March 31, 1997,
including notes thereto and the report of Arthur Andersen LLP thereon, are
herein incorporated by reference to the Trust's 1997 Annual Report. A copy of
the 1997 Annual Report must accompany the delivery of this Statement of
Additional Information.
S-19
<PAGE>
SEI INDEX FUNDS
POST-EFFECTIVE AMENDMENT NO. 20
PART C: OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS:
(a) Financial Statements
Part A: Financial Highlights
Part B: The following audited Financial Statements for the fiscal year ended
March 31, 1997 and Report of Independent Accountants dated May 2, 1997 are
incorporated by reference to the Statement of Additional Information from
Form N-30D filed on May 28, 1997 with Accession Number 0000935069-97-000083.
Statement of Net Assets
Statement of Operations
Statements of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
(b) Additional Exhibits
<TABLE>
<S> <C>
(1)(a) Declaration of Trust as originally filed as Exhibit (1) with Registrant's
Registration Statement on Form N-1A (File No. 2-97111) filed with the
Securities and Exchange Commission ("SEC") on April 17, 1985 is filed
herewith.
(1)(b) Written Instrument Amending the Agreement and Declaration of Trust dated
April 8, 1987 is filed herewith.
(1)(c) Written Instrument Amending the Declaration of Trust dated December 23,
1988 is filed herewith.
(2)(a) By-Laws as originally filed as Exhibit (2) with Registrant's Registration
Statement on Form N-1A (File No. 2-97111) filed with the SEC on April 17,
1985 are filed herewith.
(2)(b) Amended By-Laws are filed herewith.
(3) Not Applicable
(4) Not Applicable
(5)(a) Investment Administrator Agreement with Manufacturers National Bank of
Detroit, dated July 25, 1986, as originally filed with Post-Effective
Amendment No. 12 to Registrant's Registration Statement on Form N-1A
(File No. 2-97111) filed with the SEC on July 11, 1990 is filed herewith.
(5)(b) Investment Administration Agreement with Woodbridge Capital Management,
Inc. as originally filed with Post-Effective Amendment No. 15 to
Registrant's Registration Statement on Form N-1A (File No. 2-97111) filed
with the SEC on July 29, 1993 is incorporated herein by reference to
Post-Effective Amendment No. 19 filed with the SEC on May 31, 1996.
(5)(c) Investment Advisory Agreement with World Asset Management is incorporated
herein by reference to Post-Effective Amendment No. 17 to Registrant's
Registration Statement on Form N-1A (File No. 2-97111) filed with the SEC
on May 31, 1995.
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C>
(5)(d) Investment Advisory Agreement with Mellon Bond Associates is incorporated
herein by reference to Post-Effective Amendment No. 19 to Registrant's
Registration Statement on Form N-1A (File No. 2-97111) filed with the SEC
on May 31, 1996.
(5)(e) Form of Amended and Restated Investment Advisory Agreement by and between
SEI Index Funds and World Asset Management, dated December 9, 1996, is
filed herewith.
(6)(a) Distribution Agreement with SEI Financial Services Company as originally
filed with Pre-Effective Amendment No. 2 to Registrant's Registration
Statement on Form N-1A (File No. 2-97111) filed with the SEC on July 12,
1985 is incorporated herein by reference to Post-Effective Amendment No.
19 filed with the SEC on May 31, 1996.
(6)(b) Amended and Restated Distribution Agreement with SEI Financial Services
Company is incorporated herein by reference to Post-Effective Amendment
No. 18 to Registrant's Registration Statement on Form N-1A (File No.
2-97111) filed with the SEC on December 28, 1995.
(7) Not Applicable
(8)(a) Custodian Agreement with Manufacturers National Bank of Detroit as
originally filed with Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A (File No. 2-97111) filed with the SEC
on July 12, 1985 is filed herewith.
(8)(b) Amendment to the Custodian Agreement, dated January 3, 1986, is filed
herewith.
(9)(a) Management Agreement by and between TrustFunds Equity Index Funds and SEI
Financial Management Corporation is incorporated herein by reference to
Post-Effective Amendment No. 19 to Registrant's Registration Statement on
Form N-1A (File No. 2-97111) filed with the SEC on May 31, 1996.
(9)(b) Management Agreement by and between TrustFunds Equity Index Funds and SEI
Financial Management Corporation is incorporated herein by reference to
Post-Effective Amendment No. 19 to Registrant's Registration Statement on
Form N-1A (File No. 2-97111) filed with the SEC on May 31, 1996.
(9)(c) Class A Shareholder Service Plan and Agreement is incorporated herein by
reference to Post-Effective Amendment No. 19 to Registrant's Registration
Statement on Form N-1A (File No. 2-97111) filed with the SEC on May 31,
1996.
(9)(d) Class E Shareholder Service Plan and Agreement is incorporated herein by
reference to Post-Effective Amendment No. 19 to Registrant's Registration
Statement on Form N-1A (File No. 2-97111) filed with the SEC on May 31,
1996.
(10) Opinion and Consent of Counsel is incorporated herein by reference to Pre-
Effective Amendment No. 1 to Registrant's Registration Statement on Form
N-1A (File No. 2-97111) filed with the SEC on June 14, 1985.
(11) Consent of Independent Public Accountants is filed herewith.
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15)(a) Distribution Plan with SEI Financial Services Company as originally filed
with Pre-Effective Amendment No. 1 to Registrant's Registration Statement
on Form N-1A (File No. 2-97111) filed with the SEC on June 14, 1985 is
incorporated herein by reference to Post-Effective Amendment No. 19 to
Registrant's Registration Statement on Form N-1A (File No. 2-97111) filed
with the SEC on May 31, 1996.
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
(15)(b) Distribution Plan is incorporated herein by reference to Post-Effective
Amendment No. 18 to Registrant's Registration Statement on Form N-1A
(File No. 2-97111) filed with the SEC on December 28, 1995.
(15)(c) Amended and Restated Class E Distribution Plan is incorporated herein by
reference to Post-Effective Amendment No. 19 to Registrant's Registration
Statement on Form N-1A (File No. 2-97111) filed with the SEC on May 31,
1996.
(16) Performance Quotation Computation is incorporated herein by reference to
Post-Effective Amendment No. 15 to Registrant's Registration Statement on
Form N-1A (File No. 2-97111) filed with the SEC on July 29, 1993.
(17) Financial Data Schedules for the S&P 500 Index Portfolio Class A, S&P 500
Index Portfolio Class E, and Bond Index Portfolio Class A are filed
herewith.
(18)(a) Rule 18f-3 Plan is incorporated herein by reference to Post-Effective
Amendment No. 18 to Registrant's Registration Statement on Form N-1A
(File No. 2-97111) filed with the SEC on December 28, 1995.
(18)(b) Amendment No. 1 to Rule 18f-3 Plan relating to Class A and E shares is
incorporated herein by reference to Post-Effective Amendment No. 19 to
Registrant's Registration Statement on Form N-1A (File No. 2-97111) filed
with the SEC on May 31, 1996.
(24) Powers of Attorney for Robert A. Nesher, William M. Doran, Mark E. Nagle,
F. Wendell Gooch, George J. Sullivan, Jr., James M. Storey, David G. Lee
and Frank E. Morris are filed herewith.
</TABLE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:
See the Prospectuses and Statement of Additional Information filed herewith
regarding the Trust's control relationships. The Manager is a subsidiary of SEI
Corporation which also controls the distributor of the Registrant, SEI Financial
Services Company, and other corporations engaged in providing various financial
and record keeping services, primarily to bank trust departments, pension plan
sponsors, and investment managers.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES:
As of July 1, 1997:
<TABLE>
<CAPTION>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
- ------------------------------------------------------------------------------ -----------------
<S> <C>
Units of beneficial interest, without par value--
S&P 500 Index Portfolio Class A............................................. 279
S&P 500 Index Portfolio Class E............................................. 8
Bond Index Portfolio........................................................ 65
</TABLE>
ITEM 27. INDEMNIFICATION:
Article VIII of the Agreement and Declaration of Trust filed as Exhibit 1 to
the Registration Statement dated April 17, 1985 is incorporated by reference.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to trustees, directors, officers and controlling persons
of the Registrant by the Registrant pursuant to the Declaration of Trust or
otherwise, the Registrant is aware that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and, therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by trustees, directors, officers or
controlling persons of the Registrant in connection with the
C-3
<PAGE>
successful defense of any act, suit or proceeding) is asserted by such trustees,
directors, officers or controlling persons in connection with the shares being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issues.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER:
The list required by this Item 28 of officers and directors of World Asset
Management, together with information as to any other business, profession,
vocation or employment of a substantital nature engaged in by such officers and
directors during the past two years, is incorporated by reference to Schedules A
and D of Form ADV, filed by World Asset Management pursuant to the Investment
Advisers Act of 1940 (SEC File No. 801-48470).
The list required by this Item 28 of officers and directors of Mellon Bond
Associates, together with information as to any other business, profession,
vocation or employment of a substantital nature engaged in by such officers and
directors during the past two years, is incorporated by reference to Schedules A
and D of Form ADV, filed by Mellon Bond Associates pursuant to the Investment
Advisers Act of 1940 (SEC File No. 801-28576).
ITEM 29. PRINCIPAL UNDERWRITERS:
(a) Furnish the name of each investment company (other than the Registrant) for
which each principal underwriter currently distributing the securities of
the Registrant also acts as a principal underwriter, distributor or
investment adviser.
Registrant's distributor, SEI Investments Distribution Co. ("SEI
Investments"), acts as distributor for:
<TABLE>
<S> <C>
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI International Trust August 30, 1988
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, November 1, 1992
Inc.
The Arbor Fund January 28, 1993
Boston 1784 June 1, 1993
Funds-Registered Trademark-
The PBHG Funds, Inc. July 16, 1993
Marquis August 17, 1993
Funds-Registered Trademark-
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
</TABLE>
C-4
<PAGE>
<TABLE>
<S> <C>
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
FMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
SEI Institutional Investments June 14, 1996
Trust
First American Strategy Funds, October 1, 1996
Inc.
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
The Expedition Funds June 9, 1997
</TABLE>
SEI Investments provides numerous financial services to investment managers,
pension plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement and consulting services
("Funds Evaluation") and automated execution, clearing and settlement of
securities transactions ("MarketLink").
(b) Furnish the Information required by the following table with respect to each
director, officer or partner of each principal underwriter named in the
answer to Item 21 of Part B. Unless otherwise noted, the business address of
each director or officer is Oaks, PA 19456.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES
NAME POSITION AND OFFICE WITH UNDERWRITER WITH REGISTRANT
- ------------------------- --------------------------------------------------- ------------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief Executive Officer --
Henry H. Greer Director, President & Chief Operating Officer --
Carmen V. Romeo Director, Executive Vice President & --
President-Investment Advisory Group
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President, President-Investment --
Services Division
Dennis J. McGonigle Executive Vice President --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
David G. Lee Senior Vice President President & Chief
Executive Officer
Jack May Senior Vice President --
A. Keith McDowell Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
Kevin P. Robins Senior Vice President, General Counsel & Secretary Vice President &
Assistant Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND OFFICES
NAME POSITION AND OFFICE WITH UNDERWRITER WITH REGISTRANT
- ------------------------- --------------------------------------------------- ------------------------
<S> <C> <C>
Robert Aller Vice President --
Marc H. Cahn Vice President & Assistant Secretary Vice President &
Assistant Secretary
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President &
Assistant Secretary
Robert Crudup Vice President & Managing Director --
Barbara Doyne Vice President --
Jeff Drennen Vice President --
Vic Galef Vice President & Managing Director --
Kathy Heilig Vice President & Treasurer --
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
Donald H. Korytowski Vice President -
John Krzeminski Vice President & Managing Director --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Joanne Nelson Vice President --
Barbara A. Nugent Vice President & Assistant Secretary Vice President &
Assistant Secretary
Sandra K. Orlow Vice President & Assistant Secretary Vice President &
Assistant Secretary
Donald Pepin Vice President & Managing Director --
Kim Rainey Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President &
Assistant Secretary
Wayne M. Withrow Vice President & Managing Director --
James Dougherty Director of Brokerage Services --
</TABLE>
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<PAGE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3); (6);
(8); (12); and 31a-1(d), the required books and records are maintained at
the offices of Registrant's Custodian for those portfolios:
Comerica Bank
411 W. Lafayette
Detroit, MI 48226
(b) With respect to Rules 31a-1(a); 31a-1(b)(1), (2)(C) and (D); (4); (5);
(6); (8); (9); (10); (11); and 31a-1(f), the required books and records
are maintained at the offices of Registrant's Manager:
SEI Fund Management
Oaks, PA 19456
(c) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and 31a-1(f), the
required books and records are maintained at the principal offices of the
Registrant's Adviser for those portfolios:
<TABLE>
<S> <C>
S&P 500 INDEX PORTFOLIO BOND INDEX PORTFOLIO
World Asset Management Mellon Bond Associates
255 Brown Street Centre, 2nd Floor One Mellon Bank, Suite 4135
Birmingham, MI 48009 Pittsburgh, PA 15258
</TABLE>
ITEM 31. MANAGEMENT SERVICES:
None.
ITEM 32. UNDERTAKINGS:
Registrant undertakes to call a meeting of Shareholders for the purpose of
voting upon the question of removal of a Trustee(s) when requested in writing to
do so by the holders of at least 10% of Registrant's outstanding shares and in
connection with such meetings to comply with the provisions of Section 16(c) of
the Investment Company Act of 1940 relating to Shareholder communications.
Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to shareholders,
upon request and without charge.
Registrant hereby undertakes that whenever shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940 inform the
Board of Directors of their desire to communicate with Shareholders of the Fund,
the Directors will inform such Shareholders as to the approximate number of
Shareholders of record and the approximate costs of mailing or afford said
Shareholders access to a list of Shareholders.
C-7
<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust of SEI Index Funds is on
file with the Secretary of State of the Commonwealth of Massachusetts and notice
is hereby given that this Registration Statement has been executed on behalf of
the Trust by an officer of the Trust as an officer and by its Trustees as
trustees and not individually and the obligations of or arising out of this
Registration Statement are not binding upon any of the Trustees, officers, or
Shareholders individually but are binding only upon the assets and property of
the Trust.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Post-Effective Amendment No. 20 to Registration Statement No. 2-97111 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Wayne, Commonwealth of Pennsylvania, on the 29th day of July, 1997.
SEI INDEX FUNDS
By: /s/ DAVID G. LEE
-----------------------------------------
David G. Lee, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacity and on the dates indicated.
*
- ------------------------------ Trustee July 29, 1997
William M. Doran
*
- ------------------------------ Trustee July 29, 1997
F. Wendell Gooch
*
- ------------------------------ Trustee July 29, 1997
Frank E. Morris
*
- ------------------------------ Trustee July 29, 1997
Robert A. Nesher
*
- ------------------------------ Trustee July 29, 1997
James M. Storey
*
- ------------------------------ Trustee July 29, 1997
George J. Sullivan, Jr.
/s/ DAVID G. LEE
- ------------------------------ President & Chief July 29, 1997
David G. Lee Executive Officer
/s/ MARK E. NAGLE
- ------------------------------ Controller & Chief July 29, 1997
Mark E. Nagle Financial Officer
*By: /s/ DAVID G. LEE
-------------------------
David G. Lee
ATTORNEY-IN-FACT
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBITS
- ----------------
<S> <C> <C>
EX-99.B1(a) Declaration of Trust as originally filed as Exhibit (1) with Registrant's Registration
Statement on Form N-1A (File No. 2-97111) filed with the Securities and Exchange
Commission ("SEC") on April 17, 1985 is filed herewith.
EX-99.B1(b) Written Instrument Amending the Agreement and Declaration of Trust dated April 8, 1987
is filed herewith.
EX-99.B1(c) Written Instrument Amending the Declaration of Trust dated December 23, 1988 is filed
herewith.
EX-99.B2(a) By-Laws as originally filed as Exhibit (2) with Registrant's Registration Statement on
Form N-1A (File No. 2-97111) filed with the SEC on April 17, 1985 are filed herewith.
EX-99.B2(b) Amended By-Laws are filed herewith.
EX-99.B3 Not Applicable
EX-99.B4 Not Applicable
EX-99.B5(a) Investment Administrator Agreement with Manufacturers National Bank of Detroit, dated
July 25, 1986, as originally filed with Post-Effective Amendment No. 12 to
Registrant's Registration Statement on Form N-1A (File No. 2-97111) filed with the
SEC on July 11, 1990 is filed herewith.
EX-99.B5(b) Investment Administration Agreement with Woodbridge Capital Management, Inc. as
originally filed with Post-Effective Amendment No. 15 to Registrant's Registration
Statement on Form N-1A (File No. 2-97111) filed with the SEC on July 29, 1993 is
incorporated herein by reference to Post-Effective Amendment No. 19 filed with the
SEC on May 31, 1996.
EX-99.B5(c) Investment Advisory Agreement with World Asset Management is incorporated herein by
reference to Post-Effective Amendment No. 17 to Registrant's Registration Statement
on Form N-1A (File No. 2-97111) filed with the SEC on May 31, 1995.
EX-99.B5(d) Investment Advisory Agreement with Mellon Bond Associates is incorporated herein by
reference to Post-Effective Amendment No. 19 to Registrant's Registration Statement
on Form N-1A (File No. 2-97111) filed with the SEC on May 31, 1996.
EX-99.B5(e) Form of Amended and Restated Investment Advisory Agreement by and between SEI Index
Funds and World Asset Management, dated December 9, 1996, is filed herewith.
EX-99.B6(a) Distribution Agreement with SEI Financial Services Company as originally filed with
Pre-Effective Amendment No. 2 to Registrant's Registration Statement on Form N-1A
(File No. 2-97111) filed with the SEC on July 12, 1985 is incorporated herein by
reference to Post-Effective Amendment No. 19 filed with the SEC on May 31, 1996.
EX-99.B6(b) Amended and Restated Distribution Agreement with SEI Financial Services Company is
incorporated by reference to Post-Effective Amendment No. 18 to Registrant's
Registration Statement on Form N-1A (File No. 2-97111) filed with the SEC on December
28, 1995.
EX-99.B7 Not Applicable
EX-99.B8(a) Custodian Agreement with Manufacturers National Bank of Detroit as originally filed
with Pre-Effective Amendment No. 2 to Registrant's Registration Statement on Form
N-1A (File No. 2-97111) filed with the SEC on July 12, 1985 is filed herewith.
EX-99.B8(b) Amendment to the Custodian Agreement, dated January 3, 1986, is filed herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS
- ----------------
<S> <C> <C>
EX-99.B9(a) Management Agreement by and between TrustFunds Equity Index Funds and SEI Financial
Management Corporation is incorporated herein by reference to Post-Effective
Amendment No. 19 to Registrant's Registration Statement on Form N-1A (File No.
2-97111) filed with the SEC on May 31, 1996.
EX-99.B9(b) Management Agreement by and between TrustFunds Equity Index Funds and SEI Financial
Management Corporation is incorporated herein by reference to Post-Effective
Amendment No. 19 to Registrant's Registration Statement on Form N-1A (File No.
2-97111) filed with the SEC on May 31, 1996.
EX-99.B9(c) Class A Shareholder Service Plan and Agreement is incorporated herein by reference to
Post-Effective Amendment No. 19 to Registrant's Registration Statement on Form N-1A
(File No. 2-97111) filed with the SEC on May 31, 1996.
EX-99.B9(d) Class E Shareholder Service Plan and Agreement is incorporated herein by reference to
Post-Effective Amendment No. 19 to Registrant's Registration Statement on Form N-1A
(File No. 2-97111) filed with the SEC on May 31, 1996.
EX-99.B10 Opinion and Consent of Counsel is incorporated herein by reference to Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File No.
2-97111) filed with the SEC on June 14, 1985.
EX-99.B11 Consent of Independent Public Accountants is filed herewith.
EX-99.B12 Not Applicable
EX-99.B13 Not Applicable
EX-99.B14 Not Applicable
EX-99.B15(a) Distribution Plan with SEI Financial Services Company as originally filed with
Pre-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-1A
(File No. 2-97111) filed with the SEC on June 14, 1985 is incorporated herein by
reference to Post-Effective Amendment No. 19 to Registrant's Registration Statement
on Form N-1A (File No. 2-97111) filed with the SEC on May 31, 1996.
EX-99.B15(b) Distribution Plan is incorporated by reference to Post-Effective Amendment No. 18 to
Registrant's Registration Statement on Form N-1A (File No. 2-97111) filed with the
SEC on December 28, 1995.
EX-99.B15(c) Amended and Restated Class E Distribution Plan is incorporated herein by reference to
Post-Effective Amendment No. 19 to Registrant's Registration Statement on Form N-1A
(File No. 2-97111) filed with the SEC on May 31, 1996.
EX-99.B16 Performance Quotation Computation is incorporated herein by reference to Post-Effective
Amendment No. 15 to Registrant's Registration Statement on Form N-1A (File No.
2-97111) filed with the SEC on July 29, 1993.
EX-99.B18(a) Rule 18f-3 Plan is incorporated herein by reference to Post-Effective Amendment No. 18
to Registrant's Registration Statement on Form N-1A (File No. 2-97111) filed with the
SEC on December 28, 1995.
EX-99.B18(b) Amendment No. 1 to Rule 18f-3 Plan relating to Class A and E shares is incorporated
herein by reference to Post-Effective Amendment No. 19 to Registrant's Registration
Statement on Form N-1A (File No. 2-97111) filed with the SEC on May 31, 1996.
EX-99.B24 Powers of Attorney for Robert A. Nesher, William M. Doran, Mark E. Nagle, F. Wendell
Gooch, George J. Sullivan, Jr., James M. Storey, David G. Lee and Frank E. Morris are
filed herewith.
EX-27.1 Financial Data Schedules for the S&P 500 Index Portfolio Class A.
EX-27.2 Financial Data Schedules for the S&P 500 Index Portfolio Class E.
EX-27.3 Financial Data Schedules for the Bond Index Portfolio Class A.
</TABLE>
<PAGE>
TRUSTFUNDS EQUITY INDEX FUNDS
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts, this 6th
day of March, 1985, by the Trustees hereunder, and by the holders of Shares of
beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts voluntary association with transferable
Shares in accordance with the provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the holders from time
to time of Shares in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1. This Trust shall be known as the "TrustFunds Equity Index
Funds" and the Trustees shall conduct the business of the Trust under that name
or any other name as they may from time to time determine.
DEFINITIONS
SECTION 2. Whenever used herein, unless otherwise required by the
context or specifically provided:
(a) The "Trust" refers to the Massachusetts voluntary association
established by this Agreement and Declaration of Trust, as amended from time to
time;
(b) "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article IV and then in office;
<PAGE>
(c) "Shares" mean the equal proportionate transferable units of
interest into which the beneficial interest in the Trust shall be divided from
time to time or, if more than one series of Shares is authorized by the
Trustees, the equal proportionate transferable units into which each series of
Shares shall be divided from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person" , "Assignment" , "Commission" ,
"Interested Person" , "Principal Underwriter" and "Majority Shareholder Vote"
(the 67% or 50% requirement of the third sentence of Section 2(a) (42) of the
1940 Act, whichever may be applicable) shall have the meanings given them in the
1940 Act;
(g) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust as amended or restated from time to time; and
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time.
ARTICLE II
PURPOSE
The purpose of the Trust is to provide investors one or more investment
portfolios consisting primarily of securities, including debt instruments or
obligations.
ARTICLE III
SHARES
DIVISION OF BENEFICIAL INTEREST
SECTION 1. The Shares of the Trust shall be issued in one or more
series as the Trustees may, without shareholder approval, authorize. Each
series shall be preferred over all other series in respect of the assets
allocated to that series. The beneficial interest in each series shall at all
times be divided into Shares, with or without par value as the Trustee may
specify, each of which shall represent an equal proportionate interest in the
series with each other Share of the same series, none having priority or
preference over another. The number of Shares authorized shall be unlimited,
and the Shares so authorized may be represented in part by fractional Shares.
The Trustees may from time to time divide or combine the Shares of any series
-2-
<PAGE>
into a greater or lesser number without thereby changing the proportionate
beneficial interests in the series.
OWNERSHIP OF SHARES
SECTION 2. The ownership of Shares shall be recorded on the books of
the Trust or its transfer or similar agent. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent of the Trust, as the case may be, shall be conclusive
as to who are the Shareholders of each series and as to the number of Shares of
each series held from time to time by each Shareholder.
INVESTMENTS IN THE TRUST; ASSETS OF THE SERIES
SECTION 3. The Trustees may accept investments in the Trust from such
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they may from time to time authorize.
All consideration received by the Trust for the issue or sale of Shares of
each series, together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to the series of Shares
with respect to which the same were received by the Trust for all purposes,
subject only to the rights of creditors, and shall be so handled upon the books
of account of the Trust and are herein referred to as "assets of" such series.
NO PREEMPTIVE RIGHTS
SECTION 4. Shareholders shall have no preemptive or other right to
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
SECTION 5. Shares shall be deemed to be personal property giving only
the rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms of this Declaration of Trust and to have become a party thereto. The
death of a Shareholder during the continuance of the Trust shall not operate to
terminate the same nor entitle the representative of any deceased Shareholder to
an accounting or to take any action in court or elsewhere against the Trust or
the Trustees, but only to the rights of said decedent under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust property or right to call for a
-3-
<PAGE>
partition or division of the same or for an accounting, nor shall the ownership
of Shares constitute the Shareholders partners. Neither the Trust nor the
Trustees, nor any officer, employee or agent of the Trust shall have any power
to bind personally any Shareholder, nor except as specifically provided herein
to call upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.
ARTICLE IV
THE TRUSTEES
ELECTION
SECTION 1. In each year beginning 1987, at the annual meeting of
Shareholders or at any special meeting held in lieu thereof, or at any special
meeting held before 1987, the Shareholders shall elect a Board of not less than
three nor more than fifteen Trustees, each of whom shall serve until the next
annual meeting or special meeting in lieu thereof and until the election and
qualification of his or her successor, or until he or she sooner dies, resigns
or is removed. The number of Trustees to be so elected each year shall be fixed
by the Trustees in advance of the giving of notice of the meeting at which
Trustees are to be elected for such year, or if not so fixed, by vote of the
Shareholders at such meeting. The number of Trustees so fixed may be increased
either by the Shareholders or by the Trustees by a vote of a majority of the
Trustees then in office. The number of Trustees so fixed may be decreased
either by the Shareholders or by the Trustees by vote of a majority of the
Trustees then in office, but only to eliminate vacancies existing by reason of
the death, resignation or removal of one or more Trustees. The initial
Trustees, each of whom shall serve until the first meeting of Shareholders at
which Trustees are elected and until his or her successor is elected and
qualified, or until he or she sooner dies, resigns or is removed, shall be
William M. Doran and such other persons as the Trustee or Trustees then in
office shall, prior to any sale of Shares pursuant to public offering, appoint.
By vote of the Shareholders holding a majority of the Shares entitled to vote,
the Shareholders may remove a Trustee with or without cause. By vote of a
majority of the trustees then in office, the Trustees may remove a Trustee for
cause. Any Trustee may, but need not, be a Shareholder.
EFFECT OF DEATH, RESIGNATION, ETC., OF A TRUSTEE
SECTION 2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
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POWERS
SECTION 3. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt By-Laws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the Trust
and may amend and repeal them to the extent that such By-Laws do not reserve
that right to the Shareholders; they may fill vacancies in their number,
including vacancies resulting from increases in their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; they may appoint from their own number, and terminate, any one or
more committees consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session, exercise some or all
of the powers and authority of the Trustees as the Trustees may determine; they
may appoint an advisory board, the members of which shall not be Trustees and
need not be shareholders; they may employ one or more investment advisers or
managers as provided in Section 7 of this Article IV; they may employ one or
more custodians of the assets of the Trust and may authorize such custodians to
employ subcustodians and to deposit all or any part of such assets in a system
or systems for the central handling of securities, retain a transfer agent or a
Shareholder services agent, or both, provide for the distribution of Shares by
the Trust, through one or more principal underwriters or otherwise, set record
dates for the determination of Shareholders with respect to various matters, and
in general delegate such authority as they consider desirable to any officer of
the Trust, to any committee of the Trustees and to any agent or employee of the
Trust or to any such custodian or underwriter.
Without limiting the foregoing, the Trustees shall have power and authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;
(d) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in the name
of the Trustees or of the Trust or
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in the name of a custodian, subcustodian or other depositary or a nominee or
nominees or otherwise;
(f) To allocate assets, liabilities and expenses of the Trust to a
particular series of Shares or to apportion the same among two or more series,
provided that any liability or expense incurred by a particular series of Shares
shall be payable solely out of the assets of that series;
(g) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or property
of which is or was held in the Trust; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or issuer, and to pay
calls or subscriptions with respect to any security held in the Trust;
(h) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depositary or trustee as the
Trustees shall deem proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(j) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(k) To borrow funds;
(l) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge the
Trust property or any part thereof to secure any of or all such obligations;
(m) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers or managers, principal
underwriters, or independent contractors of the Trust individually against all
claims and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such person as Shareholder, Trustee, officer,
employee, agent, investment adviser or manager, principal underwriter, or
independent
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contractor, including any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have the power to
indemnify such person against such liability; and
(n) To pay pensions for faithful service, as deemed appropriate by
the Trustees, and to adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by trustees. Except as otherwise
provided herein or from time to time in the By-Laws, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
Trustees (if a quorum be present), within or without Massachusetts, including
any meeting held by means of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can
communicate with each other simultaneously and participation by such means shall
constitute presence in person at a meeting, or by written consents of a majority
of the Trustees then in office.
PAYMENT OF EXPENSES BY TRUST
SECTION 4. The Trustees are authorized to pay or to cause to be paid
out of the principal or income of the Trust, or partly out of principal and
partly out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser or manager, principal underwriter,
auditor, counsel, custodian, transfer agent, Shareholder services agent, and
such other agents or independent contractors and such other expenses and charges
as the Trustees may deem necessary or proper to incur, PROVIDED, HOWEVER, that
all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with a particular series of Shares as determined by the Trustees,
shall be payable solely out of the assets of that series.
SECTION 5. The Trustees shall have the power, as frequently as they may
determine, to cause each Shareholder to pay directly, in advance or arrears, for
any and all expenses of the Trust, an amount fixed from time to time by the
Trustees, by setting off such charges due from such Shareholder from declared
but unpaid dividends owed such Shareholder and/or by reducing the number of
shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from such Shareholder.
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OWNERSHIP OF ASSETS OF THE TRUST
SECTION 6. Title to all of the assets of each series of Shares and of
the Trust shall at all times be considered as vested in the Trustees.
ADVISORY, MANAGEMENT AND DISTRIBUTION
SECTION 7. Subject to a favorable Majority Shareholder Vote, the
Trustees may, at any time and from time to time, contract for exclusive or
nonexclusive advisory and/or management services with SEI Financial Services
Company (the "Advisor" ), a Pennsylvania corporation, and/or any other
corporation, trust, association or other organization, every such contract to
comply with such requirements and restrictions as may be set forth in the
By-Laws; and any such contract may contain such other terms interpretive of or
in addition to said requirements and restrictions as the Trustees may determine,
including, without limitation, authority to determine from time to time what
investments shall be purchased, held, sold or exchanged and what portion, if
any, of the assets of the Trust shall be held uninvested and to make changes in
the Trust's investments. The Trustees may also, at any time and from time to
time, contract with the Advisor and/or any other corporation, trust, association
or other organization, appointing it exclusive or nonexclusive distributor or
principal underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
advisor, principal underwriter, or distributor or agent of or for any
corporation, trust, association, or other organization, or of or for any
parent or affiliate of any organization, with which an advisory or
management or principal underwriter's or distributor's contract, or
transfer, Shareholder services or other agency contract may have been or
may hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in the Trust, or
that
(ii) any corporation, trust, association or other organization with
which an advisory or management or principal underwriter's or distributor's
contract, or transfer, Shareholder services or other agency contract may
have been or may hereafter be made also has an advisory or management
contract, or principal underwriter's or distributor's contract, or
transfer, Shareholder services or other agency contract with one or more
other corporations, trusts, associations, or other organizations, or has
other businesses or interests
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shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 1. The Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1, (ii) with
respect to any investment advisor or manager as provided in Article IV, Section
7, (iii) with respect to any termination of the Trust or any series to the
extent and as provided in Article IX, Section 4, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Article
IX, Section 7, (v) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or the Shareholders, and (vi) with respect to such
additional matters relating to the Trust as may be required by law, this
Declaration of Trust, the By-Laws or any registration of the Trust with the
Commission (or any successor agency) or any state, or as the Trustees may
consider necessary or desirable.
Each whole Share shall be entitled to one vote as to any matter on which it
is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. Notwithstanding any other provisions of this
Declaration of Trust, on any matter submitted to a vote of Shareholders, all
Shares of the Trust then entitled to vote, shall be voted by individual series;
except (1) when required by the 1940 Act, Shares shall be voted in the aggregate
and not by individual series; and (2) when the Trustees have determined that the
matter affects only the interests of one or more series, then only Shareholders
of such series shall be entitled to vote thereon. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by proxy.
A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to the exercise
of the proxy the Trust receives a specific written notice to the contrary from
any one of them. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise
and the burden of proving invalidity shall rest on the challenger.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration of Trust
or the By-Laws to be taken by Shareholders.
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VOTING POWER AND MEETINGS
SECTION 2. There shall be an annual meeting of the Shareholders on the
date fixed in the By-Laws at the principal office of the Trust, or at any such
other place within the United States as may be designated in the call thereof,
which call shall be made by the Trustees or the president of the Trust. In the
event that such meeting is not held in any year on the date fixed in the
By-Laws, whether the omission be by oversight or otherwise, a subsequent special
meeting may be called and held in lieu of the annual meeting with the same force
and effect as though held on such date.
Special meetings may also be called and held from time to time for the
purpose of taking action upon any matter requiring the vote or authority of the
Shareholders as herein provided or upon any other matter deemed by the Trustees
to be necessary or desirable. Special meetings may be called by the Trustees or
such other person or persons as may be specified in the By-Laws and shall be
called by the Trustees or such other person or persons as may be specified in
the By-Laws upon written application by Shareholders holding at least 25% of the
Shares then outstanding requesting that a meeting be called for a purpose
requiring action by the Shareholders as provided herein or in the By-Laws.
Shareholders shall be entitled to at least seven days' written notice of
any meeting of the Shareholders.
QUORUM AND REQUIRED VOTE
SECTION 3. A majority of the Shares entitled to vote shall be a quorum
for the transaction of business at a Shareholders' meeting, except that where
any provision of law or of this Declaration of Trust permits or requires that
holders of any series shall vote as a series, then a majority of the aggregate
number of Shares of that series entitled to vote shall be necessary to
constitute a quorum for the transaction of business by that series. Any lesser
number, however, shall be sufficient for adjournments. Any adjourned session or
sessions may be held within a reasonable time after the date set for the
original meeting without the necessity of further notice.
Except when a larger vote is required by any provisions of this Declaration
of Trust or the By-Laws, a majority of the Shares voted on any matter shall
decide such matter and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or requires that
the holders of any series shall vote as a series, then a majority of the Shares
of that series voted on the matter shall decide that matter insofar as that
series is concerned.
ACTION BY WRITTEN CONSENT
SECTION 4. Any action taken by Shareholders may be taken without a
meeting if a majority of Shareholders entitled to vote on the matter (or such
larger vote as shall be required by
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any provision of this Declaration of Trust or the By-Laws) consent to the action
in writing and such written consents are filed with the records of the meetings
of Shareholders. Such consent shall be treated for all purposes as a vote taken
at a meeting of Shareholders.
ADDITIONAL PROVISIONS
SECTION 5. The By-Laws may include further provisions for Shareholders'
votes and meetings and related matters.
ARTICLE VI
DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES,
AND DETERMINATION OF NET ASSET VALUE
DISTRIBUTIONS
SECTION 1. The Trustees may, but need not, each year distribute to the
Shareholders of each series such income and gains, accrued or realized, as the
Trustees may determine, after providing for actual and accrued expenses and
liabilities (including such reserves as the Trustees may establish) determined
in accordance with good accounting practices. The Trustees shall have full
discretion to determine which items shall be treated as income and which items
as capital and their determination shall be binding upon the Shareholders.
Distributions of each year's income of each series, if any be made, may be made
in one or more payments, which shall be in Shares, in cash or otherwise and on a
date or dates determined by the Trustees. At any time and from time to time in
their discretion, the Trustees may distribute to the Shareholders of any one or
more series as of a record date or dates determined by the Trustees, in Shares,
in cash or otherwise, all or part of any gains realized on the sale or
disposition of property of the series or otherwise, or all or part of any other
principal of the Trust attributable to the series. Each distribution pursuant
to this Section 1 shall be made ratably according to the number of Shares of the
series held by the several Shareholders on the applicable record date thereof,
provided that no distributions need be made on Shares purchased pursuant to
orders received, or for which payment is made, after such time or times as the
Trustees may determine. Any such distribution paid in Shares will be paid at
the net asset value thereof as determined in accordance with this Declaration of
Trust.
REDEMPTIONS AND REPURCHASES
SECTION 2. Any holder of Shares of the Trust may by presentation of a
written request, together with his certificates, if any, for such Shares, in
proper form for transfer, at the office of the Trust, the Advisor, the
underwriter or the distributors, or at a principal office of a transfer or
Shareholder services agent appointed by the Trust (as the Trustees may
determine), redeem his Shares for the net asset value thereof determined and
computed in accordance with the provisions of this Section 2 and the provisions
of Section 5 of Article VI of this Declaration of Trust, less any redemption
charge which the Trustees may establish.
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Upon receipt by the Trust, the Advisor, the underwriter or the distributor,
or the Trust's transfer or Shareholder services agent of such written request
for redemption of Shares, such Shares shall be redeemed at the net asset value
per share of the particular series next determined after such Shares are
tendered in proper form for transfer to the Trust or determined as of such other
time fixed by the Trustees as may be permitted or required by the 1940 Act,
provided that no such tender shall be required in the case of Shares for which a
certificate or certificates have not been issued, and in such case such Shares
shall be redeemed at the net asset value per share of the particular series next
determined after such demand has been received or determined at such other time
fixed by the Trustees as may be permitted or required by the 1940 Act.
The obligation of the Trust to redeem its Shares of each series as set
forth above in this Section 2 shall be subject to the conditions that during any
time of emergency, as hereinafter defined, such obligation may be suspended by
the Trust by or under authority of the Trustees for such period or periods
during such time of emergency as shall be determined by or under authority of
the Trustees. If there is such a suspension, any Shareholder may withdraw any
demand for redemption and any tender of Shares which has been received by the
Trust during any such period and any tender of Shares the applicable net asset
value of which would but for such suspension be calculated as of a time during
such period. Upon such withdrawal, the Trust shall return to the Shareholder
the certificates therefor, if any. For the purposes of any such suspension
"time of emergency" shall mean, either with respect to all Shares or any series
of Shares, any period during which:
a. the New York Stock Exchange is closed other than for customary
weekend and holiday closings; or
b. the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and regulations of the
Commission, either that trading on the New York Stock Exchange is
restricted, or that an emergency exists as a result of which (i) disposal
by the Trust of securities owned by it is not reasonably practicable or
(ii) it is not reasonably practicable for the Trust fairly to determine the
current value of its net assets; or
c. the suspension or postponement of such obligations is permitted
by order of the Commission.
The Trust may also purchase, repurchase or redeem shares in accordance with
such other methods, upon such other terms and subject to such other conditions
as the Trustees may from time to time authorize at a price not exceeding the net
asset value of such Shares in effect when the purchase or repurchase or any
contract to purchase or repurchase is made.
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PAYMENT IN KIND
SECTION 3. Subject to any generally applicable limitation imposed by
the Trustees, any payment on redemption, purchase or repurchase by the Trust of
Shares may, if authorized by the Trustees, be made wholly or partly in kind,
instead of in cash. Such payment in kind shall be made by distributing
securities or other property, constituting, in the opinion of the Trustees, a
fair representation of the various types of securities and other property then
held by the series of Shares being redeemed, purchased or repurchased (but not
necessarily involving a portion of each of the series' holdings) and taken at
their value used in determining the net asset value of the Shares in respect of
which payment is made.
ADDITIONAL PROVISIONS RELATING TO REDEMPTIONS AND REPURCHASES
SECTION 4. The completion of redemption, purchase or repurchase of
Shares shall constitute a full discharge of the Trust and the Trustees with
respect to such Shares and the Trustees may require that any certificate or
certificates issued by the Trust to evidence the ownership of such Shares shall
be surrendered to the Trustees for cancellation or notation.
DETERMINATION OF NET ASSET VALUE
SECTION 5. The term "net asset value" of the Shares of each series
shall mean: (i) the value of all the assets of such series; (ii) less total
liabilities of such series; (iii) divided by the number of Shares of such series
outstanding, in each case at the time of each determination. The "number of
Shares of such series outstanding" for the purposes of such computation shall
be exclusive of any Shares of such series to be redeemed, purchased or
repurchased by the Trust and not then redeemed, purchased or repurchased as to
which the price has been determined, but shall include Shares of such series
presented for redemption, purchase or repurchase by the Trust and not then
redeemed, purchased or repurchased as to which the price has not been determined
and Shares of such series the sale of which has been confirmed. Any fractions
involved in the computation of net asset value per share shall be adjusted to
the nearer cent unless the Trustees shall determine to adjust such fractions to
a fraction of a cent.
The Trustees, or any officer, or officers or agent of the Trust designated
for the purpose by the Trustees shall determine the net asset value of the
Shares of each series, and the Trustees shall fix the times as of which the net
asset value of the Shares of each series shall be determined and shall fix the
periods during which any such net asset value shall be effective as to sales,
redemptions and repurchases of, and other transactions in, the Shares of such
series, except as such times and periods for any such transaction may be fixed
by other provisions of this Declaration of Trust or by the By-Laws.
In valuing the portfolio investments of any series for determination of net
asset value per Share of such series, securities for which market quotations are
readily available shall be valued at
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prices which, in the opinion of the Trustees or any officer, or officers or
agent of the Trust designated for the purpose by the Trustees, most nearly
represent the market value of such securities which may, but need not, be the
most recent bid price obtained from one or more of the market makers for such
securities; other securities and assets shall be valued at fair value as
determined by or pursuant to the direction of the Trustees. Notwithstanding the
foregoing, short-term debt obligations, commercial paper, and repurchase
agreements may be, but need not be, valued on the basis of quoted yields for
securities of comparable maturity, quality and type, or on the basis of
amortized cost. In the determination of net asset value of any series,
dividends receivable and accounts receivable for investments sold and for Shares
sold shall be stated at the amounts to be received therefor; and income
receivable accrued daily on bonds and notes owned shall be stated at the amount
to be received. Any other assets shall be stated at fair value as determined by
the Trustees or such officer, officers or agent pursuant to the Trustees'
authority, except that no value shall be assigned to good will, furniture,
lists, reports, statistics or other noncurrent assets other than real estate.
Liabilities of any series for accounts payable, for investments purchased and
for Shares tendered for redemption, purchase or repurchase by the Trust and not
then redeemed, purchased or repurchased as to which the price has been
determined shall be stated at the amounts payable therefor. In determining net
asset value of any series, the person or persons making such determination on
behalf of the Trust may include in liabilities such reserves, estimated accrued
expenses and contingencies as such person or persons may in its, his or their
best judgment deem fair and reasonable under the circumstances. Any income
dividends and gains distributions payable by the Trust shall be deducted as of
such time or times on the record date therefor as the Trustees shall determine.
The manner of determining the net assets of any series or of determining
the net asset value of the Shares of any series may from time to time be altered
as necessary or desirable in the judgment of the Trustees to conform to any
other method prescribed or permitted by any applicable law or regulation or
generally accepted accounting practice.
Determinations in accordance with Section 5 made in good faith shall be
binding on all parties concerned.
REDEMPTIONS AT THE OPTION OF THE TRUST
SECTION 6. The Trust shall have the right at its option and at any time
to redeem Shares at the net asset value thereof (i) if such Shares are not held
in an account of a customer of the Advisor or an affiliated person of the
Advisor or in such other account as the Trustees may determine from time to
time; (ii) if at such time such Shareholder owns fewer Shares than, or Shares
having an aggregate net asset value of less than, an amount determined from time
to time by the Trustees; (iii) to the extent that such Shareholder owns Shares
of a particular series of Shares equal to or in excess of a percentage of the
outstanding Shares of that series determined from time to time by the Trustees;
or (iv) to the extent that such Shareholder owns Shares of the Trust
representing a percentage equal to or in excess of such percentage of the
aggregate number
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of outstanding Shares of the Trust or the aggregate net asset value of the Trust
determined from time to time by the Trustees.
DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES
SECTION 7. No dividend or distribution (including, without limitation,
any distribution paid upon termination of the Trust or of any series) with
respect to, nor any redemption or repurchase of, the Shares of any series shall
be effected by the Trust other than from the assets of such series.
ARTICLE VII
COMPENSATION AND LIMITATION
OF LIABILITY OF TRUSTEES
COMPENSATION
SECTION 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, legal, accounting, investment banking or other services
and payment for the same by the Trust.
LIMITATION OF LIABILITY
SECTION 2. The Trustees shall not be responsible or liable in any event
for any neglect or wrongdoing of any officer, agent, employee, investment
advisor or manager, principal underwriter or custodian, nor shall any Trustee be
responsible for the act or omission of any other Trustee, but nothing herein
contained shall protect any Trustee against any liability to which he or she
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.
Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
ARTICLE VIII
INDEMNIFICATION
Subject to the exceptions and limitations contained in this Article, every
person who is, or has been, a Trustee or officer of the Trust shall be
indemnified by the Trust to the fullest extent
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permitted by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit or proceeding in which
he becomes involved as a party or otherwise by virtue of his being or having
been a Trustee or officer and against amounts paid or incurred by him in
settlement thereof.
No indemnification shall be provided hereunder to a Trustee or officer:
(a) against any liability to the Trust or its Shareholders by reason
of a final adjudication by the court or other body before which the
proceeding was brought that he engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office;
(b) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interests of the Trust;
(c) in the event of a settlement or other disposition not involving a
final adjudication (as provided in paragraph (a) or (b)) and resulting
in a payment by a Trustee or officer, unless there has been either a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office by the court or other
body approving the settlement or other disposition or a reasonable
determination, based on a review of readily available facts (as
opposed to a full trial-type inquiry) that he did not engage in such
conduct:
(i) by a vote of a majority of the Disinterested Trustees acting
on the matter (provided that a majority of the Disinterested
Trustees then in office act on the matter); or
(ii) by written opinion of independent legal counsel.
The rights of indemnification hereinafter provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such Trustee or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person. Nothing contained herein shall affect any rights to indemnification to
which Trust personnel other than Trustees and officers may be entitled by
contract or otherwise under law.
Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding of the character described in the next to the last paragraph
of this Article shall be advanced by the Trust prior to final disposition
thereof upon receipt of an undertaking by or on behalf of the recipient to repay
such amount if it is ultimately determined that he is not entitled to
indemnification under this Article, provided that either:
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<PAGE>
(a) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses
arising out of any such advances; or
(b) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office
act on the matter) or independent legal counsel in a written opinion
shall determine, based upon a review of the readily available facts
(as opposed to a full trial-type inquiry), that there is reason to
believe that the recipient ultimately will be found entitled to
indemnification.
As used in this Article, a "Disinterested Trustee" is one (i) who is not
an "interested person" of the Trust (as defined by the 1940 Act) (including
anyone who has been exempted from being an "interested person" by any rule,
regulation or order of the Securities and Exchange Commission), and (ii) against
whom none of such actions, suits or other proceedings or another action, suit or
other proceeding on the same or similar grounds is then or has been pending.
As used in this Article, the words "claim" , "action" , "suit" or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include without limitation, attorneys' fees,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.
In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his or her being or having been a
Shareholder and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled to be
held harmless from and indemnified against all loss and expense arising from
such liability, but only out of the assets of the particular series of Shares of
which he or she is or was a Shareholder.
ARTICLE IX
MISCELLANEOUS
TRUSTEES, SHAREHOLDERS, ETC., NOT PERSONALLY LIABLE; NOTICE
SECTION 1. All persons extending credit to, contracting with or having
any claim against the Trust or a particular series of Shares shall look only to
the assets of the Trust or the assets of that particular series of Shares for
payment under such credit, contract or claim; and neither the Shareholders nor
the Trustees, nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect any Trustee against any liability to which
such Trustee would otherwise be
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subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
SECTION 2. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is required.
LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES
SECTION 3. No person dealing with the Trustees shall be bound to make
any inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
DURATION AND TERMINATION OF TRUST
SECTION 4. Unless terminated as provided herein, the Trust shall
continue without limitation of time. The Trust may be terminated at any time by
vote of Shareholders holding at least a majority of the Shares entitled to vote
or by the Trustees by written notice to the Shareholders. Any series of Shares
may be terminated at any time by vote of Shareholders holding at least a
majority of the Shares of such series entitled to vote or by the Trustees by
written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of Shares, after
paying or otherwise providing for all charges, taxes, expenses and liabilities,
whether due or accrued or anticipated, of the Trust or of the particular series
as may be determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the
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remaining assets to distributable form in cash or Shares or other securities, or
any combination thereof, and distribute the proceeds to the Shareholders of the
series involved, ratably according to the number of Shares of such series held
by the several Shareholders of such series on the date of termination.
FILING OF COPIES, REFERENCES, HEADINGS
SECTION 5. The original or a copy of this instrument and of each
amendment hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. A copy of this instrument and of each amendment
hereto shall be filed by the Trust with the Secretary of The Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any other governmental
office where such filing may from time to time be required. Anyone dealing with
the Trust may rely on a certificate by an officer of the Trust as to whether or
not any such amendments have been made and as to any matters in connection with
the Trust hereunder; and, with the same effect as if it were the original, may
rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like "herein" ,
"hereof" , and "hereunder" , shall be deemed to refer to this instrument as
amended from time to time. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. This instrument may be
executed in any number of counterparts each of which shall be deemed an
original.
APPLICABLE LAW
SECTION 6. This Declaration of Trust is made in The Commonwealth of
Massachusetts, and it is created under and is to be governed by and construed
and administered according to the laws of said Commonwealth. The Trust shall be
of the type commonly called a Massachusetts business trust, and without limiting
the provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
AMENDMENTS
SECTION 7. This Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees when authorized
so to do by vote of Shareholders holding a majority of the Shares entitled to
vote, except that an amendment which shall affect the holders of one or more
series of Shares but not the holders of all outstanding series shall be
authorized by vote of the Shareholders holding a majority of the Shares entitled
to vote of each series affected and no vote of Shareholders of a series not
affected shall be required. Amendments having the purpose of changing the name
of the Trust or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any defective or inconsistent provision contained
herein shall not require authorization by Shareholder vote.
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IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal in
the City of Boston, Massachusetts for himself and his assigns, as of the day
and year first above written.
/s/W. M. Doran
--------------------------------------------------
William M. Doran
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<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston March 6, 1985
Then personally appeared the above-named William M. Doran, and acknowledged
the foregoing instrument to be his free act and deed, before me,
/s/Elisa M. Lopez
--------------------------------------------------
Notary Public
My commission expires: November 7, 1988
(Notary's Seal)
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<PAGE>
TRUSTFUNDS INDEX FUNDS
WRITTEN INSTRUMENT AMENDING THE AGREEMENT
AND DECLARATION OF TRUST
The undersigned, being at least a majority of the Trustees of TrustFunds
Index Funds, a business trust organized under the laws of the Commonwealth of
Massachusetts pursuant to an Agreement and Declaration of Trust dated March 6,
1985 (the "Declaration of Trust"), and being authorized by the Unitholders of
said Trust to effect this amendment, do hereby amend pursuant to Article IX,
Section 7 of the Declaration of Trust, effective upon the signing of this
instrument, the Declaration of Trust as follows:
Article III, Section 1, is hereby amended in the entirety to read as
follows:
ARTICLE III
Shares
Division of Beneficial Interest
Section 1. The Shares of the Trust shall be issued in one or more series
as the Trustees may, without shareholder approval, authorize. Each series shall
be preferred over all other series in respect of the assets allocated to that
series. The beneficial interest in each series shall at all times be divided
into Shares, without par value, each of which shall represent an equal
proportionate interest in the series with each other Share of the same series,
none having priority or preference over another. Each series shall be
represented by one or more classes of Shares, with each class possessing such
rights (including, notwithstanding any contrary provisions herein, voting
rights) as the Trustees may, without shareholder approval authorize. The number
of Shares authorized shall be unlimited, and the Shares so authorized may be
represented in part by fractional shares. The Trustees may from time to time
divide or combine the Shares of any series or class into a greater or lesser
number without thereby changing the proportionate beneficial interests in the
series or class.
This instrument may be executed in several counterparts, each of which
shall be deemed an original, but all taken together shall constitute one
instrument.
<PAGE>
IN WITNESS WHEREOF AND UNDER PENALTIES OF PERJURY, the undersigned swear
that the foregoing is their free act and deed and they have set their
respective hands hereunder as of this 8th day of April, 1987.
/s/ Alfred P. West, Jr.
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Alfred P. West, Jr.
/s/ Edward W. Binshadler
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Edward W. Binshadler
/s/ R. F. Blanchard
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Richard F. Blanchard
/s/ W. M. Doran
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William M. Doran
/s/ F. W. Gooch
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F. Wendell Gooch
<PAGE>
TRUSTFUNDS INDEX FUNDS
WRITTEN INSTRUMENT AMENDING THE DECLARATION OF TRUST
The undersigned, being all of the Trustees of TrustFunds Index Funds, a
business trust organized under the laws of The Commonwealth of Massachusetts
pursuant to a Declaration of Trust dated March 6, 1985, do hereby amend,
effective upon the filing of this instrument in the office of the Secretary of
State of The Commonwealth of Massachusetts, the Declaration of Trust by deleting
the word "TrustFunds" wherever it appears therein and inserting in place thereof
the words "SEI".
This instrument may be executed in several counterparts, each of which
shall be deemed an original, but all taken together shall constitute one
instrument.
IN WITNESS WHEREOF, the undersigned have signed these presents on the dates
indicated.
/s/ Alfred P. West, Jr. December 23, 1988
- --------------------------------------------
Alfred P. West, Jr.
/s/ W. M. Doran December 23, 1988
- --------------------------------------------
William M. Doran
/s/ Edward W. Binshadler December 23, 1988
- --------------------------------------------
Edward Binshadler
/s/ R. F. Blanchard December 23, 1988
- --------------------------------------------
Richard Blanchard
/s/ F. W. Gooch December 23, 1988
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F. Wendell Gooch
<PAGE>
BY-LAWS
OF
TRUSTFUNDS EQUITY INDEX FUNDS
Section 1. AGREEMENT AND DECLARATION OF
TRUST AND PRINCIPAL OFFICE
1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject to the
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of TRUSTFUNDS EQUITY INDEX FUNDS, The Massachusetts
business trust established by the Declaration of Trust (the "Trust").
1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust shall be
located in Boston, Massachusetts.
SECTION 2. SHAREHOLDERS
2.1 ANNUAL MEETING. The annual meeting of the shareholders shall be at such
time and on such date in each year as the president or Trustees may from time to
time determine.
2.2 SPECIAL MEETING IN PLACE OF ANNUAL MEETING. If no annual meeting has been
held in accordance with the foregoing provisions, a special meeting of the
shareholders may be held in place thereof, and any action taken at such special
meeting shall have the same force and effect as if taken at the annual meeting,
and in such case all references in these By-Laws to the annual meeting of the
shareholders shall be deemed to refer to such special meeting.
2.3 SPECIAL MEETINGS. A special meeting of the shareholders of the Trust or of
any one or more series of shares may be called at any time by the Trustees, by
the president or, if the Trustees and the president shall fail to call any
meeting of shareholders for a period of 30 days after written application of one
or more shareholders who hold at least 25% of all shares issued and outstanding
and entitled to vote at the meeting, then such shareholders may call such
meeting. If the meeting is a meeting of the shareholders of one or more series
of shares, but not a meeting of all shareholders of the Trust, then only the
shareholders of such one or more series shall be entitled to notice of and to
vote at the meeting. Each call of a meeting shall state the place, date, hour
and purposes of the meeting.
2.4 PLACE OF MEETINGS. All meetings of the shareholders shall be held at the
principal office of the Trust, or, to the extent permitted by the Declaration of
Trust, at such other place within the United States as shall be designated by
the Trustees or the president of the Trust.
<PAGE>
2.5 NOTICE OF MEETINGS. A written notice of each meeting of shareholders,
stating the place, date and hour and the purposes of the meeting, shall be given
at least seven days before the meeting to each shareholder entitled to vote
thereat by leaving such notice with him or at his residence or usual place of
business or by mailing it, postage prepaid, and addressed to such shareholder at
his address as it appears in the records of the Trust. Such notice shall be
given by the secretary or an assistant secretary or by an officer designated by
the Trustees. No notice of any meeting of shareholders need be given to a
shareholder if a written waiver of notice, executed before or after the meeting
by such shareholder or his attorney thereunto duly authorized, is filed with the
records of the meeting.
2.6 BALLOTS. No ballot shall be required for any election unless requested by
a shareholder present or represented at the meeting and entitled to vote in the
election.
2.7 PROXIES. Shareholders entitled to vote may vote either in person or by
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted. Unless
otherwise specifically limited by their terms, such proxies shall entitle the
holders thereof to vote at any adjournment of such meeting but shall not be
valid after the final adjournment of such meeting.
SECTION 3. TRUSTEES
3.1 COMMITTEES AND ADVISORY BOARD. The Trustees may appoint from their number
an executive committee and other committees. Except as the Trustees may
otherwise determine, any such committee may make rules for conduct of its
business. The Trustees may appoint an advisory board to consist of not less
than two nor more than five members. The members of the advisory board shall be
compensated in such manner as the Trustees may determine and shall confer with
and advise the Trustees regarding the investments and other affairs of the
Trust. Each member of the advisory board shall hold office until the first
meeting of the Trustees following the next annual meeting of the shareholders
and until his successor is elected and qualified, or until he sooner dies,
resigns, is removed, or becomes disqualified, or until the advisory board is
sooner abolished by the Trustees.
3.2 REGULAR MEETINGS. Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the Trustees may from time to
time determine, provided that notice of the first regular meeting following any
such determination shall be given to absent Trustees. A regular meeting of the
Trustees may be held without call or notice immediately after and at the same
place as the annual meeting of the shareholders.
3.3 SPECIAL MEETINGS. Special meetings of the Trustees may be held at any time
and at any place designated in the call of the meeting, when called by the
Chairman of the Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the secretary
or an assistant secretary or by the officer or one of the Trustees
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<PAGE>
calling the meeting.
3.4 NOTICE. It shall be sufficient notice to a Trustee to send notice by mail
at least forty-eight hours or by telegram at least twenty-four hours before the
meeting addressed to the Trustee at his or her usual or last known business or
residence address or to give notice to him or her in person or by telephone at
least twenty-four hours before the meeting. Notice of a meeting need not be
given to any Trustee if a written waiver of notice, executed by him or her
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her. Neither notice of a meeting nor
a waiver of a notice need specify the purposes of the meeting.
3.5 QUORUM. At any meeting of the Trustees one-third of the Trustees then in
office shall constitute a quorum; provided, however, a quorum shall not be less
than two. Any meeting may be adjourned from time to time by a majority of the
votes cast upon the question, whether or not a quorum is present, and the
meeting may be held as adjourned without further notice.
SECTION 4. OFFICERS AND AGENTS
4.1 ENUMERATION; QUALIFICATION. The officers of the Trust shall be a
president, a treasurer, a secretary and such other officers, if any, as the
Trustees from time to time may in their discretion elect or appoint. The Trust
may also have such agents, if any, as the Trustees from time to time may in
their discretion appoint. Any officer may be but none need be a Trustee or
shareholder. Any two or more offices may be held by the same person.
4.2 POWERS. Subject to the other provisions of these By-Laws, each officer
shall have, in addition to the duties and powers herein and in the Declaration
of Trust set forth, such duties and powers as are commonly incident to his or
her office as if the Trust were organized as a Massachusetts business
corporation and such other duties and powers as the Trustees may from time to
time designate.
4.3 ELECTION. The president, the treasurer and the secretary shall be elected
annually by the Trustees at their first meeting following the annual meeting of
the shareholders. Other officers, if any, may be elected or appointed by the
Trustees at said meeting or at any other time.
4.4 TENURE. The president, the treasurer and the secretary shall hold office
until the first meeting of Trustees following the next annual meeting of the
shareholders and until their respective successors are chosen and qualified, or
in each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each agent shall retain his or her authority at the pleasure of
the Trustees.
4.5 PRESIDENT AND VICE PRESIDENTS. The president shall be the chief executive
officer of the Trust. The president shall, subject to the control of the
Trustees, have general charge and supervision of the business of the Trust. Any
vice president shall have such duties and powers as
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<PAGE>
shall be designated from time to time by the Trustees.
4.6 CHAIRMAN OF THE BOARD. If a Chairman of the Board of Trustees is elected,
he shall have the duties and powers specified in these By-laws and, except as
the Trustees shall otherwise determine, preside at all meetings of the
shareholders and of the Trustees at which he or she is present and have such
other duties and powers as may be determined by the Trustees.
4.7 TREASURER AND CONTROLLER. The treasurer shall be the chief financial
officer of the Trust and subject to any arrangement made by the Trustees with a
bank or trust company or other organization as custodian or transfer or
shareholder services agent, shall be in charge of its valuable papers and shall
have such other duties and powers as may be designated from time to time by the
Trustees or by the president. If at any time there shall be no controller, the
treasurer shall also be the chief accounting officer of the Trust and shall have
the duties and powers prescribed herein for the controller. Any assistant
treasurer shall have such duties and powers as shall be designated from time to
time by the Trustees.
The controller, if any be elected, shall be the chief accounting officer of the
Trust and shall be in charge of its books of account and accounting records.
The controller shall be responsible for preparation of financial statements of
the Trust and shall have such other duties and powers as may be designated from
time to time by the Trustees or the president.
4.8 SECRETARY AND ASSISTANT SECRETARIES. The secretary shall record all
proceedings of the shareholders and the Trustees in books to be kept therefor,
which books shall be kept at the principal office of the Trust. In the absence
of the secretary for many meeting of shareholders or Trustees, an assistant
secretary, or if there be none or he or she is absent, a temporary clerk chosen
at the meeting shall record the proceedings thereof in the aforesaid books.
SECTION 5. RESIGNATION AND REMOVALS
Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board,
the president, the treasurer or the secretary or to a meeting the Trustees.
The Trustees may remove any officer elected by them with or without cause by
the vote of a majority of the Trustees then in office. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee,
officer, or advisory board member resigning, and no officer or advisory board
member removed shall have any right to any compensation for any period
following his or her resignation or removal, or any right to damages on
account of such removal.
SECTION 6. VACANCIES
A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the
treasurer and the secretary, until his or her successor is chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed
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<PAGE>
or becomes disqualified.
SECTION 7. SHARES OF BENEFICIAL INTEREST
7.1 SHARE CERTIFICATES. No certificates certifying the ownership of shares
shall be issued except as the Trustees may otherwise authorize. In the event
that the Trustees authorize the issuance of share certificates, subject to
the provisions of Section 7.3, each shareholder shall be entitled to a
certificate stating the number of shares owned by him or her, in such form as
shall be prescribed from time to time by the Trustees. Such certificate
shall be signed by the president or a vice president and by the treasurer or
an assistant treasurer. Such signatures may be facsimiles if the certificate
is signed by a transfer or shareholder services agent or by a registrar,
other than a Trustee, officer or employee of the Trust. In case any officer
who has signed or whose facsimile signature has been placed on such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the Trust with the same effect as if he or she
were such officer at the time of its issue.
In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares,
who shall in either case be deemed, for all purposes hereunder, to be the
holders of certificates for such shares as if they had accepted such
certificates and shall be held to have expressly assented and agreed to the
terms hereof.
7.2 LOSS OF CERTIFICATES. In the case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
7.3 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any time
discontinue the issuance of share certificates and may, by written notice to
each shareholder, require the surrender of share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the
ownership of shares in the Trust.
SECTION 8. RECORD DATE
The Trustees may fix in advance a time, which shall not be more then 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the
record date for determining the shareholders having the right to notice and
to vote at such meeting and any adjournment thereof or the right to receive
such dividend or distribution, and in such case only shareholders or record
on such record date shall have such right, notwithstanding any transfer of
shares on the books of the Trust after the record date.
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<PAGE>
SECTION 9. SEAL
The seal of the Trust shall, subject to alteration by the Trustees, consist
of a flat-faced circular die with the words "A Massachusetts Voluntary
Association", together with the name of the Trust and the year of its
organization, cut or engraved thereon; but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and its absence
shall not impair the validity of, any document, instrument or other paper
executed and delivered by or on behalf of the Trust.
SECTION 10. EXECUTION OF PAPERS
Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers,
contracts, bonds, notes, checks, drafts and other obligations made, accepted
or endorsed by the Trust shall be signed, and any transfers of securities
standing in the name of the Trust shall be executed, by the president or by
one of the vice presidents or by the treasurer or by whomsoever else shall be
designated for that purpose by the vote of the Trustees and need not bear the
seal of the Trust.
SECTION 11. FISCAL YEAR
The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.
Section 12. PROVISIONS RELATING TO THE
CONDUCT OF THE TRUST'S BUSINESS
12.1 DEALINGS WITH AFFILIATES. The Trust shall not purchase or retain
securities issued by any issuer if one or more of the holders of the
securities of such issuer or one or more of the officers of directors of such
issuer is an officer or Trustee of the Trust or officer or director of any
organization, association or corporation with which the Trust has an
investment advisor's contract ("investment advisor"), if to the knowledge of
the Trust one or more of such officers or Trustees of the Trust or such
officers or directors of such investment advisors owns beneficially more than
one-half of one percent of the shares or securities of such issuer and such
officers, Trustees and directors owning more than one-half of one percent of
such shares or securities together own beneficially more than five percent of
such outstanding shares or securities. Each Trustee and officer of the Trust
shall give notice to the secretary of the identity of all issuers whose
securities are held by the Trust of which such officer or Trustee owns as
much as one-half of one percent of the outstanding securities, and the Trust
shall not be charged with the knowledge of such holdings in the absence of
receiving such notice if the Trust has requested such information not less
often than quarterly.
Subject to the provisions of the preceding paragraph, no officer, Trustee or
agent of the Trust and
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no officer, director or agent of any investment advisor shall deal for or on
behalf of the Trust with himself as principal or agent, or with any
partnership, association or corporation in which he has a material financial
interest; provided that the foregoing provisions shall not prevent (a)
officers and Trustees of the Trust from buying, holding or selling shares in
the Trust, or from being partners, officers or directors of or financially
interested in any investment advisor to the Trust or in any corporation, firm
or association which may at any time have a distributor's or principal
underwriter's contract with the Trust; (b) purchases or sales of securities
or other property if such transaction is permitted by or is exempt or
exempted from the provisions of the Investment Company Act of 1940 or any
Rule or Regulation thereunder and if such transaction does not involve any
commission or profit to any security dealer who is, or one or more of whose
partners, shareholders, officers or directors is, an officer or Trustee of
the Trust or an officer or director of the investment advisor, manager or
principal underwriter of the Trust; (c) employment of legal counsel,
registrar, transfer agent, shareholder services, dividend disbursing agent or
custodian who is, or has a partner, stockholder, officer or director who is,
an officer or Trustee of the Trust; (d) sharing statistical, research and
management expenses, including office hire and services, with any other
company in which an officer or Trustee of the Trust is an officer or director
or financially interested.
12.2 DEALING IN SECURITIES OF THE TRUST. The Trust, the investment
advisor, any corporation, firm or association which may at any time have an
exclusive distributor's or principal underwriter's contract with the Trust
(the "distributor") and the officers and Trustees of the Trust and officers
and directors of every investment advisor and distributor, shall not take
long or short positions in the securities of the Trust, except that:
(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;
(b) shares of the Trust may be purchased at not less than net asset value
for investment by the investment advisor and by officers and directors of
the distributor, investment advisor, or the Trust and by any trust,
pension, profit-sharing or other benefit plan for such persons, no such
purchase to be in contravention of any applicable state or federal
requirements.
12.3 LIMITATION ON CERTAIN LOANS. The Trust shall not make loans to any
officer, Trustee or employee of the Trust or any investment advisor or
distributor or their respective officers, directors or partners or employees.
12.4 CUSTODIAN. All securities and cash owned by the Trust shall be
maintained in the custody of one or more banks or trust companies having
(according to its last published report) not less than two million dollars
($2,000,000) aggregate capital, surplus and undivided profits (any such bank
or trust company is hereinafter referred to as the "custodian"); provided,
however, the custodian may deliver securities as collateral on borrowings
effected by the Trust, provided, that such delivery shall be conditioned upon
receipt of the borrowed funds by the custodian except
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where additional collateral is being pledged on an outstanding loan and the
custodian may deliver securities lent by the Trust against receipt of initial
collateral specified by the Trust. Subject to such rules, regulations and
orders, if any, as the Securities and Exchange Commission may adopt, the
Trust may, or may permit any custodian to, deposit all or any part of the
securities owned by the Trust in a system for the central handling of
securities operated by the Federal Reserve Banks, or established by a
national securities exchange or national securities association registered
with said Commission under the Securities Exchange Act of 1934, or such other
person as may be permitted by said Commission, pursuant to which system all
securities of any particular class or by series of any issue deposited with
the system are treated as fungible and may be transferred or pledged by
bookkeeping entry, without physical delivery of such securities.
The Trust shall upon the resignation or inability to serve of its custodian or
upon change of the custodian:
(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;
(b) require that the cash and securities owned by this corporation be
delivered directly to the successor custodian; and
(c) in the event that no successor custodian can be found, submit to the
shareholders, before permitting delivery of the cash and securities owned
by this Trust otherwise than to a successor custodian, the question whether
or not this Trust shall be liquidated or shall function without a
custodian.
12.5 REPORTS TO SHAREHOLDERS; DISTRIBUTIONS FROM REALIZED GAINS. The Trust
shall send to each shareholder of record at least annually a statement of the
condition of the Trust and of the results of its operation, containing all
information required by applicable laws or regulations.
SECTION 13. AMENDMENTS
These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority.
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<PAGE>
BY-LAWS
OF
SEI INDEX FUNDS
SECTION 1. AGREEMENT AND DECLARATION OF
TRUST AND PRINCIPAL OFFICE
1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject to the
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of SEI INDEX FUNDS, the Massachusetts business trust
established by the Declaration of Trust (the "Trust").
1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust shall be
located in Boston, Massachusetts.
SECTION 2. SHAREHOLDERS
2.1 MEETINGS. A meeting of the shareholders of the Trust or by any one or more
series of shares may be called at any time by the Trustees, by the president or,
if the Trustees and the president shall fail to call any meeting of shareholders
for a period of 30 days after written application of one or more shareholders
who at least 10% of all outstanding shares of the Trust, if shareholders of all
series are required under Declaration of Trust to vote the aggregate and not by
individual series at such meeting, or of any series, if shareholders of such
series are entitled under the Declaration of Trust to vote by individual series
at such meeting, then such shareholders may call such meeting. If the meeting
is a meeting of the shareholders of one or more series of shares, but not a
meeting of all shareholders of the Trust, then only the shareholders of such one
or more series shall be entitled to notice of and to vote at the meeting. Each
call of a meeting shall state the place, date, hour and purpose of the meeting.
2.2 SPECIAL MEETINGS. A special meeting of the shareholders may be called at
any time by the Trustees, by the president or, if the Trustees and the president
shall fail to call any meeting of shareholders for a period of 30 days after
written application of one or more shareholders who hold at least 25% of all
shares issued and outstanding and entitled to vote at the meeting, then such
shareholders may call such meeting. Each call of a meeting shall state the
place, date, hour and purposes of the meeting.
2.3 PLACE OF MEETINGS. All meetings of the shareholders shall be held at the
principal office of the Trust, or, to the extent permitted by the Declaration of
Trust, at such other place within the United States as shall be designated by
the Trustees or the president of the Trust.
2.4 NOTICE OF MEETINGS. A written notice of each meeting of shareholders,
stating the place, date and hour and the purposes of the meeting, shall be given
at least seven days before the meeting to
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each shareholder entitled to vote thereat by leaving such notice with him or at
his residence or usual place of business or by mailing it, postage prepaid, and
addressed to such shareholder at his address as it appears in the records of the
Trust. Such notice shall be given by the secretary or an assistant secretary or
by an officer designated by the Trustees. No notice of any meeting of
shareholders need be given to a shareholder if a written waiver of notice,
executed before or after the meeting by such shareholder or his attorney
thereunto duly authorized, is filed with the records of the meeting.
2.5 BALLOTS. No ballot shall be required for any election unless requested by
a shareholder present or represented at the meeting and entitled to vote in the
election.
2.6 PROXIES. Shareholders entitled to vote may vote either in person or by
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted. Unless
otherwise specifically limited by their terms, such proxies shall entitle the
holders thereof to vote at any adjournment of such meeting but shall not be
valid after the final adjournment of such meeting.
SECTION 3. TRUSTEES
3.1 COMMITTEES AND ADVISORY BOARD. The Trustees may appoint from their number
an executive committee and other committees. Except as the Trustees may
otherwise determine, any such committee may make rules for conduct of its
business. The Trustees may appoint an advisory board to consist of not less
than two nor more than five members. The members of the advisory board shall be
compensated in such manner as the Trustees may determine and shall confer with
and advise the Trustees regarding the investments and other affairs of the
Trust. Each member of the advisory board shall hold office until the first
meeting of the Trustees following the next annual meeting of the shareholders
and until his successor is elected and qualified, or until he sooner dies,
resigns, is removed, or becomes disqualified, or until the advisory board is
sooner abolished by the Trustees.
3.2 REGULAR MEETINGS. Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the Trustees may from time to
time determine, provided that notice of the first regular meeting following any
such determination shall be given to absent Trustees. A regular meeting of the
Trustees may be held without call or notice immediately after and at the same
place as the annual meeting of the shareholders.
3.3 SPECIAL MEETINGS. Special meetings of the Trustees may be held at any time
and at any place designated in the call of the meetings, when called by the
Chairman of the Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the secretary
or an assistant secretary or by the officer or one of the Trustees calling the
meeting.
3.4 NOTICE. It shall be sufficient notice to a Trustee to send notice by mail
at least forty-eight hours or by telegram at least twenty-four hours before the
meeting addressed to the Trustee at his
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<PAGE>
or her usual or last known business or residence address or to give notice to
him or her in person or by telephone at least twenty-four hours before the
meeting. Notice of a meeting need not be given to any Trustee if a written
waiver of notice, executed by him or her before or after the meeting, is filed
with the records of the meeting, or to any Trustee who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
him or her. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.
3.5 QUORUM. At any meeting of the Trustees one-third of the Trustees then in
office shall constitute a quorum; provided, however, a quorum shall not be less
than two. Any meeting may be adjourned from time to time by a majority of the
votes cast upon the question, whether or not a quorum is present, and the
meeting may be held as adjourned without further notice.
SECTION 4. OFFICERS AND AGENTS
4.1 ENUMERATION; QUALIFICATION. The officers of the Trust shall be a
president, a treasurer, a secretary and such other officers, if any, as the
Trustees from time to time may in their discretion elect or appoint. The Trust
may also have such Agents, if any, as the Trustees from time to time may in
their discretion appoint. Any officer may be but none need be a Trustee or
shareholder. Any two or more offices may be held by the same person.
4.2 POWERS. Subject to the other provisions of these By-Laws, each officer
shall have, in addition to the duties and powers herein and in the Declaration
of Trust set forth, such duties and powers as are commonly incident to his or
her office as if the Trust were organized as a Massachusetts business
corporation and such other duties and powers as the Trustees may from time to
time designate.
4.3 ELECTION. The president, the treasurer and the secretary shall be elected
annually by the Trustees at their first meeting following the annual meeting of
the shareholders. Other officers, if any, may be elected or appointed by the
Trustees at said meeting or at any other time.
4.4 TENURE. The president, the treasurer and the secretary shall hold office
until the first meeting of Trustees following the next annual meeting of the
shareholders and until their respective successors are chosen and qualified, or
in each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each agent shall retain his or her authority at the pleasure of
the Trustees.
4.5 PRESIDENT AND VICE PRESIDENTS. The president shall be the chief executive
officer of the Trust. The president shall, subject to the control of the
Trustees, have general charge and supervision of the business of the Trust. Any
vice president shall have such duties and powers as shall be designated from
time to time by the Trustees.
4.6 CHAIRMAN OF THE BOARD. If a Chairman of the Board of Trustees is elected,
he shall have the duties and powers specified in these By-Laws and, except as
the Trustees shall otherwise determine,
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<PAGE>
preside at all meetings of the shareholders and of the Trustees at which he or
she is present and have such other duties and powers as may be determined by the
Trustees.
4.7 TREASURER AND CONTROLLER. The treasurer shall be the chief financial
officer of the Trust and subject to any arrangement made by the Trustees with a
bank or trust company or other organization as custodian or transfer or
shareholder services agent, shall be in charge of its valuable papers and shall
have such other duties and powers as may be designated from time to time by the
Trustees or by the president. If at any time there shall be no controller, the
treasurer shall also be the chief accounting officer of the Trust and shall have
the duties and powers prescribed herein for the controller. Any assistant
treasurer shall have such duties and powers as shall be designated from time to
time by the Trustees.
The controller, if any be elected, shall be the chief accounting officer of the
Trust and shall be in charge of its books of account and accounting records.
The controller shall be responsible for preparation of financial statements of
the Trust and shall have such other duties and powers as may be designated from
time to time by the Trustees or the president.
4.8 SECRETARY AND ASSISTANT SECRETARIES. The secretary shall record all
proceedings of the shareholders and the Trustees in books to be kept therefor,
which books shall be kept at the principal office of the Trust. In the absence
of the secretary from any meeting of shareholders or Trustees, an assistant
secretary, or if there be none or he or she is absent, a temporary clerk chosen
at the meeting shall record the proceedings thereof in the aforesaid books.
SECTION 5. RESIGNATION AND REMOVALS
Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the secretary or to a meeting of the Trustees. The
Trustees may remove any officer elected by them with or without cause by a vote
of a majority of the Trustees then in office. Except to the extent expressly
provided in a written agreement with the Trust, no Trustee, officer, or advisory
board member resigning, and no officer or advisory board member removed shall
have any right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of such removal.
SECTION 6. VACANCIES
A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.
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<PAGE>
SECTION 7. SHARES
7.1 SHARE CERTIFICATES. No certificates certifying the ownership of shares
shall be issued except as the Trustees may otherwise authorize. In the event
that the Trustees authorize the issuance of share certificates, subject to the
provisions of Section 7.3, each shareholder shall be entitled to a certificate
stating the number of shares owned by him or her, in such form as shall be
prescribed from time to time by the Trustees. Such certificate shall be signed
by the president or a vice president and by the treasurer or an assistant
treasurer. Such signatures may be facsimiles if the certificate is signed by a
transfer or shareholder services agent or by a registrar, other than a Trustee,
officer or employee of the Trust. In case any officer who has signed or whose
facsimile signature has been placed on such certificate shall have ceased to be
such officer before such certificate is issued, it may be issued by the Trust
with the same effect as if he or she were such officer at the time of its issue.
In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
7.2 LOSS OF CERTIFICATES. In the case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
7.3 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any time
discontinue the issuance of share certificates and may, by written notice to
each shareholder, require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not affect the ownership of
shares in the Trust.
SECTION 8. RECORD DATE
The Trustees may fix in advance a time, which shall not be more than 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the record
date for determining the shareholders having the right to notice and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date.
SECTION 9. SEAL
The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts", together with the name of
the Trust and the year of its organization,
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<PAGE>
cut or engraved thereon; but, unless otherwise required by the Trustees, the
seal shall not be necessary to be placed on, and its absence shall not impair
the validity of, any document, instrument or other paper executed and delivered
by or on behalf of the Trust.
SECTION 10. EXECUTION OF PAPERS
Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and any transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by whomsoever else shall be designated for
that purpose by the vote of the Trustees and need not bear the seal of the
Trust.
SECTION 11. FISCAL YEAR
The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.
SECTION 12. PROVISIONS RELATING TO THE
CONDUCT OF THE TRUST'S BUSINESS
12.1 DEALINGS WITH AFFILIATES. No officer, Trustee or agent of the Trust
and no officer, director or agent of any investment advisor shall deal for or
on behalf of the Trust with himself as principal or agent, or with any
partnership, association or corporation in which he has a material financial
interest; provided that the foregoing provisions shall not prevent (a)
officers and Trustees of the Trust from buying, holding or selling shares in
the Trust, or from being partners, officers or directors of or financially
interested in any investment advisor to the Trust or in any corporation, firm
or association which may at any time have a distributor's or principal
underwriter's contract with the Trust; (b) purchases or sales of securities
or other property if such transaction is permitted by or is exempt or
exempted from the provisions of the Investment Company Act of 1940 or any
Rule or Regulation thereunder and if such transaction does not involve any
commission or profit to any security dealer who is, or one or more of whose
partners, shareholders, officers or directors is, an officer or Trustees of
the Trust or an officer or director of the investment advisor, manager or
principal underwriter of the Trust; (c) employment of legal counsel,
registrar, transfer agent, shareholder services, dividend disbursing agent or
custodian who is, or has a partner, stockholder, officer or director who is,
an officer or Trustee of the Trust; (d) sharing statistical, research and
management expenses, including office hire and services, with any other
company in which an officer or Trustee of the Trust is an officer or director
or financially interested.
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<PAGE>
12.2 DEALING IN SECURITIES OF THE TRUST. The Trust, the investment
advisor, any corporation, firm or association which may at any time have an
exclusive distributor's or principal underwriter's contract with the Trust
(the "distributor") and the officers and Trustees of the Trust and officers
and directors of every investment advisor and distributor, shall not take
long or short positions in the securities of the Trust, except that:
(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;
(b) shares of the Trust may be purchased at not less than net asset value
for investment by the investment advisor and by officers and directors of
the distributor, investment advisor, or the Trust and by any trust,
pension, profit-sharing or other benefit plan for such persons, no such
purchase to be in contravention of any applicable state or federal
requirement.
12.3 LIMITATION ON CERTAIN LOANS. The Trust shall not make loans to any
officer, Trustee or employee of the Trust or any investment advisor or
distributor or their respective officers, directors or partners or employees.
12.4 CUSTODIAN. All securities and cash owned by the Trust shall be
maintained in the custody of one or more banks or trust companies having
(according to its last published report) not less than two million dollars
($2,000,000) aggregate capital, surplus and undivided profits (any such bank
or trust company is hereinafter referred to as the "custodian"); provided,
however, the custodian may deliver securities as collateral on borrowings
effected by the Trust, provided, that such delivery shall be conditioned upon
receipt of the borrowed funds by the custodian except where additional
collateral is being pledged on an outstanding loan and the custodian may
deliver securities lent by the Trust against receipt of initial collateral
specified by the Trust. Subject to such rules, regulations and orders, if
any, as the Securities and Exchange Commission may adopt, the Trust may, or
may permit any custodian to, deposit all or any part of the securities owned
by the Trust in a system for the central handling of securities operated by
the Federal Reserve Banks, or established by a national securities exchange
or national securities association registered with said Commission under the
Securities Exchange Act of 1934, or such other person as may be permitted by
said Commission, pursuant to which system all securities of any particular
class or series of any issue deposited with the system are treated as
fungible and may be transferred or pledged by bookkeeping entry, without
physical delivery of such securities.
The Trust shall upon the resignation or inability to serve of its custodian or
upon change of the custodian:
(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;
(b) require that the case and securities owned by this corporation be
delivered directly to the successor custodian; and
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<PAGE>
(c) in the event that no successor custodian can be found, submit to the
shareholders, before permitting delivery of the case and securities owned
by this Trust otherwise than to a successor custodian, the question whether
or not this Trust shall be liquidated or shall function without a
custodian.
12.5 REPORTS TO SHAREHOLDERS; DISTRIBUTIONS FROM REALIZED GAINS. The Trust
shall send to each shareholder of record at least annually a statement of the
condition of the Trust and of the results of its operation, containing all
information required by applicable laws or regulations.
SECTION 13. AMENDMENTS
These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority.
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<PAGE>
INVESTMENT ADMINISTRATION AGREEMENT
Agreement made as of this 25th day of July, 1986, by and between TrustFunds
Index Funds, a Massachusetts business trust (the "Trust"), and Manufacturers
National Bank of Detroit (the "Administrator"), a national bank.
WHEREAS the Trust is an open-end, diversified investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"),
consisting of several separate portfolios of securities, each of which has the
investment objective of providing investment results that correspond to the
price and yield performance of a designated index or securities group;
WHEREAS the Trust has retained SEI Financial Management Corporation (the
"Manager") to provide certain management services for the Trust subject to the
control of the Board of Trustees; and
WHEREAS the Trust desires to retain the Administrator to render monitoring,
administrative adjustment and related services to the Trust with respect to its
S&P 500 Index Portfolio, its Extended Market Index Portfolio and such other
portfolios as the parties hereafter may agree on (the "Portfolios"), and the
Administrator is willing to render such services;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE 1. DUTIES OF ADMINISTRATOR. The Trust employs the Administrator (i)
to continuously review, supervise, and administer the investment program of the
Portfolios; (ii) to monitor regularly the S&P 500 Index and the Extended Market
Index and the relevant index or other designated securities for any other
portfolios as the parties hereto may hereafter agree upon (all such indexes or
other designated securities to be as defined from time to time in the Trust's
current Prospectus) to determine if portfolio adjustments are warranted due to
changes in index composition, mergers or other similar reasons and, if so, to
make such adjustments on a periodic basis; (iii) to determine, in the
Administrator's discretion, the securities to be purchased or sold or exchanged
in order to keep each Portfolio in approximate balance with its designated index
or designated securities group; (iv) to determine, in the Administrator's
discretion, whether to exercise warrants or other rights with respect to
Portfolio securities, and whether to accept tender offers with respect to such
securities (with any finders fees realized in connection with tender offers or
other rights with respect to Portfolio securities being rebated to the
Portfolios); (v) to determine, in the Administrator's discretion, whether the
merit of a Portfolio
<PAGE>
investment has been substantially impaired by extraordinary events or financial
conditions, thereby warranting the removal of such securities from a Portfolio,
notwithstanding its inclusion in the designated index or securities group; (vi)
to calculate and provide to the Manager the net asset value of each Portfolio on
each day that the Trust's custodian banks and the New York Stock Exchange are
open for business; (vii) to provide the Manager and the Trust on behalf of the
Portfolios with records concerning the Administrator's activities which the
Trust is required to by law maintain; and (viii) to render regular reports to
the Manager and to the Trust's officers and Trustees concerning the
Administrator's discharge of the foregoing responsibilities. The Administrator
shall discharge the foregoing responsibilities subject to the oversight of the
Manager and in compliance with such policies as the Trustees of the Trust may
from time to time establish, and in compliance with the objectives, policies,
and limitations for each Portfolio as set forth in the Trust's then current
registration statement under the Act and applicable laws and regulations. The
Administrator accepts such employment and agrees, at its own expense, to render
the services and to provide the office space, furnishings and equipment and the
personnel required by it to perform the services on the terms and for the
compensation provided herein.
ARTICLE 2. PORTFOLIO TRANSACTIONS. The Administrator is authorized to
select the brokers or dealers, including SEI Financial Services Company, that
will execute the purchases and sales of portfolio securities for each Portfolio
and is directed to use its best efforts to obtain the best net results, as
described in the Trust's then current registration statement and, as
appropriate, to place such purchase and sale orders. The Administrator will
promptly communicate to the Manager and to the officers and the Trustees of the
Trust such information relating to Portfolio transactions as they may reasonably
request.
ARTICLE 3. COMPENSATION OF THE ADMINISTRATOR. For the services to be
rendered by the Administrator as provided in Articles 1 and 2 of this Agreement,
the Trust shall pay to the Administrator compensation at an annual rate of .03%
of the average daily net assets of the Portfolios. Such compensation shall be
calculated and accrued daily and paid to the Administrator monthly. This fee
shall be allocated among the Portfolios on the basis of their relative net
assets. If this Agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, the Administrator's
compensation for that part of the month in which this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as set
forth above. Payment of the Administrator's fee as provided above is subject to
the limitation that no monthly payment shall exceed the payment
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<PAGE>
actually made to the Manager with respect to the Portfolios pursuant to the
current Management Agreement between the Manager and the Trust.
ARTICLE 4. OTHER SERVICES. At the request of the Trust or the Manager, the
Administrator, in its discretion, may make available to the Trust its office
facilities, equipment and personnel for other services.
ARTICLE 5. STATUS OF ADMINISTRATOR. The services of the Administrator to
the Trust are not to be deemed exclusive, and the Administrator shall be free to
render similar services to others so long as its services to the Trust are not
impaired thereby. The Administrator shall be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust or the Manager in any way or
otherwise be deemed an agent of the Trust or the Manager.
ARTICLE 6. CERTAIN RECORDS. Any records required to be maintained and
preserved pursuant to the provisions of Rules 31a-1 and 31a-2 promulgated under
the 1940 Act which are prepared or maintained by the Administrator on behalf of
the Trust are the property of the Trust and will be surrendered promptly to the
Trust on request. Such records shall be maintained in a readily accessible place
as required by the rules under the 1940 Act.
ARTICLE 7. LIMITATION OF LIABILITY OF ADMINISTRATOR. The Administrator
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Administrator in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
ARTICLE 8. PERMISSIBLE INTERESTS. Trustees, agents, and Unitholders of the
Trust are or may be interested in the Administrator (or any successor thereof)
as directors, partners, officers, shareholders or otherwise; directors,
partners, officers, agents and shareholders of the Administrator (or any
successor) are or may be interested in the Trust as Trustees, Unitholders or
otherwise; and the Administrator (or any successor) is or may be interested in
the Trust as a Unitholder or otherwise.
ARTICLE 9. DURATION AND TERMINATION. This Agreement, unless sooner
terminated as provided herein, shall continue as to each Portfolio for two years
following the date of this Agreement, and thereafter, with respect to each
Portfolio, for periods of one year so long as such continuance thereafter is
speci-
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fically approved at least annually (a) by the Trustees of the Trust or by vote
of a majority of the outstanding voting securities of such Portfolio, and (b) by
the vote of a majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval; provided, however,
that if the Unitholders of any Portfolio disapprove of this Agreement as
provided herein, the Administrator may continue to serve hereunder in the manner
and to the extent permitted by the 1940 Act and the rules thereunder. The
foregoing requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
1940 Act and the rules and regulations thereunder. This Agreement may be
terminated as to any Portfolio at any time, without the payment of any penalty
by vote of a majority of the Trustees of the Trust or by vote of a majority of
the outstanding voting securities of the Portfolio on not less than 30 days nor
more than 60 days written notice to the Administrator, or by the Administrator
at any time without the payment of any penalty upon 90 days written notice to
the Trust. This Agreement will automatically and immediately terminate in the
event of its assignment. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, to the other party at the
last designated mailing address of such party.
ARTICLE 10. AMENDMENTS. This Agreement may be amended as to any Portfolio
by the parties hereto only if such amendment is specifically approved (i) by the
vote of a majority of outstanding voting securities of such Portfolio, and (ii)
by the vote of a majority of the Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. For special cases,
the parties hereto may amend such procedures set forth herein as may be
appropriate or practical under the circumstances, and the Administrator may
conclusively assume that any special procedure which has been approved by the
Trust does not conflict with or violate any requirements of its Declaration of
Trust, By-laws or prospectus, or any rule, regulation or requirement of any
regulatory body.
ARTICLE 11. CERTAIN RECORDS. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Trust shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Trust and will be made available
to or surrendered promptly to the Trust or the Manager on request. In case of
any request or demand for the inspection of such records by another party, the
Administrator shall notify the Trust and follow the Trust's instructions as to
permitting or refusing such inspection;
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<PAGE>
provided that the Administrator may exhibit such records to any person in any
case where it is advised by its counsel that it may be held liable for failure
to do so, unless the Trust has agreed to indemnify the Administrator against
such liability.
ARTICLE 12. DEFINITIONS OF CERTAIN TERMS. The terms "vote of a majority of
the outstanding voting securities," "assignment," "interested person" and
"affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 13. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Massachusetts and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the Commonwealth of
Massachusetts, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 14. MULTIPLE ORIGINALS. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
TRUSTFUNDS INDEX FUNDS
By: [Signature Appears Here]
---------------------------
PRESIDENT
MANUFACTURERS NATIONAL BANK OF DETROIT
BY: [Signature Appears Here]
---------------------------
VICE PRESIDENT
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<PAGE>
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made on the 31st day of January, 1995, and amended and restated
on this 9th day of December, 1996, by and between SEI Index Funds, a
Massachusetts business trust (the "Trust"), and World Asset Management (the
"Adviser").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), consisting of several separate portfolios of securities, each of
which has the investment objective of providing investment results that
correspond to the price and yield performance of a designated index or
securities group;
WHEREAS, the Trust has retained SEI Fund Management (the "Manager") to
provide certain management services for the Trust, subject to the control of the
Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render monitoring,
administrative adjustment and related services to the Trust with respect to its
S&P 500 Index Portfolio and such other portfolios as the parties hereafter may
agree on (collectively, the "Portfolios") and the Adviser is willing to render
such services;
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
ARTICLE 1. DUTIES OF THE ADVISER. The Trust employs the Adviser (i) to
continuously review, supervise, and administer the investment program of the
Portfolios; (ii) to monitor regularly the S&P 500 Index and the relevant index
or other designated securities for any other portfolios as the parties hereto
may hereafter agree upon (all such indices or other designated securities to be
as defined from time to time in the Trust's current Prospectus) to determine if
portfolio adjustments are warranted due to changes in index composition, mergers
or other similar reasons and, if so, to make such adjustments on a periodic
basis; (iii) to determine, in the Adviser's discretion, the securities to be
purchased or sold or exchanged in order to keep each Portfolio in approximate
balance with its designated index or designated securities group; (iv) to
determine, in the Adviser's discretion, whether to exercise warrants or other
rights with respect to Portfolio securities, and whether to accept tender offers
with respect to such securities (with any finders fees realized in connection
with tender offers or other rights with respect to Portfolio securities being
rebated to the Portfolios); (v) to determine, in the Adviser's discretion,
whether the merit of a Portfolio investment has been substantially impaired by
extraordinary events or financial conditions, thereby warranting the removal of
such securities from a Portfolio, notwithstanding its inclusion in the
designated index or securities group; (vi) to calculate and provide to the
Manager the net asset value of each Portfolio on each day that the
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Trust's custodian banks and the New York Stock Exchange are open for business;
(vii) to provide the Manager and the Trust on behalf of the Portfolios with
records concerning the Adviser's activities which the Trust is required to by
law maintain; and (viii) to render regular reports to the Manager and to the
Trust's officers and Trustees concerning the Adviser's discharge of the
foregoing responsibilities. The Adviser shall discharge the foregoing
responsibilities subject to the oversight of the Manager and in compliance with
such policies as the Trustees may from time to time establish, and in compliance
with the objectives, policies, and limitations for each Portfolio as set forth
in the Trust's then current registration statement under the 1940 Act and
applicable laws and regulations. The Adviser accepts such employment and agrees,
at its own expense, to render the services and to provide the office space,
furnishings and equipment and the personnel required by it to perform the
services on the terms and for the compensation provided herein.
ARTICLE 2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the
brokers or dealers, including SEI Financial Services Company, that will execute
the purchases and sales of portfolio securities for each Portfolio and is
directed to use its best efforts to obtain the best net results, as described in
the Trust's then current registration statement and, as appropriate, to place
such purchase and sale orders. The Adviser will promptly communicate to the
Manager and to the officers and the Trustees of the Trust such information
relating to portfolio transactions as they may reasonably request.
ARTICLE 3. COMPENSATION OF THE ADVISER. For the services to be rendered by
the Adviser as provided in Articles 1 and 2 of this Agreement, the Trust shall
pay to the Adviser compensation at an annual rate of .03% of the average daily
net assets of each Portfolio. Such compensation shall be calculated and accrued
daily and paid to the Adviser monthly. If this Agreement becomes effective
subsequent to the first day of a month or terminates before the last day of a
month, the Adviser's compensation for that part of the month in which this
Agreement is in effect shall be prorated in a manner consistent with the
calculation of the fees as set forth above. Payment of the Adviser's fee as
provided above is subject to the limitation that no monthly payment shall exceed
the payment actually made to the Manager with respect to the Portfolios pursuant
to the current Management Agreement between the Manager and the Trust.
ARTICLE 4. OTHER SERVICES. At the request of the Trust or the Manager, the
Adviser, in its discretion, may make available to the Trust its office
facilities, equipment and personnel for other services.
ARTICLE 5. STATUS OF THE ADVISER The services of the Adviser to the Trust
are not to be deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services to the Trust are not impaired
thereby. The Adviser shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent the Trust or the Manager in any way or otherwise be deemed an agent
of the Trust or Manager.
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<PAGE>
ARTICLE 6. CERTAIN RECORDS. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act which are prepared or maintained by the Adviser on behalf of
the Trust are the property of the Trust and will be surrendered promptly to the
Trust on request. Such records shall be maintained in a readily accessible place
as required by the rules under the 1940 Act.
ARTICLE 7. LIMITATION OF LIABILITY OF THE ADVISER. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust in connection with the matters to which this Agreement relates, except
a loss resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Adviser in the performance of its
duties, or from reckless disregard by it or its obligations and duties under
this Agreement.
ARTICLE 8. PERMISSIBLE INTERESTS. Trustees, agents, and Shareholders of the
Trust are or may be interested in the Adviser (or any successor thereof) as
directors, partners, officers, or shareholders, or otherwise; directors,
partners, officers, agents, and shareholders of the Adviser (or any successor)
are or may be interested in the Trust as Trustees, shareholders or otherwise;
and the Adviser (or any successor) is or may be interested in the Trust as a
Shareholder or otherwise.
ARTICLE 9. DURATION AND TERMINATION. This Agreement, unless sooner
terminated as provided herein, shall continue as to each Portfolio for two years
following the date of this Agreement, and thereafter, with respect to each
Portfolio, for periods of one year so long as such continuance thereafter is
specifically approved at least annually (a) by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of each Portfolio; provided,
however, that if the Shareholders of any Portfolio disapprove of this Agreement
as provided herein, the Adviser may continue to serve hereunder in the manner
and to the extent permitted by the 1940 Act and the rules thereunder. The
foregoing requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
1940 Act and the rules and regulations thereunder. This Agreement may be
terminated as to any Portfolio at any time, without the payment of any penalty
by vote of a majority of the Trustees of the Trust or by vote of a majority of
the outstanding voting securities of the Portfolio on not less than 30 days' nor
more than 60 days' written notice to the Adviser, or by the Adviser at any time
without the payment of any penalty, on 90 days' written notice to the Trust.
This Agreement will automatically and immediately terminate in the event of its
assignment. Any notice under this Agreement shall be given
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<PAGE>
in writing, addressed and delivered, or mailed postpaid, to the other party at
the last designated mailing address of such party.
ARTICLE 10. AMENDMENTS. This Agreement may be amended as to any Portfolio by
the parties hereto only if such amendment is specifically approved (i) by the
vote of a majority of outstanding voting securities of such Portfolio, and (ii)
by the vote of a majority of the Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. For special cases,
the parties hereto may amend such procedures set forth herein as may be
appropriate or practical under the circumstances, and the Administrator may
conclusively assume that any special procedure which has been approved by the
Trust does not conflict with or violate any requirements of its Declaration of
Trust, By-Laws or prospectus, or any rule, regulation or requirement of any
regulatory body.
ARTICLE 11. CERTAIN RECORDS. The Adviser shall maintain customary records in
connection with its duties as specified in this Agreement. Any records required
to be maintained and preserved pursuant to Rules 31a-1 and 31a-2 under the 1940
Act which are prepared or maintained by the Adviser on behalf of the Trust shall
be prepared and maintained at the expense of the Adviser, but shall be the
property of the Trust and will be made available to or surrendered promptly to
the Trust or Manager on request. In case of any request or demand for the
inspection of such records by another party, the Adviser shall notify the Trust
and follow the Trust's instructions as to permitting or refusing such
inspection; provided that the Adviser may exhibit such records to any person in
any case where it is advised by its counsel that it may be held liable for
failure to do so, unless the Trust has agreed to indemnify the Adviser against
such liability.
ARTICLE 12. DEFINITIONS OF CERTAIN TERMS. The terms "vote of a majority of
the outstanding voting securities", "assignment", "interested person" and
"affiliated person", when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 13. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Massachusetts and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the Commonwealth of
Massachusetts, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 14. MULTIPLE ORIGINALS. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
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<PAGE>
A copy of the Agreement and Declaration of Trust of the Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Trustees of the Trust as
Trustees, is not binding upon any of the Trustees, officers, or shareholders of
the Trust individually but binding only upon the assets and property of the
Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Agreement to be executed as of the date written below.
SEI INDEX FUNDS
BY:
---------------------------------------
WORLD ASSET MANAGEMENT
BY:
---------------------------------------
Dated: December 9, 1996
5
<PAGE>
CUSTODIAN AGREEMENT
This Agreement is made as of the 10th day of July 1985, by and between
TrustFunds Equity Index Funds (the "Trust"), a business trust duly organized
under the laws of the Commonwealth of Massachusetts, and Manufacturers National
Bank of Detroit ("MNB"), a national bank;
WHEREAS the Trust is an open-end investment company registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended;
WHEREAS the Trust desires to appoint MNB as Custodian of the Securities and
cash owned or held by the Trust's S&P 500 Index Portfolio, Extended Market Index
Portfolio and such other Portfolios as the Trust and the Custodian may hereafter
agree on (the "Portfolios"), and MNB is willing to act in such capacity upon the
terms and conditions herein set forth; and
WHEREAS MNB in its capacity as Custodian hereunder will also collect and
apply the dividends and interest on said securities in the manner and to the
extent herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, do hereby
agree as follows:
SECTION 1. DEFINITIONS. The terms as defined in this Section wherever used
in this Agreement, or in any amendment or
<PAGE>
supplement hereto, shall have the meanings herein specified unless the context
otherwise requires.
Custodian: The term Custodian shall mean Manufacturers National Bank of Detroit
in its capacity as Custodian under this Agreement.
Proper Instructions: For purposes of this Agreement, the Custodian shall be
deemed to have received Proper Instructions upon receipt of written (including
instructions received by means of computer terminal), telephone or telegraphic
instructions from a person or persons reasonably believed by the Custodian to be
a person or persons authorized from time to time by the Trustees of the Trust or
by the Board of Directors of the manager or investment administrator for the
Trust to give the particular class of instructions. Telephone or telegraphic
instructions shall be confirmed in writing by such person or persons as said
Trustees or Board of Directors shall have from time to time authorized to give
the particular class of instructions in question. The Custodian may act upon
telephone or telegraphic instructions without awaiting receipt of written
confirmation and shall not be liable for the failure of the Trust, its manager
or its investment administrator to confirm such instructions in writing.
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Securities: The term Securities shall mean equity securities, bonds,
debentures, notes, certificates of deposit, evidences of indebtedness, and other
securities and investments from time to time owned by the Trust for the accounts
of the Portfolios.
Unitholders: The term Unitholders shall mean the registered owners from time to
time of the Units of the Portfolios in accordance with the registry records
maintained by the Trust or agents on its behalf.
Units: The term Units shall mean the units of beneficial interest of the
Portfolios.
SECTION 2. AUTHORIZING RESOLUTIONS. The Trust shall from
time to time file with the Custodian a certified copy of each resolution of its
Board of Trustees authorizing the person or persons to give Proper Instructions
(as defined in Section 1) and specifying the class of instructions that may be
given by each person to the Custodian under this Agreement, together with
certified signatures of such persons authorized to sign those instructions.
These documents shall constitute conclusive evidence of the authority of the
officers and signatories designated therein to act and shall be considered in
full force and effect with the Custodian fully protected in acting in reliance
thereon until it receives written notice to the
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<PAGE>
contrary; provided, however, that if the officer certifying the resolution
referred to above in this Section 2 is authorized to give Proper Instructions,
the certification shall be also signed by a second officer of the Trust.
SECTION 3. APPOINTMENT AS CUSTODIAN. The Trust hereby appoints the
Custodian as custodian of the Securities of the Portfolios and cash from time to
time on deposit hereunder, to be held by the Custodian and applied as provided
in this Agreement. The Custodian hereby accepts such appointment subject to the
terms and conditions hereinafter provided. Such Securities and cash of each
Portfolio shall, however, be segregated from the assets of the Custodian and
others and shall be and remain the sole property of the Trust for the respective
Portfolios, and the Custodian shall have only the bare custody thereof. The
Securities held by the Custodian shall, unless payable to bearer, be registered
in the name of the Custodian or in the name of its nominee. Securities,
excepting bearer Securities, delivered from time to time to the Custodian upon
purchase or otherwise shall in all cases be in due form for transfer or already
registered as above provided.
SECTION 4. DEPOSIT OF SECURITIES AND PROCEEDS. The Trust will initially
deposit with the Custodian the Securities owned
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<PAGE>
by the Portfolios at the time this Agreement becomes effective. Thereafter the
Trust will cause to be deposited with the Custodian additional Securities as the
same are purchased or otherwise acquired from time to time. The Trust will also
cause to be deposited with the Custodian hereunder: (i) the net proceeds of
Securities sold from time to time; and (ii) the applicable net asset value of
Units sold from time to time whether representing initial issue, other stock, or
reinvestments of dividends and/or distributions payable to Unitholders, except
for such portion of such net asset value as the Trust may from time to time keep
in the custody of another bank.
SECTION 5. DIVIDENDS AND INTEREST. The Custodian will collect from time to
time the dividends and interest on the Securities held by it hereunder and will
deposit the same in the appropriate Portfolio accounts. The Custodian is
authorized to advance or pay out of said accounts accrued interest on bonds
purchased and dividends on Securities sold and like items. In the event that any
dividends or interest payments are received by the Trust, the Trust will endorse
to the Custodian, or cause to be endorsed, dividend and interest checks and will
issue appropriate orders to the issuers of the Securities to pay dividends and
interest to the Custodian. Subject to proper reserves for interest owing on
Securities sold and like items,
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the Custodian will disburse the money from time to time on deposit in the
account to or upon the order of the Trust as it may from time to time direct in
accordance with this Agreement.
SECTION 6. CASH DISBURSEMENTS. The Custodian is hereby authorized and
directed to disburse cash from time to time as follows:
(a) to transfer to the Transfer Agent or other dividend disbursing agent
to pay dividends and/or distributions which may be authorized by the
Trust upon receipt of Proper Instructions;
(b) to pay or provide the Trust with money to pay taxes, if any, upon
receipt of Proper Instructions;
(c) for the purpose of completing the purchase of Securities purchased by
the Portfolio: (i) upon receipt of Proper Instructions specifying the
Securities and stating the purchase price and the name of the broker,
investment banker or other party to or upon whose order the purchase
price is to be paid, and (ii) upon receipt of such Securities by the
Custodian or, in the case of a purchase effected through a
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<PAGE>
Securities System, in accordance with Section 8 hereof;
(d) for the purpose of redeeming or purchasing Units upon receipt of
Proper Instructions stating the applicable redemption amounts payable
to the Transfer Agent, any other banks which the Trust shall have
appointed as a custodian, or other appropriate party;
(e) for the purpose of paying over to the Transfer Agent or dividend
disbursing agent such amounts as may be stated in Proper Instructions
representing proceeds of the sale of warrants, rights, stock
dividends, profit, and increases in values of the Securities as the
Trust may determine to include in dividends and/or distributions on
the Units;
(f) for the purpose of paying in whole or in part any loan of the
Portfolios upon receipt of Proper Instructions directing payment and
stating the Securities, if any, to be received against payment;
(g) to pay interest, investment advisory or subadvisory fees,
administration, dividend and transfer agency fees and costs,
compensation of personnel, or
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<PAGE>
operating expenses (including, without limitation, fees for legal
purposes), and any other authorized Trust expense. Before making any
such payment or disbursement, however, the Custodian shall receive
(and may conclusively rely upon) Proper Instructions requesting such
payment or disbursement and stating that it is for one or more of the
purposes hereinabove enumerated, provided that if the disbursement is
for any other purposes, the instructions shall be in writing and shall
state that the disbursement was authorized by resolution of the Board
of Trustees of the Trust (a copy of which resolution shall be
attached) and is for a proper purpose.
SECTION 7. DELIVERY OF SECURITIES. The Custodian is hereby authorized and
directed to deliver Securities from time to time as follows:
(a) for the purpose of completing sales of Securities sold by the
Portfolios upon receipt of: (i) the net proceeds of sales and (ii)
Proper Instructions specifying the Securities sold and stating the
amount to be received and the broker, investment banker, or other
party to or upon whose order the Securities are to be delivered;
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<PAGE>
(b) for the purpose of exchanging Securities for other Securities and/or
cash upon timely receipt of: (i) Proper Instructions stating the
Securities to be delivered and the Securities and/or cash to be
received in exchange and the manner in which the exchange is to be
made; and (ii) against receipt of the other Securities and/or cash as
specified in the Proper Instructions;
(c) for the purpose of exchanging or converting Securities pursuant to
their terms or pursuant to any plan of conversion, consolidation,
recapitalization, reorganization, readjustment, or otherwise upon
timely receipt of: (i) Proper Instructions authorizing such exchange
or conversion and stating the manner in which such exchange or
conversion is to be made; and (ii) against receipt of the Securities,
certificates of deposit, interim receipts, and/or cash to be received
as specified in the Proper Instructions;
(d) for the purpose of presenting Securities for payment which have
matured or have been called for redemption, upon receipt of
appropriate Proper Instructions and provided that the cash or other
consideration is to be paid to the Custodian;
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<PAGE>
(e) for the purpose of delivery of Securities upon redemption of Units in
kind, upon receipt of appropriate Proper Instructions; or
(f) for the purpose of depositing with the lender Securities to be held as
collateral for a loan to the Portfolios upon receipt of Proper
Instructions directing delivery to the lender and upon receipt of the
proceeds of the loan.
SECTION 8. DEPOSIT AND MAINTENANCE OF SECURITIES. The Custodian may
deposit and/or maintain Securities owned by the Portfolios (i) in a clearing
agency, registered with the Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934, which acts as a securities
depository, or (ii) in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as a "Securities System" in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
(a) The Custodian may keep Securities of the Portfolios in a Securities
System provided that such Securities are represented in an account
("Account") of the
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<PAGE>
Custodian in the Securities System which shall not include any assets
of the Custodian other than assets held as a fiduciary, custodian, or
otherwise for customers.
(b) The records of the Custodian with respect to Securities of the
Portfolios which are maintained in a Securities System shall identify
by book-entry those Securities belonging to the Portfolios.
(c) The Custodian shall pay for Securities purchased for the account of
the Portfolios upon: (i) receipt of advice from the Securities System
that such Securities have been transferred to the Account; and (ii)
the making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Portfolios. The Custodian
shall transfer Securities sold for the account of the Portfolios upon:
(i) receipt of advice from the Securities System that payment for such
Securities has been transferred to the Account; and (ii) the making of
an entry on the records of the Custodian to reflect such transfer and
payment for the account of the Portfolios. Copies of all advices from
the Securities
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<PAGE>
System of transfers of Securities for the account of Portfolios shall
identify the Portfolios, be maintained for the Portfolios by the
Custodian, and be provided to the Trust at its request. The Custodian
shall furnish the Trust confirmation of each transfer to or from the
account of the Portfolios in the form of a written advice or notice
and shall furnish to the Trust copies of daily transaction sheets
reflecting each day's transaction for the account of the Portfolios on
the next business day.
(d) The Custodian shall provide the Trust with any report obtained by the
Custodian on the Securities System's internal accounting control and
procedures for safeguarding securities deposited in the Securities
System.
(e) The Custodian shall have received an initial certificate of the
Secretary or an Assistant Secretary that the Trustees of the Trust
have approved the initial use of a particular Securities System, and
the Custodian shall receive an annual certificate of the Secretary or
an Assistant Secretary that the Trustees have reviewed the use by the
Trust of such Securities
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<PAGE>
System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, as amended.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to the
Trust resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of its
or their employees or from any failure of the Custodian or any such
agent to enforce effectively such rights as it may have against the
Securities System; at the election of the Trust, it shall be entitled
to be subrogated to the rights of the Custodian with respect to any
claim against the Securities System or any other person which the
Custodian may have as a consequence of any such loss or damage if and
to the extent that the Trust has not been made whole for any such loss
or damage.
SECTION 9. FORWARDING NOTICES, REPORTS AND STATEMENTS. The Custodian shall
forward to the Trust the following documents: proxies, proxy statements, annual
reports, conversion notices, call notices, or other notices or written materials
sent to the registered owners of Securities and actually
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<PAGE>
received by the Custodian excluding only certificates representing Securities
and dividend and interest payments. Responsibility for taking action thereon is
the sole responsibility of the Trust and its Manager or Investment
Administrator, and not the responsibility of the Custodian. Upon actual receipt
by the Custodian of warrants or rights issued in connection with the assets of
the Portfolios, the Custodian shall enter on its ledgers appropriate notations,
including such receipt, and shall forward notice thereof to the Trust. The
Custodian shall have no obligation whatsoever to take any action of any kind
with respect to such warrants or rights except to make a best effort to notify
the Trust with regard to call notices of bearer bonds published in the principal
trade journals, but shall not be liable for any failure in respect thereof.
SECTION 10. DUTIES OF CUSTODIAN. Subject to the provisions herein, the
Custodian assumes only the usual duties or obligations normally performed by
custodians of mutual funds. It specifically assumes no responsibility for the
management, investment or reinvestment of the Securities from time to time owned
by the Portfolios whether or not on deposit hereunder. In connection with its
function under this Agreement, the Custodian shall:
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<PAGE>
(a) obtain a "due bill" for dividends, interest, or other distributions of
the issuer due to the purchaser in connection with Securities
delivered to the Custodian;
(b) render to the Trust a daily report of all monies received or paid on
behalf of the Portfolios and such listings of Securities held by the
Custodian for the account of the Portfolios as may from time to time
be requested by the Trust;
(c) execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with the collection of
bond and note coupons;
(d) present for and collect payment of all coupons and other periodic
income items requiring presentation on the date of payment;
(e) monitor and record the collection of funds in accounts maintained by
the Custodian in the name of the Portfolios on the payable date of
such amounts;
(f) in accordance with the Manager's directions as to allocation of the
Securities to separate Portfolios designated by the Trust, the
Custodian shall maintain
-15-
<PAGE>
records showing the respective Securities, cash and other property
comprising each such Portfolio;
(g) create, maintain and retain all records relating to its activities and
obligations under this Agreement in such manner as will meet the
obligations of the Trust with respect to said Custodian's activities
in accordance with generally accepted accounting principles. All
records maintained by the Custodian in connection with the performance
of its duties under this Agreement will remain the property of the
Trust and in the event of termination of this Agreement will be
relinquished to the Trust.
The Custodian shall not be liable for any taxes, assessments, or governmental
charges which may be levied or assessed upon the Securities held by it
hereunder, or upon the income therefrom or otherwise whatsoever. The Custodian
may pay any tax, assessment or charge and reimburse itself out of the monies of
the Portfolio or out of the Securities held hereunder.
SECTION 11. LIABILITY OF CUSTODIAN. No liability of any
kind shall be attached to or incurred by the Custodian by reason of its custody
of the funds, assets, or Units held by it
-16-
<PAGE>
from time to time under this Agreement, or otherwise by reason of its position
as Custodian hereunder, except only for its own negligence, bad faith, or
willful misconduct in the performance of its duties as specifically set forth in
the Agreement. Without limiting the foregoing sentence, the Custodian:
(a) may rely upon the advice of counsel, who may be counsel for the Trust
or for the Custodian, and upon statements of accountants, brokers and
other persons believed by it in good faith to be expert in the matters
upon which they are consulted; and for any action taken in or suffered
in good faith and reasonable care based upon such advice or
statements, the Custodian shall not be liable to anyone;
(b) shall not be liable for anything done or suffered to be done in good
faith in accordance with any request or advice of, or based upon
information furnished by the Trust or its authorized officers or
agents;
(c) is authorized to accept a certificate of the Secretary or Assistant
Secretary of the Trust, or Proper Instructions, to the effect that a
resolution in the form submitted has been duly adopted by its Board of
Trustees or Unitholders as conclusive evidence that
-17-
<PAGE>
such resolution has been duly adopted and is in full force and
effect;
(d) may rely and shall be protected in acting upon any signature, written
instructions, request, letter of transmittal, certificate, opinion of
counsel, statement, instrument, report, notice, consent, order, or
other paper or document reasonably believed by it to be genuine and to
have been signed, forwarded or presented by the purchaser, Trust or
other proper party or parties.
SECTION 12. INDEMNIFICATION. The Trust, its successors and assigns hereby
indemnify and hold harmless the Custodian, its successors and assigns, of and
from any and all liability whatsoever arising out of or in connection with the
Custodian's status, acts, or omissions under this Agreement, except only for
liability arising out of the Custodian's own negligence, bad faith, or willful
misconduct in the performance of its duties specifically set forth in this
Agreement. Without limiting the foregoing sentence, the Trust, its successors
and assigns do hereby fully indemnify and hold harmless the Custodian, its
successors and assigns from any and all loss, liability, claims, demands,
actions, suits, and expenses of any
-18-
<PAGE>
nature as the same may arise from the failure of the Trust to comply with any
law, rule, regulation or order of the United States, any State or any other
jurisdiction, governmental authority, body or board relating to the sale,
registration, qualification of Units of beneficial interest in the Portfolios,
or from the failure of the Trust to perform any duty or obligation under this
Agreement.
Upon written request of the Custodian, the Trust shall assume the entire
defense of any claim subject to the foregoing indemnity, or the joint defense
with the Custodian of such claim as the Custodian shall request. The indemnities
and defense provisions of this Section 12 shall indefinitely survive termination
of this Agreement.
SECTION 13. ACCOUNTANTS' REPORTS. The Custodian shall provide the Trust, at
such times as the Trust may reasonably require, with accountants' reports on the
accounting system, internal accounting controls and procedures for safeguarding
Securities, including Securities deposited and/or maintained in a Securities
System, relating to the services provided by a Custodian under this Agreement;
such reports, which shall be of sufficient scope and in sufficient detail to
provide reasonable assurance that any material inadequacies would be disclosed,
-19-
<PAGE>
shall state in detail material inadequacies disclosed by such examination and,
if there are no such inadequacies, shall so state. Notwithstanding the
foregoing, the Custodian shall not be required by the provisions of this Section
13 to have such a report, which is not required for other purposes, prepared by
independent public accountants, unless the Trust agrees to reimburse reasonable
charges of such independent public accountants for preparing such report.
SECTION 14. AMENDING THE AGREEMENT. This Agreement may be amended from
time to time without notice to or approval of the Unitholders by a supplemental
agreement executed by the Trust and the Custodian and amending and supplementing
this Agreement in the manner mutually agreed.
SECTION 15. DURATION AND TERMINATION. This Agreement shall continue in
effect until terminated. This Agreement may be terminated as to any Portfolio at
any time without the payment of any penalty by a vote of the majority of the
Trustees of the Trust on not less than 30 days nor more than 60 days written
notice to the Custodian, or by the Custodian on not less than 90 days written
notice, such termination to take effect at the time specified in the notice. In
case such notice of termination is given either by the Trust or by the
-20-
<PAGE>
Custodian, the Trustees of the Trust shall, by resolution duly adopted, promptly
appoint a Successor Custodian which Successor Custodian shall be a bank, trust
company, or a bank and trust company in good standing, with legal capacity to
accept custody of the securities and cash of a mutual fund. Upon receipt of
written notice from the Trust of the appointment of such successor and upon
receipt of Proper Instructions, the Custodian shall deliver such Securities and
cash as it may then be holding hereunder with respect to the Portfolio(s) to
which the termination applies directly and only to the Successor Custodian.
Unless or until a Successor Custodian has been appointed as above provided, the
Custodian then acting shall continue to act as Custodian under this Agreement.
Every Successor Custodian appointed hereunder shall execute and deliver an
appropriate written acceptance of its appointment and shall thereupon become
vested with the rights, powers, obligations and custody of its predecessor
Custodian. The Custodian upon ceasing to act as custodian hereunder with respect
to one or more Portfolios, shall execute an instrument transferring to the
Successor Custodian all of the predecessor Custodian's rights, duties,
obligations, and Trust assets in its possession held for such Portfolio(s).
-21-
<PAGE>
In case the Custodian shall consolidate with or merge into any other
corporation, the corporation remaining after or resulting from such
consolidation or merger shall, without the execution or filing of any papers or
other documents, succeed to and be substituted for the Custodian with like
effect as though originally named as such.
SECTION 16. COMPENSATION. The compensation to the Custodian for performing
the services described in this Agreement shall be derived from the compensation
paid to the Custodian in its capacity as the Administrator to the Trust as set
forth in the Investment Administration Agreement entered into on July 10, 1985
by and between MNB and SEI Financial Management Corporation. In the event that
such Investment Administration Agreement is terminated, the compensation under
this Agreement will be mutually negotiated between the Trust and the Custodi-
an.
SECTION 17. EFFECTIVE DATE. This Agreement shall take effect when assets of
the Trust are first delivered to the Custodian.
SECTION 18. MULTIPLE ORIGINAL COPIES. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such
-22-
<PAGE>
counterparts shall together constitute but one and the same instrument.
SECTION 19. APPOINTMENT OF CUSTODIAN'S AGENT. The Custodian may, after
giving 30 days written notice to the Trust, at any time or times appoint (and
may at any time remove) any other bank or trust company which is itself
qualified to act as custodian under the Investment Company Act of 1940, as
amended, as its agent to carry out such of the provisions of this Agreement as
the Custodian may from time to time direct, provided, however, that the
appointment of such agent shall not relieve the Custodian of any of its
responsibilities under this Agreement.
SECTION 20. DECLARATION OF TRUST. A copy of the Declaration of Trust of the
Trust is on file with the Secretary of the Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees, officers or
Unitholders of the Trust individually, but are binding only upon the assets and
property of the Trust.
SECTION 21. CERTAIN RECORDS. The Custodian shall create and maintain all
records relating to its activities and
-23-
<PAGE>
obligations under this Agreement in such manner as will meet the obligations of
the Trust under the Investment Company Act of 1940, as amended, with particular
attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder, applicable
federal and state tax laws and any other law or administrative rules or
procedures which may be applicable to the Trust.
Subject to security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as to the conduct of such matters as may be reasonably imposed by
the Custodian after prior consultation with an officer of the Trust, the books
and records of the Custodian pertaining to its actions under this Agreement
shall be open to inspection and audit at any reasonable times by officers of,
attorneys for, and auditors employed by, the Trust.
SECTION 22. ASSIGNMENT AND SUCCESSORS. This Agreement shall extend to and
shall be binding upon the parties hereto and their respective successors and
assigns; provided, however, that this Agreement shall not be assignable by the
Trust without the written consent of the Custodian, or by the Custodian without
the written consent of the Trust, authorized or approved by a resolution of its
Board of Trustees.
-24-
<PAGE>
IN WITNESS WHEREOF, the Trust and the Custodian have caused this Agreement
to be signed by their respective officers as of the day and year first above
written.
TRUSTFUNDS EQUITY INDEX FUNDS
By: /s/ David B. Robby
-----------------------------------
President
MANUFACTURERS NATIONAL BANK OF DETROIT
BY: /s/ Robert R. Schoonbeck
-----------------------------------
ROBERT R. SCHOONBECK
SENIOR VICE PRESIDENT
-25-
<PAGE>
AMENDMENT TO THE
CUSTODIAN AGREEMENT
This Agreement is made as of the 3rd day of January, 1986 by and among
TrustFunds Equity Index Funds (the "Trust"), a business trust duly organized
under the laws of the Commonwealth of Massachusetts, Manufacturers National Bank
of Detroit ("MNB"), a national bank, and SEI Financial Management Company
("SFM"), a Delaware corporation.
WHEREAS, pursuant to a Custodian Agreement dated July 10, 1985 ("Custodian
Agreement") between the Trust and MNB, MNB is Custodian of securities and cash
owned or held by the Trust's S&P 500 Index Portfolio, Extended Market Index
Portfolio and such other portfolios as the Trust and the Custodian may
thereafter agree on;
WHEREAS, the Trust and MNB desire to amend certain terms of the Custodian
Agreement; and
WHEREAS, SFM, the Trust's Manager, desires to become a party to the
Custodian Agreement for the purposes set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, do hereby
agree as follows:
1. AMENDED INVESTMENT ADMINISTRATION AGREEMENT. All references in
the Custodian Agreement to the Investment Administration Agreement
between MNB and SFM dated July 10, 1985, are hereby amended to refer
to the Investment Administration Agreement between MNB and SFM dated
July 10, 1985, as amended by the amendment dated January 3, 1986.
2. COMPENSATION. Notwithstanding and in addition to the
compensation to be paid to MNB pursuant to Section 16 of the Custodian
Agreement, MNB may receive from SFM, for MNB's services under the
Custodian Agreement, reimbursements for actual expenditures by MNB in
the performance of its responsibilities under the Custodian Agreement.
The amount and frequency of such payments by SFM shall be subject to
the sole discretion of SFM.
3. MULTIPLE ORIGINAL COPIES. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed
to be an original, but such counterparts shall together constitute but
one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the Trust, MNB and SFM have caused this Agreement to be
signed by their respective officers as of the day and year first above written.
TRUSTFUNDS EQUITY INDEX FUNDS
By: [Signature Appears Here]
-------------------------------------
Pres.
MANUFACTURERS NATIONAL BANK OF DETROIT
By: [Signature Appears Here]
-------------------------------------
VP
SEI FINANCIAL MANAGEMENT COMPANY
By: [Signature Appears Here]
-------------------------------------
S.V.P
<PAGE>
Amendment to Custodian Agreement
This amendment, made this 25th day of July, 1986 by and between TrustFunds
Index Funds (the "Trust") and Manufacturers. National Bank of Detroit ("MNB")
WHEREAS, the Trust and MNB have entered into a Custodian Agreement dated
July 10, 1985; and
WHEREAS, the Trust and MNB wish to amend the Custodian Agreement to alter
the compensation paid to MNB;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained it is agreed that SECTION 16 of the Custodian Agreement dated July 10,
1985 be amended to read in its entirety as follows:
SECTION 16. The Custodian's compensation shall be as set forth in
schedule A attached hereto, or as shall be set forth in
amendments to such schedule as approved by the Trust and the
MNB.
TrustFunds Index Funds
By: [Signature Appears Here]
-------------------------------------
Title
Manufacturers National Bank
of Detroit
By: [Signature Appears Here]
-------------------------------------
Title VICE PRESIDENT
<PAGE>
Schedule A
CUSTODIAN FEES
The Trust will pay the Custodian a fee at an annual rate of .01% of the average
daily net assets of the Equity Index Portfolios.
In addition, the Custodian will receive the following for transaction costs:
Purchase of a Security $2.00
(common stock, futures contracts,
repurchase agreements, and other
cash-equivalent securities)
Sale of a Security 2.00
(common stock, futures contracts,
repurchase agreements, and other
cash-equivalent securities)
Free delivery/free receipt of In-Kind Securities 2.00
Dividend Postings no charge
Other Receipts & Disbursements no charge
(including maturities)
The above charges will be calculated and paid on a monthly basis.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated May 2, 1997, on
the March 31, 1997 financial statements of the SEI Index Funds, included in the
previously filed Form N-30D dated May 28, 1997, and to all references to our
firm included in Post-Effective Amendment No. 20 to the Registration Statement
File No. 2-97111.
ARTHUR ANDERSEN LLP
Philadelphia, PA
July 28, 1997
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ William M. Doran Date:10/16/96
- ------------------------- --------
William M. Doran
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ F. Wendell Gooch Date:10-18-96
- ------------------------- --------
F. Wendell Gooch
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ Frank E. Morris Date:Oct. 18, 1996
- ------------------------- -------------
Frank E. Morris
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ James M. Storey Date:
- ------------------------- ----------------
James M. Storey
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ Robert A. Nesher Date:10-15-96
- ------------------------- --------
Robert A. Nesher
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Todd C. Cipperman and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ David G. Lee Date:10/23/96
- ------------------------- --------
David G. Lee
President, Chief Executive Officer
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ George J. Sullivan, Jr. Date:OCT 16, 1996
- ------------------------- ------------
George J. Sullivan, Jr.
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
SEI LIQUID ASSET TRUST
SEI DAILY INCOME TRUST
SEI TAX EXEMPT TRUST
SEI INDEX FUNDS
SEI INSTITUTIONAL MANAGED TRUST
SEI INSTITUTIONAL INVESTMENTS TRUST
SEI INTERNATIONAL TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints David G. Lee and Kevin P. Robins, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to each Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ Mark E. Nagle Date:March 4, 1997
- ------------------------- -------------
Mark E. Nagle
Controller and Chief Financial Officer
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