<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 1997
FILE NO. 33-9504
FILE NO. 811-4878
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 26 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 28 /X/
------------------------
SEI INSTITUTIONAL MANAGED TRUST
(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) 342-5734
DAVID G. LEE
c/o SEI Investments Company
Oaks, Pennsylvania 19456
(Name and Address of Agent for Service)
COPIES TO:
<TABLE>
<S> <C>
Richard W. Grant, Esq. John H. Grady, Jr., Esq.
Morgan Lewis & Bockius LLP Morgan Lewis & Bockius LLP
2000 One Logan Square 1800 M Street, N.W.
Philadelphia, Pennsylvania 19103 Washington, D.C. 20036
</TABLE>
------------------------
It is proposed that this filing will become effective (check appropriate box)
<TABLE>
<C> <S>
/X/ immediately upon filing pursuant to paragraph (b)
/ / on [date] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / 75 days after filing pursuant to paragraph (a)
/ / on [date] pursuant to paragraph (a) of Rule 485
</TABLE>
The Registrant has elected to register an indefinite number of securities
pursuant to Rule 24f-2 of the Investment Company Act of 1940. Registrant filed a
24f-2 Notice on November 27, 1996 for its fiscal year ended September 30, 1996.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SEI INSTITUTIONAL MANAGED TRUST
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
<S> <C> <C>
PART A--CORE FIXED INCOME, BOND AND HIGH YIELD BOND PORTFOLIOS--CLASS A
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; Description of
Permitted Investments and Risk Factors
Item 5. Management of the Fund........................... General Information--Trustees of the Trust; The
Adviser; The Sub-Advisers; The Manager
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock & Other Securities................. General Information--Voting Rights, Shareholder
Inquiries, Dividends; Taxes
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares; Distribution
and Shareholder Servicing
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
PART A--LARGE CAP VALUE, LARGE CAP GROWTH, SMALL CAP VALUE, SMALL CAP GROWTH, MID-CAP, CAPITAL APPRECIATION,
EQUITY INCOME AND BALANCED PORTFOLIOS--CLASS A
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; Description of
Permitted Investments and Risk Factors
Item 5. Management of the Fund........................... General Information--Trustees of the Trust; The
Advisers; The Sub-Advisers; The Manager
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock & Other Securities................. General Information--Voting Rights, Shareholder
Inquiries, Dividends; Taxes
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares; Distribution
and Shareholder Servicing
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
<S> <C> <C>
PART A--SMALL CAP GROWTH PORTFOLIO--CLASS D
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Fund Highlights; Shareholder Transaction
Expenses; Annual Operating Expenses
Item 3. Condensed Financial Information.................. Financial Highlights
Item 4. General Description of Registrant................ General Information--The Trust; Investment
Objective and Policies; General Investment
Policies; Description of Permitted Investments
and Risk Factors
Item 5. Management of the Fund........................... General Information--Trustees of the Trust; The
Adviser; The Sub-Advisers; The Manager and
Shareholder Servicing Agent
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock & Other Securities................. General Information--Voting Rights, Shareholder
Inquiries, Dividends; Taxes
Item 7. Purchase of Securities Being Offered............. Your Account and Doing Business with Us;
Additional Information About Doing Business
with Us; Distribution
Item 8. Redemption or Repurchase......................... Your Account and Doing Business with Us;
Additional Information About Doing Business
with Us
Item 9. Pending Legal Proceedings........................ *
PART B--ALL PORTFOLIOS
Item 10. Cover Page....................................... Cover Page
Item 11. Table of Contents................................ Table of Contents
Item 12. General Information & History.................... The Trust
Item 13. Investment Objectives & Policies................. Investment Objectives and Policies; Investment
Limitations; Securities Lending
Item 14. Management of the Registrant..................... Trustees and Officers of the Trust (Prospectus);
The Manager
Item 15. Control Persons & Principal Holders of
Securities..................................... Trustees and Officers of the Trust (Prospectus)
Item 16. Investment Advisory & Other Services............. The Adviser and Sub-Advisers; The Manager;
Distribution and Shareholder Servicing; Counsel
& Independent Public Accountants
Item 17. Brokerage Allocation............................. Portfolio Transactions
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
<S> <C> <C>
Item 18. Capital Stock & Other Securities................. Description of Shares
Item 19. Purchase, Redemption, & Pricing of Securities.... Purchase and Redemption of Shares Being Offered
(Prospectus); Determination of Net Asset Value
Item 20. Tax Status....................................... Taxes (Prospectus); Taxes
Item 21. Underwriters..................................... Distribution and Shareholder Servicing
Item 22. Calculation of Yield Quotation................... Performance
Item 23. Financial Statements............................. Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
- ------------------------
* Not Applicable
** Information required by Item 5A is contained in the 1996 Annual Report to
the Shareholders.
(iii)
<PAGE>
SEI INSTITUTIONAL MANAGED TRUST
JANUARY 31, 1997
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CORE FIXED INCOME PORTFOLIO
BOND PORTFOLIO
HIGH YIELD BOND PORTFOLIO
- --------------------------------------------------------------------------------
This Prospectus sets forth concisely information about the above-referenced
portfolios. Please read this Prospectus carefully before investing, and keep it
on file for future reference.
A Statement of Additional Information dated January 31, 1997, has been filed
with the Securities and Exchange Commission and is available upon request and
without charge by writing the Distributor, SEI Financial Services Company, Oaks,
Pennsylvania 19456, or by calling 1-800-342-5734. The Statement of Additional
Information is incorporated into this Prospectus by reference.
SEI Institutional Managed Trust (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. A portfolio may offer separate classes of shares that
differ from each other primarily in the allocation of certain distribution
expenses, sales charges and minimum investment amounts. This Prospectus offers
the Class A shares of the fixed income portfolios (each a "Portfolio" and,
together, the "Portfolios") listed above.
THE HIGH YIELD BOND PORTFOLIO INVESTS PRIMARILY, AND MAY INVEST ALL OF ITS
ASSETS, IN LOWER RATED BONDS, COMMONLY REFERRED TO AS "JUNK BONDS." THESE
SECURITIES ARE SPECULATIVE AND ARE SUBJECT TO GREATER RISK OF LOSS OF PRINCIPAL
AND INTEREST THAN INVESTMENTS IN HIGHER RATED BONDS. BECAUSE INVESTMENT IN SUCH
SECURITIES ENTAILS GREATER RISKS, INCLUDING RISK OF DEFAULT, AN INVESTMENT IN
THE HIGH YIELD BOND PORTFOLIO SHOULD NOT CONSTITUTE A COMPLETE INVESTMENT
PROGRAM AND MAY NOT BE APPROPRIATE FOR ALL INVESTORS. INVESTORS SHOULD CAREFULLY
CONSIDER THE RISKS POSED BY AN INVESTMENT IN THE HIGH YIELD BOND PORTFOLIO
BEFORE INVESTING. SEE "INVESTMENT OBJECTIVES AND POLICIES," "RISK FACTORS" AND
THE "APPENDIX."
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CORE FIXED HIGH YIELD
INCOME BOND BOND
PORTFOLIO PORTFOLIO PORTFOLIO
---------- --------- ----------
<S> <C> <C> <C>
Management Fee/Advisory Fees (AFTER FEE
WAIVER) (1) 0.51% 0.43% 0.77%
12b-1 Fees None None None
Total Other Expenses 0.09% 0.17% 0.08%
Shareholder Servicing Fees (AFTER FEE
WAIVER) (2) 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------------
Total Operating Expenses (AFTER FEE WAIVERS)
(3) 0.60% 0.60% 0.85%
- ----------------------------------------------------------------------------------
</TABLE>
(1) SEI FINANCIAL MANAGEMENT CORPORATION ("SFM") HAS AGREED TO WAIVE, ON A
VOLUNTARY BASIS, A PORTION OF ITS MANAGEMENT FEE, AND THE MANAGEMENT/
ADVISORY FEES SHOWN REFLECT THIS VOLUNTARY WAIVER. SFM RESERVES THE RIGHT TO
TERMINATE ITS WAIVER AT ANY TIME IN ITS SOLE DISCRETION. ABSENT SUCH FEE
WAIVER, MANAGEMENT/ADVISORY FEES WOULD BE: CORE FIXED INCOME PORTFOLIO,
.56%; BOND PORTFOLIO, .56%; AND HIGH YIELD BOND PORTFOLIO, .84%.
(2) THE DISTRIBUTOR HAS WAIVED, ON A VOLUNTARY BASIS, ALL OR A PORTION OF ITS
SHAREHOLDER SERVICING FEE, AND THE SHAREHOLDER SERVICING FEES 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
FEES WOULD BE .25% FOR EACH PORTFOLIO.
(3) ABSENT THESE FEE WAIVERS, TOTAL OPERATING EXPENSES FOR CLASS A SHARES OF THE
PORTFOLIOS WOULD BE: CORE FIXED INCOME PORTFOLIO .90%; BOND PORTFOLIO, .98%;
AND HIGH YIELD BOND PORTFOLIO, 1.17%. ADDITIONAL INFORMATION MAY BE FOUND
UNDER "THE ADVISER," "THE SUB-ADVISERS" AND "THE MANAGER."
EXAMPLE CLASS A
- --------------------------------------------------------------------------------
<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:
Core Fixed Income Portfolio $ 6 $ 19 $ 33 $ 75
Bond Portfolio $ 6 $ 19 $ 33 $ 75
High Yield Bond Portfolio $ 9 $ 27 $ 47 $ 105
- ------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF THE 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 THE INVESTORS IN CLASS A SHARES OF THE PORTFOLIOS. CERTAIN PORTFOLIOS
OF THE TRUST ALSO OFFER CLASS D SHARES, WHICH ARE SUBJECT TO THE SAME EXPENSES,
EXCEPT THAT CLASS D SHARES BEAR DIFFERENT DISTRIBUTION COSTS, ADDITIONAL
TRANSFER AGENT COSTS AND SALES CHARGES. 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." "THE
SUB-ADVISERS" AND "DISTRIBUTION AND SHAREHOLDER SERVICING."
2
<PAGE>
FINANCIAL HIGHLIGHTS
______________________________________________________________
The following information has been audited by Price Waterhouse LLP, the Trust's
independent accountants, as indicated in their report dated November 22, 1996 on
the Trust's financial statements as of September 30, 1996 included in the
Trust's Statement of Additional Information under "Financial Statements."
Additional performance information is set forth in the 1996 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.
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
NET ASSET NET REALIZED AND DIVIDENDS
VALUE NET UNREALIZED FROM NET DISTRIBUTIONS NET ASSET
BEGINNING INVESTMENT GAINS (LOSSES) INVESTMENT FROM REALIZED VALUE END
OF PERIOD INCOME ON SECURITIES INCOME CAPITAL GAINS OF PERIOD
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------
CORE FIXED INCOME
PORTFOLIO
- ------------------
CLASS A
1996 $ 10.46 $0.64 $(0.18) $(0.69) $-- $ 10.23
1995 9.65 0.65 0.82 (0.66) -- 10.46
1994 10.87 0.56 (1.12) (0.55) (0.11) 9.65
1993 10.77 0.60 0.28 (0.60) (0.18) 10.87
1992 10.30 0.69 0.49 (0.69) (0.02) 10.77
1991 9.79 0.73 0.52 (0.74) -- 10.30
1990 9.95 0.75 (0.12) (0.76) (0.03) 9.79
1989 9.89 0.82 0.06 (0.82) -- 9.95
1988 9.84 0.82 0.07 (0.84) -- 9.89
1987(1) 10.00 0.34 (0.25) (0.25) -- 9.84
- ---------------
BOND PORTFOLIO
- ---------------
CLASS A
1996 $ 10.86 $0.62 $(0.19) $(0.68) $-- $ 10.61
1995 9.95 0.70 0.97 (0.69) (0.07) 10.86
1994 12.25 0.59 (1.62) (0.59) (0.68) 9.95
1993 11.09 0.66 1.19 (0.67) (0.02) 12.25
1992 10.47 0.73 0.62 (0.73) -- 11.09
1991 9.39 0.76 1.10 (0.77) (0.01) 10.47
1990 10.38 0.81 (0.69) (0.82) (0.29) 9.39
1989 9.83 0.81 0.74 (0.79) (0.21) 10.38
1988 9.16 0.81 0.71 (0.84) (0.01) 9.83
1987(2) 10.00 0.29 (0.93) (0.20) -- 9.16
- ------------------
HIGH YIELD BOND
PORTFOLIO
- ------------------
1996 $ 10.64 $0.94 $ 0.62 $(1.03) $(0.03) $ 11.14
1995(3) 10.00 0.67 0.55 (0.58) -- 10.64
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSE INCOME
RATIO OF INVESTMENT TO AVERAGE TO AVERAGE
NET ASSETS EXPENSES INCOME NET ASSETS NET ASSETS PORTFOLIO
TOTAL END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
RETURN PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------
CORE FIXED INCOME
PORTFOLIO
- ------------------
CLASS A
1996 4.51% $ 655,300 0.57% 6.24% 0.64% 6.17% 311%
1995 15.87% 419,959 0.55% 6.60% 0.68% 6.47% 294%
1994 (5.36)% 311,955 0.55% 5.57% 0.62% 5.50% 370%
1993 8.58% 295,798 0.55% 5.63% 0.66% 5.52% 35%
1992 11.91% 213,632 0.55% 6.71% 0.68% 6.58% 39%
1991 13.31% 153,356 0.55% 7.41% 0.73% 7.23% 44%
1990 6.58% 83,876 0.55% 7.79% 0.76% 7.58% 40%
1989 9.39% 42,707 0.55% 8.57% 0.87% 8.25% 42%
1988 9.34% 25,661 0.47% 8.57% 1.12% 7.92% 34%
1987(1) 2.26% 11,201 0.33% 8.59% 1.08% 7.84% 7%
- ---------------
BOND PORTFOLIO
- ---------------
CLASS A
1996 4.01% $ 28,863 0.57% 5.68% 0.70% 5.55% 66%
1995 17.53% 54,286 0.55% 6.46% 0.70% 6.31% 79%
1994 (9.12)% 123,329 0.55% 5.61% 0.67% 5.49% 73%
1993 17.36% 97,163 0.55% 5.87% 0.66% 5.76% 47%
1992 13.52% 65,061 0.55% 6.98% 0.71% 6.82% 24%
1991 20.56% 40,683 0.55% 7.77% 0.76% 7.56% 8%
1990 0.97% 20,339 0.55% 8.06% 0.78% 7.83% 89%
1989 16.60% 27,580 0.55% 8.21% 0.87% 7.89% 108%
1988 17.22% 12,194 0.45% 8.54% 1.13% 7.86% 125%
1987(2) (15.67)% 5,762 0.35% 8.38% 1.69% 7.04% 48%
- ------------------
HIGH YIELD BOND
PORTFOLIO
- ------------------
1996 15.46% $ 107,545 0.87% 9.01% 0.94% 8.94% 55%
1995(3) 17.72% 23,724 0.67% 10.02% 0.86% 9.83% 56%
</TABLE>
(1) CORE FIXED INCOME CLASS A SHARES WERE OFFERED BEGINNING MAY 1, 1987. ALL
RATIOS INCLUDING TOTAL RETURN FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(2) BOND CLASS A SHARES WERE OFFERED BEGINNING MAY 4, 1987. ALL RATIOS
INCLUDING TOTAL RETURN FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(3) HIGH YIELD BOND CLASS A SHARES WERE OFFERED BEGINNING JANUARY 11, 1995. ALL
RATIOS INCLUDING TOTAL RETURN FOR THAT PERIOD HAVE BEEN ANNUALIZED.
3
<PAGE>
THE TRUST
__________________________________________________________________________
SEI INSTITUTIONAL MANAGED TRUST (the "Trust") is an open-end investment
management company that offers units of beneficial interest ("shares") in
separate diversified and non-diversified portfolios. This prospectus offers
Class A shares of the Trust's Core Fixed Income, Bond and High Yield Bond
Portfolios (each a "Portfolio" and, together, the "Portfolios"). The investment
adviser and investment sub-advisers to the Portfolios are referred to
collectively as the "advisers." Additional information pertaining to the Trust
may be obtained by writing from SEI Financial Services Company, Oaks,
Pennsylvania 19456, or by calling 1-800-342-5734.
INVESTMENT OBJECTIVES
AND POLICIES
___________________________________________________________________________
CORE FIXED INCOME PORTFOLIO
The investment objective of the Core Fixed Income Portfolio
is current income consistent with the preservation of
capital. There can be no assurance that the Portfolio will
achieve its investment objective.
Under normal market conditions, the Portfolio will
invest at least 65% of its total assets in fixed income
securities that are rated investment grade or better, i.e.,
rated in one of the four highest rating categories by a
nationally recognized statistical rating organization
("NRSRO") at the time of purchase, or, if not rated,
determined to be of comparable quality by the advisers.
Fixed income securities in which the Portfolio may invest
consist of: (i) corporate bonds and debentures, (ii)
obligations issued by the United States Government, its
agencies and instrumentalities, (iii) municipal securities
of issuers located in all fifty states, the District of
Columbia, Puerto Rico and other U.S. territories and
possessions, consisting of municipal bonds, municipal
notes, tax-exempt commercial paper and municipal lease
obligations, (iv) receipts involving U.S. Treasury
obligations, (v) mortgage-backed securities, (vi)
asset-backed securities, and (vii) zero coupon, pay-in-kind
or deferred payment securities.
Any remaining assets may be invested in: (i)
interest-only and principal-only components of
mortgage-backed securities, (ii) mortgage dollar rolls,
(iii) securities issued on a when-issued and
delayed-delivery basis, including TBA mortgage-backed
securities, (iv) warrants, (v) money market securities, and
(vi) Yankee obligations. In addition, the Portfolio may
purchase or write options, futures (including futures on
U.S. Treasury obligations and Eurodollar instruments) and
options on futures.
Duration is a measure of the expected life of a fixed
income security on a cash flow basis. Most debt obligations
provide interest payments and a final payment at maturity.
Some also have put or call provisions that allow the
security to be redeemed at specified dates prior to
maturity. Duration incorporates yield, coupon interest
payments, final maturity and call features into a single
measure. The advisers therefore consider duration a more
accurate measure of a security's expected life and
sensitivity to interest rate changes than is the security's
term to maturity.
4
<PAGE>
The Core Fixed Income Portfolio invests in a
portfolio with a dollar-weighted average duration that
will, under normal market conditions, stay within plus or
minus 20% of what the advisers believe to be the average
duration of the domestic bond market as a whole. The
advisers base their analysis of the average duration of the
domestic bond market on bond market indices which they
believe to be representative. The advisers currently use
the Lehman Aggregate Bond Index for this purpose.
The Portfolio's annual turnover rate may exceed 100%.
Such a turnover rate may lead to higher transaction costs
and may result in higher taxes for shareholders. See
"Taxes."
The Portfolio's investment adviser is SEI Financial
Management Corporation, and its investment sub-advisers are
BlackRock Financial Management, Inc., Firstar Investment
Research & Management Company and Western Asset Management
Company.
BOND PORTFOLIO
The investment objective of the Bond Portfolio is current
income consistent with preservation of capital. There can
be no assurance that the Portfolio will achieve its
investment objective.
Under normal market conditions, the Portfolio will
invest at least 65% of its total assets in fixed income
securities that are rated investment grade or better, i.e.,
rated in one of the four highest rating categories by an
NRSRO at the time of purchase, or, if not rated, determined
to be of comparable quality by the advisers. Fixed income
securities in which the Portfolio may invest consist of:
(i) corporate bonds and debentures, (ii) obligations issued
by the United States Government, its agencies and
instrumentalities, (iii) receipts involving U.S. Treasury
obligations, (iv) mortgage-backed securities, (v) asset-
backed securities, and (vi) zero coupon, pay-in-kind or
deferred payment securities.
Any remaining assets may be invested in: (i)
convertible securities, (ii) securities issued on a
when-issued and delayed-delivery basis, including TBA
mortgage-backed securities, (iii) money market securities,
and (iv) Yankee obligations. In addition, the Portfolio may
purchase or write options, futures and options on futures.
There are no restrictions on the Portfolio's
maturity.
The Portfolio's investment adviser is SEI Financial
Management Corporation, and its investment sub-adviser is
Boatmen's Trust Company.
HIGH YIELD BOND PORTFOLIO
The investment objective of the High Yield Bond Portfolio
is to maximize total return. There can be no assurance that
the Portfolio will achieve its investment objective.
Under normal market conditions, the Portfolio will
invest at least 65% of its total assets in fixed income
securities that are rated below investment grade, i.e.,
rated below the top four rating categories by an NRSRO at
the time of purchase, or, if not rated, determined to be of
comparable quality by the advisers. Below investment grade
securities are commonly referred to as "junk bonds," and
generally entail increased credit and market risk.
Securities rated in the lowest rating categories may have
predominantly speculative characteristics or may be in
default. The achievement of the Portfolio's investment
objective may be more dependent on the advisers' own credit
analysis than
5
<PAGE>
would be the case if the Portfolio invested in higher rated
securities. There is no bottom limit on the ratings of high
yield securities that may be purchased or held by the
Portfolio.
The Portfolio may invest in all types of fixed income
securities issued by domestic and foreign issuers,
including: (i) mortgage-backed securities, (ii)
asset-backed securities, (iii) zero coupon, pay-in-kind or
deferred payment securities, and (iv) variable and floating
rate instruments.
Any assets of the Portfolio not invested in the fixed
income securities described above may be invested in: (i)
convertible securities, (ii) preferred stocks, (iii) equity
securities, (iv) investment grade fixed income securities,
(v) money market securities, (vi) securities issued on a
when-issued and delayed-delivery basis, including TBA
mortgage-backed securities, (vii) forward foreign currency
contracts, and (viii) Yankee obligations. In addition, the
Portfolio may purchase or write options, futures and
options on futures.
The advisers may vary the average maturity of the
securities in the Portfolio without limit, and there is no
restriction on the maturity of any individual security.
The "Appendix" to this Prospectus sets forth a
description of the bond rating categories of several
NRSROs. The ratings established by each NRSRO represents
its opinion of the safety of principal and interest
payments (and not the market risk) of bonds and other fixed
income securities it undertakes to rate at the time of
issuance. Ratings are not absolute standards of quality,
and may not reflect changes in an issuer's
creditworthiness. Accordingly, although the advisers will
consider ratings, they will perform their own analyses and
will not rely principally on ratings. The advisers will
consider, among other things, the price of the security and
the financial history and condition, the prospects and the
management of an issuer in selecting securities for the
Portfolio.
The Portfolio's investment adviser is SEI Financial
Management Corporation, and its investment sub-adviser is
BEA Associates.
GENERAL INVESTMENT
POLICIES
___________________________________________________________________________
BORROWING
Each Portfolio may borrow money to meet redemptions for
temporary, emergency purposes. A Portfolio will not
purchase securities while its borrowings exceed 5% of its
total assets.
ILLIQUID SECURITIES
Each Portfolio's investment in illiquid securities will be
limited to 15% of its net assets.
INVESTMENT COMPANY SECURITIES
Each Portfolio may purchase investment company securities,
which will result in the layering of expenses. There are
legal limits on the amount of such securities that may be
acquired by a Portfolio.
MONEY MARKET SECURITIES
Each Portfolio may hold cash reserves and invest in money
market instruments (including securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities, repurchase agreements, certificates of
deposit and bankers' acceptances issued by banks or savings
and loan associations having net assets of at least $500
million as of the end of
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their most recent fiscal year, high-grade commercial paper
and other short-term debt securities) rated at the time of
purchase in the top two categories by an NRSRO, or, if not
rated, determined by the advisers to be of comparable
quality at the time of purchase.
SECURITIES LENDING
Each Portfolio may lend its securities in order to realize
additional income.
TEMPORARY DEFENSIVE INVESTMENTS
In order to meet liquidity needs or for temporary defensive
purposes, each Portfolio may invest up to 100% of its
assets in cash and money market securities. To the extent a
Portfolio is engaged in temporary defensive investing, the
Portfolio will not be pursuing its investment objective.
For additional information regarding the Portfolios'
permitted investments, see "Risk Factors" and "Description
of Permitted Investments and Risk Factors" in this
Prospectus and "Description of Permitted Investments" in
the Statement of Additional Information. For a description
of the above ratings, see "Description of Ratings" in the
"Appendix" to this Prospectus.
RISK FACTORS
______________________________________________________________________
EQUITY SECURITIES
Investments in equity securities in general 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 in which a Portfolio invests
will cause the net asset value of the Portfolio to
fluctuate.
FIXED INCOME SECURITIES
The market value of a Portfolio's fixed income investments
will 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. Securities
with longer maturities are subject to greater fluctuations
in value than securities with shorter maturities. Fixed
income securities rated in the fourth highest rating
category lack outstanding investment characteristics, and
have speculative characteristics as well. Changes by an
NRSRO 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 a Portfolio's securities will not
affect cash income derived from these securities but will
affect the Portfolio's net asset value.
Securities held by a Portfolio that are guaranteed by
the U.S. Government, its agencies or instrumentalities
guarantee only the payment of principal and interest, and
do not guarantee the securities' yield or value or the
yield or value of a Portfolio's shares.
There is a risk that the current interest rate on
floating and variable rate instruments may not accurately
reflect existing market interest rates.
FOREIGN SECURITIES AND FOREIGN CURRENCY CONTRACTS
Investing in the securities of foreign companies and the
utilization of forward foreign currency contracts involve
special risks and considerations not typically associated
with investing in U.S. companies. These risks and
considerations include differences in
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accounting, auditing and financial reporting standards,
generally higher commission rates on foreign portfolio
transactions, the possibility of expropriation or
confiscatory taxation, adverse changes in investment or
exchange control regulations, political instability that
could affect U.S. investment in foreign countries and
potential restrictions of the flow of international capital
and currencies.
By entering into forward foreign currency contracts,
a Portfolio will seek to protect the value of its
investment securities against a decline in the value of a
currency. However, these forward foreign currency contracts
will not eliminate fluctuations in the underlying prices of
the securities. Rather, they simply establish a rate of
exchange which one can obtain at some future point in time.
Although such contracts tend to minimize the risk of loss
due to a decline in the value of the hedged currency, they
also tend to limit any potential gain which might result
should the value of such currency increase.
HIGH YIELD, LOWER RATED BONDS
The High Yield Bond Portfolio may invest in lower rated
securities. Fixed income securities are subject to the risk
of an issuer's ability to meet principal and interest
payments on the obligation (credit risk), and may also be
subject to price volatility due to such factors as interest
rate sensitivity, market perception of the creditworthiness
of the issuer and general market liquidity (market risk).
Lower rated or unrated (i.e., high yield) securities are
more likely to react to developments affecting market and
credit risk than are more highly rated securities, which
primarily react to movements in the general level of
interest rates. The market values of fixed-income
securities tend to vary inversely with the level of
interest rates. Yields and market values of high yield
securities will fluctuate over time, reflecting not only
changing interest rates but the market's perception of
credit quality and the outlook for economic growth. When
economic conditions appear to be deteriorating, medium to
lower rated securities may decline in value due to
heightened concern over credit quality, regardless of
prevailing interest rates. Investors should carefully
consider the relative risks of investing in high yield
securities and understand that such securities are not
generally meant for short-term investing.
The high yield market is relatively new and its
growth has paralleled a long period of economic expansion
and an increase in merger, acquisition and leveraged buyout
activity. Adverse economic developments can disrupt the
market for high yield securities, and severely affect the
ability of issuers, especially highly leveraged issuers, to
service their debt obligations or to repay their
obligations upon maturity which may lead to a higher
incidence of default on such securities. In addition, the
secondary market for high yield securities, which is
concentrated in relatively few market makers, may not be as
liquid as the secondary market for more highly rated
securities. As a result, the Portfolio's advisers could
find it more difficult to sell these securities or may be
able to sell the securities only at prices lower than if
such securities were widely traded. Furthermore the Trust
may experience difficulty in valuing certain securities at
certain times. Prices realized upon the sale of such lower
rated or unrated securities, under these circumstances, may
be less than the prices used in calculating the Portfolio's
net asset value.
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Prices for high yield securities may be affected by
legislative and regulatory developments. These laws could
adversely affect the Portfolio's net asset value and
investment practices, the secondary market value for high
yield securities, the financial condition of issuers of
these securities and the value of outstanding high yield
securities. For example, federal legislation requiring the
divestiture by federally insured savings and loan
associations of their investments in high yield bonds and
limiting the deductibility of interest by certain corporate
issuers of high yield bonds adversely affected the market
in recent years.
Lower rated or unrated debt obligations also present
risks based on payment expectations. If an issuer calls the
obligations for redemption, the Portfolio may have to
replace the security with a lower yielding security,
resulting in a decreased return for investors. If the
Portfolio experiences unexpected net redemptions, it may be
forced to sell its higher rated securities, resulting in a
decline in the overall credit quality of the Portfolio's
investment portfolio and increasing the exposure of the
Portfolio to the risks of high yield securities.
MORTGAGE-BACKED SECURITIES
Mortgage-backed securities are subject to the risk of
prepayment of the underlying mortgages. During periods of
declining interest rates, prepayment of mortgages
underlying these securities can be expected to accelerate.
When the mortgaged-backed securities held by a Portfolio
are prepaid, the Portfolio must reinvest the proceeds in
securities the yield of which reflects prevailing interest
rates, which may be lower than the yield of the prepaid
security.
ZERO COUPON OBLIGATIONS
Zero coupon obligations may be subject to greater
fluctuations in value due to interest rate changes than
interest bearing obligations. A Portfolio will be required
to include the imputed interest in zero coupon obligations
in its current income. Because a Portfolio distributes all
of its net investment income to shareholders, a Portfolio
may have to sell portfolio securities to distribute the
income attributable to these obligations and securities at
a time when the advisers would not have chosen to sell such
obligations or securities, and which may result in a
taxable gain or loss.
INVESTMENT LIMITATIONS
________________________________________________________________________
The investment objectives 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.
NO PORTFOLIO MAY:
1. With respect to 75% of its assets, (i) 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
its total assets would be invested in the securities of
such issuer; or (ii) acquire more than 10% of the
outstanding voting securities of any one issuer.
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2. Purchase any securities which would cause more than 25%
of the total assets of the Portfolio to be invested in
the securities of one or more issuers conducting their
principal business activities in the same industry,
provided that this limitation does not apply to
investments in obligations issued or guaranteed by the
United States Government, its agencies or
instrumentalities.
The foregoing percentage limitations will apply at the time
of the purchase of a security. Additional fundamental and
non-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. In addition, SEI Management
also serves as transfer agent (the "Transfer Agent") to the
Class A shares 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 .28% of the average daily net
assets of the Core Fixed Income and Bond Portfolios and
.35% of the average daily net assets of the High Yield Bond
Portfolio. SEI Management has voluntarily agreed to waive a
portion of its fees in order to limit the operating
expenses of each Portfolio. SEI Management reserves the
right, in its sole discretion, to terminate this voluntary
fee waiver at any time.
For the fiscal year ended September 30, 1996, the
Portfolios paid SEI Management the following management
fees (based on each Portfolio's average daily net assets
after fee waivers): Core Fixed Income Portfolio, .23%; Bond
Portfolio, .15%; and High Yield Bond Portfolio, .28%.
THE ADVISER
_______________________________________________________________________
SEI FINANCIAL MANAGEMENT CORPORATION
SEI Financial Management Corporation ("SFM") serves as
investment adviser to each Portfolio. SFM is a wholly-owned
subsidiary of SEI Investments Company ("SEI"), a financial
services company located in Oaks, Pennsylvania. The
principal business address of SFM is Oaks, Pennsylvania
19456. SEI was founded in 1968 and is a leading provider of
investment solutions to banks, institutional investors,
investment advisers and insurance companies. Affiliates of
SFM have provided consulting advice to institutional
investors for more than 20 years, including advice
regarding the selection and evaluation of investment
advisers. SFM currently serves as manager or administrator
to more than 40 investment companies, including more than
290 portfolios, which investment companies have more than
$69 billion in assets as of September 30, 1996.
SFM acts as the investment adviser to the Portfolios
and operates as a "manager of managers." As Adviser, SFM
oversees the investment advisory services provided to the
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Portfolios and manages the cash portion of the Portfolios'
assets. Pursuant to separate sub-advisory agreements with
SFM, and under the supervision of SFM and the Board of
Trustees, the sub-advisers are responsible for the
day-to-day investment management of all or a discrete
portion of the assets of the Portfolios. The sub-advisers
are selected based primarily upon the research and
recommendations of SFM, which evaluates quantitatively and
qualitatively each sub-adviser's skills and investment
results in managing assets for specific asset classes,
investment styles and strategies. Subject to Board review,
SFM allocates and, when appropriate, reallocates the
Portfolios' assets among sub-advisers, monitors and
evaluates sub-adviser performance, and oversees sub-adviser
compliance with the Portfolios' investment objectives,
policies and restrictions. SFM HAS THE ULTIMATE
RESPONSIBILITY FOR THE INVESTMENT PERFORMANCE OF THE
PORTFOLIOS DUE TO ITS RESPONSIBILITY TO OVERSEE
SUB-ADVISERS AND RECOMMEND THEIR HIRING, TERMINATION AND
REPLACEMENT.
For these advisory services, SFM is entitled to a
fee, which is calculated daily and paid monthly, at an
annual rate of .275% of the Core Fixed Income and Bond
Portfolios' average daily net assets and .4875% of the High
Yield Bond Porfolio's average daily net assets. SFM pays
the sub-advisers out of its investment advisory fee.
For the fiscal year ended September 30, 1996, SFM
received an advisory fee of .275% of the Core Fixed Income
and Bond Portfolios' average daily net assets and .4875% of
the High Yield Bond Portfolios' average daily net assets.
SFM has obtained an exemptive order from the
Securities and Exchange Commission (the "SEC") that permits
SFM, with the approval of the Trust's Board of Trustees, to
retain sub-advisers unaffiliated with SFM for the
Portfolios without submitting the sub-advisory agreements
to a vote of the Portfolios' shareholders. The exemptive
relief permits the disclosure of only the aggregate amount
payable by SFM under all such sub-advisory agreements. The
Portfolios will notify shareholders in the event of any
addition or change in the identity of its sub-advisers.
THE SUB-ADVISERS
_________________________________________________________________
BEA ASSOCIATES
BEA Associates ("BEA") serves as Sub-Adviser for the High
Yield Bond Portfolio. BEA is a general partnership
organized under the laws of the State of New York which,
together with its predecessor firms, has been engaged in
the investment advisory business for over 50 years. BEA's
principal offices are located at One Citicorp Center, 153
East 53rd Street, New York, New York 10022. Credit Suisse
Capital Corporation ("CS Capital") is an 80% partner in BEA
and CS Advisers Corp., a New York corporation which is a
wholly-owned subsidiary of CS Capital, is a 20% partner in
BEA. CS Capital is a wholly-owned subsidiary of Credit
Suisse Investment Corporation, which is a wholly-owned
subsidiary of Credit Suisse, the second largest Swiss bank,
which in turn is a subsidiary of CS Holding, a Swiss
Corporation. BEA is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended. BEA
is a diversified asset manager, handling global equity,
balanced,
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fixed income and derivative securities accounts for private
individuals, as well as corporate pension and
profit-sharing plans, state pension funds, union funds,
endowments and other charitable institutions. As of
September 30, 1996, BEA managed approximately $31.3 billion
in assets.
The Portfolio's assets have been managed by Richard
J. Lindquist, CFA, since its inception. Mr. Lindquist
joined BEA in 1995 as a result of BEA's acquisition of CS
First Boston Investment Management, and has had 12 years of
investment management experience, including 7 years of
experience working with high yield bonds. Prior to joining
CS First Boston, Mr. Lindquist was with Prudential
Insurance Company of America, where he managed high yield
portfolios totalling approximately $1.3 billion.
SFM pays BEA a fee based on a percentage of the
average monthly market value of the assets of the High
Yield Portfolio managed by BEA.
BLACKROCK FINANCIAL MANAGEMENT, INC.
BlackRock Financial Management Inc. ("BlackRock") serves as
Sub-Adviser to a portion of the assets of the Core Fixed
Income Portfolio. BlackRock, a registered investment
adviser, is a Delaware corporation with its principal
business address at 345 Park Avenue, 30th Floor, New York,
New York 10154. BlackRock's predecessor was founded in
1988, and as of September 30, 1996, BlackRock had $41
billion in assets under management. BlackRock is
wholly-owned by PNC Asset Management Group, Inc., a
wholly-owned subsidiary of PNC Bank, N.A. PNC Bank, N.A.'s
ultimate parent is PNC Bank Corp., One PNC Plaza,
Pittsburgh, Pennsylvania 15265. BlackRock provides
investment advice to investment companies, trusts,
charitable organizations, pension and profit sharing plans
and government entities.
BlackRock employs a team approach in managing the
Portfolio; however, the portfolio managers who have
day-to-day responsibility for the Portfolio are Keith
Anderson and Andrew Phillips. Mr. Anderson is a Managing
Director and Co-Head of Portfolio Management at BlackRock,
and has 13 years experience investing in fixed income
securities. Prior to founding BlackRock in 1988, Mr.
Anderson was a Vice President in Fixed Income Research at
The First Boston Corporation. Mr. Phillips is a Vice
President and portfolio manager with primary responsibility
for the management of the firm's investment activities in
fixed-rate mortgage securities.
SFM pays BlackRock a fee based on a percentage of the
average monthly market value of the portion of the assets
of the Core Fixed Income Portfolio managed by BlackRock.
BOATMEN'S TRUST COMPANY
Boatmen's Trust Company ("Boatmen's") serves as Sub-Adviser
to the Bond Portfolio. Boatmen's is a subsidiary of
NationsBank, a bank holding company located in Charlotte,
North Carolina. Boatmen's provides trust and investment
advisory services to a broad array of individual and
institutional clients. As of September 30, 1996, Boatmen's
total assets under management were approximately $45
billion for a broad spectrum of taxable and
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tax-exempt clients. The principal business address of
Boatmen's is 100 N. Broadway, St. Louis, Missouri 63102.
The Portfolio has been managed by a committee since
its inception.
SFM pays Boatmen's a fee based on a percentage of the
average monthly market value of the assets of the Bond
Portfolio managed by Boatmen's.
FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY
Firstar Investment Research & Management Company ("FIRMCO")
serves as Sub-Adviser to a portion of the assets of the
Core Fixed Income Portfolio. FIRMCO is a registered
investment adviser with its principal business address at
777 East Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin
53202. FIRMCO was founded in 1986, and as of September 30,
1996, it had approximately $17 billion in assets under
management. FIRMCO is a wholly-owned subsidiary of Firstar
Corporation, a bank holding company located at 777 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202. FIRMCO's
clients include pension and profit sharing plans, trusts
and estates and one other investment company.
Mr. Charles Groeschell, a Senior Vice President of
FIRMCO, has been employed by FIRMCO or its affiliates since
1983, and has had 14 years experience in fixed income
investing.
SFM pays FIRMCO a fee based on a percentage of the
average monthly market value of the portion of the assets
of the Core Fixed Income Portfolio managed by FIRMCO.
WESTERN ASSET MANAGEMENT COMPANY
Western Asset Management Company ("Western") serves as
Sub-Adviser to a portion of the assets of the Core Fixed
Income Portfolio. Western is located at 117 East Colorado
Boulevard, Pasadena, California 91105, and is a wholly
owned subsidiary of Legg Mason, Inc., a financial services
company located in Baltimore, Maryland. Western was founded
in 1971, and specializes in the management of fixed income
portfolios. As of September 30, 1996, Western managed
approximately $22 billion in client assets, including $3
billion of investment company assets.
Kent S. Engel, Director and Chief Investment Officer
of Western, has been primarily responsible for the
day-to-day management of the Portfolio since January 19,
1994. Mr. Engel has been with Western and its predecessor
since 1969.
SFM pays Western a fee based on a percentage of the
average monthly market value of the portion of the assets
of the Core Fixed Income Portfolio managed by Western.
DISTRIBUTION AND
SHAREHOLDER SERVICING
__________________________________________________________________________
SEI Financial Services Company (the "Distributor"), a
wholly-owned subsidiary of SEI, serves as each Portfolio's
distributor pursuant to a distribution agreement with the
Trust. The Small Cap Growth Portfolio has adopted a
distribution plan for its Class D shares (the "Class D
Plan") pursuant to Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "1940 Act").
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Each Portfolio has adopted a shareholder servicing
plan for its Class A shares (the "Service Plan") under
which a shareholder servicing fee of up to .25% of average
daily net assets attributable to Class A shares will be
paid to the Distributor. 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 in its sole
discretion, institute one or more promotional incentive
programs, which will be paid for by the Distributor from
its own resources. Under any such program, the Distributor
will provide promotional incentives, in the form of cash or
other compensation, including merchandise, airline
vouchers, trips and vacation packages, to all dealers
selling shares of the Portfolios. Such promotional
incentives will be offered uniformly to all shares of the
Portfolios, and also will be offered uniformly to all
dealers, predicated upon the amount of shares of the
Portfolios sold by such dealer.
PURCHASE AND
REDEMPTION OF SHARES
____________________________________________________________________________
Financial institutions may acquire Class A shares of the
Portfolios for their own accounts or as record owner on
behalf of fiduciary, agency or custody accounts by placing
orders with SEI Management. Institutions that use certain
SEI proprietary systems may place orders electronically
through those systems. State securities laws may require
banks and financial institutions purchasing shares for
their customers to register as broker-dealers pursuant to
state laws. 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 SEI Management for effectiveness the same
day. Financial institutions that purchase shares for the
accounts of their customers may impose separate charges on
these customers for account services. Shares of the
Portfolios are offered only to residents of states in which
the shares are eligible for purchase.
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Shares of each Portfolio may be purchased or redeemed
on days on which the New York Stock Exchange is open for
business ("Business Days"). The minimum initial investment
in a 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 SEI Management (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 its shareholders to accept such
purchase order. In addition, because excessive trading
(including short-term "market timing" trading) can hurt a
Portfolio's performance, each Portfolio may refuse purchase
orders from any shareholder account if the accountholder
has been advised that previous purchase and redemption
transactions were considered excessive in number or amount.
Accounts under common control or ownership, including those
with the same taxpayer identification number and those
administered so as to redeem or purchase shares based upon
certain predetermined market indicators, will be considered
one account for this purpose.
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 a Portfolio's investments and other assets,
less any liabilities, by the total number of outstanding
shares of that Portfolio. Net asset value per share is
determined as of the close of business of the New York
Stock Exchange (currently 4:00 p.m. Eastern time) on each
Business Day.
The market value of each portfolio security is
obtained by SEI Management from an independent pricing
service. 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). The pricing service relies primarily on
prices of actual market transactions as well as trader
quotations. However, the pricing service may use a matrix
system to determine valuations of equity and 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 procedures used by the pricing service and
its valuations are reviewed by the officers of the Trust
under the general supervision of the Trustees.
Shareholders who desire to redeem shares of the
Portfolios must place their redemption orders with SEI
Management (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 SEI Management of the
redemption order.
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Payment on redemption will be made as promptly as possible
and, in any event, within seven days after the redemption
order is received.
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.
Purchase and redemption orders may be placed by
telephone. Neither the Trust nor SEI Management 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 SEI Management 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, and shareholders
experience difficulties placing redemption orders by
telephone, shareholders may wish to consider placing their
order by other means.
PERFORMANCE
______________________________________________________________________
From time to time, a Portfolio may advertise yield and
total return. 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 the
Portfolio over a specified 30-day period. The yield is
calculated by assuming that the same amount of income
generated by the investment during that period is generated
in each 30-day period 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 to a hypothetical investment
redeemed at the end of the specified period covered by the
total return figure, for designated time periods (including
but not limited to, the period from
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which the Portfolio commenced operations through the
specified date), 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 total return of a Portfolio may also be
quoted as a dollar amount or on an aggregate basis, an
actual basis, without inclusion of any front-end or
contingent sales charges, or with a reduced sales charge in
advertisements distributed to investors entitled to a
reduced sales charge.
A Portfolio may periodically compare its performance
to that of: (i) other mutual funds tracked by mutual fund
rating services (such as Lipper Analytical), financial and
business publications and periodicals; (ii) broad groups of
comparable mutual funds; (iii) unmanaged indices which may
assume investment of dividends but generally do not reflect
deductions for administrative and management costs; or (iv)
other investment alternatives. A Portfolio may quote
Morningstar, Inc., a service that ranks mutual funds on the
basis of risk-adjusted performance, and Ibbotson Associates
of Chicago, Illinois, which provides historical returns of
the capital markets in the U.S. A 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. 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.
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 a
Portfolio or its 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
A Portfolio is treated as a separate entity for federal
income tax purposes, and is not combined with the Trust's
other portfolios. Each Portfolio intends to continue to
qualify for the special tax treatment afforded regulated
investment companies ("RICs") under Subchapter M of the
Internal Revenue Code of 1986, as amended, so as to be
relieved of federal income tax on net investment company
taxable income (including the excess, if any, of net
short-term capital gains over net long-term capital losses)
and net capital gains (the
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<PAGE>
excess of net long-term capital gains over net short-term
capital losses) distributed to shareholders.
TAX STATUS OF DISTRIBUTIONS
Each Portfolio distributes substantially all of its net
investment company taxable income 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).
Distributions of net capital gains are taxable to
shareholders as long-term capital gains regardless of how
long a shareholder has held shares. Dividends and
distributions received from a Portfolio will not qualify
for the corporate dividends received deduction. Each
Portfolio will provide annual reports to 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 a Portfolio at any time during the following
January.
Income received directly by a Portfolio on direct
U.S. obligations is exempt from tax at the state level and
may be exempt, depending on the state, when received by a
shareholder as income dividends from a Portfolio 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 intends to make sufficient
distributions to avoid liability for the federal excise tax
applicable to RICs.
Each sale, exchange or redemption of a Portfolio's
shares generally is a taxable transaction to the
shareholder.
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<PAGE>
GENERAL INFORMATION
______________________________________________________________
THE TRUST
The Trust was organized as a Massachusetts business trust
under a Declaration of Trust dated October 20, 1986. The
Declaration of Trust permits the Trust to offer separate
series ("portfolios") of shares and different classes of
each 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.
Certain shareholders in one or more of the Portfolios
may obtain asset allocation services from the Adviser and
other financial intermediaries with respect to their
investments in such Portfolios. If a sufficient amount of a
Portfolio's assets are subject to such asset allocation
services, a Portfolio may incur higher transaction costs
and a higher portfolio turnover rate than would otherwise
be anticipated as a result of redemptions and purchases of
Portfolio shares pursuant to such services. Further, to the
extent that the Adviser is providing asset allocation
services and providing investment advice to the Portfolios,
it may face conflicts of interest in fulfilling its
responsibilities because of the possible differences
between the interests of its asset allocation clients and
the interests of the Portfolios.
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. The 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 unaudited financial statements
semi-annually and audited financial statements annually.
The Trust furnishes proxy statements and other reports to
shareholders of record.
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SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Manager,
SEI Fund Management, Oaks, Pennsylvania 19456.
DIVIDENDS
Substantially all of the net investment income (exclusive
of capital gains) of each Portfolio is declared daily and
paid monthly as a dividend. 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 the 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.
The dividends on Class D shares of the Portfolios
will normally be lower than those on Class A shares because
of the additional distribution and transfer agent expenses
charged to Class D shares.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
Price Waterhouse LLP serves as the independent accountants
of the Trust.
CUSTODIAN AND WIRE AGENT
CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box
7618, Philadelphia, Pennsylvania 19101 (the "Custodian"),
acts as custodian and wire agent of the Trust's assets. The
Custodian holds cash, securities and other assets of the
Trust as required by the 1940 Act.
DESCRIPTION OF
PERMITTED INVESTMENTS
AND
RISK FACTORS
______________________________________________________________________
The following is a description of the permitted investment
practices for the Portfolios, and the associated risk
factors:
ASSET-BACKED SECURITIES
Asset-backed securities are securities secured by
non-mortgage assets such as 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, organized solely for the purpose of owning such
assets and issuing such debt.
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<PAGE>
CONVERTIBLE SECURITIES
Convertible securities are corporate securities that are
exchangeable for a set number of another security at a
prestated price. Convertible securities typically have
characteristics similar to both fixed-income and equity
securities. Because of the conversion feature, the market
value of a convertible security tends to move with the
market value of the underlying stock. The value of a
convertible security is also affected by prevailing
interest rates, the credit quality of the issuer, and any
call provisions.
DERIVATIVES
Derivatives are securities that derive their value from
other securities, assets or indices. The following are
considered derivative securities: options on futures,
futures, options (e.g., puts and calls), swap agreements,
mortgage-backed securities (e.g., CMOs, REMICs, IOs and
POs), when-issued securities and forward commitments,
floating and variable rate securities, convertible
securities, "stripped" U.S. Treasury securities (e.g.,
receipts and STRIPs) and privately issued stripped
securities (e.g., TGRs, TRs and CATS). See elsewhere in
this "Description of Permitted Investments and Risk
Factors" for discussions of these various instruments.
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 prices of longer maturity securities are also
subject to greater market fluctuations as a result of
changes in interest rates.
FORWARD FOREIGN CURRENCY CONTRACTS
A forward contract involves an obligation to purchase or
sell a specific currency amount at a future date, agreed
upon by the parties, at a price set at the time of the
contract. A Portfolio may also enter into a contract to
sell, for a fixed amount of U.S. dollars or other
appropriate currency, the amount of foreign currency
approximating the value of some or all of a Portfolio's
securities denominated in such foreign currency.
FUTURES AND OPTIONS ON FUTURES
Futures contracts provide for the future sale by one party
and purchase by another party of a specified amount of a
specific security at a specified future time and at a
specified price. An option on a futures contract gives the
purchaser the right, in exchange for a premium, to assume a
position in a futures contract at a specified exercise
price during the term of the option. A Portfolio may use
futures contracts and related options for BONA FIDE hedging
purposes, to offset changes in the value of securities held
or expected to be acquired or be disposed of, to minimize
fluctuations in foreign currencies, or to gain exposure to
a particular market or instrument. A Portfolio will
minimize the risk that it will be unable to close out a
futures contract by only entering into futures contracts
that are traded on national futures exchanges.
A bond 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 bond index
value at the close of trading of the
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<PAGE>
contract and the price at which the futures contract is
originally struck. No physical delivery of the bonds
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, high grade debt securities equal to the market
value of the futures positions held, less margin deposits,
in a segregated account with the Trust's Custodian.
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.
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 options on
futures.
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 a 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.
See also the "Risk Factors" section.
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<PAGE>
Throughout the year ended September 30, 1996, the
High Yield Bond Portfolio invested in securities that are
rated below investment grade. The following is the average
bond rating for the period as rated by Standard & Poor's
Corporation:
<TABLE>
<S> <C>
AAA 0.68%
BBB 0.66%
BB 11.61%
B 56.63%
CCC 4.68%
Unrated 25.74%
---------
Total: 100.00%
---------
---------
</TABLE>
MONEY MARKET SECURITIES
Money market securities 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 or guaranteed
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 of less issued by corporations that
issue outstanding 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, FNMA and FHLMC. GNMA,
FNMA and FHLMC guarantee timely distributions of interest
to certificate holders. GNMA and FNMA also guarantee timely
distributions of scheduled principal. FHLMC generally
guarantees only the ultimate collection of principal of the
underlying mortgage loan. FNMA and FHLMC obligations are
not backed by the full faith and credit of the U.S.
Government as GNMA certificates are, but FNMA and FHLMC
securities are supported by the instrumentalities' right to
borrow from the U.S. Treasury.
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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"), real estate mortgage investment conduits
("REMICs") and commercial mortgage-backed securities
("CMBS"). 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.
COMMERCIAL MORTGAGE-BACKED SECURITIES ("CMBS"): CMBS
are generally multi-class or pass-through securities backed
by a mortgage loan or a pool of mortgage loans secured by
commercial property, such as industrial and warehouse
properties, office buildings, retail space and shopping
malls, multifamily properties and cooperative apartments.
The commercial mortgage loans that underlie CMBS are
generally not amortizing or not fully amortizing. That is,
at their maturity date, repayment of the remaining
principal balance or "balloon" is due and is repaid through
the attainment of an additional loan of sale of the
property.
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 FNMA or FHLMC
represent beneficial ownership interests in a REMIC trust
consisting principally of mortgage loans or FNMA, FHLMC or
GNMA-guaranteed mortgage pass-through certificates.
PARALLEL PAY SECURITIES; PAC BONDS: Parallel pay
CMOs and REMICS are structured to provide payments of
principal on each payment date to more than one class.
These simultaneous payments are taken into account in
calculating the stated maturity date or final distribution
date of each class, which must be retired by its stated
maturity date or final distribution date, but may be
retired earlier. Planned Amortization Class CMOs ("PAC
Bonds") generally require payments of a specified amount of
principal on each payment date. PAC Bonds are always
parallel pay CMOs with the required principal payment on
such securities having the highest priority after interest
has been paid to all classes.
STRIPPED MORTGAGE-BACKED SECURITIES ("SMBS"): SMBs
are usually structured with two classes that receive
specified proportions of the monthly interest and principal
24
<PAGE>
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.
MORTGAGE DOLLAR ROLLS
Mortgage "dollar rolls" are transactions in which
mortgage-backed securities are sold for delivery in the
current month and the seller simultaneously contracts to
repurchase substantially similar securities on a specified
future date. The difference between the sale price and the
purchase price (plus any interest earned on the cash
proceeds of the sale) is netted against the interest income
foregone on the securities sold to arrive at an implied
borrowing rate. Alternatively, the sale and purchase
transactions can be executed at the same price, with the
Portfolio being paid a fee as consideration for entering
into the commitment to purchase.
To avoid any leveraging concerns, the Portfolio will
place U.S. Government or other liquid, high grade debt
securities in a segregated account with the Trust's
Custodian in an amount sufficient to cover its repurchase
obligation.
MUNICIPAL SECURITIES
Municipal securities consist of (i) debt obligations issued
by or on behalf of public authorities to obtain funds to be
used for various public facilities, for refunding
outstanding obligations, for general operating expenses,
and for lending such funds to other public institutions and
facilities, and (ii) certain private activity and
industrial development bonds issued by or on behalf of
public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately
operated facilities.
General obligation bonds are backed by the taxing
power of the issuing municipality. Revenue bonds are backed
by the revenues of a project or facility (tolls from a
bridge, for example). Certificates of participation
represent an interest in an underlying obligation or
commitment, such as an obligation issued in connection with
a leasing arrangement. The payment of principal and
interest on private activity and industrial development
bonds generally is dependent solely on the ability of a
facility's user to meet its financial obligations and the
pledge, if any, of real and personal property as security
for such payment.
Municipal notes include general obligation notes, tax
anticipation notes, revenue anticipation notes, bond
anticipation notes, certificates of indebtedness, demand
notes and construction loan notes and participation
interests in municipal notes.
OPTIONS
A put option gives the purchaser of the option the right to
sell, and the writer of the option the obligation to buy,
the underlying security at any time during the option
period. A call option gives the purchaser of the option the
right to buy, and the writer of the option the obligation
to sell, the underlying security at any time during the
option period.
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<PAGE>
The premium paid to the writer is the consideration for
undertaking the obligations under the option contract.
A Portfolio may purchase and write put and call
options on foreign currencies (traded on U.S. and foreign
exchanges or over-the-counter markets) to manage its
exposure to exchange rates. Call options on foreign
currency written by a Portfolio will be "covered," which
means that the Portfolio will own an equal amount of the
underlying foreign currency.
A Portfolio may purchase and write put and call
options on indices and enter into related closing
transactions. Put and call options on indices are similar
to options on securities except that options on an index
give the holder the right to receive, upon exercise of the
option, an amount of cash if the closing level of the
underlying index is greater than (or less than, in the case
of puts) the exercise price of the option. This amount of
cash is equal to the difference between the closing price
of the index and the exercise price of the option,
expressed in dollars multiplied by a specified number.
Thus, unlike options on individual securities, all
settlements are in cash, and gain or loss depends on price
movements in the particular market represented by the index
generally, rather than the price movements in individual
securities.
All options written on indices must be covered. When
a Portfolio writes an option on an index or a foreign
currency, it will establish a segregated account containing
cash or liquid, high grade debt securities with its
Custodian in an amount at least equal to the market value
of the option and will maintain the account while the
option is open or will otherwise cover the transaction.
RISK FACTORS. Risks associated with options
transactions include: (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
correlation between the movement in prices of options and
the securities underlying them; (3) there may not be a
liquid secondary market for options; and (4) while a
Portfolio will receive a premium when it writes covered
call options, it may not participate fully in a rise in the
market value of the underlying security.
RECEIPTS
Receipts are sold as zero coupon securities, which means
that they are sold at a substantial discount and redeemed
at face value at their maturity date without interim cash
payments of interest or principal. This discount is
accreted over the life of the security, and such accretion
will constitute the income earned on the security for both
accounting and tax purposes. Because of these features,
such securities may be subject to greater interest rate
volatility than interest paying Permitted Investments. See
also "Taxes."
REITS
REITs are trusts that invest primarily in commercial real
estate or real estate-related loans. The value of interests
in REITs may be affected by the value of the property owned
or the quality of the mortgages held by the trust.
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<PAGE>
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.
SECURITIES LENDING
In order to generate additional income, a Portfolio may
lend its securities pursuant to agreements that require
that the loan be continuously secured by collateral
consisting of cash or securities of the U.S. Government or
its agencies equal to at least 100% of the market value of
the loaned securities. A Portfolio continues to receive
interest on the loaned securities while simultaneously
earning interest on the investment of cash collateral.
Collateral is marked to market daily. There may be risks of
delay in recovery of the securities or even loss of rights
in the collateral should the borrower of the securities
fail financially or become insolvent.
SECURITIES OF FOREIGN ISSUERS
There are certain risks connected with investing in foreign
securities. These include risks of adverse political and
economic developments (including possible governmental
seizure or nationalization of assets), the possible
imposition of exchange controls or other governmental
restrictions, less uniformity in accounting and reporting
requirements, the possibility that there will be less
information on such securities and their issuers available
to the public, the difficulty of obtaining or enforcing
court judgments abroad, restrictions on foreign investments
in other jurisdictions, difficulties in effecting
repatriation of capital invested abroad, and difficulties
in transaction settlements and the effect of delay on
shareholder equity. Foreign securities may be subject to
foreign taxes, and may be less marketable than comparable
U.S. securities. The value of a Portfolio's investments
denominated in foreign currencies will depend on the
relative strengths of those currencies and the U.S. dollar,
and a Portfolio may be affected favorably or unfavorably by
changes in the exchange rates or exchange control
regulations between foreign currencies and the U.S. dollar.
Changes in foreign currency exchange rates also may affect
the value of dividends and interest earned, gains and
losses realized on the sale of securities and net
investment income and gains, if any, to be distributed to
shareholders by a Portfolio.
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., Federal National Mortgage
Association securities).
27
<PAGE>
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.
U.S. TREASURY RECEIPTS
U.S. Treasury receipts are interests in separately traded
interest and principal component parts of U.S. Treasury
obligations that are issued by banks or brokerage firms and
are created by depositing U.S. Treasury obligations into a
special account at a custodian bank. The custodian holds
the interest and principal payments for the benefit of the
registered owners of the certificates of receipts. The
custodian arranges for the issuance of the certificates or
receipts evidencing ownership and maintains the register.
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
some other reset period, and may have a floor or ceiling on
interest rate changes.
WARRANTS
Warrants are instruments giving holders the right, but not
the obligation, to buy equity or fixed income securities of
a company at a given price during a specified period.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES, INCLUDING TBA MORTGAGE-BACKED
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 with the
Custodian a separate account with liquid, high grade debt
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.
One form of when-issued or delayed-delivery security
that a Portfolio may purchase is a "to be announced"
("TBA") mortgage-backed security. A TBA mortgage-backed
security transaction arises when a mortgage-backed
security, such as a GNMA pass-through security, is
purchased or sold with specific pools that will constitute
that GNMA pass-through security to be announced on a future
settlement date.
YANKEE OBLIGATIONS
Yankee obligations ("Yankees") are U.S. dollar-denominated
instruments of foreign issuers who either register with the
Securities and Exchange Commission or issue securities
under Rule 144A of the Securities Exchange Act of 1933, as
amended. These consist of debt securities (including
preferred or preference stock of non-governmental issuers),
certificates of deposit, fixed time deposits and bankers'
acceptances issued by foreign banks, and debt obligations
of foreign governments or their subdivisions, agencies and
instrumentalities, international agencies and supranational
entities.
28
<PAGE>
ZERO COUPON, PAY-IN-KIND AND DEFERRED PAYMENT SECURITIES
Zero coupon securities are securities that are sold at a
discount to par value and securities on which interest
payments are not made during the life of the security. Upon
maturity, the holder is entitled to receive the par value
of the security. While interest payments are not made on
such securities, holders of such securities are deemed to
have received "phantom income" annually. Because a
Portfolio will distribute its "phantom income" to
shareholders, to the extent that shareholders elect to
receive dividends in cash rather than reinvesting such
dividends in additional shares, a Portfolio will have fewer
assets with which to purchase income producing securities.
In the event of adverse market conditions, zero coupon,
pay-in-kind and deferred payment securities may be subject
to greater fluctuations in value and may be less liquid
than comparably rated securities paying cash interest at
regular interest payment periods.
Additional information on permitted investments and risk
factors can be found in the Statement of Additional
Information.
29
<PAGE>
APPENDIX--DESCRIPTION OF CORPORATE BOND RATINGS ________________________________
MOODY'S RATINGS DEFINITIONS
LONG TERM
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edged". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risk appear somewhat larger than
the Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment some time in
the future.
Baa
Bonds which are rated Baa are considered as medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca
Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
A-1
<PAGE>
Moody's bond ratings, where specified, are applied to senior bank obligations
and insurance company senior policyholder and claims obligations with an
original maturity in excess of one year. Obligations relying upon support
mechanisms such as letters-of-credit and bonds of indemnity are excluded unless
explicitly rated.
Obligations of a branch of a bank are considered to be domiciled in the country
in which the branch is located. Unless noted as an exception, Moody's rating on
a bank's ability to repay senior obligations extends only to branches located in
countries which carry a Moody's sovereign rating. Such branch obligations are
rated at the lower of the bank's rating or Moody's sovereign rating for the bank
deposits for the country in which the branch is located.
When the currency in which an obligation is denominated is not the same as the
currency of the country in which the obligation is domiciled, Moody's ratings do
not incorporate an opinion as to whether payment of the obligation will be
affected by the actions of the government controlling the currency of
denomination. In addition, risk associated with bilateral conflicts between an
investor's home country and either the issuer's home country or the country
where an issuer branch is located are not incorporated into Moody's ratings.
Moody's makes no representation that rated bank obligations or insurance company
obligations are exempt from registration under the U.S. Securities Act of 1933
or issued in conformity with any other applicable law or regulation. Nor does
Moody's represent that any specific bank or insurance company obligation is
legally enforceable or is a valid senior obligation of a rated issuer.
Moody's ratings are opinions, not recommendations to buy or sell, and their
accuracy is not guaranteed. A rating should be weighed solely as one factor in
an investment decision and you should make your own study and evaluation of any
issuer whose securities or debt obligations you consider buying or selling.
NOTE: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
STANDARD & POOR'S RATINGS DEFINITIONS
A Standard & Poor's corporate or municipal debt rating is a current assessment
of creditworthiness of an obligor with respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers, or
lessees.
The debt rating is not a recommendation to purchase, sell or hold a security, as
it does not comment on market price or suitability for a particular investor.
The ratings are based, in varying degrees, on the following considerations:
(1) Likelihood of default. The rating assesses the obligor's capacity and
willingness as to timely payment of interest and repayment of principal in
accordance with the terms of the obligation.
A-2
<PAGE>
(2) The obligation's nature and provisions.
(3) Protection afforded to, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under bankruptcy
laws and other laws affecting creditor's rights.
Likelihood of default is indicated by an issuer's senior debt rating. If senior
debt is not rated, an implied senior debt rating is determined. Subordinated
debt usually is rated lower than senior debt to better reflect relative position
of the obligation in bankruptcy. Unsecured debt, where significant secured debt
exists, is treated similarly to subordinated debt.
LONG-TERM
INVESTMENT GRADE
AAA
Debt rated 'AAA' has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA
Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt only in small degree.
A
Debt rated 'A' has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.
BBB
Debt rated 'BBB' is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category than in higher rated categories.
SPECULATIVE GRADE
Debt rated 'BB', 'B', 'CCC', 'CC', and 'C' is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay
principal. 'BB' indicates the least degree of speculation and 'C' the highest
degree of speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposure to adverse conditions.
BB
Debt rated 'BB' has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions that could
lead to inadequate capacity to meet timely interest and principal payments.
The 'BB' rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied 'BBB-' rating.
B
Debt rate 'B' has greater vulnerability to default but presently has the
capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions would likely impair capacity or
willingness to pay interest and repay principal. The 'B' rating category
also is used for debt subordinated to senior debt that is assigned an
actual or implied 'BB' or 'BB-' rating.
A-3
<PAGE>
CCC
Debt rated 'CCC' has a current identifiable vulnerability to default, and
is dependent on favorable business, financial and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial, or economic conditions, it is not likely to
have the capacity to pay interest and repay principal. The 'CCC' rating
category also is used for debt subordinated to senior debt that is assigned
an actual or implied 'B' or 'B-' rating.
CC
The rating 'CC' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC' rating.
C
The rating 'C' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC-' debt rating. The 'C' rating
may be used to cover a situation where a bankruptcy petition has been
filed, but debt service payment are continued.
CI
Debt rated 'CI' is reserved for income bonds on which no interest is being
paid.
D
Debt is rated 'D' when the issue is in payment default, or the obligor has
filed for bankruptcy. The 'D' rating is used when interest or principal
payments are not made on the date due, even if the applicable grace period
has not expired, unless S&P believes that such payments will be made during
such grace period.
Plus (+) or minus (-): The ratings from 'AA' to 'CCC' may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
c
The letter 'C' indicates that the holder's option to tender the security
for purchase may be canceled under certain prestated conditions enumerated
in the tender option documents.
p
The letter 'p' indicates that the rating is provisional. A provisional
rating assumes the successful completion of the project financed by the
debt being rated and indicates that payment of the debt service
requirements is largely or entirely dependent upon the successful timely
completion of the project. This rating, however, while addressing credit
quality subsequent to completion of the project, makes no comment on the
likelihood of, or the risk of default upon failure of such completion. The
investor should exercise his own judgement with respect to such likelihood
and risk.
L
The letter 'L' indicates that the rating pertains to the principal amount
of those bonds to the extent that the underlying deposit collateral is
federally insured, and interest is adequately collateralized. In the case
of certificates of deposit, the letter 'L' indicates that the deposit,
combined with other deposits being held in the same right and capacity,
will be honored for principal and pre-default interest up to federal
insurance limits within 30 days after closing of the insured institution
or, in the event that the deposit is assumed by a successor insured
institution, upon maturity.
- ----------
*Continuance of the rating is contingent upon S&P's receipt of an executed copy
of the escrow agreement or closing documentation confirming investments and
cash flows.
N.R. Not rated.
A-4
<PAGE>
Debt obligations of issuers outside the United States and its territories are
rated on the same basis as domestic corporate and municipal issues. The ratings
measure the creditworthiness of the obligor but do not take into account
currency exchange and related uncertainties.
If an issuer's actual or implied senior debt rating is 'AAA', its subordinated
or junior debt is rated 'AAA' or 'AA+'. If an issuer's actual or implied senior
debt rating is lower than 'AAA' but higher than 'BB+', its junior debt is
typically rated one designation lower than the senior debt ratings. For example,
if the senior debt rating is 'A', subordinated debt normally would be rated
'A-'. If an issuer's actual or implied senior debt rating is 'BB+' or lower, its
subordinated debt is typically rated two designations lower than the senior debt
rating.
NOTE: The term "investment grade" was originally used by various regulatory
bodies to connote obligations eligible for investment by institutions such as
banks, insurance companies, and savings and loan associations. Over time, this
term gained widespread usage throughout the investment community. Issues rated
in the four highest categories, 'AAA', 'AA', 'A', 'BBB', generally are
recognized as being investment grade. Debt 'BB' or below generally is referred
to as speculative grade. The term "junk bond" is merely a more irreverent
expression for this category of more risky debt. Neither term indicates which
securities S&P deems worthy of investment, as an investor with a particular risk
preference may appropriately invest in securities that are not investment grade.
FITCH INVESTOR SERVICES INC. RATINGS DEFINITIONS
LONG-TERM
AAA
Bonds rated AAA are judged to be strictly high grade, broadly marketable,
suitable for investment by trustees and fiduciary institutions liable to
slight market fluctuation other than through changes in the money rate. The
prime feature of an AAA bond is a showing of earnings several times or many
times greater than interest requirements, with such stability of applicable
earnings that safety is beyond reasonable question whatever changes occur
in conditions.
AA
Bonds rated AA are judged to be of safety virtually beyond question and are
readily salable, whose merits are not unlike those of the AAA class, but
whose margin of safety is less strikingly broad. The issue may be the
obligation of a small company, strongly secured but influenced as to rating
by the lesser financial power of the enterprise and more local type market.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of satisfactory
credit quality. The obligor's ability to pay interest and repay principal
is considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the ratings
of these bonds will fall below investment grade is higher than for bonds
with higher ratings.
A-5
<PAGE>
BB
Bonds rated BB are considered speculative. The obligor's ability to pay
interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified
which could assist the obligor in satisfying its debt service requirements.
B
Bonds rated B are considered highly speculative. While bonds in this class
are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds have certain identifiable characteristics which, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.
CC
Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C
Bonds are in imminent default in payment of interest or principal.
DDD
DD
D
Bonds are in default on interest and/or principal payments. Such bonds are
extremely speculative and should be valued on the basis of their ultimate
recovery value in liquidation or reorganization of the obligor. 'DDD'
represents the lowest potential for recovery on these bonds, and 'D'
represents the lowest potential for recovery.
PLUS (+) MINUS (-) Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the 'AAA', 'DDD', 'DD', or 'D' categories.
DUFF AND PHELPS, INC. RATINGS DEFINITIONS
AAA
Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA+
AA-
High credit quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions.
A+
A-
Protection factors are average but adequate. However, risk factors are more
variable and greater in periods of economic stress.
BBB+
BBB-
Below average protection factors but still considered sufficient for
prudent investment. Considerable variability in risk during economic
cycles.
BB+
BB
BB-
Below investment grade but deemed likely to meet obligations when due.
Present or prospective financial protection factors fluctuate according to
industry conditions or company fortunes. Overall quality may move up or
down frequently within this category.
B+
B
B-
Below investment grade and possessing risk that obligations will not be met
when due. Financial protection factors will fluctuate widely according to
economic cycles, industry conditions and/or company fortunes. Potential
exists for frequent changes in the rating within this category or into a
higher or lower rating grade.
A-6
<PAGE>
CCC
Well below investment grade securities. Considerable uncertainty exists as
to timely payment of principal, interest or preferred dividends. Protection
factors are narrow and risk can be substantial with unfavorable economic/
industry conditions, and/or with unfavorable company developments.
DD
Defaulted debt obligations. Issuer failed to meet scheduled principal
and/or interest payments.
DP
Preferred stock with dividend arrearages.
IBCA LIMITED RATINGS DEFINITIONS
AAA
Obligations rated AAA have the lowest expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial,
such that adverse changes in business, economic or financial conditions are
unlikely to increase investment risk significantly.
AA
Obligations for which there is a very low expectation of investment risk
are rated AA. Capacity for timely repayment of principal and interest is
substantial. Adverse changes in business, economic or financial conditions
may increase investment risk albeit not very significantly.
A
Bonds rated A are obligations for which there is a low expectation of
investment risk. Capacity for timely repayment of principal and interest is
strong, although adverse changes in business, economic or financial
conditions may lead to increased investment risk.
BBB
Bonds rated BBB are obligations for which there is currently a low
expectation of investment risk. Capacity for timely repayment of principal
and interest is adequate, although adverse changes in business, economic or
financial conditions are more likely to lead to increased investment risk
than for obligations in other categories.
BB
Bonds rated BB are obligations for which there is a possibility of
investment risk developing. Capacity for timely repayment of principal and
interest exists, but is susceptible over time to adverse changes in
business, economic or financial conditions. Bonds rated B are obligations
for which investment risk exists. Timely repayment of principal and
interest is not sufficiently protected against adverse changes in business,
economic or financial conditions.
B
Obligations for which investment risk exists. Timely repayment of principal
and interest is not sufficiently protected against adverse changes in
business, economic or financial conditions.
CCC
Obligations for which there is a current perceived possibility of default.
Timely repayment of principal and interest is dependent on favorable
business, economic or financial conditions.
CC
Obligations which are highly speculative or which have a high risk of
default.
C
Obligations which are currently in default.
NOTES: "+" or "-" may be appended to a rating to denote relative status within
major rating categories.
Ratings of BB and below are assigned where it is considered that
speculative characteristics are present.
A-7
<PAGE>
THOMSON BANKWATCH RATINGS DEFINITIONS
AAA
Bonds rated AAA indicate that the ability to repay principal and interest
on a timely basis is very high.
AA
Bonds rated AA indicate a superior ability to repay principal and interest
on a timely basis, with limited incremental risk compared to issues rated
in the highest category.
A
Bonds rated A indicate the ability to repay principal and interest is
strong. Issues rated A could be more vulnerable to adverse developments
(both internal and external) than obligations with higher ratings.
BBB
Bonds rated BBB indicate an acceptable capacity to repay principal and
interest. Issues rated BBB are, however, more vulnerable to adverse
developments (both internal and external) than obligations with higher
ratings.
BB
While not investment grade, the BB rating suggests that the likelihood of
default is considerably less than for lower-rated issues. However, there
are significant uncertainties that could affect the ability to adequately
service debt obligations.
B
Issues rated B show a higher degree of uncertainty and therefore greater
likelihood of default than higher-rated issues. Adverse developments could
well negatively affect the payment of interest and principal on a timely
basis.
CCC
Issues rated "CCC" clearly have a high likelihood of default, with little
capacity to address further adverse changes in financial circumstances.
CC
"CC" is applied to issues that are subordinate to other obligations rated
"CCC" and are afforded less protection in the event of bankruptcy or
reorganization.
D
Default
Ratings in the Long-Term Debt categories may include a plus (+) or minus (-)
designation, which indicates where within the respective category the issue is
placed.
A-8
<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
Risk Factors..................................... 7
Investment Limitations........................... 9
The Manager...................................... 10
The Adviser...................................... 10
The Sub-Advisers................................. 11
Distribution and Shareholder Servicing........... 13
Purchase and Redemption of Shares................ 14
Performance...................................... 16
Taxes............................................ 17
General Information.............................. 19
Description of Permitted Investments and Risk
Factors......................................... 20
Appendix......................................... A-1
</TABLE>
<PAGE>
SEI INSTITUTIONAL MANAGED TRUST
JANUARY 31, 1997
- --------------------------------------------------------------------------------
LARGE CAP VALUE PORTFOLIO
LARGE CAP GROWTH PORTFOLIO
SMALL CAP VALUE PORTFOLIO
SMALL CAP GROWTH PORTFOLIO
MID-CAP PORTFOLIO
CAPITAL APPRECIATION PORTFOLIO
EQUITY INCOME PORTFOLIO
BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
This Prospectus sets forth concisely information about the above-referenced
portfolios. Please read this Prospectus carefully before investing, and keep it
on file for future reference.
A Statement of Additional Information dated January 31, 1997, has been filed
with the Securities and Exchange Commission and is available upon request and
without charge by writing the Distributor, SEI Financial Services Company, Oaks,
Pennsylvania 19456, or by calling 1-800-342-5734. The Statement of Additional
Information is incorporated into this Prospectus by reference.
SEI Institutional Managed Trust (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. A portfolio may offer separate classes of shares that
differ from each other primarily in the allocation of certain distribution
expenses, sales charges and minimum investment amounts. This Prospectus offers
the Class A shares of one balanced (fixed income and equity) and seven equity
portfolios (each a "Portfolio" and, together, the "Portfolios") listed above.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP SMALL CAP SMALL CAP CAPITAL EQUITY
VALUE GROWTH VALUE GROWTH MID-CAP APPRECIATION INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fee/Advisory Fees (AFTER
FEE WAIVER) 0.70% 0.70%(1) 1.00% 1.00% 0.75% 0.70%(1) 0.70%(1)
12b-1 Fees None None None None None None None
Total Other Expenses (AFTER
REIMBURSEMENTS) 0.15% 0.15% 0.10% 0.10% 0.25% 0.14% 0.15%
Shareholder Servicing Fees (AFTER
FEE WAIVER) (2) 0.08% 0.10% 0.03% 0.03% 0.12% 0.05% 0.07%
- ----------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (AFTER FEE
WAIVERS) (3) 0.85% 0.85% 1.10% 1.10% 1.00% 0.84% 0.85%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) CLASS A
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED
PORTFOLIO
---------
<S> <C>
Management Fee/Advisory Fees (AFTER FEE WAIVER) 0.62%(1)
12b-1 Fees (AFTER REIMBURSEMENTS) None
Total Other Expenses (AFTER REIMBURSEMENTS) 0.13%
Shareholder Servicing Fees (AFTER FEE WAIVER) (2) 0.00%
- ---------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (AFTER FEE WAIVERS) (3) 0.75%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) SEI FINANCIAL MANAGEMENT CORPORATION ("SFM") AND CERTAIN OF THE SUB-ADVISERS
(COLLECTIVELY, "ADVISERS") HAVE AGREED TO WAIVE ON A VOLUNTARY BASIS, A
PORTION OF THEIR FEES, AND THE MANAGEMENT/ADVISORY FEES SHOWN REFLECT THESE
VOLUNTARY WAIVERS. SUCH FEE WAIVERS ARE VOLUNTARY AND MAY BE TERMINATED AT
ANY TIME IN THE SOLE DISCRETION OF EACH ENTITY THAT HAS AGREED TO WAIVE A
PORTION OF ITS FEE. ABSENT SUCH FEE WAIVERS, MANAGEMENT/ADVISORY FEES WOULD
BE: LARGE CAP GROWTH PORTFOLIO, .75%; CAPITAL APPRECIATION PORTFOLIO, .75%;
EQUITY INCOME PORTFOLIO, .75%; AND BALANCED PORTFOLIO, .75%. MANAGEMENT/
ADVISORY FEES FOR THE MID-CAP PORTFOLIO ARE RESTATED TO REFLECT THE
ELIMINATION OF FEE WAIVERS.
(2) THE DISTRIBUTOR HAS WAIVED, ON A VOLUNTARY BASIS, ALL OR A PORTION OF ITS
SHAREHOLDER SERVICING FEE, AND THE SHAREHOLDER SERVICING FEES 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
FEES WOULD BE .25% FOR EACH PORTFOLIO.
(3) ABSENT THESE FEE WAIVERS, TOTAL OPERATING EXPENSES FOR THE CLASS A SHARES OF
THE PORTFOLIOS WOULD BE: LARGE CAP VALUE PORTFOLIO, 1.02%; LARGE CAP GROWTH
PORTFOLIO, 1.05%; SMALL CAP VALUE PORTFOLIO, 1.32%; SMALL CAP GROWTH
PORTFOLIO, 1.32%; MID-CAP PORTFOLIO, 1.13%; CAPITAL APPRECIATION PORTFOLIO,
1.09%; EQUITY INCOME PORTFOLIO, 1.08%; AND BALANCED PORTFOLIO, 1.13%.
ADDITIONAL INFORMATION MAY BE FOUND UNDER "THE ADVISER," "THE SUB-ADVISERS"
AND "THE MANAGER."
EXAMPLE CLASS A
- --------------------------------------------------------------------------------
<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:
Large Cap Value Portfolio $ 9 $ 27 $ 47 $ 105
Large Cap Growth Portfolio $ 9 $ 27 $ 47 $ 105
Small Cap Value Portfolio $ 11 $ 35 $ 61 $ 134
Small Cap Growth Portfolio $ 11 $ 35 $ 61 $ 134
Mid-Cap Portfolio $ 10 $ 32 $ 55 $ 122
Capital Appreciation Portfolio $ 9 $ 27 $ 47 $ 104
Equity Income Portfolio $ 9 $ 27 $ 47 $ 105
Balanced Portfolio $ 8 $ 24 $ 42 $ 93
- -----------------------------------------------------------------------------------------------------------------------------------
</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 SMALL CAP GROWTH
PORTFOLIO ALSO OFFERS CLASS D SHARES, WHICH ARE SUBJECT TO THE SAME EXPENSES,
EXCEPT THAT CLASS D SHARES BEAR DIFFERENT DISTRIBUTION COSTS, ADDITIONAL
TRANSFER AGENT COSTS AND SALES CHARGES. 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," "THE
SUB-ADVISERS" AND "DISTRIBUTION AND SHAREHOLDER SERVICING."
2
<PAGE>
FINANCIAL HIGHLIGHTS
______________________________________________________________
The following information has been audited by Price Waterhouse LLP, the Trust's
independent accountants, as indicated in their report dated November 22, 1996 on
the Trust's financial statements as of September 30, 1996 included in the
Trust's Statement of Additional Information under "Financial Statements."
Additional performance information is set forth in the 1996 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 A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET ASSET NET NET REALIZED AND DIVIDENDS
VALUE INVESTMENT UNREALIZED FROM NET DISTRIBUTIONS NET ASSET
BEGINNING INCOME GAINS (LOSSES) INVESTMENT FROM REALIZED VALUE END TOTAL
OF PERIOD (LOSS) ON SECURITIES INCOME CAPITAL GAINS OF PERIOD RETURN
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------
LARGE CAP VALUE PORTFOLIO
- -------------------------
CLASS A
1996 $ 13.00 $ 0.32 $ 2.01 $(0.26) $(0.29) $ 14.78 18.33%
1995 10.71 0.33 2.44 (0.33) (0.15) 13.00 26.83%
1994 11.54 0.28 (0.46) (0.27) (0.38) 10.71 (1.64)%
1993 12.49 0.31 0.22 (0.33) (1.15) 11.54 4.35%
1992 12.05 0.34 0.71 (0.33) (0.28) 12.49 9.17%
1991 9.30 0.35 2.92 (0.35) (0.17) 12.05 35.95%
1990 11.75 0.33 (2.16) (0.38) (0.24) 9.30 (16.42)%
1989 9.45 0.33 2.24 (0.27) -- 11.75 (27.58)%
1988 10.99 0.30 (1.52) (0.31) (0.01) 9.45 (10.88)%
1987(1) 10.00 0.12 0.96 (0.09) -- 10.99 24.28%
- -------------------------
LARGE CAP GROWTH
PORTFOLIO
- -------------------------
1996 $ 12.75 $ 0.07 $ 2.51 $(0.08) $(0.22) $ 15.03 20.59%
1995(2) 10.00 0.11 2.72 (0.08) -- 12.75 37.90%
- -------------------------
SMALL CAP VALUE PORTFOLIO
- -------------------------
1996 $ 12.19 $ 0.02 $ 1.27 $(0.01) $(0.30) $ 13.17 10.86%
1995(3) 10.00 0.03 2.19 (0.03) -- 12.19 29.38%
- -------------------------
SMALL CAP GROWTH
PORTFOLIO
- -------------------------
CLASS A
1996 $ 19.88 $(0.08) $ 4.37 $-- $(3.66) $ 20.51 26.56%
1995 14.04 (0.14) 5.98 -- -- 19.88 41.65%
1994 14.67 (0.05) 0.07 -- (0.65) 14.04 0.23%
1993 10.65 (0.02) 4.05 (0.01) -- 14.67 37.81%
1992(4) 10.00 0.02 0.65 (0.02) -- 10.65 15.07%
- ------------------
MID-CAP PORTFOLIO
- ------------------
CLASS A
1996 $ 13.04 $ 0.18 $ 1.89 $(0.15) $-- $ 14.96 16.03%
1995 10.89 0.01 2.14 -- -- 13.04 19.78%
1994 12.10 0.01 (0.98) (0.01) (0.23) 10.89 (8.10)%
1993(5) 10.00 0.01 2.10 (0.01) -- 12.10 34.06%
<CAPTION>
FOR A CLASS A SHARE OUTST
RATIO OF NET
INVESTMENT
RATIO OF NET RATIO OF INCOME
INVESTMENT EXPENSE (LOSS)
RATIO OF INCOME TO AVERAGE TO AVERAGE
NET ASSETS EXPENSES (LOSS) TO NET ASSETS NET ASSETS PORTFOLIO AVERAGE
END OF TO AVERAGE AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION
PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE+
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------
- -------------------------
LARGE CAP VALUE PORTFOLIO
- -------------------------
CLASS A
1996 $ 515,011 0.83% 2.31% 0.83% 2.31% 75% $ 0.0531
1995 331,692 0.76% 2.92% 0.82% 2.86% 99% N/A
1994 133,178 0.75% 2.51% 0.75% 2.51% 67% N/A
1993 205,157 0.75% 2.64% 0.76% 2.63% 96% N/A
1992 242,065 0.75% 2.79% 0.80% 2.74% 17% N/A
1991 187,876 0.75% 3.11% 0.83% 3.03% 25% N/A
1990 119,763 0.75% 3.05% 0.98% 2.82% 28% N/A
1989 111,810 0.76% 3.31% 1.26% 2.81% 29% N/A
1988 44,841 0.75% 3.37% 1.33% 2.79% 44% N/A
1987(1) 39,234 0.74% 2.82% 1.14% 2.42% 7% N/A
- -------------------------
LARGE CAP GROWTH
PORTFOLIO
- -------------------------
1996 $ 482,079 0.82% 0.50% 0.87% 0.45% 90% $ 0.0602
1995(2) 297,377 0.85% 1.15% 0.89% 1.11% 44% N/A
- -------------------------
SMALL CAP VALUE PORTFOLIO
- -------------------------
1996 $ 163,177 1.11% 0.15% 1.11% 0.15% 121% $ 0.0507
1995(3) 102,975 1.10% 0.26% 1.12% 0.24% 64% N/A
- -------------------------
SMALL CAP GROWTH
PORTFOLIO
- -------------------------
CLASS A
1996 $ 380,525 1.10% (0.63)% 1.11% (0.64)% 167% $ 0.0529
1995 310,238 1.10% (0.60)% 1.13% (0.63)% 113% N/A
1994 300,296 1.01% (0.51)% 1.11% (0.61)% 97% N/A
1993 193,816 0.97% (0.25)% 1.14% (0.42)% 85% N/A
1992(4) 36,191 0.97% 0.49% 1.29% 0.17% 33% N/A
- ------------------
MID-CAP PORTFOLIO
- ------------------
CLASS A
1996 $ 24,954 0.77% 1.28% 0.88% 1.17% 101% $ 0.0124
1995 27,898 0.94% 0.04% 1.09% (0.11)% 108% N/A
1994 108,002 0.93% 0.03% 1.06% (0.10)% 89% N/A
1993(5) 57,669 0.90% 0.26% 1.12% 0.04% 87% N/A
</TABLE>
3
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED) _______________________________________________
<TABLE>
<CAPTION>
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET ASSET NET NET REALIZED AND DIVIDENDS
VALUE INVESTMENT UNREALIZED FROM NET DISTRIBUTIONS NET ASSET
BEGINNING INCOME GAINS (LOSSES) INVESTMENT FROM REALIZED VALUE END TOTAL
OF PERIOD (LOSS) ON SECURITIES INCOME CAPITAL GAINS OF PERIOD RETURN
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------
CAPITAL APPRECIATION
PORTFOLIO
- -------------------------
CLASS A
1996 $ 16.70 $ 0.20 $ 3.18 $(0.17) $(1.77) $ 18.14 22.14%
1995 15.18 0.22 2.42 (0.23) (0.89) 16.70 19.03%
1994 16.36 0.24 (0.22) (0.25) (0.95) 15.18 (0.11)%
1993 15.09 0.32 1.68 (0.30) (0.43) 16.36 13.50%
1992 14.15 0.30 1.23 (0.30) (0.29) 15.09 11.03%
1991 11.21 0.41 3.06 (0.40) (0.13) 14.15 31.69%
1990 13.29 0.35 (1.01) (0.39) (1.03) 11.21 (5.75)%
1989 10.06 0.31 3.34 (0.28) (0.14) 13.29 37.43%
1988(6) 10.00 0.16 0.03 (0.13) -- 10.06 3.34%
- ------------------------
EQUITY INCOME PORTFOLIO
- ------------------------
CLASS A
1996 $ 16.07 $ 0.49 $ 2.20 $(0.41) $(1.95) $ 16.40 18.17%
1995 14.06 0.55 2.48 (0.55) (0.47) 16.07 23.00%
1994 15.00 0.51 (0.38) (0.50) (0.57) 14.06 1.05%
1993 13.33 0.51 1.75 (0.51) (0.08) 15.00 17.34%
1992 12.36 0.52 1.05 (0.52) (0.08) 13.33 13.03%
1991 10.09 0.57 2.54 (0.60) (0.24) 12.36 32.05%
1990 12.82 0.62 (2.41) (0.66) (0.28) 10.09 (15.02)%
1989 10.37 0.49 2.40 (0.42) (0.02) 12.82 28.53%
1988(7) 10.00 0.10 0.34 (0.07) -- 10.37 13.49%
- -------------------
BALANCED PORTFOLIO
- -------------------
CLASS A
1996 $ 12.76 $ 0.42 $ 1.44 $(0.34) $(0.34) $ 13.94 15.01%
1995 11.52 0.34 1.34 (0.34) (0.10) 12.76 15.05%
1994 12.24 0.23 (0.62) (0.22) (0.11) 11.52 (3.25)%
1993 11.35 0.25 1.29 (0.26) (0.39) 12.24 14.49%
1992 10.70 0.52 0.73 (0.53) (0.07) 11.35 11.64%
1991 9.77 0.65 0.96 (0.68) -- 10.70 15.96%
1990(8) 10.00 0.07 (0.30) -- -- 9.77 (15.56)%
<CAPTION>
FOR A CLASS A SHARE OUTST
RATIO OF NET
INVESTMENT
RATIO OF NET RATIO OF INCOME
INVESTMENT EXPENSE (LOSS)
RATIO OF INCOME TO AVERAGE TO AVERAGE
NET ASSETS EXPENSES (LOSS) TO NET ASSETS NET ASSETS PORTFOLIO AVERAGE
END OF TO AVERAGE AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION
PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE+
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------
- -------------------------
CAPITAL APPRECIATION
PORTFOLIO
- -------------------------
CLASS A
1996 $ 236,581 0.84% 1.20% 0.86% 1.18% 153% $ 0.0517
1995 310,693 0.84% 1.39% 0.89% 1.34% 107% N/A
1994 729,100 0.79% 1.45% 0.84% 1.40% 109% N/A
1993 776,745 0.75% 2.06% 0.84% 1.97% 119% N/A
1992 536,028 0.75% 2.12% 0.88% 1.99% 84% N/A
1991 248,440 0.75% 3.10% 0.94% 2.91% 83% N/A
1990 47,250 0.75% 2.95% 1.04% 2.66% 96% N/A
1989 47,250 0.76% 2.98% 1.50% 2.24% 122% N/A
1988(6) 17,848 0.76% 3.17% 1.14% 2.79% 87% N/A
- ------------------------
EQUITY INCOME PORTFOLIO
- ------------------------
CLASS A
1996 $ 202,823 0.83% 3.00% 0.86% 2.97% 43% $ 0.0429
1995 250,609 0.82% 3.72% 0.88% 3.66% 47% N/A
1994 418,207 0.78% 3.68% 0.84% 3.62% 28% N/A
1993 337,939 0.75% 3.73% 0.85% 3.63% 39% N/A
1992 178,756 0.75% 4.15% 0.87% 4.03% 18% N/A
1991 93,552 0.75% 4.99% 0.86% 4.88% 42% N/A
1990 54,193 0.75% 5.63% 1.02% 5.36% 33% N/A
1989 30,865 0.76% 5.03% 2.62% 3.17% 11% N/A
1988(7) 2,910 1.04% 4.74% 1.18% 4.60% 5% N/A
- -------------------
BALANCED PORTFOLIO
- -------------------
CLASS A
1996 $ 57,915 0.75% 2.98% 0.84% 2.89% 143% $ 0.0382
1995 70,464 0.75% 2.92% 0.90% 2.77% 159% N/A
1994 65,480 0.75% 2.05% 0.91% 1.89% 149% N/A
1993 33,807 0.75% 2.24% 0.94% 2.05% 109% N/A
1992 5,974 0.75% 4.83% 1.12% 4.46% 101% N/A
1991 2,174 0.75% 5.68% 2.54% 3.89% 19% N/A
1990(8) 459 0.76% 5.66% 3.23% 3.19% 0% N/A
</TABLE>
(1) LARGE CAP VALUE CLASS A SHARES WERE OFFERED BEGINNING APRIL 20, 1987. ALL
RATIOS INCLUDING TOTAL RETURN FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(2) LARGE CAP GROWTH CLASS A SHARES WERE OFFERED BEGINNING DECEMBER 20, 1994.
ALL RATIOS INCLUDING TOTAL RETURN FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(3) SMALL CAP VALUE CLASS A SHARES WERE OFFERED BEGINNING DECEMBER 20, 1994.
ALL RATIOS INCLUDING TOTAL RETURN FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(4) SMALL CAP GROWTH CLASS A SHARES WERE OFFERED BEGINNING APRIL 20, 1992. ALL
RATIOS INCLUDING TOTAL RETURN FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(5) MID-CAP CLASS A SHARES WERE OFFERED BEGINNING FEBRUARY 16, 1993. ALL RATIOS
INCLUDING TOTAL RETURN FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(6) CAPITAL APPRECIATION CLASS A SHARES WERE OFFERED BEGINNING MARCH 1, 1988.
ALL RATIOS INCLUDING TOTAL RETURN FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(7) EQUITY INCOME CLASS A SHARES WERE OFFERED BEGINNING JUNE 2, 1988. ALL
RATIOS INCLUDING TOTAL RETURN FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(8) BALANCED CLASS A SHARES WERE OFFERED BEGINNING SEPTEMBER 6, 1992. ALL
RATIOS INCLUDING TOTAL RETURN FOR THAT PERIOD HAVE BEEN ANNUALIZED.
+ AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES
DURING THE PERIOD. PRESENTATION OF THE RATE IS REQUIRED FOR FISCAL YEARS
BEGINNING AFTER SEPTEMBER 1, 1995.
4
<PAGE>
THE TRUST
__________________________________________________________________________
SEI INSTITUTIONAL MANAGED TRUST (the "Trust") is an open-end investment
management company that offers units of beneficial interest ("shares") in
separate diversified and non-diversified portfolios. The Small Cap Growth
Portfolio has two separate classes of shares, Class A and Class D, which provide
for variations in distribution and transfer agent costs, sales charges, voting
rights and dividends. This prospectus offers Class A shares of the Trust's Large
Cap Value, Large Cap Growth, Small Cap Value, Small Cap Growth, Mid-Cap, Capital
Appreciation, Equity Income and Balanced Portfolios (each a "Portfolio" and,
together, the "Portfolios"). The investment adviser and investment sub-advisers
to the Portfolios are referred to collectively as the "advisers." Additional
information pertaining to the Trust may be obtained by writing SEI Financial
Services Company, Oaks, Pennsylvania 19456, or by calling 1-800-342-5734.
INVESTMENT OBJECTIVES
AND POLICIES
___________________________________________________________________________
LARGE CAP VALUE PORTFOLIO
The investment objective of the Large Cap Value Portfolio
is long-term growth of capital and income. There can be no
assurance that the Portfolio will achieve its investment
objective.
Under normal market conditions, the Portfolio will
invest at least 65% of its total assets in a diversified
portfolio of high quality, income producing common stocks
of large companies (i.e., companies with market
capitalizations of more than $1 billion) which, in the
opinion of the advisers, are undervalued in the marketplace
at the time of purchase. In general, the advisers
characterize high quality securities as those that have
above-average reinvestment rates. The advisers also
consider other factors, such as earnings and dividend
growth prospects, as well as industry outlook and market
share. Any remaining assets may be invested in other equity
securities and in investment grade fixed income securities.
Investment grade fixed income securities are securities
that are rated at least BBB by Standard & Poor's
Corporation ("S&P") or Baa by Moody's Investors Service,
Inc. ("Moody's").
The Portfolio's investment adviser is SEI Financial
Management Corporation, and its investment sub-advisers are
LSV Asset Management, Mellon Equity Associates and Pacific
Alliance Capital Management.
LARGE CAP GROWTH PORTFOLIO
The investment objective of the Large Cap Growth Portfolio
is capital appreciation. There can be no assurance that the
Portfolio will achieve its investment objective.
Under normal market conditions, the Portfolio will
invest at least 65% of its total assets in equity
securities of large companies (i.e., companies with market
capitalizations of more than $1 billion) which, in the
opinion of the advisers, possess significant growth
potential. Any remaining assets may be invested in
investment grade fixed income securities or in equity
securities of smaller companies that the Portfolio's
advisers believe are appropriate in light of the
Portfolio's objective.
5
<PAGE>
The Portfolio's investment adviser is SEI Financial
Management Corporation, and its investment sub-advisers are
Alliance Capital Management L.P., IDS Advisory Group Inc.
and Provident Investment Counsel, Inc.
SMALL CAP VALUE PORTFOLIO
The investment objective of the Small Cap Value Portfolio
is capital appreciation. There can be no assurance that the
Portfolio will achieve its investment objective.
Under normal market conditions, the Portfolio will
invest at least 65% of its total assets in the equity
securities of smaller companies (i.e., companies with
market capitalizations of less than $1 billion) which, in
the opinion of the advisers, have prices that appear low
relative to certain fundamental characteristics such as
earnings, book value, or return on equity. Any remaining
assets may be invested in investment grade fixed income
securities or equity securities of larger, more established
companies that the Portfolio's advisers believe are
appropriate in light of the Portfolio's objective.
The Portfolio's annual turnover rate may exceed 100%.
Such a turnover rate may result in higher transaction costs
and in additional taxes for shareholders. See "Taxes."
The Portfolio's investment adviser is SEI Financial
Management Corporation, and its investment sub-advisers are
1838 Investment Advisors, L.P. and Boston Partners Asset
Management, L.P.
SMALL CAP GROWTH PORTFOLIO
The investment objective of the Small Cap Growth Portfolio
is long-term capital appreciation. There can be no
assurance that the Portfolio will achieve its investment
objective.
Under normal market conditions, the Portfolio will
invest at least 65% of its total assets in the equity
securities of smaller growth companies (i.e., companies
with market capitalizations less than $1 billion) which, in
the opinion of the advisers, are in an early stage or
transitional point in their development and have
demonstrated or have the potential for above average
capital growth. The advisers will select companies that
have the potential to gain market share in their industry,
achieve and maintain high and consistent profitability or
produce increases in earnings. The advisers also seek
companies with strong company management and superior
fundamental strength. Small capitalization companies have
the potential to show earnings growth over time that is
well above the growth rate of the overall economy. Any
remaining assets may be invested in the equity securities
of more established companies that the advisers believe may
offer strong capital appreciation potential due to their
relative market position, anticipated earnings growth,
changes in management or other similar opportunities.
For temporary defensive purposes, the Portfolio may
invest all or a portion of its assets in common stocks of
larger, more established companies and in investment grade
fixed income securities.
The Portfolio's annual turnover rate may exceed 100%.
Such a turnover rate may result in higher transaction costs
and in additional taxes for shareholders. See "Taxes."
6
<PAGE>
The Portfolio's investment adviser is SEI Financial
Management Corporation, and its investment sub-advisers are
Nicholas-Applegate Capital Management, Inc., First of
America Investment Corporation, Furman Selz Capital
Management LLC, and Wall Street Associates.
MID-CAP PORTFOLIO
The investment objective of the Mid-Cap Portfolio is
long-term capital appreciation. There can be no assurance
that the Portfolio will achieve its investment objective.
Under normal market conditions, the Portfolio will
invest at least 65% of its total assets in equity
securities of medium-sized companies (i.e., companies with
market capitalizations of $500 million to $5 billion). Such
companies are typically well established but have not
reached full maturity, and may offer significant growth
potential. The advisers will seek to identify companies
which, in their opinion, will experience accelerating
earnings, increased institutional ownership or strong price
appreciation relative to their industries and broad market
averages.
Any remaining assets may be invested in equity
securities of larger, more established companies,
investment grade fixed income securities or money market
securities. For temporary defensive purposes, when the
advisers determine that market conditions warrant, the
Portfolio may invest all or a portion of its assets in
equity securities of larger companies.
The Portfolio's annual turnover rate may exceed 100%.
Such a turnover rate may result in higher transaction costs
and in additional taxes for shareholders. See "Taxes."
The Portfolio's investment adviser is SEI Financial
Management Corporation, and its investment sub-adviser is
Martingale Asset Management, L.P.
CAPITAL APPRECIATION PORTFOLIO
The investment objective of the Capital Appreciation
Portfolio is capital appreciation. There can be no
assurance that the Portfolio will achieve its investment
objective.
Under normal market conditions, at least 65% of the
Portfolio's assets will be invested in a diversified
portfolio of common stocks (and securities convertible into
common stock) which, in the opinion of the advisers, are
undervalued in the marketplace at the time of purchase.
Dividend income is an incidental consideration compared to
growth of capital. In selecting securities for the
Portfolio, the advisers will evaluate factors they believe
are likely to affect long-term capital appreciation such as
the issuer's background, industry position, historical
returns on equity and experience and qualifications of the
management team. The advisers will rotate the Portfolio
holdings between various market sectors based on economic
analysis of the overall business cycle. Any remaining
assets may be invested in investment grade fixed income
securities and other types of equity securities.
The Portfolio's annual turnover rate may exceed 100%.
Such a turnover rate may result in higher transaction costs
and in additional taxes for shareholders. See "Taxes."
The Portfolio's investment adviser is SEI Financial
Management Corporation, and its investment sub-adviser is
STI Capital Management, N.A.
7
<PAGE>
EQUITY INCOME PORTFOLIO
The investment objective of the Equity Income Portfolio is
to provide current income and, as a secondary objective,
moderate capital appreciation. There can be no assurance
that the Portfolio will achieve its investment objectives.
Under normal market conditions, at least 65% of the
Portfolio's assets will be invested in a diversified
portfolio of common stocks. The investment approach
employed by the advisers emphasizes income-producing common
stocks which, in general, have above-average dividend
yields relative to the stock market as measured by the
Standard and Poor's 500 Index. Any remaining assets may be
invested in investment grade fixed income securities.
The Portfolio's investment adviser is SEI Financial
Management Corporation, and its investment sub-adviser is
Pacific Alliance Capital Management.
BALANCED PORTFOLIO
The investment objective of the Balanced Portfolio is total
return consistent with the preservation of capital. There
can be no assurance that the Portfolio will achieve its
investment objective.
The Portfolio invests in a combination of undervalued
common stocks and fixed income securities or in other
investment companies that invest in such securities. The
Portfolio seeks strong total return in all market
conditions, with a special emphasis on minimizing interim
declines during falling equity markets. The Portfolio
primarily invests in large capitalization equity
securities, intermediate-maturity fixed income securities
and money market instruments.
The average maturity of the fixed income securities
in the Portfolio will, under normal circumstances, be
approximately five years, although this will vary with
changing market conditions.
The Portfolio's investment adviser is SEI Financial
Management Corporation, and its investment sub-adviser is
STI Capital Management, N.A.
GENERAL INVESTMENT
POLICIES
___________________________________________________________________________
BORROWING
Each Portfolio may borrow money to meet redemptions for
temporary, emergency purposes. Interest paid on such
borrowings will reduce a Portfolio's income. A Portfolio
will not purchase securities while its borrowings exceed 5%
of its total assets.
EQUITY SECURITIES
Each Portfolio may purchase equity securities. Equity
securities include common stock, preferred stock, warrants
or rights to subscribe to common stock and, in general, any
security that is convertible into or exchangeable for
common stock. The Large Cap Value, Small Cap Growth,
Capital Appreciation and Equity Income Portfolios may only
invest in such securities if they are listed on registered
exchanges or actively traded in the over-the-counter
market.
8
<PAGE>
INVESTMENT COMPANY SECURITIES
Each Portfolio may purchase investment company securities,
which will result in the layering of expenses. There are
legal limits on the amount of such securities that may be
acquired by a Portfolio.
MONEY MARKET
SECURITIES
Each Portfolio may hold cash reserves and invest in money
market instruments (including securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities, repurchase agreements, certificates of
deposit and bankers' acceptances issued by banks or savings
and loan associations having net assets of at least $500
million as of the end of their most recent fiscal year,
high-grade commercial paper and other short-term debt
securities) rated at the time of purchase in the top two
categories by a nationally recognized statistical rating
organization ("NRSRO"), or, if not rated, determined by the
advisers to be of comparable quality at the time of
purchase.
OPTIONS AND FUTURES
Each Portfolio may purchase or write options, futures and
options on futures. Risks associated with investing in
options and futures may include lack of a liquid secondary
market, trading restrictions which may be imposed by an
exchange and government regulations which may restrict
trading.
SECURITIES LENDING
Each Portfolio may lend assets to qualified investors in
order to realize additional income.
TEMPORARY DEFENSIVE
INVESTMENTS
In order to meet liquidity needs, or for temporary
defensive purposes, each Portfolio may invest up to 100% of
its assets in cash and money market securities. To the
extent a Portfolio is engaged in temporary defensive
investing, the Portfolio will not be pursuing its
investment objective.
U.S. DOLLAR DENOMINATED SECURITIES OF FOREIGN ISSUERS
Each Portfolio, except the Mid-Cap Portfolio, may invest in
U.S. dollar denominated securities of foreign issuers,
including American Depositary Receipts, that are traded on
registered exchanges or listed on NASDAQ.
U.S. TREASURY RECEIPTS
The Large Cap Value, Capital Appreciation and Equity Income
Portfolios may invest in receipts involving U.S. Treasury
obligations.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES
Each Portfolio may invest in when-issued and delayed
delivery securities.
For additional information regarding the Portfolios'
permitted investments, see "Risk Factors" and "Description
of Permitted Investments and Risk Factors" in this
Prospectus and "Description of Permitted Investments" in
the Statement of Additional Information. For a description
of the above ratings, see "Description of Ratings" in the
Statement of Additional Information.
RISK FACTORS
______________________________________________________________________
EQUITY SECURITIES
Investments in equity securities in general 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.
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Fluctuations in the value of equity securities in which a
Portfolio invests will cause the net asset value of the
Portfolio to fluctuate.
Investments in small or middle capitalization
companies involve greater risk than is customarily
associated with larger, more established companies due to
the greater business risks of small size, limited markets
and financial resources, narrow product lines and the
frequent lack of depth of management. The securities of
small or medium-sized companies are often traded
over-the-counter, and may not be traded in volumes typical
of securities traded on a national securities exchange.
Consequently, the securities of smaller companies may have
limited market stability and may be subject to more abrupt
or erratic market movements than securities of larger, more
established companies or the market averages in general.
FIXED INCOME SECURITIES
The market value of a Portfolio's fixed income investments
will 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. Securities
with longer maturities are subject to greater fluctuations
in value than securities with shorter maturities. Changes
by an NRSRO 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 a Portfolio's securities will not
affect cash income derived from these securities but will
affect the Portfolio's net asset value.
Debt securities rated BBB by S&P or Baa by Moody's
lack outstanding investment characteristics, and have
speculative characteristics as well.
Securities held by a Portfolio that are guaranteed by
the U.S. Government, its agencies or instrumentalities
guarantee only the payment of principal and interest on the
guaranteed securities, and do not guarantee the securities'
yield or value or the yield or value of a Portfolio's
shares.
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.
NO PORTFOLIO MAY:
1. With respect to 75% of its assets, (i) purchase the
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
its total assets would be invested in the securities of
such issuer; or (ii) acquire more than 10% of the
outstanding voting securities of any one issuer.
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2. Purchase any securities which would cause more than 25%
of the total assets of the Portfolio to be invested in
the securities of one or more issuers conducting their
principal business activities in the same industry,
provided that this limitation does not apply to
investments in obligations issued or guaranteed by the
United States Government, its agencies or
instrumentalities.
The foregoing percentage limitations will apply at the time
of the purchase of a security. Additional fundamental and
non-fundamental investment limitations are set forth in the
Trust's 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. In addition, SEI Management
also serves as transfer agent (the "Transfer Agent") to the
Class A shares 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 .35% of the average daily net
assets of each Portfolio. SEI Management may waive all or a
portion of its fee in order to limit the operating expenses
of a Portfolio. Any such waivers are voluntary and may be
terminated at any time in SEI Management's sole discretion.
For the fiscal year ended September 30, 1996, the
Portfolios paid SEI Management the following management
fees (based on each Portfolio's average daily net assets
after fee waivers): Large Cap Value Portfolio, .35%; Large
Cap Growth, .35%; Small Cap Value, .34%; Small Cap Growth
Portfolio, .34%; Capital Appreciation Portfolio, .34%;
Equity Income Portfolio, .33%; Balanced Portfolio, .27%;
and Mid-Cap Portfolio, .24%.
THE ADVISER
_______________________________________________________________________
SEI FINANCIAL MANAGEMENT CORPORATION
SEI Financial Management Corporation ("SFM") serves as
investment adviser to each Portfolio. SFM is a wholly-owned
subsidiary of SEI Investments Company ("SEI"), a financial
services company located in Oaks, Pennsylvania. The
principal business address of SFM is Oaks, Pennsylvania
19456. SEI was founded in 1968 and is a leading provider of
investment solutions to banks, institutional investors,
investment advisers, and insurance companies. Affiliates of
SFM have provided consulting advice to institutional
investors for more than 20 years, including advice
regarding selection and evaluation of investment advisers.
SFM currently serves as manager or administrator to more
than 40 investment companies, including more than 290
portfolios, which investment companies have more than $69
billion in assets as of September 30, 1996.
SFM acts as the investment adviser to the Portfolios
and operates as a "manager of managers." As Adviser, SFM
oversees the investment advisory services provided to the
Portfolios and manages the cash portion of the Portfolios'
assets. Pursuant to separate
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<PAGE>
sub-advisory agreements with SFM, and under the supervision
of SFM and the Board of Trustees, the sub-advisers are
responsible for the day-to-day investment management of all
or a discrete portion of the assets of the Portfolios. The
sub-advisers are selected based primarily upon the research
and recommendations of SFM, which evaluates quantitatively
and qualitatively each sub-adviser's skills and investment
results in managing assets for specific asset classes,
investment styles and strategies. Subject to Board review,
SFM allocates and, when appropriate, reallocates the
Portfolios' assets among sub-advisers, monitors and
evaluates sub-adviser performance, and oversees sub-adviser
compliance with the Portfolios' investment objectives,
policies and restrictions. SFM has the ultimate
responsibility for the investment performance of the
Portfolios due to its responsibility to oversee
sub-advisers and recommend their hiring, termination and
replacement.
For these advisory services, SFM is entitled to a
fee, which is calculated daily and paid monthly, at an
annual rate of .35% of the Large Cap Value Portfolio's
average daily net assets, at an annual rate of .40% of the
Large Cap Growth, Mid-Cap, Capital Appreciation, Equity
Income and Balanced Portfolios' average daily net assets
and at an annual rate of .65% of Small Cap Value and Small
Cap Growth Portfolios' average daily net assets. SFM pays
the sub-advisers out of its investment advisory fees.
For the fiscal year ended September 30, 1996, SFM
received an advisory fee of .35% of the Large Cap Value and
Large Cap Growth Portfolios' average daily net assets, .40%
of the Mid-Cap, .39% of the Capital Appreciation, Equity
Income and Balanced Portfolios' average daily net assets
and .65% of the Small Cap Value and Small Cap Growth
Portfolios' average daily net assets.
SFM has obtained an exemptive order from the
Securities and Exchange Commission (the "SEC") that permits
SFM, with the approval of the Trust's Board of Trustees, to
retain sub-advisers unaffiliated with SFM for the
Portfolios without submitting the sub-advisory agreements
to a vote of the Portfolios' shareholders. The exemptive
relief permits the disclosure of only the aggregate amount
payable by SFM under all such sub-advisory agreements. The
Portfolios will notify shareholders in the event of any
addition or change in the identity of its sub-advisers.
THE SUB-ADVISERS
_________________________________________________________________
1838 INVESTMENT ADVISORS, L.P.
1838 Investment Advisors, L.P. ("1838") serves as
Sub-Adviser to a portion of the assets of the Small Cap
Value Portfolio. 1838 is a Delaware limited partnership
located at 100 Matsonford Road, Radnor, Pennsylvania. As of
September 30, 1996, 1838 managed $4.5 billion in assets in
large and small capitalization equity, fixed income and
balanced account portfolios. Clients include corporate
employee benefit plans, municipalities, endowments,
foundations, jointly trusteed plans, insurance companies
and wealthy individuals.
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<PAGE>
Edwin B. Powell has served as the portfolio manager
to the Small Cap Value Portfolio since its inception, and
since 1995, Cynthia R. Axelrod has also served as a
portfolio manager to the Portfolio. These individuals work
as a team and share responsibility. Mr. Powell joined 1838
in 1994. Mr. Powell managed small cap equity portfolios for
Provident Capital Management from 1987 to 1994. Prior to
joining 1838, Ms. Axelrod was with Friess Associates from
1992 to 1995. Prior to 1992, Ms. Axelrod was with Provident
Capital Management from 1987 to 1992.
SFM pays 1838 a fee based on a percentage of the
average monthly market value of the portion of the assets
of the Small Cap Value Portfolio managed by 1838.
ALLIANCE CAPITAL MANAGEMENT L.P.
Alliance Capital Management L.P. ("Alliance") serves as
Sub-Adviser to a portion of the assets of the Large Cap
Growth Portfolio. Alliance is a registered investment
adviser organized as a Delaware limited partnership which
originated as Alliance Capital Management Corporation in
1971. Alliance Capital Management Corporation, an indirect
wholly-owned subsidiary of The Equitable Life Assurance
Society of the United States, is the general partner of
Alliance. As of September 30, 1996, Alliance managed over
$174 billion in assets. The principal business address of
Alliance is 1345 Avenue of the Americas, New York, New York
10105.
The Portfolio has been managed by a committee since
its inception.
SFM pays Alliance a fee based on a percentage of the
average monthly market value of the portion of the assets
of the Large Cap Growth Portfolio managed by Alliance.
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
Boston Partners Asset Management, L.P. ("BPAM") serves as
Sub-Adviser to a portion of the assets of the Small Cap
Value Portfolio. BPAM, a Delaware limited partnership, is a
registered investment adviser with its principal offices
located at One Financial Center, 43rd Floor, Boston,
Massachusetts 02111. BPAM was founded in April, 1995, and
as of September 30, 1996, it had approximately $6.8 billion
in assets under management. BPAM's clients include
corporations, endowments, foundations, pension and profit
sharing plans, and investment companies. BPAM's general
partner is Boston Partners, Inc.
The portion of the Small Cap Value Portfolio's assets
allocated to BPAM is managed by Wayne J. Archambo, CFA. Mr.
Archambo has been employed by BPAM since its organization,
and has more than 10 years experience investing in
equities. Prior to joining BPAM, Mr. Archambo was employed
at The Boston Company Asset Management, Inc. ("TBCAM") from
1989 through April 1995. Mr. Archambo created TBCAM's small
cap value product in 1992. The following year he was named
as a member of TBCAM's Equity Strategy Committee, and in
1994, he created their mid-cap value product. Prior to
joining TBCAM in 1989, Mr. Archambo spent six years as a
fund manager/analyst for Boston-based Systematic Investors.
SFM pays BPAM a fee based on a percentage of the
average monthly market value of the portion of the assets
of the Small Cap Value Portfolio managed by BPAM.
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<PAGE>
FIRST OF AMERICA
INVESTMENT CORPORATION
First of America Investment Corporation ("First of
America") serves as Sub-Adviser to a portion of the Small
Cap Growth Portfolio. First of America is a Michigan
Corporation that is a wholly-owned subsidiary of First
America Bank -- Michigan, N.A., a national banking
association, which is in turn a wholly-owned subsidiary of
First America Bank Corporation, a registered bank holding
company. First of America is registered as an investment
adviser under the Investment Advisers Act of 1940. First of
America, together with its predecessor, has been engaged in
the investment advisory business since 1932. First of
America's principal business address is 303 North Rose
Street, Suite 500, Kalamazoo, Michigan 49007. As of
September 30, 1996, First of America had approximately
$14.3 billion in assets under management. First of
America's clients include mutual funds, trust funds, and
individually managed institutional and individual accounts.
Mr. Roger Stamper, CFA, has primary responsibility
for First of America's portion of the Small Cap Growth
Portfolio. Mr. Stamper is a Managing Director of First of
America and has been with First of America since 1988.
SFM pays First of America a fee based on a percentage
of the average monthly market value of the portion of the
assets of the Small Cap Growth Portfolio managed by First
of America.
FURMAN SELZ CAPITAL MANAGEMENT LLC
Furman Selz Capital Management LLC ("Furman Selz") serves
as Sub-Adviser to a portion of the assets of the Small Cap
Growth Portfolio. Furman Selz, a Delaware limited liability
company whose predecessor was formed in 1977, is a
registered investment adviser that managed approximately $7
billion in assets as of August 31, 1996. Furman Selz is a
wholly-owned subsidiary of Furman Selz Holdings LLC. Furman
Selz's principal business address is 230 Park Avenue, New
York, NY 10169, Matthew S. Price and David C. Campbell,
Managing Directors/Portfolio Managers of Furman Selz, are
primarily responsible for the day-to-day management and
investment decisions made with respect to the assets of the
Portfolio. Prior to joining Furman Selz, Mr. Price and Mr.
Campbell were Senior Portfolio Managers at Value Line Asset
Management.
SFM pays Furman Selz a fee based on a percentage of
the average monthly market value of the portion of the
assets of the Small Cap Growth Portfolio managed by Furman
Selz.
IDS ADVISORY GROUP INC.
IDS Advisory Group Inc. ("IDS") serves as Sub-Adviser to a
portion of the assets of the Large Cap Growth Portfolio.
IDS is a registered investment adviser and wholly-owned
subsidiary of American Express Financial Corporation. As of
August 30, 1996, IDS managed over $28 billion in assets,
with $7.1 billion of this total in large capitalization
growth domestic equities. IDS was founded in 1972 to manage
tax-exempt assets for institutional clients. The principal
business address of IDS is IDS Tower 10, Minneapolis,
Minnesota 55440.
The day-to-day management of IDS' portion of the
Large Cap Growth Portfolio's investments is the
responsibility of a committee composed of the six
investment portfolio
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<PAGE>
managers of the equity investment team. No individual
person is primarily responsible for making recommendations
to that committee. IDS has served as sub-adviser to the
Large Cap Growth Portfolio since its inception.
SFM pays IDS a fee based on a percentage of the
average monthly market value of the portion of the assets
of the Large Cap Growth Portfolio managed by IDS.
LSV ASSET MANAGEMENT
LSV Asset Management ("LSV") serves as Sub-Adviser to a
portion of the assets of the Large Cap Value Portfolio. LSV
is a registered investment adviser organized as a Delaware
general partnership in which an affiliate of SFM owns a
majority interest. The general partners of LSV have
developed quantitative value analysis methodology and
software which has been used to manage assets over the past
6 years. The portfolio identified by the model has been
implemented by a number of institutional clients with
aggregate assets invested of approximately $295 million.
The principal business address of LSV is 181 W. Madison
Avenue, Chicago, Illinois 60602.
Josef Lakonishok, Andrei Shleifer and Robert Vishny,
officers of LSV, monitor the quantitative analysis model on
a continuous basis, and make adjustments to the model based
on their ongoing research and statistical analysis.
Securities are identified for purchase or sale for the
Portfolio based upon the computer model and defined
variance tolerances. Purchases and sales are effected by
LSV based upon the output from the model.
SFM pays LSV a fee, which is calculated and paid
monthly, based on an annual rate of .20% of the average
monthly market value of the assets of the Large Cap Value
Portfolio managed by LSV. For the fiscal year ended
September 30, 1996, LSV received a sub-advisory fee of .20%
from SFM.
MARTINGALE ASSET MANAGEMENT, L.P.
Martingale Asset Management, L.P. ("Martingale") serves as
Sub-Adviser to the Mid-Cap Portfolio. Martingale is a
Delaware limited partnership with its principal address at
222 Berkeley Street, Boston, Massachusetts 02116. Commerz
Asset Management USA Corporation ("CAM") is the general
partner with a controlling interest in Martingale. CAM is
an affiliate of Commerz International Capital Management
GmbH ("CICM"), headquartered in Frankfurt, Germany. CICM is
the asset management subsidiary of Commerzbank AG.
Martingale was established in 1987, and as of September 30,
1996, had assets of approximately $470 million under
management.
The assets of the Portfolio have been managed by
William Jacques since , 1996. Mr. Jacques, Executive
Vice President and portfolio manager, has been with
Martingale since 1987.
SFM pays Martingale a fee based on a percentage of
the average monthly market value of the assets of the
Mid-Cap Portfolio managed by Martingale.
MELLON EQUITY ASSOCIATES
Mellon Equity Associates ("Mellon Equity") serves as
Sub-Adviser to a portion of the assets of the Large Cap
Value Portfolio. Mellon Equity is a Pennsylvania business
trust
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<PAGE>
founded in 1987, whose beneficial owners are Mellon Bank,
N.A. and MMIP, Inc. MMIP, Inc. is a wholly-owned subsidiary
of Mellon Bank, N.A., which itself is a wholly-owned
subsidiary of the Mellon Bank Corporation. Mellon Equity is
a professional investment counseling firm that provides
investment management services to the equity and balanced
pension, public fund and profit-sharing investment
management markets, and is an investment adviser registered
under the Investment Advisers Act of 1940. Mellon Equity
had discretionary management authority with respect to
approximately $9.9 billion of assets as of June 30, 1996.
Mellon Equity's predecessor organization had managed
domestic equity tax-exempt institutional accounts since
1947. The business address for Mellon Equity is 500 Grant
Street, Suite 3700, Pittsburgh, Pennsylvania 15258.
William P. Rydell and Robert A. Wilk have been the
Portfolio Managers for Mellon Equity's portion of the
assets of the Large Cap Value Portfolio since 1994. Mr.
Rydell is the President and Chief Executive Officer of
Mellon Equity, and has been managing individual and
collectivized portfolios at Mellon Equity since 1982. Mr.
Wilk is a Senior Vice President and Portfolio Manager of
Mellon Equity, and has been involved with securities
analysis, quantitative research, asset allocation, trading
and client services at Mellon since April, 1990.
SFM pays Mellon Equity a fee based on a percentage of
the average monthly market value of the portion of the
assets of the Large Cap Value Portfolio managed by Mellon
Equity.
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT, INC.
Nicholas-Applegate Capital Management, Inc.
("Nicholas-Applegate") serves as Sub-Adviser to a portion
of the assets of the Small Cap Growth Portfolio.
Nicholas-Applegate has operated as an investment adviser
which provides investment services to numerous clients,
including employee benefit plans, public retirement systems
and unions, university endowments, foundations, investment
companies, other institutional investors and individuals.
As of September 30, 1996, Nicholas-Applegate had
discretionary management authority with respect to
approximately $30.6 billion of assets. The principal
business address of Nicholas-Applegate is 600 West
Broadway, 29th Floor, San Diego, California 92101.
Nicholas-Applegate, pursuant to a partnership agreement, is
controlled by its general partner Nicholas-Applegate
Capital Management Holdings, L.P., a California Limited
Partnership controlled by Arthur E. Nicholas.
Nicholas-Applegate manages its portion of the Small
Cap Growth Portfolio's assets through its systematic-driven
management team under the general supervision of Mr.
Nicholas, founder and Chief Investment Officer of the firm.
Nicholas-Applegate's systems driven investment team, headed
by Lawrence S. Speidell, has been primarily responsible for
the day-to-day management of the Portfolio since March,
1994. Mr. Speidell has been a Portfolio Manager and
investment team leader with Nicholas-Applegate since March,
1994. Prior to joining Nicholas-Applegate, he was an
institutional portfolio manager with Batterymarch Financial
Management.
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SFM pays Nicholas-Applegate a fee based on a
percentage of the average monthly market value of the
portion of the assets of the Small Cap Growth Portfolio
managed by Nicholas-Applegate.
PACIFIC ALLIANCE CAPITAL MANAGEMENT
Pacific Alliance Capital Management ("Pacific") serves as
Sub-Adviser to the Equity Income Portfolio, and also serves
as Sub-Adviser to a portion of the assets of the Large Cap
Value Portfolio. Pacific is a division of Union Bank of
California, N.A., and provides equity and fixed-income
management services for corporate pension plans,
endowments, foundations, Taft-Hartley Plans, public
agencies and individuals. Union Bank of California, N.A.,
is a wholly-owned subsidiary of The Bank of
Tokyo-Mitsubishi Limited. As of September 30, 1996, Pacific
had discretionary management authority with respect to
approximately $13 billion of assets. The principal business
address of Pacific is 475 Sansome Street, San Francisco,
California 94111.
The Equity Income Portfolio has been managed by a
committee since its inception. The Large Cap Value
Portfolio has been managed by a committee since December,
1994.
SFM pays Pacific a fee based on a percentage of the
average monthly market value of the assets of the Equity
Income Portfolio, and a percentage of the average monthly
market value of the portion of the assets of the Large Cap
Value Portfolio managed by Pacific.
PROVIDENT INVESTMENT COUNSEL, INC.
Provident Investment Counsel, Inc. ("Provident") serves as
Sub-Adviser to a portion of the assets of the Large Cap
Growth Portfolio. Provident is a registered investment
adviser with its principal business address at 300 North
Lake Avenue, Pasadena, California 91101. Provident, which,
through its predecessors, has been in business since 1951,
is a wholly-owned subsidiary of United Asset Management
("UAM"), a publicly traded investment adviser holding
company. UAM is headquartered at One International Place,
Boston, Massachusetts 02110. Provident provides investment
advice to corporations, public entities, foundations, and
labor unions, as well as to other investment companies. As
of November 30, 1996, Provident had over $21.9 billion in
client assets under management.
While Provident utilizes a team approach to portfolio
management, its Managing Director, Jeffrey J. Miller, is
responsible for the day-to-day management of the portion of
the Portfolio's assets assigned to Provident. Mr. Miller
has been employed by Provident since 1972, and has 24 years
of investment experience.
SFM pays Provident a fee based on a percentage of the
average monthly market value of the portion of the assets
of the Large Cap Growth Portfolio managed by Provident.
STI CAPITAL MANAGEMENT, N.A.
STI Capital Management, N.A. ("STI") serves as Sub-Adviser
to the Capital Appreciation and Balanced Portfolios. STI
was established in 1934, and is a wholly-owned subsidiary
of Sun Trust Banks, Inc., a Fortune 500 company. As of
September 30, 1996, STI had discretionary management
authority over more than $11 billion in assets. The
principal
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business address is: STI Capital Management, P.O. Box 3786,
Orlando, Florida 32802-3786.
Anthony R. Gray is Chairman and Chief Investment
Officer for STI. Mr. Gray is responsible for corporate and
investment policy at STI and management of the Trust's
growth equity products, including the Capital Appreciation
and Balanced Portfolios. Prior to establishing STI as a
separate entity within the SunTrust organization in 1989,
Mr. Gray served as the Director of Equity Investments for
the bank's trust assets. Mr. Gray joined the SunTrust
organization in 1979, and has been in the investment
management business for 23 years.
SFM pays STI a fee based on a percentage of the
average monthly market value of the assets of the Capital
Appreciation and Balanced Portfolios.
WALL STREET ASSOCIATES
Wall Street Associates ("WSA") serves as Sub-Adviser to a
portion of the assets of the Small Cap Growth Portfolio.
WSA is organized as a corporation with its principal
business address at 1200 Prospect Street, Suite 100, La
Jolla, California 92037. WSA was founded in 1987, and as of
September 30, 1996, had approximately $1 billion in assets
under management. WSA provides investment advisory services
for institutional clients, an investment partnership for
which it serves as general partner, a group trust for which
it serves as sole investment manager, and an offshore fund
for foreign investors for which it serves as the sole
investment manager.
William Jeffery III, Kenneth F. McCain, and Richard
S. Coons, each of whom own 1/3 of WSA, serve as Portfolio
Managers for the portion of the Portfolio's assets
allocated to WSA since August, 1995. Each is a principal of
WSA and, together, they have 78 years of investment
management experience.
SFM pays WSA a fee based on a percentage of the
average monthly market value of the portion of the assets
of the Small Cap Growth Portfolio managed by WSA.
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DISTRIBUTION AND
SHAREHOLDER SERVICING
__________________________________________________________________________
SEI Financial Services Company (the "Distributor"), a
wholly-owned subsidiary of SEI serves as each Portfolio's
distributor pursuant to a distribution agreement with the
Trust. The Small Cap Growth Portfolio has adopted a
distribution plan for its Class D shares (the "Class D
Plan") pursuant to Rule 12b-1 under the Investment Company
Act of 1940 (the "1940 Act").
Each Portfolio has adopted a shareholder servicing
plan for its Class A shares (the "Service Plan") under
which a shareholder servicing fee of up to .25% of average
daily net assets attributable to Class A shares will be
paid to the Distributor. 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 in its sole
discretion, institute one or more promotional incentive
programs, which will be paid for by the Distributor from
its own resources. Under any such program, the Distributor
will provide promotional incentives, in the form of cash or
other compensation, including merchandise, airline
vouchers, trips and vacation packages, to all dealers
selling shares of the Portfolios. Such promotional
incentives will be offered uniformly to all shares of the
Portfolios, and also will be offered uniformly to all
dealers, predicated upon the amount of shares of the
Portfolios sold by such dealer.
PURCHASE AND
REDEMPTION OF SHARES
____________________________________________________________________________
Financial institutions may acquire Class A shares of the
Portfolios for their own accounts or as record owner on
behalf of fiduciary, agency or custody accounts by placing
orders with SEI Management. Institutions that use certain
SEI proprietary systems may place orders
19
<PAGE>
electronically through those systems. State securities laws
may require banks and financial institutions purchasing
shares for their customers to register as broker-dealers
pursuant to state laws. 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 SEI Management for
effectiveness the same day. Financial institutions that
purchase shares for the accounts of their customers may
impose separate charges on these customers for account
services. Shares of the Portfolios are offered only to
residents of states in which the shares are eligible for
purchase.
Shares of each Portfolio may be purchased or redeemed
on days on which the New York Stock Exchange is open for
business ("Business Days"). The minimum initial investment
in a 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 SEI Management (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 its shareholders to accept such
purchase order. In addition, because excessive trading
(including short-term "market timing" trading) can hurt a
Portfolio's performance, each Portfolio may refuse purchase
orders from any shareholder account if the accountholder
has been advised that previous purchase and redemption
transactions were considered excessive in number or amount.
Accounts under common control or ownership, including those
with the same taxpayer identification number and those
administered so as to redeem or purchase shares based upon
certain predetermined market indicators, will be considered
one account for this purpose.
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 a Portfolio's investments and other assets,
less any liabilities, by the total number of outstanding
shares of that Portfolio. Net asset value per share is
determined daily at the close of business of the New York
Stock Exchange (currently 4:00 p.m. Eastern time) on each
Business Day.
The market value of each portfolio security is
obtained by SEI Management from an independent pricing
service. 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). The pricing service relies primarily on
prices of actual market transactions as well as trader
quotations. However, the pricing service may use a matrix
system to determine valuations of equity and fixed income
securities. This system considers
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such factors as security prices, yields, maturities, call
features, ratings and developments relating to specific
securities in arriving at valuations. The procedures used
by the pricing service and its valuations are reviewed by
the officers of the Trust under the general supervision of
the Trustees.
Shareholders who desire to redeem shares of the
Portfolios must place their redemption orders with SEI
Management (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 SEI Management 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.
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.
Purchase and redemption orders may be placed by
telephone. Neither the Trust nor SEI Management 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 SEI Management 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, and shareholders
experience difficulties placing redemption orders by
telephone, shareholders may wish to consider placing their
order by other means.
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PERFORMANCE
______________________________________________________________________
From time to time, a Portfolio may advertise yield and
total return. 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 the
Portfolio over a specified 30-day period. The yield is
calculated by assuming that the same amount of income
generated by the investment during that period is generated
in each 30-day period 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 to a hypothetical investment
redeemed at the end of the specified period covered by the
total return figure, 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 and assuming the reinvestment of all dividend and
capital gain distributions. The total return of a Portfolio
may also be quoted as a dollar amount or on an aggregate
basis, an actual basis, without inclusion of any front-end
or contingent sales charges, or with a reduced sales charge
in advertisements distributed to investors entitled to a
reduced sales charge.
A Portfolio may periodically compare its performance
to that of: (i) other mutual funds tracked by mutual fund
rating services (such as Lipper Analytical), financial and
business publications and periodicals; (ii) broad groups of
comparable mutual funds; (iii) unmanaged indices which may
assume investment of dividends but generally do not reflect
deductions for administrative and management costs; or (iv)
other investment alternatives. A Portfolio may quote
Morningstar, Inc., a service that ranks mutual funds on the
basis of risk-adjusted performance, and Ibbotson Associates
of Chicago, Illinois, which provides historical returns of
the capital markets in the U.S. A 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. 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.
For the Small Cap Growth Portfolio, the performance
of Class A shares will normally be higher than the
performance of the Class D shares of that Portfolio because
of the additional distribution and transfer agent expenses
charged to Class D shares.
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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 a
Portfolio or its 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
A Portfolio is treated as a separate entity for federal
income tax purposes and is not combined with the Trust's
other portfolios. Each Portfolio intends to continue to
qualify for the special tax treatment afforded regulated
investment companies ("RICs") under Subchapter M of the
Internal Revenue Code of 1986, as amended, so as to be
relieved of federal income tax on net investment company
taxable income (including the excess, if any, of net
short-term capital gains over net long-term capital losses)
and net capital gains (the excess of net long-term capital
gains over net short-term capital losses) distributed to
shareholders.
TAX STATUS
OF DISTRIBUTIONS
Each Portfolio distributes substantially all of its net
investment company taxable income 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), and
generally will qualify for the dividends-received deduction
for corporate shareholders to the extent that such
dividends are derived from dividends received by the
portfolio from domestic corporations. Distributions of net
capital gains are also not eligible for the corporate
dividends-received deduction and are taxable to
shareholders as long-term capital gains, regardless of how
long a shareholder has held shares. Each Portfolio will
provide annual reports to 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 a Portfolio at any time during the following
January.
Each Portfolio intends to make sufficient
distributions to avoid liability for the federal excise tax
applicable to RICs.
Each sale, exchange or redemption of a Portfolio's
shares generally 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 October 20, 1986. The
Declaration of Trust permits the Trust to offer separate
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series ("portfolios") of shares and different classes of
each 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.
Certain shareholders in one or more of the Portfolios
may obtain asset allocation services from the Adviser and
other financial intermediaries with respect to their
investments in such Portfolios. If a sufficient amount of a
Portfolio's assets are subject to such asset allocation
services, a Portfolio may incur higher transaction costs
and a higher portfolio turnover rate than would otherwise
be anticipated as a result of redemptions and purchases of
Portfolio shares pursuant to such services. Further, to the
extent that the Adviser is providing asset allocation
services and providing investment advice to the Portfolios,
it may face conflicts of interest in fulfilling its
responsibilities because of the possible differences
between the interests of its asset allocation clients and
the interest of the Portfolios.
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. The 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 unaudited financial statements
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 the Manager,
SEI Fund Management, Oaks, Pennsylvania 19456.
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DIVIDENDS
Substantially all of the net investment income (exclusive
of capital gains) of each Portfolio is periodically
declared and paid as a dividend. Dividends currently are
paid on a quarterly basis for each Portfolio. 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 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 distribution, 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 D shares of the Small Cap
Growth Portfolio will normally be lower than those on Class
A shares because of the additional distribution and
transfer agent expenses charged to Class D shares.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
Price Waterhouse LLP serves as the independent accountants
of the Trust.
CUSTODIAN AND WIRE AGENT
CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box
7618, Philadelphia, Pennsylvania 19101 (the "Custodian"),
acts as custodian and wire agent of the Trust's assets. The
Custodian holds cash, securities and other assets of the
Trust as required by the 1940 Act.
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DESCRIPTION OF
PERMITTED INVESTMENTS
AND RISK FACTORS
______________________________________________________________________
The following is a description 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 underlying security.
CONVERTIBLE SECURITIES
Convertible securities are corporate securities that are
exchangeable for a set number of another security at a
prestated price. Convertible securities typically have
characteristics similar to both fixed-income and equity
securities. Because of the conversion feature, the market
value of a convertible security tends to move with the
market value of the underlying stock. The value of a
convertible security is also affected by prevailing
interest rates, the credit quality of the issuer, and any
call provisions.
DERIVATIVES
Derivatives are securities that derive their value from
other securities assets, or indices. The following are
considered derivative securities: options on futures,
futures, options (e.g., puts and calls), swap agreements,
mortgage-backed securities (e.g., CMOs, REMICs, IOs and
POs), when-issued securities and forward commitments,
floating and variable rate securities, convertible
securities, "stripped" U.S. Treasury securities (e.g.,
Receipts and STRIPs), privately issued stripped securities
(e.g., TGRs, TRs and CATS). See elsewhere in this
"Description of Permitted Investments and Risk Factors" for
discussions of these various instruments.
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 prices of longer maturity securities are also
subject to greater market fluctuations as a result of
changes in interest rates.
FUTURES AND OPTIONS ON FUTURES
Futures contracts provide for the future sale by one party
and purchase by another party of a specified amount of a
specific security at a specified future time and at a
specified price. An option on a futures contract gives the
purchaser the right, in exchange for a premium, to assume a
position in a futures contract at a specified exercise
price during the term of the option. A Portfolio may use
futures contracts and related options for BONA FIDE
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hedging purposes, to offset changes in the value of
securities held or expected to be acquired or be disposed
of, to minimize fluctuations in foreign currencies, or to
gain exposure to a particular market or instrument. A
Portfolio will minimize the risk that it will be unable to
close out a futures contract by only entering into futures
contracts that are traded on national futures exchanges.
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 stocks 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, high grade debt securities equal to the market
value of the futures positions held, less margin deposits,
in a segregated account with the Trust's Custodian.
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 "bone 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.
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 options on
futures.
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.
MONEY MARKET SECURITIES
Money market securities 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;
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(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, and 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, FNMA and FHLMC. GNMA,
FNMA and FHLMC guarantee timely distributions of interest
to certificate holders. GNMA and FNMA also guarantee timely
distributions of scheduled principal. FHLMC generally
guarantees only the ultimate collection of principal of the
underlying mortgage loan. FNMA and FHLMC obligations are
not backed by the full faith and credit of the U.S.
Government as GNMA certificates are, but FNMA 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
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"regular" interests, or "residual" interests. Guaranteed
REMIC pass-through certificates ("REMIC Certificates")
issued by FNMA or FHLMC represent beneficial ownership
interests in a REMIC trust consisting principally of
mortgage loans or FNMA, FHLMC or GNMA-guaranteed mortgage
pass-through certificates.
PARALLEL PAY SECURITIES; PAC BONDS: Parallel pay
CMOs and REMICS are structured to provide payments of
principal on each payment date to more than one class.
These simultaneous payments are taken into account in
calculating the stated maturity date or final distribution
date of each class, which must be retired by its stated
maturity date or final distribution date, but may be
retired earlier. Planned Amortization Class CMOs ("PAC
Bonds") generally require payments of a specified amount of
principal on each payment date. PAC Bonds are always
parallel pay CMOs with the required principal payment on
such securities having the highest priority after interest
has been paid to all classes.
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.
OPTIONS
A put option gives the purchaser of the option the right to
sell, and the writer of the option the obligation to buy,
the underlying security at any time during the option
period. A call option gives the purchaser of the option the
right to buy, and the writer of the option the obligation
to sell, the underlying security at any time during the
option period. The premium paid to the writer is the
consideration for undertaking the obligations under the
option contract.
A Portfolio may purchase and write put and call
options on indices and enter into related closing
transactions. Put and call options on indices are similar
to options on securities except that options on an index
give the holder the right to receive, upon exercise of the
option, an amount of cash if the closing level of the
underlying index is greater than (or less than, in the case
of puts) the exercise price of the option. This amount of
cash is equal to the difference between the closing price
of the index and the exercise price of the option,
expressed in dollars multiplied by a specified number.
Thus, unlike options on individual securities, all
settlements are in cash, and gain or loss depends on price
movements in the particular market represented by the index
generally, rather than the price movements in individual
securities.
All options written on indices must be covered. When
a Portfolio writes an option on an index, it will establish
a segregated account containing cash or liquid, high grade
debt securities with its Custodian in an amount at least
equal to the market value of the
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option and will maintain the account while the option is
open or will otherwise cover the transaction.
RISK FACTORS: Risks associated with options
transactions include: (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
correlation between the movement in prices of options and
the securities underlying them; (3) there may not be a
liquid secondary market for options; and (4) while a
Portfolio will receive a premium when it writes covered
call options, it may not participate fully in a rise in the
market value of the underlying security.
RECEIPTS
Receipts are sold as zero coupon securities, which means
that they are sold at a substantial discount and redeemed
at face value at their maturity date without interim cash
payments of interest or principal. This discount is
accreted over the life of the security, and such accretion
will constitute the income earned on the security for both
accounting and tax purposes. Because of these features,
such securities may be subject to greater interest rate
volatility than interest paying Permitted Investments. See
also "Taxes."
REITS
REITs are trusts that invest primarily in commercial real
estate or real estate-related loans. The value of interests
in REITs may be affected by the value of the property owned
or the quality of the mortgages held by the trust.
REPURCHASE AGREEMENTS
Arrangements 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.
SECURITIES LENDING
In order to generate additional income, a Portfolio may
lend its securities pursuant to agreements that require
that the loan be continuously secured by collateral
consisting of cash or securities of the U.S. Government or
its agencies equal to at least 100% of the market value of
the loaned securities. A Portfolio continues to receive
interest on the loaned securities while simultaneously
earning interest on the investment of cash collateral.
Collateral is marked to market daily. There may be risks of
delay in recovery of the securities or even loss of rights
in the collateral should the borrower of the securities
fail financially or become insolvent.
SECURITIES OF FOREIGN ISSUERS
There are certain risks connected with investing in foreign
securities. These include risks of adverse political and
economic developments (including possible governmental
seizure or nationalization of assets), the possible
imposition of exchange controls or other governmental
restrictions, less uniformity in accounting and reporting
requirements, the possibility that there will be less
information on such securities and their issuers available
to the public, the difficulty of obtaining or enforcing
court judgments abroad, restrictions on foreign investments
in other jurisdictions, difficulties in effecting
repatriation of capital
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invested abroad, and difficulties in transaction
settlements and the effect of delay on shareholder equity.
Foreign securities may be subject to foreign taxes, and may
be less marketable than comparable U.S. securities.
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., Federal National Mortgage
Association 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.
U.S. TREASURY RECEIPTS
U.S. Treasury receipts are interests in separately traded
interest and principal component parts of U.S. Treasury
obligations that are issued by banks or brokerage firms and
are created by depositing U.S. Treasury notes and
obligations into a special account at a custodian bank. The
custodian holds the interest and principal payments for the
benefit of the registered owners of the certificates of
receipts. The custodian arranges for the issuance of the
certificates or receipts evidencing ownership and maintains
the register.
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
some other reset period, and may have a floor or ceiling on
interest rate changes.
WARRANTS
Warrants are instruments giving holders the right, but not
the obligation, to buy equity or fixed income securities of
a company at a given price during a specified period.
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 with the
custodian a separate account with liquid, high grade debt
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 permitted investments and risk
factors can be found in the Statement of Additional
Information.
31
<PAGE>
TABLE OF CONTENTS
_________________________________________________________________
<TABLE>
<S> <C>
Annual Operating Expenses........................ 2
Financial Highlights............................. 3
The Trust........................................ 5
Investment Objectives and Policies............... 5
General Investment Policies...................... 8
Risk Factors..................................... 9
Investment Limitations........................... 10
The Manager...................................... 11
The Adviser...................................... 11
The Sub-Advisers................................. 12
Distribution and Shareholder Servicing........... 19
Purchase and Redemption of Shares................ 19
Performance...................................... 22
Taxes............................................ 23
General Information.............................. 23
Description of Permitted Investments and Risk
Factors......................................... 26
</TABLE>
<PAGE>
PROSPECTUS
JANUARY 31, 1997
- --------------------------------------------------------------------------------
SMALL CAP GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
This Prospectus sets forth concisely information about the above-referenced
portfolio. Please read this Prospectus carefully before investing, and keep it
on file for future reference. It contains information that can help you decide
if the Portfolio's investment goals match your own.
A Statement of Additional Information dated January 31, 1997, has been filed
with the Securities and Exchange Commission and is available upon request and
without charge by writing the Distributor, SEI Financial Services Company, Oaks,
Pennsylvania 19456, or by calling 1-800-437-6016. The Statement of Additional
Information is incorporated into this Prospectus by reference.
SEI Institutional Managed Trust (the "Trust") is an open-end management
investment company, certain classes of which offer shareholders a convenient
means of investing their funds in one or more professionally managed diversified
portfolios of securities. The Small Cap Growth Portfolio, an investment
portfolio of the Trust, offers two classes of shares, Class A shares and Class D
shares. Class D shares differ from Class A shares primarily in the imposition of
sales charges and the allocation of certain distribution expenses and transfer
agent fees. Class D shares are available through SEI Financial Services Company
(the Trust's distributor) and through participating broker-dealers, financial
institutions and other organizations. This Prospectus offers the Class D shares
of the Small Cap Growth Portfolio (the "Portfolio").
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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>
HOW TO READ THIS PROSPECTUS ____________________________________________________
This Prospectus gives you information that you should know about the Portfolio
before investing. Brief descriptions are also provided throughout the Prospectus
to better explain certain key points. To find these helpful guides, look for
this symbol:
FUND HIGHLIGHTS
___________________________________________________________________
The following summary provides basic information about the Class D shares of the
Trust's Small Cap Growth Portfolio. This summary is qualified in its entirety by
reference to the more detailed information provided elsewhere in this Prospectus
and in the Statement of Additional Information.
INVESTMENT OBJECTIVE AND POLICIES
Below are the investment objective and policies for the
Portfolio. For more information, see "Investment Objective
and Policies," "General Investment Policies," "Risk
Factors" and "Description of Permitted Investments and Risk
Factors." There can be no assurance that
the Portfolio will achieve its
investment objective.
SMALL CAP GROWTH PORTFOLIO
The Small Cap Growth Portfolio
seeks to provide long-term
capital appreciation by
investing primarily in equity
securities of smaller companies
that the advisers believe are in
an early stage or transitional
point in their development and
have demonstrated or have the
potential for above average
capital growth.
UNDERSTANDING RISK
Shares of the Portfolio, like
shares of any mutual fund, will
fluctuate in value and when you
sell your shares, they may be
worth more or less than what you
paid for them. The Portfolio may
invest in equity securities that
are affected by market and
economic factors, and may invest
in fixed income securities that
tend to vary inversely with
interest rates and may be
affected by other market and
economic factors as well, which
may cause these securities to
fluctuate in value. In addition,
the Portfolio will invest in
equity securities of smaller
companies, which involve greater
risk than is customarily
associated with investments in
larger, more established
companies. See "Investment
Objective and Policies," "Risk
Factors" and "Description of
Permitted Investments and Risk
Factors."
- --------------------------------------------------------------------------------
TABLE OF
CONTENTS
<TABLE>
<S> <C>
FUND HIGHLIGHTS................................... 2
SHAREHOLDER TRANSACTION EXPENSES.................. 4
ANNUAL OPERATING EXPENSES......................... 4
FINANCIAL HIGHLIGHTS.............................. 5
YOUR ACCOUNT AND DOING BUSINESS WITH US........... 6
INVESTMENT OBJECTIVE AND POLICIES................. 8
GENERAL INVESTMENT POLICIES....................... 9
RISK FACTORS...................................... 10
INVESTMENT LIMITATIONS............................ 11
THE MANAGER AND SHAREHOLDER SERVICING AGENT....... 11
THE ADVISER....................................... 12
THE SUB-ADVISERS.................................. 13
DISTRIBUTION...................................... 15
PERFORMANCE....................................... 16
TAXES............................................. 17
ADDITIONAL INFORMATION ABOUT DOING BUSINESS WITH
US.............................................. 19
GENERAL INFORMATION............................... 23
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK
FACTORS......................................... 25
</TABLE>
- --------------------------------------------------------------------------------
2
<PAGE>
MANAGEMENT PROFILE
SEI Financial Management Corporation ("SFM") serves
as the investment adviser to the Small Cap Growth
Portfolio. Nicholas-Applegate Capital Management,
Inc., First of America Investment Corporation, Furman
Selz Capital Management LLC and Wall Street
Associates each serves as the investment sub-adviser
to a portion of the assets of the Portfolio. SEI Fund
Management serves as the manager of the Trust. The
investment adviser and investment sub-advisers to the
Portfolio are referred to collectively as the
"advisers." DST Systems, Inc. acts as transfer agent
(the "Transfer Agent") to the Class D shares of the
Trust. SEI Financial Services Company acts as
distributor of the Trust's shares. See "The Manager
and Shareholder Servicing Agent," "The Adviser," "The
Sub-Advisers" and "Distribution."
- --------------------------------------------------------------------------------
INVESTMENT
PHILOSOPHY
BELIEVING THAT NO SINGLE INVESTMENT ADVISER CAN DELIVER OUTSTANDING PERFORMANCE
IN EVERY INVESTMENT CATEGORY, ONLY THOSE ADVISERS WHO HAVE DISTINGUISHED
THEMSELVES WITHIN THEIR AREAS OF SPECIALIZATION ARE SELECTED TO ADVISE OUR
MUTUAL FUNDS.
- --------------------------------------------------------------------------------
YOUR ACCOUNT AND DOING BUSINESS WITH US
You may open an account with just $1,000, and make additional investments with
as little as $100. Class D shares of the Portfolio are offered at net asset
value per share plus a maximum sales charge at the time of purchase of 5.00%.
Shareholders who purchase higher amounts may qualify for a reduced sales charge.
Redemptions of the Portfolio's shares are made at net asset value per share. See
"Your Account and Doing Business with Us" and "Additional Information About
Doing Business with Us."
DIVIDENDS
Substantially all of the net investment income (exclusive
of capital gains) is distributed in the form of dividends
that will be paid quarterly for the Portfolio. Any realized
net capital gain is distributed at least annually.
Distributions are paid in additional shares unless the
shareholder elects to take the payment in cash. See
"Dividends."
INFORMATION/SERVICE CONTACTS
For more information about Class D shares, call
1-800-437-6016.
3
<PAGE>
SHAREHOLDER TRANSACTION EXPENSES (AS A PERCENTAGE OF OFFERING PRICE) CLASS D
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP
GROWTH
PORTFOLIO
----------
<S> <C>
Maximum Sales Charge Imposed on Purchases 5.00%
Maximum Sales Charge Imposed on Reinvested Dividends None
Redemption Fees (1) None
</TABLE>
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Management/Advisory Fees (AFTER FEE WAIVER) 1.00%
12b-1 Fees (AFTER FEE WAIVER) (2) .25%
Other Expenses .22%
- ------------------------------------------------------------------------
Total Operating Expenses(AFTER FEE WAIVER) (3) 1.47%
- ------------------------------------------------------------------------
</TABLE>
(1) A CHARGE, CURRENTLY $10.00, IS IMPOSED ON WIRES OF REDEMPTION PROCEEDS OF
THE PORTFOLIOS' CLASS D SHARES.
(2) THE DISTRIBUTOR HAS WAIVED, ON A VOLUNTARY BASIS, A PORTION OF ITS 12B-1
FEE, AND THE 12B-1 FEES SHOWN REFLECT THIS WAIVER. THE DISTRIBUTOR RESERVES
THE RIGHT TO TERMINATE ITS WAIVER AT ANY TIME IN ITS SOLE DISCRETION. ABSENT
SUCH WAIVER, 12B-1 FEES WOULD BE .30% FOR THE PORTFOLIO.
(3) ABSENT THESE FEE WAIVERS, TOTAL OPERATING EXPENSES FOR CLASS D SHARES WOULD
BE: SMALL CAP GROWTH PORTFOLIO, 1.52%. ADDITIONAL INFORMATION MAY BE FOUND
UNDER "THE ADVISER," "THE SUB-ADVISERS" AND "THE MANAGER AND SHAREHOLDER
SERVICING AGENT."
EXAMPLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
3 5 10
1 YR. YRS. YRS. YRS.
----- ----- ----- -----
<S> <C> <C> <C> <C>
An investor in a Portfolio would pay the following expenses
on a $1,000 investment assuming (1) the imposition of the
maximum sales charge; (2) a 5% annual return and (3)
redemption at the end of each time period:
Small Cap Growth Portfolio $ 64 $ 94 $126 $217
- ----------------------------------------------------------------------------------------
</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 D SHARES OF THE PORTFOLIO. THE INFORMATION SET FORTH
IN THE FOREGOING TABLE AND EXAMPLE RELATES ONLY TO THE CLASS D SHARES. THE
PORTFOLIO ALSO OFFERS CLASS A SHARES, WHICH ARE SUBJECT TO THE SAME EXPENSES,
EXCEPT THAT THERE ARE NO SALES CHARGES, DIFFERENT DISTRIBUTION COSTS AND NO
TRANSFER AGENT COSTS. A PERSON WHO PURCHASES SHARES THROUGH AN ACCOUNT WITH A
FINANCIAL INSTITUTION MAY BE CHARGED SEPARATE FEES BY THAT INSTITUTION.
ADDITIONAL INFORMATION MAY BE FOUND UNDER "THE MANAGER AND SHAREHOLDER SERVICING
AGENT," "THE ADVISER," "THE SUB-ADVISERS" AND "DISTRIBUTION."
THE RULES OF THE SECURITIES AND EXCHANGE COMMISSION REQUIRE THAT THE MAXIMUM
SALES CHARGE BE REFLECTED IN THE ABOVE TABLE. HOWEVER, CERTAIN INVESTORS MAY
QUALIFY FOR REDUCED SALES CHARGES. SEE "PURCHASE OF SHARES." LONG-TERM
SHAREHOLDERS MAY PAY MORE THAN THE ECONOMIC EQUIVALENT OF THE MAXIMUM FRONT-END
SALES CHARGE OTHERWISE PERMITTED BY THE CONDUCT RULES OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC.
4
<PAGE>
FINANCIAL HIGHLIGHTS
______________________________________________________________
The following information has been audited by Price Waterhouse LLP, the Trust's
independent accountants, as indicated in their report dated November 22, 1996 on
the Trust's financial statements as of September 30, 1996 included in the
Trust's Statement of Additional Information under "Financial Statements."
Additional performance information is set forth in the 1996 Annual Report to
Shareholders, which is available upon request and without charge by calling
1-800-437-6016. This table should be read in conjunction with the Trust's
financial statements and notes thereto.
FOR A CLASS D SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED AND DIVIDENDS
VALUE INVESTMENT UNREALIZED FROM NET DISTRIBUTIONS NET ASSET NET ASSETS
BEGINNING INCOME GAINS (LOSSES) INVESTMENT FROM REALIZED VALUE END TOTAL END OF
OF PERIOD (LOSS) ON SECURITIES INCOME CAPITAL GAINS OF PERIOD RETURN* PERIOD (000)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------
SMALL CAP GROWTH
PORTFOLIO
- ------------------
CLASS D
1996 $ 19.78 $(0.07) $ 4.24 $ -- $(3.66) $ 20.29 26.01%* $ 1,826
1995 13.99 (0.09) 5.88 -- -- 19.78 41.44%* 786
1994 (1) 14.04 (0.02) (0.03) -- -- 13.99 (3.02)%* 171
<CAPTION>
RATIO OF NET
INVESTMENT
NET RATIO OF INCOME
INVESTMENT EXPENSE (LOSS)
RATIO OF INCOME TO AVERAGE TO AVERAGE
EXPENSES (LOSS) NET ASSETS NET ASSETS PORTFOLIO AVERAGE
TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION
NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE+
- ------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------
SMALL CAP GROWTH
PORTFOLIO
- ------------------
CLASS D
1996 1.49% (1.02)% 1.49% (1.02)% 167% $ 0.0529
1995 1.50% (1.03)% 1.55% (1.08)% 113% N/A
1994 (1) 1.49% (0.92)% 1.52% (0.95)% 97% N/A
</TABLE>
* SALES CHARGE IS NOT REFLECTED IN TOTAL RETURN.
(1) SMALL CAP GROWTH CLASS D SHARES WERE OFFERED BEGINNING MAY 2, 1994. ALL
RATIOS INCLUDING TOTAL RETURN FOR THAT PERIOD HAVE BEEN ANNUALIZED.
+ AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES
DURING THE PERIOD. PRESENTATION OF THE RATE IS REQUIRED FOR FISCAL YEARS
BEGINNING AFTER SEPTEMBER 1, 1995.
5
<PAGE>
YOUR ACCOUNT AND DOING BUSINESS WITH US ______________________________________
Class D shares of the Portfolio are sold on a continuous basis and may be
purchased directly from the Trust's Distributor, SEI Financial Services Company.
Shares may also be purchased through financial institutions, broker-dealers, or
other organizations which have established a dealer agreement or other
arrangement with SEI Financial Services Company ("Intermediaries"). For more
information about the following topics, see "Additional Information About Doing
Business with Us."
- --------------------------------------------------------------------------------
HOW TO BUY, SELL
AND EXCHANGE
SHARES THROUGH
INTERMEDIARIES
Class D shares of the Portfolio may be purchased through
Intermediaries which provide various levels of shareholder
services to their customers. Contact your Intermediary for
information about the services
available to you and for
specific instructions on how to
buy, sell and exchange shares.
To allow for processing and
transmittal of orders to the
Distributor on the same day,
Intermediaries may impose
earlier cut-off times for
receipt of purchase orders.
Certain Intermediaries may
charge customer account fees.
Information concerning
shareholder services and any
charges will be provided to the
customer by the Intermediary.
Certain of these Intermediaries
may be required to register as broker/dealers under state
law.
- --------------------------------------------------------------------------------
WHAT IS AN
INTERMEDIARY?
ANY ENTITY, SUCH AS A BANK, BROKER-DEALER, OTHER FINANCIAL INSTITUTION,
ASSOCIATION OR ORGANIZATION WHICH HAS ENTERED INTO AN ARRANGEMENT WITH THE
DISTRIBUTOR TO SELL CLASS D SHARES TO ITS CUSTOMERS.
- --------------------------------------------------------------------------------
The shares you purchase through an Intermediary may be held "of record" by
that Intermediary. If you want to transfer the registration of shares
beneficially owned by you, but held "of record" by an Intermediary, you should
call the Intermediary to request this change.
HOW TO BUY SHARES FROM THE TRANSFER AGENT
Application forms can be obtained by calling 1-800-437-6016. Class D shares of
the Portfolio are offered only to residents of states in which the shares are
eligible for purchase.
OPENING AN ACCOUNT BY CHECK
You may buy Class D shares by mailing a completed
application and a check (or other negotiable bank
instrument or money order) payable to "Class D shares
(Small Cap Growth Portfolio)." If you send a check that
does not clear, the purchase will be canceled and you could
be liable for any losses or fees incurred. Third-Party
checks, credit cards, credit card checks and cash will not
be accepted. When purchases are made by check, redemptions
will not be allowed until the investment being redeemed has
been in the account for 15 business days.
To buy shares by Fed Wire, call toll-free 1-800-437-6016.
BY FED WIRE
AUTOMATIC INVESTMENT PLAN ("AIP")
You may systematically buy Class D shares through
deductions from your checking or savings accounts, provided
these accounts are maintained through banks which are part
of the Automated Clearing House ("ACH") system. You may
purchase shares on a fixed schedule (semi-monthly or
monthly) with amounts as low as $25, or as high as
$100,000.
6
<PAGE>
Upon notice, the amount you commit to the AIP may be
changed or canceled at any time. The AIP is subject to
account minimum initial purchase amounts and minimum
maintained balance requirements discussed under "Additional
Information About Doing Business With Us."
OTHER INFORMATION ABOUT BUYING SHARES SALES CHARGES
Your purchase is subject to a sales charge which varies
depending on the size of your purchase. The following table
shows the regular sales charges on Class D shares of the
Portfolio to a "single purchaser," together with the
reallowance paid to dealers and the agency commission paid
to brokers (collectively the "commission"):
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
SALES CHARGE AS REALLOWANCE AND
SALES CHARGE AS APPROPRIATE BROKERAGE COMMISSION
A PERCENTAGE OF PERCENTAGE OF NET AS PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
- ---------------------------------------------------------------------------------------
< $50,000 5.00% 5.26% 4.50%
$50,000 but < $100,000 4.50% 4.71% 4.00%
$100,000 but < $250,000 3.50% 3.63% 3.00%
$250,000 but < $500,000 2.50% 2.56% 2.00%
$500,000 but < $1,000,000 2.00% 2.04% 1.75%
$1,000,000 but < $2,000,000 1.00% 1.01% 1.00%
$2,000,000 but < $4,000,000 .50% .50% .50%
Over $4,000,000 none none none
- -----------------------------------------------------------------------------
</TABLE>
The commissions shown in the table above apply to
sales through Intermediaries. Under certain circumstances,
commissions up to the amount of the entire sales charge may
be re-allowed to certain Intermediaries, who might then be
deemed to be "underwriters" under the Securities Act of
1933, as amended.
RIGHT OF ACCUMULATION
A Right of Accumulation allows you, under certain
circumstances, to combine your current purchase with the
current market value of previously purchased shares of the
Portfolio and Class D shares of other portfolios ("Eligible
Portfolios") in order to obtain a reduced sales charge.
LETTER OF INTENT
A Letter of Intent allows you, under certain circumstances,
to aggregate anticipated purchases over a 13-month period
to obtain a reduced sales charge.
SALES CHARGE WAIVER
Certain shareholders may qualify for a sales charge waiver.
To determine whether or not you qualify for a sales charge
waiver see "Additional Information About Doing Business
with Us." Shareholders who qualify for a sales charge
waiver must notify the Transfer Agent before purchasing
shares.
7
<PAGE>
HOW TO SELL SHARES THROUGH THE TRANSFER AGENT
To sell your shares, a written request for redemption in
good order must be received by the Transfer Agent (or its
authorized agent). Valid written redemption requests will
be effective on receipt. All shareholders of record must
sign the redemption request.
BY MAIL
For information about the proper form of redemption
requests, call 1-800-437-6016. You may also have the
proceeds mailed to an address of record or mailed (or sent
by ACH) to a commercial bank
account previously designated on
the Account Application or
specified by written instruction
to the Transfer Agent.
There is no charge for
having redemption requests
mailed to a designated bank
account.
BY TELEPHONE
You may sell your shares by
telephone if you previously
elected that option on the
Account Application. You may
have the proceeds mailed to the
address of record, wired or sent
by ACH to a commercial bank
account previously designated on
the Account Application. Under
most circumstances, payments
will be transmitted on the next
Business Day following receipt of a valid telephone request
for redemption. Wire redemption requests may be made by
calling 1-800-437-6016. A wire redemption charge (presently
$10.00) will be deducted from the amount of the redemption.
- --------------------------------------------------------------------------------
WHAT IS A
SIGNATURE
GUARANTEE?
A SIGNATURE GUARANTEE VERIFIES THE AUTHENTICITY OF YOUR SIGNATURE AND MAY BE
OBTAINED FROM ANY OF THE FOLLOWING: BANKS, BROKERS, DEALERS, CERTAIN CREDIT
UNIONS, SECURITIES EXCHANGE OR ASSOCIATION, CLEARING AGENCY OR SAVINGS
ASSOCIATION. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE GUARANTEE.
- --------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWAL PLAN ("SWP")
You may establish a systematic withdrawal plan for an account with a $10,000
minimum balance. Under the plan, redemptions can be automatically processed from
accounts (monthly, quarterly, semi-annually or annually) by check or by ACH with
a minimum redemption amount of $50.
INVESTMENT OBJECTIVE
AND POLICIES
_______________________________________________________________________
SMALL CAP GROWTH PORTFOLIO
The investment objective of the
Small Cap Growth Portfolio is
long-term capital appreciation.
There can be no assurance that
the Portfolio will achieve its
investment objective.
Under normal market
conditions, the Portfolio will
invest at least 65% of its total
assets in the equity securities
of smaller growth companies
(i.e., companies with market
capitalizations less than $1
billion) which, in the opinion
of the advisers, are in an early
stage or transitional point in
their development and have
demonstrated or have the
potential for above average
capital growth. The
- --------------------------------------------------------------------------------
WHAT ARE INVESTMENT
OBJECTIVES AND
POLICIES?
THE PORTFOLIO'S INVESTMENT OBJECTIVE IS A STATEMENT OF WHAT IT SEEKS TO ACHIEVE.
IT IS IMPORTANT TO MAKE SURE THAT THE INVESTMENT OBJECTIVE MATCHES YOUR OWN
FINANCIAL NEEDS AND CIRCUMSTANCES. THE INVESTMENT POLICIES SECTION SPELLS OUT
THE TYPES OF SECURITIES IN WHICH THE PORTFOLIO INVESTS.
- --------------------------------------------------------------------------------
8
<PAGE>
advisers will select companies that have the potential to gain market share in
their industry, achieve and maintain high and consistent profitability or
produce increases in earnings. The advisers also seek companies with strong
company management and superior fundamental strength. Small capitalization
companies have the potential to show earnings growth over time that is well
above the growth rate of the overall economy. Any remaining assets may be
invested in the equity securities of more established companies that the
advisers believe may offer strong capital appreciation potential due to their
relative market position, anticipated earnings growth, changes in management or
other similar opportunities.
For temporary defensive purposes, the Portfolio may invest all or a
portion of its assets in common stocks of larger, more established companies or
in investment grade fixed income securities.
The Portfolio's annual turnover rate may exceed 100%. Such a turnover rate
may result in higher transaction costs and may result in additional taxes for
shareholders. See "Taxes."
The Portfolio's investment adviser is SEI Financial Management Corporation
and its investment sub-advisers are Nicholas-Applegate Capital Management, Inc.,
First of America Investment Corporation, Furman Selz Capital Management LLC and
Wall Street Associates.
GENERAL INVESTMENT
POLICIES
___________________________________________________________________________
BORROWING
The Portfolio may borrow money to meet redemptions for
temporary emergency purposes. Interest paid on such
borrowings will reduce the Portfolio's income. The
Portfolio will not purchase securities while its borrowings
exceed 5% of its total assets.
EQUITY SECURITIES
Equity securities include common stock, preferred stock,
warrants and rights to subscribe to common stock and, in
general, any security that is convertible into or
exchangeable for common stock. The Portfolio will invest in
common stocks listed on registered exchanges or actively
traded in the over-the-counter market.
INVESTMENT
COMPANY SECURITIES
The Portfolio may purchase investment company securities,
which will result in the layering of expenses. There are
legal limits on the amount of such securities that may be
acquired by a Portfolio.
MONEY MARKET
SECURITIES
The Portfolio may hold cash reserves and invest in money
market instruments (including securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities, repurchase agreements, certificates of
deposit and bankers' acceptances issued by banks or savings
and loan associations having net assets of at least $500
million as of the end of their most recent fiscal year,
high-grade commercial paper and other short-term debt
securities) rated at the time of purchase in the top two
categories by a nationally recognized statistical rating
organization ("NRSRO"), or, if not rated, determined by the
advisers to be of comparable quality at the time of
purchase.
9
<PAGE>
OPTIONS AND FUTURES
The Portfolio may purchase or write options, futures and
options on futures. Risks associated with investing in
options and futures may include lack of a liquid secondary
market, trading restrictions which may be imposed by an
exchange and government regulations which may restrict
trading.
SECURITIES LENDING
The Portfolio may lend its assets to qualified investors in
order to realize additional income.
TEMPORARY DEFENSIVE
INVESTMENTS
In order to meet liquidity needs, or for temporary
defensive purposes, the Portfolio may invest up to 100% of
its assets in cash and money market securities. To the
extent the Portfolio is engaged in temporary defensive
investing, the Portfolio will not be pursuing its
investment objective.
U.S. DOLLAR DENOMINATED
SECURITIES OF FOREIGN ISSUERS
The Portfolio may invest in U.S. dollar denominated
securities of foreign issuers, including American
Depositary Receipts, that are traded on registered
exchanges or listed on NASDAQ.
WHEN-ISSUED AND
DELAYED-DELIVERY
SECURITIES
The Portfolio may invest in when-issued and delayed
delivery securities.
For additional information regarding the Portfolio's
permitted investments, see "Risk Factors" and "Description
of Permitted Investments and Risk Factors" in this
Prospectus and "Description of Permitted Investments" in
the Statement of Additional Information. For a description
of the above ratings, see "Description of Ratings" in the
Statement of Additional Information.
RISK FACTORS
______________________________________________________________________
EQUITY SECURITIES
Investments in equity securities in general 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 provision. Fluctuations in the
value of equity securities in which the Portfolio invests
will cause the net asset value of the Portfolio to
fluctuate.
Investments in small capitalization companies
involves greater risk than is customarily associated with
larger, more established companies due to the greater
business risks of small size, limited markets and financial
resources, narrow product lines and the frequent lack of
depth of management. The securities of small companies are
often traded over-the-counter, and may not be traded in
volumes typical of securities traded on a national
securities exchange. Consequently, the securities of
smaller companies may have limited market stability and may
be subject to more abrupt or erratic market movements than
securities of larger, more established companies or the
market averages in general.
FIXED INCOME SECURITIES
The market value of the Portfolio's fixed income
investments will 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. Securities with longer
10
<PAGE>
maturities are subject to greater fluctuations in value
than securities with shorter maturities. Changes by an
NRSRO 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 a Portfolio's securities will not
affect cash income derived from these securities but will
affect the Portfolio's net asset value.
Investment grade fixed income securities are
securities that are rated at least BBB by Standard & Poor's
Corporation ("S&P") or Baa by Moody's Investors Service,
Inc. ("Moody's"). Fixed income securities rated BBB by S&P
or Baa by Moody's lack outstanding investment
characteristics, and have speculative characteristics as
well.
Securities held by the Portfolio that are guaranteed
by the U.S. Government, its agencies or instrumentalities
guarantee only the payment of principal and interest on the
guaranteed securities, and do not guarantee the securities'
yield or value or the yield or value of the Portfolio's
shares.
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 the Portfolio without the consent of the holders
of a majority of the Trust's or the Portfolio's outstanding
shares.
NO PORTFOLIO MAY:
1. With respect to 75% of its assets, (i) purchase the
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
its total assets would be invested in the securities of
such issuer; or (ii) acquire more than 10% of the
outstanding voting securities of any one issuer.
2. Purchase any securities which would cause more than 25%
of the total assets of the Portfolio to be invested in
the securities of one or more issuers conducting their
principal business activities in the same industry,
provided that this limitation does not apply to
investments in obligations issued or guaranteed by the
United States Government, its agencies or
instrumentalities.
The foregoing percentage limitations will apply at the time
of the purchase of a security. Additional fundamental and
non-fundamental investment limitations are set forth in the
Trust's Statement of Additional Information.
THE MANAGER
AND SHAREHOLDER
SERVICING AGENT
___________________________________________________________________
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 shareholder servicing agent for the
Portfolio's Class D shares.
11
<PAGE>
For its management services, SEI Management is
entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .35% of the average daily net
assets of the Small Cap Growth Portfolio. In addition, SEI
Management has voluntarily agreed to waive a portion of its
fees in order to limit the operating expenses of the
Portfolio's Class D shares on an annualized basis. Any such
waivers are voluntary and may be terminated at any time in
SEI Management's sole discretion.
For the fiscal year ended September 30, 1996, the
Portfolio paid management fees (based on its average daily
net assets after fee waivers) of .34%.
The Trust and DST Systems, Inc., 1004 Baltimore St.,
2nd Floor, Kansas City, Missouri 64105, have entered into a
separate transfer agent agreement with respect to the Class
D shares of the Trust. Under this agreement, DST acts as
the transfer agent and dividend disbursing agent (the
"Transfer Agent") for the Class D shares of the Trust.
THE ADVISER
_______________________________________________________________________
SEI FINANCIAL MANAGEMENT CORPORATION
SEI Financial Management Corporation ("SFM") serves as
investment adviser to the Portfolio. SFM is a wholly-owned
subsidiary of SEI Investments Company ("SEI"), a financial
services company located in Oaks, Pennsylvania. The
principal business address of SFM is Oaks, Pennsylvania
19456. SEI was founded in 1968 and is a leading provider of
investment solutions to banks, institutional investors,
investment advisers and insurance companies. Affiliates of
SFM have provided consulting advice to institutional
investors for more than 20 years, including advice
regarding selection and evaluation of investment advisers.
SFM currently serves as manager or administrator to more
than 40 investment companies, including more than 290
portfolios, which investment companies have more than $69
billion in assets as of September 30, 1996.
SFM acts as the investment adviser to the Portfolio
and operates as a "manager of managers." As Adviser, SFM
oversees the investment advisory services provided to the
Portfolio and manages the cash portion of the Portfolio's
assets. Pursuant to separate sub-advisory agreements with
SFM, and under the supervision of SFM and the Board of
Trustees, the sub-advisers are responsible for the
day-to-day investment management of all or a discrete
portion of the assets of the Portfolio. The sub-advisers
are selected based primarily upon the research and
recommendations of SFM, which evaluates quantitatively and
qualitatively each sub-adviser's skills and investment
results in managing assets for specific asset classes,
investment styles and strategies. Subject to Board review.
SFM allocates and, when appropriate, reallocates the
Portfolio's assets among sub-advisers, monitors and
evaluates sub-adviser performance, and oversees sub-adviser
compliance with the Portfolio's investment objective,
policies and restrictions. SFM has the ultimate
responsibility for the investment performance of the
Portfolio due to its responsibility to oversee sub-advisers
and recommend their hiring, termination and replacement.
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<PAGE>
For these advisory services SFM is entitled to a fee,
which is calculated daily and paid monthly, at an annual
rate of .65% of the Small Cap Growth Portfolio's average
daily net assets. SFM pays the sub-advisers out of its
investment advisory fee.
For the fiscal year ended September 30, 1996, SFM
received an advisory fee of .65% of the Small Cap Growth
Portfolio's average daily net assets.
SFM has obtained an exemptive
order from the Securities and
Exchange Commission (the "SEC")
that permits SFM, with the
approval of the Trust's Board of
Trustees, to retain sub-advisers
unaffiliated with SFM for the
Portfolio without submitting the
sub-advisory agreements to a
vote of the Portfolio's
shareholders. The exemptive
relief permits the disclosure of
only the aggregate amount
payable by SFM under all such
sub-advisory agreements. The
Portfolio will notify
shareholders in the event of any
addition or change in the
identity of its sub-advisers.
- --------------------------------------------------------------------------------
INVESTMENT
ADVISER & SUB-ADVISERS
THE PORTFOLIO'S ADVISERS MANAGE THE INVESTMENT ACTIVITIES AND ARE RESPONSIBLE
FOR THE PERFORMANCE OF THE PORTFOLIO. THE SUB-ADVISERS CONDUCT INVESTMENT
RESEARCH, EXECUTE INVESTMENT STRATEGIES BASED ON AN ASSESSMENT OF ECONOMIC AND
MARKET CONDITIONS, AND DETERMINE WHICH SECURITIES TO BUY, HOLD OR SELL.
- --------------------------------------------------------------------------------
THE SUB-ADVISERS
_________________________________________________________________
FIRST OF AMERICA INVESTMENT CORPORATION
First of America Investment Corporation ("First of
America") serves as sub-adviser to a portion of the assets
of the Small Cap Growth Portfolio. First of America is a
Michigan Corporation that is a wholly-owned subsidiary of
First America Bank - Michigan, N.A., a national banking
association, which is in turn a wholly-owned subsidiary of
First America Bank Corporation, a registered bank holding
company. First of America is registered as an investment
adviser under the Investment Advisers Act of 1940. First of
America, together with its predecessor, has been engaged in
the investment advisory business since 1932. First of
America's principal business address is 303 North Rose
Street, Suite 500, Kalamazoo, Michigan 49007. As of
September 30, 1996, First of America had approximately
$14.3 billion in assets under management. First of
America's clients include mutual funds, trust funds, and
individually managed institutional and individual accounts.
Mr. Roger Stamper, CFA, has primary responsibility
for First of America's portion of the Small Cap Growth
Portfolio. Mr. Stamper is a Managing Director of First of
America and has been with First of America since 1988.
SFM pays First of America a fee based on a percentage
of the average monthly market value of the portion of the
assets of the Portfolio managed by First of America.
13
<PAGE>
FURMAN SELZ CAPITAL MANAGEMENT LLC
Furman Selz Capital Management LLC ("Furman Selz") serves
as sub-adviser to a portion of the assets of the Small Cap
Growth Portfolio. Furman Selz, a Delaware limited liability
company whose predecessor was formed in 1977, is a
registered investment adviser that managed approximately $7
billion in assets as of August 31, 1996. Furman Selz is a
wholly-owned subsidiary of Furman Selz Holdings LLC. Furman
Selz's principal business address is 230 Park Avenue, New
York, NY 10169.
Matthew S. Price and David C. Campbell, Managing
Directors/Portfolio Managers of Furman Selz, are primarily
responsible for the day-to-day management and investment
decisions made with respect to the assets of the Portfolio.
Prior to joining Furman Selz, Mr. Price and Mr. Campbell
were Senior Portfolio Managers at Value Line Asset
Management.
SFM pays Furman Selz a fee based on a percentage of
the average monthly market value of the portion of the
assets of the Portfolio managed by Furman Selz.
NICHOLAS-APPLEGATE
CAPITAL
MANAGEMENT, INC.
Nicholas-Applegate Capital Management, Inc.
("Nicholas-Applegate") serves as sub-adviser to a portion
of the assets of the Small Cap Growth Portfolio.
Nicholas-Applegate has operated as an investment adviser
which provides investment services to numerous clients,
including employee benefit plans, public retirement systems
and unions, university endowments, foundations, investment
companies, other institutional investors and individuals.
As of September 30, 1996, Nicholas-Applegate had
discretionary management authority with respect to
approximately $30.6 billion of assets. The principal
business address of Nicholas-Applegate is 600 West
Broadway, 29th Floor, San Diego, California 92101.
Nicholas-Applegate, pursuant to a partnership agreement, is
controlled by its general partner Nicholas-Applegate
Capital Management, Holdings, L.P., a California Limited
Partnership controlled by Arthur E. Nicholas.
Nicholas-Applegate manages its portion of the Small
Cap Growth Portfolio through its systematic-driven
management team under the general supervision of Mr.
Nicholas, founder and Chief Investment Officer of the firm.
Nicholas-Applegate's systems driven investment team, headed
by Lawrence S. Speidell, is primarily responsible for the
day-to-day management of the Portfolio since March, 1994.
Mr. Speidell has been a Portfolio Manager and investment
team leader with Nicholas-Applegate since March, 1994.
Prior to joining Nicholas-Applegate, he was an
institutional portfolio manager with Batterymarch Financial
Management.
SFM pays Nicholas-Applegate a fee based on a
percentage of the average monthly market value of the
portion of the assets of the Portfolio managed by
Nicholas-Applegate.
WALL STREET
ASSOCIATES
Wall Street Associates ("WSA") serves as sub-adviser to a
portion of the assets of the Small Cap Growth Portfolio.
WSA is organized as a corporation with its principal
business address at 1200 Prospect Street, Suite 100, La
Jolla, California 92037. WSA was founded in 1987, and as of
September 30, 1996, had approximately $1 billion in assets
under management. WSA provides investment advisory services
for institutional clients, an
14
<PAGE>
investment partnership for which it serves as general
partner, a group trust, for which it serves as sole
investment manager, and an offshore fund for foreign
investors for which it serves as the sole investment
manager.
William Jeffery III, Kenneth F. McCain, and Richard
S. Coons, each of whom own 1/3 of WSA, has served as
Portfolio Managers for the portion of the Portfolio's
assets allocated to WSA since August, 1995. Each is a
principal of WSA and, together, they have 78 years of
investment management experience.
SFM pays WSA a fee based on a percentage of the
average monthly market value of the portion of the assets
of the Portfolio managed by WSA.
DISTRIBUTION
_______________________________________________________________________
SEI Financial Services Company (the "Distributor"), a
wholly-owned subsidiary of SEI, serves as the Portfolio's
distributor pursuant to a distribution agreement (the
"Distribution Agreement") with the Trust. The Trust has
adopted a distribution plan for its Class D shares (the
"Class D Plan") pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "1940 Act.") The Portfolio has
adopted a shareholder servicing plan for its Class A shares
(the "Class A Service Plan").
The Class D Plan provides for payments to the
Distributor at an annual rate of .30% of the Portfolio's
average daily net assets attributable to Class D shares.
This payment may be used to compensate financial
institutions that provide distribution-related services to
their customers. These payments are characterized as
"compensation," and are not directly tied to expenses
incurred by the Distributor; the payments the Distributor
receives during any year may therefore be higher or lower
than its actual expenses. These payments compensate the
Distributor for its services in connection with
distribution assistance or the provision of shareholder
services, and some or all of it may be used to pay
financial institutions and intermediaries such as banks,
savings and loan associations, insurance companies, and
investment counselors, broker-dealers (including the
Distributor's affiliates and subsidiaries) for services or
reimbursement of expenses incurred in connection with
distribution assistance or the provision of shareholder
services. If the Distributor's expenses are less than its
fees under the Class D Plan, the Trust will still pay the
full fee and the Distributor will realize a profit, but the
Trust will not be obligated to pay in excess of the full
fee, even if the Distributor's actual expenses are higher.
Currently, the Distributor is taking this compensation
payment under the Class D Plan at a rate of .25% of the
Portfolio's average daily net assets, on an annualized
basis, attributable to Class D shares.
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.
15
<PAGE>
The Distributor may, from time to time in its sole
discretion, institute one or more promotional incentive
programs, which will be paid for by the Distributor from
its own resources. Under any such program, the Distributor
will provide promotional incentives, in the form of cash or
other compensation, including merchandise, airline
vouchers, trips and vacation packages, to all dealers
selling shares of the Portfolio. Such promotional
incentives will be offered uniformly to all shares of the
Portfolio, and also will be offered uniformly to all
dealers, predicated upon the amount of shares of the
Portfolio sold by such dealer.
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. The yield of the Portfolio refers to the
annualized income generated by an investment in the
Portfolio over a specified 30-day period. The yield is
calculated by assuming that the same amount of income
generated by the investment during that period is generated
in each 30-day period 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 to a hypothetical
investment, net of any sales charge imposed on Class D
Shares redeemed at the end of the specified period covered
by the total return figure, 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 and assuming the reinvestment of all
dividend and capital gain distributions. The total return
of the Portfolio may also be quoted as a dollar amount or
on an aggregate basis, an actual basis, without inclusion
of any front-end or contingent sales charges, or with a
reduced sales charge in advertisements distributed to
investors entitled to a reduced sales charge.
The Portfolio may periodically compare its
performance to that of: (i) other mutual funds tracked by
mutual fund rating services (such as Lipper Analytical),
financial and business publications and periodicals; (ii)
broad groups of comparable mutual funds; (iii) unmanaged
indices which may assume investment of dividends but
generally do not reflect deductions for administrative and
management costs; or (iv) other investment alternatives.
The Portfolio may quote Morningstar, Inc., a service that
ranks mutual funds on the basis of risk-adjusted
performance, and Ibbotson Associates of Chicago, Illinois,
which provides historical returns of the capital markets in
the U.S. 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.
16
<PAGE>
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
benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot
be calculated precisely.
For the Portfolio, the performance of Class A shares
will normally be higher than the performance of the Class D
shares because of the additional distribution and transfer
agent expenses charged to Class D 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 income taxes. Additional information
concerning taxes is set forth in the Statement of
Additional Information.
TAX STATUS
OF THE PORTFOLIOS
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 continue to qualify
for the special tax treatment
afforded regulated investment
companies ("RICs") under
Subchapter M of the Internal
Revenue Code of 1986, as
amended, so as to be relieved of
federal income tax on net
investment company taxable income (including the excess, if
any, of net short-term capital gains over net long-term
capital losses) and net capital gains (the excess of net
long-term capital gains over net short-term capital losses)
distributed to shareholders.
- --------------------------------------------------------------------------------
TAXES
YOU MUST PAY TAXES ON YOUR PORTFOLIO'S EARNINGS, WHETHER YOU TAKE YOUR PAYMENTS
IN CASH OR ADDITIONAL SHARES.
- --------------------------------------------------------------------------------
TAX STATUS
OF DISTRIBUTIONS
The Portfolio distributes substantially all of its
net investment company taxable income to
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), and generally will
qualify for the dividends-received deduction for
corporate shareholders to the extent that such
dividends are derived from dividends received by the
Portfolio from domestic corporations. Distributions
of
- --------------------------------------------------------------------------------
DISTRIBUTIONS
THE PORTFOLIO DISTRIBUTES INCOME DIVIDENDS AND CAPITAL GAINS. INCOME DIVIDENDS
REPRESENT THE EARNINGS FROM THE PORTFOLIO'S INVESTMENTS; CAPITAL GAINS
DISTRIBUTIONS OCCUR WHEN THE PORTFOLIO SELLS INVESTMENTS FOR MORE THAN THEIR
ORIGINAL PURCHASE PRICE.
- --------------------------------------------------------------------------------
17
<PAGE>
net capital gains are not eligible for the corporate dividends-received
deduction and are taxable to shareholders as long-term capital gains regardless
of how long a shareholder has held shares. The Portfolio will provide annual
reports to 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.
The Portfolio intends to make sufficient distributions to avoid liability
for the federal excise tax applicable to RICs.
Each sale, exchange, or redemption of the Portfolio's shares generally is
a taxable transaction to the shareholder.
ADDITIONAL
INFORMATION ABOUT
DOING BUSINESS
WITH US
____________________________________________________________________________
BUSINESS DAYS
You may buy, sell or exchange
shares on days which the New
York Stock Exchange is open for
business (a "Business Day"). All
purchase, exchange and
redemption requests received in
"good order" will be effective
as of the Business Day received
by the Transfer Agent (or its
authorized agent) as long as the
Transfer Agent (or its
authorized agent) receives the
order and, in the case of a
purchase request, payment before
4:00 p.m. Eastern time.
Otherwise the purchase will be
effective when payment is
received. Broker-dealers may
have separate arrangements with
the Trust regarding the sale of
its Class D shares.
If an exchange request is
for shares of a portfolio whose
net asset value is calculated as
of a time earlier than 4:00 p.m.
Eastern time, the exchange request will not be effective
until the next Business Day. Anyone who wishes to make an
exchange must have received a current prospectus of the
portfolio into which the exchange is being made before the
exchange will be effected.
- --------------------------------------------------------------------------------
BUY, EXCHANGE AND
SELL REQUESTS ARE IN
"GOOD ORDER" WHEN:
- - THE ACCOUNT NUMBER AND PORTFOLIO NAME ARE SHOWN
- THE AMOUNT OF THE TRANSACTION IS SPECIFIED IN DOLLARS OR SHARES
- SIGNATURES OF ALL OWNERS APPEAR EXACTLY AS THEY ARE REGISTERED ON THE
ACCOUNT
- ANY REQUIRED SIGNATURE GUARANTEES (IF APPLICABLE) ARE INCLUDED
- OTHER SUPPORTING LEGAL DOCUMENTS (AS NECESSARY) ARE PRESENT
- --------------------------------------------------------------------------------
MINIMUM INVESTMENTS
The minimum initial investment in the Portfolio's Class D shares is $1,000;
however, the minimum investment may be waived at the Distributor's discretion.
All subsequent purchases must be at least $100 ($25 for payroll deductions
authorized pursuant to pre-approved payroll deduction plans). The Trust reserves
the right to reject a purchase order
18
<PAGE>
when the Distributor determines that it is not in the best
interest of the Trust or its shareholders to accept such
order. In addition, because excessive trading (including
short-term "market timing" trading) can hurt the
Portfolio's performance, the Portfolio may refuse purchase
orders from any shareholder account if the accountholder
has been advised that previous purchase and redemption
transactions were considered excessive in number or amount.
Accounts under common control or ownership, including those
with the same taxpayer identification number and those
administered so as to redeem or purchase shares based upon
certain predetermined market indicators, will be considered
one account for this purpose.
MAINTAINING A MINIMUM
ACCOUNT BALANCE
Due to the relatively high cost of handling small
investments, the Portfolio reserves the right to redeem, at
net asset value, the shares of any shareholder if, because
of redemptions of shares by or on behalf of the
shareholder, the account of such shareholder in the
Portfolio has a value of less than $1,000, the minimum
initial purchase amount. Accordingly, an investor
purchasing shares of the Portfolio in only the minimum
investment amount may be subject to such involuntary
redemption if he or she thereafter redeems any of these
shares. Before the Portfolio exercises its right to redeem
such shares and to send the proceeds to the shareholder,
the shareholder will be given notice that the value of the
shares in his or her account is less than the minimum
amount and will be allowed 60 days to make an additional
investment in the Portfolio in an amount that will increase
the value of the account to at least $1,000. See "Purchase
and Redemption of Shares" in the Statement of Additional
Information for examples of when the right of redemption
may be suspended.
At various times, the Portfolio may receive a request
to redeem shares for which it has not yet received good
payment. In such circumstances, redemption proceeds will be
forwarded upon collection of payment for the shares;
collection of payment may take 10 or more days. The
Portfolio intends to pay cash for all shares redeemed, but
under abnormal conditions that make payment in cash unwise,
payment may be made wholly or partly in portfolio
securities with a market value equal to the redemption
price. In such cases, an investor may incur brokerage costs
in converting such securities to cash.
NET ASSET VALUE
An order to buy shares will be executed at a per share
price equal to the net asset value next determined after
the receipt of the purchase order by the Distributor plus
any applicable sales charge (the "offering price"). No
certificates representing shares will be issued. An order
to sell shares will be executed at the net asset value per
share next determined after receipt and effectiveness of a
request for redemption in good order. Net asset value per
share is determined as of the close of business of the New
York Stock Exchange (currently, 4:00 p.m. Eastern time) on
each Business Day. Payment to shareholders for shares
redeemed will be made within seven days after receipt by
the Distributor of the redemption order.
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<PAGE>
HOW THE
NET ASSET VALUE
IS DETERMINED
The net asset value per share of the Portfolio is
determined by dividing the total market value of its
investments and other assets, less any liabilities, by the
total number of outstanding shares of the Portfolio. The
Portfolio may use a pricing service to obtain the last sale
price of each equity or fixed income security held by the
Portfolio. In addition, portfolio securities are valued at
the last quoted sales price for such securities, or, if
there is no such reported sales price on the valuation
date, at the most recent quoted bid price. Unlisted
securities for which market quotations are readily
available are valued at the most recent quoted bid price.
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 each Business Day.
Purchases will be made in full and fractional shares of the
Portfolio calculated to three decimal places. Although the
methodology and procedures for determining net asset value
per share are identical for both classes of the Portfolio,
the net asset value per share of one class may differ from
that of another class because of the different distribution
fees charged to each class and the incremental transfer
agent fees charged to Class D shares.
RIGHTS OF ACCUMULATION
In calculating the sales charge rates applicable to current
purchases of the Portfolio's shares, a "single purchaser"
(defined below) is entitled to combine current purchases
with the current market value of previously purchased
shares of the Portfolio and Class D shares of other
portfolios ("Eligible Portfolios") which are sold subject
to a comparable sales charge.
The term "single purchaser" refers to (i) an
individual, (ii) an individual and spouse purchasing shares
of the Portfolio for their own account or for trust or
custodial accounts of their minor children, or (iii) a
fiduciary purchasing for any one trust, estate or fiduciary
account, including employee benefit plans created under
Sections 401 or 457 of the Code, including related plans of
the same employer. Furthermore, under this provision,
purchases by a single purchaser shall include purchases by
an individual for his or her own account in combination
with (i) purchases of that individual and spouse for their
joint accounts or for trust and custodial accounts for
their minor children and (ii) purchases of that
individual's spouse for his or her own account. To be
entitled to a reduced sales charge based upon shares
already owned, the investor must ask the Transfer Agent for
such reduction at the time of purchase and provide the
account number(s) of the investor, the investor and spouse,
and their children (under age 21). The Portfolio may amend
or terminate this right of accumulation at any time as to
subsequent purchases.
LETTER OF INTENT
By submitting a Letter of Intent (the "Letter") to the
Transfer Agent, a single purchaser may purchase shares of
the Portfolio and the other Eligible Portfolios during a
13-month period at the reduced sales charge rates applying
to the aggregate amount of the intended purchases stated in
the Letter. The Letter may apply to purchases made up to 90
days before the date of the Letter. It is the shareholder's
responsibility to notify SEI
20
<PAGE>
Management at the time the Letter is submitted that there
are prior purchases that may apply.
Five percent (5%) of the total amount intended to be
purchased will be held in escrow by the Transfer Agent
until such purchase is completed within the 13-month
period. The 13-month period begins on the date of the
earliest purchase. If the intended investment is not
completed, SEI Management will surrender an appropriate
number of the escrowed shares for redemption in order to
realize the difference between the sales charge on the
shares purchased at the reduced rate and the sales charge
otherwise applicable to the total shares purchased. Such
purchasers may include the value of all their shares of the
Portfolio and of any of the other Eligible Portfolios
towards the completion of such Letter.
SALES CHARGE WAIVERS
No sales charge is imposed on shares of the Portfolio: (i)
issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Trust is a
party; (ii) sold to dealers or brokers that have a sales
agreement with the Distributor ("participating
broker-dealers"), for their own account or for retirement
plans for employees or sold to present employees of dealers
or brokers that certify to the Distributor at the time of
purchase that such purchase is for their own account; (iii)
sold to present employees of SEI or one of its affiliates,
or of any entity which is a current service provider to the
Trust; (iv) sold to tax-exempt organizations enumerated in
Section 501(c) of the Code or qualified employee benefit
plans created under Sections 401, 403(b)(7) or 457 of the
Code (but not IRAs or SEPs); (v) sold to fee-based clients
of banks, financial planners and investment advisers; (vi)
sold to clients of trust companies and bank trust
departments; (vii) sold to trustees and officers of the
Trust; (viii) purchased with proceeds from the recent
redemption of shares of another class of shares of a
portfolio of the Trust or Class D shares of SEI Tax Exempt
Trust, SEI International Trust or SEI Liquid Asset Trust;
(ix) purchased with the proceeds from the recent redemption
of shares of a mutual fund with similar investment
objectives and policies for which a front-end sales charge
was paid (this offer will be extended, to cover shares on
which a deferred sales charge was paid, if permitted under
regulatory authorities' interpretation of applicable law);
(x) sold to participants or members of certain affinity
groups, such as trade associations or membership
organizations, which have entered into arrangements with
the Distributor; or (xi) sold to persons participating in
certain financial services programs offered by the bank
affiliates of First Security Corporation.
An investor relying upon any of the categories of
waivers of sales charges must qualify such waiver in
advance of the purchase with the Transfer Agent or the
financial institution or the intermediary through which
shares are purchased by the investor.
The waiver of the sales charge under circumstances
(viii) and (ix) above applies only if the following
conditions are met: the purchase must be made within 60
days of the redemption; the Transfer Agent must be notified
in writing by the investor, or his or her
21
<PAGE>
agent, at the time a purchase is made; and a copy of the
investor's account statement showing such redemption must
accompany such notice. The waiver policy with respect to
the purchase of shares through the use of proceeds from a
recent redemption as described in clauses (viii) and (ix)
above will not be continued indefinitely and may be
discontinued at any time without notice. Investors should
call 1-800-437-6016 to confirm availability prior to
initiating the procedures described in clauses (viii) and
(ix) above.
The Distributor has also entered into arrangements
with certain affinity groups and broker-dealers wherein
their members or clients are entitled to percentage-based
discounts from the otherwise applicable sales charge for
purchase of Class D shares. Currently the percentage-based
discount is either 10% or 50%. Members of affinity groups
and clients of broker-dealers should see the Statement of
Additional Information or contact the Transfer Agent for
further information.
SIGNATURE GUARANTEES
The Transfer Agent may require that the signatures on the
written request be guaranteed. You should be able to obtain
a signature guarantee from a bank, broker, dealer, certain
credit unions, securities exchange or association, clearing
agency or savings association. Notaries public cannot
guarantee signatures. The signature guarantee requirement
will be waived if all of the following conditions apply:
(1) the redemption is for not more than $5,000 worth of
shares, (2) the redemption check is payable to the
shareholder(s) of record, and (3) the redemption check is
mailed to the shareholder(s) at his or her address of
record. The Trust and SEI Management reserve the right to
amend these requirements without notice.
TELEPHONE/WIRE INSTRUCTIONS
Redemption orders may be placed by telephone. Neither the
Trust nor the Transfer 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 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, and you experience
difficulties placing redemption orders by telephone, you
may wish to consider placing your order by other means.
SYSTEMATIC
WITHDRAWAL
PLAN ("SWP")
Please note that if withdrawals exceed income dividends,
your invested principal in the account will be depleted.
Thus, depending upon the frequency and amounts of the
withdrawal payments and/or any fluctuations in the net
asset value per share, your original investment could be
exhausted entirely. To participate in the SWP, you must
have your dividends automatically reinvested. You may
change or cancel the SWP at any time, upon written notice
to the Transfer Agent.
HOW TO
CLOSE YOUR ACCOUNT
An account may be closed by providing written notice to the
Transfer Agent. You may also close your account by
telephone if you have previously elected telephone options
on your account application.
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GENERAL INFORMATION
______________________________________________________________
THE TRUST
The Trust was organized as a Massachusetts business trust
under a Declaration of Trust dated October 20, 1986. The
Declaration of Trust permits the Trust to offer separate
series ("portfolios") of shares and different classes of
the Portfolio. Shareholders may purchase shares in the
Portfolio through two separate classes: Class A and Class D
shares, which provide for variation in distribution and
transfer agent costs, voting rights, dividends, and the
imposition of a sales charge on the Class D shares.
Additional information pertaining to the Trust may be
obtained by writing to SEI Fund Management, Oaks,
Pennsylvania 19456, or by calling 1-800-437-6016. All
consideration received by the Trust for shares of any
portfolio and all assets of such portfolio belong to that
portfolio 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, including litigation and
other extraordinary expenses, brokerage costs, interest
charges, taxes and organization expenses.
Certain shareholders in the Trust may obtain asset
allocation services from the Adviser and other financial
intermediaries with respect to their investments in the
Trust. If a sufficient amount of the Portfolio's assets are
subject to such asset allocation services, the Portfolio
may incur higher transaction costs and a higher portfolio
turnover rate than would otherwise be anticipated as a
result of redemptions and purchases of Portfolio shares
pursuant to such services. Further, to the extent that the
Adviser is providing asset allocation services and
providing investment advice to the Portfolio, it may face
conflicts of interest in fulfilling its responsibilities
because of the possible differences between the interests
of its asset allocation clients and the interests of the
Portfolio.
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. The shareholders of each Portfolio of the Trust will
vote separately on matters relating solely to that
Portfolio. The shareholders of each class will vote
separately on matters pertaining to its 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.
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<PAGE>
REPORTING
The Trust issues unaudited financial statements
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 DST Systems,
Inc., P.O. Box 419240, Kansas City, Missouri 64141-6240.
DIVIDENDS
Substantially all of the net investment income (exclusive
of capital gains) of the Portfolio is periodically declared
and paid as a dividend. Dividends currently are paid on a
quarterly basis for the Portfolio. Currently, capital
gains, if any, are 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 D shares will normally be
lower than on Class A shares of the Portfolio because of
the additional distribution and transfer agent expenses
charged to Class D shares.
COUNSEL AND INDEPENDENT
ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
Price Waterhouse LLP serves as the independent accountants
of the Trust.
CUSTODIAN AND WIRE AGENT
CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box
7618, Philadelphia, Pennsylvania 19101 (the "Custodian"),
acts as custodian and wire agent of the Trust's assets. The
Custodian holds cash, securities and other assets of the
Trust as required by the 1940 Act.
DESCRIPTION OF
PERMITTED
INVESTMENTS AND
RISK FACTORS
______________________________________________________________________
The following is a description of the permitted investment
practices for the Portfolio, and the associated risk
factors:
AMERICAN DEPOSITARY
RECEIPTS ("ADRS")
ADRs are securities, typically issued by 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
24
<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 underlying
security.
CONVERTIBLE SECURITIES
Convertible securities are corporate securities that are
exchangeable for a set number of another security at a
prestated price. Convertible securities typically have
characteristics similar to both fixed-income and equity
securities. Because of the conversion feature, the market
value of a convertible security tends to move with the
market value of the underlying stock. The value of a
convertible security is also affected by prevailing
interest rates, the credit quality of the issuer, and any
call provisions.
DERIVATIVES
Derivatives are securities that derive their value from
other securities, assets or indices. The following are
considered derivative securities: options on futures,
futures, options (e.g., puts and calls), swap agreements,
mortgage-backed securities (e.g., CMOs, REMICs, IOs and
POs), when-issued securities and forward commitments,
floating and variable rate securities, convertible
securities, "stripped" U.S. Treasury securities (e.g.,
Receipts and STRIPs), privately issued stripped securities
(e.g., TGRs, TRs and CATS). See elsewhere in this
"Description of Permitted Investments and Risk Factors" for
discussions of these various instruments.
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 prices of longer maturity securities are also
subject to greater market fluctuations as a result of
changes in interest rates.
FUTURES AND OPTIONS ON
FUTURES
Futures contracts provide for the future sale by one party
and purchase by another party of a specified amount of a
specific security at a specified future time and at a
specified price. An option on a futures contract give the
purchaser the right, in exchange for a premium, to assume a
position in a futures contract at a specified exercise
price during the term of the option. The Portfolio may use
futures contracts and related options for bona fide hedging
purposes, to offset changes in the value of securities held
or expected to be acquired or be disposed of, to minimize
fluctuations in foreign currencies, or to gain exposure to
a particular market or instrument. The Portfolio will
minimize the risk that it will be unable to close out a
futures contract that are traded on national futures
exchanges.
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
25
<PAGE>
delivery of the stocks 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, high grade debt securities equal to the market
value of the futures positions held, less margin deposits,
in a segregated account with the Trust's Custodian.
Collateral equal to the current market value of the futures
position will be marked to market on a daily basis.
The 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 "bone 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.
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 future, (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 option on
futures.
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.
MONEY MARKET SECURITIES
Money market securities 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.
OPTIONS
A put option gives the purchase of the option the right to
sell, and the writer of the option the obligation to buy,
the underlying security at any time during the option
period. A call option gives the purchaser of the option the
right to buy, and the writer of the option the obligation
to sell, the underlying security at any time during the
option period.
26
<PAGE>
The premium paid to the writer is the consideration for
undertaking the obligations under the option contract.
The Portfolio may purchase and write put and call
options on indices and enter into related closing
transactions. Put and call options on indices are similar
to options on securities except that options on an index
give the holder the right to receive, upon exercise of the
option, an amount of cash if the closing level of the
underlying index is greater than (or less than, in the case
of puts) the exercise price of the option. This amount of
cash is equal to the difference between the closing price
of the index and the exercise price of the option,
expressed in dollars multiplied by a specified number.
Thus, unlike options on individual securities, all
settlements are in cash, and gain or loss depends on price
movements in the particular market represented by the index
generally, rather than the price movements in individual
securities.
All options written on indices must be covered. When
the Portfolio writes an option on an index, it will
establish a segregated account containing cash or liquid,
high grade debt securities with its Custodian in an amount
at least equal to the market value of the option and will
maintain the account while the option is open or will
otherwise cover the transaction.
RISK FACTORS: Risks associated with options
transactions include: (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
correlation between the movement in prices of options and
the securities underlying them; (3) there may not be a
liquid secondary market for option; and (4) while the
Portfolio will receive a premium when it writes covered
call options, it may not participate fully in a rise in the
market value of the underlying security.
SECURITIES LENDING
In order to generate additional income, the Portfolio may
lend its securities pursuant to agreements that require
that the loan be continuously secured by collateral
consisting of cash or securities of the U.S. Government or
its agencies equal to at least 100% of the market value of
the loaned securities. The Portfolio continues to receive
interest on the loaned securities while simultaneously
earning interest on the investment of cash collateral.
Collateral is marked to market daily. There may be risks of
delay in recovery of the securities or even loss of rights
in the collateral should the borrower of the securities
fail financially or become insolvent.
SECURITIES OF FOREIGN ISSUERS
There are certain risks connected with investing in foreign
securities. These include risks of adverse political and
economic developments (including possible governmental
seizure or nationalization of assets), the possible
imposition of exchange controls or other governmental
restrictions, less uniformity in accounting and reporting
requirements, the possibility that there will be less
information on such securities and their issuers available
to the public, the difficulty of obtaining or enforcing
court judgments abroad, restrictions on foreign investments
in other jurisdictions, difficulties in effecting
repatriation of capital
27
<PAGE>
invested abroad, and difficulties in transaction
settlements and the effect of delay on shareholder equity.
Foreign securities may be subject to foreign taxes, and may
be less marketable than comparable U.S. securities.
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., Federal National Mortgage
Association 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.
WARRANTS
Warrants are instruments giving holders the right, but not
the obligation, to buy equity or fixed income securities of
a company at a given price during a specified period.
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 with the
custodian a separate account with liquid, high grade debt
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 permitted investments and risk
factors can be found in the Statement of Additional
Information.
28
<PAGE>
SEI INSTITUTIONAL MANAGED TRUST
Manager:
SEI Fund Management
Distributor:
SEI Financial Services Company
Investment Adviser and Sub-Advisers:
1838 Investment Advisors, L.P.
Alliance Capital Management L.P.
BEA Associates
BlackRock Financial Management, Inc.
Boatmen's Trust Company
Boston Partners Asset Management, L.P.
First of America Investment Corporation
Firstar Investment Research &
Management Company
Furman Selz Capital Management LLC
IDS Advisory Group Inc.
LSV Asset Management
Martingale Asset Management, L.P.
Mellon Equity Associates
Nicholas-Applegate Capital Management, Inc.
Pacific Alliance Capital Management
Provident Investment Counsel, Inc.
SEI Financial Management Corporation
STI Capital Management, N.A.
Wall Street Associates
Western Asset Management Company
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
January 31, 1997. Prospectuses may be obtained by writing the Trust's
distributor, SEI Financial Services Company, at Oaks, Pennsylvania 19456, or by
calling 1-800-342-5734.
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Trust............................................................................. S-2
Description of Permitted Investments.................................................. S-2
Investment Limitations................................................................ S-10
Description of Ratings................................................................ S-11
The Manager........................................................................... S-16
The Adviser and Sub-Advisers.......................................................... S-17
Distribution and Shareholder Servicing................................................ S-19
Trustees and Officers of the Trust.................................................... S-20
Performance........................................................................... S-23
Purchase and Redemption of Shares..................................................... S-25
Shareholder Services (Class D Shares)................................................. S-26
Taxes................................................................................. S-27
Portfolio Transactions................................................................ S-29
Description of Shares................................................................. S-32
Limitation of Trustees' Liability..................................................... S-33
Voting................................................................................ S-33
Shareholder Liability................................................................. S-33
Control Persons and Principal Holders of Securities................................... S-33
Experts............................................................................... S-34
Financial Statements.................................................................. S-34
January 31, 1997
SEI-F-048-08
</TABLE>
<PAGE>
THE TRUST
SEI Institutional Managed Trust (the "Trust") is an open-end management
investment company that offers shares of diversified portfolios. The Trust was
established as a Massachusetts business trust pursuant to a Declaration of Trust
dated October 20, 1986. The Declaration of Trust permits the Trust to offer
separate series ("portfolios") of units of beneficial interest ("shares") and
separate classes of portfolios. Shareholders may purchase shares in certain
portfolios through two separate classes, Class A and Class D, which provide for
variations in sales charges, distribution costs, transfer agent fees, voting
rights and dividends. Except for differences between the Class A shares and/or
Class D shares pertaining to sales charges, distribution and shareholder
servicing, voting rights, dividends and transfer agent expenses, 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 following
portfolios: Balanced, Bond, Capital Appreciation, Equity Income, High Yield
Bond, Core Fixed Income (formerly, the Limited Volatility Bond Portfolio), Large
Cap Growth, Large Cap Value, Mid-Cap (formerly, the Mid-Cap Growth Portfolio),
Small Cap Growth and Small Cap Value Portfolios (each a "Portfolio" and,
together, the "Portfolios"), and any different classes of the Portfolios.
DESCRIPTION OF PERMITTED INVESTMENTS
ALL PORTFOLIOS MAY INVEST IN THE FOLLOWING INVESTMENTS UNLESS SPECIFICALLY
NOTED OTHERWISE.
AMERICAN DEPOSITORY RECEIPTS ("ADRS")--The Balanced, Capital Appreciation,
Equity Income, High Yield Bond, Large Cap Growth, Large Cap Value and Small Cap
Value Portfolios may invest in ADRs traded on registered exchanges or on NASDAQ.
The Large Cap Growth Portfolio may also invest in ADRs not traded on an
established exchange. While the Portfolios typically invest in sponsored ADRs,
joint arrangements between the issuer and the depositary, some ADRs may be
unsponsored. Unlike sponsored ADRs, the holders of unsponsored ADRs bear all
expenses and the depositary may not be obligated to distribute shareholder
communications or to pass through the voting rights on the deposited securities.
ASSET-BACKED SECURITIES--The Bond, Core Fixed Income and High Yield Bond
Portfolios may invest in securities backed by automobile, credit-card or other
types of receivables in securities backed by other types of assets. Credit
support for asset-backed securities may be based on the underlying assets and/
or provided by a third party through credit enhancements. Credit enhancement
techniques include letters of credit, insurance bonds, limited guarantees (which
are generally provided by the issuer), senior-subordinated structures and
overcollateralization.
Asset-backed securities are not issued or guaranteed by the United States
Government or its agencies or instrumentalities; however, the payment of
principal and interest on such obligations may be guaranteed up to certain
amounts and for a certain period by a letter of credit issued by a financial
institution (such as a bank or insurance company) unaffiliated with the issuers
of such securities. The purchase of asset-backed securities raises risk
considerations peculiar to the financing of the instruments underlying such
securities. For example, there is a risk that another party could acquire an
interest in the obligations superior to that of the holders of the asset-backed
securities. There also is the possibility that recoveries on repossessed
collateral may not, in some cases, be available to support payments on those
securities. Asset-backed securities entail prepayment risk, which may vary
depending on the type of asset, but is generally less than the prepayment risk
associated with mortgage-backed securities. In addition, credit card receivables
are unsecured obligations of the card holders.
The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be a limited secondary market for such
securities.
S-2
<PAGE>
BANKERS' ACCEPTANCES--A bankers' acceptance is a bill of exchange or time
draft drawn on and accepted by a commercial bank. It is used by corporations to
finance the shipment and storage of goods and to furnish dollar exchange.
Maturities are generally six months or less.
CERTIFICATES OF DEPOSIT--A certificate of deposit is a negotiable,
interest-bearing instrument with a specific maturity. Certificates of deposit
are issued by banks and savings and loan institutions in exchange for the
deposit of funds, and normally can be traded in the secondary market prior to
maturity. Certificates of deposit have penalties for early withdrawal.
COMMERCIAL PAPER--Commercial paper is the term used to designate unsecured,
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a day to nine months.
CONVERTIBLE SECURITIES--Convertible securities have characteristics similar
to both fixed income and equity securities. Because of the conversion feature,
the market value of convertible securities tends to move together with the
market value of the underlying stock. As a result, a Portfolio's selection of
convertible securities is based, to a great extent, on the potential for capital
appreciation that may exist in the underlying stock. The value of convertible
securities is also affected by prevailing interest rates, the credit quality of
the issuer and any call provisions. The Bond, Capital Appreciation, Equity
Income, High Yield Bond, Mid-Cap, Large Cap Growth, Large Cap Value, Small Cap
Growth and Small Cap Value Portfolios may invest in convertible securities.
FOREIGN SECURITIES--The Balanced, Capital Appreciation, Equity Income, High
Yield Bond, Small Cap Growth, Small Cap Value, Large Cap Growth and Large Cap
Value Portfolios may invest in U.S. dollar denominated obligations or securities
of foreign issuers. In addition, the Bond, Core Fixed Income and High Yield Bond
Portfolios may invest in Yankee Obligations. Permissible investments may consist
of obligations of foreign branches of U.S. banks and foreign banks, including
European Certificates of Deposit, European Time Deposits, Canadian Time
Deposits, Yankee Certificates of Deposit and investments in Canadian Commercial
Paper, foreign securities and Europaper. These instruments may subject the
Portfolio to investment risks that differ in some respects from those related to
investments in obligations of U.S. issuers. Such risks include future adverse
political and economic developments, the possible imposition of withholding
taxes on interest or other income, possible seizure, nationalization, or
expropriation of foreign deposits, the possible establishment of exchange
controls or taxation at the source, greater fluctuations in value due to changes
in the exchange rates, or the adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and interest
on such obligations. Such investments may also entail higher custodial fees and
sales commissions than domestic investments. Foreign issuers of securities or
obligations are often subject to accounting treatment and engage in business
practices different from those respecting domestic issuers of similar securities
or obligations. Foreign branches of U.S. banks and foreign banks may be subject
to less stringent reserve requirements than those applicable to domestic
branches of U.S. banks.
FORWARD FOREIGN CURRENCY CONTRACTS--At the maturity of a forward contract, a
Portfolio may either sell a portfolio security and make delivery of the foreign
currency, or it may retain the security and terminate its contractual obligation
to deliver the foreign currency by purchasing an "offsetting" contract with the
same currency trader, obligating it to purchase, on the same maturity date, the
same amount of the foreign currency. A Portfolio may realize a gain or loss from
currency transactions.
LOWER RATED SECURITIES--The High Yield Bond Portfolio will invest in
lower-rated bonds commonly referred to as "junk bonds" or high-yield/high-risk
securities. Lower rated securities are defined as securities below the fourth
highest rating category by a nationally recognized statistical rating
organization ("NRSRO"). Such obligations are speculative and may be in default.
There is no bottom limit on the ratings of high-yield securities that may be
purchased or held by the Portfolio. In addition, the Portfolio may invest in
unrated securities subject to the restrictions stated in the Prospectus.
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CERTAIN RISK FACTORS RELATING TO HIGH-YIELD, HIGH-RISK SECURITIES. The
descriptions below are intended to supplement the discussion in the Prospectus
under "Risk Factors."
GROWTH OF HIGH-YIELD BOND, HIGH-RISK BOND MARKET. The widespread expansion
of government, consumer and corporate debt within the U.S. economy has made the
corporate sector more vulnerable to economic downturns or increased interest
rates. Further, an economic downturn could severely disrupt the market for lower
rated bonds and adversely affect the value of outstanding bonds and the ability
of the issuers to repay principal and interest.
SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES. Lower rated bonds are
very sensitive to adverse economic changes and corporate developments. During an
economic down turn or substantial period of rising interest rates, highly
leveraged issuers may experience financial stress that would adversely affect
their ability to service their principal and interest payment obligations, to
meet projected business goals, and to obtain additional financing. If the issuer
of a bond defaulted on its obligations to pay interest or principal or entered
into bankruptcy proceedings, the Portfolio may incur losses or expenses in
seeking recovery of amounts owed to it. In addition, periods of economic
uncertainty and change can be expected to result in increased volatility of
market prices of high-yield, high-risk bonds and the Portfolio's net asset
value.
PAYMENT EXPECTATIONS. High-yield, high-risk bonds may contain redemption or
call provisions. If an issuer exercised these provisions in a declining interest
rate market, the Portfolio would have to replace the security with a lower
yielding security, resulting in a decreased return for investors. Conversely, a
high-yield, high-risk bond's value will decrease in a rising interest rate
market, as will the value of the Portfolio's assets. If the Portfolio
experiences significant unexpected net redemptions, this may force it to sell
high-yield, high-risk bonds without regard to their investment merits, thereby
decreasing the asset base upon which expenses can be spread and possibly
reducing the Portfolio's rate of return.
LIQUIDITY AND VALUATION. There may be little trading in the secondary
market for particular bonds, which may affect adversely the Portfolio's ability
to value accurately or dispose of such bonds. Adverse publicity and investor
perception, whether or not based on fundamental analysis, may decrease the
values and liquidity of high-yield, high-risk bonds, especially in a thin
market.
LEGISLATION. Federal laws require the divestiture by federally insured
savings and loan associations of their investments in lower rated bonds and
limit the deductibility of interest by certain corporate issuers of high-yield
bonds. These laws could adversely affect the Portfolio's net asset value and
investment practices, the secondary market for high-yield securities, the
financial condition of issuers of these securities and the value of outstanding
high-yield securities.
TAXES. The Portfolio may purchase debt securities (such as zero-coupon or
pay-in-kind securities) that contain original issue discount. Original issue
discount that accrues in a taxable year is treated as earned by a Portfolio and
therefore is subject to the distribution requirements of the tax code. Because
the original issue discount earned by the Portfolio in a taxable year may not be
represented by cash income, the Portfolio may have to dispose of other
securities and use the proceeds to make distributions to shareholders.
MORTGAGE-BACKED SECURITIES--The Balanced, Bond, Core Fixed Income, and High
Yield Bond Portfolios may, consistent with their respective investment
objectives and policies, invest in mortgage-backed securities.
Mortgage-backed securities in which the Portfolios may invest represent
pools of mortgage loans assembled for sale to investors by various governmental
agencies such as the Government National Mortgage Association ("GNMA") and
government-related organizations such as the Federal National Mortgage
Association ("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC"),
as well as by non-governmental issuers such as commercial banks, savings and
loan institutions, mortgage
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bankers, and private mortgage insurance companies. Although certain
mortgage-backed securities are guaranteed by a third party or otherwise
similarly secured, the market value of the security, which may fluctuate, is not
so secured. If a Portfolio purchases a mortgage-backed security at a premium,
that portion may be lost if there is a decline in the market value of the
security whether resulting from changes in interest rates or prepayments in the
underlying mortgage collateral. As with other interest-bearing securities, the
prices of such securities are inversely affected by changes in interest rates.
However, though the value of a mortgage-backed security may decline when
interest rates rise, the converse is not necessarily true since in periods of
declining interest rates the mortgages underlying the securities are prone to
prepayment. When the mortgage-backed securities held by a Portfolio are prepaid,
the Portfolio must reinvest the proceeds in securities the yield of which
reflects prevailing interest rates, which may be lower than the prepaid
security. For this and other reasons, a mortgage-backed security's stated
maturity may be shortened by unscheduled prepayments on the underlying mortgages
and, therefore, it is not possible to predict accurately the security's return
to a Portfolio. In addition, regular payments received in respect of
mortgage-backed securities include both interest and principal. No assurance can
be given as to the return a Portfolio will receive when these amounts are
reinvested.
A Portfolio may also invest in mortgage-backed securities that are
collateralized mortgage obligations structured on pools of mortgage pass-through
certificates or mortgage loans. For purposes of determining the average maturity
of a mortgage-backed security in its investment portfolio, the Core Fixed Income
Portfolio will utilize the expected average life of the security, as estimated
in good faith by the Portfolio's advisers. Unlike most single family residential
mortgages, commercial real estate property loans often contain provisions which
substantially reduce the likelihood that such securities will be prepaid. The
provisions generally impose significant prepayment penalties on loans and, in
some cases there may be prohibitions on principal prepayments for several years
following origination.
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-backed securities
and among the securities that they issue. Mortgage-backed securities issued by
the GNMA include GNMA Mortgage Pass-Through Certificates (also known as "Ginnie
Maes") that are guaranteed as to the timely payment of principal and interest by
GNMA and are backed by the full faith and credit of the United States. GNMA is a
wholly-owned U.S. Government corporation within the Department of Housing and
Urban Development. GNMA certificates also are supported by the authority of GNMA
to borrow funds from the U.S. Treasury to make payments under its guarantee.
Mortgage-backed securities issued by the FNMA include FNMA Guaranteed Mortgage
Pass-Through Certificates (also known as "Fannie Maes") that are solely the
obligations of the FNMA and are not backed by or entitled to the full faith and
credit of the United States. The FNMA is a government-sponsored organization
owned entirely by private stockholders. Fannie Maes are guaranteed as to timely
payment of the principal and interest by FNMA. 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. 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. FNMA REMIC
Certificates are issued and guaranteed as to timely distribution of principal
and interest by FNMA.
MORTGAGE DOLLAR ROLLS--Mortgage dollar rolls may be renewed prior to cash
settlement and initially may involve only a firm commitment agreement by the
Portfolio to buy a security. If the broker-
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dealer to whom the Portfolio sells the security becomes insolvent, the
Portfolio's right to repurchase the security may be restricted. Other risks
involved in entering into mortgage dollar rolls include the risk that the value
of the security may change adversely over the term of the mortgage dollar roll
and that the security the Portfolio is required to repurchase may be worth less
than the security that the Portfolio originally held.
MUNICIPAL SECURITIES--The Core Fixed Income Portfolio may invest in
municipal securities. The two principal classifications of Municipal Securities
are "general obligation" and "revenue" issues. General obligation issues are
issues involving the credit of an issuer possessing taxing power and are payable
from the issuer's general unrestricted revenues, although the characteristics
and method of enforcement of general obligation issues may vary according to the
law applicable to the particular issuer. Revenue issues are payable only from
the revenues derived from a particular facility or class of facilities or other
specific revenue source. A Portfolio may also invest in "moral obligation"
issues, which are normally issued by special purpose authorities. Moral
obligation issues are not backed by the full faith and credit of the state and
are generally backed by the agreement of the issuing authority to request
appropriations from the state legislative body. Municipal Securities include
debt obligations issued by governmental entities to obtain funds for various
public purposes, such as the construction of a wide range of public facilities,
the refunding of outstanding obligations, the payment of general operating
expenses, and the extension of loans to other public institutions and
facilities. Certain private activity bonds that are issued by or on behalf of
public authorities to finance various privately-owned or operated facilities are
included within the term "Municipal Securities." Private activity bonds and
industrial development bonds are generally revenue bonds, the credit and quality
of which are directly related to the credit of the private user of the
facilities.
Municipal Securities may also include general obligation notes, tax
anticipation notes, bond anticipation notes, revenue anticipation notes, project
notes, certificates of indebtedness, demand notes, tax-exempt commercial paper,
construction loan notes and other forms of short-term, tax-exempt loans. Such
instruments are issued with a short-term maturity in anticipation of the receipt
of tax funds, the proceeds of bond placements or other revenues. Project notes
are issued by a state or local housing agency and are sold by the Department of
Housing and Urban Development. While the issuing agency has the primary
obligation with respect to its project notes, they are also secured by the full
faith and credit of the United States through agreements with the issuing
authority which provide that, if required, the federal government will lend the
issuer an amount equal to the principal of and interest on the project notes.
The quality of Municipal Securities, both within a particular classification
and between classifications, will vary, and the yields on Municipal Securities
depend upon a variety of factors, including general money market conditions, the
financial condition of the issuer (or other entity whose financial resources are
supporting the securities), general conditions of the municipal bond market, the
size of a particular offering, the maturity of the obligation and the rating(s)
of the issue. In this regard, it should be emphasized that the ratings of any
NRSRO are general and are not absolute standards of quality. Municipal
Securities with the same maturity, interest rate and rating(s) may have
different yields, while Municipal Securities of the same maturity and interest
rate with different rating(s) may have the same yield.
An issuer's obligations under its Municipal Securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the Federal Bankruptcy Code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations or upon the ability of municipalities to
levy taxes. The power or ability of an issuer to meet its obligations for the
payment of interest on and principal of its Municipal Securities may be
materially adversely affected by litigation or other conditions.
MUNICIPAL LEASES--The Core Fixed Income Portfolio may invest in instruments,
or participations in instruments, issued in connection with lease obligations or
installment purchase contract obligations of municipalities ("municipal lease
obligations"). Although municipal lease obligations do not constitute
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general obligations of the issuing municipality, a lease obligation is
ordinarily backed by the municipality's covenant to budget for, appropriate
funds for, and make the payments due under the lease obligation. However,
certain lease obligations contain "non-appropriation" clauses, which provide
that the municipality has no obligation to make lease or installment purchase
payments in future years unless money is appropriated for such purpose in the
relevant years. Municipal lease obligations are a relatively new form of
financing, and the market for such obligations is still developing. Municipal
leases will be treated as liquid only if they satisfy criteria set forth in
guidelines established by the Board of Trustees, and there can be no assurance
that a market will exist or continue to exist for any municipal lease
obligation.
PAY-IN-KIND BONDS--Investments of the Bond, Core Fixed Income and High Yield
Bond Portfolios in fixed-income securities may include pay-in-kind bonds. These
are securities which, at the issuer's option, pay interest in either cash or
additional securities for a specified period. Pay-in-kind bonds, like zero
coupon bonds, are designed to give an issuer flexibility in managing cash flow.
Pay-in-kind bonds are expected to reflect the market value of the underlying
debt plus an amount representing accrued interest since the last payment.
Pay-in-kind bonds are usually less volatile than zero coupon bonds, but more
volatile than cash pay securities.
OPTIONS--Options are contracts that give one of the parties to the contract
the right to buy or sell the security that is subject to the option at a stated
price during the option period, and obligates the other party to the contract to
buy or sell such security at the stated price during the option period.
Each Portfolio may trade put and call options on securities and securities
indices, as the advisers determine is appropriate in seeking the Portfolio's
investment objective, and except as restricted by each Portfolio's investment
limitations as set forth below. See "Investment Limitations."
A put option gives the purchaser (a Portfolio) the right to sell, and
imposes on the writer an obligation to buy, the underlying security at the
exercise price during the option period. The advantage to a Portfolio of buying
the protective put is that if the price of the security falls during the option
period, the Portfolio may exercise the put and receive the higher price for the
security. However, if the security rises in value, the Portfolio will have paid
a premium for the put, which will expire unexercised.
A call option gives the purchaser the right to buy and imposes on the writer
(a Portfolio) the obligation to sell, the underlying security at the exercise
price during the option period. The advantage to a Portfolio of writing covered
call options is that the Portfolio receives a premium, which is additional
income. However, if the security rises in value, the Portfolio may not fully
participate in the market appreciation. During the option period, a covered call
option writer may be assigned an exercise notice by the broker-dealer through
whom such call option was sold requiring the writer to deliver the underlying
security against payment of the exercise price. A Portfolio's obligation as the
writer of a covered call is terminated upon the expiration of the option period
or at such earlier time in which the writer effects a closing purchase
transaction. As noted above, a closing purchase transaction is one in which a
Portfolio, when obligated as a writer of an option, terminates its obligation by
purchasing an option of the same series as the option previously written. A
closing purchase transaction cannot be effected with respect to an option once
the option writer has received an exercise notice for such option.
A Portfolio may purchase and write options on an exchange or
over-the-counter. Over-the-counter options ("OTC options") differ from
exchange-traded options in several respects. They are transacted directly with
dealers and not with a clearing corporation, and therefore entail the risk of
non-performance by the dealer. OTC options are available for a greater variety
of securities and for a wider range of expiration dates and exercise prices than
are available for exchange-traded options. Because OTC options are not traded on
an exchange, pricing is done normally by reference to information from a market
maker. It is the position of the Securities and Exchange Commission that OTC
options are generally illiquid.
The market value of an option generally reflects the market price of an
underlying security. Other principal factors affecting market value include
supply and demand, interest rates, the pricing volatility of the underlying
security and the time remaining until the expiration date.
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RECEIPTS--Receipts are interests in separately traded interest and principal
component parts of U.S. Government obligations that are issued by banks or
brokerage firms and are created by depositing U.S. Government obligations into a
special account at a custodian bank. The custodian holds the interest and
principal payments for the benefit of the registered owners of the certificates
or receipts. The custodian arranges for the issuance of the certificates or
receipts evidencing ownership and maintains the register. Receipts include
"Treasury Receipts" ("TRs"), "Treasury Investment Growth Receipts" ("TIGRs"),
"Liquid Yield Option Notes" ("LYONs") and "Certificates of Accrual on Treasury
Securities" ("CATS"). LYONs, TIGRs and CATS are interests in private proprietary
accounts while TRs and STRIPS (See "U.S. Treasury Obligations") are interests in
accounts sponsored by the U.S. Treasury. Receipts are sold as zero coupon
securities; see "Zero Coupon Securities." The Bond, Capital Appreciation, Core
Fixed Income, Equity Income, and Large Cap Value Portfolios may invest in
receipts.
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 involved bears a risk of loss in the event that the other
party to a repurchase agreement defaults on its obligations and a Portfolio is
delayed or prevented from exercising its rights to dispose of the collateral
securities. An adviser enters into repurchase agreements only with financial
institutions that it 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. The advisers 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 of principal and
interest if the Portfolio is treated as an unsecured creditor.
RESTRICTED SECURITIES--Restricted securities are securities that may not be
sold freely to the public absent registration under the Securities Act of 1933,
as amended (the "1933 Act"), or an exemption from registration. Section 4(2)
commercial paper is issued in reliance on an exemption from registration under
Section 4(2) of the 1933 Act, and is generally sold to institutional investors
who purchase for investment. Any resale of such commercial paper must be in an
exempt transaction, usually to an institutional investor through the issuer or
investment dealers who make a market on such commercial paper. Rule 144A
securities are securities re-sold in reliance on an exemption from registration
provided by Rule 144A under the 1933 Act.
SECURITIES LENDING--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.
TIME DEPOSITS--Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits with a withdrawal penalty are
considered to be illiquid securities.
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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.
VARIABLE OR FLOATING RATE INSTRUMENTS--Variable or floating rate instruments
may involve a demand feature and may include variable amount master demand notes
available through the Custodian. Variable or floating rate instruments bear
interest at a rate which varies with changes in market rates. The holder of an
instrument with a demand feature may tender the instrument back to the issuer at
par prior to maturity. A variable amount master demand note is issued pursuant
to a written agreement between the issuer and the holder, its amount may be
increased by the holder or decreased by the holder or issuer, it is payable on
demand, and the rate of interest varies based upon an agreed formula. The
quality of the underlying credit must, in the opinion of a Portfolio's advisers,
be equivalent to the long-term bond or commercial paper ratings applicable to
permitted investments for each Portfolio. Each Portfolio's advisers will monitor
on an ongoing basis the earning power, cash flow, and liquidity ratios of the
issuers of such instruments and will similarly monitor the ability of an issuer
of a demand instrument to pay principal and interest on demand. 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.
In case of obligations which include a put feature at the option of the debt
holder, the date of the put may be used as an effective maturity date for the
purpose of determining weighted average portfolio maturity.
WHEN-ISSUED SECURITIES--When-Issued securities are securities that involve
the purchase of debt obligations on a when-issued basis, in which case delivery
and payment normally take place within 45 days after the date of commitment to
purchase. A 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. The when-issued securities are subject
to market fluctuation, and no interest accrues to the purchaser during this
period. 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. 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 when-issued obligations results in 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
that case there could be an unrealized loss at the time of delivery. A Portfolio
will establish a segregated account with the Custodian and maintain liquid
assets in an amount at least equal in value to that Portfolio's commitments to
purchase when-issued securities. If the value of these assets declines, the
Portfolio involved 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.
YANKEE OBLIGATIONS--Some securities issued by foreign governments or their
subdivisions, agencies and instrumentalities may not be backed by the full faith
and credit of the foreign government. Yankee obligations as obligations of
foreign issuers, are subject to the same types of risks discussed in "Securities
of Foreign Issuers," above.
The yankee obligations selected for the Portfolios will adhere to the same
quality standards as those utilized for the selection of domestic debt
obligations.
ZERO COUPON SECURITIES--STRIPS and Receipts (TRs, TIGRs, LYONs and CATS) are
sold as zero coupon securities, that is, fixed income securities that have been
stripped of their unmatured interest coupons. Zero coupon securities are sold at
a (usually substantial) discount and redeemed at face value at their maturity
date without interim cash payments of interest or principal. The amount of this
discount is
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accreted over the life of the security, and the accretion constitutes the income
earned on the security for both accounting and tax purposes. Because of these
features, the market prices of zero coupon securities are generally more
volatile than the market prices of securities that have similar maturity but
that pay interest periodically. Zero coupon securities are likely to respond to
a greater degree to interest rate changes than are non-zero coupon securities
with similar maturity and credit qualities. The Portfolio may have to dispose of
its portfolio securities under disadvantageous circumstances to generate cash,
or may have to leverage itself by borrowing cash to satisfy income distribution
requirements. A Portfolio accrues income with respect to the securities prior to
the receipt of cash payments. Pay-in-kind securities are securities that have
interest payable by delivery of additional securities. Deferred payment
securities are securities that remain zero coupon securities until a
predetermined date, at which time the stated coupon rate becomes effective and
interest becomes payable at regular intervals. See also "Taxes."
CORPORATE ZERO COUPON SECURITIES--Corporate zero coupon securities are: (i)
notes or debentures which do not pay current interest and are issued at
substantial discounts from par value, or (ii) notes or debentures that pay no
current interest until a stated date one or more years into the future, after
which date the issuer is obligated to pay interest until maturity, usually at a
higher rate than if interest were payable from the date of issuance, and may
also make interest payments in kind (E.G., with identical zero coupon
securities). Such corporate zero coupon securities, in addition to the risks
identified above, are subject to the risk of the issuer's failure to pay
interest and repay principal in accordance with the terms of the obligation.
INVESTMENT LIMITATIONS
FUNDAMENTAL POLICIES
No Portfolio may:
1. Borrow money in an amount exceeding 33 1/3% of the value of its total
assets, provided that, for purposes of this limitation, investment
strategies which either obligate a Portfolio to purchase securities or
require a Portfolio to segregate assets are not considered to be borrowings.
To the extent that its borrowings exceed 5% of its assets, (i) all
borrowings will be repaid before making additional investments and any
interest paid on such borrowings will reduce income; and (ii) asset coverage
of at least 300% is required.
2. Make loans if, as a result, more than 33 1/3% of its total assets would be
loaned to other parties, except that each Portfolio may (i) purchase or hold
debt instruments in accordance with its investment objective and policies;
(ii) enter into repurchase agreements; and (iii) lend its securities.
3. Purchase or sell real estate, physical commodities, or commodities
contracts, except that each Portfolio may purchase (i) marketable securities
issued by companies which own or invest in real estate (including real
estate investment trusts), commodities, or commodities contracts; and (ii)
commodities contracts relating to financial instruments, such as financial
futures contracts and options on such contracts.
4. Issue senior securities (as defined in the 1940 Act) except as permitted by
rule, regulation or order of the Securities and Exchange Commission (the
"SEC").
5. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
6. Invest in interests in oil, gas, or other mineral exploration or development
programs and oil, gas or mineral leases.
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 immediately after or as a result of a purchase of
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such security. These investment limitations and the investment limitations in
each Prospectus are fundamental policies of the Trust and may not be changed
without shareholder approval.
NON-FUNDAMENTAL POLICIES
No Portfolio may:
1. Pledge, mortgage or hypothecate assets except to secure borrowings permitted
by the Portfolio's fundamental limitation on borrowing.
2. Invest in companies for the purpose of exercising control.
3. Purchase securities on margin or effect short sales, except that each
Portfolio may (i) obtain short-term credits as necessary for the clearance
of security transactions; (ii) provide initial and variation margin payments
in connection with transactions involving futures contracts and options on
such contracts; and (iii) make short sales "against the box" or in
compliance with the SEC's position regarding the asset segregation
requirements imposed by Section 18 of the 1940 Act.
4. Invest its assets in securities of any investment company, except as
permitted by the 1940 Act or an order of exemption therefrom.
5. Purchase or hold illiquid securities, I.E., securities that cannot be
disposed of for their approximate carrying value in seven days or less
(which term includes repurchase agreements and time deposits maturing in
more than seven days) if, in the aggregate, more than 15% of its net assets
would be invested in illiquid securities.
6. Purchase securities which are not readily marketable, if, in the aggregate,
more than 15% of its total assets would be invested in such securities.
Under rules and regulations, established by the SEC, a Portfolio is
prohibited from acquiring the securities of other investment companies if, as a
result of such acquisition, the Portfolio owns more than 3% of the total voting
stock of the company; securities issued by any one investment company represent
more than 5% of the total Portfolio's assets; or securities (other than treasury
stock) issued by all investment companies represent more than 10% of the total
assets of the Portfolio. A Portfolio's purchase of such investment company
securities results in the bearing of expenses such that shareholders would
indirectly bear a proportionate share of the operating expenses of such
investment companies, including advisory fees.
Each of the foregoing percentage limitations (except with respect to the
limitation on investing in illiquid securities) apply at the time of purchase.
These limitations are non-fundamental and may be changed by the Trust's Board of
Trustees without a vote of shareholders.
DESCRIPTION OF RATINGS
DESCRIPTION OF CORPORATE BOND RATINGS
The following descriptions of corporate bond ratings have been published by
Moody's Investor's Service, Inc. ("Moody's"), Standard and Poor's Corporation
("S&P"), Duff and Phelps, Inc. ("Duff"), Fitch Investor's Services, Inc.
("Fitch"), IBCA Limited ("IBCA") and Thomson BankWatch ("Thomson"),
respectively.
DESCRIPTION OF MOODY'S LONG-TERM RATINGS
Aaa Bonds rated Aaa are judged to be of the best quality.They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to
S-11
<PAGE>
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risk appear somewhat larger than
the Aaa securities.
A Bonds rated A possess many favorable investment attributes and are to be
considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa Bonds rated Baa are considered as medium-grade obligations (I.E., they
are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment characteristics
and in fact have speculative characteristics as well.
DESCRIPTION OF S&P'S LONG-TERM RATINGS
INVESTMENT GRADE
AAA Debt rated "AAA" has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt only in small degree.
A Debt rated "A" has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.
BBB Debt rated "BBB" is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category than in higher rated categories.
DESCRIPTION OF DUFF'S LONG-TERM RATINGS
AAA Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA+ High credit quality. Protection factors are strong.
AA- Risk is modest but may vary slightly from time to time because of economic
conditions.
A+ Protection factors are average but adequate. However,
A- risk factors are more variable and greater in periods of economic stress.
BBB+ Below average protection factors but still considered
BBB- sufficient for prudent investment. Considerable variability in risk during
economic cycles.
S-12
<PAGE>
DESCRIPTION OF FITCH'S LONG-TERM RATINGS
INVESTMENT GRADE BOND
AAA Bonds rated AAA are judged to be strictly high grade, broadly marketable,
suitable for investment by trustees and fiduciary institutions liable to
slight market fluctuation other than through changes in the money rate. The
prime feature of an AAA bond is a showing of earnings several times or many
times greater than interest requirements, with such stability of applicable
earnings that safety is beyond reasonable question whatever changes occur
in conditions.
AA Bonds rated AA are judged to be of safety virtually beyond question and are
readily salable, whose merits are not unlike those of the AAA class, but
whose margin of safety is less strikingly broad. The issue may be the
obligation of a small company, strongly secured but influenced as to rating
by the lesser financial power of the enterprise and more local type market.
A Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB Bonds rated BBB are considered to be investment grade and of satisfactory
credit quality. The obligor's ability to pay interest and repay principal
is considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the ratings
of these bonds will fall below investment grade is higher than for bonds
with higher ratings.
DESCRIPTION OF IBCA'S LONG-TERM RATINGS
AAA Obligations rated AAA have the lowest expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial,
such that adverse changes in business, economic or financial conditions are
unlikely to increase investment risk significantly.
AA Obligations for which there is a very low expectation of investment risk
are rated AA. Capacity for timely repayment of principal and interest is
substantial. Adverse changes in business, economic or financial conditions
may increase investment risk albeit not very significantly.
A Bonds rated A are obligations for which there is a low expectation of
investment risk. Capacity for timely repayment of principal and interest is
strong, although adverse changes in business, economic or financial
conditions may lead to increased investment risk.
BBB Bonds rated BBB are obligations for which there is currently a low
expectation of investment risk. Capacity for timely repayment of principal
and interest is adequate, although adverse changes in business, economic or
financial conditions are more likely to lead to increased investment risk
than for obligations in other categories.
DESCRIPTION OF THOMSON'S LONG-TERM DEBT RATINGS
INVESTMENT GRADE
AAA Bonds rated AAA indicate that the ability to repay principal and interest
on a timely basis is very high.
AA Bonds rated AA indicate a superior ability to repay principal and interest
on a timely basis, with limited incremental risk compared to issues rated
in the highest category.
S-13
<PAGE>
A Bonds rated A indicate the ability to repay principal and interest is
strong. Issues rated A could be more vulnerable to adverse developments
(both internal and external) than obligations with higher ratings.
BBB Bonds rated BBB indicate an acceptable capacity to repay principal and
interest. Issues rated BBB are, however, more vulnerable to adverse
developments (both internal and external) than obligations with higher
ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published
by Moody's, Standard and Poor's, Duff and Phelps, Fitch, IBCA and Thomson
BankWatch, respectively.
DESCRIPTION OF MOODY'S SHORT-TERM RATINGS
PRIME-1 Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics:
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
PRIME-2 Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
S&P'S SHORT-TERM RATINGS
<TABLE>
<S> <C>
A-1 This highest category indicates that the degree of safety regarding timely payment
is strong. Debt determined to possess extremely strong safety characteristics is
denoted with a plus sign (+) designation.
A-2 Capacity for timely payment on issues with this designation is satisfactory.
However, the relative degree of safety is not as high as for issues designated
'A-1'.
DESCRIPTION OF DUFF'S SHORT-TERM RATINGS
Duff 1+ Highest certainty of timely payment. Short-term liquidity, including internal
operating factors and/or access to alternative sources of funds, is outstanding,
and safety is just below risk-free U.S. Treasury short-term obligations.
Duff 1 Very high certainty of timely payment. Liquidity factors are excellent and
supported by good fundamental protection factors. Risk factors are minor.
Duff 1- High certainty of timely payment. Liquidity factors are strong and supported by
good fundamental protection factors. Risk factors are very small.
</TABLE>
S-14
<PAGE>
<TABLE>
<S> <C>
GOOD GRADE
Duff 2 Good certainty of timely payment. Liquidity factors and company fundamentals are
sound. Although ongoing funding needs may enlarge total financing requirements,
access to capital markets is good. Risk factors are small.
DESCRIPTION OF FITCH'S SHORT-TERM RATINGS
F-1+ Exceptionally Strong Credit Quality. Issues assigned this rating are regarded as
having the strongest degree of assurance for timely payment.
F-1 Very Strong Credit Quality. Issues assigned this rating reflect an assurance of
timely payment only slightly less in degree than issues rated 'F-1+'
F-2 Good Credit Quality. Issues assigned this rating have a satisfactory degree of
assurance for timely payment, but the margin of safety is not as great as for
issues assigned 'F-1+' and 'F-1' ratings.
LOC The symbol LOC indicates that the rating is based on a letter of credit issued by
a commercial bank.
DESCRIPTION OF IBCA'S SHORT-TERM RATINGS (UP TO 12 MONTHS)
A1+ Obligations supported by the highest capacity for timely repayment.
A1 Obligations supported by a strong capacity for timely repayment.
A2 Obligations supported by a satisfactory capacity for timely repayment, although
such capacity may be susceptible to adverse changes in business, economic, or
financial conditions.
DESCRIPTION OF THOMSON'S SHORT-TERM RATINGS
TBW-1 The highest category; indicates a very high likelihood that principal and interest
will be paid on a timely basis.
TBW-2 The second-highest category; while the degree of safety regarding timely repayment
of principal and interest is strong, the relative degree of safety is not as high
as for issues rated "TBW-1".
</TABLE>
S-15
<PAGE>
THE MANAGER
The Management Agreement provides that SEI Fund Management ("SEI Management"
or the "Manager") 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 SEI Management 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
1940 Act) 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 as to any Portfolio without penalty by the Trustees of the Trust, by a
vote of a majority of the outstanding shares of the Portfolio or by SEI
Management on not less than 30 days' nor more than 60 days' written notice.
SEI Management, a Delaware business trust, has its principal business
offices at Oaks, Pennsylvania 19456. SEI Financial Management Corporation
("SFM"), a wholly-owned subsidiary of SEI Investments Company ("SEI"), is the
owner of all beneficial interest in SEI Management. 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, FMB Funds, Inc., First American Funds, Inc., First American Investment
Funds, Inc., First American Strategy Funds, Inc., 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., 1784
Funds-Registered Trademark-, SEI Asset Allocation Trust, SEI Daily Income Trust,
SEI Index Funds, SEI Institutional Investments Trust, SEI International Trust,
SEI Liquid Asset Trust, SEI Tax Exempt Trust, Stepstone Funds, STI Classic
Funds, STI Classic Variable Trust, and Turner Funds.
If operating expenses of any Portfolio exceed limitations established by
certain states, SEI Management will pay such excess. SEI Management will not be
required to bear expenses of any Portfolio 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. The term "expenses" is defined in such
laws or regulations, and generally excludes brokerage commissions, distribution
expenses, taxes, interest and extraordinary expenses.
S-16
<PAGE>
For the fiscal years ended September 30, 1994, 1995 and 1996, the Portfolios
paid fees to the Manager as follows:
<TABLE>
<CAPTION>
MANAGEMENT FEES PAID MANAGEMENT FEES
(000) WAIVED (000)
---------------------- ------------------
1994 1995 1996 1994 1995 1996
------ ------ ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Balanced Portfolio........................ $ 173 $ 210 $ 171 $ 82 $105 $ 55
Bond Portfolio............................ $ 337 $ 223 $ 64 $131 $125 $ 57
Capital Appreciation Portfolio............ $3,649 $2,042 $ 898 $377 $212 $ 28
Core Fixed Income Portfolio............... $1,031 $1,154 $1,266 $297 $478 $ 339
Equity Income Portfolio................... $1,801 $1,303 $ 780 $149 $197 $ 40
High Yield Bond Portfolio................. * $ 16 $ 160 * $ 18 $ 42
Large Cap Growth Portfolio................ * $ 444 $1,484 * $ 0 $ 0
Large Cap Value Portfolio................. $ 799 $ 637 $1,598 $ 0 $112 $ 0
Mid-Cap Portfolio......................... $ 329 $ 189 $ 58 $115 $ 79 $ 28
Small Cap Growth Portfolio................ $1,023 $1,267 $1,102 $259 $102 $ 27
Small Cap Value Portfolio................. * $ 156 $ 490 * $ 6 $ 11
</TABLE>
- ------------------------
* Not in operation during such period.
THE ADVISERS AND SUB-ADVISERS
The Advisory Agreement and certain of the Sub-Advisory Agreements provide
that SEI Financial Management Corporation ("SFM" or the Adviser") (or any
Sub-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. In addition, certain of the Sub-Advisory
Agreements provide that the Sub-Adviser shall not be protected against any
liability to the Trust or its shareholders by reason of willful misfeasance, bad
faith or negligence on its part in the performance of its duties, or from
reckless disregard of its obligations or duties thereunder.
The continuance of each Advisory and Sub-Advisory Agreement must be
specifically approved at least annually (i) by the vote of a majority of the
outstanding shares of that Portfolio or by the Trustees, and (ii) by the vote of
a majority of the Trustees who are not parties to such Agreement or "interested
persons" of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. Each Advisory or Sub-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 a
Portfolio, by a majority of the outstanding shares of that Portfolio, on not
less than 30 days' nor more than 60 days' written notice to the Adviser (or
Sub-Adviser) or by the Adviser (or Sub-Adviser) on 90 days' written notice to
the Trust.
SFM has obtained an exemptive order from the SEC that permits SFM, with the
approval of the Trust's Board of Trustees, to retain unaffiliated sub-advisers
for a Portfolio without submitting the sub-advisory agreement to a vote of the
Portfolio's shareholders. The exemptive relief permits the non-disclosure of
amounts payable by SFM under such sub-advisory agreements. The Trust will notify
shareholders in the event of any change in the identity of the sub-adviser for a
Portfolio.
S-17
<PAGE>
For the fiscal years ended September 30, 1994, 1995 and 1996, the Portfolios
paid advisory fees as follows:
<TABLE>
<CAPTION>
ADVISORY FEES PAID ADVISORY FEES
(000) WAIVED (000)
---------------------- ------------------
1994 1995 1996(1) 1994 1995 1996
------ ------ ------ ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Balanced Portfolio................................ $ 127 $ 193 $ 253 $ 0 $ 0 $ 6
Bond Portfolio.................................... $ 133 $ 127 $ 119 $ 0 $ 0 $ 0
Capital Appreciation Portfolio.................... $2,016 $1,291 $1,033 $ 0 $ 0 $ 25
Core Fixed Income Portfolio....................... $ 386 $ 474 $1,424 $ 0 $ 0 $ 0
Equity Income Portfolio........................... $ 900 $ 883 $ 915 $75 $ 0 $ 22
High Yield Bond Portfolio......................... * $ 31 $ 282 * $ 0 $ 0
Mid-Cap Portfolio................................. $ 400 $ 235 $ 98 $ 0 $ 0 $ 0
Large Cap Growth Portfolio........................ * $ 449 $1,498 * $58 $198
Large Cap Value Portfolio......................... $ 320 $ 645 $1,598 $ 0 $ 0 $ 0
Small Cap Growth Portfolio........................ $1,282 $1,493 $2,098 $ 0 $ 0 $ 0
Small Cap Value Portfolio......................... * $ 299 $ 930 * $ 1 $ 0
</TABLE>
- ------------------------
* Not in operation during such period.
(1) Includes amounts paid to the Portfolios' sub-advisers under the former
investment advisory agreements.
For the fiscal years ended September 30, 1994, 1995 and 1996, SFM paid
sub-advisory fees as follows:
<TABLE>
<CAPTION>
SUB-ADVISORY FEES SUB-ADVISORY FEES
PAID (000) WAIVED (000)
------------------- ------------------
1994 1995 1996 1994 1995 1996
---- ---- ------ ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Balanced Portfolio................................ * $ 39 $ 157 * $0 $ 0
Bond Portfolio.................................... * $ 16 $ 54 * $0 $ 0
Capital Appreciation Portfolio.................... * $181 $ 621 * $0 $ 0
Core Fixed Income Portfolio....................... * N/A $ 614 * $0 $ 0
Equity Income Portfolio........................... * $146 $ 548 * $0 $ 0
High Yield Bond Portfolio......................... * $ 16 $ 195 * $0 $ 0
Large Cap Growth Portfolio........................ * $260 $ 832 * $0 $ 0
Large Cap Value Portfolio......................... * $346 $ 894 * $0 $ 0
Mid-Cap Portfolio................................. * $ 9 $ 62 * $0 $ 0
Small Cap Growth Portfolio........................ * $205 $1,574 * $0 $ 0
Small Cap Value Portfolio......................... * $240 $ 595 * $0 $ 0
</TABLE>
- ------------------------
* Not applicable during such period.
S-18
<PAGE>
DISTRIBUTION AND SHAREHOLDER SERVICING
The Trust has adopted a Distribution Plan for the Class D shares of the
Small Cap Growth Portfolio (the "Plan") in accordance with the provisions of
Rule 12b-1 under the 1940 Act (which regulates circumstances under which an
investment company may directly or indirectly bear expenses relating to the
distribution of its shares). In this regard, the Board of Trustees has
determined that the Plan and the Distribution Agreement are in the best
interests of the shareholders. Continuance of the Plan must be approved annually
by a majority of the Trustees of the Trust and by a majority of the Trustees who
are not "interested persons" of the Trust (as that term is defined in the 1940
Act) and who have no direct or indirect financial interest in the operation of a
distribution plan or in any agreements related thereto ("Qualified Trustees").
The Plan requires that quarterly written reports of amounts spent under the Plan
and the purposes of such expenditures be furnished to and reviewed by the
Trustees. The Plan may not be amended to increase materially the amount which
may be spent thereunder without approval by a majority of the outstanding shares
of the Portfolio or class affected. All material amendments of the Plan will
require approval by a majority of the Trustees of the Trust and of the Qualified
Trustees.
The Plan adopted by the Class D shareholders provides that the Trust will
pay the Distributor a fee of up to .30% of the average daily net assets of the
Small Cap Growth Portfolio's Class D shares which the Distributor can use to
compensate broker-dealers and service providers, including SEI Financial
Services Company and its affiliates which provide distribution related services
to Class D shareholders or their customers who beneficially own Class D shares.
The distribution-related services that may be provided under the Plan
include establishing and maintaining customer accounts and records; aggregating
and processing purchase and redemption requests from customers; placing net
purchase and redemption orders with the Distributor; automatically investing
customer account cash balances; providing periodic statements to customers;
arranging for wires; answering customer inquiries concerning their investments;
assisting customers in changing dividend options, account designations, and
addresses; performing sub-accounting functions; processing dividend payments
from the Trust on behalf of customers; and forwarding shareholder communications
from the Trust (such as proxies, shareholder reports, and dividend distribution,
and tax notices) to these customers with respect to investments in the Trust.
Certain state securities laws may require those financial institutions providing
such distribution services to register as dealers pursuant to state law.
Except to the extent that SEI Management (as Manager), SFM and the
Portfolio's advisers benefitted through increased fees from an increase in the
net assets of the Trust which may have resulted in part from the expenditures,
no interested person of the Trust nor any Trustee of the Trust who is not an
interested person of the Trust had a direct or indirect financial interest in
the operation of the Plan or related agreements.
The Portfolios have also adopted a shareholder servicing plan for their
Class A shares (the "Service Plan"). Under the Service Plan, the Distributor may
perform, or may compensate other service providers for performing, the following
shareholder 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.
Although banking laws and regulations prohibit banks from distributing
shares of open-end investment companies such as the Trust, according to an
opinion issued to the staff of the SEC by the Office of the Comptroller of the
Currency, financial institutions are not prohibited from acting in other
capacities for investment companies, such as providing shareholder services.
Should future legislative, judicial or administrative action prohibit or
restrict the activities of financial institutions in connection with providing
S-19
<PAGE>
shareholder services, the Trust may be required to alter materially or
discontinue its arrangements with such financial institutions.
For the fiscal year ended September 30, 1996, the Portfolios incurred the
following distribution expenses:
<TABLE>
<CAPTION>
AMOUNT PAID
TO 3RD PROSPECTUS
PARTIES BY PRINTING AND
SFS FOR MAILING
DISTRIBUTOR COSTS (NEW
RELATED SALES SHAREHOLDERS
TOTAL SERVICES EXPENSES ADVERTISING ONLY)
PORTFOLIO/CLASS ($AMOUNT) ($AMOUNT) ($AMOUNT) ($AMOUNT) ($AMOUNT)
- -------------------------------------------------- --------- ----------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
CLASS A
Balanced Portfolio.............................. $ 30,224 -- $ 9,662 -- $12,942
Bond Portfolio.................................. $ 39,285 -- $ 5,559 -- $20,495
Capital Appreciation Portfolio.................. $129,001 -- $ 25,786 -- $45,823
Core Fixed Income Portfolio..................... $157,948 -- $ 60,160 -- $53,141
Equity Income Portfolio......................... $116,540 -- $ 45,746 -- $32,918
High Yield Bond Portfolio....................... $ 10,954 -- $ 4,296 -- $ 5,330
Large Cap Growth Portfolio...................... $139,815 -- $101,225 -- $21,960
Large Cap Value Portfolio....................... $150,072 -- $ 93,221 -- $28,494
Mid-Cap Portfolio............................... $ 15,889 -- $ 1,424 -- $ 7,395
Small Cap Growth Portfolio...................... $131,739 -- $ 65,842 -- $30,540
Small Cap Value Portfolio....................... $ 53,161 -- $ 31,114 -- $15,602
CLASS D
Small Cap Growth Portfolio...................... $ 3,375 -- $ 3,146 -- $ 106
<CAPTION>
COSTS ASSOCIATED
WITH REGISTRATION
PORTFOLIO/CLASS FEES ($AMOUNT)
- -------------------------------------------------- -----------------
<S> <C>
CLASS A
Balanced Portfolio.............................. $ 7,620
Bond Portfolio.................................. $ 13,231
Capital Appreciation Portfolio.................. $ 57,392
Core Fixed Income Portfolio..................... $ 44,647
Equity Income Portfolio......................... $ 37,876
High Yield Bond Portfolio....................... $ 1,328
Large Cap Growth Portfolio...................... $ 16,630
Large Cap Value Portfolio....................... $ 28,357
Mid-Cap Portfolio............................... $ 7,070
Small Cap Growth Portfolio...................... $ 35,357
Small Cap Value Portfolio....................... $ 6,445
CLASS D
Small Cap Growth Portfolio...................... $ 123
</TABLE>
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 Financial Management Corporation, 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, CoreFunds, Inc., CrestFunds, Inc.,
CUFUND, First American Funds, Inc., First American Investment Funds, Inc., First
American Strategy Funds, Inc., FMB Funds, Inc., 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., 1784
Funds-Registered Trademark-, SEI Asset Allocation Trust, SEI Daily Income Trust,
SEI Index Funds, SEI Institutional Investments Trust, SEI International Trust,
SEI Liquid Asset Trust, SEI Tax Exempt Trust, Stepstone Funds, STI Classic
Funds, STI Classic Variable Trust and Turner 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 Financial Services Company.
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-, Advisors' Inner Circle Fund,
SEI Liquid Asset Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI Index
Funds, SEI Asset Allocation Trust, SEI Institutional Investments Trust, SEI
International Trust, Insurance Investment Products Trust, 1784
Funds-Registered Trademark-, Pillar Funds, Rembrandt Funds-Registered Trademark-
and Stepstone Funds.
S-20
<PAGE>
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-, Advisors' Inner Circle Fund, SEI Liquid Asset
Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI Index Funds, SEI Asset
Allocation Trust, SEI Institutional Investments Trust, SEI International Trust
and Insurance Investment Products Trust.
F. WENDELL GOOCH (DOB 12/03/37)--Trustee**--P.O. Box 190, Paoli, IN 47454.
President, Orange County Publishing Co., Inc. since October 1981. Publisher of
the Paoli News and the Paoli Republican and Editor of the Paoli Republican since
January 1981. 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, SEI Liquid Asset Trust, SEI Daily Income Trust,
SEI Tax Exempt Trust, SEI Index Funds, SEI Asset Allocation Trust, SEI
Institutional Managed Trust, SEI Institutional Investments Trust and SEI
International 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-, Advisors' Inner
Circle Fund, SEI Liquid Asset Trust, SEI Daily Income Trust, SEI Tax Exempt
Trust, SEI Index Funds, SEI Asset Allocation Trust, SEI Institutional Managed
Trust, SEI Institutional Investments Trust and SEI International Trust.
JAMES M. STOREY (DOB 04/12/31)--Trustee--Partner, Dechert Price & Rhoads,
from September 1987-December 1993; Trustee of The Arbor Fund, Marquis
Funds-Registered Trademark-, Advisors' Inner Circle Fund, SEI Liquid Asset
Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI Index Funds, SEI Asset
Allocation Trust, SEI Institutional Investments Trust, SEI International Trust
and Insurance Investment Products Trust since December 1993.
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 Index Funds, SEI Asset
Allocation Trust, SEI Institutional Investments Trust, and SEI International
Trust.
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 and General Counsel of SEI, the Administrator
and Distributor since 1994. Vice President and Assistant Secretary of SEI, the
Administrator 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, Manager and Distributor.
KATHRYN L. STANTON (DOB 11/19/58)--Vice President and Assistant
Secretary--Vice President, Deputy General Counsel and Assistant Secretary of
SEI, the Administrator and Distributor since 1994. Associate, Morgan, Lewis &
Bockius LLP (law firm), 1989-1994.
JOSEPH P. LYDON (DOB 09/27/59)--Vice President and Assistant
Secretary--Director, Business Administration of Fund Resources, April 1995. Vice
President, Fund Group, Dremen Value Management, LP, President Dremen Financial
Services, Inc. prior to 1995.
S-21
<PAGE>
STEPHEN G. MEYER (DOB 07/12/65)--Controller, Chief Financial Officer--Vice
President and Controller of SEI Corporation since 1994. Director, Internal Audit
and Risk Management, SEI Corporation, 1992-1994. Senior Associate, Coopers &
Lybrand, 1990-1992. Internal Audit, Vanguard Group prior to 1992.
TODD CIPPERMAN (DOB 01/14/66)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI, the Administrator 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, the Administrator 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 Administrator and Distributor
since 1996. Associate General Counsel, Barclays Bank 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. The Trust pays the fees for unaffiliated Trustees.
Compensation of officers and affiliated Trustees of the Trust is paid by the
Manager. For the fiscal year ended September 30, 1996, 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 9/30/96 FUND EXPENSES RETIREMENT FOR FYE 9/30/96
- --------------------------------- ------------------ ------------------- ---------------- -----------------------------------
<S> <C> <C> <C> <C>
Robert A. Nesher, Trustee........ $ 0 $0 $0 $0 for services on 8 boards
Richard F. Blanchard,
Trustee(1)..................... $13,013 $0 $0 $45,000 for services on 8 boards
William M. Doran, Trustee........ $ 0 $0 $0 $0 for services on 8 boards
F. Wendell Gooch, Trustee........ $27,001 $0 $0 $90,000 for services on 8 boards
Frank E. Morris, Trustee......... $27,001 $0 $0 $90,000 for services on 8 boards
James M. Storey, Trustee(2)...... $27,001 $0 $0 $90,000 for services on 8 boards
George J. Sullivan, Trustee...... $ 5,641 $0 $0 $22,500 for services on 8 boards
</TABLE>
- ------------------------
(1) Deceased May 7, 1996
(2) Mr. Storey received the stated amounts as compensation for service as an
Honorary Trustee for the Trust during the most recent fiscal year.
S-22
<PAGE>
PERFORMANCE
From time to time, each Portfolio may advertise yield and/or total return.
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 the 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 each period over 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.
Based on the foregoing, the 30-day yield for the Portfolios for the 30-day
period ended September 30, 1996 were as follows:
<TABLE>
<CAPTION>
FUND 30 DAY YIELD
- -------------------------------------------------------------------------------- -------------
<S> <C>
CLASS A
Balanced Portfolio............................................................ 3.12%
Bond Portfolio................................................................ 5.91%
Capital Appreciation Portfolio................................................ 1.26%
Core Fixed Income Portfolio................................................... 6.33%
Equity Income Portfolio....................................................... 2.77%
High Yield Bond Portfolio..................................................... 9.17%
Large Cap Growth Portfolio.................................................... 0.33%
Large Cap Value Portfolio..................................................... 2.08%
Mid-Cap Portfolio............................................................. 1.13%
Small Cap Growth Portfolio.................................................... 0.00%
Small Cap Value Portfolio..................................................... 0.11%
CLASS D
Small Cap Growth Portfolio.................................................... 0.00%
</TABLE>
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: 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.
S-23
<PAGE>
Based on the foregoing, the average annual total returns for the Portfolios
from inception through September 30, 1996 and for the one, five and ten year
periods ended September 30, 1996, were as follows:
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
--------------------------------------------
<S> <C> <C> <C> <C> <C>
SINCE
PORTFOLIO CLASS ONE YEAR FIVE YEAR TEN YEAR INCEPTION
- ---------------------------------- ---------------------------- --------- --------- --------- -----------
Balanced Portfolio Class A(1).................. 15.01% 10.35% * 10.56%
Bond Portfolio Class A(2).................. 10.56% 8.16% * 9.23%
Capital Appreciation Portfolio Class A(3).................. 22.14% 12.85% * 14.44%
Core Fixed Income Portfolio Class A(4).................. 4.51% 6.85% * 7.76%
Equity Income Portfolio Class A(5).................. 18.17% 14.27% * 13.80%
High Yield Bond Portfolio Class A(6).................. 15.46% * * 16.23%
Large Cap Growth Portfolio Class A(7).................. 20.59% * * 27.88%
Large Cap Value Portfolio Class A(8).................. 18.33% 10.97% * 9.75%
Mid-Cap Portfolio Class A(9).................. 16.03% * * 12.80%
Small Cap Growth Portfolio Class A(10)................. 26.56% * * 24.42%
Class D(11) (no load)....... 26.01% * * 26.77%
Class D(11) (load).......... 19.71% * * 24.11%
Small Cap Value Portfolio Class A(12)................. 10.86% * * 18.62%
</TABLE>
- ------------------------
* Not in operation during period.
(1) Commenced operations August 7, 1990.
(2) Commenced operations May 4, 1987.
(3) Commenced operations March 1, 1988.
(4) Commenced operations May 4, 1987.
(5) Commenced operations June 2, 1988.
(6) Commenced operations January 11, 1995.
(7) Commenced operations December 20, 1994.
(8) Commenced operations April 20, 1987.
(9) Commenced operations February 16, 1993.
(10) Commenced operations April 20, 1992.
(11) Commenced operations May 2, 1994.
(12) Commenced operations December 20, 1995.
The Portfolios may, from time to time, compare their performance to other
mutual funds tracked by mutual fund rating services, to broad groups of
comparable mutual funds or to unmanaged indices which may assume investment of
dividends but generally do not reflect deductions for administrative and
management costs.
S-24
<PAGE>
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.
It is currently the Trust's policy to pay 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 readily marketable 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 all
Portfolios of the Trust during any 90-day period of up to the lesser of $250,000
or 1% of the Trust's net assets.
A gain or loss for federal income tax purposes may be realized by a taxable
shareholder upon an in-kind redemption depending upon the shareholder's basis in
the shares of the Trust redeemed.
Purchases and redemptions of shares of the Portfolios may be made on any day
the New York Stock Exchange is open for business. Currently, the following
holidays are observed by the Trust: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. 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
Portfolios for any period during which the New York Stock Exchange, the Manager,
the Distributor, and/or the Custodian are not open for business.
REDUCTIONS IN SALES CHARGES
In calculating the sales charge rates applicable to current purchases of
Class D shares, members of the following affinity groups and clients of the
following broker-dealers, each of which has entered into an agreement with the
Distributor, are entitled to the following percentage-based discounts from the
otherwise applicable sales charge:
<TABLE>
<CAPTION>
PERCENTAGE DATE OFFER DATE OFFER
NAME OF GROUP DISCOUNT STARTS TERMINATES
- --------------------------------------------------------- --------------- ---------- ----------
<S> <C> <C> <C>
BHC Securities, Inc. .................................... 10% 12/29/94 N/A
First Security Investor Services, Inc. .................. 10% 12/29/94 N/A
</TABLE>
Those members or clients who take advantage of a percentage-based reduction
in the sales charge during the offering period noted above may continue to
purchase shares at the reduced sales charge rate after the offering period
relating to each such purchaser's affinity group or broker-dealer relationship
has terminated.
S-25
<PAGE>
For more information regarding reductions in sales charges, please contact
the Distributor at 1-800-437-6016.
SHAREHOLDER SERVICES (CLASS D SHARES)
The following is a description of plans and privileges by which the sale
charges imposed on the Class D shares of the Small Cap Growth Portfolio may be
reduced.
RIGHT OF ACCUMULATION: A shareholder qualifies for cumulative quantity
discounts when his or her new investment, together with the current market value
of all holdings of that shareholder in certain eligible portfolios, reaches a
discount level. See "Purchase and Redemption of Shares" in the Prospectus for
the sales charge on quantity purchases.
LETTER OF INTENT: The reduced sales charges are also applicable to the
aggregate amount of purchases made by any such purchaser previously enumerated
within a 13-month period pursuant to a written Letter of Intent provided to the
Distributor, that does not legally bind the signer to purchase any set number of
shares and provides for the holding in escrow by the Administrator of 5% of the
amount purchased until such purchase is completed within the 13-month period. A
Letter of Intent may be dated to include shares purchased up to 90 days prior to
the date the Letter of Intent is signed. The 13-month period begins on the date
of the earliest purchase. If the intended investment is not completed, the
Administrator will surrender an appropriate number of the escrowed shares for
redemption in order to recover the difference between the sales charge imposed
under the Letter of Intent and the sales charge that would have otherwise been
imposed.
DISTRIBUTION INVESTMENT OPTION: Distributions of dividends and capital
gains made by the Portfolios may be automatically invested in shares of one of
the Portfolios if shares of the Portfolio are available for sale. Such
investments will be subject to initial investment minimums, as well as
additional purchase minimums. A shareholder considering the Distribution
Investment Option should obtain and read the prospectus of the other Portfolios
and consider the differences in objectives and policies before making any
investment.
REINSTATEMENT PRIVILEGE: A shareholder who has redeemed shares of the
Portfolio has a one-time right to reinvest the redemption proceeds in shares of
the Portfolios at their net asset value as of the time of reinvestment. Such a
reinvestment must be made within 30 days of the redemption and is limited to the
amount of the redemption proceeds. Although redemptions and repurchases of
shares are taxable events, a reinvestment within such 30-day period in the same
fund is considered a "wash sale" and results in the inability to recognize
currently all or a portion of a loss realized on the original redemption for
federal income tax purposes. The investor must notify the Transfer Agent at the
time the trade is placed that the transaction is a reinvestment.
EXCHANGE PRIVILEGE: Some or all of the Portfolio's Class D shares for which
payment has been received (I.E., an established account), may be exchanged for
Class D shares of SEI Liquid Asset Trust, SEI Tax Exempt Trust and SEI
International Trust ("SEI Funds"). Exchanges are made at net asset value plus
any applicable sales charge. SEI Funds' portfolios that are not money market
portfolios currently impose a sales charge on Class D shares. A shareholder who
exchanges into one of these "non-money market" portfolios will have to pay a
sales charge on any portion of the exchanged Class D shares for which he or she
has not previously paid a sales charge. If a shareholder has paid a sales charge
on Class D shares, no additional sales charge will be assessed when he or she
exchanges those Class D shares for other Class D shares. If a shareholder buys
Class D shares of a "non-money market" fund and receives a sales load waiver, he
or she will be deemed to have paid the sales load for purposes of this exchange
privilege. In calculating any sales charge payable on an exchange transaction,
the SEI Funds will assume that the first shares a shareholder exchanges are
those on which he or she has already paid a sales charge. Sales charge waivers
may also be available under certain circumstances, as described in the
portfolios' prospectuses. The
S-26
<PAGE>
Trust reserves the right to change the terms and conditions of the exchange
privilege discussed herein, or to terminate the exchange privilege, upon sixty
days' notice. Exchanges will be made only after proper instructions in writing
or by telephone (an "Exchange Request") are received for an established account
by the Distributor.
A shareholder may exchange the shares of the Portfolio's Class D shares, for
which good payment has been received, in his or her account at any time,
regardless of how long he or she has held his or her shares.
Each Exchange Request must be in proper form (I.E., if in writing, signed by
the record owner(s) exactly as the shares are registered; if by telephone-proper
account identification is given by the dealer or shareholder of record), and
each exchange must involve either shares having an aggregate value of at least
$1,000 or all the shares in the account. Each exchange involves the redemption
of the shares of the Portfolio (the "Old Portfolio") to be exchanged and the
purchase at net asset value (I.E., without a sales charge) of the shares of the
other portfolios (the "New Portfolios"). Any gain or loss on the redemption of
the shares exchanged is reportable on the shareholder's federal income tax
return, unless such shares were held in a tax-deferred retirement plan or other
tax-exempt account. If the Exchange Request is received by the Distributor in
writing or by telephone on any business day prior to the redemption cut-off time
specified in each Prospectus, the exchange usually will occur on that day if all
the restrictions set forth above have been complied with at that time. However,
payment of the redemption proceeds by the Old Portfolios, and thus the purchase
of shares of the New Portfolios, may be delayed for up to seven days if the
Portfolio determines that such delay would be in the best interest of all of its
shareholders. Investment dealers which have satisfied criteria established by
the Portfolios may also communicate a Shareholder's Exchange Request to the
Portfolio subject to the restrictions set forth above. No more than five
exchange requests may be made in any one telephone Exchange Request.
TAXES
The following is only a summary of certain additional federal tax
considerations generally affecting the Portfolios and their shareholders that
are not described in the Portfolios' prospectuses. No attempt is made to present
a detailed explanation of the federal, state or local tax treatment of the
Portfolios or their shareholders and the discussion here and in the Portfolios'
prospectuses is not intended as a substitute for careful tax planning.
This discussion of federal income tax consequences is based on the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations issued
thereunder, in effect on the date of this Statement of Additional Information.
New legislation, 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.
Each Portfolio is treated as a separate entity for federal income tax
purposes and is not combined with the Trust's other Portfolios. Each Portfolio
intends to qualify as a regulated investment company ("RIC") under Subchapter M
of the Code so that it will be relieved of federal income tax on that part of
its income that is distributed to shareholders. In order to qualify for
treatment as a RIC, a Portfolio must distribute annually to its shareholders at
least 90% of its investment company taxable income (generally, net investment
income plus the excess, if any, of net short-term capital gain over net
long-term capital losses) ("Distribution Requirement") and also 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, and gains
from the sale or other disposition of stock or securities, or other income
derived with respect to its business of investing in such stock 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 stock or securities held for less
than three months; (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
S-27
<PAGE>
other securities limited, in respect of any one issuer, to an amount that does
not exceed 5% of the value of a Portfolio's assets and that does not represent
more than 10% of the outstanding voting securities of such issuer; and (iv) at
the close of each quarter of a Portfolio's taxable year, not more than 25% of
the value of its 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 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, which only
requires a Portfolio to distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital
gain, a Portfolio will be subject to a nondeductible 4% federal excise tax to
the extent it fails to distribute by the end of any calendar year at least 98%
of its ordinary income for that year and 98% of its capital gain net income (the
excess of short- and long-term capital gain over short-and long-term capital
loss) for the one-year period ending on October 31 of that year, plus certain
other amounts. Each Portfolio intends to make sufficient distributions to avoid
liability for the federal excise tax. A Portfolio may in certain circumstances
be required to liquidate portfolio investments in order to make sufficient
distributions to avoid federal excise tax liability when the investment advisor
might not otherwise have chosen to do so, and liquidation of investments in such
circumstances may affect the ability of a Portfolio to satisfy the requirements
for qualification as a RIC.
If capital gain distributions have been made with respect to shares that are
sold at a loss after being held for six months or less, then the loss is treated
as a long-term capital loss to the extent of the capital gain distributions. If
a Portfolio fails to qualify as a RIC for any year, all of its income will be
subject to tax at corporate rates, and its distributions (including capital gain
distributions) generally will be taxable as ordinary income dividends to its
shareholders, subject to the dividends received deduction for corporate
shareholders who have held shares for more than 45 days.
A Portfolio will be required in certain cases to withhold and remit to the
United States Treasury 31% of amounts payable to any shareholder who (1) has
provided the Portfolio 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.
With respect to investments in STRIPS, TR's, TIGR's, LYONs, CATS and other
Zero Coupon securities which are sold at original issue discount and thus do not
make periodic cash interest payments, a 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
that period. Because each Portfolio distributes 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 advisers would
not have chosen to sell such securities and which may result in taxable gain or
loss.
STATE TAXES
A Portfolio is not liable for any income or franchise tax in Massachusetts
if it qualifies as a RIC for federal income tax purposes. Distributions by the
Portfolio to shareholders and the ownership of shares may be subject to state
and local taxes. Shareholders should consult their own tax advisers regarding
the affect of federal, state and local taxes in their own individual
circumstances.
S-28
<PAGE>
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, the advisers are 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 the advisers
generally seek reasonably competitive spreads or commissions, the Trust will not
necessarily be paying the lowest spread or commission available. The Trust will
not purchase portfolio securities from any affiliated person acting as principal
except in conformity with the regulations of the SEC.
It is expected that the Portfolios may execute brokerage or other agency
transactions through the Distributor, a registered broker-dealer, for a
commission in conformity with the 1940 Act, the Securities Exchange Act of 1934,
as amended, and rules and regulations of the SEC. 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." In addition, the
Portfolios may direct commission business to one or more designated
broker-dealers, including the Distributor, in connection with such
broker-dealer's payment of certain of the Portfolios' expenses. 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. In addition, SFM has
adopted a policy respecting the receipt of research and related products and
services in connection with transactions effected for Portfolios operating
within the "Manager of Managers" structure. Under this policy, SFM and the
various firms that serve as sub-advisers to certain Portfolios of the Trust, in
the exercise of joint investment discretion over the assets of a Portfolio, will
direct a substantial portion of a Portfolio's brokerage to the Distributor in
consideration of the Distributor's provision of research and related products to
SFM for use in performing its advisory responsibilities. All such transactions
directed to the Distributor must be accomplished in a manner that is consistent
with the Trust's policy to achieve best net results, and must comply with the
Trust's procedures regarding the execution of transactions through affiliated
brokers.
S-29
<PAGE>
For the fiscal year ended September 30, 1996, the Portfolios paid the
following brokerage fees:
<TABLE>
<CAPTION>
TOTAL $ AMOUNT
OF BROKERAGE % OF TOTAL % OF TOTAL TOTAL $
TOTAL $ AMOUNT COMMISSIONS BROKERAGE BROKERED TOTAL $ AMOUNT OF
OF BROKERAGE PAID TO COMMISSIONS TRANSACTIONS AMOUNT OF BROKERAGE
COMMISSIONS AFFILIATED PAID TO EFFECTED THROUGH BROKERAGE COMMISSIONS
PAID IN FYE BROKERS IN AFFILIATED AFFILIATED TRANSACTIONS PAID FOR
FUND 9/30/96 FYE 9/30/96 BROKERS BROKERS FOR RESEARCH RESEARCH
- ----------------------------------- -------------- -------------- ------------ ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Balanced Portfolio................. $ 117,731 $ 14,167 12.03% 78.52% $ 48,373,893 $ 51,937
Bond Portfolio..................... $ 0 0 0 9.67% 0 0
Capital Appreciation Portfolio..... $ 901,374 $ 30,830 3.42% 36.41% $399,309,824 $456,022
Core Fixed Income Portfolio........ $ 125,097 $ 18,090 14.46% 90.73% $ 25,600,000 $ 16,100
Equity Income Portfolio............ $ 387,891 $ 5,760 1.49% 69.42% $ 0 $ 0
High Yield Bond Portfolio.......... 0 0 0 0 0 0
Mid-Cap Portfolio.................. $ 40,892 $ 22,811 5.58% 90.29% $ 0 0
Large Cap Growth Portfolio......... $ 737,152 $ 65,986 8.95% 40.68% $ 28,893,334 $ 75,242
Large Cap Value Portfolio.......... $ 784,758 $186,041 23.71% 25.12% $ 94,864,287 $107,616
Small Cap Growth Portfolio......... $ 551,149 $ 15,867 2.88% 42.46% $ 42,330,083 $111,685
Small Cap Value Portfolio.......... $ 500,459 $ 25,669 5.13% 43.48% $ 0 $ 0
</TABLE>
- ------------------------
* Not in operation during such period.
S-30
<PAGE>
For the fiscal years ended September 30, 1994 and 1995, the Portfolios paid
the following brokerage fees:
<TABLE>
<CAPTION>
TOTAL $ AMOUNT OF
TOTAL $ AMOUNT OF BROKERAGE
BROKERAGE COMMISSIONS COMMISSIONS PAID
PAID TO AFFILIATES
---------------------- ------------------
<S> <C> <C> <C> <C>
FUND 1994 1995 1994 1995
- --------------------------------------------- ---------- ---------- -------- --------
Balanced Portfolio........................... $ 101,709 $ 148,731 $ 20,376 $ 0
Bond Portfolio............................... $ 0 $ 0 $ 0 $ 0
Capital Appreciation Portfolio............... $1,611,243 $1,577,921 $173,127 $ 20,042
Core Fixed Income Portfolio.................. $ 1,840 $ 0 $ 0 $ 0
Equity Income Portfolio...................... $ 490,073 $ 648,410 $ 38,830 $ 33,725
High Yield Bond Portfolio.................... $ 0 $ 0 $ 0 $ 0
Mid-Cap Portfolio............................ $ 264,405 $ 264,386 $ 18,120 $ 0
Large Cap Growth Portfolio................... $ 0 $ 270,371 $ 0 $192,232
Large Cap Value Portfolio.................... $ 267,623 $ 804,877 $ 10,375 $115,823
Small Cap Growth Portfolio................... $ 447,356 $ 0 $ 47,550 $ 0
Small Cap Value Portfolio.................... $ 0 $ 191,324 $ 0 $ 2,814
</TABLE>
Class D shareholders paid the following sales charges:
<TABLE>
<CAPTION>
DOLLAR AMOUNT OF CHARGES
DOLLAR AMOUNT OF CHARGES RETAINED BY SFS
------------------------------- -----------------------------
PORTFOLIO/CLASS 1994 1995 1996 1994 1995 1996
- --------------------------------------------- ---------- ---------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Bond Portfolio--Class D...................... $ 4,306.18 $ 430.09 N/A $ 404.24 $ 49.78 N/A
Capital Appreciation Portfolio--Class D...... $13,466.77 $15,353.85 N/A $1,312.19 $1,711.53 N/A
Equity Income Portfolio--Class D............. $26,611.27 $ 6,281.96 N/A $2,651.98 $ 752.30 N/A
Core Fixed Income Portfolio--Class D......... $ 56.00 $ 3,375.64 N/A $ 6.22 $ 434.85 N/A
Mid-Cap Portfolio--Class D................... $ 140.98 $ 0 N/A $ 14.10 $ 0 N/A
Small Cap Growth Portfolio--Class D.......... $ 278.97 $11,874.23 N/A $ 27.90 $1,455.18 N/A
</TABLE>
For each of the Portfolios, there is no material difference between the
percentage of brokerage commissions paid to the Distributor as compared to all
brokerage commissions and the percentage of the amount of brokered transactions
as compared to the aggregate amount of all brokered transactions.
The portfolio turnover rate for each Portfolio for the fiscal years ending
September 30, 1995 and 1996 was as follows:
<TABLE>
<CAPTION>
TURNOVER
RATE
-----------
FUND 1995 1996
- ------------------------------------------------------------ ---- ----
<S> <C> <C>
Balanced Portfolio.......................................... 159% 143%
Bond Portfolio.............................................. 79% 66%
Capital Appreciation Portfolio.............................. 107% 153%
Core Fixed Income Portfolio................................. 294% 311%
Equity Income Portfolio..................................... 47% 43%
High Yield Bond Portfolio................................... 56% 55%
Mid-Cap Portfolio........................................... 108% 101%
Large Cap Growth Portfolio.................................. 44% 90%
Large Cap Value Portfolio................................... 99% 75%
Small Cap Growth Portfolio.................................. 113% 167%
Small Cap Value Portfolio................................... 64% 121%
</TABLE>
S-31
<PAGE>
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, a Portfolio's advisers or sub-advisers 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.
The Trust does not expect to use one particular dealer, but a Portfolio's
advisers or sub-advisers may, consistent with the interests of the Portfolio,
select brokers on the basis of the research services they provide to the
Portfolio's advisers. Such services may include analysis of the business or
prospects of a company, industry or economic sector or statistical and pricing
services. Information so received by the advisers will be in addition to and not
in lieu of the services required to be performed by a Portfolio's advisers under
the Advisory and Sub-Advisory Agreements. If in the judgement of a Portfolio's
advisers, the Portfolio, or other accounts managed by the Portfolio's advisers,
will be benefitted by supplemental research services, the Portfolio's advisers
are authorized to pay brokerage commissions to a broker furnishing such services
that are in excess of commissions which another broker may have charged for
effecting the same transaction. The expenses of a Portfolio's advisers will not
necessarily be reduced as a result of the receipt of such supplemental
information.
The Trust is required to identify any securities of its "regular brokers or
dealers" (as such term is defined in the Investment Company Act) which the Trust
has acquired during its most recent fiscal year. As of September 30, 1996, the
Large Cap Value Portfolio held $4,790,000 of equity securities issued by JP
Morgan Securities, Inc., $2,454,000 of equity securities issued by Bear Stearns,
$1,273,000 of equity securities issued by Merrill Lynch & Co., and $817,000 of
equity securities issued by Salomon Brothers, Inc. and entered into a repurchase
agreement worth $17,648,000 with JP Morgan Securities, Inc.; the Small Cap
Growth Portfolio entered into a repurchase agreement worth $26,409,000 with J.P.
Morgan; the Capital Appreciation Portfolio entered into a repurchase agreement
worth $11,857,000 with Lehman Brothers; the Equity Income Portfolio held
$4,950,000 of equity securities issued by JP Morgan Securities, Inc. and entered
into a repurchase agreement worth $5,208,000 with J.P. Morgan; the Balanced
Portfolio held $1,024,000 of debt securities issued by Salomon Brothers, Inc,
$2,000 of debt securities issued by Merrill Lynch & Co., and entered into a
repurchase agreement worth $5,043,000 with J.P. Morgan; the Mid-Cap Portfolio
held $251,000 of equity securities issued by Bear Stearns, $433,000 of equity
securities issued by Salomon Brothers, Inc., $88,000 of equity securities of
PaineWebber, Inc., and entered into a repurchase agreement worth $687,000 with
JP Morgan Securities, Inc.; the Core Fixed Income Portfolio held $5,837,000 of
debt securities issued by Lehman Brothers, $4,499,000 of debt securities issued
by Bear Stearns, $4,459,000 of debt securities issued by Goldman Sachs,
$1,154,000 of debt securities issued by PaineWebber, Inc., $3,315,000 of debt
securities issued by Salomon Brothers, Inc., $1,218,000 of debt securities
issued by Prudential Securities, Inc, and entered into a repurchase agreement
worth $70,741,000 with J.P. Morgan; the Bond Portfolio entered into a repurchase
agreement worth $68,000 with Lehman Brothers; the Large Cap Growth Portfolio
held $3,649,000 of equity securities with Merrill Lynch & Co. and entered into a
repurchase agreement worth $10,082,000 with Lehman Brothers; and the Small Cap
Value Portfolio held $379,000 of equity securities of Donaldson, Lufkin &
Jenrette and entered into a repurchase agreement worth $6,983,000 with Lehman
Brothers.
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 that Portfolio. Each share upon liquidation entitles a shareholder
to a PRO RATA share in the net assets of that Portfolio, after taking into
account additional distribution and transfer agency expenses attributable to
Class D shares. Shareholders have no preemptive rights. The Declaration of Trust
provides that the Trustees of the Trust may create additional
S-32
<PAGE>
series of shares or separate classes of portfolios. Share certificates
representing the shares will not be issued.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for
his or her 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 or her wilful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties.
VOTING
Where the Trust's Prospectuses or Statement of Additional Information state
that an investment limitation or a fundamental policy may not be changed without
shareholder approval, such approval means the vote of (i) 67% or more of the
affected Portfolio's shares present at a meeting if the holders of more than 50%
of the outstanding shares of the Portfolio are present or represented by Proxy,
or (ii) more than 50% of the affected Portfolio's outstanding shares, whichever
is less.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business 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.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of January 6, 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 below were held by the below persons in accounts for their
fiduciary, agency, or custodial customers.
Balanced Portfolio--Class A: Nabank & Co., c/o Bank of Oklahoma, N.A., Attn:
Lisa Marrs, P.O. Box 2300, Tulsa, OK 74192, 9.33%; Nabank & Co., Attn: Record
Keeping, P.O. Box 2180, Tulsa, OK, 74101-2180, 11.49%; SEI Trust Company, Attn:
Jacqueline Esposito, 680 E. Swedesford Road, Wayne, PA 19087, 66.27%.
Bond Portfolio--Class A: Unit & Co., c/o National Bank of Oregon, Attn: Tom
Coleman, Trust Department Securities Clearance, P.O. Box 7928, Boise, ID 83707,
14.57%; SEI Trust Company, Attn: Jacqueline Esposito, 680 E. Swedesford Road,
Wayne, PA 19087, 13.70%. BMS and Company, c/o Central Trust Bank, Attn. Trust &
Financial Services, P.O. Box 779, Jefferson City, MO 55102, 7.90%; Boatmen's
Trust Co. Master Cust. For Missouri United Methodist BTCFXD, Debbie Schroder,
Mutual Funds, P.O. Box 14737, St. Louis, MO 53178, 7.89%; TSTCO, c/o Magna Trust
Company, P.O. Box 523, Belleville,
S-33
<PAGE>
IL 62222, 7.74%; The Farmers Company, c/o Farmers First Bank - Lititz, Attn:
Wendy Basehoar, P.O. Box 1000, Lititz, PA 17543, 5.21%
Capital Appreciation Portfolio--The Fulton Company, c/o Fulton Bank Trust
Dept., Attn: Dennis Patrick, One Penn Square, Lancaster, PA 17602, 7.97%; SEI
Trust Company, Attn: Jacqueline Esposito, 680 E. Swedesford Road, Wayne, PA
19087, 22.13%.
Core Fixed Income Portfolio--Class A: SEI Trust Company, Attn: Jacqueline
Esposito, 680 E. Swedesford Road, Wayne, PA 19087, 60.51%.
Equity Income Portfolio--Class A: Sheldon & Co. (Integra), c/o National
City, Attn: Trust Mutual Funds, P.O. Box 94777, LOU 6012, Cleveland, OH 44101,
9.33%; Unit & Co., c/o U.S. National Bank of Oregon, Attn: Tom Coleman, Trust
Department Securities Clearance, P.O. Box 7928, Boise, ID 83707, 5.43%; SEI
Trust Company, Attn: Jacqueline Esposito, 680 E. Swedesford Road, Wayne, PA
19087, 10.10%.
High Yield Bond Portfolio--Class A: SEI Trust Company, Attn: Jacqueline
Esposito, 680 E. Swedesford Road, Wayne, PA 19087, 87.50%.
Large Cap Growth Portfolio--Class A: SEI Trust Company, Attn: Jacqueline
Esposito, 680 E. Swedesford Road, Wayne, PA 19087, 64.87%.
Large Cap Value Portfolio--Class A: SEI Trust Company, Attn: Jacqueline
Esposito, 680 E. Swedesford Road, Wayne, PA 19087, 60.20%.
Mid-Cap Portfolio--Class A: BMS and Company, c/o Central Trust Bank, Attn:
Wanda McGlade, P.O. Box 779, Jefferson City, MO 65102, 11.87%; SEI Trust
Company, Attn: Jacqueline Esposito, 680 E. Swedesford Road, Wayne, PA 19087,
42.45%; First American Trust Company, Attn: Jeff Eubanks, 800 First American
Center, Nashville, TN 37237-0801, 7.05% Ingersol and Company, c/o Brenton Bank,
Attn: Laurie Konrad, P.O. Box 891, Des Moines, IA 50309, 5.56%.
Small Cap Growth Portfolio--Class A: Valle, c/o Marshall & Iisley, 1000
North Water Street TR 11, Milwaukee, WI 53202, 7.99%; SEI Trust Company, Attn:
Jacqueline Esposito, 680 E. Swedesford Road, Wayne, PA 19087, 36.01%.
Small Cap Value Portfolio--Class A: SEI Trust Company, Attn: Jacqueline
Esposito, 680 E. Swedesford Road, Wayne, PA 19087, 64.48%.
EXPERTS
The financial statements and the financial highlights have been audited by
Price Waterhouse LLP, independent public accountants.
FINANCIAL STATEMENTS
The Trust's financial statements for the fiscal year ended September 30,
1996, including notes thereto and the report of Price Waterhouse LLP thereon,
are herein incorporated by reference from the Trust's 1996 Annual Report. A copy
of the 1996 Annual Report must accompany the delivery of this Statement of
Additional Information.
S-34
<PAGE>
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 September 30, 1996 and Report of Independent Accountants dated
November 22, 1996 are incorporated by reference to the Statement of
Additional Information from Form N-30D filed on November 27, 1996 with
Accession Number 0000935069-96-000150
Statement of Net Assets
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
(b) Additional Exhibits:
<TABLE>
<S> <C>
(1) Declaration of Trust incorporated by reference to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on October
17, 1986.
(1)(a) Amendment to the Declaration of Trust dated December 23, 1988 is filed
herewith.
(2) By-Laws incorporated by reference to Registrant's Registration Statement on
Form N-1A (File No. 33-9504) filed with the SEC on October 17, 1986.
(3) Not Applicable.
(4) Not Applicable.
(5)(a) Investment Advisory Agreement between the Trust and SunBank, N.A. with
respect to the Trust's Capital Appreciation Portfolio incorporated by
reference as Exhibit (5)(b) to Post-Effective Amendment No. 4 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on November 25, 1987.
(5)(b) Investment Advisory Agreement between the Trust and The Bank of California
with respect to the Trust's Equity Income Portfolio incorporated by
reference as Exhibit (5)(c) to Post-Effective Amendment No. 4 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on November 25, 1987.
(5)(c) Investment Advisory Agreement between the Trust and Merus Capital
Management, Inc. with respect to the Trust's Equity Income Portfolio
incorporated by reference as Exhibit (5)(d) to Post-Effective Amendment
No. 4 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on November 25, 1987.
(5)(d) Investment Advisory Agreement between the Trust and Boatmen's Trust Company
with respect to the Trust's Bond Portfolio incorporated by reference as
Exhibit (5)(e) to Post-Effective Amendment No. 5 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC
on November 30, 1988.
(5)(e) Investment Advisory Agreement between the Trust and Bank One, Indianapolis,
N.A. with respect to the Trust's Limited Volatility Bond Portfolio
incorporated by reference as Exhibit (5)(f) to Post-Effective Amendment
No. 6 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on May 4, 1989.
(5)(f) Investment Advisory Agreement between the Trust and Nicholas-Applegate
Capital Management with respect to the Trust's Mid-Cap Growth Portfolio
incorporated by reference as Exhibit (5)(h) to Post-Effective Amendment
No. 12 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on September 15, 1992.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(5)(g) Investment Sub-Advisory Agreement between the SEI Financial Management
Corporation (the "Adviser") and Investment Advisers, Inc. with respect to
the Trust's Small Cap Growth Portfolio incorporated by reference as
Exhibit (5)(i) to Post-Effective Amendment No. 25 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC
on November 30, 1995.
(5)(h) Investment Sub-Advisory Agreement between the Adviser and Nicholas Applegate
Capital Management with respect to the Trust's Small Cap Growth Portfolio
incorporated by reference as Exhibit (5)(j) to Post-Effective Amendment
No. 25 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on November 30, 1995.
(5)(i) Investment Advisory Agreement between the Adviser and Pilgrim Baxter &
Associates with respect to the Trust's Small Cap Growth Portfolio
incorporated by reference as Exhibit (5)(k) to Post-Effective Amendment
No. 25 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on November 30, 1995.
(5)(j) Investment Advisory Agreement between the Trust and Duff & Phelps Investment
Management Co. with respect to the Trust's Value Portfolio incorporated by
reference as Exhibit (5)(l) to Post-Effective Amendment No. 17 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on June 21, 1993.
(5)(k) Investment Advisory Agreement between the Trust and E.I.I. Realty
Securities, Inc. with respect to the Trust's Real Estate Securities
Portfolio incorporated by reference as Exhibit (5)(n) to Post-Effective
Amendment No. 25 to Registrant's Registration Statement on Form N-1A (File
No. 33-9504) filed with the SEC on November 30, 1995.
(5)(l) Investment Advisory Agreement between the Trust and Western Asset Management
with respect to the Trust's Intermediate Bond Portfolio incorporated by
reference as Exhibit (5)(o) to Post-Effective Amendment No. 21 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on November 29, 1994.
(5)(m) Investment Advisory Agreement between the Trust and Mellon Equity Associates
with respect to the Trust's Large Cap Value Portfolio incorporated by
reference as Exhibit (5)(p) to Post-Effective Amendment No. 21 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on November 29, 1994.
(5)(n) Investment Sub-Advisory Agreement between the Adviser and LSV Asset
Management with respect to the Trust's Large Cap Value Portfolio
incorporated by reference as Exhibit (5)(q) to Post-Effective Amendment
No. 25 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on November 30, 1995.
(5)(o) Investment Sub-Advisory Agreement between the Adviser and Alliance Capital
Management L.P. with respect to the Trust's Large Cap Growth Portfolio
incorporated by reference as Exhibit (5)(r) to Post-Effective Amendment
No. 25 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on November 30, 1995.
(5)(p) Investment Sub-Advisory Agreement between the Adviser and IDS Advisory
Group, Inc. with respect to the Trust's Large Cap Growth Portfolio
incorporated by reference as Exhibit (5)(s) to Post-Effective Amendment
No. 25 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on November 30, 1995.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(5)(q) Investment Sub-Advisory Agreement between the Adviser and 1838 Investment
Advisors, L.P. with respect to the Trust's Small Cap Value Portfolio
incorporated by reference as Exhibit (5)(t) to Post-Effective Amendment
No. 25 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on November 30, 1995.
(5)(r) Investment Sub-Advisory Agreement between the Adviser and Martingale Asset
Management with respect to the Trust's Mid-Cap Portfolio incorporated by
reference as Exhibit (5)(u) to Post-Effective Amendment No. 25 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on November 30, 1995.
(5)(s) Form of Investment Sub-Advisory Agreement between the Adviser and BlackRock
Financial Management, Inc. with respect to the Trust's Core Fixed Income
Portfolio incorporated by reference as Exhibit (5)(v) to Post-Effective
Amendment No. 25 to Registrant's Registration Statement on Form N-1A (File
No. 33-9504) filed with the SEC on November 30, 1995.
(5)(t) Investment Sub-Advisory Agreement between the Adviser and Firstar Investment
Research & Management Company with respect to the Trust's Core Fixed
Income Portfolio incorporated by reference as Exhibit (5)(x) to
Post-Effective Amendment No. 25 to Registrant's Registration Statement on
Form N-1A (File No. 33-9504) filed with the SEC on November 30, 1995.
(5)(u) Investment Sub-Advisory Agreement between the Adviser and BEA Associates
with respect to the Trust's High Yield Bond Portfolio incorporated by
reference as Exhibit (5)(y) to Post-Effective Amendment No. 25 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on November 30, 1995.
(5)(v) Investment Sub-Advisory Agreement between the Adviser and Boston Partners
Asset Management, L.P. with respect to the Trust's Small Cap Value
Portfolio incorporated by reference as Exhibit (5)(z) to Post-Effective
Amendment No. 25 to Registrant's Registration Statement on Form N-1A (File
No. 33-9504) filed with the SEC on November 30, 1995.
(5)(w) Investment Sub-Advisory Agreement between the Adviser and Apodaca-Johnston
Capital Management, Inc. with respect to the Trust's Small Cap Growth
Portfolio incorporated by reference as Exhibit (5)(aa) to Post-Effective
Amendment No. 25 to Registrant's Registration Statement on Form N-1A (File
No. 33-9504) filed with the SEC on November 30, 1995.
(5)(x) Investment Sub-Advisory Agreement between the Adviser and Wall Street
Associates with respect to the Trust's Small Cap Growth Portfolio
incorporated by reference as Exhibit (5)(bb) to Post-Effective Amendment
No. 25 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on November 30, 1995.
(5)(y) Investment Sub-Advisory Agreement between the Adviser and First of America
Corporation dated June 14, 1996 with respect to the Trust's Small Cap
Growth Portfolio is filed herewith.
(5)(z) Form of Investment Sub-Advisory Agreement between the Adviser and Furman
Selz Capital Management LLC with respect to the Trust's Small Cap Growth
Portfolio is filed herewith.
(5)(aa) Form of Investment Sub-Advisory Agreement between the Adviser and Provident
Investment Counsel, Inc. with respect to the Trust's Large Cap Growth
Portfolio is filed herewith.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
(5)(bb) Investment Sub-Advisory Agreement between the Adviser and Boatmen's Trust
Company dated December 16, 1996 with respect to the Trust's Bond Portfolio
is filed herewith
(5)(cc) Investment Advisory Agreement between the Trust and the Adviser dated
December 16, 1994 is filed herewith.
(6) Distribution Agreement between the Trust and SEI Financial Services Company
incorporated by reference to Registrant's Registration Statement on Form
N-1A (File No. 33-9504) filed with the SEC on October 17, 1986.
(7) Not Applicable.
(8)(a) Custodian Agreement between the Trust and CoreStates Bank, N.A. (formerly
Philadelphia National Bank) incorporated by reference to Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File
No. 33-9504) filed with the SEC on January 29, 1987.
(8)(b) Custodian Agreement between the Trust and United States National Bank of
Oregon incorporated by reference to Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on January 29, 1987.
(9)(a) Management Agreement between the Trust and SEI Financial Management
Corporation incorporated by reference as Exhibit (5)(a) to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC
on October 17, 1986.
(9)(b) Schedule C to Management Agreement between the Trust and SEI Financial
Management Corporation adding the Mid-Cap Growth Portfolio incorporated by
reference as Exhibit (5)(g) to Post-Effective Amendment No. 12 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on September 15, 1992.
(9)(c) Schedule D to Management Agreement between the Trust and SEI Financial
Management Corporation adding the Real Estate Securities Portfolio
incorporated by reference as Exhibit (5)(m) to Post-Effective Amendment
No. 17 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on June 21, 1993.
(9)(d) Consent to Assignment and Assumption between SFM and SEI Fund Management
dated August 21, 1996 is filed herewith.
(10) Opinion and Consent of Counsel incorporated by reference to Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File
No. 33-9504) filed with the SEC on January 29, 1987.
(11) Consent of Independent Public Accountants is filed herewith.
(12) Not Applicable.
(13) Not Applicable.
(14) Not Applicable.
(15)(a) Distribution Plan pursuant to Rule 12b-1 (Class A) incorporated by reference
to Registrant's Registration Statement on Form N-1A (File No. 33-9504)
filed with the SEC on October 17, 1986.
(15)(b) Distribution Plan pursuant to Rule 12b-1 (Class B) incorporated by reference
to Post-Effective Amendment No. 17 to Registrant's Registration Statement
on Form N-1A (File No. 33-9504) filed with the SEC on June 21, 1993.
(15)(c) Form of Distribution Plan pursuant to Rule 12b-1 (ProVantage Class)
incorporated by reference to Post-Effective Amendment No. 19 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on December 2, 1993.
(15)(d) Amended and Restated Distribution Plan is filed herewith.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
(15)(e) Shareholder Service Plan and Agreement with respect to the Class A shares is
filed herewith.
(16) Performance Quotation Computation incorporated by reference to
Post-Effective Amendment No. 19 to Registrant's Registration Statement on
Form N-1A (File No. 33-9504) filed with the SEC on December 2, 1993.
(18)(a) Rule 18f-3 Multiple Class Plan incorporated by reference as Exhibit (15)(d)
to Post-Effective Amendment No. 23 to Registrant's Registration Statement
on Form N-1A (File No. 33-9504) filed with the SEC on June 19, 1995.
(18)(b) Amendment No. 1 to Rule 18f-3 Plan relating to Class A and Class D shares is
filed herewith.
(24) Powers of Attorney for Robert A. Nesher, William M. Doran, George J.
Sullivan, Jr., F. Wendell Gooch, Stephen G. Meyer, 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:
None.
Item 26. NUMBER OF HOLDERS OF SECURITIES:
As of January 6, 1997:
<TABLE>
<CAPTION>
NUMBER OF
RECORD
TITLE OF CLASS HOLDERS
- ---------------------------------------------------------------------------------- -------------
<S> <C>
Shares of beneficial interest, without par value--
Large Cap Value Portfolio
Class A........................................................................... 310
Large Cap Growth Portfolio
Class A......................................................................... 253
Small Cap Value Portfolio
Class A......................................................................... 172
Small Cap Growth Portfolio
Class A......................................................................... 346
Class D......................................................................... 0
Mid-Cap Portfolio
Class A......................................................................... 74
Capital Appreciation Portfolio
Class A......................................................................... 208
Equity Income Portfolio
Class A......................................................................... 191
Balanced Portfolio
Class A......................................................................... 39
Core Fixed Income Portfolio
Class A......................................................................... 178
Bond Portfolio
Class A......................................................................... 87
High Yield Bond Portfolio
Class A......................................................................... 163
</TABLE>
5
<PAGE>
Item 27. INDEMNIFICATION:
Article VIII of the Agreement and Declaration of Trust filed as Exhibit 1 to
the Registration Statement 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 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:
Other business, profession, vocation, or employment of a substantial nature
in which each director or principal officer of each Investment Adviser is or has
been, at any time during the last two fiscal years, engaged for his own account
or in the capacity of director, officer, employee, partner or trustee are as
follows:
1838 INVESTMENT ADVISORS, L.P.
1838 Investment Advisors, L.P. is an investment sub-adviser for the
Registrant's Small Cap Value Portfolio. The principal address of 1838 Investment
Advisors, L.P. is 100 Matsonford Road, Radnor, Pennsylvania 19087. 1838
Investment Advisors, L.P. is an investment adviser registered under the Advisers
Act.
The list required by this Item 28 of officers and directors of 1838
Investment Advisors, L.P., together with information as to any other business
profession, vocation, or employment of a substantial 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 1838 Investment Advisors, L.P. to the
Advisers Act (SEC File No. 801-33025).
ALLIANCE CAPITAL MANAGEMENT L.P.
Alliance Capital Management L.P. is an investment sub-adviser for the
Registrant's Large Cap Growth Portfolio. The principal address of Alliance
Capital Management L.P. is 1345 Avenue of the Americas, New York, New York
10105. Alliance Capital Management L.P. is an investment adviser registered
under the Advisers Act.
The list required by this Item 28 of officers and directors of Alliance
Capital Management L.P., together with information as to any other business
profession, vocation, or employment of a substantial 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 Alliance Capital Management L.P. to the
Advisers Act (SEC File No. 801-32361).
BEA ASSOCIATES
BEA Associates is an investment sub-adviser for the Registrant's High Yield
Bond Portfolio. The principal address of BEA Associates is One Citicorp Center,
153 East 53rd Street, New York, New York 10022. BEA Associates is an investment
adviser registered under the Advisers Act.
6
<PAGE>
The list required by this Item 28 of officers and directors of BEA
Associates, together with information as to any other business profession,
vocation, or employment of a substantial 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 BEA Associates to the Advisers Act (SEC File No.
801-37170).
BLACKROCK FINANCIAL MANAGEMENT, INC.
BlackRock Financial Management, Inc. is an investment sub-adviser for the
Registrant's Core Fixed Income Portfolio. The principal address of BlackRock
Financial Management, Inc. is 345 Park Avenue, 30th Floor, New York, New York
10154. BlackRock Financial Management, Inc. is an investment adviser registered
under the Advisers Act.
The list required by this Item 28 of officers and directors of BlackRock
Financial Management, Inc., together with information as to any other business
profession, vocation, or employment of a substantial 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 BlackRock Financial Management, Inc. to
the Advisers Act (SEC File No. 801-48433).
BOATMEN'S TRUST COMPANY
Boatmen's Trust Company is an investment sub-adviser for the Bond Portfolio.
The principal address of Boatmen's Trust Company is 510 Locust Street, St.
Louis, MO 63101.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Howard F. Baer A.S. Aloe Chief Executive Officer
Director of Adviser
Clarence C. Barksdale Southwestern Bell Corp. Director
Director of Adviser
Washington University Vice Chairman
Gerald D. Blatherwick Southwestern Bell Corporation Vice Chairman
Director of Adviser
Telmex Director
Stephen F. Brauer Hunter Engineering Company President
Director of Adviser
Mary Leyhe Burke, Ph.D. Whitfield School Head of School
George K. Conant Tri-Star Supply, Inc. Consultant
Director of Adviser
Blue Cross/Blue Shield of Missouri Director
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Andrew B. Craig III Boatmen's Bancshares, Inc. Chairman and Chief Executive Officer
Director of Adviser
The Boatmen's National Bank of St. Director
Louis
The Boatmen's Bank of Delaware Chairman
Petrolite Corp. Director
Anheuser-Busch Company, Inc. Director
Wm. S. Barnickel & Co. Director
Donald Danforth, Jr. Danforth Agri-Resources, Inc. President
Director of Adviser
Kennelwood Village, Inc. President
Vector Corp. Chairman
Ralston Purina Co. Chairman
Martin E. Galt, III Boatmen's Trust Company Chairman
President of Adviser
A. William Hager Hager Hinge Company Chairman
Director of Adviser
Laclede Steel Co. Director
Muny Opera Director
Samuel B. Hayes, III Boatmen's Bancshares, Inc. President
Boatmen's National Bank of St. Louis Chairman, President & C.F.O.
Robert E. Kresko Rekko Management Co., Inc. President
Director of Adviser
Cupplos Manufacturing Co. Director
Nooney R.E.I.T. Director
John Peters MacCarthy Boatmen's Trust Company Chairman and Chief Executive Officer
Director of Adviser
Boatmen's Bancshares, Inc. Vice Chairman and Director
Union Electric Company Director
James S. McDonnell, III McDonnell-Douglas Corp. Director
Director of Adviser
Automobile Club of Missouri Director
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
John B. McKinney Laclede Steel Company President, Chief Executive Officer
Director of Adviser and Director
Automobile Club of Missouri Director
Webster University Director
Whitfield School Director
St. Louis University Advisory Board Member
Reuben M. Morriss, III Boatmen's Trust Company Vice Chairman
Director of Adviser
The Boatmen's National Bank of St. Executive Vice President and Senior
Louis Trust Officer
Bellefontaine Cemetery Director
Churchill School Director
Opera Theatre of St. Louis Director
St. Louis Bi-State Director
American Red Cross
St. Louis Country Club Director
St. Luke's Hospital Director
William Woods College Chairman
William C. Nelson Boatmen's First National Bank of Chairman, President & C.E.O.
Kansas City
Boatmen's Bank of Delaware Director
Boatmen's Bancshares of Iowa Director
Consumer Bankers Association Director
Kansas City Board of Trade Director
William A. Peck, M.D. Washington University School of Executive Vice Chancellor & Dean
Medicine
W. R. Persons Emerson Electric Company Chief Executive Officer
Director of Adviser
Jerry E. Ritter Anheuser-Busch Companies Executive Vice President, Chief
Director of Adviser Financial Officer and Chief
Administrative Officer
Boatmen's Bancshares, Inc. Director
Louis S. Sachs Sachs Properties, Inc. Chairman
Director of Adviser
SEM5 Chairman
Sachs Holdings, Inc. Chairman
Washington University Trustee
Missouri Botanical Gardens Trustee Emeritus
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Hugh Scott, III Western Diesel Service, Inc. Chairman and Chief Executive Officer
Director of Adviser
Richard W. Shomaker Brown Shoe Company Retired
Director of Adviser
Lee-Rowan Company Director
Brice R. Smith, Jr. Sverdrup Corporation Chairman and Chief Executive Officer
Director of Adviser
William D. Stamper W. D. Stamper Company President
Director of Adviser
Janet M. Weakley Janet McAfee Inc. Real Estate President
Director of Adviser
Gordon E. Wells Boatmen's First National Bank of Director
Kansas City
St. Louis Union Trust Company Chief Executive Officer
Olin Corporation Director
AMR Corporation Director
Emerson Electric Co. Director
</TABLE>
STI CAPITAL MANAGEMENT, N.A.
STI Capital Management, N.A. is an investment sub-adviser for the Capital
Appreciation and Balanced Portfolios. The principal business address of STI
Capital Management, N.A. is P.O. Box 3808, Orlando, FL 94104.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Anthony R. Gray -- --
Chairman & Chief Investment Officer
James R. Wood -- --
President
E. Jenner Wood III -- --
Director
Hunting F. Deutsch -- --
Director
Jonathan D. Rich -- --
Director
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Elliott A. Perny -- --
Executive Vice President
Chief Portfolio Manager
Daniel Jaworski -- --
Senior Vice President
Larry M. Cole -- --
Senior Vice President
Daniel G. Shannon -- --
Senior Vice President
Ronald Schwartz -- --
Senior Vice President
Robert Buhrmann -- --
Senior Vice President
L. Earl Denney -- --
Executive Vice President
Thomas A. Edgar -- --
Senior Vice President
Stuart F. Van Arsdale -- --
Senior Vice President
Ryan R. Burrow -- --
Senior Vice President
Christopher A. Jones -- --
Senior Vice President
Mills A. Riddick -- --
Senior Vice President
David E. West -- --
Vice President
</TABLE>
11
<PAGE>
PACIFIC ALLIANCE CAPITAL MANAGEMENT
Pacific Alliance Capital Management, a division of Union Bank of California,
N.A., is an investment sub-adviser for the Equity Income and Large Cap Value
Portfolios. The principal address of Pacific Alliance Capital Management is 475
Sansome Street, San Francisco, CA 94111.
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Stanley F. Farrar Sullivan & Cromwell Partner
Director of Adviser
Raymond E. Miles Univ. of California School of Bus. Dean
Director of Adviser Admin.
Alexander D. Calhoun Graham & James Partner
Director
Richard D. Farman Pacific Enterprises President, COO & Director
Director
Herman E. Gallegos Independent Management Consultant --
Director
Jack L. Hancock Retired --
Director
Richard C. Hartnack Retired --
Vice Chairman
Harry W. Lou Judicial Arbitration and Mediation Mediator/Arbitrator
Director Services, Inc.
J. Fernado Niebla Infotec Development, Inc. Chairman & CEO
Director of Adviser
Hiroo Nozawa Bank of Tokyo, Mitsubishi Director
Director of Adviser
Chairman, President & CEO
Carl W. Robertson Warland Investments Company Managing Director
Director of Adviser
Paul W. Steere Bogle & Gates Partner
Director of Adviser
Charles R. Scott Leadership Centers USA Chairman & CEO
Director of Adviser
Henry T. Swigert ESCO Corporation Chairman
Director of Adviser
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Minoru Noda UnionBanCal Corporation Vice Chairman
Director of Adviser,
Vice Chairman Credit & Finance
Roy A. Henderson UnionBanCal Corporation Vice Chairman
Director of Adviser,
Chairman, Regional Banking
Mary S. Metz University Extension, University of Dean
Director California, Berkley
Sidney R. Peterson Consultant --
Director
Robert M. Walker Retired --
Vice Chairman
Blenda J. Wilson California State University, President
Director Northridge
Kanetaka Yoshida Bank of Tokyo, Mitsubishi Limited Director
President, C.E.O. & Director
Luke Mazur -- --
Senior Vice President & Manager
</TABLE>
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
Boston Partners Asset Management, L.P. is an investment sub-adviser for the
Small Cap Value Portfolio. The principal address of Boston Partners Asset
Management, L.P. is One Financial Center, 43rd Floor, Boston, Massachusetts
02111. Boston Partners Asset Management, L.P. is an investment adviser
registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Boston
Partners Asset Management, L.P., together with information as to any other
business profession, vocation, or employment of a substantial 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 Boston Partners Asset
Management, L.P. to the Advisers Act (SEC File No. 801-49059).
FIRST OF AMERICA INVESTMENT CORPORATION
First of America Investment Corporation ("First of America") is an
investment sub-adviser for the Registrant's Small Cap Fund. The principal
business address of First of America is 303 North Rose Street, Suite 500,
Kalamazoo, Michigan 49007. First of America is an investment sub-adviser
registered under the Advisers Act.
The list required by this Item 28 of officers and directors of First of
America, together with information as to any other business, profession,
vocation or employment of a substantial nature engaged
13
<PAGE>
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 First of America pursuant to
the Advisers Act (SEC File No. 801-446).
FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY
Firstar Investment Research & Management Company is an investment
sub-adviser for the Core Fixed Income Portfolio. The principal address of
Firstar Investment Research & Management Company is 777 E. Wisconsin Avenue,
Suite 800, Milwaukee, Wisconsin 53202. Firstar Investment Research & Management
Company is an investment adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Firstar
Investment Research & Management Company, together with information as to any
other business profession, vocation, or employment of a substantial 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 Firstar
Investment Research & Management Company to the Advisers Act (SEC File No.
801-28084).
FURMAN SELZ CAPITAL MANAGEMENT LLC
Furman Selz Capital Management LLC ("Furman Selz") is an investment
sub-adviser for the Registrant's Small Cap Fund. The principal business address
of Furman Selz is 230 Park Avenue, New York, NY 10169. Furman Selz is an
investment sub-adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Furman Selz,
together with information as to any other business, profession, vocation or
employment of a substantial 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 Furman Selz pursuant to the Advisers Act (SEC File No.
801-20737).
IDS ADVISORY GROUP INC.
IDS Advisory Group Inc. is an investment sub-adviser for the Registrant's
Large Cap Growth Portfolio. The principal address of IDS Advisory Group Inc. is
IDS Tower 10, Minneapolis, Minnesota 55440. IDS Advisory Group Inc. is an
investment adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of IDS Advisory
Group Inc., together with information as to any other business profession,
vocation, or employment of a substantial 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 IDS Advisory Group Inc. to the Advisers Act (SEC File
No. 801-25943).
LSV ASSET MANAGEMENT
LSV Asset Management is an investment sub-adviser for the Large Cap Value
Portfolio. The principal address of LSV Asset Management is 181 West Madison
Street, Chicago, Illinois 60602. LSV Asset Management is an investment adviser
registered under the Advisers Act.
The list required by this Item 28 of officers and directors of LSV Asset
Management, together with information as to any other business profession,
vocation, or employment of a substantial 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 LSV Asset Management to the Advisers Act (SEC File
No. 801-47689).
MARTINGALE ASSET MANAGEMENT, L.P.
Martingale Asset Management, L.P. is the investment sub-adviser for the
Mid-Cap Portfolio. The principal address of Martingale Asset Management, L.P. is
222 Berkeley Street, Boston, Massachusettes 02116. Martingale Asset Management,
L.P. is an investment adviser registered under the Advisers Act.
14
<PAGE>
The list required by this Item 28 of officers and directors of Martingale
Asset Management, L.P., together with information as to any other business
profession, vocation, or employment of a substantial 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 Martingale Asset Management, L.P. to the
Advisers Act (SEC File No. 801-30067).
MELLON EQUITY ASSOCIATES
Mellon Equity Associates is an investment sub-adviser for the Large Cap
Value Portfolio. The principal address of Mellon Equity Associates is 500 Grant
Street, Suite 3700, Pittsburgh, Pennsylvania. Mellon Equity Associates is an
investment adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Mellon Equity
Associates, together with information as to any other business profession,
vocation, or employment of a substantial 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 Equity Associates to the Advisers Act (SEC
File No. 801-28692).
NICHOLAS APPLEGATE CAPITAL MANAGEMENT, INC.
Nicholas Applegate Capital Management, Inc. is an investment sub-adviser for
the Small Cap Growth Portfolio. The principal address of Nicholas Applegate
Capital Management, Inc. is 600 West Broadway, 29th Floor, San Diego, California
92101. Nicholas Applegate Capital Management, Inc. is an investment adviser
registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Nicholas
Applegate Management, Inc., together with information as to any other business
profession, vocation, or employment of a substantial 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 Nicholas Applegate Capital Management,
Inc. to the Advisers Act (SEC File No. 801-21442).
PROVIDENT INVESTMENT COUNSEL, INC.
Provident Investment Counsel, Inc. ("Provident") is an investment
sub-adviser for the Registrant's Large Cap Fund. The principal business address
of Provident is 300 North Lake Avenue, Pasadena, CA 91101. Provident is an
investment sub-adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Provident,
together with information as to any other business, profession, vocation or
employment of substantial 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 Provident pursuant to the Adviser Act (SEC File No.
801-47993).
SEI FINANCIAL MANAGEMENT CORPORATION
SEI Financial Management Company ("SFM") is an investment adviser for the
Large Cap Value, Large Cap Growth, Small Cap Value, Small Cap Growth, Mid-Cap,
Capital Appreciation, Equity Income, Balanced, Core Fixed Income, Bond and High
Yield Bond Portfolios. The principal address of SFM is Oaks, Pennsylvania 19456.
SFM is an investment adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of SFM, together
with information as to any other business profession, vocation, or employment of
a substantial 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
SFM to the Advisers Act (SEC File No. 801-24593).
15
<PAGE>
WALL STREET ASSOCIATES
Wall Street Associates is an investment sub-adviser for the Small Cap Growth
Portfolio. The principal address of Wall Street Associates is 1200 Prospect
Street, Suite 100, La Jolla, California 92037. Wall Street Associates is an
investment adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Wall Street
Associates, together with information as to any other business profession,
vocation, or employment of a substantial 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 Wall Street Associates to the Advisers Act (SEC File
No. 801-30019).
WESTERN ASSET MANAGEMENT COMPANY
Western Asset Management Company is an investment sub-adviser for the Core
Fixed Income Portfolio. The principal address of Western Asset Management
Company is 117 East Colorado Boulevard, Pasadena, California 91105. Western
Asset Management Company is an investment adviser registered under the Advisers
Act.
The list required by this Item 28 of officers and directors of Western Asset
Management Company, together with information as to any other business
profession, vocation, or employment of a substantial 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 Western Asset Management Company to the
Advisers Act (SEC File No. 801-08162).
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.
16
<PAGE>
Registrant's distributor, SEI Financial Services Company ("SFS"), 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
Stepstone Funds January 30, 1991
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, Inc. November 1, 1992
The Arbor Fund January 28, 1993
1784 Funds-Registered Trademark- June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis Funds-Registered Trademark- August 17, 1993
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
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
FMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
Turner Funds April 30, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
</TABLE>
SFS 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>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME 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 & Treasurer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President, President-Investment --
Services Division
Leo J. Dolan, Jr. Senior Vice President --
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------- ------------------------------------------------------ ------------------------
<S> <C> <C>
Carl A. Guarino Senior Vice President --
Jerome Hickey Senior Vice President --
Larry Hutchison Senior Vice President --
Steven Kramer Senior Vice President --
David G. Lee Senior Vice President President and Chief
Executive Officer
William Madden Senior Vice President --
Jack May Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
James V. Morris Senior Vice President --
Steven Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, General Counsel & Secretary Vice President and
Assistant Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Aller Vice President --
Marc H. Cahn Vice President & Assistant Secretary Vice President and
Assistant Secretary
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President and
Assistant Secretary
Robert Crudup Vice President & Managing Director --
Ed Daly Vice President --
Jeff Drennen Vice President --
Mick Duncan Vice President and Team Leader Assistant Secretary
Vic Galef Vice President & Managing Director --
Kathy Heilig Vice President --
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 --
Robert S. Ludwig Vice President & Team Leader Assistant Secretary
Vicki Malloy Vice President and Team Leader Assistant Secretary
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------- ------------------------------------------------------ ------------------------
<S> <C> <C>
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Barbara A. Nugent Vice President & Assistant Secretary Vice President and
Assistant Secretary
Sandra K. Orlow Vice President & Assistant Secretary Vice President and
Assistant Secretary
Donald Pepin Vice President & Managing Director --
Larry Pokora Vice President --
Kim Rainey Vice President --
Paul Sachs Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President, Deputy General Counsel & Assistant Vice President and
Secretary Assistant Secretary
Wayne M. Withrow Vice President & Managing Director --
William Zawaski Vice President --
James Dougherty Director of Brokerage Services --
</TABLE>
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:
CoreStates Bank, N.A.
Broad and Chestnut Streets
P.O. Box 7618
Philadelphia, PA 19101
(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1),(4);
(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 Advisers:
1838 Investment Advisors, L.P.
100 Matsonford Road
Radnor, PA 19087
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, NY 10105
19
<PAGE>
BEA Associates
One Citicorp Center
153 East 53rd Street
New York, NY 10022
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
Boatmen's Trust Company
510 Locust Street
St. Louis, MO 63101
Boston Partners Asset Management, L.P.
One Financial Center, 43rd Floor
Boston, MA 02111
First of America Investment Corporation
303 North Rose Street
Suite 500
Kalamazoo, MI 49007
Firstar Investment Research & Management Company
777 East Wisconsin Avenue
Suite 800
Milwaukee, WI 53202
Furman Selz Capital Management LLC
230 Park Avenue
New York, NY 10169
IDS Advisory Group Inc.
IDS Tower 10
Minneapolis, MN 55440
LSV Asset Management
181 W. Madison Avenue
Chicago, IL 60602
Martingale Asset Management, L.P.
222 Berkeley Street
Boston, MA 02210
Mellon Equity Associates
500 Grant Street
Suite 3700
Pittsburgh, PA 15258
Nicholas Applegate Capital Management, Inc.
600 West Broadway, 29th Floor
San Diego, CA 92101
Pacific Alliance Capital Management
475 Sansome Street
San Francisco, CA 94104
Provident Investment Counsel, Inc.
300 North Lake Avenue
Pasadena, CA 91101
20
<PAGE>
SEI Financial Management Corporation
Oaks, PA 19456
STI Capital Management, N.A.
P.O. Box 3808
Orlando, FL 32802
Wall Street Associates
1200 Prospect Street
Suite 100
La Jolla, CA 92037
Western Asset Management Company
117 East Colorado Boulevard
Pasadena, CA 91105
ITEM 31. MANAGEMENT SERVICES:
None.
ITEM 32. UNDERTAKINGS:
Registrant hereby undertakes that whenever Shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940 inform the
Board of Trustees of their desire to communicate with Shareholders of the Trust,
the Trustees will inform such Shareholders as to the approximate number of
Shareholders of record and the approximate cost of mailing or afford said
Shareholders access to a list of Shareholders.
Registrant undertakes to hold 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 for any
series of the Registrant is delivered with a copy of the Registrant's latest
annual report to shareholders for such series, when such annual report is issued
containing information called for by Item 5A of Form N-1A, upon request and
without charge.
NOTICE
A copy of the Agreement and Declaration of Trust of SEI Institutional
Managed Trust 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.
21
<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. 26 to Registration Statement No. 33-9504 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Wayne, Commonwealth of Pennsylvania on the 28th day of January, 1997.
SEI INSTITUTIONAL MANAGED TRUST
By: /s/ DAVID G. LEE
-----------------------------------------
David G. Lee
PRESIDENT & CHIEF EXECUTIVE OFFICER
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 on the date(s) indicated.
*
- ------------------------------ Trustee January 28, 1997
William M. Doran
*
- ------------------------------ Trustee January 28, 1997
F. Wendell Gooch
*
- ------------------------------ Trustee January 28, 1997
Frank E. Morris
*
- ------------------------------ Trustee January 28, 1997
George J. Sullivan, Jr.
*
- ------------------------------ Trustee January 28, 1997
James M. Storey
*
- ------------------------------ Trustee January 28, 1997
Robert A. Nesher
/s/ DAVID G. LEE
- ------------------------------ President & Chief January 28, 1997
David G. Lee Executive Officer
/s/ STEPHEN G. MEYER
- ------------------------------ Controller & Chief January 28, 1997
Stephen G. Meyer Financial Officer
*By: /s/ DAVID G. LEE
-------------------------
David G. Lee
ATTORNEY IN FACT
22
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
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<S> <C>
EX-99.B(1) Declaration of Trust incorporated by reference to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on October 17, 1986.
EX-99.B(1)(a) Amendment to the Declaration of Trust dated December 23, 1988 is filed herewith.
EX-99.B(2) By-Laws incorporated by reference to Registrant's Registration Statement on Form
N-1A (File No. 33-9504) filed with the SEC on October 17, 1986.
EX-99.B(3) Not Applicable.
EX-99.B(4) Not Applicable.
EX-99.B(5)(a) Investment Advisory Agreement between the Trust and SunBank, N.A. with respect to
the Trust's Capital Appreciation Portfolio incorporated by reference as Exhibit
(5)(b) to Post-Effective Amendment No. 4 to Registrant's Registration Statement
on Form N-1A (File No. 33-9504) filed with the SEC on November 25, 1987.
EX-99.B(5)(b) Investment Advisory Agreement between the Trust and The Bank of California with
respect to the Trust's Equity Income Portfolio incorporated by reference as
Exhibit (5)(c) to Post-Effective Amendment No. 4 to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on November 25,
1987.
EX-99.B(5)(c) Investment Advisory Agreement between the Trust and Merus Capital Management, Inc.
with respect to the Trust's Equity Income Portfolio incorporated by reference as
Exhibit (5)(d) to Post-Effective Amendment No. 4 to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on November 25,
1987.
EX-99.B(5)(d) Investment Advisory Agreement between the Trust and Boatmen's Trust Company with
respect to the Trust's Bond Portfolio incorporated by reference as Exhibit (5)(e)
to Post-Effective Amendment No. 5 to Registrant's Registration Statement on Form
N-1A (File No. 33-9504) filed with the SEC on November 30, 1988.
EX-99.B(5)(e) Investment Advisory Agreement between the Trust and Bank One, Indianapolis, N.A.
with respect to the Trust's Limited Volatility Bond Portfolio incorporated by
reference as Exhibit (5)(f) to Post-Effective Amendment No. 6 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on May
4, 1989.
EX-99.B(5)(f) Investment Advisory Agreement between the Trust and Nicholas-Applegate Capital
Management with respect to the Trust's Mid-Cap Growth Portfolio incorporated by
reference as Exhibit (5)(h) to Post-Effective Amendment No. 12 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on
September 15, 1992.
EX-99.B(5)(g) Investment Sub-Advisory Agreement between the SEI Financial Management Corporation
(the "Adviser") and Investment Advisers, Inc. with respect to the Trust's Small
Cap Growth Portfolio incorporated by reference as Exhibit (5)(i) to
Post-Effective Amendment No. 25 to Registrant's Registration Statement on Form
N-1A (File No. 33-9504) filed with the SEC on November 30, 1995.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- --------------------
<S> <C>
EX-99.B(5)(h) Investment Sub-Advisory Agreement between the Adviser and Nicholas Applegate
Capital Management with respect to the Trust's Small Cap Growth Portfolio
incorporated by reference as Exhibit (5)(j) to Post-Effective Amendment No. 25 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed with
the SEC on November 30, 1995.
EX-99.B(5)(i) Investment Advisory Agreement between the Adviser and Pilgrim Baxter & Associates
with respect to the Trust's Small Cap Growth Portfolio incorporated by reference
as Exhibit (5)(k) to Post-Effective Amendment No. 25 to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on November 30,
1995.
EX-99.B(5)(j) Investment Advisory Agreement between the Trust and Duff & Phelps Investment
Management Co. with respect to the Trust's Value Portfolio incorporated by
reference as Exhibit (5)(l) to Post-Effective Amendment No. 17 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on June
21, 1993.
EX-99.B(5)(k) Investment Advisory Agreement between the Trust and E.I.I. Realty Securities, Inc.
with respect to the Trust's Real Estate Securities Portfolio incorporated by
reference as Exhibit (5)(n) to Post-Effective Amendment No. 25 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on
November 30, 1995.
EX-99.B(5)(l) Investment Advisory Agreement between the Trust and Western Asset Management with
respect to the Trust's Intermediate Bond Portfolio incorporated by reference as
Exhibit (5)(o) to Post-Effective Amendment No. 21 to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on November 29,
1994.
EX-99.B(5)(m) Investment Advisory Agreement between the Trust and Mellon Equity Associates with
respect to the Trust's Large Cap Value Portfolio incorporated by reference as
Exhibit (5)(p) to Post-Effective Amendment No. 21 to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on November 29,
1994.
EX-99.B(5)(n) Investment Sub-Advisory Agreement between the Adviser and LSV Asset Management with
respect to the Trust's Large Cap Value Portfolio incorporated by reference as
Exhibit (5)(q) to Post-Effective Amendment No. 25 to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on November 30,
1995.
EX-99.B(5)(o) Investment Sub-Advisory Agreement between the Adviser and Alliance Capital
Management L.P. with respect to the Trust's Large Cap Growth Portfolio
incorporated by reference as Exhibit (5)(r) to Post-Effective Amendment No. 25 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed with
the SEC on November 30, 1995.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- --------------------
<S> <C>
EX-99.B(5)(p) Investment Sub-Advisory Agreement between the Adviser and IDS Advisory Group, Inc.
with respect to the Trust's Large Cap Growth Portfolio incorporated by reference
as Exhibit (5)(s) to Post-Effective Amendment No. 25 to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on November 30,
1995.
EX-99.B(5)(q) Investment Sub-Advisory Agreement between the Adviser and 1838 Investment Advisors,
L.P. with respect to the Trust's Small Cap Value Portfolio incorporated by
reference as Exhibit (5)(t) to Post-Effective Amendment No. 25 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on
November 30, 1995.
EX-99.B(5)(r) Investment Sub-Advisory Agreement between the Adviser and Martingale Asset
Management with respect to the Trust's Mid-Cap Portfolio incorporated by
reference as Exhibit (5)(u) to Post-Effective Amendment No. 25 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on
November 30, 1995.
EX-99.B(5)(s) Form of Investment Sub-Advisory Agreement between the Adviser and BlackRock
Financial Management, Inc. with respect to the Trust's Core Fixed Income
Portfolio incorporated by reference as Exhibit (5)(v) to Post-Effective Amendment
No. 25 to Registrant's Registration Statement on Form N-1A (File No. 33-9504)
filed with the SEC on November 30, 1995.
EX-99.B(5)(t) Investment Sub-Advisory Agreement between the Adviser and Firstar Investment
Research & Management Company with respect to the Trust's Core Fixed Income
Portfolio incorporated by reference as Exhibit (5)(x) to Post-Effective Amendment
No. 25 to Registrant's Registration Statement on Form N-1A (File No. 33-9504)
filed with the SEC on November 30, 1995.
EX-99.B(5)(u) Investment Sub-Advisory Agreement between the Adviser and BEA Associates with
respect to the Trust's High Yield Bond Portfolio incorporated by reference as
Exhibit (5)(y) to Post-Effective Amendment No. 25 to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on November 30,
1995.
EX-99.B(5)(v) Investment Sub-Advisory Agreement between the Adviser and Boston Partners Asset
Management, L.P. with respect to the Trust's Small Cap Value Portfolio
incorporated by reference as Exhibit (5)(z) to Post-Effective Amendment No. 25 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed with
the SEC on November 30, 1995.
EX-99.B(5)(w) Investment Sub-Advisory Agreement between the Adviser and Apodaca-Johnston Capital
Management, Inc. with respect to the Trust's Small Cap Growth Portfolio
incorporated by reference as Exhibit (5)(aa) to Post-Effective Amendment No. 25
to Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed with
the SEC on November 30, 1995.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- --------------------
<S> <C>
EX-99.B(5)(x) Investment Sub-Advisory Agreement between the Adviser and Wall Street Associates
with respect to the Trust's Small Cap Growth Portfolio incorporated by reference
as Exhibit (5)(bb) to Post-Effective Amendment No. 25 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on
November 30, 1995.
EX-99.B(5)(y) Investment Sub-Advisory Agreement between the Adviser and First of America
Corporation dated June 14, 1996 with respect to the Trust's Small Cap Growth
Portfolio is filed herewith.
EX-99.B(5)(z) Form of Investment Sub-Advisory Agreement between the Adviser and Furman Selz
Capital Management LLC with respect to the Trust's Small Cap Growth Portfolio is
filed herewith.
EX-99.B(5)(aa) Form of Investment Sub-Advisory Agreement between the Adviser and Provident
Investment Counsel, Inc. with respect to the Trust's Large Cap Growth Portfolio
is filed herewith.
EX-99.B(5)(bb) Investment Sub-Advisory Agreement between the Adviser and Boatmen's Trust Company
dated December 16, 1996 with respect to the Trust's Bond Portfolio is filed
herewith.
EX-99.B(5)(cc) Investment Advisory Agreement between the Trust and the Adviser dated December 16,
1994 is filed herewith.
EX-99.B(6) Distribution Agreement between the Trust and SEI Financial Services Company
incorporated by reference to Registrant's Registration Statement on Form N-1A
(File No. 33-9504) filed with the SEC on October 17, 1986.
EX-99.B(7) Not Applicable.
EX-99.B(8)(a) Custodian Agreement between the Trust and CoreStates Bank, N.A. (formerly
Philadelphia National Bank) incorporated by reference to Pre-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A (File No. 33-9504)
filed with the SEC on January 29, 1987.
EX-99.B(8)(b) Custodian Agreement between the Trust and United States National Bank of Oregon
incorporated by reference to Pre-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on
January 29, 1987.
EX-99.B(9)(a) Management Agreement between the Trust and SEI Financial Management Corporation
incorporated by reference as Exhibit (5)(a) to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on October 17, 1986.
EX-99.B(9)(b) Schedule C to Management Agreement between the Trust and SEI Financial Management
Corporation adding the Mid-Cap Growth Portfolio incorporated by reference as
Exhibit (5)(g) to Post-Effective Amendment No. 12 to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on September 15,
1992.
EX-99.B(9)(c) Schedule D to Management Agreement between the Trust and SEI Financial Management
Corporation adding the Real Estate Securities Portfolio incorporated by reference
as Exhibit (5)(m) to Post-Effective Amendment No. 17 to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on June 21, 1993.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- --------------------
<S> <C>
EX-99.B(9)(d) Consent to Assignment and Assumption between SFM and SEI Fund Management dated
August 21, 1996 is filed herewith.
EX-99.B(10) Opinion and Consent of Counsel incorporated by reference to Pre-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A (File No. 33-9504)
filed with the SEC on January 29, 1987.
EX-99.B(11) Consent of Independent Public Accountants is filed herewith.
EX-99.B(12) Not Applicable.
EX-99.B(13) Not Applicable.
EX-99.B(14) Not Applicable.
EX-99.B(15)(a) Distribution Plan pursuant to Rule 12b-1 (Class A) incorporated by reference to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed with
the SEC on October 17, 1986.
EX-99.B(15)(b) Distribution Plan pursuant to Rule 12b-1 (Class B) incorporated by reference to
Post-Effective Amendment No. 17 to Registrant's Registration Statement on Form
N-1A (File No. 33-9504) filed with the SEC on June 21, 1993.
EX-99.B(15)(c) Form of Distribution Plan pursuant to Rule 12b-1 (ProVantage Class) incorporated by
reference to Post-Effective Amendment No. 19 to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on December 2, 1993.
EX-99.B(15)(d) Amended and Restated Distribution Plan is filed herewith.
EX-99.B(15)(e) Shareholder Service Plan and Agreement with respect to the Class A shares is filed
herewith.
EX-99.B(16) Performance Quotation Computation incorporated by reference to Post-Effective
Amendment No. 19 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on December 2, 1993.
EX-99.B(18)(a) Rule 18f-3 Multiple Class Plan incorporated by reference as Exhibit (15)(d) to
Post-Effective Amendment No. 23 to Registrant's Registration Statement on Form
N-1A (File No. 33-9504) filed with the SEC on June 19, 1995.
EX-99.B(18)(b) Amendment No. 1 to Rule 18f-3 Plan relating to Class A and Class D shares is filed
herewith.
EX-99.B(24) Powers of Attorney for Robert A. Nesher, William M. Doran, George J. Sullivan, Jr.,
F. Wendell Gooch, Stephen G. Meyer, James M. Storey, David G. Lee and Frank E.
Morris are filed herewith.
EX-27.1 Financial Data Schedule for the Class A Large Cap Growth Portfolio is filed
herewith.
EX-27.2 Financial Data Schedule for the Class A Small Cap Value Portfolio is filed
herewith.
EX-27.3 Financial Data Schedule for the Class A High Yield Bond Portfolio is filed
herewith.
EX-27.4 Financial Data Schedule for the Class A Large Cap Value Portfolio is filed
herewith.
EX-27.5 Financial Data Schedule for the Class A Balanced Portfolio is filed herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- --------------------
<S> <C>
EX-27.6 Financial Data Schedule for the Class A Capital Appreciation Portfolio is filed
herewith.
EX-27.7 Financial Data Schedule for the Class D Capital Appreciation Portfolio is filed
herewith.
EX-27.8 Financial Data Schedule for the Class A Equity Income Portfolio is filed herewith.
EX-27.9 Financial Data Schedule for the Class D Equity Income Portfolio is filed herewith.
EX-27.10 Financial Data Schedule for the Class A Core Fixed Income Portfolio is filed
herewith.
EX-27.11 Financial Data Schedule for the Class D Core Fixed Income Portfolio is filed
herewith.
EX-27.12 Financial Data Schedule for the Class A Bond Portfolio is filed herewith.
EX-27.13 Financial Data Schedule for the Class D Bond Portfolio is filed herewith.
EX-27.14 Financial Data Schedule for the Class A Small Cap Growth Portfolio is filed
herewith.
EX-27.15 Financial Data Schedule for the Class D Small Cap Growth Portfolio is filed
herewith.
EX-27.16 Financial Data Schedule for the Class A Mid Cap Portfolio is filed herewith.
EX-27.17 Financial Data Schedule for the Class D Mid Cap Portfolio is filed herewith.
</TABLE>
<PAGE>
TRUSTFUNDS INSTITUTIONAL MANAGED TRUST
WRITTEN INSTRUMENT AMENDING THE DECLARATION OF TRUST
The undersigned, being all of the Trustees of TrustFunds Institutional
Managed Trust, a business trust organized under the laws of The Commonwealth of
Massachusetts pursuant to a Declaration of Trust dated October 20, 1986, 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/ William M. Doran December 23, 1988
- -------------------------
William M. Doran
/s/ Edward Binshadler December 23, 1988
- -------------------------
Edward Binshadler
/s/ Richard Blanchard December 23, 1988
- -------------------------
Richard Blanchard
/s/ F. Wendell Gooch December 23, 1988
- -------------------------
F. Wendell Gooch
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and First of America Investment
Corporation (the "Sub-Adviser").
WHEREAS, SEI Institutional Managed Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated December 16, 1994 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Small Cap Growth
Portfolio (the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker
<PAGE>
or dealer, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. In evaluating the best
overall terms available, and in selecting the broker-dealer to execute a
particular transaction, the Sub-Adviser may also consider the brokerage and
research services provided (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934). Consistent with any guidelines
established by the Board of Trustees of the Trust, the Sub-Adviser is
authorized to pay to a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for
the Portfolio which is in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction if, but only
if, the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer -- viewed in terms of that particular
transaction or terms of the overall responsibilities of the Sub-Adviser to
the Portfolio. In addition, the Sub-Adviser is authorized to allocate
purchase and sale orders for securities to brokers or dealers (including
brokers and dealers that are affiliated with the Adviser, Sub-Adviser or
the Trust's principal underwriter) to take into account the sale of shares
of the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with
other qualified firms. In no instance, however, will the Portfolio's
Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust,
Adviser, the Sub-Adviser or the principal underwriter, acting as principal
in the transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
2
<PAGE>
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the Assets.
The Adviser shall instruct the custodian and other parties providing
services to the Portfolio to promptly forward misdirected proxies to the
Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the "By-
Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-
Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own, or any
other sub-adviser's, willful misfeasance, bad faith or negligence, or to
the reckless disregard of its duties under this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio. This Agreement shall
continue in effect for a period of more than two years from the date hereof
only so long as continuance is specifically approved at least annually in
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Portfolio (a) by the Portfolio at any
time, without the payment of any penalty, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Portfolio, (b) by the Adviser at any time, without
3
<PAGE>
the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days' written notice to the
Adviser. This Agreement shall terminate automatically and immediately in
the event of its assignment, or in the event of a termination of the
Adviser's agreement with the Trust. As used in this Section 6, the terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the respective meanings set forth in the 1940 Act and the rules
and regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
9. NOTICE. Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: First of AmericaInvestment Corporation
303 N. Rose Street
Suite 500
Kalamazoo, Michigan 49007
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation First of America Investment Corporation
4
<PAGE>
By: By:
/s/ Kevin P. Robins /s/ L. Edward Knox
------------------- ------------------
Name: Name:
Kevin P. Robins L. Edward Knox
--------------- --------------
Title: Title:
Senior Vice President Vice President
--------------------- --------------
5
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
FIRST OF AMERICA INVESTMENT CORPORATION
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Small Cap Growth Portfolio . %
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
AGREEMENT made this __th day of ____, 1996, between SEI Financial
Management Corporation, (the "Adviser") and Furman Selz Capital Management, LLC
(the "Sub-Adviser").
WHEREAS, SEI Institutional Managed Trust, a Massachusetts business trust
(the "Trust"), is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated December 16, 1994 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Small Cap Growth
Portfolio (the "Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting
the broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934).
Consistent with any guidelines established by the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker or dealer who
<PAGE>
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith that
such commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer -- viewed in terms
of that particular transaction or terms of the overall responsibilities of
the Sub-Adviser to the Portfolio. In addition, the Sub-Adviser is
authorized to allocate purchase and sale orders for securities to brokers
or dealers (including brokers and dealers that are affiliated with the
Adviser, Sub-Adviser or the Trust's principal underwriter) to take into
account the sale of shares of the Trust if the Sub-Adviser believes that
the quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
the Portfolio's Assets be purchased from or sold to the Adviser, Sub-
Adviser, the Trust's principal underwriter, or any affiliated person of
either the Trust, Adviser, the Sub-Adviser or the principal underwriter,
acting as principal in the transaction, except to the extent permitted by
the Securities and Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and
2
<PAGE>
other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the "By-
Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-
Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance of the Adviser's obligations
under this Agreement; provided, however, that the Adviser's obligation
under this Section 5 shall be reduced to the extent that the claim against,
or the loss, liability or damage experienced by the Sub-Adviser, is caused
by or is otherwise directly related to the Sub-Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
3
<PAGE>
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio. This Agreement shall
continue in effect for a period of more than two years from the date hereof
only so long as continuance is specifically approved at least annually in
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Portfolio (a) by the Portfolio at any
time, without the payment of any penalty, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Portfolio, (b) by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days' written notice to the
Adviser. This Agreement shall terminate automatically and immediately in
the event of its assignment, or in the event of a termination of the
Adviser's agreement with the Trust. As used in this Section 6, the terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the respective meanings set forth in the 1940 Act and the rules
and regulations thereunder, subject to such exceptions as may be granted by
the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Furman Selz Capital Management, LLC
230 Park Avenue, 10th Floor
New York, NY 10169
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation Furman Selz Capital Management, LLC
By: By:
--------------------------------- --------------------------------
Name: Name:
--------------------------------- --------------------------------
Title: Title:
--------------------------------- --------------------------------
5
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
FURMAN SELZ CAPITAL MANAGEMENT, LLC
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Small Cap Growth Portfolio . %
6
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
AGREEMENT made this _____ day of ______, 1996, between SEI Financial
Management Corporation, (the "Adviser") and Provident Investment Counsel, Inc.
(the "Sub-Adviser").
WHEREAS, SEI Institutional Managed Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June ____, 1996 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Large Cap Portfolio (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Portfolio's Registration Statement
(as defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal securities
laws. In executing Portfolio transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In evaluating the best overall terms available, and in selecting
the broker-dealer to execute a particular transaction, the Sub-Adviser may
also consider the brokerage and research services provided (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934).
Consistent with any guidelines established by the Board of Trustees of the
Trust, the Sub-Adviser is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the
<PAGE>
Portfolio which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only if,
the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer -- viewed in terms of that particular
transaction or terms of the overall responsibilities of the Sub-Adviser to
the Portfolio. In addition, the Sub-Adviser if authorized to allocate
purchase and sale orders for securities to brokers or dealers (including
brokers and dealers that are affiliated with the Adviser, Sub-Adviser or
the Trust's principal underwriter) to take into account the sale of shares
of the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with
other qualified firms. In no instance, however, will the Portfolio's
Assets be purchased from or sold to the Adviser, Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust,
Adviser, the Sub-Adviser or the principal underwriter, acting as principal
in the transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor sub-adviser upon the termination of
this Agreement (or, if there is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
-2-
<PAGE>
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Internal Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the "By-
Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-
Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio. This Agreement shall
continue in effect for a period of more than two years from the date hereof
only so long as continuance is specifically approved at least annually in
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Portfolio (a) by the Portfolio at any
time, without the payment of any penalty, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Portfolio, (b) by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the Sub-Adviser, or (c) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days' written
-3-
<PAGE>
notice to the Adviser. This Agreement shall terminate automatically and
immediately in the event of its assignment, or in the event of a
termination of the Adviser's agreement with the Trust. As used in this
Section 6, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
9. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Provident Investment Counsel, Inc.
300 North Lake Avenue, Penthouse
Pasadena, CA 91101
Attention: President
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation Provident Investment Counsel, Inc.
By: By:
--------------------------------- -------------------------------
Name: Name:
------------------------------- -----------------------------
Title: Title:
------------------------------ ----------------------------
-5-
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
PROVIDENT INVESTMENT COUNSEL, INC.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Large Cap Portfolio . %
-6-
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
AGREEMENT made this 19th day of December, 1996, by and among SEI Financial
Management Corporation, (the "Adviser") and Boatmen's Trust Company (the "Sub-
Adviser").
WHEREAS, SEI Institutional Managed Trust, a Massachusetts business trust
(the "Trust") is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated December 16, 1994 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Bond Portfolio (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Portfolio entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio and will place orders with or through such persons, brokers or
dealers to carry out the policy with respect to brokerage set forth in the
Portfolio's Registration Statement (as defined herein) and Prospectus or as
the Board of Trustees or the Adviser may direct from time to
<PAGE>
time, in conformity with federal securities laws. In executing Portfolio
transactions and selecting brokers or dealers, the Sub-Adviser will use its
best efforts to seek on behalf of the Portfolio the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. In evaluating the
best overall terms available, and in selecting the broker-dealer to execute
a particular transaction the Sub-Adviser may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Portfolio and/or other
accounts over which the Sub-Adviser or an affiliate of the Sub-Adviser may
exercise investment discretion. The Sub-Adviser is authorized, subject to
the prior approval of the Trust's Board of Trustees, to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if, but only if, the Sub-Adviser determines in
good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer --
viewed in terms of that particular transaction or terms of the overall
responsibilities of the Sub-Adviser to the Portfolio. In addition, the
Sub-Adviser is authorized to allocate purchase and sale orders for
securities to brokers or dealers (including brokers and dealers that are
affiliated with the Adviser, Sub-Adviser or the Trust's principal
underwriter) to take into account the sale of shares of the Trust if the
Sub-Adviser believes that the quality of the transaction and the commission
are comparable to what they would be with other qualified firms. In no
instance, however, will the Portfolio's Assets be purchased from or sold to
the Adviser, Sub-Adviser, the Trust's principal underwriter, or any
affiliated person of either the Trust, Adviser, the Sub-Adviser or the
principal underwriter, acting as principal in the transaction, except to
the extent permitted by the Securities and Exchange Commission and the 1940
Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Adviser or Board of Trustees such periodic and
special reports as the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filled by the Adviser or the
Trust with the Securities and Exchange Commission ("SEC") or sent to
shareholders under the 1940 Act (including the rules adopted thereunder) or
any exemptive or other relief that the Adviser or the Trust obtains from
the SEC. The Sub-Adviser agrees that all records that
2
<PAGE>
it maintains on behalf of the Portfolio are property of the Portfolio and
the Sub-Adviser will surrender promptly to the Portfolio any of such
records upon the Portfolio's request; provided, however, that the Sub-
Adviser may retain a copy of such records. In addition, for the duration
of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor Sub-Adviser upon the termination of
his Agreement (or, if there is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Portfolio. The Adviser shall instruct the custodian
and other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for compliance
with the Portfolio's investment objectives, policies, and restrictions, as
provided in Section 1 hereunder, in connection with its management of the
Assets.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
3
<PAGE>
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the "By-
Laws");
(c) Prospectus(es) of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-
Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
SEC staff current interpretation thereon), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with performance of its obligations under this Agreement, except
a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act), or a loss resulting from willful misfeasance, bad faith
or negligence on the Sub- Adviser's part in the performance of its duties
or from reckless disregard of its obligations and duties under this
Agreement, except as may otherwise be provided under provisions of
applicable state law which cannot be waived or modified hereby.
6. REPORTS. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Portfolios, the Trust or the public
that refer to the Sub-Adviser or its clients in any way prior to use
thereof and not to use material if the Sub-Adviser reasonably objects in
writing within five business days (or such other period as may be mutually
agreed) after receipt thereof. The Sub-Adviser's right to object to such
materials is limited to the portions of such materials that expressly
relate to the Sub-Adviser, its services and its clients. The Adviser
agrees to use its reasonable best efforts to ensure that materials prepared
by its employees or agents or its affiliates that refer to the Sub-Adviser
or its clients in any way are consistent with those materials previously
approved by the Sub-Adviser as referenced in the first sentence of this
paragraph. Sales literature may be furnished to the Sub-Adviser by first
class or overnight mail, facsimile transmission equipment or hand delivery.
7. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with this Agreement or the performance by the
Sub-Adviser of its duties hereunder; provided, however, that the Sub-
Adviser shall not be required to indemnify or otherwise hold the
4
<PAGE>
Adviser harmless under this Section 7 where the claim against, or the loss,
liability or damage experienced by the Adviser, is caused by or is
otherwise directly related to the Adviser's own willful misfeasance, bad
faith or negligence, or to the reckless disregard of its duties under this
Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance by the Adviser of its duties
under this Agreement; provided, however, that the Adviser shall not be
required to indemnify or otherwise hold the Sub-Adviser harmless under this
Section 7 where the claim against, or the loss, liability or damage
experienced by the Sub-Adviser, is caused by or is otherwise directly
related to the Sub-Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
8. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio; provided, however, that
at any time the Adviser shall have obtained exemptive relief from the SEC
permitting it to engage a Sub-Adviser without first obtaining approval of
the Agreement from a majority of the outstanding voting securities of the
Portfolio(s) involved, the Agreement shall become effective upon its
approval by the Trust's Board of Trustees. Any Sub-Adviser so selected and
approved shall be without the protection accorded by shareholder approval
of an investment adviser's receipt of compensation under Section 36(b) of
the 1940 Act.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated with respect to the Portfolio (a) by the
Portfolio at any time, without the payment of any penalty, by the vote of a
majority of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of the Portfolio, (b) by the Adviser at any
time, without the payment of any penalty, on not more than 60 days' nor
less than 30 days' written notice to the Sub-Adviser, or (c) by the Sub-
Adviser at any time, without the payment of any penalty, on 90 days'
written notice to the Adviser. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As used
in this Section 8, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the Commission under the 1940 Act.
9. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
10. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby.
5
<PAGE>
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors.
11. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, Pennsylvania 19087
Attention: Legal Department
To the Sub-Adviser at: Boatmen's Trust Company
The Boatmen's Tower
100 North Broadway
St. Louis, Missouri 63178
Attention: Chief Fixed Income
Investment Officer
12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that the obligations of this instrument are not binding upon any of the
Trustees, officers or shareholders of the Portfolio or the Trust.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or
6
<PAGE>
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation Boatmen's Trust Company
By: By:
/s/ Kevin P. Robins /s/ Frank J. Aten
- ------------------- -----------------
Name: Kevin P. Robins Name: Frank J. Aten
--------------- -------------
Title: Vice President Title: Senior Vice President
-------------- ---------------------
7
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
BOATMEN'S TRUST COMPANY
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Bond Portfolio . %
<PAGE>
INVESTMENT ADVISORY AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
AGREEMENT made this 16th day of December, 1994, by and between SEI
Institutional Managed Trust, a Massachusetts business trust (the "Trust"), and
SEI Financial Management Corporation, (the "Adviser").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"),
consisting of several portfolios of shares, each having its own investment
policies; and
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its Large Cap Growth, Small Cap Value, High
Yield Bond Portfolios and such other portfolios as the Trust and the Adviser may
agree upon (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:
1. DUTIES OF THE ADVISER. The Trust employs the Adviser to manage the
investment and reinvestment of the assets, to hire (subject to the approval
of the Trust's Board of Trustees and, except as otherwise permitted under
the terms of any exemptive relief obtained by the Adviser from the
Securities and Exchange Commission, or by rule or regulation, a majority of
the outstanding voting securities of any affected Portfolio(s)) and
thereafter supervise the investment activities of one or more sub-advisers
deemed necessary to carry out the investment program of any Portfolios of
the Trust, and to continuously review, supervise and (where appropriate)
administer the investment program of the Portfolios, to determine in its
discretion (where appropriate) the securities to be purchased or sold, to
provide the Administrator and the Trust with records concerning the
Adviser's activities which the Trust is required to maintain, and to render
regular reports to the Administrator and to the Trust's officers and
Trustees concerning the Adviser's discharge of the foregoing
responsibilities. The retention of a sub-adviser by the Adviser shall not
relieve the Adviser of its responsibilities under this Agreement.
The Adviser shall discharge the foregoing responsibilities subject to the
control of the Board of Trustees of the Trust 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 such Portfolio set
forth in the Trust's prospectus and statement of additional information, as
amended from time to time (referred to collectively as the "Prospectus"),
and applicable laws and regulations. The Trust will furnish the Adviser
from time to time with copies of all amendments or supplements to the
Prospectus, if any.
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 (including any sub-advisers) required by it to
perform the services on the terms and for the compensation provided herein.
The Adviser will not, however, pay for the cost of securities, commodities,
and other investments (including brokerage commissions and other
transaction charges, if any) purchased or sold for the Trust.
1
<PAGE>
2. DELIVERY OF DOCUMENTS. The Trust has furnished Adviser with copies
properly certified or authenticated of each of the following:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as presently in effect and as it shall from time to
time be amended, is herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of
this Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio(s).
3. OTHER COVENANTS. The Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the
Securities and Exchange Commission and will in addition conduct its
activities under this Agreement in accordance with other applicable law;
(b) will place orders pursuant to its investment determinations for the
Portfolios either directly with the issuer or with any broker or dealer.
In executing Portfolio transactions and selecting brokers or dealers, the
Adviser will use its best efforts to seek on behalf of the Portfolio the
best overall terms available. In assessing the best overall terms
available for any transaction, the Adviser shall consider all factors that
it deems relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability of
the broker or dealer, and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis. In evaluating
the best overall terms available, and in selecting the broker-dealer to
execute a particular transaction the Adviser may also consider the
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) provided to the Portfolio
and/or other accounts over which the Adviser or an affiliate of the Adviser
may exercise investment discretion. The Adviser is authorized, subject to
the prior approval of the Trust's Board of Trustees, to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for any of the Portfolios which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the Adviser
determines in good faith that such commission was reasonable in relation to
the value of the brokerage and research services provided by such broker or
dealer - - viewed in terms of that particular transaction or terms of the
overall responsibilities of the Adviser to the Portfolio. In addition, the
Adviser if authorized to allocate purchase and sale orders for portfolio
securities to brokers or dealers (including brokers and dealers that are
affiliated with the Adviser or the Trust's principal underwriter) to take
into account the sale of shares of the Trust if the Adviser believes that
the quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will
any Portfolio's securities be purchased from or sold to the Adviser, any
sub-adviser engaged with respect to that Portfolio, the Trust's principal
underwriter, or any affiliated person of either the Trust, the Adviser, and
sub-adviser or the principal underwriter,
2
<PAGE>
acting as principal in the transaction, except to the extent permitted by
the Securities and Exchange Commission and the 1940 Act.
4. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Sections 1 and 2 of this Agreement, the Trust shall
pay to the Adviser compensation at the rate(s) specified in the Schedule(s)
which are attached hereto and made a part of this Agreement. Such
compensation shall be paid to the Adviser at the end of each month, and
calculated by applying a daily rate, based on the annual percentage rates
as specified in the attached Schedule(s), to the assets of the Portfolio.
The fee shall be based on the average daily net assets for the month
involved. The Adviser may, in its discretion and from time to time, waive
a portion of its fee.
All rights of compensation under this Agreement for services performed as
of the termination date shall survive the termination of this Agreement.
5. EXCESS EXPENSES. If the expenses for any Portfolio for any fiscal year
(including fees and other amounts payable to the Adviser, but excluding
interest, taxes, brokerage costs, litigation, and other extraordinary
costs) as calculated every business day would exceed the expense
limitations imposed on investment companies by any applicable statute or
regulatory authority of any jurisdiction in which Shares are qualified for
offer and sale, the Adviser shall bear such excess cost.
However, the Adviser will not bear expenses of the Trust or any Portfolio
which would result in the Trust's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code. Payment
of expenses by the Adviser pursuant to this Section 5 shall be settled on a
monthly basis (subject to fiscal year end reconciliation) by a waiver of
the Adviser's fees provided for hereunder, and such waiver shall be treated
as a reduction in the purchase price of the Adviser's services.
6. REPORTS. The Trust and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and such
other information with regard to their affairs as each may reasonably
request. The Adviser further agrees to furnish to the Trust, if
applicable, the same such documents and information pertaining to any sub-
adviser as the Trust may reasonably request.
7. 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 in any way or otherwise be deemed an
agent of the Trust. To the extent that the purchase or sale of securities
or other investments of any issuer may be deemed by the Adviser to be
suitable for two or more accounts managed by the Adviser, the available
securities or investments may be allocated in a manner believed by the
Adviser to be equitable to each account. It is recognized that in some
cases this may adversely affect the price paid or received by the Trust or
the size or position obtainable for or disposed by the Trust or any
Portfolio.
8. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions
3
<PAGE>
of Rule 31a-1 and Rule 31a-2 promulgated under the 1940 Act which are
prepared or maintained by the Adviser (or any sub-adviser) on behalf of the
Trust are the property of the Trust and will be surrendered promptly to the
Trust on request. The Adviser further agrees to preserve for the periods
prescribed in Rule 31a-2 under the 1940 Act the records required to be
maintained under Rule 31a-1 under the 1940 Act.
9. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the Adviser shall be
confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Adviser hereunder. The Adviser
shall not be liable for any error of judgment or mistake of law or for any
loss arising out of any investment or for any act or omission in carrying
out its duties hereunder, except a loss resulting from willful misfeasance,
bad faith or gross negligence in the performance of its duties, or by
reason of reckless disregard of its obligations and duties hereunder,
except as may otherwise be provided under provisions of applicable state
law which cannot be waived or modified hereby. (As used in this Section 9,
the term "Adviser" shall include directors, officers, employees and other
corporate agents of the Adviser as well as that corporation itself).
10. 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 are or may be
interested in the Trust as Trustees, officers, shareholders or otherwise;
and the Adviser (or any successor) is or may be interested in the Trust as
a shareholder or otherwise subject to the provisions of applicable law.
All such interests shall be fully disclosed between the parties on an
ongoing basis and in the Trust's Prospectus as required by law. In
addition, brokerage transactions for the Trust may be effected through
affiliates of the Adviser or any sub-adviser if approved by the Board of
Trustees, subject to the rules and regulations of the Securities and
Exchange Commission.
11. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of
execution, and thereafter, 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 fail to approve the Agreement as provided
herein, the Adviser may continue to serve hereunder in the manner and to
the extent permitted by the 1940 Act and rules and regulations 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.
4
<PAGE>
As used in this Section 11, the terms "assignment", "interested
persons", and a "vote of a majority of the outstanding voting securities"
shall have the respective meanings set forth in the 1940 Act and the rules
and regulations thereunder, subject to such exemptions as may be granted by
the Securities and Exchange Commission.
12. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however that nothing herein shall be construed as
being inconsistent with the 1940 Act.
13. NOTICE: Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attn: Legal Department
To the Trust at: SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087
Attn: Legal Department
14. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
15. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
A copy of the Declaration of Trust of the Trust is on file with the Secretary of
State 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
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.
No Portfolio of the Trust shall be liable for the obligations of any other
Portfolio of the Trust. Without limiting the generality of the foregoing, the
Adviser shall look only to the assets of a particular Portfolio for payment of
fees for services rendered to that Portfolio.
Where the effect of a requirement of the 1940 Act reflected in any provision of
this Agreement is altered by a rule, regulation or order of the Commission,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first written above.
SEI Institutional Managed Trust SEI Financial Management Corporation
By:Robert B. Carroll By:signature appears here
Attest:signature appears here Attest:signature appears here
6
<PAGE>
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI INSTITUTIONAL MANAGED TRUST
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 4, the Trust shall pay the Adviser compensation at an annual
rate as follows:
Large Cap Growth .40%
Small Cap Value .65%
High Yield Bond .4875%
Large Cap Value .35%
7
<PAGE>
SCHEDULE B
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI INSTITUTIONAL MANAGED TRUST
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 4, the Trust shall pay the Adviser compensation at an annual
rate as follows:
Small Cap Growth .65%
Mid-Cap Growth .60%
Capital Appreciation .40%
Balanced .40%
Equity Income .40%
Real Estate Securities .55%
Core Fixed Income .275%
Bond .275%
8
<PAGE>
CONSENT TO ASSIGNMENT AND ASSUMPTION
1. SEI Financial Management Corporation ("Assignor") hereby notifies SEI
Institutional Managed Trust ("Trust") that it intends to assign all of its
rights and delegate its obligations under the Administration Agreement
between the Trust and SEI Financial Management Corporation, dated January
22, 1987, as amended (the "Assignment and Assumption Agreement") to SEI
Fund Management, ("Assignee"), no later than June 1,1996, in connection
with the transition of Assignor's fund administration and distribution
business to Assignee;
2. Trust releases Assignor from its rights and obligations under the Agreement
on or after the date the Assignment and Assumption Agreement is executed
and any liability or responsibility for (i) breach of the Agreement by
Assignee or (ii) demands and claims made against the Trust or damages,
losses or expenses incurred by the Trust on or after the date of the
Assignment and Assumption Agreement, unless such demands, claims, losses,
damages or expenses arose out of ,or resulted from an act or omission of
Assignor prior to the date of the Assignment and Assumption Agreement.
3. This consent is not a waiver or estoppel with respect to any rights the
Trust may have by reason of the past performance or failure to perform by
Assignor.
4. This consent is conditioned upon the execution of an Assignment and
Assumption Agreement between Assignor and Assignee that require(s) Assignee
(i) to assume all rights and obligations of Assignor under the Agreement
and (ii) to be liable to the Trust for any default or breach of the
Agreement to the extent the default or breach occurs on or after the date
of execution of the Assignment and Assumption Agreement.
5. Except as provided herein, neither this consent nor the Assignment and
Assumption Agreement shall alter or modify the terms or conditions of the
Agreement.
<TABLE>
<S> <C>
Trust: SEI Institutional Managed Trust Assignor:
SEI Financial Management Corporation
By: /s/ Kathryn L. Stanton By: /s/ Barbara A. Nugent
---------------------- ---------------------
Title: Vice President & Assistant Secretary Title: Vice President & Assistant Secretary
</TABLE>
<PAGE>
EXHIBIT 99.B11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 26 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated November 22, 1996, relating to the financial
statements and financial highlights appearing in the September 30, 1996 Annual
Report to Shareholders of the SEI Institutional Managed Trust, which are also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the headings "Financial Highlights" and "Independent
Accountants" in the Prospectuses and under the heading "Financial Statements" in
the Statement of Additional Information.
[SIG]
PRICE WATERHOUSE LLP
Philadelphia, PA
January 24, 1997
<PAGE>
AMENDED AND RESTATED DISTRIBUTION PLAN
SEI INSTITUTIONAL MANAGED TRUST
CLASS D SHARES
WHEREAS, SEI Institutional Managed Trust (the "Trust") is engaged in
business as an open-end investment company registered under the Investment
Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the parties wish to amend and restate the terms of the
Distribution Plan previously adopted as set forth herein; and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution Plan will benefit the
Portfolios of the Trust listed on Exhibit A hereto (the "Portfolios") and the
owners of the Class D shares of such Portfolios (the "Shares");
NOW, THEREFORE, the Trustees of the Trust hereby adopt this Distribution
Plan pursuant to Rule 12b-1 under the 1940 Act.
SECTION 1. The Trust has adopted this Class D Distribution Plan (the
"Plan") to enable the Trust to directly or indirectly bear expenses relating to
the distribution of the Shares of the Trust.
SECTION 2. The Trust will pay the Distributor a fee on the Shares of the
Portfolios up to the amount set forth on Exhibit A. The Distributor may use
this fee for (i) compensation for its services in connection with distribution
assistance or provision of shareholder services; or (ii) payments to financial
institutions and intermediaries such as banks, savings and loan associations,
insurance companies and investment counselors, broker-dealers and the
Distributor's affiliates and subsidiaries as compensation for services or
reimbursement of expenses incurred in connection with distribution assistance or
provision of shareholder services.
SECTION 3. This Plan shall not take effect with respect to any Portfolio
until it has been approved (a) by a vote of at least a majority of the
outstanding voting securities of the Shares of such Portfolio; and (b) together
with any related agreements, by votes of the majority of both (i) the Trustees
of the Trust and (ii) the Qualified Trustees, cast in person at a Board of
Trustees meeting called for the purpose of voting on this Plan or such
agreement.
SECTION 4. This Plan shall continue in effect for a period of more than
one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in Part (b) of
Section 3 herein for the approval of this Plan.
SECTION 5. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
SECTION 6. This Plan may be terminated at any time by the vote of a
majority of the Qualified Trustees or by vote of a majority of the outstanding
voting securities of the Shares of the Portfolios.
SECTION 7. All agreements with any person relating to implementation of
this Plan shall be in writing,
<PAGE>
and any agreement related to this Plan shall provide (a) that such agreement may
be terminated at any time, without payment of any penalty, by the vote of a
majority of the Qualified Trustees or by the vote of a majority of the
outstanding voting securities of the Shares of the Portfolios, on not more than
60 days written notice to any other party to the agreement; and (b) that such
agreement shall terminate automatically in the event of its assignment.
SECTION 8. This Plan may not be amended to increase materially the amount
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of Shareholders holding a majority of the outstanding voting securities
of the Shares of the Portfolios, and all material amendments to this Plan shall
be approved in the manner provided in Part (b) of Section 3 herein for the
approval of this Plan.
SECTION 9. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" 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.
SECTION 10. While this Plan is in effect, the selection and nomination of
those Trustees who are not interested persons of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
SECTION 11. This Plan shall not obligate the Trust or any other party to
enter into an agreement with any particular person.
Amended and Restated May 1, 1996
<PAGE>
EXHIBIT A
Small Cap Growth Portfolio............................................ .30%
<PAGE>
SHAREHOLDER SERVICE PLAN AND AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
CLASS A
SEI Institutional Managed Trust (the "Trust") is an open-end investment
company registered under the Investment Company Act of 1940, as amended, and
currently consisting of a number of separately managed portfolios (the
"Portfolios"). The Trust desires to retain SEI Financial Services Company (the
"Distributor"), a Pennsylvania corporation, to itself provide or to compensate
service providers who themselves provide, the services described herein to
clients (the "Clients") who from time to time beneficially own Class A shares
("Shares") of any Portfolio of the Trust. The Distributor is willing to itself
provide or to compensate service providers for providing, such shareholder
services in accordance with the terms and conditions of this Agreement.
SECTION 1. The Distributor will provide, or will enter into written agreements
in the form attached hereto with service providers pursuant to which the service
providers will provide, one or more of the following shareholder services to
Clients who may from time to time beneficially own Shares:
(i) providing information periodically to Clients showing their
positions in Shares;
(ii) forwarding shareholder communications from the Trust (such as
proxies, shareholder reports, annual and semi- annual financial
statements and dividend, distribution and tax notices) to Clients;
(iii) processing purchase, exchange and redemption requests from
Clients and placing such orders with the Trust or its service
providers;
(iv) providing subaccounting with respect to Shares beneficially owned
by Clients;
(v) processing dividend payments from the Trust on behalf of Clients;
and
(vi) providing such other similar services as the Trust may reasonably
request to the extent that the Distributor and/or the service provider
is permitted to do so under applicable laws or regulations.
<PAGE>
SECTION 2. The Distributor will provide all office space and equipment,
telephone facilities and personnel (which may be part of the space, equipment
and facilities currently used in the Distributor's business, or any personnel
employed by the Distributor) as may be reasonably necessary or beneficial in
order to fulfill its responsibilities under this Agreement.
SECTION 3. Neither the Distributor nor any of its officers, employees, or
agents is authorized to make any representations concerning the Trust or the
Shares except those contained in the Trust's then-current prospectus or
Statement of Additional Information for the Shares, copies of which will be
supplied to the Distributor, or in such supplemental literature or advertising
as may be authorized in writing.
SECTION 4. For purposes of this Agreement, the Distributor and each service
provider will be deemed to be independent contractors, and will have no
authority to act as agent for the Trust in any matter or in any respect. By its
written acceptance of this Agreement, the Distributor agrees to and does
release, indemnify, and hold the Trust harmless from and against any and all
direct or indirect liabilities or losses resulting from requests, directions,
actions, or inactions of or by the Distributor or its officers, employees, or
agents regarding the Distributor's responsibilities under this Agreement, the
provision of the aforementioned services to Clients by the Distributor or any
service provider, or the purchase, redemption, transfer, or registration of
Shares (or orders relating to the same) by or on behalf of Clients. The
Distributor and its officers and employees will, upon request, be available
during normal business hours to consult with representatives of the Trust or its
designees concerning the performance of the Distributor's responsibilities under
this Agreement.
SECTION 5. In consideration of the services and facilities to be provided by
the Distributor or any service provider, each Portfolio that has issued Class A
shares will pay to the Distributor a fee, as agreed from time to time, at an
annual rate of up to .25% (twenty-five basis points) of the average net asset
value of all Class A shares of each Portfolio, which fee will be computed daily
and paid monthly. The Trust may, in its discretion and without notice, suspend
or withdraw the sale of Class A Shares of any Portfolio, including the sale of
Class A Shares to any service provider for the account of any Client or Clients.
The Distributor may waive all or any portion of its fee from time to time.
SECTION 6. The Trust may enter into other similar servicing agreements with any
other person or persons without the Distributor's consent.
SECTION 7. By its written acceptance of this Agreement, the Distributor
represents, warrants, and agrees that the services
<PAGE>
provided by the Distributor under this Agreement will in no event be primarily
intended to result in the sale of Shares.
SECTION 8. This Agreement will become effective on the date a fully executed
copy of this Agreement is received by the Trust or its designee and shall
continue until terminated by either party. This Agreement is terminable with
respect to the Class A Shares of any Portfolio, without penalty, at any time by
the Trust or by the Distributor upon written notice to the Trust.
SECTION 9. All notices and other communications to either the Trust or to the
Distributor will be duly given if mailed, telegraphed, telefaxed, or transmitted
by similar communications device to the appropriate address stated herein, or to
such other address as either party shall so provide the other.
SECTION 10. This Agreement will be construed in accordance with the laws of the
Commonwealth of Pennsylvania and may not be "assigned" by either party thereto
as that term is defined in the Investment Company Act of 1940.
SECTION 11. References to the "SEI Institutional Managed Trust," the "Trust,"
and the "Trustees" of the Trust refer respectively to the Trust created and the
Trustees as trustees, but not individually or personally, acting from time to
time under the Declaration of Trust of the Trust dated October 20, 1986, a copy
of which is on file with the Department of State of the Commonwealth of
Pennsylvania and at the Trust's principal office. The obligations of the Trust
entered into in the name or on behalf thereof by any of the Trustees, officers,
representatives, or agents are made not individually, but in such capacities,
and are not binding upon any of the Trustees, shareholders, officers,
representatives, or agents of the Trust personally. Further, any obligations of
the Trust with respect to any one Portfolio shall not be binding upon any other
Portfolio.
By their signatures, the Trust and the Distributor agree to the terms of this
Agreement.
SEI INSTITUTIONAL MANAGED TRUST
By: signature appears here Date: 5/1/96
---------------------- ------
SEI FINANCIAL SERVICES COMPANY
By: signature appears here Date: 5/1/96
---------------------- ------
- 3 -
<PAGE>
Amendment #1
SEI INSTITUTIONAL MANAGED TRUST
CERTIFICATE OF CLASS DESIGNATION
Class A Shares
1. CLASS-SPECIFIC DISTRIBUTION ARRANGEMENTS; OTHER EXPENSES
Class A shares are sold without a sales charge, but are subject to a
shareholder servicing fee of up to .25% payable to the Distributor. The
Distributor will provide or will enter into written agreements with service
providers who will provide one or more of the following shareholder services to
clients who may from time to time beneficially own shares: (i) maintaining
accounts relating to clients that invest in shares; (ii) providing information
periodically to clients showing their position in shares; (iii) arranging for
bank wires; (iv) responding to client inquiries relating to the services
performed by the Distributor or any service provider; (v) responding to
inquiries from clients concerning their investments in shares; (vi) forwarding
shareholder communications from the Fund (such as proxies, shareholder reports,
annual and semi-annual financial statements and dividend, distribution and tax
notices) to clients; (vii) processing purchase, exchange and redemption requests
from clients and placing such orders with the Fund or its service providers;
(viii) assisting clients in changing dividend options, account designations, and
addresses; (ix) providing subaccounting with respect to shares beneficially
owned by clients; (x) processing dividends payments from the Fund on behalf of
clients; and (xi) providing such other similar services as the Fund may
reasonably request to the extent that the Distributor and/or the service
provider is permitted to do so under applicable laws or regulations.
2. ELIGIBILITY OF PURCHASERS
Class A shares do not require a minimum initial investment and are
available only to financial institutions and intermediaries.
3. EXCHANGE PRIVILEGES
Class A shares of each Fund may be exchanged for Class A shares of each
other Fund of the Trust in accordance with the procedures disclosed in the
Fund's Prospectus and subject to and applicable limitations resulting from the
closing of Funds to new investors.
4. VOTING RIGHTS
Each Class A shareholder will have one vote for each full Class A share
held and a fractional vote for each fractional Class A share held. Class A
shareholders will have exclusive voting rights regarding any matter submitted to
shareholders that relates solely to Class A (such as a distribution plan or
service agreement relating to Class A), and will have separate voting rights on
any other matter submitted to shareholders in which the interests of the Class A
shareholders differ from the interests of holders of any other class.
5. CONVERSION RIGHTS
Class A shares do not have a conversion feature.
<PAGE>
Amendment #1
SEI INSTITUTIONAL INVESTMENTS TRUST
CERTIFICATE OF CLASS DESIGNATION
Class D Shares
1. CLASS-SPECIFIC DISTRIBUTION ARRANGEMENTS; OTHER EXPENSES
Class D shares are subject to Rule 12b-1 distribution plan payments of up
to .30% for the Small Cap Value Portfolio payable to the Distributor. The
Distributor may use this fee for (i) compensation for its services in connection
with distribution assistance or provision of shareholder services; or (ii)
payments to financial institutions and intermediaries such as banks, savings and
loan associations, insurance companies and investment counselors, broker-dealers
and the Distributor's affiliates and subsidiaries as compensation for services
or reimbursement of expenses incurred in connection with distribution assistance
or provision of shareholder services.
2. ELIGIBILITY OF PURCHASERS
Class D shares require a minimum initial investment of $1,000 and may be
purchased through intermediaries which provide various levels of shareholder
services to their customers.
3. EXCHANGE PRIVILEGES
Class D shares of each Fund may be exchanged for Class D shares of each
other Fund of the Trust in accordance with the procedures disclosed in the
Fund's Prospectus and subject to and applicable limitations resulting from the
closing of Funds to new investors.
4. VOTING RIGHTS
Each Class D shareholder will have one vote for each full Class D share
held and a fractional vote for each fractional Class D share held. Class D
shareholders will have exclusive voting rights regarding any matter submitted to
shareholders that relates solely to Class D (such as a distribution plan or
service agreement relating to Class D), and will have separate voting rights on
any other matter submitted to shareholders in which the interests of the Class D
shareholders differ from the interests of holders of any other class.
5. CONVERSION RIGHTS
Class D shares do not have a conversion feature.
<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/ Sephen G. Meyer Date:10-16-96
- ------------------- --------
Stephen G. Meyer
Controller and Chief Financial 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
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