<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 1998
FILE NO. 33-9504
FILE NO. 811-4878
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 28 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 30 /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>
------------------------
Title of Securities Being Registered . . . . . . . . . . . . . . Units of
Beneficial Interest
It is proposed that this filing 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>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SEI INSTITUTIONAL MANAGED TRUST
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
<S> <C> <C>
PART A--
Item 1. Cover Page....................................... Cover Page
Item 2. Synopsis......................................... Annual Operating Expenses
Item 3. Condensed Financial Information.................. *
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 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 B--
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
Item 17. Brokerage Allocation............................. Portfolio Transactions
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
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
<S> <C> <C>
Item 23. 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
(ii)
<PAGE>
PROSPECTUS
JANUARY 31, 1998
- --------------------------------------------------------------------------------
SMALL CAP GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
This Prospectus concisely sets forth information about the above-referenced
portfolio that an investor needs to know before investing. Please read this
Prospectus carefully, and keep it on file for future reference. 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, 1998, has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request and without charge by writing the Distributor, SEI Investments
Distribution Co., Oaks, Pennsylvania 19456, or by calling 1-800-437-6016. The
Statement of Additional Information is incorporated by reference into this
Prospectus.
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 Investments Distribution
Co. (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, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THE TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
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," "General
Investment Policies and 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,"
"General Investment Policies and
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 AND RISK FACTORS...... 9
INVESTMENT LIMITATIONS............................ 10
THE MANAGER AND SHAREHOLDER SERVICING AGENT....... 11
THE ADVISER....................................... 11
THE SUB-ADVISERS.................................. 13
DISTRIBUTION...................................... 14
PERFORMANCE....................................... 15
TAXES............................................. 16
ADDITIONAL INFORMATION ABOUT DOING BUSINESS WITH
US.............................................. 18
GENERAL INFORMATION............................... 22
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK
FACTORS......................................... 24
</TABLE>
- --------------------------------------------------------------------------------
2
<PAGE>
MANAGEMENT PROFILE
SEI INVESTMENTS MANAGEMENT CORPORATION ("SIMC")
serves as the investment adviser to the Small Cap
Growth 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 Investments
Distribution Co. 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 1.00%
12b-1 Fees (AFTER FEE WAIVER) (2) .25%
Other Expenses .21%
- ------------------------------------------------------------------------
Total Operating Expense (AFTER FEE WAIVER) (3) 1.46%
- ------------------------------------------------------------------------
</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, 1.51%. 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 $216
- ----------------------------------------------------------------------------------------
</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 derived from the financial statements audited
by Price Waterhouse LLP, the Trust's independent accountants, as indicated in
their report dated November 25, 1997, the Trust's financial statements as of
September 30, 1997, incorporated by reference into the Trust's Statement of
Additional Information. The Trust's financial statements and additional
performance information are set forth in the 1997 Annual Report to Shareholders,
which is available upon request and without charge by calling 1-800-437-6016.
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
1997 $ 20.29 $(0.11) $ 2.66 $ -- $(3.85) $ 18.99 16.80%* $ 2,202
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
1997 1.46% (0.95)% 1.46% (0.95)% 107% $ 0.0723
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 Investments Distribution
Co. Shares may also be purchased through financial institutions, broker-dealers,
or other organizations which have established a dealer agreement or other
arrangement with SEI Investments Distribution Co. ("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.
- --------------------------------------------------------------------------------
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.
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 (including
certified or cashier's check), redemption proceeds will not
be forwarded until the check providing for the investment
being redeemed has cleared (which may take up to 15 days).
Subsequent investments may also be mailed directly to the
Transfer Agent.
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. 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
6
<PAGE>
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 of 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.
- --------------------------------------------------------------------------------
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>
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 may also borrow
money, invest in Real Estate Investment Trusts ("REITs")when-issued and
delayed-delivery securities and shares of other investment companies, and lend
its securities to qualified buyers.
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.
GENERAL INVESTMENT
POLICIES AND
RISK FACTORS
______________________________________________________________________
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.
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
Fixed income securities are debt obligations issued by
corporations, municipalities and other borrowers. 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 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.
9
<PAGE>
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.
10
<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.
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.
For additional information regarding the Portfolio's
permitted investments, see "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.
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.
3. Borrow money in an amount exeeding 33 1/3% of the value
of its total assets, provided that, for purposes of this
limitation, investment strategies which either obligate
the Portfolio to purchase securities or require the
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
11
<PAGE>
paid on such borrowings will reduce income; and (ii)
asset coverage of at least 300% is required.
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.
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, 1997, the
Portfolio paid management fees (based on its average daily
net assets after fee waivers) of .35%.
The Trust and DST Systems, Inc., 1004 Baltimore St.,
Kansas City, Missouri 64105,("DST") 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 INVESTMENTS MANAGEMENT CORPORATION
SEI Investments Management Corporation ("SIMC") serves as
investment adviser to the Portfolio. SIMC is a wholly-owned
subsidiary of SEI Investments Company ("SEI Investments"),
a financial services company. The principal business
address of SIMC and SEI Investments is Oaks, Pennsylvania
19456. SEI Investments was founded in 1968 and is a leading
provider of investment solutions to banks, institutional
investors, investment advisers and insurance companies.
Affiliates of SIMC have provided consulting advice to
institutional investors for more than 20 years, including
advice regarding selection and evaluation of investment
advisers. SIMC currently serves as manager or administrator
to more than 46 investment companies, including more than
345 portfolios, which investment companies have more than
$99.9 billion in assets as of September 30, 1997.
SIMC acts as the investment adviser to the Portfolio
and operates as a "manager of managers." As Adviser, SIMC
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
SIMC, and under the supervision of SIMC and the Board of
12
<PAGE>
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 SIMC, 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
SIMC 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. SIMC 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.
For these advisory services SIMC 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.
For the fiscal year ended September 30, 1997, SIMC
received an advisory fee of .65% of the Small Cap Growth
Portfolio's average daily net assets. SIMC paid the sub-
advisers a fee based on a percentage of the average monthly
market value of the assets managed by each sub-adviser out
of its advisory fee.
SIMC and the Trust have obtained an exemptive
order from the Securities and
Exchange Commission (the "SEC")
that permits SIMC, with the
approval of the Trust's Board of
Trustees, to retain sub-advisers
unaffiliated with SIMC 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 SIMC 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.
- --------------------------------------------------------------------------------
13
<PAGE>
THE SUB-ADVISERS
_________________________________________________________________
FIRST OF AMERICA INVESTMENT CORPORATION
First of America Investment Corporation ("First America")
serves as sub-adviser to a portion of the assets of the
Small Cap Growth Portfolio. First 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 America is registered as an investment
adviser under the Investment Advisers Act of 1940. First
America, together with its predecessor, has been engaged in
the investment advisory business since 1932. First
America's principal business address is 303 North Rose
Street, Suite 500, Kalamazoo, Michigan 49007. As of
September 30, 1997, First America had approximately $16.8
billion in assets under management. First America's clients
include mutual funds, trust funds, and individually managed
institutional and individual accounts.
Mr. Roger Stamper, CFA, has primary responsibility
for First America's portion of the Small Cap Growth
Portfolio. Mr. Stamper is a Managing Director of First
America, and has been with First America since 1988.
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
$10.2 billion in assets as of September 30, 1997. The
ultimate parent of Furman Selz is ING Groep N.V., a Dutch
financial services company. 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.
NICHOLAS-APPLEGATE
CAPITAL
MANAGEMENT
Nicholas-Applegate Capital Management
("Nicholas-Applegate") serves as a sub-adviser for 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, 1997, Nicholas-Applegate had
discretionary management authority with respect to
approximately $33 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.
13
<PAGE>
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.
The U.S. Systematic team is responsible for the day-to-day
management of the Portfolio's assets. The lead U.S.
Systematic portfolio manager is John Kane, and he is
assisted by six other portfolio manager/analysts for the
Portfolio's U.S. Systematic assets. Mr. Kane has been a
fund manager and investment team leader since June 1994.
Prior to joining Nicholas-Applegate, he had 25 years of
investment/economics experience with ARCO Investment
Management Company and General Electric Company.
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, 1997, had approximately $1.4 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, 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 81 years of
investment management experience.
DISTRIBUTION
_______________________________________________________________________
SEI Investments Distribution Co. (the "Distributor"), a
wholly-owned subsidiary of SEI Investments, 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
14
<PAGE>
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.
The Distributor may, from time to time and at its own
expense, provide promotional incentives, in the form of
cash or other compensation, to certain financial
institutions whose representatives have sold or are
expected to sell significant amounts of the Portfolio's
shares.
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
15
<PAGE>
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.
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.
- --------------------------------------------------------------------------------
16
<PAGE>
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
to
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
shareholders of net capital gains of the Portfolio also will not qualify for the
dividends received deduction and will be taxable to shareholders as long-term
capital gain, taxable at the rate of 20% for property held for more than 18
months and at the rate of 28% for property held for more than one year but not
for more than 18 months, whether received in cash or additional shares, and
regardless of how long a shareholder has held
the 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
the Portfolio's net asset value
has been determined. 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 that of
the Portfolio, the exchange request will not be effective
until the next Business Day. Anyone who wishes to make an
17
<PAGE>
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 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 15 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
18
<PAGE>
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 daily at the close
of regular trading on 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.
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. If
there is no readily ascertainable market value for a
security, SEI Management will make a good faith
determination as to the "fair value" of the security.
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).
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
and shareholder servicing 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
19
<PAGE>
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 the
Transfer Agent 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, the Transfer Agent 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
20
<PAGE>
redemption; the Transfer Agent must be notified in writing
by the investor, or his or her 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 the Transfer Agent 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.
21
<PAGE>
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.
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
22
<PAGE>
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 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.
23
<PAGE>
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 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
24
<PAGE>
this "Description of Permitted Investments and Risk
Factors" for discussions of certain of these instruments.
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.
An 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
the Portfolio invests in futures contracts, it will cover
its position by depositing an amount of cash or liquid
securities equal to the market value of the futures
positions held, less margin deposits, in a segregated
account and that amount will be marked to market on a daily
basis.
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 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.
25
<PAGE>
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
The Portfolio may purchase and write put and call options
on indices and enter into related closing transactions. A
put option on a security 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 on a security 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.
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 or securities must be
covered. When the Portfolio writes an option or security on
an index, it will establish a segregated account containing
cash or liquid securities 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.
26
<PAGE>
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.
U.S. GOVERNMENT AGENCY
OBLIGATIONS
Obligations issued or guaranteed by agencies of the U.S.
Government, including, among others, the Federal Farm
Credit Bank, the Federal Housing Administration and the
Small Business Administration, and obligations issued or
guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage
Corporation, the Federal Land Banks and the U.S. Postal
Service. Some of these securities are supported by the full
faith and credit of the U.S. Treasury (e.g., Government
National Mortgage Association Securities), and others are
supported by the right of the issuer to borrow from the
Treasury (e.g., Federal Farm Credit Bank Securities), while
still others are supported only by the credit of the
instrumentality (e.g., Fannie Mae Securities).
U.S. TREASURY OBLIGATIONS
U.S. Treasury obligations consist of bills, notes and bonds
issued by the U.S. Treasury, as well as separately traded
interest and principal component parts of such obligations
known as Separately Traded Registered Interest and
Principal Securities ("STRIPS") that are transferable
through the Federal book-entry system.
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 a separate
account with liquid securities or cash in an amount at
least equal to these commitments. The interest rate
realized on these securities is fixed as of the purchase
date, and no interest accrues to the Portfolio before
settlement.
Additional information on permitted investments and risk
factors can be found in the Statement of Additional
Information.
27
<PAGE>
SEI INSTITUTIONAL MANAGED TRUST
JANUARY 31, 1998
- --------------------------------------------------------------------------------
CORE FIXED INCOME PORTFOLIO
HIGH YIELD BOND PORTFOLIO
- --------------------------------------------------------------------------------
This Prospectus concisely sets forth information about the above-referenced
portfolios that an investor needs to know before investing. Please read this
Prospectus carefully, and keep it on file for future reference.
A Statement of Additional Information dated January 31, 1998, has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request and without charge by writing the Distributor, SEI Investments
Distribution Co., Oaks, Pennsylvania 19456, or by calling 1-800-342-5734. The
Statement of Additional Information is incorporated by reference into this
Prospectus.
SEI 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," "GENERAL INVESTMENT
POLICIES AND RISK FACTORS" AND THE "APPENDIX."
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THE TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) CLASS A
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CORE FIXED HIGH YIELD
INCOME BOND
PORTFOLIO PORTFOLIO
---------- ----------
<S> <C> <C>
Management Fee/Advisory Fees (AFTER FEE
WAIVER) (1) 0.54% 0.79%
12b-1 Fees None None
Total Other Expenses 0.06% 0.07%
Shareholder Servicing Fees 0.00% 0.00%
- ----------------------------------------------------------------------
Total Operating Expenses (AFTER FEE WAIVER)
(2) 0.60% 0.86%
- ----------------------------------------------------------------------
</TABLE>
(1) SEI INVESTMENTS MANAGEMENT CORPORATION ("SIMC") HAS AGREED TO WAIVE, ON A
VOLUNTARY BASIS, A PORTION OF ITS MANAGEMENT FEE, AND THE MANAGEMENT/
ADVISORY FEES SHOWN REFLECT THIS VOLUNTARY WAIVER. SIMC 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%; AND HIGH YIELD BOND PORTFOLIO, .84%.
(2) ABSENT THESE FEE WAIVERS, TOTAL OPERATING EXPENSES FOR CLASS A SHARES OF THE
PORTFOLIOS WOULD BE: CORE FIXED INCOME PORTFOLIO, .62%; AND HIGH YIELD BOND
PORTFOLIO, .91%. 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
High Yield Bond Portfolio $ 9 $ 27 $ 48 $ 106
- ------------------------------------------------------------------------------------
</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 derived from the financial statements audited
by Price Waterhouse LLP, the Trust's independent accountants. Price Waterhouse
LLP's report dated November 25, 1997 on the Trust's financial statements as of
September 30, 1997 is incorporated by reference into the Trust's Statement of
Additional Information. The Trust's financial statements and additional
performance information are set forth in the 1997 Annual Report to Shareholders,
which is available upon request and without charge by calling 1-800-342-5734.
This table should be read in conjunction with the Trust's financial statements
and notes thereto.
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
1997 $ 10.23 $0.63 $ 0.33 $(0.63) $(0.16) $ 10.40
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(1) 9.84 0.82 0.07 (0.84) -- 9.89
- ------------------
HIGH YIELD BOND
PORTFOLIO
- ------------------
1997 $ 11.14 $1.04 $ 0.57 $(1.04) $(0.05) $ 11.66
1996 10.64 0.94 0.62 (1.03) (0.03) 11.14
1995(2) 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
1997 9.80% $1,063,335 0.60% 6.17% 0.61% 6.16% 216%
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(1) 9.34% 25,661 0.47% 8.57% 1.12% 7.92% 34%
- ------------------
HIGH YIELD BOND
PORTFOLIO
- ------------------
1997 15.30% $ 236,457 0.86% 9.33% 0.91% 9.28% 68%
1996 15.46% 107,545 0.87% 9.01% 0.94% 8.94% 55%
1995(2) 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) 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 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 Investments Distribution Co., 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. The Portfolio may also borrow money,
invest in illiquid securities and shares of other
investment companies, and lend its securities to qualified
buyers.
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
4
<PAGE>
more accurate measure of a security's expected life and
sensitivity to interest rate changes than is the security's
term to maturity.
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.
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 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 Portfolio may also borrow money,
invest in illiquid securities and shares of other
investment companies, and lend its securities to qualified
buyers.
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
5
<PAGE>
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 achievement of the Portfolio's investment
objective may be more dependent on the advisers' own credit
analysis than 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.
GENERAL INVESTMENT
POLICIES AND RISK
FACTORS
____________________________________________________________________________
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.
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
Fixed income securities are debt obligations issued by
corporations, municipalities and other borrowers. 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 accounting, auditing and financial
reporting standards, generally higher commission rates on
foreign portfolio transactions, the possibility of
expropriation or confiscatory taxation,
6
<PAGE>
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.
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.
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.
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
7
<PAGE>
Portfolio's investment portfolio and increasing the
exposure of the Portfolio to the risks of high yield
securities.
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 an NRSRO, or, if not rated, determined by the
advisers to be of comparable quality at the time of
purchase.
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.
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.
For additional information regarding the Portfolios'
permitted investments, see "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.
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.
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
8
<PAGE>
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.
3. 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.
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. 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 Portfolio 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, 1997, 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, .26%; and
High Yield Bond Portfolio, .30%.
THE ADVISER
_______________________________________________________________________
SEI INVESTMENTS MANAGEMENT CORPORATION
SEI Investments Management Corporation ("SIMC") serves as
investment adviser to each Portfolio. SIMC is a
wholly-owned subsidiary of SEI Investments Company ("SEI
Investments"), a financial services company. The principal
business address of SIMC and SEI Investments is Oaks,
Pennsylvania 19456. SEI Investments was founded in 1968 and
is a leading provider of investment solutions to banks,
institutional investors, investment advisers and insurance
companies. Affiliates of SIMC have provided consulting
advice to institutional investors for more than 20 years,
including advice regarding the selection and evaluation of
investment advisers. SIMC currently serves as manager or
administrator to more than 46 investment companies,
including more than 345 portfolios, which investment
companies had more than $99.9 billion in assets as of
September 30, 1997.
9
<PAGE>
SIMC acts as the investment adviser to the Portfolios
and operates as a "manager of managers." As Adviser, SIMC
oversees the investment advisory services provided to the
Portfolios and manages the cash portion of the Portfolios'
assets. Pursuant to separate sub-advisory agreements with
SIMC, and under the supervision of SIMC 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 SIMC, 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,
SIMC 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. SIMC 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, SIMC is entitled to a
fee, which is calculated daily and paid monthly, at an
annual rate of .275% of the Core Fixed Income Portfolio's
average daily net assets and .4875% of the High Yield Bond
Porfolio's average daily net assets.
For the fiscal year ended September 30, 1997, SIMC
received an advisory fee of .275% of the Core Fixed Income
Portfolio's average daily net assets and .4875% of the High
Yield Bond Portfolio's average daily net assets. SIMC paid
the sub-advisers a fee based on a percentage of the average
monthly market value of the assets managed by each
sub-adviser out of its advisory fee.
SIMC and the Trust have obtained an exemptive order
from the Securities and Exchange Commission (the "SEC")
that permits SIMC, with the approval of the Trust's Board
of Trustees, to retain sub-advisers unaffiliated with SIMC
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 SIMC 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. BEA 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 a diversified asset
manager, handling global equity, balanced, fixed income and
derivative securities accounts for private individuals, as
well as corporate
10
<PAGE>
pension and profit-sharing plans, state pension funds,
union funds, endowments and other charitable institutions.
As of September 30, 1997, BEA managed approximately $34.5
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 14 years of
investment management 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. Prior to joining Prudential, Mr. Lindquist was
managing high yield funds at T. Rowe Price.
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, 1997, BlackRock had $51.7
billion in assets under management. BlackRock provides
investment advice to investment companies, trusts,
charitable organizations, pension and profit sharing plans
and government entities. BlackRock is wholly-owned by PNC
Asset Management Group, Inc., a wholly-owned subsidiary of
PNC Bank, N.A. whose ultimate parent is PNC Bank Corp., One
PNC Plaza, Pittsburgh, Pennsylvania 15265. In December
1997, PNC Bank Corp. announced a reorganization of its
subsidiary PNC Asset Management Group to integrate its
investment management business. The following companies
will be merged in early 1998 to form a single company under
the name BlackRock Financial Management, BlackRock, PNC
Institutional Management Co. (PIMC), Provident Capital
Management (PCM), PNC Equity Advisor Co. (PEAC) and
CastleInternational Asset Management, as well as Provident
Advisors and Compass Capital Group.
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 14 years experience investing in fixed income
securities. Mr. Phillips is a Principal and portfolio
manager with primary responsibility for the management of
the firm's investment activities in fixed-rate mortgage
securities.
FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY, LLC
Firstar Investment Research & Management Company, LLC
("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,
1997, it had approximately $22.4 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
11
<PAGE>
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 15 years experience in fixed income
investment management.
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, 1997, Western managed
approximately $32.3 billion in client assets, including
$4.6 billion of investment company assets.
Kent S. Engel, Director and Chief Investment Officer
of Western, is primarily responsible for the day-to-day
management of the portion of the Portfolio's assets
allocated to Western. Mr. Engel has been with Western and
its predecessor since 1969.
DISTRIBUTION AND
SHAREHOLDER SERVICING
__________________________________________________________________________
SEI Investments Distribution Co. (the "Distributor"), a
wholly-owned subsidiary of SEI Investments, 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").
The Portfolios have adopted a shareholder service
plan for Class A shares (the "Class A Service Plan") under
which firms, including the Distributor, that provide
shareholder and administrative services may receive
compensation therefor. Under the Class A Service Plan, the
Distributor may provide those services itself, or may enter
into arrangements under which third parties provide such
services and are compensated by the Distributor. Under such
arrangements, the Distributor may retain as profit any
difference between the fee it receives and the amount it
pays such third parties. In addition, the Portfolios may
enter into such arrangements directly. Under the Class A
Service Plan, a Portfolio may pay the Distributor a
negotiated fee at a rate of up to .25% annually of the
average daily net assets of such Portfolio attributable to
Class A shares that are subject to the arrangement in
return for provision of a broad range of shareholder and
administrative services, including: maintaining client
accounts; arranging for bank wires; responding to client
inquiries concerning services provided for investments;
changing dividend options; account designations and
addresses; providing sub-accounting; providing information
on share positions to clients; forwarding shareholder
communications to clients; processing purchase, exchange
and redemption orders; and processing dividend payments.
12
<PAGE>
It is possible that an institution may offer
different classes of shares to its customers and thus
receive different compensation with respect to different
classes. These financial institutions may also charge
separate fees to their customers.
The Trust may execute brokerage or other agency
transactions through the Distributor, for which the
Distributor may receive compensation.
The Distributor may, from time to time and at its own
expense, provide promotional incentives, in the form of
cash or other compensation, to certain financial
institutions whose representatives have sold or are
expected to sell significant amounts of the Portfolios'
shares.
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 the Transfer Agent (or its authorized agent).
Institutions that use certain SEI proprietary systems may
place orders electronically through those systems.
Financial institutions may impose an earlier cut-off time
for receipt of purchase orders directed through them to
allow for processing and transmittal of these orders to the
Transfer Agent for effectiveness 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 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 the Transfer Agent (or its
authorized agent) prior to the determination of net asset
value on any Business Day for the order to be accepted on
that Business Day. Purchase orders received after the
determination of net asset value on any Business Day will
be effected at the next Business Day's net asset value.
Generally, payment for fund shares must be transmitted on
the next Business Day following the day the order is
placed. Payment for such shares may only be transmitted or
delivered in federal funds to the wire agent. 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
13
<PAGE>
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 regular trading on the New
York Stock Exchange (currently 4:00 p.m., Eastern time) on
each Business Day.
If there is no readily ascertainable market value for
a security, SEI Management will make a good faith
determination as to the "fair value" of the security.
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).
Shareholders who desire to redeem shares of the
Portfolios must place their redemption orders with the
Transfer Agent (or its authorized agent) prior to the
determination of net asset value, on any Business Day.
Redemption orders received after the determination of net
asset value will be effected at the next Business Day's net
asset value. The redemption price is the net asset value
per share of the Portfolio next determined after receipt by
the Transfer Agent of the redemption order. Payment on
redemption will be made as promptly as possible and, in any
event, within seven days after the redemption order is
received.
Shares of a Portfolio may be purchased in exchange
for securities included in the Portfolio subject to SIMC'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.
SIMC and 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.
14
<PAGE>
Purchase and 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 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 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.
15
<PAGE>
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 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 to shareholders of net capital gains of the
Portfolio also will not qualify for the dividends received
deduction and will be taxable to shareholders as long-term
capital gain, taxable at the rate of 20% for property held
for more than 18 months and at the rate of 28% for property
held for more than one year but not for more than 18
months, whether received in cash or additional shares, and
regardless of how long a shareholder has held the 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.
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
16
<PAGE>
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.
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.
17
<PAGE>
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.
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.
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.
18
<PAGE>
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.
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 certain of these instruments.
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 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.
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
19
<PAGE>
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.
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.
An 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 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 invests in futures contracts, it will cover its
position by depositing an amount of cash or liquid
securities equal to the market value of the futures
positions held, less margin deposits, in a segregated
account and that amount 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,
20
<PAGE>
securities for which there is no active secondary market,
and repurchase agreements with durations (or maturities)
over seven days in length.
JUNK BONDS
Securities 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.
Throughout the year ended September 30, 1997, 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 --%
BBB 0.52%
BB 13.63%
B 73.62%
CCC 3.34%
Unrated 8.89%
---------
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 and
governments that issue outstanding high-quality commercial
paper or similar securities; 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
21
<PAGE>
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 Government National Mortgage
Association ("GNMA"), Fannie Mae and the Federal Home Loan
Mortgage Corporation ("FHLMC"). GNMA, Fannie Mae and FHLMC
guarantee timely distributions of interest to certificate
holders. GNMA and Fannie Mae also guarantee timely
distributions of scheduled principal. FHLMC generally
guarantees only the ultimate collection of principal of the
underlying mortgage loan. Fannie Mae and FHLMC obligations
are not backed by the full faith and credit of the U.S.
Government as GNMA certificates are, but Fannie Mae and
FHLMC securities are supported by the instrumentalities'
right to borrow from the U.S. Treasury. Government and
private guarantees do not extend to the securities' value,
which is likely to vary inversely with fluctuations in
interest rates.
PRIVATE PASS-THROUGH SECURITIES: These are
mortgage-backed securities issued by a non-governmental
entity, such as a trust. 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 of 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. Each class of a CMO is issued with a specific fixed
or floating coupon rate and has a stated maturity or final
distribution date.
REMICS: A REMIC is a CMO that qualifies for special
tax treatment under the Internal Revenue Code and invests
in certain mortgages principally secured by interests in
real property. Investors may purchase beneficial interests
in REMICs, which are known as "regular" interests, or
"residual" interests. Guaranteed REMIC pass-through
certificates ("REMIC Certificates") issued by Fannie Mae,
GNMA or FHLMC represent beneficial ownership interests in a
REMIC trust consisting principally of mortgage loans or
Fannie
22
<PAGE>
Mae, FHLMC or GNMA-guaranteed mortgage pass-through
certificates. 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. Fannie Mae REMIC Certificates
are issued and guaranteed as to timely distribution of
principal and interest by Fannie Mae. GNMA REMIC
Certificates are backed by the full faith and credit of the
U.S. Government.
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, while the other class
may receive all of the principal payments. 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 a
Portfolio being paid a fee as consideration for entering
into the commitment to purchase.
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
23
<PAGE>
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 Portfolio may purchase and write put and call options on
indices and enter into related closing transactions. A put
option on a security 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 on a security 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 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.
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 or securities must be
covered. When a Portfolio writes an option or security on
an index or a foreign currency, it will establish a
segregated account containing cash or liquid securities 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.
24
<PAGE>
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.
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
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.
25
<PAGE>
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 FHLMC, 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., GNMA securities), and others are supported by the
right of the issuer to borrow from the Treasury (e.g.,
Federal Farm Credit Bank securities), while still others
are supported only by the credit of the instrumentality
(e.g., Fannie Mae securities).
U.S. TREASURY OBLIGATIONS
U.S. Treasury obligations consist of bills, notes and bonds
issued by the U.S. Treasury, as well as separately traded
interest and principal component parts of such obligations
known as Separately Traded Registered Interest and
Principal Securities ("STRIPS") that are transferable
through the Federal book-entry system.
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 a separate
account with liquid securities or cash in an amount at
least equal to these commitments. The interest rate
realized on these securities is fixed as of the purchase
date, and no interest accrues to the Portfolio before
settlement.
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
26
<PAGE>
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.
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.
27
<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>
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.
(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
A-2
<PAGE>
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.
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.
A-3
<PAGE>
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.
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
A-4
<PAGE>
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.
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.
A-5
<PAGE>
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.
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.
A-6
<PAGE>
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.
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-7
<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 and Risk Factors..... 6
Investment Limitations........................... 8
The Manager...................................... 9
The Adviser...................................... 9
The Sub-Advisers................................. 10
Distribution and Shareholder Servicing........... 12
Purchase and Redemption of Shares................ 13
Performance...................................... 15
Taxes............................................ 16
General Information.............................. 17
Description of Permitted Investments and Risk
Factors......................................... 19
Appendix......................................... A-1
</TABLE>
<PAGE>
SEI INSTITUTIONAL MANAGED TRUST
JANUARY 31, 1998
- --------------------------------------------------------------------------------
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 concisely sets forth information about the above-referenced
portfolios that an investor needs to know before investing. Please read this
Prospectus carefully, and keep it on file for future reference.
A Statement of Additional Information dated January 31, 1998, has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request and without charge by writing the Distributor, SEI Investments
Distribution Co., Oaks, Pennsylvania 19456, or by calling 1-800-342-5734. The
Statement of Additional Information is incorporated by reference into this
Prospectus.
SEI 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, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THE TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) CLASS A
- --------------------------------------------------------------------------------
<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% 0.74%(1) 0.70%(1) 0.70%(1)
12b-1 Fees None None None None None None None
Total Other Expenses 0.15% 0.15% 0.11% 0.10% 0.19% 0.14% 0.15%
Shareholder Servicing Fees 0.10% 0.10% 0.04% 0.04% 0.13% 0.08% 0.09%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Total Operating Expenses (AFTER FEE
WAIVER) 0.85% 0.85%(2) 1.11% 1.10% 0.93%(2) 0.84%(2) 0.85%(2)
</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) 0.69%(1)
12b-1 Fees None
Total Other Expenses 0.06%
Shareholder Servicing Fees 0.00%
- ---------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (AFTER FEE WAIVER) 0.75%(2)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) SEI INVESTMENTS MANAGEMENT CORPORATION ("SIMC") 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%; MID-CAP PORTFOLIO, .75%;
CAPITAL APPRECIATION PORTFOLIO, .75%; EQUITY INCOME PORTFOLIO, .75%; AND
BALANCED PORTFOLIO, .75%.
(2) ABSENT THESE FEE WAIVERS, TOTAL OPERATING EXPENSES FOR THE CLASS A SHARES OF
THE PORTFOLIOS WOULD BE: LARGE CAP GROWTH PORTFOLIO, .90%; MID-CAP
PORTFOLIO, .94%; CAPITAL APPRECIATION PORTFOLIO, .89%; EQUITY INCOME
PORTFOLIO, .90%; AND BALANCED PORTFOLIO, .81%. 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 $ 135
Small Cap Growth Portfolio $ 11 $ 35 $ 61 $ 134
Mid-Cap Portfolio $ 9 $ 30 $ 51 $ 114
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 derived from the financial statements audited
by Price Waterhouse LLP, the Trust's independent accountants. Price Waterhouse
LLP's report dated November 25, 1997 on the Trust's financial statements as of
September 30, 1997 is incorporated by reference into the Trust's Statement of
Additional Information. The Trust's financial statements and additional
performance information are set forth in the 1997 Annual Report to Shareholders,
which is available upon request and without charge by calling 1-800-342-5734.
This table should be read in conjunction with the Trust's financial statements
and notes thereto.
<TABLE>
<CAPTION>
FOR A CLASS 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
1997 $ 14.78 $ 0.28 $ 5.77 $(0.29) $(1.17) $ 19.37 44.12%
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(1) 10.99 0.30 (1.52) (0.31) (0.01) 9.45 (10.88)%
- -------------------------
LARGE CAP GROWTH
PORTFOLIO
- -------------------------
1997 $ 15.03 $ 0.03 $ 6.33 $(0.05) $(0.94) $ 20.40 44.35%
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
- -------------------------
1997 $ 13.17 $ 0.05 $ 5.74 $(0.05) $(1.06) $ 17.85 47.16%
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
1997 $ 20.51 $ 0.02 $ 2.64 $-- $(3.85) $ 19.32 17.23%
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
1997 $ 14.96 $ 0.13 $ 5.86 $(0.14) $(1.25) $ 19.56 43.13%
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
1997 $ 866,826 0.85% 1.74% 0.85% 1.74% 67% $ 0.0496
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(1) 44,841 0.75% 3.37% 1.33% 2.79% 44% N/A
- -------------------------
LARGE CAP GROWTH
PORTFOLIO
- -------------------------
1997 $ 800,479 0.85% 0.22% 0.90% 0.17% 73% $ 0.0539
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
- -------------------------
1997 $ 323,337 1.11% 0.37% 1.11% 0.37% 98% $ 0.0510
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
1997 $ 561,414 1.10% (0.60%) 1.10% (0.60%) 107% $ 0.0723
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
1997 $ 35,047 0.93% 0.79% 0.94% 0.78% 92% $ 0.0268
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
1997 $ 18.14 $ 0.21 $ 4.65 $(0.22) $(4.58) $ 18.20 34.02%
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
1997 $ 16.40 $ 0.39 $ 4.33 $(0.42) $(2.68) $ 18.02 33.46%
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
1997 $ 13.94 $ 0.41 $ 2.27 $(0.42) $(2.14) $ 14.06 22.38%
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
1997 $ 164,238 0.84% 1.20% 0.89% 1.15% 178% $ 0.0568
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
1997 $ 173,766 0.85% 2.38% 0.90% 2.33% 40% $ 0.0582
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
1997 $ 51,195 0.75% 3.15% 0.81% 3.09% 197% $ 0.0572
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 Investments
Distribution Co., 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 may also borrow money,
invest in illiquid securities, when-issued and
delayed-delivery securities and shares of other investment
companies, and lend its securities to qualified buyers.
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. The Portfolio may also borrow money,
invest in illiquid securities, when-issued and
delayed-delivery securities and shares of other investment
companies, and lend its securities to qualified buyers.
5
<PAGE>
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 may also borrow money, invest in illiquid
securities, Real Estate Investment Trusts ("REITs"),
when-issued and delayed-delivery securities and shares of
other investment companies, and lend its securities to
qualified buyers.
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.
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. 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 may also borrow
money, invest in illiquid securities, REITs, when-issued
and delayed-delivery securities and shares of other
investment companies, and lend its securities to qualified
buyers.
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.
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
6
<PAGE>
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 may
also borrow money, invest in illiquid securities,
when-issued and delayed-delivery securities and shares of
other investment companies, and lend its securities to
qualified buyers.
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.
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 may also borrow money, invest in illiquid
securities, when-issued and delayed-delivery securities and
shares of other investment companies, and lend its
securities to qualified buyers.
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.
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 may also borrow money, invest in illiquid
securities, when-issued and delayed-delivery securities and
shares of other investment companies, and lend its
securities to qualified buyers.
7
<PAGE>
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 Portfolio may also borrow
money, invest in illiquid securities, when-issued and
delayed-delivery securities and shares of other investment
companies, and lend its securities to qualified buyers.
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.
GENERAL INVESTMENT
POLICIES
AND RISK FACTORS
_________________________________________________________________
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.
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. 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.
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.
8
<PAGE>
FIXED INCOME SECURITIES
Fixed income securities are debt obligations issued by
corporations, municipalities and other borrowers. 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.
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.
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.
For additional information regarding the Portfolios'
permitted investments, see "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.
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.
9
<PAGE>
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.
3. 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.
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. 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, 1997, 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, Large Cap
Growth, Small Cap Value, Small Cap Growth Portfolio,
Capital Appreciation Portfolio, and Equity Income
Portfolio, each paid .35%; and the Balanced Portfolio and
Mid-Cap Portfolio, each paid .34%.
10
<PAGE>
THE ADVISER
_______________________________________________________________________
SEI INVESTMENTS MANAGEMENT CORPORATION
SEI Investments Management Corporation ("SIMC") serves as
investment adviser to each Portfolio. SIMC is a
wholly-owned subsidiary of SEI Investments Company ("SEI
Investments"), a financial services company. The principal
business address of SIMC and SEI Investments is Oaks,
Pennsylvania 19456. SEI Investments was founded in 1968 and
is a leading provider of investment solutions to banks,
institutional investors, investment advisers, and insurance
companies. Affiliates of SIMC have provided consulting
advice to institutional investors for more than 20 years,
including advice regarding selection and evaluation of
investment advisers. SIMC currently serves as manager or
administrator to more than 46 investment companies,
including more than 345 portfolios, which investment
companies had more than $99.9 billion in assets as of
September 30, 1997.
SIMC acts as the investment adviser to the Portfolios
and operates as a "manager of managers." As Adviser, SIMC
oversees the investment advisory services provided to the
Portfolios and manages the cash portion of the Portfolios'
assets. Pursuant to separate sub-advisory agreements with
SIMC, and under the supervision of SIMC 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 SIMC, 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,
SIMC 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. SIMC 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, SIMC 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.
For the fiscal year ended September 30, 1997, SIMC
received an advisory fee of .35% of the Large Cap Value,
Large Cap Growth, Capital Appreciation, Equity Income and
Balanced Portfolios' average daily net assets, .40% of the
Mid-Cap Portfolio's average daily net assets, and .65% of
the Small Cap Value and Small Cap Growth Portfolios'
average daily net assets. SIMC paid the sub-advisers a fee
based on a percentage of the average monthly market value
of the assets managed by each sub-adviser out of its
advisory fee.
SIMC and the Trust have obtained an exemptive order
from the Securities and Exchange Commission (the "SEC")
that permits SIMC, with the approval of the Trust's
11
<PAGE>
Board of Trustees, to retain sub-advisers unaffiliated with
SIMC 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 SIMC 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, 1997, 1838 managed $5.5 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.
Edwin B. Powell and Cynthia R. Axelrod are the fund
managers for the portion of the Small Cap Value Portfolio's
assets allocated to 1838. These individuals work as a team
and share responsibility. Mr. Powell managed small cap
equity portfolios for Provident Capital Management from
1987 to 1994. Prior to joining 1838 in 1995, Ms. Axelrod
was with Friess Associates from 1992 to 1995.
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, 1997, Alliance managed over
$217.3 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. Mr. Christopher Toub has primary portfolio
management responsibility. For the past five years, Mr.
Toub has been a portfolio manager in Alliance's Disciplined
Growth Team.
AMERICAN EXPRESS ASSET MANAGEMENT GROUP INC.
American Express Asset Management Group Inc. (formerly,
"IDS Advisory Group Inc.") serves as a sub-adviser for a
portion of the assets of the Large Cap Growth Portfolio.
American Express Asset Management Group Inc. ("AEAMG") is a
registered investment adviser and wholly-owned subsidiary
of American Express Financial Corporation. As of September
30, 1997, AEAMG managed over $39 billion in assets, with
$8.7 billion of this total in large capitalization growth
domestic equities. AEAMG was founded in 1972 to manage
tax-exempt assets for institutional clients. The principal
business address of AEAMG is IDS Tower 10, Minneapolis,
Minnesota 55440.
12
<PAGE>
A committee composed of five investment fund managers
of the equity investment team manages the portion of the
Large Cap Growth Portfolio's assets allocated to AEAMG. No
individual person is primarily responsible for making
recommendations to that committee.
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, 1997, it had approximately $12.5
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 14 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 he
created their mid-cap value product.
FIRST OF AMERICA
INVESTMENT CORPORATION
First of America Investment Corporation ("First America")
serves as Sub-Adviser to a portion of the assets of the
Small Cap Growth Portfolio. First 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 America, together with its predecessor, has
been engaged in the investment advisory business since
1932. First America's principal business address is 303
North Rose Street, Suite 500, Kalamazoo, Michigan 49007. As
of September 30, 1997, First America had approximately
$16.8 billion in assets under management. First America's
clients include mutual funds, trust funds, and individually
managed institutional and individual accounts.
Mr. Roger Stamper, CFA, has primary responsibility
for First America's portion of the Small Cap Growth
Portfolio. Mr. Stamper is a Managing Director of First
America, and has been with First America since 1988.
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
$10.2 billion in assets as of September 30, 1997. The
ultimate parent of Furman Selz is ING Group N.V., a Dutch
financial services company. Furman Selz's principal
business address is 230 Park Avenue, New York, NY 10169.
13
<PAGE>
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.
LSV ASSET MANAGEMENT
LSV Asset Management ("LSV") serves as a sub-adviser for a
portion of the assets of the Large Cap Value and Small Cap
Value Portfolios. LSV is a registered investment adviser
organized as a Delaware general partnership, in which an
affiliate of SIMC owns a majority interest. The general
partners developed a quantitative value investment
philosophy that has been used to manage assets over the
past 6 years. The investment process has been implemented
for a number of institutional clients with aggregate assets
invested of approximately $1.23 billion. The principal
business address of LSV is 181 W. Madison Avenue, Chicago,
Illinois 60602.
Josef Lakonishok, Andrei Shleifer and Robert Vishny,
officers of LSV, manage the Portfolios on an ongoing basis
and make adjustments to the investment model based on their
research and statistical analysis. Through their investment
process, LSV identifies buy and sell candidates subject to
specific tolerances and constraints.
SIMC 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 and .50% of the average monthly market value of
the assets of the Small Cap Value Portfolio managed by LSV.
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,
1997, had assets of approximately $885 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.
MELLON EQUITY ASSOCIATES, LLP
Mellon Equity Associates, LLP ("Mellon Equity") serves as
Sub-Adviser to a portion of the assets of the Large Cap
Value Portfolio. Mellon Equity is a Pennsylvania Limited
Liability Partnership founded in 1987. Mellon Bank, N.A.,
is the 99% limited partner and MMIP, Inc. is the 1% general
partner. 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
14
<PAGE>
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 $15.6 billion of
assets as of September 30, 1997. 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 Equity since April, 1990.
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT, INC.
Nicholas-Applegate Capital Management
("Nicholas-Applegate") serves as sub-adviser for 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, 1997, Nicholas-Applegate had
discretionary management authority with respect to
approximately $33 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 a corporation 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.
The U.S. Systematic team is responsible for the day-to-day
management of the Portfolio's assets. The lead U.S.
Systematic portfolio manager is John Kane, and he is
assisted by six other portfolio manager/analysts for the
Portfolio's U.S. Systematic assets. Mr. Kane has been a
fund manager and investment team leader since June 1994.
Prior to joining Nicholas-Applegate, he had 25 years of
investment/economics experience with ARCO Investment
Management Company and General Electric Company.
PACIFIC ALLIANCE CAPITAL MANAGEMENT
Pacific Alliance Capital Management ("Pacific") serves as
Sub-Adviser to the Equity Income 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, 1997, Pacific
had discretionary management authority with respect to
approximately
15
<PAGE>
$15.5 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.
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 September 30, 1997, Provident had over $20 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 25 years
of investment experience.
SANFORD C. BERNSTEIN & CO., INC.
Sanford C. Bernstein & Co., Inc. ("Bernstein"), serves as a
sub-adviser for a portion of the assets of the Large Cap
Value Portfolio. Founded in 1967, Bernstein is a registered
investment adviser that managed approximately $69.3 billion
in assets as of September 30, 1997. Bernstein is controlled
by the members of its Board of Directors and its principal
business address is 767 Fifth Avenue, New York, New York
10153.
Lewis A. Sanders and Marilyn Goldstein Fedak are
primarily responsible for the day-to-day management and
investment decisions with respect to the assets of the
Portfolio. Mr. Sanders has been employed by Bernstein since
1969, and is currently Chairman of the Board, Chief
Executive Officer, and a Director of Bernstein. Ms. Fedak,
Chief Investment Officer--Large Capitalization Domestic
Equities and a Director of Bernstein, has been employed by
Bernstein since 1984.
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, 1997, STI had discretionary management
authority over more than $13 billion in assets. The
principal business address is: STI Capital Management, P.O.
Box 3786, Orlando, Florida 32802-3786.
16
<PAGE>
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 24 years.
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, 1997, had approximately $1.4 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 81 years of investment
management experience.
DISTRIBUTION AND
SHAREHOLDER SERVICING
__________________________________________________________________________
SEI Investments Distribution Co. (the "Distributor"), a
wholly-owned subsidiary of SEI Investments 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").
The Portfolios have adopted a shareholder service
plan for Class A shares (the "Class A Service Plan") under
which firms, including the Distributor, that provide
shareholder and administrative services may receive
compensation therefor. Under the Class A Service Plan, the
Distributor may provide those services itself, or may enter
into arrangements under which third parties provide such
services and are compensated by the Distributor. Under such
arrangements, the Distributor may retain as profit any
difference between the fee it receives and the amount it
pays such third parties. In addition, the Portfolios may
enter into such arrangements directly. Under the Class A
Service Plan, a Portfolio may pay the Distributor a
negotiated fee at a rate of up to .25% annually of the
average daily net assets of such Portfolio attributable to
Class A shares that are subject to the arrangement in
return for provision of a broad range of shareholder and
administrative services, including: maintaining client
accounts; arranging for bank wires; responding to
17
<PAGE>
client inquiries concerning services provided for
investments; changing dividend options; account
designations and addresses; providing sub-accounting;
providing information on share positions to clients;
forwarding shareholder communications to clients;
processing purchase, exchange and redemption orders; and
processing dividend payments.
It is possible that an institution may offer
different classes of shares to its customers and thus
receive different compensation with respect to different
classes. These financial institutions may also charge
separate fees to their customers.
The Trust may execute brokerage or other agency
transactions through the Distributor, for which the
Distributor may receive compensation.
The Distributor may, from time to time and at its own
expense, provide promotional incentives, in the form of
cash or other compensation, to certain financial
institutions whose representatives have sold or are
expected to sell significant amounts of the Portfolios'
shares.
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 the Transfer Agent (or its authorized agent).
Institutions that use certain SEI proprietary systems may
place orders electronically through those systems.
Financial institutions may impose an earlier cut-off time
for receipt of purchase orders directed through them to
allow for processing and transmittal of these orders to the
Transfer Agent for effectiveness 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 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 the Transfer Agent (or its
authorized agent) prior to the determination of net asset
value on any Business Day for the order to be accepted on
that Business Day. Purchase orders received by a fund after
the determination of net asset value will be effected at
the next Business Day's net asset value. Generally, payment
for fund shares must be transmitted on the next Business
Day following the day the order is placed. Payment for such
shares may only be transmitted or delivered in federal
funds to the wire agent. 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
18
<PAGE>
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 regular trading on the New
York Stock Exchange (currently 4:00 p.m., Eastern time) on
each Business Day.
If there is no readily ascertainable market value for
a security, SEI Management will make a good faith
determination as to the "fair value" of the security.
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).
Shareholders who desire to redeem shares of the
Portfolios must place their redemption orders with the
Transfer Agent (or its authorized agent) prior to the
determination of net asset value on any Business Day.
Redemption orders received after the determination of net
asset value will be effected at the next Business Day's net
asset value. 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 SIMC'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.
SIMC and 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;
19
<PAGE>
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 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 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 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
20
<PAGE>
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.
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 to
shareholders of net capital gains of the Portfolio also
will not qualify for the dividends received deduction and
will be taxable to shareholders as long-term capital gain,
taxable at the rate of 20% for property held for more than
18 months and at the rate of 28% for property held for more
than one year but not for more than 18 months, whether
received in cash or additional shares, and
21
<PAGE>
regardless of how long a shareholder has held the 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
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
22
<PAGE>
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.
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.
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.
23
<PAGE>
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 certain of these instruments.
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.
An 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
24
<PAGE>
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 invests in futures contracts, it will cover its
position by depositing an amount of cash or liquid
securities equal to the market value of the futures
positions held, less margin deposits, in a segregated
account and that amount will be marked to market on a daily
basis.
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 futures options.
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 and governments that
issue high-quality commercial paper or similar securities;
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
25
<PAGE>
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 Government National Mortgage
Association ("GNMA"), Fannie Mae and the Federal Home Loan
Mortgage Corporation ("FHLMC"). GNMA, Fannie Mae and FHLMC
guarantee timely distributions of interest to certificate
holders. GNMA and Fannie Mae also guarantee timely
distributions of scheduled principal. FHLMC generally
guarantees only the ultimate collection of principal of the
underlying mortgage loan. Fannie Mae and FHLMC obligations
are not backed by the full faith and credit of the U.S.
Government as GNMA certificates are, but Fannie Mae and
FHLMC securities are supported by the instrumentalities'
right to borrow from the U.S. Treasury. Government and
private guarantees do not extend to the securities' value,
which is likely to vary inversely with fluctuations in
interest rates.
PRIVATE PASS-THROUGH SECURITIES: These are
mortgage-backed securities issued by a non-governmental
entity, such as a trust. 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 of 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. Each class of a CMO is issued with a specific fixed
or floating coupon rate and has a stated maturity or final
distribution date.
REMICS: A REMIC is a CMO that qualifies for special
tax treatment under the Internal Revenue Code and invests
in certain mortgages principally secured by interests in
real property. Investors may purchase beneficial interests
in REMICs, which are known as "regular" interests, or
"residual" interests. Guaranteed REMIC pass-through
certificates ("REMIC Certificates") issued by Fannie Mae,
FHLMC or GNMA represent beneficial ownership interests in a
REMIC trust consisting principally of mortgage loans or
Fannie Mae, FHLMC or GNMA-guaranteed mortgage pass-through
certificates. 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. Fannie Mae REMIC Certificates
are issued and guaranteed as to timely distribution of
principal and interest by Fannie Mae. GNMA REMIC
Certificates are backed by the full faith and credit of the
U.S. Government.
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
26
<PAGE>
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, while the other class
may receive all of the principal payments. The market for
SMBs is not as fully developed as other markets; SMBs,
therefore, may be illiquid.
OPTIONS
A Portfolio may purchase and write put and call options on
indices and enter into related closing transactions. A put
option on a security 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 on a security 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.
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 or securities must be
covered. When a Portfolio writes an option or security on
an index, it will establish a segregated account containing
cash or liquid securities 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.
27
<PAGE>
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 securities.
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 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 FHLMC, 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, and others are supported by the right of the
issuer to borrow from the Treasury, while still others are
supported only by the credit of the instrumentality.
28
<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 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 a separate
account with liquid securities or cash in an amount at
least equal to these commitments. The interest rate
realized on these securities is fixed as of the purchase
date, and no interest accrues to a Portfolio before
settlement.
Additional information on permitted investments and risk
factors can be found in the Statement of Additional
Information.
29
<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 and Risk Factors..... 8
Investment Limitations........................... 9
The Manager...................................... 10
The Adviser...................................... 11
The Sub-Advisers................................. 12
Distribution and Shareholder Servicing........... 17
Purchase and Redemption of Shares................ 18
Performance...................................... 20
Taxes............................................ 21
General Information.............................. 22
Description of Permitted Investments and Risk
Factors......................................... 24
</TABLE>
<PAGE>
SEI INSTITUTIONAL MANAGED TRUST
Manager:
SEI Fund Management
Distributor:
SEI Investments Distribution Co.
Investment Adviser and Sub-Advisers:
1838 Investment Advisors, L.P.
Alliance Capital Management L.P.
American Express Asset Management
Group Inc.
BEA Associates
BlackRock Financial Management, Inc.
Boston Partners Asset Management, L.P.
First of America Investment Corporation
Firstar Investment Research &
Management Company, LLC
Furman Selz Capital Management LLC
LSV Asset Management
Martingale Asset Management, L.P.
Mellon Equity Associates, LLP
Nicholas-Applegate Capital Management
Pacific Alliance Capital Management
Provident Investment Counsel, Inc.
Sanford C. Bernstein & Co., Inc.
SEI Investments 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, 1998. Prospectuses may be obtained by writing the Trust's
distributor, SEI Investments Distribution Co., 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-12
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-22
Purchase and Redemption of Shares..................................................... S-24
Shareholder Services (Class D Shares)................................................. S-25
Taxes................................................................................. S-26
Portfolio Transactions................................................................ S-28
Description of Shares................................................................. S-31
Limitation of Trustees' Liability..................................................... S-31
Voting................................................................................ S-32
Shareholder Liability................................................................. S-32
Control Persons and Principal Holders of Securities................................... S-32
Experts............................................................................... S-34
Financial Statements.................................................................. S-34
January 31, 1998
SEI-F-048-09
</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, Capital Appreciation, Equity Income, High Yield Bond, Core
Fixed Income, Large Cap Growth, Large Cap Value, Mid-Cap, 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 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 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 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. A Portfolio will place assets in a segregated account to
assure that its obligations under forward foreign currency contracts are
covered.
FUTURES AND OPTIONS ON FUTURES--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. A
Portfolio may buy and sell futures contracts
S-3
<PAGE>
and related options to manage its exposure to changing interest rates and
securities prices. Some strategies reduce a Portfolio's exposure to price
fluctuations, while others tend to increase its market exposure. Futures and
options on futures can be volatile instruments and involve certain risks that
could negatively impact a Portfolio's return.
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.
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.
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, 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
S-4
<PAGE>
Mortgage Association ("GNMA") and government-related organizations such as
Fannie Mae and the Federal Home Loan Mortgage Corporation ("FHLMC"), as well as
by non-governmental issuers such as commercial banks, savings and loan
institutions, mortgage 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 Fannie Mae include Fannie Mae Guaranteed
Mortgage Pass-Through Certificates (also known as "Fannie Maes") that are solely
the obligations of Fannie Mae and are not backed by or entitled to the full
faith and credit of the United States. Fannie Mae is a government-sponsored
organization owned entirely by private stockholders. Fannie Maes are guaranteed
as to timely payment of the principal and interest by Fannie Mae.
Mortgage-backed securities issued by the FHLMC include FHLMC Mortgage
Participation Certificates (also known as "Freddie Macs" or "PC's"). The FHLMC
is a corporate instrumentality of the United States, created pursuant to an Act
of Congress, which is owned entirely by Federal Home Loan Banks. Freddie Macs
are not guaranteed by the United States or by any Federal Home Loan Banks and do
not constitute a debt or obligation of the United States or of any Federal Home
Loan Bank. Freddie Macs entitle the holder to timely payment of interest, which
is guaranteed by the FHLMC. The FHLMC guarantees either ultimate collection or
timely payment of all principal payments on the underlying mortgage loans. When
the FHLMC does not guarantee timely payment of principal, FHLMC may remit the
amount due on account of its guarantee of ultimate payment of principal at any
time after default on an underlying mortgage, but in no event later than one
year after it becomes payable. 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
S-5
<PAGE>
mortgage participation certificates. Fannie Mae REMIC Certificates are issued
and guaranteed as to timely distribution of principal and interest by Fannie
Mae.
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-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.
To avoid any leveraging concerns, a Portfolio will place U.S. Government or
other liquid securities in a segregated account in an amount sufficient to cover
its repurchase obligation.
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
S-6
<PAGE>
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 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 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."
The initial purchase (sale) of an option contract is an "opening
transaction." In order to close out an option position, a Portfolio may enter
into a "closing transaction," which is simply the sale (purchase) of an option
contract on the same security with the same exercise price and expiration date
as the option contract originally opened. If a Portfolio is unable to effect a
closing purchase transaction with respect to an option it has written, it will
not be able to sell the underlying security until the option expires or the
Portfolio delivers the security upon exercise.
A Portfolio may purchase put and call options on securities to protect
against a decline in the market value of the securities in its portfolio or to
anticipate an increase in the market value of securities that the Portfolio may
seek to purchase in the future. A Portfolio purchasing put and call options pays
a premium therefor. If price movements in the underlying securities are such
that exercise of the options would not be profitable for the Portfolio loss of
the premium paid may be offset by an increase in the value of the Portfolio's
securities or by a decrease in the cost of acquisition of securities by the
Portfolio.
A Portfolio may write covered call options on securities as a means of
increasing the yield on its fund and as a means of providing limited protection
against decreases in its market value. When a Portfolio writes an option, if the
underlying securities do not increase or decrease to a price level that would
make the exercise of the option profitable to the holder thereof, the option
generally will expire without being exercised and the Portfolio will realize as
profit the premium received for such option. When a call option of which a
Portfolio is the writer is exercised, the Portfolio will be required to sell the
underlying securities to the option holder at the strike price, and will not
participate in any increase in the price of such securities above the strike
price. When a put option of which a Portfolio is the writer is exercised, the
S-7
<PAGE>
Portfolio will be required to purchase the underlying securities at a price in
excess of the market value of such securities.
A segregated account is maintained to cover the difference between the
closing price of the index and the exercise price of the index option, expressed
in dollars multiplied by a specified number. Thus, unlike options on individual
securities, the ability of a Portfolio to enter into closing transactions
depends upon the existence of a liquid secondary market for such transactions.
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.
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 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.
S-8
<PAGE>
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.
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 AND DELAYED DELIVERY 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. 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
S-9
<PAGE>
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 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.
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. 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.
2. 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.
3. 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").
S-10
<PAGE>
4. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
5. 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 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 typically
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. However, certain Portfolios may rely upon SEC exemptive
orders issued to the Trust which permit the Portfolios to invest in other
investment companies beyond these percentage limitations. 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"),
S-11
<PAGE>
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 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,
S-12
<PAGE>
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.
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.
S-13
<PAGE>
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.
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'.
</TABLE>
S-14
<PAGE>
<TABLE>
<S> <C>
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.
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.
The Manager, a Delaware business trust, has its principal business offices
at Oaks, Pennsylvania 19456. SEI Investments Management Corporation ("SIMC"), a
wholly-owned subsidiary of SEI Investment Company ("SEI Investments"), is the
owner of all beneficial interest in SEI Management. Alfred P. West, Jr., Carmen
V. Romeo, and Henry H. Greer constitute the Board of Directors of SIMC, the
Investment Adviser to the Portfolio. Mr. West serves as Chairman of the Board of
Directors and Chief Executive Officer of SIMC and SEI Investments, Mr. Greer
serves as President and Chief Operating Officer of SIMC and SEI Investments, and
Chief Financial Officer of SEI Investments, and Mr. Romeo serves as Executive
Vice President and Treasurer of SEI Investments. SEI Investments 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 or
sub-administrator to the following other mutual funds: The Achievement Funds
Trust, The Advisors' Inner Circle Fund, The Arbor Fund, ARK Funds, Bishop Street
Funds, Boston 1784 Funds-Registered Trademark-, CoreFunds, Inc., CrestFunds,
Inc., CUFUND, The Expedition Funds, FMB Funds, Inc., First American Funds, Inc.,
First American Investment Funds, Inc., First American Strategy Funds, Inc.,
HighMark Funds, Marquis Funds-Registered Trademark-, Monitor Funds, Morgan
Grenfell Investment Trust, The PBHG Funds, Inc., PBHG Insurance Series Fund,
Inc., The Pillar Funds, Santa Barbara Group of Mutual Funds, Inc., 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, STI Classic Funds, STI Classic Variable Trust, and TIP Funds.
If operating expenses of any Portfolio exceed applicable limitations, 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 of 1986, as amended (the "Code"). The term "expenses" is
defined in such laws or regulations, and generally excludes brokerage
commissions, distribution expenses, taxes, interest and extraordinary expenses.
S-16
<PAGE>
For the fiscal years ended September 30, 1995, 1996 and 1997 the Portfolios
paid fees to the Manager as follows:
<TABLE>
<CAPTION>
MANAGEMENT FEES PAID MANAGEMENT FEES
(000) WAIVED (000)
---------------------- ------------------
1995 1996 1997 1995 1996 1997
------ ------ ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Balanced Portfolio........................ $ 210 $ 171 $ 176 $105 $ 55 $ 3
Bond Portfolio(1)......................... $ 223 $ 64 $ 58 $125 $ 57 $ 3
Capital Appreciation Portfolio............ $2,042 $ 898 $ 657 $212 $ 28 $ 0
Core Fixed Income Portfolio............... $1,154 $1,266 $2,235 $478 $339 $ 108
Equity Income Portfolio................... $1,303 $ 780 $ 663 $197 $ 40 $ 0
High Yield Bond Portfolio................. $ 16 $ 160 $ 501 $ 18 $ 42 $ 82
Large Cap Growth Portfolio................ $ 444 $1,484 $2,156 $ 0 $ 0 $ 0
Large Cap Value Portfolio................. $ 637 $1,598 $2,279 $112 $ 0 $ 0
Mid-Cap Portfolio......................... $ 189 $ 58 $ 97 $ 79 $ 28 $ 4
Small Cap Growth Portfolio................ $1,267 $1,102 $1,441 $102 $ 27 $ 0
Small Cap Value Portfolio................. $ 156 $ 490 $ 771 $ 6 $ 11 $ 0
</TABLE>
- ------------------------
* Not in operation during such period.
(1) The Bond Portfolio was terminated on December 31, 1997.
THE ADVISERS AND SUB-ADVISERS
The Advisory Agreement and certain of the Sub-Advisory Agreements provide
that SEI Investments Management Corporation ("SIMC" 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.
SIMC has obtained an exemptive order from the SEC that permits SIMC, 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 SIMC 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, 1995, 1996 and 1997, the Portfolios
paid advisory fees as follows:
<TABLE>
<CAPTION>
ADVISORY FEES PAID ADVISORY FEES
(000) WAIVED (000)
---------------------- ------------------
1995 1996(1) 1997 1995 1996 1997
------ ------ ------ ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Balanced Portfolio................................ $ 193 $ 253 $ 178 $ 0 $ 6 $ 26
Bond Portfolio(2)................................. $ 127 $ 119 $ 60 $ 0 $ 0 $ 0
Capital Appreciation Portfolio.................... $1,291 $1,033 $ 657 $ 0 $25 $ 94
Core Fixed Income Portfolio....................... $ 474 $1,424 $2,301 $ 0 $ 0 $ 0
Equity Income Portfolio........................... $ 883 $ 915 $ 662 $ 0 $22 $ 95
High Yield Bond Portfolio......................... $ 31 $ 282 $ 812 $ 0 $ 0 $ 0
Large Cap Growth Portfolio........................ $ 449 $1,498 $2,157 $58 $198 $308
Large Cap Value Portfolio......................... $ 645 $1,598 $2,279 $ 0 $ 0 $ 0
Mid-Cap Portfolio................................. $ 235 $ 98 $ 115 $ 0 $ 0 $ 0
Small Cap Growth Portfolio........................ $1,493 $2,098 $2,675 $ 0 $ 0 $ 0
Small Cap Value Portfolio......................... $ 299 $ 930 $1,432 $ 1 $ 0 $ 0
</TABLE>
- ------------------------
* Not in operation during such period.
(1) Includes amounts paid to the Portfolios' sub-advisers under the former
investment advisory agreements.
(2) The Bond Portfolio was terminated on December 31, 1997.
For the fiscal years ended September 30, 1995, 1996 and 1997, SIMC paid
sub-advisory fees as follows:
<TABLE>
<CAPTION>
SUB-ADVISORY FEES
PAID (000)
-------------------
1995 1996 1997
---- ---- ------
<S> <C> <C> <C>
Balanced Portfolio................................ $39 $157 $ 102
Bond Portfolio(1)................................. $16 $ 54 $ 28
Capital Appreciation Portfolio.................... $181 $621 $ 359
Core Fixed Income Portfolio....................... N/A $614 $ 950
Equity Income Portfolio........................... $146 $548 $ 369
High Yield Bond Portfolio......................... $16 $195 $ 585
Large Cap Growth Portfolio........................ $260 $832 $1,263
Large Cap Value Portfolio......................... $346 $894 $1,284
Mid-Cap Portfolio................................. $ 9 $ 62 $ 71
Small Cap Growth Portfolio........................ $205 $1,574 $1,966
Small Cap Value Portfolio......................... $240 $595 $1,061
</TABLE>
- ------------------------
* Not applicable during such period.
(1) The Bond Portfolio was terminated on December 31, 1997.
S-18
<PAGE>
DISTRIBUTION AND SHAREHOLDER SERVICING
The Trust has adopted a Distribution Agreement for the Portfolios. The Trust
has also adopted a Distribution Plan (the "Class D Plan") for the Class D shares
of the Small Cap Growth Portfolio 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 Class
D Plan and the Distribution Agreement are in the best interests of the
shareholders. Continuance of the Class D Plan must be approved annually by a
majority of the Trustees of the Trust and by a majority of the Qualified
Trustees, as defined in the Plan. The Class D Plan requires that quarterly
written reports of amounts spent under the Class D Plan and the purposes of such
expenditures be furnished to and reviewed by the Trustees. The Class D 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 Class D Plan will require
approval by a majority of the Trustees of the Trust and of the Qualified
Trustees.
The Class D Plan provides that the Trust will pay a fee of up to .30% of the
average daily net assets of the Small Cap Growth Portfolio's Class D shares that
the Distributor can use to compensate broker-dealers and service providers,
including SEI Investments Distribution Co. and its affiliates, which provide
distribution-related services to the Small Cap Growth Portfolio 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; and automatically investing
customer account cash balances.
Except to the extent that the Manager and 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
shareholder services, the Trust may be required to alter materially or
discontinue its arrangements with such financial institutions.
S-19
<PAGE>
For the fiscal year ended September 30, 1997, the Portfolios incurred the
following distribution expenses:
<TABLE>
<CAPTION>
AMOUNT PAID
TO 3RD
PARTIES BY
THE PROSPECTUS
DISTRIBUTOR PRINTING AND
FOR MAILING
DISTRIBUTION COSTS (NEW
RELATED SALES SHAREHOLDERS
TOTAL SERVICES EXPENSES ADVERTISING ONLY)
PORTFOLIO/CLASS ($AMOUNT) ($AMOUNT) ($AMOUNT) ($AMOUNT) ($AMOUNT)
- -------------------------------------------------- --------- ----------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
CLASS D
Small Cap Growth Portfolio...................... $ 4,557 4,$557 $ 0 $ 0 $ 0
<CAPTION>
COSTS ASSOCIATED
WITH REGISTRATION
PORTFOLIO/CLASS FEES ($AMOUNT)
- -------------------------------------------------- -----------------
<S> <C>
CLASS D
Small Cap Growth Portfolio...................... $ 0
</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 Investments, Oaks, Pennsylvania 19456. Certain officers
of the Trust also serve as officers of some or all of the following: The
Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund, ARK
Funds, Bishop Street Funds, Boston 1784 Funds-Registered Trademark-, CoreFunds,
Inc., CrestFunds, Inc., CUFUND, The Expedition Funds, FMB Funds, Inc., First
American Funds, Inc., First American Investment Funds, Inc., First American
Strategy Funds, Inc., HighMark Funds, Marquis Funds-Registered Trademark-,
Monitor Funds, Morgan Grenfell Investment Trust, The PBHG Funds, Inc., PBHG
Insurance Series Fund, Inc., The Pillar Funds, Santa Barbara Group of Mutual
Funds, Inc., 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 TIP Funds, each of which is an open-end management
investment company managed by SEI Fund Management or its affiliates and, except
for Santa Barbara Group of Mutual Funds, Inc., are distributed by SEI
Investments Distribution Co.
ROBERT A. NESHER (DOB 08/17/46)--Chairman of the Board of
Trustees*--Currently performs various services on behalf of SEI Investments for
which Mr. Nesher is compensated. Executive Vice President of SEI Investments,
1986-1994. Director and Executive Vice President of the Manager and the
Distributor, 1981-1994. Trustee of the Arbor Fund, Marquis
Funds-Registered Trademark-, The Advisors' Inner Circle Fund, The Expedition
Funds, SEI Liquid Asset Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI
Index Funds, SEI Asset Allocation Trust, SEI Institutional Investments Trust,
SEI International Trust, Boston 1784 Funds-Registered Trademark-, Pillar Funds
and Rembrandt Funds-Registered Trademark-.
WILLIAM M. DORAN (DOB 05/26/40)--Trustee*--2000 One Logan Square,
Philadelphia, PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm), counsel
to the Trust, Manager, Adviser and Distributor, Director and Secretary of SEI
Investments and Secretary of the Manager, Adviser and Distributor. Trustee of
The Arbor Fund, Marquis Funds-Registered Trademark-, The Advisors' Inner Circle
Fund, The Expedition Funds, SEI Liquid Asset Trust, SEI Daily Income Trust, SEI
Tax Exempt Trust, SEI Index Funds, SEI Asset Allocation Trust, SEI Institutional
Investments Trust and SEI International 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. Retired.
Publisher of the Paoli News and the Paoli Republican and Editor of the Paoli
Republican from January 1981 to 1997. President, H&W Distribution, Inc., since
July 1984. Executive Vice President, Trust Department, Harris Trust and Savings
Bank and Chairman of the Board of Directors of The Harris Trust Company of
Arizona before January 1981. Trustee of STI Classic Funds, SEI Liquid Asset
Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI Index
S-20
<PAGE>
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-, The 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**--Retired; Partner, Dechert Price &
Rhoads, from September 1987-December 1993; Trustee of The Arbor Fund, Marquis
Funds-Registered Trademark-, The Advisors' Inner Circle Fund, The Expedition
Funds, SEI Liquid Asset Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI
Index Funds, SEI Asset Allocation Trust, SEI Institutional Investments Trust,
and SEI International Trust.
GEORGE J. SULLIVAN, JR. (DOB 11/13/42)--Trustee**--General Partner, Teton
Partners, L.P., since 1991; Chief Financial Officer, Noble Partners, L.P., since
1991; Treasurer and Clerk, Peak Asset Management, Inc., since 1991; Trustee,
Navigator Securities Lending Trust, since 1995. Trustee of SEI Liquid Asset
Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI 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, Adviser 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, Adviser and Distributor since
1988.
KEVIN P. ROBINS (DOB 04/15/61)--Vice President and Assistant
Secretary--Senior Vice President and General Counsel of SEI Investments, the
Manager, Adviser and Distributor since 1994. Vice President and Assistant
Secretary of SEI Investments, the Manager, Adviser 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, Adviser and Distributor.
KATHRYN L. STANTON (DOB 11/19/58)--Vice President and Assistant
Secretary--Vice President, Deputy General Counsel and Assistant Secretary of SEI
Investments, the Manager, Adviser and Distributor since 1994. Associate, Morgan,
Lewis & Bockius LLP (law firm), 1989-1994.
MARK E. NAGLE (DOB 10/20/59)--Controller and Chief Financial Officer--Vice
President of Fund Accounting and Administration for SEI Fund Resources and the
Manager since 1996. Vice President of Fund Accounting, BISYS Fund Services
1995-1996. Senior Vice President and Site Manager, Fidelity Investments
(1981-1995).
TODD CIPPERMAN (DOB 02/14/66)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI Investments, the Manager, Adviser and
the Distributor since 1995. Associate, Dewey Ballantine (law firm) (1994-1995).
Associate, Winston & Strawn (law firm) (1991-1994).
- ------------------------
* 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.
S-21
<PAGE>
Compensation of officers and affiliated Trustees of the Trust is paid by the
Manager. For the fiscal year ended September 30, 1997, the Trust paid the
following amounts to the Trustees.
<TABLE>
<CAPTION>
AGGREGATE PENSION OR
COMPENSATION FROM RETIREMENT BENEFITS ESTIMATED ANNUAL TOTAL COMPENSATION FROM REGISTRANT
REGISTRANT FOR FYE ACCRUED AS PART OF BENEFITS UPON AND FUND COMPLEX PAID TO DIRECTORS
NAME OF PERSON AND POSITION 9/30/97 FUND EXPENSES RETIREMENT FOR FYE 9/30/97
- --------------------------------- ------------------ ------------------- ---------------- -----------------------------------
<S> <C> <C> <C> <C>
Robert A. Nesher, Trustee........ $ 0 $0 $0 $0 for services on 8 boards
William M. Doran, Trustee........ $ 0 $0 $0 $0 for services on 8 boards
F. Wendell Gooch, Trustee........ $25,367 $0 $0 $96,750 for services on 8 boards
Frank E. Morris, Trustee......... $25,367 $0 $0 $96,750 for services on 8 boards
James M. Storey, Trustee......... $25,367 $0 $0 $96,750 for services on 8 boards
George J. Sullivan, Trustee...... $25,367 $0 $0 $96,750 for services on 8 boards
</TABLE>
- ------------------------
Mr. Edward W. Binshadler serves as a consultant to the Audit Committee and
receives as compensation $5,000 per Audit Committee meeting attended.
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 such Portfolio over a specified 30-day
period. The yield is calculated by assuming that the income generated by the
investment during that period is generated 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............................................................ 2.61%
Bond Portfolio(1)............................................................. 5.65%
Capital Appreciation Portfolio................................................ 0.95%
Core Fixed Income Portfolio................................................... 6.05%
Equity Income Portfolio....................................................... 1.97%
High Yield Bond Portfolio..................................................... 7.68%
Large Cap Growth Portfolio.................................................... 0.11%
Large Cap Value Portfolio..................................................... 1.46%
Mid-Cap Portfolio............................................................. 0.54%
Small Cap Growth Portfolio.................................................... 0.00%
Small Cap Value Portfolio..................................................... 0.24%
CLASS D
Small Cap Growth Portfolio.................................................... 0.00%
</TABLE>
- ------------------------
(1) The Bond Portfolio was terminated on December 31, 1997.
S-22
<PAGE>
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.
Based on the foregoing, the average annual total returns for the Portfolios
from inception through September 30, 1997 and for the one, five and ten year
periods ended September 30, 1997, 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).................. 22.38% 12.40% * 12.15%
Bond Portfolio** Class A(2).................. 9.97% 7.48% 10.48% 9.34%
Capital Appreciation Portfolio Class A(3).................. 34.02% 17.18% * 16.34%
Core Fixed Income Portfolio Class A(4).................. 9.80% 6.44% 8.25% 8.00%
Equity Income Portfolio Class A(5).................. 33.46% 18.13% * 15.76%
High Yield Bond Portfolio Class A(6).................. 15.30% * * 16.00%
Large Cap Growth Portfolio Class A(7).................. 44.35% * * 33.58%
Large Cap Value Portfolio Class A(8).................. 44.12% 17.30% 12.10% 12.65%
Mid-Cap Portfolio Class A(9).................. 43.13% * * 18.77%
Small Cap Growth Portfolio Class A(10)................. 17.23% 23.76% * 23.07%
Class D(11) (no load)....... 16.80% 23.43% * 22.70%
Class D(11) (load).......... 10.95% 22.18% * 21.62%
Small Cap Value Portfolio Class A(12)................. 47.16% * * 28.19%
</TABLE>
- ------------------------
* Not in operation during period.
** The Bond Portfolio was terminated on December 31, 1997.
(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-23
<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.
Information about the market value of each portfolio security may be
obtained by SEI Management from an independent pricing service. 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 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.
Securities with remaining maturities of 60 days or less will be valued by
the amortized cost method, which involves valuing a security at its cost on the
date of purchase and thereafter (absent unusual circumstances) assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuations in general market rates of interest on the value of the
instrument. While this method provides certainty in valuation, it may result in
periods during which value, as determined by this method, is higher or lower
than the price the Trust would receive if it sold the instrument. During periods
of declining interest rates, the daily yield of a Portfolio may tend to be
higher than a like computation made by a company with identical investments
utilizing a method of valuation based upon market prices and estimates of market
prices for all of its portfolio securities. Thus, if the use of amortized cost
by a Portfolio resulted in a lower aggregate portfolio value on a particular
day, a prospective investor in a Portfolio would be able to obtain a somewhat
higher yield that would result from investment in a company utilizing solely
market values, and existing shareholders in the Portfolio would experience a
lower yield. The converse would apply during a period of rising interest rates.
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, Martin Luther King, Jr. 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
S-24
<PAGE>
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
NAME OF GROUP DISCOUNT STARTS
- ---------------------------------------------------------------------- --------------- ----------
<S> <C> <C>
BHC Securities, Inc. ................................................. 10% 12/29/94
First Security Investor Services, Inc. ............................... 10% 12/29/94
</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.
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 (i) does not legally bind the signer to purchase any set number
of shares and (ii) 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
S-25
<PAGE>
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 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 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
S-26
<PAGE>
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) at the close of
each quarter of a Portfolio's taxable year, at least 50% of the value of its
total assets must be represented by cash and cash items, U.S. government
securities, securities of other RICs and other securities, with such other
securities limited, in respect of any one issuer, to an amount that does not
exceed 5% of the value of a Portfolio's assets and that does not represent more
than 10% of the outstanding voting securities of such issuer; and (iii) 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-27
<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, SIMC 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, SIMC 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, may
direct a substantial portion of a Portfolio's brokerage to the Distributor. 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-28
<PAGE>
For the fiscal year ended September 30, 1997, the Portfolios paid the
following brokerage fees:
<TABLE>
<CAPTION>
TOTAL
BROKERAGE
COMMISSIONS
PAID TO THE
TOTAL $ AMOUNT DISTRIBUTOR
OF BROKERAGE % OF TOTAL % OF TOTAL TOTAL $ IN
TOTAL $ AMOUNT COMMISSIONS BROKERAGE BROKERED AMOUNT OF CONNECTION
OF BROKERAGE PAID TO COMMISSIONS TRANSACTIONS BROKERAGE WITH
COMMISSIONS AFFILIATED PAID TO EFFECTED THROUGH COMMISSIONS REPURCHASE
PAID IN FYE BROKERS IN AFFILIATED AFFILIATED PAID FOR AGREEMENT
FUND 9/30/97 FYE 9/30/97 BROKERS BROKERS RESEARCH TRANSACTIONS
- ----------------------------------- -------------- -------------- ------------ ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Balanced Portfolio................. $89,948 $7,443 8.27% 7.84% $ $1,180
Bond Portfolio(1).................. $0 $0 0 0% $0 $398
Capital Appreciation Portfolio..... $720,618 $50,855 6.96% 5.67% $ $6,882
Core Fixed Income Portfolio........ $0 $0 0 0 $0 $50,830
Equity Income Portfolio............ $273,210 $119,347 43.68% 29.09% $ $3,041
High Yield Bond Portfolio.......... $0 $0 0 0 $0 $0
Large Cap Growth Portfolio......... $853,946 $383,294 44.96% 35.35% $ $5,829
Large Cap Value Portfolio.......... $967,297 $235,717 24.37% 20.08% $ $7,734
Mid-Cap Portfolio.................. $41,511 $0 0 0 $610
Small Cap Growth Portfolio......... $803,002 $77,385 9.64% 7.26% $ $13,669
Small Cap Value Portfolio.......... $639,229 $40,859 6.39% 3.40% $ $6,997
</TABLE>
- ------------------------
* Not in operation during such period.
(1) The Bond Portfolio was terminated on December 31, 1997.
For the fiscal years ended September 30, 1995 and 1996, 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 1995 1996 1995 1996
- --------------------------------------------- ---------- ---------- -------- --------
Balanced Portfolio........................... $ 148,731 $ 117,731 $ 0 $ 14,167
Bond Portfolio(1)............................ $ 0 $ 0 $ 0 $ 0
Capital Appreciation Portfolio............... $1,577,921 $ 901,374 $ 20,042 $ 30,830
Core Fixed Income Portfolio.................. $ 0 $ 125,097 $ 0 $ 18,090
Equity Income Portfolio...................... $ 648,410 $ 387,891 $ 33,725 $ 5,760
High Yield Bond Portfolio.................... $ 0 $ 0 $ 0 $ 0
Large Cap Growth Portfolio................... $ 270,371 $ 737,152 $192,232 $ 65,986
Large Cap Value Portfolio.................... $ 804,877 $ 784,758 $115,823 $186,841
Mid-Cap Portfolio............................ $ 264,386 $ 40,892 $ 0 $ 22,811
Small Cap Growth Portfolio................... $ 0 $ 551,149 $ 0 $ 15,867
Small Cap Value Portfolio.................... $ 191,324 $ 500,459 $ 2,814 $ 25,669
</TABLE>
- ------------------------
(1) The Bond Portfolio was terminated on December 31, 1997.
Class D shareholders paid the following sales charges:
<TABLE>
<CAPTION>
DOLLAR AMOUNT OF CHARGES
DOLLAR AMOUNT OF CHARGES RETAINED BY SFS
------------------------------- -----------------------------
PORTFOLIO/CLASS 1995 1996 1997 1995 1996 1997
- --------------------------------------------- ---------- ----- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Small Cap Growth Portfolio--Class D.......... $11,874.23 N/A N/A $1,455.18 N/A N/A
</TABLE>
S-29
<PAGE>
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, 1996 and 1997 was as follows:
<TABLE>
<CAPTION>
TURNOVER
RATE
-----------
FUND 1996 1997
- ------------------------------------------------------------ ---- ----
<S> <C> <C>
Balanced Portfolio.......................................... 143% 197%
Bond Portfolio(1)........................................... 66% 305%
Capital Appreciation Portfolio.............................. 153% 178%
Core Fixed Income Portfolio................................. 311% 216%
Equity Income Portfolio..................................... 43% 40%
High Yield Bond Portfolio................................... 55% 68%
Large Cap Growth Portfolio.................................. 90% 73%
Large Cap Value Portfolio................................... 75% 67%
Mid-Cap Portfolio........................................... 101% 92%
Small Cap Growth Portfolio.................................. 167% 107%
Small Cap Value Portfolio................................... 121% 98%
</TABLE>
- ------------------------
(1) The Bond Portfolio was terminated on December 31, 1997.
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.
S-30
<PAGE>
The Trust is required to identify any securities of its "regular brokers or
dealers" (as such term is defined in the 1940 Act) which the Trust has acquired
during its most recent fiscal year. As of September 30, 1997, the Trust held the
following securities:
<TABLE>
<CAPTION>
PORTFOLIO TYPE OF SECURITY NAME OF ISSUER AMOUNT (000)
- ------------------------------ -------------------------- -------------------------- -------------
<S> <C> <C> <C>
Large Cap Growth Equity Merrill Lynch & Co. $ 9,021
Equity Morgan Stanley $ 9,353
Repurchase Agreement Lehman Brothers $ 7,613
Small Cap Growth Repurchase Agreement J.P. Morgan Securities, $ 19,147
Inc. ("J.P. Morgan")
Equity Income Equity J.P. Morgan $ 3,014
Repurchase Agreement J.P. Morgan $ 9,587
Large Cap Value Equity Lehman Brothers $ 4,177
Debt J.P. Morgan $ 24,298
Equity Morgan Stanley $ 2,187
Equity Merrill Lynch $ 7,018
Equity Salomon Brothers, Inc. $ 3,827
Equity Bear Stearns $ 9,838
Repurchase Agreement J.P. Morgan $ 17,004
Small Cap Value Repurchase Agreement Lehman Brothers $ 23,270
Mid-Cap Equity Bear Stearns $ 695
Equity Paine Webber $ 196
Repurchase Agreement J.P. Morgan $ 2,767
Capital Appreciation Repurchase Agreement J.P. Morgan $ 5,834
Balanced Debt Bear Stearns $ 807
Debt Merrill Lynch $ 1,126
Repurchase Agreement J.P. Morgan $ 1,435
Core Fixed Income Debt Bear Stearns $ 5,688
Debt Merrill Lynch $ 3,758
Debt Lehman Brothers $ 10,060
Debt Paine Webber $ 1,204
Debt J.P. Morgan $ 2,225
Debt Goldman Sachs $ 4,612
Debt Salomon Brothers $ 3,418
Repurchase Agreement J.P. Morgan $ 47,602
</TABLE>
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 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
S-31
<PAGE>
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 1, 1998, 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.
<TABLE>
<CAPTION>
ADDRESS NUMBER OF SHARES PERCENTAGE
- --------------------------------- --------------------------------- ---------------------------------
<S> <C> <C>
Large Cap Growth
SEI Trust Company 31,500,333.6540 67.39%
Attn: Jackie Esposito
Oaks, PA 19456
Small Cap Value
SEI Trust Company 14,239,294.8180 64.03%
Attn: Jackie Esposito
Oaks, PA 19456
High Yield Bond
SEI Trust Company 15,033,231.8470 83.99%
Attn: Jackie Esposito
Oaks, PA 19456
</TABLE>
S-32
<PAGE>
<TABLE>
<CAPTION>
ADDRESS NUMBER OF SHARES PERCENTAGE
- --------------------------------- --------------------------------- ---------------------------------
<S> <C> <C>
Large Cap Value
SEI Trust Company 34,885,484.7750 66.14%
Attn: Jackie Esposito
Oaks, PA 19456
Balanced
SEI Trust Company 2,633,016.0330 65.20%
Attn: Jackie Esposito
Oaks, PA 19456
NABANK & CO 492,134.9540 12.19%
Attn: Record Keeping
P.O. Box 2180
Tulsa, OK 74101-2180
Capital Appreciation
Eleven & Co 679,781.8300 6.42%
Trust Company Bank
Attn: Gregory Kirk
P.O. Box 105870
Atlanta, GA 30348-5870
Charles Schawb and Co. 787,471.9950 7.43%
101 Montgomery Street
Attn: Mutual Funds Dept.
San Francisco, CA 94101-4122
Valle 538,251.1740 5.08%
c/o Marshall & Iisley
1000 North Water Street - TR11
Milwaukee, WI 53202-3197
Equity Income
SEI Trust Company 2,795,580.9590 26.39%
Attn: Jackie Esposito
Oaks, PA 19456
Sheldon & Co. (Integra) 767,231.6470 7.70%
c/o National City
Attn: Trust Mutual Funds
P.O. Box 94777, LOC 5312
Cleveland, OH 44101-4777
Kaw & Co. Y Bank 516,720.2430 5.19%
c/o One Valley Bank
Attn: Pam Taylor
P.O. Box 1793
One Valley Square
Charleston, WV 25309-9045
</TABLE>
S-33
<PAGE>
<TABLE>
<CAPTION>
ADDRESS NUMBER OF SHARES PERCENTAGE
- --------------------------------- --------------------------------- ---------------------------------
<S> <C> <C>
Meg and Co. 524,181.2140 5.26%
c/o United States National Bank
Attn: Debbie Moraca
P.O. Box 520
Johnstown, PA 15907-0520
Core Fixed Income
SEI Trust Company 5,572,710.6520 5.18%
Attn: Jackie Esposito
Oaks, PA 19456
SEI Trust Company 66,446,283.4470 61.81%
Attn: Jackie Esposito
Oaks, PA 19456
Small Cap Growth
Valle 1,760,287.0030 5.59%
c/o Marshall & Iisley
1000 North Water Street - TR11
Milwaukee, WI 53202-3197
SEI Trust Company 14,297,190.5680 45.40%
Attn: Jackie Esposito
Oaks, PA 19456
Mid-Cap
FTC & Co. 125,794.9540 5.36%
Attn: Datalynx House
Account
P.O. Box 173736
BMS and Company 178,134.2520 7.60%
c/o Central Trust Bank
Attn: Wanda McGlade
P.O. Box 779
Jefferson City, MO 65102-0779
</TABLE>
EXPERTS
The financial statements incorporated by reference into this Statement of
Additional Information have been incorporated by reference in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
The Trust's financial statements for the fiscal year ended September 30,
1997, including notes thereto and the report of Price Waterhouse LLP thereon,
are herein incorporated by reference from the Trust's 1997 Annual Report. A copy
of the 1997 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, 1997 and Report of Independent Accountants dated
November 25, 1997 are incorporated by reference to the Statement of
Additional Information from Form N-30D filed on December 1, 1997 with
Accession Number 0000935069-97-000205.
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) Agreement and Declaration of Trust dated October 17, 1986 as originally
filed with Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on October 17, 1986 is filed herewith.
(1)(a) Amendment to the Declaration of Trust dated December 23, 1988 is
incorporated by reference to Post-Effective Amendment No. 27 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on December 19, 1997.
(2) By-Laws filed with Registrant's Registration Statement on Form N-1A (File
No. 33-9504) filed with the SEC on October 17, 1986.
(2)(a) Amended and Restated By-Laws are filed herewith.
(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 filed 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 filed 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 filed
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 filed 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 filed
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.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(5)(f) Investment Advisory Agreement between the Trust and Nicholas-Applegate
Capital Management with respect to the Trust's Mid-Cap Growth Portfolio
filed 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.
(5)(g) Investment Sub-Advisory Agreement between the SEI Investments 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 filed 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 filed 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, LLP with respect to the Trust's Large Cap Value Portfolio as
originally filed 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 is filed herewith.
(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.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(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.
(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 incorporated by reference to Post-Effective Amendment
No. 26 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on January 28, 1997.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
(5)(z) Investment Sub-Advisory Agreement between the Adviser and Furman Selz
Capital Management LLC with respect to the Trust's Small Cap Growth
Portfolio as previously filed with Post-Effective Amendment No. 26 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on January 28, 1997 is filed herewith.
(5)(aa) Investment Sub-Advisory Agreement between the Adviser and Provident
Investment Counsel, Inc. with respect to the Trust's Large Cap Growth
Portfolio as previously filed with Post-Effective Amendment No. 26 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on January 28, 1997 is filed herewith.
(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 incorporated by reference to Post-Effective Amendment No. 26 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on January 28, 1997.
(5)(cc) Investment Advisory Agreement between the Trust and the Adviser dated
December 16, 1994 is incorporated by reference to Post-Effective Amendment
No. 26 to Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on January 28, 1997.
(5)(dd) Investment Sub-Advisory Agreement between the Adviser and Western Asset
Management Company dated November 13, 1995 is filed herewith.
(5)(ee) Investment Sub-Advisory Agreement between the Adviser and Sanford C.
Bernstein Co., Inc. dated December 15, 1997 is filed herewith.
(5)(ff) Investment Sub-Advisory Agreement between the Adviser and Pacific Alliance
Capital Management (formerly, Merus-UCA Capital Management) dated April 1,
1996 is filed herewith.
(5)(gg) Investment Sub-Advisory Agreement between the Advisor and STI Capital
Management, N.A. (formerly "Sun Bank Capital Management, N.A.") dated July
10, 1995 is filed herewith.
(6) Distribution Agreement between the Trust and SEI Investments Distribution
Co. as originally filed with Registrant's Registration Statement on Form
N-1A (File No. 33-9504) filed with the SEC on October 17, 1986 is filed
herewith.
(7) Not Applicable.
(8)(a) Custodian Agreement between the Trust and CoreStates Bank, N.A. (formerly
Philadelphia National Bank) as originally filed with 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 is filed herewith.
(8)(b) Custodian Agreement between the Trust and United States National Bank of
Oregon filed with 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 Investments Management
Corporation as originally filed with Exhibit (5)(a) to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC
on October 17, 1986 is filed herewith.
(9)(b) Schedule C to Management Agreement between the Trust and SEI Investments
Management Corporation adding the Mid-Cap Growth Portfolio as originally
filed as Exhibit (5)(j) 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 is filed herewith.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
(9)(c) Schedule D to Management Agreement between the Trust and SEI Investments
Management Corporation adding the Real Estate Securities Portfolio filed
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 SIMC and SEI Fund Management
dated August 21, 1996 is incorporated by reference to Post-Effective
Amendment No. 26 to Registrant's Registration Statement on Form N-1A (File
No. 33-9504) filed with the SEC on January 28, 1997.
(10) Opinion and Consent of Counsel as originally filed with 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 is filed herewith.
(11) Consent of Independent Accountants is filed herewith.
(12) Not Applicable.
(13) Not Applicable.
(14) Not Applicable.
(15)(a) Distribution Plan pursuant to Rule 12b-1 (Class A) filed with 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) filed with 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) Distribution Plan pursuant to Rule 12b-1 (ProVantage Class) filed with
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 incorporated by reference to Post-
Effective Amendment No. 26 to Registrant's Registration Statement on Form
N-1A (File No. 33-9504) filed with the SEC on January 28, 1997.
(15)(e) Shareholder Service Plan and Agreement with respect to the Class A shares is
incorporated by reference to Post-Effective Amendment No. 26 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on January 28, 1997.
(16) Performance Quotation Computation as originally filed with 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 is filed herewith.
(17) Financial Data Schedules are filed herewith.
(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
incorporated by reference to Post-Effective Amendment No. 26 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed
with the SEC on January 28, 1997.
(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 incorporated by reference to Post-Effective
Amendment No. 26 to Registrant's Registration Statement on Form N-1A (File
No. 33-9504) filed with the SEC on January 28, 1997.
</TABLE>
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:
None.
5
<PAGE>
Item 26. NUMBER OF HOLDERS OF SECURITIES:
As of January 1, 1998:
<TABLE>
<CAPTION>
NUMBER OF
RECORD
TITLE OF CLASS HOLDERS
- ---------------------------------------------------------------------------------- -------------
<S> <C>
Shares of beneficial interest, without par value--
Tax-Managed Large Cap Fund
Class A......................................................................... 0
Large Cap Value Portfolio
Class A......................................................................... 327
Large Cap Growth Portfolio
Class A......................................................................... 278
Small Cap Value Portfolio
Class A......................................................................... 417
Small Cap Growth Portfolio
Class A......................................................................... 454
Class D......................................................................... 0
Mid-Cap Portfolio
Class A......................................................................... 106
Capital Appreciation Portfolio
Class A......................................................................... 212
Equity Income Portfolio
Class A......................................................................... 198
Balanced Portfolio
Class A......................................................................... 42
Core Fixed Income Portfolio
Class A......................................................................... 217
High Yield Bond Portfolio
Class A......................................................................... 111
</TABLE>
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,
6
<PAGE>
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., pursuant
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 and the Tax-Managed Large Cap Funds. 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. pursuant
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.
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 pursuant 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.
pursuant to the Advisers Act (SEC File No. 801-48433).
7
<PAGE>
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 3786, Orlando, FL 32802.
<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
Elliott A. Perny -- --
Executive Vice President
Chief Portfolio Manager
Larry M. Cole -- --
Senior Vice President
Ronald Schwartz -- --
Senior Vice President
L. Earl Denney -- --
Executive Vice President
Stuart F. Van Arsdale -- --
Senior Vice President
Christopher A. Jones -- --
Senior Vice President
Mills A. Riddick -- --
Senior Vice President
David E. West -- --
Vice President
</TABLE>
8
<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 Portfolio. 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
Minoru Noda UnionBanCal Corporation Vice Chairman
Director of Adviser,
Vice Chairman Credit & Finance
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION CONNECTION WITH
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY OTHER COMPANY
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
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>
AMERICAN EXPRESS ASSET MANAGEMENT GROUP INC.
American Express Asset Management Group Inc. ("AEAMG") is a money manager
for the Registrant's Large Cap Growth Portfolio. The principal address of AEAMG
is IDS Tower 10, Minneapolis, Minnesota 55400-0010. AEAMG is an investment money
manager registered under the Advisers Act.
The list required by this Item 28 of officers and directors of AEAMG,
together with information as to any 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 AEAMG pursuant to the Advisers Act (SEC File No. 801-259743).
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., pursuant to the Advisers Act (SEC File No. 801-49059).
FIRST OF AMERICA INVESTMENT CORPORATION
First of America Investment Corporation ("First America") is an investment
sub-adviser for the Registrant's Small Cap Fund. The principal business address
of First America is 303 North Rose Street, Suite 500, Kalamazoo, Michigan 49007.
First America is an investment sub-adviser registered under the Advisers Act.
10
<PAGE>
The list required by this Item 28 of officers and directors of First
America, 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 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 pursuant 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).
LSV ASSET MANAGEMENT
LSV Asset Management is an investment sub-adviser for the Large Cap Value
and Small Cap Value Portfolios. 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 pursuant 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.
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.,
pursuant to the Advisers Act (SEC File No. 801-30067).
MELLON EQUITY ASSOCIATES, LLP
Mellon Equity Associates, LLP is an investment sub-adviser for the Large Cap
Value Portfolio and the Tax-Managed Large Cap Funds. The principal address of
Mellon Equity Associates is 500 Grant Street,
11
<PAGE>
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 pursuant to the Advisers Act
(SEC File No. 801-28692).
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
Nicholas-Applegate Capital Management ("Nicholas-Applegate"), is an
investment sub-adviser for the Small Cap Growth Portfolio. The principal address
of Nicholas-Applegate is 600 West Broadway, 29th Floor, San Diego, California
92101. Nicholas-Applegate is an investment adviser registered under the Advisers
Act.
The list required by this Item 28 of officers and directors of
Nicholas-Applegate, 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 pursuant 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 Portfolio. 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).
SANFORD C. BERNSTEIN & CO., INC.
Sanford C. Bernstein & Co., Inc., is an investment sub-adviser for the
Tax-Managed Fund and Large Cap Value Portfolio. The principal address of Sanford
C. Bernstein & Co., Inc., is 767 Fifth Avenue, New York, New York 10153-0185.
Sanford C. Bernstein & Co., Inc., is an investment adviser registered under the
Advisers Act.
The list required by this Item 28 of officers and directors of Sanford C.
Bernstein & Co., 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 Sanford C. Bernstein & Co., Inc., to the
Advisers Act (SEC File No. 801-10488).
SEI INVESTMENTS MANAGEMENT CORPORATION
SEI Investments Management Company ("SIMC") is an investment adviser for
each of the Portfolios. The principal address of SIMC is Oaks, Pennsylvania
19456. SIMC is an investment adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of SIMC,
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 SIMC pursuant to the Advisers Act (SEC File No. 801-24593).
12
<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 pursuant to the Advisers Act
(SEC File No. 801-30019).
WESTERN ASSET MANAGEMENT COMPANY
Western Asset Management Company is an investment sub-adviser for the Bond
and Core Fixed Income Portfolios. 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 pursuant
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.
Registrant's distributor, SEI Investments Distribution Co. (the
"Distributor"), 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 International Trust August 30, 1988
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
Boston 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
</TABLE>
13
<PAGE>
<TABLE>
<S> <C>
FMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
The Expedition Funds June 9, 1997
</TABLE>
The Distributor 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 & --
President-Investment Advisory Group
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President, President-Investment --
Services Division
Dennis J. McGonigle Executive Vice President --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
David G. Lee Senior Vice President President and Chief
Executive Officer
Jack May Senior Vice President --
A. Keith McDowell Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
Kevin P. Robins Senior Vice President, General Counsel & Secretary Vice President and
Assistant Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Robert Aller Vice President --
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President and
Assistant Secretary
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------- ------------------------------------------------------ ------------------------
<S> <C> <C>
Robert Crudup Vice President & Managing Director --
Barbara Doyne Vice President --
Jeff Drennen Vice President --
Vic Galef Vice President & Managing Director --
Kathy Heilig Vice President & Treasurer --
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
John Krzeminski Vice President & Managing Director --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Joanne Nelson Vice President --
Sandra K. Orlow Vice President & Assistant Secretary Vice President and
Assistant Secretary
Cynthia M. Parrish Vice President & Assistant Secretary --
Donald Pepin Vice President & Managing Director --
Kim Rainey Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President and
Assistant Secretary
Wayne M. Withrow Vice President & Managing Director --
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
15
<PAGE>
(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
American Express Asset Management Group Inc.
IDS Tower 10
Minneapolis, Minnesota 55400-0010
BEA Associates
One Citicorp Center
153 East 53rd Street
New York, NY 10022
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
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
LSV Asset Management
181 W. Madison Avenue
Chicago, IL 60602
Martingale Asset Management, L.P.
222 Berkeley Street
Boston, MA 02210
Mellon Equity Associates, LLP
500 Grant Street
Suite 3700
Pittsburgh, PA 15258
Nicholas-Applegate Capital Management, Inc.
600 West Broadway, 29th Floor
San Diego, CA 92101
16
<PAGE>
Pacific Alliance Capital Management
475 Sansome Street
San Francisco, CA 94104
Provident Investment Counsel, Inc.
300 North Lake Avenue
Pasadena, CA 91101
Sanford C. Bernstein & Co., Inc.
767 Fifth Avenue
New York, NY 10153-0185
SEI Investments 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.
Registrant hereby undertakes to file a post-effective amendment, using
financial statements with respect to the Tax-Managed Large Cap Fund which need
not be certified, within four to six months from the effective date of
Post-Effective Amendment No. 27.
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.
17
<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. 28 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 27th day of January, 1998.
SEI INSTITUTIONAL MANAGED TRUST
By: /s/ David G. Lee
-----------------------------------------
David G. Lee
PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacity on the dates indicated.
*
- ------------------------------ Trustee January 27, 1998
George J. Sullivan, Jr.
*
- ------------------------------ Trustee January 27, 1998
William M. Doran
*
- ------------------------------ Trustee January 27, 1998
F. Wendell Gooch
*
- ------------------------------ Trustee January 27, 1998
Frank E. Morris
*
- ------------------------------ Trustee January 27, 1998
James M. Storey
*
- ------------------------------ Trustee January 27, 1998
Robert A. Nesher
/s/ Mark E. Nagle
- ------------------------------ Controller & Chief January 27, 1998
Mark E. Nagle Financial Officer
/s/ David G. Lee
- ------------------------------ President & Chief January 27, 1998
David G. Lee Executive Officer
*By: /s/ David G. Lee
-------------------------
David G. Lee
ATTORNEY IN FACT
19
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
- --------------------
<S> <C>
EX-99.B(1) Agreement and Declaration of Trust dated October 17, 1986 as originally filed with
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed with
the SEC on October 17, 1986 is filed herewith.
EX-99.B(1)(a) Amendment to the Declaration of Trust dated December 23, 1988 is incorporated by
reference to Post-Effective Amendment No. 27 to Registrant's Registration
Statement on Form N-1A (File No. 33-9504) filed with the SEC on December 19,
1997.
EX-99.B(2) By-Laws filed with Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on October 17, 1986.
EX-99.B(2)(a) Amended and Restated By-Law are filed herewith.
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 filed 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 filed 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 filed 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 filed 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 filed 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 filed 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>
<CAPTION>
EXHIBIT
- --------------------
<S> <C>
EX-99.B(5)(g) Investment Sub-Advisory Agreement between the SEI Investments 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.
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 filed 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 filed 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, LLP
with respect to the Trust's Large Cap Value Portfolio filed 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 is filed
herewith.
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 incorporated by reference to Post-Effective Amendment No. 26 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed with
the SEC on January 28, 1997.
EX-99.B(5)(z) Investment Sub-Advisory Agreement between the Adviser and Furman Selz Capital
Management LLC with respect to the Trust's Small Cap Growth Portfolio as
previously filed with Post-Effective Amendment No. 26 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on
January 28, 1997 is filed herewith.
EX-99.B(5)(aa) Investment Sub-Advisory Agreement between the Adviser and Provident Investment
Counsel, Inc. with respect to the Trust's Large Cap Growth Portfolio is
incorporated by reference to Post-Effective Amendment No. 26 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on
January 28, 1997 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
incorporated by reference to Post-Effective Amendment No. 26 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on
January 28, 1997.
EX-99.B(5)(cc) Investment Advisory Agreement between the Trust and the Adviser dated December 16,
1994 is incorporated by reference to Post-Effective Amendment No. 26 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed with
the SEC on January 28, 1997.
EX-99.B(5)(dd) Investment Sub-Advisory Agreement between the Adviser and Western Asset Management
Company dated November 13, 1995 is filed herewith.
EX-99.B(5)(ee) Investment Sub-Advisory Agreement between the Adviser and Sanford C. Bernstein Co.,
Inc. dated December 15, 1997 is filed herewith.
EX-99.B(5)(ff) Investment Sub-Advisory Agreement between the Adviser and Pacific Alliance Capital
Management (formerly, Merus-UCA Capital Management) dated April 1, 1996 is filed
herewith.
EX-99.B(5)(gg) Investment Sub-Advisory Agreement between the Adviser and STI Capital Management,
N.A. (formerly "Sun Bank Capital Management, N.A.") dated July 10, 1995 is filed
herewith.
EX-99.B(6) Distribution Agreement between the Trust and SEI Investments Distribution Co. as
originally filed with Registrant's Registration Statement on Form N-1A (File No.
33-9504) filed with the SEC on October 17, 1986 is filed herewith.
EX-99.B(7) Not Applicable.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- --------------------
<S> <C>
EX-99.B(8)(a) Custodian Agreement between the Trust and CoreStates Bank, N.A. (formerly
Philadelphia National Bank) as originally filed with 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 is filed herewith.
EX-99.B(8)(b) Custodian Agreement between the Trust and United States National Bank of Oregon
filed with 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 Investments Management Corporation
as originally filed with Exhibit (5)(a) to Registrant's Registration Statement on
Form N-1A (File No. 33-9504) filed with the SEC on October 17, 1986 is filed
herewith.
EX-99.B(9)(b) Schedule C to Management Agreement between the Trust and SEI Investments Management
Corporation adding the Mid-Cap Growth Portfolio as originally filed as Exhibit
(5)(j) 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 is filed
herewith.
EX-99.B(9)(c) Schedule D to Management Agreement between the Trust and SEI Investments Management
Corporation adding the Real Estate Securities Portfolio filed 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.
EX-99.B(9)(d) Consent to Assignment and Assumption between SIMC and SEI Fund Management dated
August 21, 1996 is incorporated by reference to Post-Effective Amendment No. 26
to Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed with
the SEC on January 28, 1997.
EX-99.B(10) Opinion and Consent of Counsel as originally filed with 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 is filed herewith.
EX-99.B(11) Consent of Independent 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) filed with 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) filed with 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) Distribution Plan pursuant to Rule 12b-1 (ProVantage Class) filed with
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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- --------------------
<S> <C>
EX-99.B(15)(d) Amended and Restated Distribution Plan is incorporated by reference to
Post-Effective Amendment No. 26 to Registrant's Registration Statement on Form
N-1A (File No. 33-9504) filed with the SEC on January 28, 1997.
EX-99.B(15)(e) Shareholder Service Plan and Agreement with respect to the Class A shares is
incorporated by reference to Post-Effective Amendment No. 26 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on
January 28, 1997.
EX-99.B(16) Performance Quotation Computation as originally filed with 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 is filed herewith.
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
incorporated by reference to Post-Effective Amendment No. 26 to Registrant's
Registration Statement on Form N-1A (File No. 33-9504) filed with the SEC on
January 28, 1997.
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 incorporated by reference to Post-Effective Amendment No. 26 to
Registrant's Registration Statement on Form N-1A (File No. 33-9504) filed with
the SEC on January 28, 1997.
EX-27.1 Financial Data Schedule for the Class A Large Cap Growth Portfolio.
EX-27.2 Financial Data Schedule for the Class A Small Cap Value Portfolio.
EX-27.3 Financial Data Schedule for the Class A High Yield Bond Portfolio.
EX-27.4 Financial Data Schedule for the Class A Large Cap Value Portfolio.
EX-27.5 Financial Data Schedule for the Class A Balanced Portfolio.
EX-27.6 Financial Data Schedule for the Class A Capital Appreciation Portfolio.
EX-27.7 Financial Data Schedule for the Class A Equity Income Portfolio.
EX-27.8 Financial Data Schedule for the Class A Core Fixed Income Portfolio.
EX-27.9 Financial Data Schedule for the Class A Bond Portfolio.
EX-27.10 Financial Data Schedule for the Class A Small Cap Growth Portfolio.
EX-27.11 Financial Data Schedule for the Class D Small Cap Growth Portfolio.
EX-27.12 Financial Data Schedule for the Class A Mid-Cap Portfolio.
</TABLE>
<PAGE>
Exhibit 99.B(1)
TRUSTFUNDS INSTITUTIONAL MANAGED TRUST
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST dated the 17th day of October, 1986,
by the Trustees hereunder, and by the holders of Shares of beneficial
interest to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of a Massachusetts voluntary association with
transferable Shares in accordance with the provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the pro rata benefit of the holders
from time to time of Shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
Name
Section 1. This Trust shall be known as the "TrustFunds Institutional
Managed Trust" and the Trustees shall conduct the business of the Trust under
that name or any other name as they may from time to time determine.
Definitions
Section 2. Whenever used herein, unless otherwise required by the
context or specifically provided:
(a) The "Trust" refers to the Massachusetts voluntary association
established by this Agreement and Declaration of Trust, as amended from
time to time;
(b) "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article IV and then in office;
(c) The term "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest in the Trust shall
be divided from time to time or,
<PAGE>
if more than one series of Shares is authorized by the Trustees, the
equal proportionate transferable units into which each series of Shares
shall be divided from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person," "Assignment," and "Majority
Shareholder Vote" (the 67% or 50% requirement of the third sentence of
Section 2(a)(42) of the 1940 Act, whichever may be applicable) shall have
the meanings given them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust as amended or restated from time to time; and
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time.
ARTICLE II
Purpose
The purpose of the Trust is to provide investors with one or more
investment portfolios consisting primarily of securities, including debt
instruments or obligations.
ARTICLE III
Shares
Division of Beneficial Interest
Section I. The Shares of the Trust shall be issued in one or more series
as the Trustees may, without shareholder approval, authorize. Each series
shall be preferred over all other series in respect of the assets allocated
to that series. The beneficial interest in each series shall at all times be
divided into Shares, without par value, each of which shall represent an
equal proportionate interest in the series with each other Share of the same
series, none having priority or preference over another. Each series shall be
represented by one or more classes of Shares, with each class possessing such
rights (including, notwithstanding any contrary provision herein, voting
rights) as the Trustees may, without shareholder approval, authorize. The
number of Shares authorized shall be unlimited, and the Shares so authorized
may be represented in part by fractional Shares. The
2
<PAGE>
Trustees may from time to time divide or combine the Shares of any series
into a greater or lesser number without thereby changing the proportionate
beneficial interests in the series.
Ownership of Shares
Section 2. The ownership of Shares shall be recorded on the books of the
Trust or its transfer or similar agent. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they
consider appropriate for the issuance of Share certificates, the transfer of
Shares and similar matters. The record books of the Trust as kept by the
Trust or any transfer or similar agent of the Trust, as the case may be,
shall be conclusive as to who are the Shareholders of each series and as to
the number of Shares of each series held from time to time by each
Shareholder.
Investments in the Trust; Assets of the Series
Section 3. The Trustees may accept investments in the Trust from such
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property
or a combination thereof, as they may from time to time authorize.
All consideration received by the Trust for the issue or sale of Shares of
each series, together with all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any funds or payments derived from any reinvestment
of such proceeds in whatever form the same may be, shall irrevocably belong
to the series of Shares with respect to which the same were received by the
Trust for all purposes, subject only to the rights of creditors, and shall be
so recorded upon the books of account of the Trust and are herein referred to
as "assets of" such series. In addition, any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular series shall be allocated by the
Trustees between and among one or more of the series in such manner as they,
in their sole discretion, deem fair and equitable. Each such allocation shall
be conclusive and binding upon the Shareholders of all series for all
purposes, and shall be referred to as assets belonging to that series.
No Preemptive Rights
Section 4. Shareholders shall have no preemptive or other right to
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust.
3
<PAGE>
Status of Shares and Limitation of Personal Liability
Section 5. Shares shall be deemed to be personal property giving only the
rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to
the terms of this Declaration of Trust and to have become a party thereto.
The death of a Shareholder during the continuance of the Trust shall not
operate to terminate the same nor entitle the representative of any deceased
Shareholder to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but only to the rights of said decent
under this Trust. Ownership of Shares shall not entitle the Shareholder to
any title in or to the whole of any part of the Trust property or right to
call for a partition or division of the same or for an accounting, nor shall
the ownership of Shares constitute the Shareholders partners. Neither the
Trust nor the Trustees, nor any officer, employee or agent of the Trust
shall have any power to bind personally any Shareholder, nor, except as
specifically provided herein, to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder
may at any time personally agree to pay.
Trustees and Officers as Shareholders
Section 6. Any Trustee, officer or other agent of the Trust may acquire,
own and dispose of Shares of the Trust to the same extent as if he were not a
Trustee, officer or agent; and the Trustees may issue and sell or cause to be
issued and sold Shares to and buy such Shares from any such person of any
firm or company in which he is interested, subject only to the general
limitations herein contained as to the sale and purchase of such Shares; and
all subject to any restrictions which may be contained in the By-Laws.
ARTICLE IV
The Trustees
Election
Section 1. The number of Trustees shall be fixed by the Trustees, except
that these shall be not less than three nor more than fifteen Trustees, each
of whom shall hold office during the lifetime of this Trust or until the
election and qualification of his or her successor, or until he or she sooner
dies, resigns or is removed. The number of Trustees so fixed may be increased
either by the Shareholders or by the Trustees by a vote of a majority of the
Trustees then in office. The number of Trustees so fixed may be decreased
either by the Shareholders or by the Trustees by vote of a majority of the
Trustees then in office, but only to eliminate vacancies existing by reason
of the death, resignation or removal or one or more Trustees. The initial
Trustees, each of whom shall serve until the first meeting of
4
<PAGE>
Shareholders at which Trustees are elected and until his or her successor is
elected and qualified, or until he or she sooner dies, resigns or is removed,
shall be William M. Doran and such other persons as the Trustee or Trustees
then in office shall, prior to any sale of Shares pursuant to public
offering, appoint. By vote of the Shareholders holding a majority of the
shares entitled to vote, the Shareholders may remove a Trustee with or
without cause. By vote of a majority of the Trustees then in office, the
Trustees may remove a Trustee for cause. Any Trustee may, but need not, be a
Shareholder.
In case of the declination, death, resignation, retirement, removal,
incapacity, or inability of any of the Trustees, or in case a vacancy shall
exist by reason of an increase in number, or for any other reason, the
remaining Trustees shall fill such vacancy by appointing such other person as
they in their discretion shall see fit consistent with the limitations under
the Investment Company Act of 1940. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office or by
recording in the records of the Trust, whereupon the appointment shall take
effect. An appointment of a Trustee may be made by the Trustees then in
office in anticipation of a vacancy to occur by reason of retirement,
resignation or increase in number of Trustees effective at a later date,
provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee so appointed shall have accepted this
trust, the trust estate shall vest in the new Trustee or Trustees, together
with the continuing Trustees, without any further act or conveyance, and he
shall be deemed a Trustee hereunder. The power of appointment is subject to
the provisions of Section 16(a) of the 1940 Act. In the event that at any
time after the commencement of public sales of Trust Shares less than a
majority of the Trustees then holding office were elected to such office by
the Shareholders, the Trustees or the Trust's President promptly shall call a
meeting of Shareholders for the purpose of electing Trustees. Each Trustee
elected by the Shareholders or by the Trustees shall serve until the election
or qualification of his or her successor, or until he or she sooner dies,
resigns or is removed.
Effect of Death, Resignation, etc. of a Trustee
Section 2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them, shall not operate to annul
the Trust or to revoke any existing agency created pursuant to the terms of
this Declaration of Trust.
5
<PAGE>
Powers
Section 3. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have
all powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt By-Laws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the
Trust and may amend and repeal them to the extent that such By-Laws do not
reserve that right to the Shareholders; they may fill vacancies in their
number, including vacancies resulting from increases in their number, and
may elect and remove such officers and appoint and terminate such agents as
they consider appropriate; they may appoint from their own number, and
terminate, any one or more committees consisting of two or more Trustees,
including an executive committee which may, when the Trustees are not in
session, exercise some or all of the powers and authority of the Trustees as
the Trustees may determine; they may appoint an advisory board, the members
of which shall not be Trustees and need not be Shareholders; they may employ
one or more investment advisors or managers as provided in Section 7 of this
Article IV; they may employ one or more custodians of the assets of the Trust
and may authorize such custodians to employ subcustodians and to deposit all
or any part of such assets in a system or systems for the central handling of
securities, retain a transfer agent or a Shareholder servicing agent, or both,
provide for the distribution of Shares by the Trust, through one or more
principal underwriters or otherwise, set record dates for the determination
of Shareholders with respect to various matters, and in general delegate such
authority as they consider desirable to any officer of the Trust, to any
committee of the Trustees and to any agent or employee of the Trust or to any
such custodian or underwriter; and they may elect and remove such officers
and appoint and terminate such agents as they consider appropriate.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate; write options
on and lease any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion
with relation to securities or property as the Trustees shall deem proper;
6
<PAGE>
(d) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in the name of
the Trustees or of the Trust or in the name of a custodian, subcustodian or
other depositary or a nominee or nominees or otherwise;
(f) To establish separate and distinct series of shares with separately
defined investment objectives, policies and purposes, and to allocate assets,
liabilities and expenses of the Trust to a particular series of Shares or to
apportion the same among two or more series, provided that any liability or
expense incurred by a particular series of Shares shall be payable solely out
of the assets of that series;
(g) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or
property of which is or was held in the Trust; to consent to any contract,
lease, mortgage, purchase or sale of property by such corporation or issuer,
and to pay calls or subscriptions with respect to any security held in the
Trust;
(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit
any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of
the expenses and compensation of such committee, depositary or trustee as the
Trustees shall deem proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(j) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(k) To borrow funds from a bank for temporary or emergency purposes and
not for investment purposes;
(l) To endorse or guarantee the payment of any notes or other obligations
of any person; to make contracts of guaranty or suretyship, or otherwise
assume liability for payment thereof; and to mortgage and pledge the Trust
property or any part thereof to secure any or all of such obligations;
7
<PAGE>
(m) To purchase and pay for entirely out of Trust property such insurance
as they may deem necessary or appropriate for the conduct of the business,
including, without limitation, insurance policies insuring the assets of the
Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers or managers, principal
underwriters, or independent contractors of the Trust individually against
all claims and liabilities of every nature arising by reason of holding,
being or having held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such person as Shareholder,
Trustee, officer, employee, agent, investment adviser or manager, principal
underwriter, or independent contractor, including any action taken or omitted
that may be determined to constitute negligence, whether or not the Trust
would have the power to indemnify such person against such liability; and
(n) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement, incentive
and benefit plans, trusts and provisions, including the purchasing of life
insurance and annuity contracts as a means of providing such retirement and
other benefits, for any or all of the Trustees, officers, employees and
agents of the Trust.
(o) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any Shareholders
whose investment is less than such minimum upon giving notice to such
Shareholder.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by Trustees. Except as
otherwise provided herein or from time to time in the By-Laws, any action to
be taken by the Trustees may be taken by a majority of the Trustees present at
a meeting of Trustees (if a quorum be present), within or without
Massachusetts, including any meeting held by means of a conference telephone
or other communications equipment by means of which all persons
participating in the meeting can communicate with each other simultaneously
and participation by such means shall constitute presence in person at a
meeting, or by written consent of a majority of the Trustees then in office.
Payment of Expenses by the Trust
Section 4. The Trustees are authorized to pay or to cause to be paid out
of the principal or income of the Trust, or partly out of principal and
partly out of income, as they deem fair, all expenses, fees, charges, taxes
and liabilities incurred or arising in connection with the Trust, or in
connection with the management thereof, including, but not limited to, the
Trustees'
8
<PAGE>
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser or manager, principal underwriter,
auditor, counsel, custodian, transfer agent, Shareholder servicing agent, and
such other agents or independent contractors and such other expenses and
charges as the Trustees may deem necessary or proper to incur, provided,
however, that all expenses, fees, charges, taxes and liabilities incurred or
arising in connection with a particular series of Shares as determined by the
Trustees, shall be payable solely out of the assets of that series. Any
general liabilities, expenses, costs, charges or reserves of the Trust which
are not readily identifiable as belonging to any particular series shall be
allocated and charged by the Trustees between or among any one or more of the
series in such manner as the Trustees in their sole discretion deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all series for all purposes. Any creditor of any series may
look only to the assets of that series to satisfy such creditor's debt.
SECTION 5. The Trustees shall have the power, as frequently as they may
determine, to cause each Shareholder to pay directly, in advance or arrears,
for any and all expenses of the Trust, an amount fixed from time to time by
the Trustees, by setting off such charges due from such Shareholder from
declared but unpaid dividends owed such Shareholder and/or by reducing the
number of Shares in the account of such Shareholder by that number of full
and/or fractional Shares which represents the outstanding amount of such
charges due from such Shareholder.
Ownership of Assets of the Trust
SECTION 6. Title to all of the assets of each series of Shares and of the
Trust shall at all times be considered as vested in the Trustees.
Advisory, Management and Distribution
SECTION 7. The Trustees may, at any time and from time to time, contract
with respect to the Trust or any series thereof for exclusive or nonexclusive
advisory and/or management services with SEI Financial Management
Corporation, a Delaware corporation, and/or any other corporation, trust,
association or other organization, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any
such contract may contain such other terms interpretive of or in addition to
said requirements and restrictions as the Trustees may determine, including,
without limitation, authority to determine from time to time what investments
shall be purchased, held, sold or exchanged and what portion, if any, of the
assets of the Trust shall be held uninvested and to make changes in the
Trust's investments. Any contract for advisory services shall be subject to
such Shareholder approval as is required by the 1940 Act. The Trustees may
also, at any time and
9
<PAGE>
from time to time, contract with SEI Financial Services Company, a
Pennsylvania corporation, and/or any other corporation, trust, association or
other organization, appointing it exclusive or nonexclusive distributor or
principal underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any
such contract may contain such other terms interpretive of or in addition to
said requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter, or distributor or agent of or for any
corporation, trust, association, or other organization, or of or for any
parent or affiliate of any organization, with which an advisory or
management or principal underwriter's or distributor's contract, or
transfer, Shareholder servicing or other agency contract may have been or
may hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in the Trust, or
that
(ii) any corporation, trust, association or other organization with
which an advisory or management or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract may have been or may hereafter be made also has an
advisory or management contact, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract with one or more other corporations, trusts,
associations, or other organizations, or has other businesses or interests
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing
the same or create any liability or accountability to the Trust or its
Shareholders.
Action by the Trustees
Section 8. The Trustees shall act by majority vote at a meeting duly
called or by unanimous written consent without a meeting or by telephone
consent provided a quorum or Trustees participates in any such telephonic
meeting, unless the 1940 Act requires that a particular action be taken only
at a meeting in person of the Trustees. At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the Trustees
may be called orally or in writing by the Chairman of the Trustees, by any
two other Trustees, or by any officer of the Trust. Notice of the time, date
and place of all meetings of the Trustees shall be given by the party calling
the meeting to
10
<PAGE>
each Trustee by telephone or telegram sent to his home or business address at
least twenty-four hours in advance of the meeting or by written notice mailed
to his home or business address at least seventy-two hours in advance of
the meeting. Notice need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who executes a written waiver of
notice with respect to the meeting. Subject to the requirements of the 1940
Act, the Trustees by majority vote may delegate to any one or their number
their authority to approve particular matters or take particular actions on
behalf of the Trust.
ARTICLE V
Shareholders' Voting Powers and Meetings
Voting Powers
Section 1. The Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1, (ii)
with respect to any investment adviser as provided in Article IV, Section 7,
(iii) with respect to any termination of the Trust or any series to the
extent and as provided in Article IX, Section 4, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in
Article IX, Section 7, (v) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the
Shareholders, and (vi) with respect to such additional matters relating to
the Trust as may be required by law, by this Declaration of Trust, by the
By-Laws or by any registration of the Trust with the Securities and Exchange
Commission or any state, or as the Trustees may consider necessary or
desirable.
Each whole Share shall be entitled to one vote as to any matter on which
it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. Notwithstanding any other provisions of this
Declaration of Trust, on any matter submitted to a vote of Shareholders, all
Shares of the Trust then entitled to vote shall be voted by individual
series, except (1) when required by the 1940 Act, Shares shall be voted in
the aggregate and not by individual series, and (2) when the Trustees have
determined that the matter affects only the interests of one or more series,
then only Shareholders of such series shall be entitled to vote thereon.
There shall be no cumulative voting in the election of Trustees. Shares may
be voted in person or by proxy.
A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to the
exercise of the proxy the Trust receives a specific written notice to the
contrary from any one of them. A
11
<PAGE>
proxy purporting to be executed by or on behalf of a Shareholder shall be
deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration of
Trust of the By-Laws to be taken by Shareholders.
Voting Power and Meetings
Section 2. Meetings of Shareholders of the Trust or of any series or
class may be called by the Trustees, or such other person or persons as may
be specified in the By-Laws, and held from time to time for the purpose of
taking action upon any matter requiring the vote or the authority of the
Shareholders of the Trust or any series or class as herein provided or upon
any other matter deemed by the Trustees to be necessary or desirable.
Meetings of Shareholders of the Trust or of any series or class shall be
called by the Trustees or such other person or persons as may be specified in
the By-Laws upon written application requesting that a meeting be called for
a purpose requiring action by the Shareholders as provided herein or in the
By-Laws by Shareholders holding at least 10% of the outstanding Shares of the
Trust if Shareholders of all series are required hereunder to vote in the
aggregate and not by individual series at such meeting, or Shareholders
holding at least 10% of the outstanding shares of a series or class if
Shareholders of such series or class are entitled hereunder to vote by
individual series or class at such meeting. The Shareholders shall be
entitled to at least seven days' written notice of any meeting of the
Shareholders.
Quorum and Required Vote
Section 3. A majority of the Shares entitled to vote shall be a quorum
for the transaction of business at a Shareholders' meeting, except that where
any provision of law or of this Declaration of Trust permits or requires that
holders of any series or class shall vote as a series or class, then a
majority of the aggregate number of Shares of that series or class entitled
to vote shall be necessary to constitute a quorum for the transaction of
business by that series or class. Any lesser number, however, shall be
sufficient for adjournments. Any adjourned session or sessions may be held
within a reasonable time after the date set for the original meeting without
the necessity of further notice.
Except when a larger vote is required by any provisions of this
Declaration of Trust or the By-Laws, a majority of the shares voted on any
matter shall decide such matter and a plurality shall elect a Trustee,
provided that where any
12
<PAGE>
provision of law or of this Declaration of Trust permits or requires that the
holders of any series of class shall vote as a series or class, then a
majority of the Shares of that series or class voted on the matter shall
decide that matter insofar as that series or class is concerned.
Action by Written Consent
Section 4. Any action taken by Shareholders may be taken without a
meeting if a majority of Shareholders entitled to vote on the matter (or such
larger vote as shall be required by any provision of this Declaration of
Trust or the By-Laws) consent to the action in writing and such written
consents are filed with the records of the meetings of Shareholders. Such
consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.
Additional Provisions
Section 5. The By-Laws may include further provisions for Shareholders'
votes and meetings and related matters.
ARTICLE VI
Distributions, Redemptions, Repurchases
and Determination of Net Asset Value
Distributions
Section 1. The Trustees may, but need not, distribute each year to the
Shareholders of each series such income and gains, accrued or realized, as
the Trustees may determine, after providing for actual and accrued expenses
and liabilities (including such reserves as the Trustees may establish)
determined in accordance with good accounting practices. The Trustees shall
have full discretion to determine which items shall be treated as income and
which items as capital and their determination shall be binding upon the
Shareholders. Distributions of each year's income of each series, if any be
made, may be made in one or more payments, which shall be in Shares, in cash
or otherwise and on a date or dates determined by the Trustees. At any time
and from time to time in their discretion, the Trustees may distribute to the
Shareholders of any one or more series as of a record date or dates
determined by the Trustees, in Shares, in cash or otherwise, all or part of
any gains realized on the sale or disposition of property of the series or
otherwise, or all or part of any other principal of the Trust attributable to
the series. Each distribution pursuant to this Section 1 shall be made
ratably according to the number of Shares of the series or class held by the
several Shareholders on the applicable record date thereof, provided that no
distributions need be made on Shares purchased pursuant to orders received,
or for which payment is made, after such time or times
13
<PAGE>
as the Trustees may determine. Any such distribution paid in Shares will be
paid at the net asset value thereof as determined in accordance with this
Declaration of Trust.
Redemptions and Repurchases
Section 2. Any holder of Shares of the Trust may by presentation of a
written request, together with his certificates, if any, for such Shares, in
proper form for transfer, at the office of the Trust, the adviser, the
underwriter or the distributors, or at a principal office of a transfer or
Shareholder servicers agent appointed by the Trust (as the Trustees may
determine), redeem his Shares for the net asset value thereof determined and
computed in accordance with the provisions of this Section 2 and the
provisions of Section 5 of Article VI of this Declaration of Trust, less any
redemption charge which the Trustee may establish.
Upon receipt of such written request for redemption of Shares by the
Trust, the adviser, the underwriter or the distributor, or the Trust's
transfer or Shareholder services agent, such Shares shall be redeemed at the
net asset value per share of the particular series next determined after such
Shares are tendered in proper form for transfer to the Trust or determined as
of such other time fixed by the Trustees as may be permitted or required by
the 1940 Act, provided that no such tender shall be required in the case of
Shares for which a certificate or certificates have not been issued, and in
such case such Shares shall be redeemed at the net asset value per share of
the particular series next determined after such demand has been received or
determined at such other time fixed by the Trustees as may be permitted or
required by the 1940 Act.
The obligation of the Trust to redeem its Shares of each series as set
forth above in this Section 2 shall be subject to the condition that, during
any time of emergency, as hereinafter defined, such obligation may be
suspended by the Trust by or under authority of the Trustees for such period
or periods during such time of emergency as shall be determined by or under
authority of the Trustees. If there is such a suspension, any Shareholder may
withdraw any demand for redemption and any tender of Shares which has been
received by the Trust during any such period and any tender of Shares the
applicable net asset value of which would but for such suspension be
calculated as of a time during such period. Upon such withdrawal, the Trust
shall return to the Shareholder the certificate therefor, if any. For the
purposes of any such suspension "time of emergency" shall mean, either with
respect to all Shares or any series of Shares, any period during which:
a. the New York Stock Exchange is closed other than for customary
weekend and holiday closings; or
14
<PAGE>
b. the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and regulations or
orders of the Commission, either that trading on the New York Stock
Exchange is restricted, or that an emergency exists as a result of which
(i) disposal by the Trust of securities owned by it is not reasonably
practicable or (ii) it is not reasonably practicable for the Trust fairly
to determine the current value of its net assets; or
c. the suspension or postponement of such obligations is permitted by
order of the Commission.
The trust may also purchase, repurchase or redeem Shares in accordance
with such other methods, upon such other terms and subject to such other
conditions as the Trustees may from time to time authorize at a price not
exceeding the net asset value of such Shares in effect when the purchase or
repurchase or any contract to purchase or repurchase is made.
Payment in Kind
Section 3. Subject to any generally applicable limitation imposed by the
Trustees, any payment on redemption, purchase or repurchase by the Trust of
Shares may, if authorized by the Trustees, be made wholly or partly in kind,
instead of in cash. Such payment in kind shall be made by distributing
securities or other property, constituting, in the opinion of the Trustees, a
fair representation of the various types of securities and other property
then held by the series of Shares being redeemed, purchased or repurchased
(but not necessarily involving a portion of each of the Series' holdings) and
taken at their value used in determining the net asset value of the Shares in
respect of which payment is made.
Additional Provisions Relating to Redemptions and Repurchases
Section 4. The completion of redemption, purchase or repurchase of Shares
shall constitute a full discharge of the Trust and the Trustees with respect
to such Shares and the Trustees may require that any certificate or
certificates issued by the Trust to evidence the ownership of such Shares
shall be surrendered to the Trustees for cancellation or notation.
Determination of Net Asset Value
Section 5. The term "net asset value" of the Shares of each series shall
mean: (i) the value of all the assets of such series; (ii) less total
liabilities of such series; (iii) divided by the number of Shares of such
series outstanding, in each case at the time of each determination. The
"number of Shares of such series outstanding" for the purpose of such
computation shall be exclusive of any Shares of such series to be redeemed,
purchased
15
<PAGE>
or repurchased by the Trust and not then redeemed, purchased or repurchased as
to which the price has been determined, but shall include Shares of such
series presented for redemption, purchase or repurchase by the Trust and not
then redeemed, purchased or repurchased as to which the price has not been
determined and Shares of such series the sale of which has been confirmed.
Any fractions involved in the computation of net asset value per share shall
be adjusted to the nearer cent unless the Trustees shall determine to adjust
such fractions to a fraction of a cent.
The Trustees or any officer, officers or agent of the Trust designated
for the purpose by the Trustees shall determine the net asset value of the
Shares of each series, and the Trustees shall fix the times as of which the
net asset value of the Shares of each series shall be determined and shall
fix the periods during which any such net asset value shall be effective as
to sales, redemptions and repurchases of, and other transactions in, the
Shares of such series, except as such times and periods for any such
transaction may be fixed by other provisions of this Declaration of Trust or
the By-Laws.
In valuing the portfolio investments of any series for determination of
net asset value per Share of such series, securities for which market
quotations are readily available shall be valued at prices which, in the
opinion of the Trustees any officer, officers or agent of the Trust
designated for the purpose by the Trustees, most nearly represent the market
value of such securities, which may, but need not, be the most recent bid
price obtained from one or more of the market makers for such securities;
other securities and assets shall be valued at fair value as determined by or
pursuant to the direction of the Trustees. Notwithstanding the foregoing,
short-term debt obligations, commercial paper, and repurchase agreements may
be, but need not be, valued on the basis of quoted yields for securities of
comparable maturity, quality and type, or on the basis of amortized cost. In
the determination of net asset value of any series, dividends receivable and
accounts receivable for investments sold and for Shares sold shall be stated
at the amounts to be received therefor; and income receivable accrued daily
on bonds and notes owned shall be stated at the amount to be received. Any
other assets shall be stated at fair value as determined by the Trustees or
such officer, officers or agent pursuant to the Trustees' authority, except
that no value shall be assigned to good will, furniture, lists, reports,
statistics or other noncurrent assets other than real estate. Liabilities of
any series for accounts payable, for investments purchased and for Shares
tendered for redemption, purchase or repurchase by the Trust and not then
redeemed, purchased or repurchased as to which the price has been determined
shall be stated at the amounts payable therefor. In determining net asset
value of any series, the person or persons making such determination on
behalf of the Trust may include in liabilities such reserves, estimated
accrued expenses and contingencies as such person or persons may in its,
16
<PAGE>
his or their best judgment deem fair and reasonable under the circumstances.
Any income dividends and gains distributions payable by the Trust shall be
deducted as of such time or times on the record date therefor as the Trustees
shall determine.
The manner of determining the net assets of any series or of determining
the net asset value of the Shares of any series may from time to time be
altered as necessary or desirable in the judgment of the Trustees to conform
to any other method prescribed or permitted by any applicable law or
regulation or generally accepted accounting practice.
Determinations in accordance with Section 5 made in good faith shall be
binding on all parties concerned.
Redemptions at the Option of the Trust
Section 6. The Trust shall have the right at its option and at any time
to redeem Shares at the net asset value thereof (i) if such Shares are not
held in an account of a customer of SEI Corporation or any of its affiliated
companies or in such other account as the Trustees may determine from time to
time; (ii) if at such time such Shareholder owns fewer Shares than, or Shares
having an aggregate new asset value of less than, an amount determined from
time to time by the Trustees; (iii) to the extent that such Shareholder owns
Shares of a particular series of Shares equal to or in excess of a percentage
of the outstanding Shares of that series determined from time to time by the
Trustees; or (iv) to the extent that such Shareholder owns Shares of the
Trust representing a percentage equal to or in excess of such percentage of
the aggregate number of outstanding Shares of the Trust or the aggregate net
asset value of the Trust determined from time to time by the Trustees.
Dividends, Distributions, Redemptions and Repurchases
Section 7. No dividend or distribution (including, without limitation,
any distribution paid upon termination of the Trust or of any series) with
respect to, nor any redemption or repurchase of, the Shares of any series
shall be effected by the Trust other than from the assets of such series.
ARTICLE VII
Compensation and Limitation
of Liability of Trustees
Compensation
Section 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent
17
<PAGE>
the employment of any Trustee for advisory, management, legal, accounting,
investment banking or other services and payment for the same by the Trust.
Limitation of Liability
Section 2. The Trustees shall not be responsible or liable in any event
for any neglect or wrongdoing of any officer, agent, employee, investment
adviser or manager, principal underwriter or custodian, not shall any Trustee
be responsible for the act or omission of any other Trustee, but nothing
herein contained shall protect any Trustee against any liability to which he
or she would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office.
Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of
the Trust or the Trustees or any of them in connection with the Trust shall
be conclusively deemed to have been executed or done only in or with respect
to their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
ARTICLE VIII
Indemnification
Subject to the exceptions and limitations contained in this Article,
every person who is, or has been, a Trustee or officer of the Trust shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a
Trustee or officer and against amounts paid or incurred by him in settlement
thereof.
No indemnification shall be provided hereunder to a Trustee or officer:
(a) against any liability to the Trust or its Shareholders by
reason of a final adjudication by the court or other body before which the
proceeding was brought that he engaged in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct
of his office;
(b) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interests of the Trust;
18
<PAGE>
(c) in the event of a settlement or other disposition not involving a
final adjudication (as provided in paragraph (a) or (b)) and resulting in a
payment by a Trustee or officer, unless there has been either a determination
that such Trustee or officer did not engage in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office by the court or other body approving the settlement or
other disposition or a reasonable determination, based on a review of readily
available facts (as opposed to a full trial-type inquiry) that he did not
engage in such conduct:
(i) by a vote of a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees then in
office act on the matter); or
(ii) by written opinion of independent legal counsel.
The rights of indemnification hereinafter provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter by
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel other than Trustees and
officers may be entitled by contract or otherwise under law.
Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in the next to the last
paragraph of this Article shall be advanced by the Trust prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Article, provided that either:
(a) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses arising
out of any such advances; or
(b) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office act
on the matter) or independent legal counsel in a written opinion shall
determine, based upon a review of the readily available facts (as opposed to
a full trial-type inquiry), that there is reason to believe that the
recipient ultimately will be found entitled to indemnification.
19
<PAGE>
As used in this Article, a "Disinterested Trustee" is one (i) who is
not an "interested person" of the Trust (as defined by the 1940 Act)
(including anyone who has been exempted from being an "interested person" by
any rule, regulation or order of the Securities and Exchange Commission), and
(ii) against whom none of such actions, suits or other proceedings or another
action, suit or other proceeding on the same or similar grounds is then or
has been pending.
As used in this Article, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include without limitation, attorneys' fees,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.
In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his or her being or having been a
Shareholder and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her heirs,
executors, administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general successor) shall
be entitled to be held harmless from and indemnified against all loss and
expense arising from such liability, but only out of the assets of the
particular series of Shares of which he or she is or was a Shareholder.
ARTICLE IX
Miscellaneous
Trustees, Shareholders, etc. Not Personally Liable; Notice
Section 1. All persons extending credit to, contracting with or having
any claim against the Trust or a particular series of Shares shall look only
to the assets of the Trust or the assets of that particular series of Shares
for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of the Trust's officers, employees or
agents, whether past, present or future, shall be personally liable therefor.
Nothing in this Declaration of Trust shall protect any Trustee against any
liability to which such Trustee would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of the Commonwealth
of Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or
20
<PAGE>
officer and not individually and that the obligations of such instrument are
not binding upon any of them or the Shareholders individually but are binding
only upon the assets and property of the Trust, and may contain such further
recital as he or she or they may deem appropriate, but the omission thereof
shall not operate to bind any Trustees or Trustee or officers or officer or
Shareholders or Shareholder individually.
Trustees' Good Faith Action, Expert Advice; No Bond or Surety
Section 2. The exercise by Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be
liable for his or her own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee, and for nothing else, and shall not be liable for errors of judgment
or mistakes of fact or law. The Trustee may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of
Trust, and shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice. The Trustees shall not
be required to give any bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustees
Section 3. No person dealing with the Trustees shall be bound to make
any inquiry concerning the validity of any transaction made or to be made by
the Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
Duration and Termination of Trust
Section 4. Unless terminated as provided herein, the Trust shall
continue without limitation of time. The Trust may be terminated at any time
by vote of Shareholders holding at least a majority of the Shares entitled to
vote or by the Trustees by written notice to the Shareholders. Any series of
Shares may be terminated at any time by vote of Shareholders holding at least
a majority of the Shares of such series entitled to vote or by the Trustees
by written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of Shares,
after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated, of the Trust or of the
particular series as may be determined by the Trustees, the Trust shall, in
accordance with such procedures as the Trustees consider appropriate, reduce
the remaining assets to distributable form in cash or Shares or other
securities, or any combination thereof, and distribute the proceeds to the
Shareholders of the series involved, ratably according to the number of
Shares of such series held by the several Shareholders of such series on the
date of termination.
21
<PAGE>
Section 5. The original or a copy of this instrument and of each
amendment hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. A copy of this instrument and of each amendment
hereto shall be filed by the Trust with the Secretary of the Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any other
governmental office where such filing may from time to time be required.
Anyone dealing with the Trust may rely on certificate by an officer of the
Trust as to whether or not any such amendments have been made and as to any
matters in connection with the Trust hereunder; and, with the same effect as
if it were the original, may rely on a copy certified by an officer of the
Trust to be a copy of this instrument or of any such amendments. In this
instrument and in such amendment, references to this instrument, and the
expression "herein," "hereof," and "hereunder," shall be deemed to refer to
this instrument as amended from time to time. Headings are placed herein for
convenience of reference only, and shall not be taken as part hereof or
control or affect the meaning, construction or effect of this instrument.
This instrument may be executed in any number of counterparts each of which
shall be deemed an original.
Applicable Law
Section 6. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust. This
Declaration of Trust is to be governed by and construed and administered
according to the laws of said Commonwealth.
Amendments
Section 7. This Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees when
authorized to do so by a vote of Shareholders holding a majority of the
Shares entitled to vote, except that an amendment which shall affect the
holders of one or more series or classes of Shares but not the holders of all
outstanding series or classes shall be authorized by vote of the Shareholders
holding a majority of the Shares entitled to vote of each series or classes
affected and no vote of Shareholders of a series or classes not affected
shall be required. Amendments having the purpose of changing the name of the
Trust or of supplying any omission, curing any ambiguity of curing,
correcting or supplementing any defective or inconsistent provision contained
herein shall not require authorization by Shareholder vote.
22
<PAGE>
IN WITNESS WHEREOF, the undersigned being the sole initial Trustee of the
Trust, has executed this document this 16th day of October, 1986.
/s/ William M. Doran
---------------------------
William M. Doran
2000 One Logan Square
Philadelphia, Pa. 19103
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF PHILADELPHIA
I, the undersigned authority, hereby certify that the foregoing is a true
and correct copy of the instrument presented to me by William M. Doran as the
original of such instrument.
WITNESS my hand and official seal, this 16th day of October, 1986.
---------------------------
Notary Public
My commission expires: Jan. 24, 1987
--------------------
Resident Agent:
James E. Howard, Esquire
Kirkpatrick & Lockhart
Exchange Place, 53 State Street
Boston, MA 02109
(617) 227-6000
23
<PAGE>
BY-LAWS
OF
SEI INSTITUTIONAL MANAGED TRUST
SECTION 1. AGREEMENT AND DECLARATION OF
TRUST AND PRINCIPAL OFFICE
1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject to the
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of SEI INSTITUTIONAL MANAGED TRUST, the Massachusetts
business trust established by the Declaration of Trust (the "Trust").
1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust shall be
located in Boston, Massachusetts.
SECTION 2. SHAREHOLDERS
2.1 MEETINGS. A meeting of the shareholders of the Trust or by any one or more
series of shares may be called at any time by the Trustees, by the president or,
if the Trustees and the president shall fail to call any meeting of shareholders
for a period of 30 days after written application of one or more shareholders
who at least 10% of all outstanding shares of the Trust, if shareholders of all
series are required under Declaration of Trust to vote the aggregate and not by
individual series at such meeting, or of any series, if shareholders of such
series are entitled under the Declaration of Trust to vote by individual series
at such meeting, then such shareholders may call such meeting. If the meeting
is a meeting of the shareholders of one or more series of shares, but not a
meeting of all shareholders of the Trust, then only the shareholders of such one
or more series shall be entitled to notice of and to vote at the meeting. Each
call of a meeting shall state the place, date, hour and purpose of the meeting.
2.2 SPECIAL MEETINGS. A special meeting of the shareholders may be called at
any time by the Trustees, by the president or, if the Trustees and the president
shall fail to call any meeting of shareholders for a period of 30 days after
written application of one or more shareholders who hold at least 25% of all
shares issued and outstanding and entitled to vote at the meeting, then such
shareholders may call such meeting. Each call of a meeting shall state the
place, date, hour and purposes of the meeting.
2.3 PLACE OF MEETINGS. All meetings of the shareholders shall be held at the
principal office of the Trust, or, to the extent permitted by the Declaration of
Trust, at such other place within the United States as shall be designated by
the Trustees or the president of the Trust.
<PAGE>
2.4 NOTICE OF MEETINGS. A written notice of each meeting of shareholders,
stating the place, date and hour and the purposes of the meeting, shall be given
at least seven days before the meeting to each shareholder entitled to vote
thereat by leaving such notice with him or at his residence or usual place of
business or by mailing it, postage prepaid, and addressed to such shareholder at
his address as it appears in the records of the Trust. Such notice shall be
given by the secretary or an assistant secretary or by an officer designated by
the Trustees. No notice of any meeting of shareholders need be given to a
shareholder if a written waiver of notice, executed before or after the meeting
by such shareholder or his attorney thereunto duly authorized, is filed with the
records of the meeting.
2.5 BALLOTS. No ballot shall be required for any election unless requested by
a shareholder present or represented at the meeting and entitled to vote in the
election.
2.6 PROXIES. Shareholders entitled to vote may vote either in person or by
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted. Unless
otherwise specifically limited by their terms, such proxies shall entitle the
holders thereof to vote at any adjournment of such meeting but shall not be
valid after the final adjournment of such meeting.
SECTION 3. TRUSTEES
3.1 COMMITTEES AND ADVISORY BOARD. The Trustees may appoint from their number
an executive committee and other committees. Except as the Trustees may
otherwise determine, any such committee may make rules for conduct of its
business. The Trustees may appoint an advisory board to consist of not less
than two nor more than five members. The members of the advisory board shall be
compensated in such manner as the Trustees may determine and shall confer with
and advise the Trustees regarding the investments and other affairs of the
Trust. Each member of the advisory board shall hold office until the first
meeting of the Trustees following the next annual meeting of the shareholders
and until his successor is elected and qualified, or until he sooner dies,
resigns, is removed, or becomes disqualified, or until the advisory board is
sooner abolished by the Trustees.
3.2 REGULAR MEETINGS. Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the Trustees may from time to
time determine, provided that notice of the first regular meeting following any
such determination shall be given to absent Trustees. A regular meeting of the
Trustees may be held without call or notice immediately after and at the same
place as the annual meeting of the shareholders.
3.3 SPECIAL MEETINGS. Special meetings of the Trustees may be held at any time
and at any place designated in the call of the meetings, when called by the
Chairman of the Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the secretary
or an assistant secretary or by the officer or one of the Trustees calling the
meeting.
-2-
<PAGE>
3.4 NOTICE. It shall be sufficient notice to a Trustee to send notice by mail
at least forty-eight hours or by telegram at least twenty-four hours before the
meeting addressed to the Trustee at his or her usual or last known business or
residence address or to give notice to him or her in person or by telephone at
least twenty-four hours before the meeting. Notice of a meeting need not be
given to any Trustee if a written waiver of notice, executed by him or her
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her. Neither notice of a meeting nor
a waiver of a notice need specify the purposes of the meeting.
3.5 QUORUM. At any meeting of the Trustees one-third of the Trustees then in
office shall constitute a quorum; provided, however, a quorum shall not be less
than two. Any meeting may be adjourned from time to time by a majority of the
votes cast upon the question, whether or not a quorum is present, and the
meeting may be held as adjourned without further notice.
SECTION 4. OFFICERS AND AGENTS
4.1 ENUMERATION; QUALIFICATION. The officers of the Trust shall be a
president, a treasurer, a secretary and such other officers, if any, as the
Trustees from time to time may in their discretion elect or appoint. The Trust
may also have such Agents, if any, as the Trustees from time to time may in
their discretion appoint. Any officer may be but none need be a Trustee or
shareholder. Any two or more offices may be held by the same person.
4.2 POWERS. Subject to the other provisions of these By-Laws, each officer
shall have, in addition to the duties and powers herein and in the Declaration
of Trust set forth, such duties and powers as are commonly incident to his or
her office as if the Trust were organized as a Massachusetts business
corporation and such other duties and powers as the Trustees may from time to
time designate.
4.3 ELECTION. The president, the treasurer and the secretary shall be elected
annually by the Trustees at their first meeting following the annual meeting of
the shareholders. Other officers, if any, may be elected or appointed by the
Trustees at said meeting or at any other time.
4.4 TENURE. The president, the treasurer and the secretary shall hold office
until the first meeting of Trustees following the next annual meeting of the
shareholders and until their respective successors are chosen and qualified, or
in each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each agent shall retain his or her authority at the pleasure of
the Trustees.
4.5 PRESIDENT AND VICE PRESIDENTS. The president shall be the chief executive
officer of the Trust. The president shall, subject to the control of the
Trustees, have general charge and supervision of the business of the Trust. Any
vice president shall have such duties and powers as shall be designated from
time to time by the Trustees.
-3-
<PAGE>
4.6 CHAIRMAN OF THE BOARD. If a Chairman of the Board of Trustees is elected,
he shall have the duties and powers specified in these By-Laws and, except as
the Trustees shall otherwise determine, preside at all meetings of the
shareholders and of the Trustees at which he or she is present and have such
other duties and powers as may be determined by the Trustees.
4.7 TREASURER AND CONTROLLER. The treasurer shall be the chief financial
officer of the Trust and subject to any arrangement made by the Trustees with a
bank or trust company or other organization as custodian or transfer or
shareholder services agent, shall be in charge of its valuable papers and shall
have such other duties and powers as may be designated from time to time by the
Trustees or by the president. If at any time there shall be no controller, the
treasurer shall also be the chief accounting officer of the Trust and shall have
the duties and powers prescribed herein for the controller. Any assistant
treasurer shall have such duties and powers as shall be designated from time to
time by the Trustees.
The controller, if any be elected, shall be the chief accounting officer of the
Trust and shall be in charge of its books of account and accounting records.
The controller shall be responsible for preparation of financial statements of
the Trust and shall have such other duties and powers as may be designated from
time to time by the Trustees or the president.
4.8 SECRETARY AND ASSISTANT SECRETARIES. The secretary shall record all
proceedings of the shareholders and the Trustees in books to be kept therefor,
which books shall be kept at the principal office of the Trust. In the absence
of the secretary from any meeting of shareholders or Trustees, an assistant
secretary, or if there be none or he or she is absent, a temporary clerk chosen
at the meeting shall record the proceedings thereof in the aforesaid books.
SECTION 5. RESIGNATION AND REMOVALS
Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the secretary or to a meeting of the Trustees. The
Trustees may remove any officer elected by them with or without cause by a vote
of a majority of the Trustees then in office. Except to the extent expressly
provided in a written agreement with the Trust, no Trustee, officer, or advisory
board member resigning, and no officer or advisory board member removed shall
have any right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of such removal.
SECTION 6. VACANCIES
A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.
-4-
<PAGE>
SECTION 7. SHARES
7.1 SHARE CERTIFICATES. No certificates certifying the ownership of shares
shall be issued except as the Trustees may otherwise authorize. In the event
that the Trustees authorize the issuance of share certificates, subject to the
provisions of Section 7.3, each shareholder shall be entitled to a certificate
stating the number of shares owned by him or her, in such form as shall be
prescribed from time to time by the Trustees. Such certificate shall be signed
by the president or a vice president and by the treasurer or an assistant
treasurer. Such signatures may be facsimiles if the certificate is signed by a
transfer or shareholder services agent or by a registrar, other than a Trustee,
officer or employee of the Trust. In case any officer who has signed or whose
facsimile signature has been placed on such certificate shall have ceased to be
such officer before such certificate is issued, it may be issued by the Trust
with the same effect as if he or she were such officer at the time of its issue.
In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
7.2 LOSS OF CERTIFICATES. In the case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
7.3 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any time
discontinue the issuance of share certificates and may, by written notice to
each shareholder, require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not affect the ownership of
shares in the Trust.
SECTION 8. RECORD DATE
The Trustees may fix in advance a time, which shall not be more than 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the record
date for determining the shareholders having the right to notice and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date.
-5-
<PAGE>
SECTION 9. SEAL
The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts", together with the name of
the Trust and the year of its organization, cut or engraved thereon; but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
SECTION 10. EXECUTION OF PAPERS
Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and any transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by whomsoever else shall be designated for
that purpose by the vote of the Trustees and need not bear the seal of the
Trust.
SECTION 11. FISCAL YEAR
The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.
SECTION 12. PROVISIONS RELATING TO THE
CONDUCT OF THE TRUST'S BUSINESS
12.1 DEALINGS WITH AFFILIATES. No officer, Trustee or agent of the Trust and no
officer, director or agent of any investment advisor shall deal for or on behalf
of the Trust with himself as principal or agent, or with any partnership,
association or corporation in which he has a material financial interest;
provided that the foregoing provisions shall not prevent (a) officers and
Trustees of the Trust from buying, holding or selling shares in the Trust, or
from being partners, officers or directors of or financially interested in any
investment advisor to the Trust or in any corporation, firm or association which
may at any time have a distributor's or principal underwriter's contract with
the Trust; (b) purchases or sales of securities or other property if such
transaction is permitted by or is exempt or exempted from the provisions of the
Investment Company Act of 1940 or any Rule or Regulation thereunder and if such
transaction does not involve any commission or profit to any security dealer who
is, or one or more of whose partners, shareholders, officers or directors is, an
officer or Trustees of the Trust or an officer or director of the investment
advisor, manager or principal underwriter of the Trust; (c) employment of legal
counsel, registrar, transfer agent, shareholder services, dividend disbursing
agent or custodian who is, or has a partner, stockholder, officer or director
who is, an officer or Trustee of the Trust; (d) sharing statistical, research
and management expenses, including
-6-
<PAGE>
office hire and services, with any other company in which an officer or Trustee
of the Trust is an officer or director or financially interested.
12.2 DEALING IN SECURITIES OF THE TRUST. The Trust, the investment advisor, any
corporation, firm or association which may at any time have an exclusive
distributor's or principal underwriter's contract with the Trust (the
"distributor") and the officers and Trustees of the Trust and officers and
directors of every investment advisor and distributor, shall not take long or
short positions in the securities of the Trust, except that:
(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;
(b) shares of the Trust may be purchased at not less than net asset value
for investment by the investment advisor and by officers and directors of
the distributor, investment advisor, or the Trust and by any trust,
pension, profit-sharing or other benefit plan for such persons, no such
purchase to be in contravention of any applicable state or federal
requirement.
12.3 LIMITATION ON CERTAIN LOANS. The Trust shall not make loans to any
officer, Trustee or employee of the Trust or any investment advisor or
distributor or their respective officers, directors or partners or employees.
12.4 CUSTODIAN. All securities and cash owned by the Trust shall be maintained
in the custody of one or more banks or trust companies having (according to its
last published report) not less than two million dollars ($2,000,000) aggregate
capital, surplus and undivided profits (any such bank or trust company is
hereinafter referred to as the "custodian"); provided, however, the custodian
may deliver securities as collateral on borrowings effected by the Trust,
provided, that such delivery shall be conditioned upon receipt of the borrowed
funds by the custodian except where additional collateral is being pledged on an
outstanding loan and the custodian may deliver securities lent by the Trust
against receipt of initial collateral specified by the Trust. Subject to such
rules, regulations and orders, if any, as the Securities and Exchange Commission
may adopt, the Trust may, or may permit any custodian to, deposit all or any
part of the securities owned by the Trust in a system for the central handling
of securities operated by the Federal Reserve Banks, or established by a
national securities exchange or national securities association registered with
said Commission under the Securities Exchange Act of 1934, or such other person
as may be permitted by said Commission, pursuant to which system all securities
of any particular class or series of any issue deposited with the system are
treated as fungible and may be transferred or pledged by bookkeeping entry,
without physical delivery of such securities.
The Trust shall upon the resignation or inability to serve of its custodian or
upon change of the custodian:
(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;
-7-
<PAGE>
(b) require that the case and securities owned by this corporation be
delivered directly to the successor custodian; and
(c) in the event that no successor custodian can be found, submit to the
shareholders, before permitting delivery of the case and securities owned
by this Trust otherwise than to a successor custodian, the question whether
or not this Trust shall be liquidated or shall function without a
custodian.
12.5 REPORTS TO SHAREHOLDERS; DISTRIBUTIONS FROM REALIZED GAINS. The Trust
shall send to each shareholder of record at least annually a statement of the
condition of the Trust and of the results of its operation, containing all
information required by applicable laws or regulations.
SECTION 13. AMENDMENTS
These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority.
-8-
<PAGE>
Exhibit 99.B(5)(m)
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
AGREEMENT made this 16th day of December, 1994, by and among SEI
Financial Management Corporation, (the "Adviser") and Mellon Equity
Associates (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 16th, 1994 (the "Advisory Agreement") with the Trust, pursuant
to which the Adviser will act as investment adviser to the Large Cap Value
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 the
investment operations of the Portfolio and the composition of the
Portfolio, including the purchase, retention and disposition of
securities and other 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 provide supervision of the Portfolio's
investments and determine from time to time what investments and
securities 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 securities 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, 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, which may include 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
<PAGE>
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 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 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 portfolio securities
to brokers or dealers (including brokers and dealers that are affiliated
with the 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 securities be purchased from or sold to the Sub-Adviser, the
Trust's principal underwriter, or any affiliated person of either the
Trust, 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
the Portfolio's portfolio transactions 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 Portfolio's books and records required to
be maintained by the Sub-Adviser of 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 that is required to be filed 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 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.
2
<PAGE>
(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.
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. The Adviser hereby covenants to promptly provide the
Sub-Adviser with copies of any amendment or supplement to the
Portfolio's Registration Statement as well as all applicable trading
guidelines and procedures established for the Portfolio.
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 form time to time, are herein called "By-Laws");
(c) Prospectus(es) of the Portfolio.
(d) The Adviser hereby covenants to promptly furnish the Sub-Adviser
with copies of any amendments or supplements to such documents.
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 Schedule A which is
attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of investments
under management and will be paid to the Sub-Adviser monthly. The
Sub-Adviser may, in its discretion and from time to time, waive a
portion of its fee.
5. Limitations 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.
3
<PAGE>
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 the performance by the Sub-Adviser of its
duties under this Agreement; provided, however, that the Sub-Adviser shall
not be required to indemnify or otherwise hold the 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 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 such 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 other party, or (c) by the
Sub-Adviser at any time, without the payment of any penalty, on 90 days'
written notice to the other party. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a
4
<PAGE>
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. 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, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Mellon Equity Associates
500 Grant Street, Suite 3700
Pittsburgh, PA 15258
Attention: President
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.
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.
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 Mellon Equity Associates
Corporation
By: /s/ Signature Appears Here By: /s/ Signature Appears Here
--------------------------- ----------------------------
Title: Vice President Title: President
5
<PAGE>
Schedule A
to the
Sub-Advisory Agreement
between
SEI Financial Management Corporation
and
Mellon Equity Associates
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at
an annual rate as follows:
Large Cap Value Portfolio
6
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
AGREEMENT made this 20th day of September, 1996, between SEI Investments
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 other parties providing services to the Portfolio to promptly forward
misdirected proxies to the Sub-
<PAGE>
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.
<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; provided, however, that
at any time the Adviser shall have obtained exemptive relief from the
Securities and Exchange Commission 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 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 Investments Management Corporation
Oaks, PA 19456
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
<PAGE>
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.
<TABLE>
<CAPTION>
<S> <C>
SEI Investments Management Corporation Furman Selz Capital Management, LLC
By: By:
/s/ Kevin P. Robins /s/ Vincent J. Lepore
------------------- ---------------------
Name: Name:
Kevin P. Robins Vincent J. Lepore
--------------- -----------------
Title: Title:
Senior Vice President Vice President and Managing Director
--------------------- ------------------------------------
</TABLE>
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS 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 . %
<PAGE>
Exhibit 99.B(5)(aa)
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
AGREEMENT made this 1st day of May, 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 December 16, 1994 (the "Advisory Agreement") with the Trust, pursuant
to which the Adviser will act as investment adviser to the Large 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
<PAGE>
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 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.
2
<PAGE>
(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 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
3
<PAGE>
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 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.
4
<PAGE>
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 Provident Investment Counsel, Inc.
By: /s/ Todd Cipperman By: /s/ Thad M. Brown
----------------------------- --------------------------------
Name: /s/ Todd Cipperman Name: /s/ Thad M. Brown
----------------------------- --------------------------------
Title: Vice President Title: Senior V.P./C.O.O.
----------------------------- --------------------------------
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 Growth Portfolio
6
<PAGE>
Exhibit 99.B(5)(dd)
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
AGREEMENT made this 13th day of November, 1995, between SEI Financial
Management Corporation, (the "Adviser") and Western Asset Management 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 Core Fixed Income
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, subject to the Prospectus and any written
instruction or 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 Advisor 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-Advisor 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-Advisor 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
<PAGE>
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 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.
2
<PAGE>
(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 fullfill
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 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 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
3
<PAGE>
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 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.
6. 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.
7. 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 7, 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.
8. 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 constructed
as being inconsistent with the 1940 Act.
9. 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.
4
<PAGE>
10. 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: Western Asset Management Company
117 East Colorado Boulevard
Pasadena, California 91105
Attention: Ilene S. Harker, Director
11. 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 Western Asset Management Company
By: /s/ Robert B. Carroll By: /s/ Ilene S. Harker
------------------------- ------------------------
Name: Robert B. Carroll Name: Ilene S. Harker
Title: Vice President Title: Director
5
<PAGE>
Schedule A
to the
Sub-Advisory Agreement
between
SEI Financial Management Corporation
and
Western Asset Management Company
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at
an annual rate as follows:
Core Fixed Income Portfolio
6
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
AGREEMENT made this 15th day of December, 1997, between SEI Investments
Management Corporation, (the "Adviser") and Sanford C. Bernstein & Co., 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 December 16, 1994 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Large Cap Value
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
<PAGE>
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 and Section
28(e) of the Exchange Act, 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 its discretionary clients, including
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
2
<PAGE>
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.
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 of the Portfolio.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser
3
<PAGE>
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 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 losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the Sub-Adviser's failure to perform its
obligations under this Agreement with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims; 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.
In any determination of the Sub-Adviser's liability for indemnification
under this Section 5 or otherwise, the investment and management decisions
of the Sub-Adviser respecting individual assets and courses of action shall
not be evaluated in isolation but in the context of the Portfolio taken as
a whole and as part of an overall investment strategy having risk and
return objectives reasonable suited to the Portfolio. The conditions of
the foregoing indemnity and hold harmless covenant are that (a) the
indemnified persons shall inform the Sub-Adviser promptly of any claims
threatened or made against any indemnified persons (b) the indemnified
persons shall cooperate fully with the Sub-Adviser in responding to such
threatened or actual claims, (c) any settlement agreement shall require the
written approval of the Sub-Adviser, (d) the Sub-Adviser shall not be
liable for any legal or other expenses incurred in connection with any
threatened, pending or current actions, suit, proceeding or claim (of any
nature whatsoever), or defense to any of the foregoing, that were not
specifically authorized by the Sub-Adviser and (e) the Sub-Adviser shall
not be liable for indemnification under this Section 5 as a result of any
court, administrative or other action, suit, claim or proceeding in which
it has not been made a party and been able to present its defense. Nothing
in this Agreement shall in any way constitute a waiver or limitation of any
of the obligations which the Sub-Adviser may have under any federal
securities laws.
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; provided, however, that
at any time the Adviser shall have obtained exemptive relief from the
Securities and Exchange Commission 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 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
4
<PAGE>
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 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 Investments Management Corporation
One Freedom Valley Road
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Sanford C. Bernstein & Co., Inc.
21st Floor
767 5th Avenue
New York, NY 10153-0185
Attention: Dean Allen
with a copy to: Kevin Brine
(at the above address)
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding
5
<PAGE>
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.
<TABLE>
<CAPTION>
<S> <C>
SEI INVESTMENTS MANAGEMENT CORPORATION SANFORD C. BERNSTEIN & CO., INC.
By: By:
/s/ Kevin P. Robins /s/ J. Philip Clark
------------------- -------------------
Name: Name:
Kevin P. Robins J. Philip Clark
- --------------- ---------------
Title: Title:
Vice President Vice President & Managing Director
-------------- ----------------------------------
</TABLE>
6
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
SANFORD C. BERNSTEIN & CO., INC.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
SEI Institutional Managed Trust
Large Cap Value Portfolio . %
For purposes of calculating fees, the average monthly market value of the assets
of the Portfolio and such other related SEI large cap domestic equity portfolios
or accounts as the Sub-Adviser may now or in the future provide investment
sub-advisory services for (collectively, the "SEI Portfolios"), shall be
aggregated. Further, if the combined value of the portion of the assets of the
SEI Portfolios allocated to the Sub-Adviser have not grown to $800 million by
December 31, 1998, the Adviser will pay to the Sub-Adviser the difference
between (i) an amount equal to 0.25% of the combined value of the portion of the
assets of the SEI Portfolios allocated to the Sub-Adviser on December 31, 1998
(the "12/31/98 Portfolio Value") and (ii) and amount calculated by multiplying
the 12/31/98 Portfolio Value by the fee rate determined in accordance with Fee
Schedule A set forth below. The amount of such payment will be billed to the
Adviser by the Sub-Adviser during January 1999 and is due and payable when
billed. The following Fee Schedules (A and B) will be in effect for all periods
commencing on and after December 31, 1998.
FEE SCHEDULE A
Average Monthly Market Value of the combined Annual Fee
assets of the Portfolios (Less than $800 million)
First $300,000,000 . %
Next $499,000,000 . %
FEE SCHEDULE B
Average Monthly Market Value of the combined Annual Fee
assets of the Portfolios ($800 million or greater)
$800,000,000 and thereafter . %
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
AGREEMENT made this 1st day of April, 1996, between SEI Financial
Management Corporation, (the "Adviser") and Merus-UCA Capital Management, a
division of the Union Bank of California, N.A. (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 Equity Income and
Large Cap Value Portfolios (the "Portfolio"), each 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, subject to the direction of the Adviser,
determine 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
written 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
1
<PAGE>
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 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.
2
<PAGE>
(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
in connection with it 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. 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
3
<PAGE>
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. 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 6 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 6 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.
7. 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 7, 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.
8. 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.
9. 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.
4
<PAGE>
10. 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: Merus-UCA Capital Management
475 Sansome Street
San Francisco, CA 94111
Attention: President
11. 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 Merus-UCA Capital Management, a
division of the Union Bank of
California, N.A.
By: By:
/s/ Kathryn L. Stanton /s/ Clark R. Gates
-------------------------------- --------------------------------
Name: Name:
Kathryn L. Stanton Clark R. Gates
-------------------------------- --------------------------------
Title: Vice President Title: President
-------------------------------- --------------------------------
5
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
MERUS-UCA CAPITAL MANAGEMENT, A DIVISION OF THE UNION BANK OF CALIFORNIA, N.A.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at
an annual rate as follows:
Equity Income Portfolio
Large Cap Value Portfolio
6
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL MANAGED TRUST
AGREEMENT made this 10th day of July, 1995, by and among SEI Financial
Management Corporation, (the "Adviser") and Sun Bank Capital Management, N.A.
(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 Capital Appreciation
and Balanced Portfolios (the "Portfolio"), each 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 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
<PAGE>
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-Advisor 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 filed 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 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 to 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.
<PAGE>
(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");
(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
<PAGE>
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
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.
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.
<PAGE>
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. 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, PA 19087
Attention: Legal Department
To the Sub-Adviser at: Sun Bank Capital Management, N.A.
200 S. Orange Avenue
SOAB 8
Orlando, FL 32802
Attention: President
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 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 Sun Bank Capital Management, N.A.
By: /s/ Robert B. Carroll By: /s/ Elliott A. Perny
--------------------------------- -----------------------------------
Name: Robert B. Carroll Name: Elliott A. Perny
------------------------------- ---------------------------------
Title: Vice President Title: Senior Executive Vice President
------------------------------ --------------------------------
<PAGE>
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT CORPORATION
AND
SUN BANK CAPITAL MANAGEMENT, N.A.
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Capital Appreciation Portfolio %
Balanced Portfolio %
<PAGE>
Exhibit 99.B(6)
DISTRIBUTION AGREEMENT
TRUSTFUNDS INSTITUTIONAL MANAGED TRUST
THIS AGREEMENT is made as of this 22nd day of January, 1987 between
TrustFunds Institutional Managed Trust (the "Trust"), a Massachusetts
business trust and SEI Financial Services Company (the "Distributor"), a
Pennsylvania corporation.
WHEREAS the Trust is registered as an investment company with the
Securities and Exchange Commission ("SEC") under the Investment Company Act
of 1940, as amended ("1940 Act"), and its Units are registered with the SEC
under the Securities Act of 1933, as amended ("1933 Act"); and
WHEREAS Distributor is registered as a broker-dealer with the SEC under
the Securities Exchange Act of 1934, as amended;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Trust and Distributor hereby agree as follows:
ARTICLE 1. Sale of Units. The Trust grants to the Distributor the
exclusive right to sell Units of the Trust at the net asset value per Unit,
as agent and on behalf of the Trust, during the term of this Agreement and
subject to the registration requirements of the 1933 Act, the rules and
regulations of the SEC and the laws governing the sale of securities in the
various states ("Blue Sky laws").
ARTICLE 2. Solicitation of Sales. In consideration of these rights
granted to the Distributor, the Distributor agrees to use all reasonable
efforts, consistent with its other business, to obtain purchasers for Units
of the Trust; provided, however, that the Distributor shall not be prevented
from entering into like arrangements with other issuers. The provisions of
this paragraph do not obligate the Distributor to register as a broker or
dealer under the Blue Sky laws of any jurisdiction when it determines it
would be uneconomical for it to do so or to maintain its registration in any
jurisdiction in which it is now registered.
ARTICLE 3. Authorized Representations. The Distributor is not authorized
by the Trust to give any information or to make any representations other
than those contained in the current registration statements and prospectuses
of the Trust filed with the SEC or contained in Unitholder reports or other
material that may be prepared by or on behalf of the Trust for the
Distributor's use. The Distributor may prepare and distribute sales
literature and other material as it may deem appropriate, provided that such
literature and materials have been approved by the Trust prior to their use.
<PAGE>
ARTICLE 4. Registration of Units. The Trust agrees that it will take all
action necessary to register Units under the federal and state securities
laws so that there will be available for sale the number of Units the
Distributor may reasonably be expected to sell. The Trust shall make
available to the Distributor such number of copies of its currently effective
prospectus and statement of additional information as the Distributor may
reasonably request. The Trust shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of Units of the
Trust.
ARTICLE 5. Compensation. As compensation for the services performed and
the expenses assumed by the Distributor under this Agreement, and to the
extent provided in the Trust's Distribution Plan adopted in accordance with
Rule 12b-1 under the 1940 Act, the Trust shall reimburse the Distributor for
(i) the cost of prospectuses and statements of additional information,
reports to Unitholders, sales literature and other materials for potential
investors, (ii) the costs of complying with the Federal and state securities
laws pertaining to the distribution of Units, (iii) advertising, and (iv)
expenses incurred in promoting and selling Units, including expenses for
travel, communication, and compensation and benefits of sales personnel.
Separate and apart from the services and compensation provided for under this
Agreement, the Distributor may retain additional compensation that it
receives from the Trust on portfolio transactions that it effects for the
Trust in accordance with applicable rules of the Securities and Exchange
Commission.
ARTICLE 6. Indemnification of Distributor. The Trust agrees to indemnify
and hold harmless the Distributor and each of its directors and officers and
each person, if any, who controls the Distributor within the meaning of
Section 15 of the 1933 Act against any loss, liability, claim, damages or
expense (including the reasonable cost of investigating or defending any
alleged loss, liability, claim, damages, or expense and reasonable counsel
fees and disbursements incurred in connection therewith), arising by reason
of any person acquiring any Units, based upon the ground that the
registration statement, prospectus, Unitholder reports or other information
filed or made public by the Trust (as from time to time amended) included an
untrue statement of a material fact or omitted to state a material fact
required to be stated or necessary in order to make the statements made not
misleading. However, the Trust does not agree to indemnify the Distributor or
hold it harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the Trust by
or on behalf of the Distributor.
In no case (i) is the indemnity of the Trust to be deemed to protect the
Distributor or any person against any liability to the Trust or its
Unitholders to which the Distributor or such
2
<PAGE>
person otherwise would be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Trust to be liable to the Distributor under the indemnity
agreement contained in this paragraph with respect to any claim made against
the Distributor or any person indemnified unless the Distributor or other
person shall have notified the Trust in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such other person (or after the Distributor or the person
shall have received notice of service on any designated agent). However,
failure to notify the Trust of any claim shall not relieve the Trust from any
liability which it may have to the Distributor or any person against whom
such action is brought otherwise than on account of its indemnity agreement
contained in this Paragraph.
The Trust shall be entitled to Participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Trust elects
to assume the defense of any such claim, the defense shall be conducted by
counsel chosen by the Trust and satisfactory to the indemnified defendants in
the suit whose approval shall not be unreasonably withheld. In the event that
the Trust elects to assume the defense of any suit and retain counsel, the
indemnified defendants shall bear the fees and expenses of any additional
counsel retained by them. If the Trust does not elect to assume the defense
of a suit, it will reimburse the indemnified defendants for the reasonable
fees and expenses of any counsel retained by the indemnified defendants.
The Trust agrees to notify the Distributor promptly of the commencement of
any litigation or proceedings against it or any of its officers or Trustees
in connection with the issuance or sale of any of its Units.
ARTICLE 7. Indemnification of Trust. The Distributor covenants and
agrees that it will indemnify and hold harmless the Trust and each of its
Trustees and officers and each person, if any, who controls the Trust within
the meaning of Section 15 of the Act, against any loss, liability, damages,
claim or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, damages, claim or expense and reasonable counsel
fees incurred in connection therewith) based upon the 1933 Act or any other
statute or common law and arising by reason of any person acquiring any
Units, and alleging an wrongful act of the Distributor or any of its
employees or alleging that the registration statement, prospectus, Unitholder
reports or other information filed or made public by the Trust (as from time
to time amended) including an untrue statement of a material fact or
3
<PAGE>
omitted to state a material fact required to be stated or necessary in order
to make the statements not misleading, insofar as the statement or omission
was made in reliance upon and in conformity with information furnished to the
Trust by or on behalf of the Distributor.
In no case (i) is the indemnity of the Distributor in favor of the Trust
or any other person indemnified to be deemed to protect the Trust or any
other person against any liability to which the Trust or such other person
would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Distributor to be liable under its indemnity agreement contained
in this paragraph with respect to any claim made against the Trust or any
person indemnified unless the Trust or person, as the case may be, shall have
notified the Distributor in writing of the claim within a reasonable time
after the summons or other first written notification giving information of
the nature of the claim shall have been served upon the Trust or upon any
person (or after the Trust or such person shall have received notice of
service on any designated agent). However, failure to notify the Distributor
of any claim shall not relieve the Distributor from any liability which it
may have to the Trust or any person against whom the action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph.
The Distributor shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and
satisfactory to the indemnified defendants whose approval shall not be
unreasonably withheld. In the event that the Distributor elects to assume the
defense of any suit and retain counsel, the defendants in the suit shall bear
the fees and expenses of any additional counsel retained by them. If the
Distributor does not elect to assume the defense of any suit, it will
reimburse the indemnified defendants in the suit for the reasonable fees and
expenses of any counsel retained by them.
The Distributor agrees to notify the Trust promptly of the commencement
of any litigation or proceedings against it in connection with the issue and
sale of any of the Trusts' Units.
ARTICLE 8. Effective Date. This Agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force for one
year from the effective date and the thereafter from year to year, provided
that such annual continuance is approved by (i) either the vote of a majority
of the Trustees of the Trust, or the vote of a majority of the outstanding
voting securities of the Trust, and (ii) the vote of
4
<PAGE>
a majority of those Trustees of the Trust who are not parties to this
Agreement or the Trust's Distribution Plan or interested persons of any such
party ("Qualified Trustees"), cast in person at a meeting called for the
purpose of voting on the approval. This Agreement shall automatically
terminate in the event of its assignment. As used in this paragraph the terms
"vote of a majority of the outstanding voting securities", "assignment" and
"interested person" shall have the respective meanings specified in the 1940
Act. In addition, this Agreement may at any time be terminated without
penalty by SFS, by a vote of a majority of Qualified Trustees or by vote
of a majority of the outstanding voting securities of the Trust upon not
less than sixty days prior written notice to the other party.
ARTICLE 9. Notices. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party
giving notice: if to the Trust, at 28 State Street, Boston, Massachusetts
02109, and if to the Distributor, 680 E. Swedesford Road, Wayne, Pennsylvania
19087.
ARTICLE 10. Limitation of Liability. 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 Agreement is executed on
behalf of the Trustees of the Trust as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or unitholders of the Trust individually but binding only upon the
assets and property of the Trust.
ARTICLE 11. Governing Law. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the
applicable provisions of the 1940 Act. To the extent that the applicable laws
of the Commonwealth of Massachusetts, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control.
ARTICLE 12. Multiple Originals. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the
same instrument.
5
<PAGE>
IN WITNESS, the Trust and Distributor have each duly executed this
Agreement, as of the day and year above written.
TRUSTFUNDS INSTITUTIONAL MANAGED TRUST
By: /s/ Signature appears here
------------------------------------
SEI FINANCIAL SERVICES COMPANY
By: /s/ Signature appears here
------------------------------------
6
<PAGE>
SEI Institutional Managed Trust
SUPPLEMENT DATED MAY 10, 1989 TO THE
DISTRIBUTION AGREEMENT DATED JANUARY 22, 1987
WHEREAS SEI Institutional Managed Trust (the "Trust") has been authorized
to issue Class B units of beneficial interest ("Units") for certain
portfolios of the Trust;
WHEREAS the Trust has authorized the distribution of Class B Units by SEI
Financial Services Company ("SFS") in accordance with the terms of the
Distribution Agreement between the Trust and SFS dated January 22, 1987 (the
"Agreement");
WHEREAS the Trust and SFS wish to clarify the level of payments to be
made by the Trust to SFS in connection with the distribution of Class B units;
NOW THEREFORE, THE Trust and SFS hereby agree that the Agreement is hereby
supplemented as follows:
1. In addition to the reimbursement of expenses by the Trust to SFS as
provided for by Article 5 of the Agreement, the Trust shall also make monthly
payments to SFS on an annualized basis equal to .30% of the daily net assets
of all Class B units issued and outstanding.
2. The payments provided by paragraph 1 immediately above are in
addition to, and not in lieu of, any other payments provided for by the
Agreement.
3. The payments provided by paragraph 1 immediately above shall be used
by SFS in whole or in part to reimburse Class B unitholders which provide
administrative services to their clients relating to the Trust.
SEI Institutional Managed Trust
By: /s/ Signature appears here
-----------------------------
Vice President
SEI Financial Services Company
By: /s/ Signature appears here
-----------------------------
Vice President
7
<PAGE>
CUSTODIAN AGREEMENT
This Agreement, dated day of made by and between Trust
Funds (the Fund), a business trust operating as
an open end investment company, duly organized under the laws of the
Commonwealth of Massachusetts and The Philadelphia National Bank (PNB), a
national bank:
WITNESSETH:
WHEREAS, the Fund desires to appoint The Philadelphia National Bank as
custodian of its Securities and cash, and The Philadelphia National Bank is
willing to act in such capacity upon the terms and conditions herein set
forth; and
WHEREAS, The Philadelphia National Bank in its capacity as custodian
hereunder will also collect and apply the dividends and interest on said
Securities in the manner and to the extent herein set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto, intending to be legally bound, do
hereby agree as follows:
SECTION 1. The terms as defined in this Section wherever used in this
Agreement, or in any amendment or supplement hereto, shall have the meanings
herein specified unless the context otherwise requires.
CUSTODIAN: The term Custodian shall mean The Philadelphia National Bank in
its capacity as custodian under this Agreement.
PROPER INSTRUCTIONS: For purposes of this Agreement the Custodian shall be
deemed to have received Proper Instructions upon receipt of written,
telephone or telegraphic instructions from a person or persons reasonably
believed by the Custodian to be a person or persons authorized from time to
time by the trustees of the Fund or by the Board of Directors of an
investment adviser for the Fund to give the particular class of instructions.
Telephone or telegraphic instructions shall be confirmed in writing by such
person or persons as said Trustees or said Board of Directors shall have from
time to time authorized to give the particular class of instructions in
question. The Custodian may act upon telephone or telegraphic instructions
without awaiting receipt of written confirmation, and shall not be liable for
Fund's or such investment adviser's failure to confirm such instructions in
writing.
SECURITIES: The term Securities shall mean bonds, debentures, notes,
certificates of deposit, evidences of indebtedness, and other securities and
investments from time to time owned by the Fund.
<PAGE>
SHAREHOLDERS: The term Shareholders shall mean the registered owners from
time to time of the Shares of the Fund in accordance with the registry
records maintained by the Fund or agents on its behalf.
SHARES: The term Shares of the Fund shall mean the shares of beneficial
interest of the Fund.
SECTION 2. The Fund shall from time to time file with the Custodian a
certified copy of each resolution of its Board of Trustees authorizing the
person or persons to give Proper Instructions (as defined in SECTION 1) and
specifying the class of instructions that may be given by each person to the
Custodian under this Agreement, together with certified signatures of such
persons authorized to sign, which shall constitute conclusive evidence of the
authority of the officers and signatories designed therein to act, and shall
be considered in full force and effect with the Custodian fully protected in
acting in reliance thereon until it receives written notice to the contrary;
provided, however, that if the certifying officer is authorized to give
Proper Instructions, the certification shall be also signed by a second
officer of the Fund.
SECTION 3. The Fund hereby appoints the Custodian as custodian of the
Securities of the Fund and cash from time to time on deposit hereunder, to be
held by the Custodian and applied as provided in this Agreement. The
Custodian hereby accepts such appointment subject to the terms and
conditions hereinafter provided. Such Securities and cash shall, however, be
segregated from the assets of others and shall be and remain the sole
property of the Fund and the Custodian shall have only the bare custody
thereof. The Securities held by the Custodian shall, unless payable to
bearer, be registered in the name of the Custodian or in the name of its
nominee. Securities, excepting bearer securities, delivered from time to time
to the Custodian upon purchase or otherwise shall in all cases be in due form
for transfer or already registered as above provided.
SECTION 4. The Fund will initially deposit with the Custodian the
Securities owned by the Fund at the time this Agreement becomes effective.
Thereafter the Fund will cause to be deposited with the Custodian additional
Securities as the same are purchased or otherwise acquired from time to time.
The Fund will make an initial deposit of cash to be held and applied by the
Custodian hereunder. Thereafter the Fund will cause to be deposited with the
Custodian hereunder (i) the net proceeds of Securities sold from time to time
and (ii) the applicable net assets value of Shares sold from time to time
whether representing initial issue, other stock or reinvestments of dividends
and/or distributions payable to Shareholders.
<PAGE>
The Fund warrants that it shall keep all of its Securities, similar
investments, cash proceeds and other cash assets of the Fund in the custody
of the Custodian, except where permitted to otherwise keep, deposit, loan,
pledge or otherwise dispose of or maintain such assets in accordance with
applicable law.
SECTION 5. The Custodian will collect from time to time the dividends and
interest on the Securities held by it hereunder and will deposit the same in
the Fund's account. The Custodian is authorized to advance or pay out of said
account accrued interest on bonds purchased and dividends on securities sold
and like items. In the event that any dividends or interest payments are
received by the Fund, the Fund will endorse to the Custodian, or cause to be
endorsed, dividend and interest checks and will issue appropriate orders to
the issuers of the Securities to pay dividends and interest to the
Custodian. Subject to proper reserves for interest owing on Securities sold
and like items, the Custodian will disburse the money from time to time on
deposit in the account to or upon the order of the Fund as it may from time
to time direct in accordance with this Agreement.
SECTION 6. The Custodian is hereby authorized and directed to disburse cash
from time to time as follows:
(a) to pay the proper compensation and expenses of Custodian upon
receipt of Proper Instructions;
(b) to transfer to the Transfer Agent or other dividend disbursing
agent to pay dividends and/or distributions which may be authorized by the
Fund upon receipt of Proper Instructions;
(c) to pay, or provide the Fund with money to pay, if any, taxes upon
receipt of Proper Instructions;
(d) for the purpose of completing the purchase of Securities purchased
by the Fund, upon receipt of (i) Proper Instructions specifying the
Securities and stating the purchase price, and the name of the broker,
investment banker or other party to or upon whose order the purchase price is
to be paid; and (ii) upon receipt of such Securities by the Custodian or, in
the case of a purchase of such Securities by the Custodian or, in the case of
a purchase effected through a Securities System, in accordance with Section 8
hereof;
(e) for the purpose of redeeming or purchasing Shares upon receipt of
Proper Instructions stating the applicable redemption amounts payable, to the
Transfer Agent or other appropriate party;
<PAGE>
(f) for the purpose of paying over to the Transfer Agent or dividend
disbursing agent such Amounts as may be stated in Proper Instructions,
representing proceeds of the sale of warrants, rights, stock dividends,
profit and increases in values of the Securities, as the Fund may determine
to include in dividends and/or distributions on the Shares;
(g) for the purpose of paying in whole or in part any loan of the Fund
upon receipt of Proper Instructions directing payment and stating the
Securities, if any, to be received against payment;
(h) to pay interest, investment advisory or supervisory fees,
administration, dividend and transfer agency fees and costs, compensation of
personnel, or operating expenses (including, without limitation thereto, fees
for legal purposes). Before making any such payment or disbursement,
however, the Custodian shall receive (and may conclusively rely upon) Proper
Instructions requesting such payment or disbursement and stating that it is
for one or more of the purposes hereinabove enumerated, provided that if the
disbursement is for any other purposes, the instructions shall be in writing
and shall state that the disbursement was authorized by resolution of the
Board of Trustees of the Fund (a copy of which resolution shall be attached)
and is for a proper purpose.
SECTION 7. The Custodian is hereby authorized and directed to deliver
Securities from time to time as follows:
(a) for the purpose of completing sales of Securities sold by the
Fund, upon receipt of (i) the net proceeds of sale and (ii) Proper
Instructions specifying the Securities sold and stating the amount to be
received and the broker, investment banker or other party to or upon whose
order the Securities are to be delivered;
(b) for the purpose of exchanging Securities for other Securities
and/or cash upon timely receipt of (i) Proper Instructions stating Securities
to be delivered and the Securities and/or cash to be received in exchange and
the manner in which the exchange is to be made, and (ii) against receipt of
the other Securities and/or cash as specified in the Proper Instructions;
(c) for the purpose of exchanging or converting Securities pursuant to
their terms or pursuant to any plan of conversion, consolidation,
recapitalization, reorganization, readjustment or otherwise, upon timely
receipt of (i) Proper Instructions authorizing such exchange or conversion
and stating the manner in which such exchange or conversion is to be made,
and (ii) against receipt of the Securities, certificates of deposit, interim
receipts, and/or cash to be received as specified in the Proper Instructions;
(d) for the purpose of presenting Securities for payment which have
matured or have been called for redemption upon receipt of appropriate Proper
Instructions and provided that the cash or other consideration is to be paid
to the Custodian;
<PAGE>
(e) for the purpose of delivery of Securities upon redemption of
Shares in kind, upon receipt of appropriate Proper Instructions; or
(f) for the purpose of depositing with the lender Securities to be
held as collateral of a loan to the Fund upon receipt of Proper Instructions
directing delivery to the lender and upon receipt of the proceeds of the loan.
SECTION 8. The Custodian may deposit and/or maintain Securities owned by the
Fund in a clearing agency Registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934, which
acts as a securities depository, or in the book-entry system authorized by
the U.S. Department of the Treasury and certain Federal agencies,
collectively referred to herein as "Securities System" in accordance with
applicable Federal Reserve Board and Securities and Exchange Commission rules
and regulations, if any, and subject to the following provisions:
1) The Custodian may keep Securities of the Fund in a Securities
System provided that such Securities are represented in an account
("Account") of the Custodian in the Securities System which shall
not include any assets of the Custodian other than assets held as
a fiduciary, custodian, or otherwise for customers.
2) The records of the Custodian with respect to Securities of the
Fund which are maintained in a Securities System shall identify
by book-entry those Securities belonging to the Fund.
3) The Custodian shall pay for Securities purchased for the account
of the Fund upon (i) receipt of advice from the Securities
System that such Securities have been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian
to reflect such payment and transfer for the account of the Fund.
The Custodian shall transfer Securities sold for the account of
the Fund upon (i) receipt of advice from the Securities System
that payment for such Securities has been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account
of the Fund. Copies of all advices from the Securities System
of transfers of Securities for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian
and be provided to the Fund at its request. The Custodian shall
furnish the Fund confirmation of each transfer to or from the
the account of the Fund in the form of a written advice or
notice and shall furnish to the Fund copies of daily transaction
sheets reflecting each day's transaction for the account of the
Fund on the next business day.
<PAGE>
4) The Custodian shall provide the Fund with any report obtained
by the Custodian on the Securities System's internal accounting
control and procedures for safeguarding securities deposited in
the Securities System.
5) The Custodian shall have received an initial certificate of the
Secretary or an Assistant Secretary that the Trustees of the
Fund have approved the initial use of a particular Securities
System and the Custodian shall receive an annual certificate of
the Secretary or an Assistant Secretary that the Trustees have
reviewed the use by the Fund of such Securities System, as
required in each case by Rule 17f-4 under the Investment Company
Act of 1940, as amended.
6) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to
the Fund resulting from use of the Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or any
any of its agents or of any of its or their employees or from any
failure of the Custodian or any such agent to enforce effectively
such rights as it may have against the Securities System; at the
election of the Fund, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may have
as a consequence of any such loss or damage if and to the extent
that the Fund has not been made whole for any such loss or damage.
SECTION 9. The Custodian's compensation shall be as set forth in Schedule A
hereto attached, or as shall be set forth in amendments to such schedule
approved by the Fund and the Custodian.
SECTION 10. The Custodian shall forward to the Fund proxies, proxy statements,
annual reports, conversion notices, call notices, or other notices or written
materials sent to the registered owners of securities and actually received
by the Custodian (hereafter referred to as "notices and materials"),
excluding only certificates representing securities and dividend and interest
payments. Responsibility for taking action thereon is the sole responsibility
of the Fund and its investment advisor, and not the responsibility of the
Custodian. Upon actual receipt by the Custodian of warrants or rights issued
in connection with the assets of the Fund, the Custodian shall enter on its
ledgers appropriate notations indicating such receipt and shall forward
notice thereof to the Fund, but shall have no obligation whatsoever to take
any action of any kind with respect to such warrants or rights except upon
receipt of Proper Instructions authorizing the exercise or sale of such
warrants or rights.
<PAGE>
SECTION 11. The Custodian assumes only the usual duties or obligations
normally performed by custodians of mutual funds. It specifically assumes no
responsibility for the management, investment or reinvestment of the
Securities from time to time owned by the Fund whether or not on deposit
hereunder, it being understood that the responsibility for the proper and
timely management, investment and reinvestment of said securities shall be
that of the Fund and its investment advisors.
In connection with its functions under this Agreement, the Custodian shall:
(a) obtain a "due bill" for dividends, interest or other distributions
of the issuer, due the purchaser in connection with Securities delivered to
the Custodian;
(b) render to the Fund a daily report of all monies received or paid on
behalf of the Fund and such listings of Securities held by the Custodian for
the account of the Fund as may from time to time be requested by the Fund.
(c) execute ownership and other certificates and affidavits for all
Federal and State tax purposes in connection with the collection of bond and
note coupons;
(d) present for payment on the date of payment all coupons and other
periodic income items requiring presentation;
(e) monitor and record the collection of funds in accounts maintained
by the Custodian, in the name of the Fund on the same day as received;
(f) in accordance with the manager's directions as to allocation of the
securities to separate portfolios designated by the Fund, the Custodian shall
maintain records showing the respective securities comprising each such
portfolio.
(g) create, maintain and retain all records relating to its activities
and obligations under this Agreement in such manner as will meet the
obligations of the Fund with respect to said Custodian activities and
obligations under generally accepted accounting principles. All records
maintained by the Custodian in connection with the performance of its duties
under this Agreement will remain the property of the Fund and in the event of
termination of this Agreement will be relinquished to the Fund.
If the Custodian does not receive payment for items due under subsection (a),
(d), or (e) within a reasonable time after it has made proper demands for the
same, it shall so notify the Fund in writing, including copies of all demand
letters, any written responses thereto, and memoranda of all oral responses
thereto and to telephonic demands, and await Proper Instructions; the
Custodian shall not be obliged to take legal action for collection except by
its consent and unless and until reasonably indemnified to its satisfaction.
The Custodian shall also notify the Fund as soon as
<PAGE>
reasonably practicable whenever income due on Securities is not collected in
due course.
The Custodian shall not be liable for any taxes, assessments, or governmental
charges which may be levied or assessed upon the Securities held by it
hereunder, or upon the income therefrom or otherwise whatsoever. The
Custodian may pay any such tax, assessment or charge and reimburse itself out
of the monies of the Fund or out of the Securities held hereunder.
SECTION 12. No liability of any kind shall be attached to or incurred by the
Custodian by reason of its custody of the funds, assets, or shares held by it
from time to time under this Agreement, or otherwise by reason of its
position as custodian hereunder except only for its own negligence, bad
faith, or willful misconduct in the performance of its duties as specifically
set forth in the Agreement. Without limiting the generality of the foregoing
sentence, the Custodian:
(a) may rely upon the advice of counsel, who may be counsel for the
Fund or for the Custodian, and upon statements or accountants, brokers and
other persons believed by it in good faith to be experts in the matters upon
which they are consulted; and for any action taken or suffered in good faith
based upon such advice or statements the Custodian shall not be liable to
anyone:
(b) shall not be liable for anything done or suffered to be done in
good faith in accordance with any request or advice of, or based upon
information furnished by, the Fund or its authorized officers or agents;
(c) is authorized to accept a certificate of the Secretary or Assistant
Secretary of the Fund, or Proper Instructions, to the effect that a
resolution in the form submitted has been duly adopted by its Board of
Trustees or by the Shareholders, as conclusive evidence that such resolution
has been duly adopted and is in full force and effect;
(d) may rely and shall be protected in acting upon any signature,
written (including telegraph or other mechanical) instructions, request,
letter of transmittal, certificate, option of counsel, statement, instrument,
report, notice, consent, order, or other paper or document reasonably
believed by it to be genuine and to have been signed, forwarded or presented
by the purchaser, Fund or other proper party or parties.
SECTION 13. The Fund, its successors and assigns hereby indemnify and hold
harmless the Custodian, its successors and assigns, of and from any and all
liability whatsoever arising out of or in connection with the Custodian's
status, acts, or omissions under this Agreement, except only for liability
arising out of the Custodian's own negligence, bad faith, or willful
misconduct in the performance of
<PAGE>
its duties specifically set forth in this Agreement. Without limiting the
generality of the foregoing, the Fund, its successors and assigns do hereby
fully indemnify and hold harmless the Custodian, its successors and assigns,
from any and all loss, liability, claims, demand, actions, suits and expenses
of any nature as the same may arise from the failure of the Fund to comply
with any law, rule, regulation or order of the United States, any State or
any other jurisdiction, governmental Authority, body, or board relating to
the sale, registration, qualification of shares of any beneficial interest in
the Fund, or from the failure of the Fund to perform any duty or obligation
under this Agreement.
Upon written request of the Custodian, the Fund shall assume the entire
defense of any claim subject to the foregoing indemnity, or the joint defense
with the Custodian of such claim, as the Custodian shall request. The
indemnities and defense provisions of this SECTION 13 shall indefinitely
survive termination of this Agreement.
SECTION 14. The Custodian shall provide the Fund, at such times at the Fund
may reasonably require, with accountants' reports on the accounting system,
internal accounting control and procedures for safeguarding securities,
including securities deposited and/or maintained in a Securities System,
relating to the services provided by the Custodian under this Agreement; such
reports, which shall be of sufficient scope and in sufficient detail to
provide reasonable assurance that any material inadequacies would be
disclosed, shall state in detail material inadequacies disclosed by such
examination, and, if there are no such inadequacies, shall so state.
Notwithstanding the foregoing the Custodian shall not be required by the
provisions of this Section 14 to have such a report, which is not required
for other purposes, prepared by independent public accountants, unless the
Fund agrees to reimburse the Custodian for the reasonable charges of such
independent public accountants for preparing such report.
SECTION 15. This Agreement may be amended from time to time without notice
to or approval of the Shareholders by a supplemental agreement executed by
the Fund and the Custodian and amending and supplementing this Agreement in
the manner mutually agreed.
SECTION 16. Either the Fund or the Custodian may give one hundred twenty
(120) days written notice to the other of the termination of this Agreement,
such termination to take effect a time specified in the notice. In case such
notice of termination is given either by the Fund or by the Custodian, the
Trustees of the Fund shall, by resolution duly adopted, promptly appoint a
Successor Custodian which Successor Custodian shall be a bank, trust company,
or a bank and trust company in good standing, with legal capacity to accept
custody of the securities of a mutual fund. Upon receipt of written notice
from the Fund of the appointment of such successor and upon receipt of Proper
Instructions, the Custodian shall deliver such
<PAGE>
Securities and cash as it may then be holding hereunder directly to and only
to the Successor Custodian. Unless or until a Successor Custodian has been
appointed as above provided, the Custodian then acting shall continue to act
as Custodian under this Agreement.
Every Successor Custodian appointed hereunder shall execute and deliver an
appropriate written acceptance of its appointment and shall thereupon become
vested with the rights, powers, obligations and custody of its predecessor
Custodian. The Custodian ceasing to act shall nevertheless, upon request of
the Fund and the Successor Custodian and upon payment of its charges and
disbursements, execute an instrument in form approved by its counsel
transferring to the Successor Custodian all the predecessor Custodian's
rights, duties, obligations and custody.
In case the Custodian shall consolidate with or merge into any other
corporation, the corporation remaining after or resulting from such
consolidation or merger shall ipso facto, without the execution of filing of
any papers or other documents, succeed to and be substituted for the
Custodian with like effect as though originally named as such.
SECTION 17. This Agreement shall take effect when assets of the Fund are
first delivered to the Custodian.
SECTION 18. This Agreement may be executed in two or more counterparts, each
of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 19. The Custodian may, at any time or times appoint (and may at any
time remove) and other bank or trust company which is itself qualified under
the Investment Company Act of 1940, as amended, to act as a custodian, as its
agent to carry out such of the provisions of this Agreement as the Custodian
may from time to time direct, provided, however, that the appointment of such
agent shall not relieve the Custodian of any of its responsibilities under
this Agreement.
SECTION 20. A copy of the Declaration of Trust of the Fund is on file with
the Secretary of The Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Fund
as Trustees and not individually and that the obligations of this instrument
are not binding upon any of the Trustees, officers or shareholders of the
Fund individually but binding only upon the assets and property of the Fund.
SECTION 21. The Custodian shall create and maintain all records relating to
its activities and obligations under this Agreement in such manner as will
meet the obligations of the Fund under the Investment Company Act of 1940,
with particular attention to Section
<PAGE>
31 thereof and Rules 31a-1 and 31a-2 thereunder, applicable Federal and state
tax laws and any other law or administrative rules or procedures which may be
applicable to the Fund.
Subject to security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as to the conduct of such monitors as may be reasonably imposed
by the Custodian after prior consultation with an officer of the Fund the
books and records of the Custodian pertaining to its actions under this
Agreement shall be open to inspection and audit at any reasonable times by
officers of, attorneys for, and auditors employed by, the Fund.
SECTION 22. Nothing contained in this Agreement is intended to or shall
require the Custodian in any capacity hereunder to perform any functions or
duties on any holiday or other day of special observance on which the
Custodian is closed. Functions or duties normally scheduled to be performed
on such days shall be performed on, and as of, the next business day the
Custodian is open.
SECTION 23. This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Fund without the
written consent of the Custodian, or by the Custodian without the written
consent of the Fund, authorized or approved by a resolution of its Board of
Trustees.
IN WITNESS WHEREOF, the Fund and the Custodian have caused this Agreement to
be signed by their respective officers as of the day and year first above
written.
TrustFunds
By:
-----------------------------------
President
THE PHILADELPHIA NATIONAL BANK
By:
-----------------------------------
Vice President
<PAGE>
Exhibit 99.B(9)(a)
MANAGEMENT AGREEMENT
TRUSTFUNDS INSTITUTIONAL MANAGED TRUST
THIS AGREEMENT is made as of this ____ day of __________, 1986 by and
between TrustFunds Institutional Managed Trust (the "Trust"), a Massachusetts
business trust, and SEI Financial Management Corporation (the "Manager"), a
Delaware corporation.
WHEREAS the Trust is a diversified open-end investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS the Manager is willing to provide management, administrative,
transfer agent and unitholder servicing services to the Trust's Short-Term
Bond Portfolio, Intermediate-Term Bond Portfolio, Long-Term Bond Portfolio,
Growth Portfolio, Value Portfolio, Equity Income Portfolio, Balanced
Portfolio and such other portfolios as the Trust and the Manager may agree on
("Portfolios"), on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the covenants
hereinafter contained, the Trust and the Manager hereby agree as follows:
ARTICLE 1. Retention of the Manager. The Trust hereby retains the Manager
to act as the Manager and Unitholder Servicing Agent of the Portfolios and to
furnish the Portfolios with management, administrative, transfer agent and
unitholder servicing services as set forth below. The Manager hereby accepts
such employment to perform the duties set forth below. The Manager shall, for
all purposes herein, be deemed to be an independent contractor and, unless
otherwise expressly provided or authorized, shall have no authority to act
for or represent the Trust in any way and shall not be deemed an agent of the
Trust. All of the Manager's duties shall be subject always to the objective,
policies and restrictions contained in the Trust's current registration
statement under the 1940 Act, to the Trust's Declaration of Trust and
By-Laws, to the provisions of the 1940 Act, and to any other guidelines that
may be established by the Trust's Trustees. The Manager shall calculate the
daily net asset value of the Portfolios in accordance with the procedures
prescribed in the Trust's Registration Statement and such other procedures as
may be established by the Trustees of the Trust.
ARTICLE 2. Evaluation Services. The Manager shall oversee and monitor the
performance of the Portfolios' investment advisers and shall furnish to the
Trust such information, evaluations, analyses and opinions regarding said
performance as the Trustees may, from time to time, reasonably request;
provided, however, that the Manager shall have no authority to
<PAGE>
make and shall not make investment decisions for the Portfolios nor furnish
any advice with respect to the desireability of making such investment
decisions.
ARTICLE 3. Transfer Agent Services. The Manager will act as Transfer
Agent for the Portfolios and, as such, will record in an account (the
"Account") the total number or units of beneficial interest ("Units") of each
Portfolio issued and outstanding from time to time and will maintain Unit
transfer records in which it will note the name and registered addresses of
Unitholders, and the number of Units from time to time owned by each of them.
Each Unitholder will be assigned one or more account numbers. The Manager is
authorized to set up accounts and record transactions in the accounts on the
basis of instructions received from Unitholders when accompanied by
remittance in appropriate amount as provided in the Trust's then current
prospectus. The Trust will not issue certificates representing its Units.
Whenever Units are purchased or issued, the Manager shall credit the Account
with the Units issued, and credit the proper number of Units to the
appropriate Unitholder. Likewise, whenever the Manager has occasion to redeem
Units owned by a Unitholder, the Trust authorizes the Manager to process the
transaction by making appropriate entries in its Unit transfer records and
debiting the Account.
Upon receipt by the Trust's Wire Agent (currently the United States
National Bank of Oregon) on behalf of the Manager of funds through the
Federal Reserve wire system or conversion into Federal funds of funds
transmitted by other means for the purchase of Units in accordance with the
Trust's current prospectus, the Manager shall notify the Trust of such
deposits on a daily basis. The Manager shall credit the Unitholder's account
with the number of shares purchased according to the price of the Units in
effect for such purchases determined in the manner set forth in the Trust's
then current prospectus. The Manager shall process each order for the
redemption of Units from or on behalf of a Unitholder, and shall cause cash
proceeds to be wired in Federal funds. The requirements as to instruments of
transfer and other documentation, the applicable redemption price and the
time of payment shall be as provided in the then current prospectus, subject
to such supplemental requirements consistent with such prospectuses as may be
established by mutual agreement between the Trust and Manager. If the Manager
or the Trust determines that a request for redemption does not comply with
the requirements for redemption, the Manager shall promptly so notify the
Unitholder, together with the reason therefor, and shall effect such
redemption at the price next determined after receipt of documents complying
with said standards. On each day that the Trust's custodian banks and the New
York Stock Exchange are open for business ("Business Day"), the Manager shall
notify the Custodian of the amount of cash or other assets required to meet
payments made pursuant to the provisions of this paragraph, and the Trust
shall instruct the Custodian to make available from
2
<PAGE>
time to time sufficient funds or other assets therefor. The authority of the
Manager to perform its responsibilities under this paragraph shall be
suspended upon receipt by it of notification from the Securities and Exchange
Commission or the Trustees of the suspension of the determination of the
Trust's net asset value.
In registering transfers, the Manager may rely upon the opinion of counsel
in not requiring complete documentation, in registering transfers without
inquiry into adverse claims, in delaying registration for purposes of such
inquiry, or in refusing registration where in its judgment an adverse claim
requires such refusal.
The Trust warrants that it has or shall deliver to the Manager, as
transfer agent:
(a) A copy of the Declaration of Trust of the Trust, incorporating
all amendments thereto, certified by the Secretary or Assistant Secretary
of the Trust;
(b) an opinion of counsel to the Trust with respect to (i) the
legality and continuing existence of the Trust, (ii) the legality of its
outstanding Units of beneficial interest, and (iii) the number of Units
authorized for issuance and stating that upon issuance they will be
validly issued and nonassessable; and
(c) The Trust's Secretary's or Assistant Secretary's certificate
as to the authorized outstanding Units of the Trust, its address to which
notices may be sent, the names and specimen signatures of its officers who
are authorized to sign instructions or requests to the Manager on behalf
of the Trust, and the name and address of legal counsel to the Trust. In
the event of any future amendment or change in respect of any of the
foregoing, prompt written notification of such change shall be given by
the Trust to the Manager, together with copies of all relevant
resolutions, instruments or other documents, specimen signatures,
certificates, opinions to the like as the Manager may deem necessary or
appropriate.
ARTICLE 4. Dividend Disbursing Agent. The Manager shall act as Dividend
Disbursing Agent for the Trust and, as such, in accordance with the
provisions of the Trust's Declaration of Trust and then current prospectus,
shall prepare and wire or credit income and capital gains distributions to
Unitholders. The Trust agrees that it shall promptly inform the Manager of
the declaration of any dividend or distribution on its Units, and that on or
before the payment date of a distribution, it shall instruct the Custodian to
make available, at the instruction of the Dividend Disbursing Agent,
sufficient funds for the cash
3
<PAGE>
amount to be paid out. If a Unitholder is entitled to receive additional
Units by virtue of any such distribution or dividend, appropriate credits
will be made to the Unitholder's account.
ARTICLE 5. Other Administrative Services. In addition to the services
described above, the Manager shall perform or supervise the performance by
others of other administrative services in connection with the operations of
the Portfolios, and, on behalf of the Trust, will investigate, assist in the
selection of and conduct relations with custodians, depositories,
accountants, underwriters, brokers and dealers, corporate fiduciaries,
insurers, banks and persons in any other capacity deemed to be necessary or
desirable for the Portfolios' operation. The Manager shall provide the Trust
with regulatory reporting and related bookkeeping services, all necessary
office space, equipment, personnel compensation and facilities (including
facilities for Unitholders' and Trustees' meetings) for handling the affairs
of the Portfolios and such other services as the Manager shall, from time to
time, determine to be necessary to perform its obligations under this
Agreement. The Manager shall make reports to the Trust's Trustees concerning
the performance of its obligations hereunder; furnish advice and
recommendations with respect to other aspects of the business and affairs of
the Portfolios as the Trust shall determine desirable, and shall provide the
Portfolios' Unitholders with the reports described in the Trust's current
prospectus. Also, the Manager will perform other services for the Trust as
agreed from time to time, including, but not limited to, preparation and
mailing of appropriate federal income tax forms; mailing the annual reports
of the Trust; preparing an annual list of Unitholders; furnishing the Trust
with such reports regarding the sale and redemption of Units as may be
required in order to comply with federal and state securities law; and
mailing notices of Unitholders' meetings, proxies and proxy statements, for
all of which the Trust will pay the Manager's out-of-pocket expenses.
ARTICLE 6. Allocation of Charges and Expenses.
(A) The Manager. The Manager shall furnish at its own expense the
executive, supervisory and clerical personnel necessary to perform its
obligations under this Agreement. The Manager shall also provide the items
which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Trust as well as all Trustees of the
Trust who are affiliated persons of the Manager or any affiliated
corporation; provided, however, that unless otherwise specifically provided,
the Manager shall not be obligated to pay the compensation of any employee of
the Trust retained by the Trustees of the Trust to perform services on behalf
of the Trust.
(B) The Trust. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust not otherwise allocated herein, including,
without limitation, organizational costs,
4
<PAGE>
taxes, expenses for legal and auditing services, the expenses of preparing
(including typesetting), printing and mailing reports, prospectuses,
statements of additional information, proxy solicitation material and
notices to existing Unitholders, all expenses incurred in connection with
issuing and redeeming Trust Units, the costs of custodial services, the cost
of initial and ongoing registration of the Trust's Units under federal and
state securities laws, fees and out-of-pocket expenses of Trustees who are
not affiliated persons of the Manager of any affiliated corporation,
insurance, interest, brokerage costs, litigation and other extraordinary or
nonrecurring expenses, all fees and charges of investment advisers to the
Trust, and distribution expenses in accordance with the Trust's Distribution
Plan.
ARTICLE 7. Compensation Of The Manager
(A) Management Fee. For the services to be rendered, the facilities
furnished and the expenses assumed by the Manager pursuant to this Agreement,
the Trust shall pay to the Manager compensation at an annual rate of ___% of
the average daily net assets of each Portfolio other than the Short-Term
Bond, Intermediate-Term Bond, Long-Term Bond, Growth, Value, Equity Income
and Balanced Portfolios shall be as agreed upon by the parties to this
Agreement.) Such compensation shall be calculated and accrued daily, and
paid to the Manager monthly (subject to any expenses to be borne by the
Manager under Article 7(b) herein). If this Agreement becomes effective
subsequent to the first day of a month or terminates before the last day of a
month, the Manager's compensation for that part of the month in which this
Agreement is in effect shall be prorated in a manner consistent with the
calculation of the fees as set forth above. Payment of the Manager's
compensation for the preceding month shall be made promptly after completion
of the computations contemplated by paragraph (B) of this Article 7.
(B) Excess Expenses. If the expenses of any Portfolio for any fiscal
year (including fees and other amounts payable to the Manager, but excluding
interest, taxes, brokerage costs, litigation and other extraordinary costs)
as calculated every Business Day would exceed (i) an annual rate of ___% of a
Portfolio's average daily net asset value (or, with respect to a Portfolio
other than the Short-Term Bond, Intermediate-Term Bond, Long-Term Bond,
Growth, Value, Equity Income and Balanced Portfolios, such other annual rate
as agreed to by the parties to this Agreement), or (ii) the expense
limitations imposed on investment companies by any applicable statute or
regulatory authority of any jurisdiction in which units are qualified for
offer and sale, the Manager shall bear such excess cost. However, the
Manager will not bear expenses of the Trust to an extent 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 Manager
pursuant to
5
<PAGE>
this Article 7(B) shall be settled on a monthly basis (subject to fiscal year
end reconciliation) by a reduction in the fee payable to Manager for such
month pursuant to Article 7(A) above and, if such reduction shall be
insufficient to offset such expenses, by reimbursing the Trust. Any excess
expenses borne under Article 7(B)(i) (including any fees waived by the
Manager) may be recovered by the Manager from the Trust when such recovery
would not cause the Trust's expenses to exceed the expense limitation set
forth in this paragraph.
(C) Compensation from Transactions. The Trust hereby authorizes any
entity or person associated with the Manager which is a member of a national
securities exchange to effect any transaction on the exchange for the account
of the Trust which is permitted by Section 11(a) of the Securities Exchange
Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby consents to
the retention of compensation for such transactions in accordance with Rule
11a2-2(T)(a)(2)(iv).
(D) Survival of Compensation Rates. All rights of compensation under this
Agreement shall survive the termination of this Agreement.
ARTICLE 8. Limitation of Liability of the Manager. The duties of the
Manager shall be confined to those expressly set forth herein, and no implied
duties are assumed by or may be asserted against the Manager hereunder. The
Manager 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 Article 8, the
term "Manager' shall include directors, officers, employees and other
corporate agents of the Manager as well as that corporation itself.) So long
as the Manager acts in good faith and with due diligence and without gross
negligence, the Trust assumes full responsibility and shall indemnify the
Manager and hold it harmless from and against any and all actions, suits and
claims, whether groundless or otherwise, and from and against any and all
losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation
expenses) arising directly or indirectly out of said management and transfer,
dividend disbursing and unitholder servicing agency relationship to the Trust
or any other service rendered to the Trust hereunder. The indemnity and
defense provisions set forth herein shall indefinitely survive the
termination of this Agreement. The rights hereunder shall include the right
to reasonable advances of defense expenses in the event of any pending or
threatened litigation with respect to which indemnification hereunder may
ultimately be merited. In
6
<PAGE>
order that the indemnification provision contained herein shall apply,
however, it is understood that if in any case the Trust may be asked to
indemnify or hold the Manager harmless, the Trust shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that the Manager will use all reasonable care to identify
and notify the Trust promptly concerning any situation which presents or
appears likely to present the probability of such a claim for indemnification
against the Trust, but failure to do so in good faith shall not affect the
rights hereunder.
The Manager may apply to the Trust at any time for instructions and may
consult counsel for the Trust or its own counsel and with accountants and
other experts with respect to any matter arising in connection with the
Manager's duties, and the Manager shall not be liable or accountable for any
action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other
experts. Also, the Manager shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or
presented by the proper person or persons. Nor shall the Manager be held to
have notice of any change of authority of any officer, employee or agent of
the Trust until receipt of written notice thereof from the Trust.
ARTICLE 9. Activities of the Manager. The services of the Manager
rendered to the Trust are not to be deemed to be exclusive. The Manager is
free to render such services to others and to have other businesses and
interests. It is understood that Trustees, officers, employees and
Unitholders of the Trust are or may be or become interested in the Manager, as
directors, officers, employees and shareholders or otherwise and that
directors, officers, employees and shareholders of the Manager and its
counsel are or may be or become similarly interested in the Trust, and that
the Manager may be or become interested in the Trust as a Unitholder or
otherwise.
ARTICLE 10. Duration and Termination of This Agreement. This Agreement,
unless terminated sooner as provided herein, shall remain in effect for two
years after the date of the Agreement and shall continue in effect for
successive periods of one year if such continuance is specifically approved
at least annually (i) by the Trustees of the Trust and (ii) by the vote of a
majority of the Trustees of the Trust who are not parties to this Agreement
or interested persons of any such party, cast in person at a Board of Trustees
meeting called for the purpose of voting on such approval. This Agreement may
be terminated at any time and without penalty by the Trustees of the Trust
or by the Manager on not less than 30 days nor more than 60 days written
notice to the other party hereto. Any notice under this Agreement shall be
given in writing, addressed and delivered, or mailed postpaid, to the other
party at the designated mailing address of such party.
7
<PAGE>
This Agreement shall not be assignable by either party without the written
consent of the other party.
ARTICLE 11. Amendments. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Trustees of the Trust who are not parties to this Agreement
or interested persons of any such party, cast in person at a Board of
Trustees meeting called for the purpose of voting on such approval. For
special cases, the parties hereto may amend such procedures set forth herein
as may be appropriate or practical under the circumstances, and the Manager
may conclusively assume that any special procedure which has been approved by
the Trust does not conflict with or violate any requirements of its
Declaration of Trust, By-Laws or prospectus, or any rule, regulation or
requirement of any regulatory body.
ARTICLE 12. Trustees' Liability. 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 not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
Officers or Unitholders of the Trust individually, but binding only upon the
assets and property of the Trust.
ARTICLE 13. Certain Records. The Manager shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Manager on
behalf of the Trust shall be prepared and maintained at the expense of the
Manager, but shall be the property of the Trust and will be made available to
or surrendered promptly to the Trust on request. In case of any request or
demand for the inspection of such records by another party, the Manager shall
notify the Trust and follow the Trust's instructions as to permitting or
refusing such inspection; provided that the Manager may exhibit such records
to any person in any case where it is advised by its counsel that it may be
held liable for failure to do so, unless (in cases involving potential
exposure only to civil liability) the Trust has agreed to indemnify the
Manager against such liability.
ARTICLE 14. Definitions of Certain Terms. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the
respective meanings specified in the 1940 Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the Securities
and Exchange Commission.
8
<PAGE>
ARTICLE 15. Governing Law. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the
applicable provisions of the 1940 Act. To the extent that the applicable Laws
of the Commonwealth of Massachusetts, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control.
ARTICLE 16. Multiple Originals. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
TRUSTFUNDS INSTITUTIONAL MANAGED TRUST
By
-------------------------------------
SEI FINANCIAL MANAGEMENT CORPORATION
By
-------------------------------------
9
<PAGE>
Exhibit 99.B(9)(b)
SCHEDULE C
Fee Schedule
Mid-Cap Growth Portfolio
Management Fee
August 3, 1992
- --------------------------------------------------------------------------------
Mid-Cap Growth Portfolio .50%
<PAGE>
[Letterhead]
January 28, 1987
TrustFunds Institutional Managed Trust
28 State Street
Boston, Massachusetts 02109
Gentlemen:
You have requested our opinion regarding certain matters in connection
with the issuance of shares of beneficial interest ("Shares") by TrustFunds
Institutional Managed Trust (the "Trust"). We have examined the Trust's
Agreement and Declaration of Trust and other documents relating to the
authorization and issuance of the Shares of the Trust. Based upon this
examination, we are of the opinion that:
1. All legal requirements have been complied with in the organization
of the Trust and it is now a validly existing unincorporated voluntary
association under the laws of the Commonwealth of Massachusetts.
2. The Trust is authorized to issue an unlimited number of Shares,
without par value, in five series representing interests in the
Short-Term Bond Portfolio, Intermediate-Term Bond Portfolio,
Long-Term Bond Portfolio, Value Portfolio and Balanced Portfolio of
the Trust and in such other series as the Trustees may hereafter duly
authorize.
3. The unlimited number of unissued Shares which are currently being
registered under the Securities Act of 1933 may be legally and validly
issued from time to time in accordance with the Trust's Agreement and
Declaration of Trust and By-Laws and subject to compliance with the
Securities Act of 1940, and applicable state laws regulating the sale
of securities; and
4. When so issued, the Trust's Shares will be validly issued, fully
paid and nonaccessable by the Trust.
<PAGE>
KIRKPATRICK & LOCKHART
TrustFunds Institutional Managed Trust
January 26, 1987
Page 2
The Trust is an entity of the type commonly know as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust. The
Agreement and Declaration of Trust states that creditors of, contractors with
and claimants against the Trust shall look only to the assets of the Trust or
a particular series of Shares for payment. It also requires that notice of
such disclaimer be given in each note, bond, contract, certificate,
undertaking or instrument made or issued by the Officers of the Trust or the
Trustees on behalf of the Trust. The Agreement and Declaration of Trust
further provides for indemnification out of the assets of a series for all
loss and expense of any shareholder of that series held personally liable
for the obligations of the Trust by virtue of ownership of Shares of that
series. Thus, risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the series in
which that person is a shareholder would be unable to meet its obligations.
We hereby consent to the filing of this opinion in connection with
Pre-Effective Amendment No. 1 to the Trust's Registration Statement of Form
N-1A (File No. 33-9504) to be filed with the Securities and Exchange
Commission. We also consent to the reference to our firm under the caption
"Counsel and Independent Public Accountants" in each Prospectus filed as part
of the Registration Statement.
Very truly yours,
KIRKPATRICK & LOCKHART
By: /s/Donald W. Smith
-----------------------------------
Donald W. Smith
<PAGE>
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. 28 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated November 25, 1997, relating to the financial
statements and financial highlights appearing in the September 30, 1997
Annual Report to Shareholders of 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 Statements" and
"General Information" in the Prospectuses and under the headings "Experts"
and "Financial Statements" in the Statement of Additional Information.
Price Waterhouse LLP
Philadelphia, PA
January 26, 1998
<PAGE>
Exhibit 99.B(16)
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATION
This schedule is included to illustrate how yield and total return will
be calculated.
a - b
Yield = 2[(----------- + 1)(6) -1]
cd
MID-CAP GROWTH
--------------
a = $ 784,617.44
b = $ 188,064.64
c = $21,211,856.437
d = $ 15.35
Yield = 2.21%
Total Return = P(1 + T)(2) = ERV
P = $1,000
n = 1
ERV = $1,351.00
T = 35.10%
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000804239
<NAME> SEI INSTITUTIONAL MANAGED TRUST
<SERIES>
<NUMBER> 011
<NAME> LARGE CAP GROWTH
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 549596
<INVESTMENTS-AT-VALUE> 800811
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 800811
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 332
<TOTAL-LIABILITIES> 332
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 509598
<SHARES-COMMON-STOCK> 39232
<SHARES-COMMON-PRIOR> 32070
<ACCUMULATED-NII-CURRENT> 907
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 38692
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 251282
<NET-ASSETS> 800479
<DIVIDEND-INCOME> 5550
<INTEREST-INCOME> 1049
<OTHER-INCOME> 0
<EXPENSES-NET> (5259)
<NET-INVESTMENT-INCOME> 1340
<REALIZED-GAINS-CURRENT> 40177
<APPREC-INCREASE-CURRENT> 189767
<NET-CHANGE-FROM-OPS> 231284
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1617)
<DISTRIBUTIONS-OF-GAINS> (29959)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 18242
<NUMBER-OF-SHARES-REDEEMED> (12724)
<SHARES-REINVESTED> 1644
<NET-CHANGE-IN-ASSETS> 318400
<ACCUMULATED-NII-PRIOR> 490
<ACCUMULATED-GAINS-PRIOR> 29424
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2465
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5567
<AVERAGE-NET-ASSETS> 616139
<PER-SHARE-NAV-BEGIN> 15.03
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 6.33
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> (.94)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.40
<EXPENSE-RATIO> .85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000804239
<NAME> SEI INSTITUTIONAL MANAGED TRUST
<SERIES>
<NUMBER> 021
<NAME> SMALL CAP VALUE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 271390
<INVESTMENTS-AT-VALUE> 335016
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 335016
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11679
<TOTAL-LIABILITIES> 11679
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 225034
<SHARES-COMMON-STOCK> 18117
<SHARES-COMMON-PRIOR> 12391
<ACCUMULATED-NII-CURRENT> 163
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 34435
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 63705
<NET-ASSETS> 323337
<DIVIDEND-INCOME> 2458
<INTEREST-INCOME> 790
<OTHER-INCOME> 0
<EXPENSES-NET> (2441)
<NET-INVESTMENT-INCOME> 807
<REALIZED-GAINS-CURRENT> 35962
<APPREC-INCREASE-CURRENT> 52651
<NET-CHANGE-FROM-OPS> 89420
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (777)
<DISTRIBUTIONS-OF-GAINS> (13817)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9600
<NUMBER-OF-SHARES-REDEEMED> (4717)
<SHARES-REINVESTED> 843
<NET-CHANGE-IN-ASSETS> 160160
<ACCUMULATED-NII-PRIOR> 107
<ACCUMULATED-GAINS-PRIOR> 12316
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1432
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2441
<AVERAGE-NET-ASSETS> 220329
<PER-SHARE-NAV-BEGIN> 13.17
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 5.74
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> (1.06)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.85
<EXPENSE-RATIO> 1.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000804239
<NAME> SEI MANAGED INSTITUTIONAL TRUST
<SERIES>
<NUMBER> 031
<NAME> HIGH YIELD BOND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 217552
<INVESTMENTS-AT-VALUE> 231043
<RECEIVABLES> 0
<ASSETS-OTHER> 5414
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 236457
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 223192
<SHARES-COMMON-STOCK> 20272
<SHARES-COMMON-PRIOR> 9655
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (116)
<ACCUMULATED-NET-GAINS> (110)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13491
<NET-ASSETS> 236457
<DIVIDEND-INCOME> 137
<INTEREST-INCOME> 16867
<OTHER-INCOME> 0
<EXPENSES-NET> (1438)
<NET-INVESTMENT-INCOME> 15566
<REALIZED-GAINS-CURRENT> (110)
<APPREC-INCREASE-CURRENT> 10144
<NET-CHANGE-FROM-OPS> 25600
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (15566)
<DISTRIBUTIONS-OF-GAINS> (589)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13006
<NUMBER-OF-SHARES-REDEEMED> (3731)
<SHARES-REINVESTED> 1342
<NET-CHANGE-IN-ASSETS> 128912
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 473
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 812
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1520
<AVERAGE-NET-ASSETS> 166841
<PER-SHARE-NAV-BEGIN> 11.14
<PER-SHARE-NII> 1.04
<PER-SHARE-GAIN-APPREC> .57
<PER-SHARE-DIVIDEND> (1.04)
<PER-SHARE-DISTRIBUTIONS> (.05)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.66
<EXPENSE-RATIO> .86
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000804239
<NAME> SEI INSTITUTIONAL MANAGED TRUST
<SERIES>
<NUMBER> 041
<NAME> LARGE CAP VALUE
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 652972
<INVESTMENTS-AT-VALUE> 863195
<RECEIVABLES> 0
<ASSETS-OTHER> 3631
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 866826
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 590228
<SHARES-COMMON-STOCK> 44751
<SHARES-COMMON-PRIOR> 34840
<ACCUMULATED-NII-CURRENT> 3008
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 63214
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 210376
<NET-ASSETS> 866826
<DIVIDEND-INCOME> 15965
<INTEREST-INCOME> 866
<OTHER-INCOME> 0
<EXPENSES-NET> (5534)
<NET-INVESTMENT-INCOME> 11297
<REALIZED-GAINS-CURRENT> 69094
<APPREC-INCREASE-CURRENT> 162008
<NET-CHANGE-FROM-OPS> 242399
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (11086)
<DISTRIBUTIONS-OF-GAINS> (40762)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 19261
<NUMBER-OF-SHARES-REDEEMED> (12099)
<SHARES-REINVESTED> 2749
<NET-CHANGE-IN-ASSETS> 351815
<ACCUMULATED-NII-PRIOR> 2752
<ACCUMULATED-GAINS-PRIOR> 34933
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2279
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5534
<AVERAGE-NET-ASSETS> 651102
<PER-SHARE-NAV-BEGIN> 14.78
<PER-SHARE-NII> .28
<PER-SHARE-GAIN-APPREC> 5.77
<PER-SHARE-DIVIDEND> (.29)
<PER-SHARE-DISTRIBUTIONS> (1.17)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.37
<EXPENSE-RATIO> .85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000804239
<NAME> SEI INSTITUTIONAL MANAGED TRUST
<SERIES>
<NUMBER> 051
<NAME> BALANCED FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 44414
<INVESTMENTS-AT-VALUE> 50452
<RECEIVABLES> 0
<ASSETS-OTHER> 743
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 51195
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 39159
<SHARES-COMMON-STOCK> 3641
<SHARES-COMMON-PRIOR> 4154
<ACCUMULATED-NII-CURRENT> 514
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5484
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6038
<NET-ASSETS> 51195
<DIVIDEND-INCOME> 417
<INTEREST-INCOME> 1571
<OTHER-INCOME> 0
<EXPENSES-NET> (383)
<NET-INVESTMENT-INCOME> 1605
<REALIZED-GAINS-CURRENT> 6041
<APPREC-INCREASE-CURRENT> 2510
<NET-CHANGE-FROM-OPS> 10156
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1690)
<DISTRIBUTIONS-OF-GAINS> (8229)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 920
<NUMBER-OF-SHARES-REDEEMED> (2208)
<SHARES-REINVESTED> 775
<NET-CHANGE-IN-ASSETS> (6720)
<ACCUMULATED-NII-PRIOR> 453
<ACCUMULATED-GAINS-PRIOR> 7780
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 204
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 412
<AVERAGE-NET-ASSETS> 51028
<PER-SHARE-NAV-BEGIN> 13.94
<PER-SHARE-NII> .41
<PER-SHARE-GAIN-APPREC> 2.27
<PER-SHARE-DIVIDEND> (.42)
<PER-SHARE-DISTRIBUTIONS> (2.14)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.06
<EXPENSE-RATIO> .75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000804239
<NAME> SEI INSTITUTIONAL MANAGED TRUST
<SERIES>
<NUMBER> 061
<NAME> CAPITAL APPRECIATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 128094
<INVESTMENTS-AT-VALUE> 160054
<RECEIVABLES> 0
<ASSETS-OTHER> 4184
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 164238
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 90780
<SHARES-COMMON-STOCK> 9022
<SHARES-COMMON-PRIOR> 13041
<ACCUMULATED-NII-CURRENT> 362
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 41036
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 32060
<NET-ASSETS> 164238
<DIVIDEND-INCOME> 2639
<INTEREST-INCOME> 1180
<OTHER-INCOME> 0
<EXPENSES-NET> (1576)
<NET-INVESTMENT-INCOME> 2243
<REALIZED-GAINS-CURRENT> 43785
<APPREC-INCREASE-CURRENT> 7498
<NET-CHANGE-FROM-OPS> 53526
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2573)
<DISTRIBUTIONS-OF-GAINS> (56597)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2206
<NUMBER-OF-SHARES-REDEEMED> (8773)
<SHARES-REINVESTED> 2548
<NET-CHANGE-IN-ASSETS> (72343)
<ACCUMULATED-NII-PRIOR> 716
<ACCUMULATED-GAINS-PRIOR> 53660
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 751
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1670
<AVERAGE-NET-ASSETS> 187631
<PER-SHARE-NAV-BEGIN> 18.14
<PER-SHARE-NII> .21
<PER-SHARE-GAIN-APPREC> 4.65
<PER-SHARE-DIVIDEND> (.22)
<PER-SHARE-DISTRIBUTIONS> (4.58)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.20
<EXPENSE-RATIO> .84
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000804239
<NAME> SEI INSTITUTIONAL MANAGED TRUST
<SERIES>
<NUMBER> 071
<NAME> EQUITY INCOME
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 121833
<INVESTMENTS-AT-VALUE> 173115
<RECEIVABLES> 0
<ASSETS-OTHER> 651
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 173766
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 93150
<SHARES-COMMON-STOCK> 9641
<SHARES-COMMON-PRIOR> 12370
<ACCUMULATED-NII-CURRENT> 1348
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 27950
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 51318
<NET-ASSETS> 173766
<DIVIDEND-INCOME> 5797
<INTEREST-INCOME> 328
<OTHER-INCOME> 0
<EXPENSES-NET> (1610)
<NET-INVESTMENT-INCOME> 4515
<REALIZED-GAINS-CURRENT> 31754
<APPREC-INCREASE-CURRENT> 18385
<NET-CHANGE-FROM-OPS> 54654
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5055)
<DISTRIBUTIONS-OF-GAINS> (32447)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2202
<NUMBER-OF-SHARES-REDEEMED> (5817)
<SHARES-REINVESTED> 886
<NET-CHANGE-IN-ASSETS> (29057)
<ACCUMULATED-NII-PRIOR> 1438
<ACCUMULATED-GAINS-PRIOR> 29103
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 757
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1705
<AVERAGE-NET-ASSETS> 189357
<PER-SHARE-NAV-BEGIN> 16.40
<PER-SHARE-NII> .39
<PER-SHARE-GAIN-APPREC> 4.33
<PER-SHARE-DIVIDEND> (.42)
<PER-SHARE-DISTRIBUTIONS> (2.68)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.02
<EXPENSE-RATIO> .85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000804239
<NAME> SEI INSTITUTIONAL MANAGED TRUST
<SERIES>
<NUMBER> 081
<NAME> CORE FIXED INCOME
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 1076523
<INVESTMENTS-AT-VALUE> 1094794
<RECEIVABLES> 0
<ASSETS-OTHER> 33290
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1128084
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 64749
<TOTAL-LIABILITIES> 64749
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1043643
<SHARES-COMMON-STOCK> 102202
<SHARES-COMMON-PRIOR> 64047
<ACCUMULATED-NII-CURRENT> 15
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2515
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17162
<NET-ASSETS> 1063335
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 56646
<OTHER-INCOME> 0
<EXPENSES-NET> (5020)
<NET-INVESTMENT-INCOME> 51626
<REALIZED-GAINS-CURRENT> 4733
<APPREC-INCREASE-CURRENT> 22140
<NET-CHANGE-FROM-OPS> 78499
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (51626)
<DISTRIBUTIONS-OF-GAINS> (10904)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 51087
<NUMBER-OF-SHARES-REDEEMED> (17227)
<SHARES-REINVESTED> 4295
<NET-CHANGE-IN-ASSETS> 408035
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 8684
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2301
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5128
<AVERAGE-NET-ASSETS> 837022
<PER-SHARE-NAV-BEGIN> 10.23
<PER-SHARE-NII> .63
<PER-SHARE-GAIN-APPREC> .33
<PER-SHARE-DIVIDEND> (.63)
<PER-SHARE-DISTRIBUTIONS> (.16)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.40
<EXPENSE-RATIO> .60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000804239
<NAME> SEI INSTITUTIONAL MANAGED TRUST
<SERIES>
<NUMBER> 091
<NAME> BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 17380
<INVESTMENTS-AT-VALUE> 17759
<RECEIVABLES> 0
<ASSETS-OTHER> 189
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17948
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 21221
<SHARES-COMMON-STOCK> 1627
<SHARES-COMMON-PRIOR> 2721
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (90)
<ACCUMULATED-NET-GAINS> (3562)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 379
<NET-ASSETS> 17948
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1367
<OTHER-INCOME> 0
<EXPENSES-NET> (131)
<NET-INVESTMENT-INCOME> 1236
<REALIZED-GAINS-CURRENT> 399
<APPREC-INCREASE-CURRENT> 436
<NET-CHANGE-FROM-OPS> 2071
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1233)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 476
<NUMBER-OF-SHARES-REDEEMED> (1615)
<SHARES-REINVESTED> 45
<NET-CHANGE-IN-ASSETS> (10915)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (4078)
<GROSS-ADVISORY-FEES> 60
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 134
<AVERAGE-NET-ASSETS> 21868
<PER-SHARE-NAV-BEGIN> 10.61
<PER-SHARE-NII> .61
<PER-SHARE-GAIN-APPREC> .42
<PER-SHARE-DIVIDEND> (.61)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.03
<EXPENSE-RATIO> .60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000804239
<NAME> SEI INSTITUTIONAL MANAGED TRUST
<SERIES>
<NUMBER> 111
<NAME> SMALL CAP GROWTH CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 416265
<INVESTMENTS-AT-VALUE> 567785
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 567785
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4169
<TOTAL-LIABILITIES> 4169
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 393628
<SHARES-COMMON-STOCK> 29055
<SHARES-COMMON-PRIOR> 18555
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 16455
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 151575
<NET-ASSETS> 563616
<DIVIDEND-INCOME> 566
<INTEREST-INCOME> 1516
<OTHER-INCOME> 0
<EXPENSES-NET> (4544)
<NET-INVESTMENT-INCOME> (2462)
<REALIZED-GAINS-CURRENT> 17612
<APPREC-INCREASE-CURRENT> 74705
<NET-CHANGE-FROM-OPS> 89855
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (74231)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 15890
<NUMBER-OF-SHARES-REDEEMED> (8530)
<SHARES-REINVESTED> 3140
<NET-CHANGE-IN-ASSETS> 181265
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 73427
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2675
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4544
<AVERAGE-NET-ASSETS> 409778
<PER-SHARE-NAV-BEGIN> 20.51
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 2.64
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (3.85)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.32
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000804239
<NAME> SEI INSTITUTIONAL MANAGED TRUST
<SERIES>
<NUMBER> 112
<NAME> SMALL CAP GROWTH CLASS D
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 416265
<INVESTMENTS-AT-VALUE> 567785
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 567785
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4169
<TOTAL-LIABILITIES> 4169
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1958
<SHARES-COMMON-STOCK> 116
<SHARES-COMMON-PRIOR> 90
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 16455
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 151575
<NET-ASSETS> 563616
<DIVIDEND-INCOME> 566
<INTEREST-INCOME> 1516
<OTHER-INCOME> 0
<EXPENSES-NET> (4544)
<NET-INVESTMENT-INCOME> (2462)
<REALIZED-GAINS-CURRENT> 17612
<APPREC-INCREASE-CURRENT> 74705
<NET-CHANGE-FROM-OPS> 89855
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (355)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 33
<NUMBER-OF-SHARES-REDEEMED> (30)
<SHARES-REINVESTED> 23
<NET-CHANGE-IN-ASSETS> 181265
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 73427
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2675
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4544
<AVERAGE-NET-ASSETS> 1823
<PER-SHARE-NAV-BEGIN> 20.29
<PER-SHARE-NII> (.11)
<PER-SHARE-GAIN-APPREC> 2.66
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (3.85)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.99
<EXPENSE-RATIO> 1.46
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000804239
<NAME> SEI INSTITUTIONAL MANAGED TRUST
<SERIES>
<NUMBER> 121
<NAME> MID CAP
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 27148
<INVESTMENTS-AT-VALUE> 35069
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 35069
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22
<TOTAL-LIABILITIES> 22
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22156
<SHARES-COMMON-STOCK> 1792
<SHARES-COMMON-PRIOR> 1668
<ACCUMULATED-NII-CURRENT> 40
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4930
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7921
<NET-ASSETS> 35047
<DIVIDEND-INCOME> 427
<INTEREST-INCOME> 66
<OTHER-INCOME> 0
<EXPENSES-NET> (267)
<NET-INVESTMENT-INCOME> 226
<REALIZED-GAINS-CURRENT> 5433
<APPREC-INCREASE-CURRENT> 4865
<NET-CHANGE-FROM-OPS> 10524
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (243)
<DISTRIBUTIONS-OF-GAINS> (2094)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 918
<NUMBER-OF-SHARES-REDEEMED> (900)
<SHARES-REINVESTED> 106
<NET-CHANGE-IN-ASSETS> 10093
<ACCUMULATED-NII-PRIOR> 67
<ACCUMULATED-GAINS-PRIOR> 1581
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 115
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 271
<AVERAGE-NET-ASSETS> 28695
<PER-SHARE-NAV-BEGIN> 14.96
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 5.86
<PER-SHARE-DIVIDEND> (.14)
<PER-SHARE-DISTRIBUTIONS> (1.25)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.56
<EXPENSE-RATIO> .93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
