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RBB
FAMILY OF MUTUAL FUNDS
A TRADITION OF BUILDING WEALTH
[LOGO OMITTED]
GOVERNMENT SECURITIES PORTFOLIO
(RBB CLASS)
PROSPECTUS
December 29, 1998
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<PAGE>
THE RBB CLASS
OF THE RBB FUND, INC.
This Prospectus offers one class of shares in the Government Securities
Portfolio of The RBB Fund, Inc. (the "Fund"). The investment objective of this
portfolio is as follows:
GOVERNMENT SECURITIES PORTFOLIO--to provide the highest level of current
income consistent with liquidity and a low risk to principal from a portfolio of
U.S. Government obligations. It seeks to achieve such objective by investing in
obligations issued or guaranteed by the U.S. Treasury or other agencies or
instrumentalities of the U.S. Government.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK
AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
This Prospectus contains information that a prospective investor needs to
know before investing. Please keep it for future reference. A Statement of
Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained free of charge from the Fund by calling (800)
430-9618. The Prospectus and Statement of Additional Information are also
available for reference, along with other related materials, on the SEC Internet
Web Site (http://www.sec.gov).
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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PROSPECTUS December 29, 1998
<PAGE>
INTRODUCTION
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The RBB Fund, Inc. is an open-end management investment company
incorporated under the laws of the State of Maryland on February 29, 1988 and is
currently operating or proposing to operate seventeen separate investment
portfolios. The class (the "RBB Class" or the "Class") of shares (the "RBB
Shares" or "Shares") offered by this Prospectus represents interests in the
Government Securities Portfolio (the "Portfolio").
FUND MANAGEMENT
BlackRock Institutional Management Corporation ("BIMC"), a majority-owned
subsidiary of PFPCTrust Company, serves as the investment adviser to the
Portfolio. PNC Bank serves as the custodian to the Fund. PNC Bank and its
subsidiaries currently manage over $45.9 billion of assets, of which
approximately $31.4 billion are mutual funds.
PFPC Inc. ("PFPC") serves as the administrator and transfer and dividend
disbursing agent to the Fund.
THE DISTRIBUTOR
Provident Distributors, Inc. (the "Distributor"), serves as the Fund's
distributor.
INVESTMENT PORTFOLIO
The investment objective of the Government Securities Portfolio is to
provide the highest level of current income consistent with liquidity and a low
risk to principal from a portfolio of U.S. Government obligations. It seeks to
achieve this objective by investing in obligations issued or guaranteed by the
U.S. Treasury or other agencies or instrumentalities of the U.S. Government.
EXPENSE TABLE
The Fee Table below contains a summary of annual operating expenses
incurred by the RBB Shares of the Portfolio (after fee waivers and expense
reimbursements) for the fiscal year ended August 31, 1998, as a percentage of
average daily net assets. An example based on the summary is also shown.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as percentage of offering price) ......................... 4.75%
ANNUAL FUND OPERATING EXPENSES (RBB CLASS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (after waivers)(1) ............................. 0%
12b-1 Fees ..................................................... .40%
Other Expenses (after waivers)(1) .............................. .30%
----
Total Fund Operating Expenses (after waivers)(1) ............... .70%
====
(1) Management Fees and 12b-1 Fees are each based on average daily net assets
and are calculated daily and paid monthly. Before expense reimbursements
and waivers for the Portfolio, Management Fees would be .40%, Other
Expenses would be .91%, and Total Fund Operating Expenses would be 1.71%.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the
Portfolio, assuming (1) a 5% annual return, and (2) redemption at the end of
each time period:
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ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ---------- ---------
Government Securities ........... $7* $22* $39* $87*
*Reflects the imposition of the maximum sales charge at the beginning of the
period.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. Long-term shareholders of the Portfolio may
pay more than the economic equivalent of the maximum front-end sales charge
permitted by the National Association of Securities Dealers, Inc.
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that a holder of RBB Shares in the Portfolio will
bear directly or indirectly. (For more complete descriptions of the various
costs and expenses, see "Management" and "Distribution of Shares" below.) The
Fee Table reflects a voluntary waiver of Management Fees for the Portfolio.
However, there can be no assurance that any future waivers of Management Fees
(if any) will not vary from the figure reflected in the Fee Table. In addition,
the investment adviser is currently voluntarily assuming additional expenses of
the Portfolio. There can be no assurance that the investment adviser will
continue to assume such expenses. Assumption of additional expenses will have
the effect of lowering a Portfolio's overall expense ratio and increasing its
yield to investors. The expense figures are based on actual costs and fees
charged to the Portfolio.
OFFERING PRICE
RBB Shares will be offered to the public at the next determined net asset
value after receipt by PFPC, the Fund's transfer agent, of an order plus a
maximum sales charge of 4.75% of the offering price on single purchases of less
than $100,000. The sales charge is reduced on a graduated scale on single
purchases of $100,000 or more.
MINIMUM INITIAL AND SUBSEQUENT INVESTMENTS
The minimum initial investment for RBB Shares is $1,000. Subsequent
investments must be $100 or more. See "How to Purchase Shares."
REDEMPTION
Shares may be redeemed at any time at their net asset value next determined
after receipt by PFPC of a redemption request. The Fund reserves the right, upon
30 days written notice, to redeem an account consisting of RBB Shares if the net
asset value of the investor's Shares in that account falls below $500 and is not
increased to at least such amount within such 30-day period. See "How to Redeem
Shares--Involuntary Redemption."
CERTAIN FACTORS TO CONSIDER
An investment in the Portfolio is subject to certain risks, as set forth in
detail under "Investment Objective and Policies." As with other mutual funds,
there can be no assurance that the Portfolio will achieve its objective. The
Portfolio, to the extent set forth under "Investment Objective and Policies,"
engages in the following investment practices: the use of repurchase agreements
and reverse repurchase agreements, the purchase of mortgage-related securities,
the purchase of securities on a "when-issued" or "forward commitment" basis, the
purchase of stand-by commitments, the lending of portfolio securities and
engaging in options and futures transactions. All of these transactions
involving certain special risks, as set forth under "Investment Objective and
Policies." Investment methods
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described in this Prospectus are among those which the Portfolio has the power
to utilize. Some may be employed on a regular basis; others may not be used at
all. Accordingly, reference to any particular method or technique carries no
implication that it will be utilized or, if it is, that it will be successful.
SHAREHOLDER INQUIRIES
Any questions or communications regarding a shareholder account should be
directed to PFPC, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (800) 430-9618.
FINANCIAL HIGHLIGHTS
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The table below sets forth certain information concerning the investment
results of the RBB Class of the Government Securities Portfolio for the periods
indicated. The financial data included in this table for each of the periods
ended August 31, 1994 through August 31, 1998 are part of the Fund's financial
statements for the Portfolio, which are incorporated by reference into the
Statement of Additional Information and have been audited by
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), the Fund's independent
accountants. The financial data for the Portfolio for the periods ending August
31, 1991, 1992 and 1993 are a part of previous financial statements audited by
PricewaterhouseCoopers. Further information about the performance of the
Portfolio is available in the Annual Report to Shareholders. The financial data
should be read in conjunction with the financial statements and notes thereto.
Both the Statement of Additional Information and the Annual Report to
Shareholders may be obtained free of charge by calling the telephone number on
Page 1 of this Prospectus.
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THE RBB CLASS
GOVERNMENT SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS(e)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1998 1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .... $ 8.87 $ 9.04 $ 9.54 $ 9.69 $ 10.73 $ 10.46
------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income ................. 0.5562 0.8744 0.5220 0.5819 0.5931 0.7080
Net gains (losses) on securities
(both realized and unrealized) ...... 0.3565 0.1346 (0.2540) 0.0361 (0.8651) 0.3300
------- ------- ------- ------- ------- -------
Total from investment operations .... 0.9127 1.0090 0.2680 0.6180 (0.2720) 1.0380
------- ------- ------- ------- ------- -------
Less distributions
Dividends (from net investment income) . (0.5562) (0.8744) (0.5220) (0.5819) (0.5901) (0.7080)
Distributions (from excess of net
investment income) ................... -- -- -- -- (0.0235) --
Return of capital ...................... (0.3565) (0.3046) (0.2460) (0.1861) (0.1544) (0.0600)
------- ------- ------- ------- ------- -------
Total distributions .................. (0.9127) (1.1790) (0.7680) (0.7680) (0.7680) (0.7680)
------- ------- ------- ------- ------- -------
Net asset value, end of period ........... $ 8.87 $ 8.87 $ 9.04 $ 9.54 $ 9.69 $ 10.73
======= ======= ======= ======= ======= =======
Total return ............................. 6.48%(d) 9.39%(d) 2.75%(d) 6.72%(d) (2.60%)(d) 10.36%(d)
Ratios/Supplemental Data
Net assets, end of period (000) ........ $ 5,901 $ 6,737 $ 8,785 $10,514 $54,938 $36,296
Ratios of expenses to average
net assets ........................... 0.70%(a) 0.70%(a) .70%(a) .72%(a) .64%(a) .66%(a)
Ratios of net investment income to
average net assets ................... 6.16% 6.18% 6.05% 6.59% 5.86% 6.70%
Portfolio turnover rate ................ 5% 26% 77% 86% 65% 47%
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
AUGUST 1, 1991
FOR THE (COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
AUGUST 31, AUGUST 31,
1992 1991
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<S> <C> <C>
Net asset value, beginning of period .... $ 10.12 $ 10.00
------- -------
Income from investment operations:
Net investment income ................. 0.8002 0.0737
Net gains (losses) on securities
(both realized and unrealized) ...... 0.3408 0.1213
------- -------
Total from investment operations .... 1.1410 0.1950
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Less distributions
Dividends (from net investment income) . (0.8010) (0.0750)
Distributions (from excess of net
investment income) ................... -- --
Return of capital ...................... -- --
------- -------
Total distributions .................. (0.8010) (0.0750)
------- -------
Net asset value, end of period ........... $ 10.46 $ 10.12
======= =======
Total return ............................. 11.73%(d) 1.95%(c)(d)
Ratios/Supplemental Data
Net assets, end of period (000) ........ $25,604 $28,225
Ratios of expenses to average
net assets ........................... .83%(a) 1.10%(a)(b)
Ratios of net investment income to
average net assets ................... 7.81% 8.50%(b)
Portfolio turnover rate ................ 21% 3%(c)
<FN>
(a) Without the waiver of advisory, administration and custody fees and without
the reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Government Securities Portfolio would have been
1.71%, 2.15%, 2.05%, 1.22%, 1.10%, 1.22% and 1.22% for the years ended
August 31, 1998, 1997, 1996, 1995, 1994, 1993 and 1992, respectively, and
1.28% annualized for the period ended August 31, 1991.
(b) Annualized.
(c) Not annualized.
(d) Sales load not reflected in total return.
(e) Financial Highlights relate solely to the RBB Class of Shares within the
portfolio.
</FN>
</TABLE>
5
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INVESTMENT OBJECTIVE AND POLICIES
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GOVERNMENT SECURITIES PORTFOLIO
The objective of the Government Securities Portfolio is to provide the
highest level of current income consistent with liquidity and a low risk to
principal from a portfolio of U.S. Government obligations. It seeks to achieve
such objective by investing in obligations issued or guaranteed by the U.S.
Treasury or other agencies or instrumentalities of the U.S. Government. There is
no assurance that the investment objective of the Portfolio will be achieved.
U.S. GOVERNMENT OBLIGATIONS. The Portfolio may purchase U.S. Government
agency and instrumentality obligations, which are debt securities issued by U.S.
Government-sponsored enterprises and federal agencies. Some obligations of
agencies and instrumentalities of the U.S. Government are supported by the full
faith and credit of the U.S. Government or by U.S. Treasury guarantees, such as
securities of the Government National Mortgage Association and the Federal
Housing Authority; others, by the right of the issuer to borrow from the U.S.
Treasury, such as securities of the Federal Home Loan Mortgage Corporation and
others, only by the credit of the agency or instrumentality issuing the
obligation, such as securities of the Federal National Mortgage Association and
the Federal Loan Banks. No assurance can be given that the U.S. Government will
provide financial support to U.S. Government-sponsored agencies or
instrumentalities if it is not obligated to do so by law.
During ordinary market conditions, at least 90% of the Portfolio's net
assets will be invested in obligations issued or guaranteed by the U.S. Treasury
or the agencies or instrumentalities of the U.S. Government, including options
and futures on such obligations. The maturities of U.S. Government securities
usually range from three months to thirty years. The Portfolio will at all times
invest at least 65% of its assets in such obligations, not including options and
futures on such obligations. The Portfolio's investment adviser may adjust the
average maturity of the Portfolio from time to time depending on its assessment
of relative yields of securities of different maturities and its expectations of
future changes in interest rates. Thus, at certain times the average maturity of
the Portfolio may be relatively short (under one year to five years, for
example) and at other times may be relatively long (more than 10 years, for
example). The obligations in which the Portfolio invests may not yield as high a
level of current income as lower grade obligations.
HEDGING INVESTMENTS. At such times as the Portfolio's investment adviser
deems it appropriate and consistent with the investment objective of the
Portfolio, the Portfolio may write covered call options on U.S. Government
obligations which are traded on a national securities exchange. The Portfolio
may also purchase and sell (i) options on U.S. Government obligations, (ii)
interest rate futures contracts, and (iii) options on interest rate futures
contracts. The purpose of such transactions is to hedge against changes in the
market value of securities in the Portfolio caused by fluctuating interest
rates, and to close out or offset its existing positions in such futures
contracts or options as described below. Such instruments will not be used for
speculation. Options and futures contracts are discussed below.
OPTIONS. The Portfolio may purchase options issued by the Options Clearing
Corporation on U.S. Treasury bonds, notes and bills. Such options give the
Portfolio the right for a fixed period of time to sell (in the case of the
purchase of a put option) or to buy (in the case of the purchase of a call
option) the number of units of the underlying obligation covered by the option
at a fixed or determinable exercise price. Buying a put hedges against the risk
of rising interest rates. Buying a call hedges against a market advance when the
Portfolio is not fully invested. Prior to its expiration, a put or call option
may be sold in a closing sale transaction. Gain or loss from the sale will
depend on whether the amount received is more or less than the premium paid for
the option plus the related transaction costs.
The Portfolio also may write (sell) put or call options but only if such
options are covered, and such options remain covered so long as the Portfolio is
obligated as a writer of the option (seller). A call option is "covered" if the
Portfolio owns the underlying security covered by the call. A put option is
"covered" if the Portfolio maintains in a segregated account with its custodian
liquid assets with a value equal to the exercise price. If a "covered" call or
put option expires unexercised, the writer realizes a gain in the amount of the
premium received. If the covered call is exercised, the writer
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realizes a gain or loss from the sale or purchase of the underlying security
with the proceeds to the writer being increased by the amount of the premium. If
the covered put is exercised, the writer's cost of purchasing the underlying
security is reduced by the amount of the premium. Prior to its expiration, a put
or call option may be purchased in a closing sale transaction and gain or loss
from the sale will depend on whether the amount paid is more or less than the
premium received for the option plus the related transaction costs.
Options are subject to certain risks, including the risk of imperfect
correlation between the option and the Portfolio's other investments and the
risk that there might not be a liquid secondary market for the option. In
general, options whose strike prices are close to their underlying instruments'
current value will have the highest trading volume, while options whose strike
prices are further away may be less liquid. The liquidity of options may also be
affected if options exchanges impose trading halts, particularly when markets
are volatile.
FUTURES CONTRACTS. As noted above, the Portfolio may invest in financial
futures contracts. Financial futures contracts obligate the seller to deliver a
specific type of security called for in the contract, at a specified future
time, and for a specified price. Financial futures contracts may be satisfied by
actual delivery of the securities or, more typically, by entering into an
offsetting transaction. There are risks that are associated with the use of
futures contracts for hedging purposes. In certain market conditions, as in a
rising interest rate environment, sales of futures contracts may not completely
offset a decline in value of the portfolio securities against which the futures
contracts are being sold. In the futures market, it may not always be possible
to execute a buy or sell order at the desired price, or to close out an open
position due to market conditions, limits on open positions, and/or daily price
fluctuations. Risks in the use of futures contracts also result from the
possibility that changes in the market interest rates may differ substantially
from the changes anticipated by the Portfolio's investment adviser when hedge
positions were established.
OPTIONS ON FUTURES. The Portfolio may purchase and write call and put
options on futures contracts which are traded on a U.S. exchange or board of
exchange and enter into closing transactions with respect to such options to
terminate an existing position. An option on a futures contract gives the
purchaser the right, in return for the premium paid, to assume a position in a
futures contract. The Portfolio may use options on futures contracts in
connection with hedging strategies. The purchase of put options on futures
contracts is a means of hedging against the risk of rising interest rates. The
purchase of call options on futures contracts is a means of hedging against a
market advance when the Portfolio is not fully invested.
There is no assurance that the Portfolio will be able to close out its
financial futures positions at any time, in which case it would be required to
maintain the margin deposits on the contract. There can be no assurance that
hedging transactions will be successful, as there may be imperfect correlations
(or no correlations) between movements in the prices of the futures contracts
and of the debt securities being hedged, or price distortions due to market
conditions in the futures markets. Such imperfect correlations could have an
impact on the Portfolio's ability to effectively hedge its securities.
The Portfolio will not enter into financial futures contracts or related
options contracts (valued at market value) if, immediately thereafter, more than
50% of the value of the Portfolio's total assets would be so hedged. The 50%
investment restriction is not a fundamental policy of the Portfolio and may be
changed without a shareholder vote by the Board of Directors. Restrictions
imposed by the Internal Revenue Code may also limit the Portfolio's ability to
engage in hedging transactions.
The Portfolio intends to comply with the regulations of the Commodity
Futures Trading Commission exempting the Portfolio from registration as a
"commodity pool operator."
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SHORT SALES. The Portfolio may only make short sales of securities
"against-the-box." A short sale is a transaction in which a Portfolio sells a
security it does not own in anticipation that the market price of that security
will decline. The Portfolio may make short sales as a form of hedging to offset
potential declines in long positions in similar securities. In a short sale
"against-the-box," at the time of sale, the Portfolio owns or has the immediate
and unconditional right to acquire the identical security at no additional cost.
When selling short "against-the-box," a portfolio forgoes an opportunity for
capital appreciation in the security.
WHEN-ISSUED SECURITIES. The Portfolio may purchase portfolio securities on
a "when-issued" basis. When-issued securities are securities purchased for
delivery beyond the normal settlement date at a stated price and yield. The
Portfolio will generally not pay for such securities or start earning interest
on them until they are received. Securities purchased on a when-issued basis are
recorded as an asset when the commitment is entered into and are subject to
changes in value prior to delivery based upon changes in the general level of
interest rates. The Portfolio expects that commitments to purchase when-issued
securities will not exceed 25% of the value of its total assets absent unusual
market conditions. The Portfolio does not intend to purchase when-issued
securities for speculative purposes but only in furtherance of its investment
objective.
REPURCHASE AGREEMENTS. The Portfolio may agree to purchase securities from
financial institutions subject to the seller's agreement to repurchase them at
an agreed-upon time and price ("repurchase agreements"). The securities held
subject to a repurchase agreement may have stated maturities exceeding 13
months, provided the repurchase agreement itself matures in less than 13 months.
Default by or bankruptcy of the seller would, however, expose the Portfolio to
possible loss because of adverse market action or delays in connection with the
disposition of the underlying obligations.
LENDING OF PORTFOLIO SECURITIES. The Portfolio may also lend its portfolio
securities to financial institutions in accordance with the investment
restrictions described below. Such loans would involve risks of delay in
receiving additional collateral in the event the value of the collateral
decreased below the value of the securities loaned or of delay in recovering the
securities loaned or even loss of rights in the collateral should the borrower
of the securities fail financially. However, loans will be made only to
borrowers deemed by the Portfolio's investment adviser to be of good standing
and only when, in the adviser's judgment, the income to be earned from the loans
justifies the attendant risks.
PORTFOLIO TURNOVER. The Portfolio will actively use trading to benefit from
yield disparities among different issues of U.S. Government securities or
otherwise to achieve its investment objective and policies. The Portfolio,
therefore, may be subject to a greater degree of turnover and, thus, a higher
incidence of short-term capital gains taxable as ordinary income than might be
expected from portfolios which invest substantially all of their funds on a
long-term basis, and correspondingly larger mark-up charges can be expected to
be borne by the Portfolio. The Portfolio anticipates that the annual turnover in
the Portfolio will not be in excess of 200%. A 200% turnover rate is greater
than that of many other investment companies.
ILLIQUID SECURITIES. The Portfolio will not invest more than 15% of its net
assets in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days and other securities that are illiquid by
virtue of the absence of a readily available market or legal or contractual
restrictions on resale. Repurchase agreements subject to demand are deemed to
have a maturity equal to the notice period. Securities that have legal or
contractual restrictions on resale but have a readily available market are not
deemed illiquid for purposes of this limitation. The Portfolio's investment
adviser will monitor the liquidity of such restricted securities under the
supervision of the Board of Directors. See "Investment Objective and
Policies--Illiquid Securities" in the Statement of Additional Information.
The Portfolio's investment objective and policies described above may be
changed by the Fund's Board of Directors without the affirmative vote of the
holders of a majority of outstanding Shares of the Fund representing interests
in the Portfolio.
8
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YEAR 2000
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Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
INVESTMENT LIMITATIONS
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The Portfolio may not change the following investment limitations (with
certain exceptions, as noted below) without shareholder approval. (A complete
list of the investment limitations that cannot be changed without such a vote of
the shareholders is contained in the Statement of Additional Information under
"Investment Objective and Policies.")
The Portfolio may not:
1. Purchase the securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, if immediately after and as a result of such purchase
more than 5% of the value of the Portfolio's total assets would be invested
in the securities of such issuer, or more than 10% of the outstanding
voting securities of such issuer would be owned by the Portfolio, except
that up to 25% of the value of the Portfolio's total assets may be invested
without regard to such limitations.
2. Borrow money, except from banks for temporary purposes and then in
amounts not in excess of 10% of the value of the Portfolio's total assets
at the time of such borrowing, and only if after such borrowing there is
asset coverage of at least 300% for all borrowings of the Portfolio, or
mortgage, pledge or hypothecate any of its assets except in connection with
any such borrowing and in amounts not in excess of 10% of the value of the
Portfolio's total assets at the time of such borrowing; or purchase
portfolio securities while borrowings are in excess of 5% of the
Portfolio's net assets. (This borrowing provision is not for investment
leverage, but solely to facilitate management of the Portfolio's securities
by enabling the Portfolio to meet redemption requests where the liquidation
of portfolio securities is deemed to be disadvantageous or inconvenient.)
3. Purchase any securities which would cause, at the time of purchase,
25% or more of the value of the total assets of the Portfolio to be
invested in the obligations of issuers in any industry, provided that there
is no limitation with respect to investments in U.S. Government
obligations. (In determining whether the Portfolio has complied with this
limitation, the value of options and futures will not be taken into
account.)
4. Make loans except that the Portfolio may purchase or hold debt
obligations in accordance with its investment objective, policies and
limitations, may enter into repurchase agreements for securities, and may
lend portfolio securities against collateral consisting of cash or
securities which are consistent with the Portfolio's permitted investments,
which is equal at all times to at least 100% of the value of the securities
loaned. There is no investment restriction on the amount of securities that
may be loaned, except that payments received on such loans, including
amounts received during the loan on account of interest on the securities
loaned, may not (together with all non-qualifying income) exceed 10% of the
Portfolio's annual gross income (without offset for realized capital gains)
unless, in the opinion of counsel to the Fund, such amounts are qualifying
income under federal income tax provisions applicable to regulated
investment companies.
9
<PAGE>
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of the Fund and the Portfolio are managed under
the direction of the Fund's Board of Directors. The Fund currently operates or
proposes to operate seventeen separate investment portfolios. The RBB Family
Class represents interests in the Government Securities Portfolio.
INVESTMENT ADVISER
BIMC, an indirect majority-owned subsidiary of PNC Bank, serves as the
investment adviser for the Portfolio. BIMC has its principal offices at Bellevue
Park Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware 19809. PNC
Bank and its subsidiaries currently manage over $45.9 billion of assets, of
which approximately $31.4 billion are mutual funds. PNC Bank, a national bank
whose principal business address is 1600 Market Street, Philadelphia,
Pennsylvania 19103, is a wholly-owned subsidiary of PNC Bancorp, Inc. PNC
Bancorp, Inc. is a bank holding company and a wholly-owned subsidiary of PNC
Bank Corp., a multi-bank holding company.
As adviser to the Portfolio, BIMC is responsible for overall management of
the Portfolio, and is responsible for all purchases and sales of portfolio
securities for the Portfolio.
Robert J. Morgan is responsible for the day-to-day portfolio management of
the Portfolio. Mr. Morgan is Assistant Vice President with BIMC, where he has
been employed since 1988. Previously, he was a Portfolio Manager with CoreStates
Financial Corp.
For the services provided and expenses assumed by it, BIMC is entitled to
receive the following fees, computed daily and payable monthly based on the
Portfolio's average daily net assets: .40% of first $250 million of net assets;
.35% of next $250 million of net assets; and .30% of net assets in excess of
$500 million. BIMC may in its discretion from time to time agree to waive
voluntarily all or any portion of its advisory fee for the Portfolio. In
addition, BIMC may from time to time enter into an agreement with one of its
affiliates pursuant to which it delegates some or all of its accounting and
administrative obligations under its advisory agreements with the Fund relating
to the Portfolio. Any such arrangement would have no effect on the advisory fees
payable by the Portfolio to BIMC.
For the fiscal year ended August 31, 1998, BIMC waived all investment
advisory fees payable to it with respect to the Portfolio.
ADMINISTRATOR
PFPC serves as administrator to the Portfolio. PFPC is an indirect,
wholly-owned subsidiary of PNC Bank Corp. PFPC generally assists the Portfolio
in all aspects of its administration and operations, including matters relating
to the maintenance of financial records and accounting. PFPC is entitled to an
administration fee, computed daily and payable monthly at an annual rate of .10%
of the Portfolio's average daily net assets. For the fiscal year ended August
31, 1998, PFPC waived all administration fees payable to it with respect to the
portfolio. PFPC's principal business address is 400 Bellevue Parkway,
Wilmington, Delaware 19809.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholder servicing
agreements with registered broker/dealers who have entered into dealer
agreements with the Distributor
10
<PAGE>
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<PAGE>
THE RBB CLASS NEW ACCOUNT APPLICATION
Mail completed application to: PFPC - Attention: The RBB Class, P.O. Box 8950,
Wilmington, DE 19899
<TABLE>
========================================================================================================
<S> <C> <C>
1 --------------------------------------------------------- [ ] Individual
PLEASE PRINT
Registration
--------------------------------------------------------- [ ] Joint Tenant
Owner
[ ] Custodian
---------------------------------------------------------
Co-owner*, minor, trust
[ ] UGMA_____(state)
---------------------------------------------------------
Street Address [ ] Trust
--------------------------------------------------------- [ ] Corporation
City State Zip Code
[ ] Other____________
---------------------------------------------------------
*For joint registration, both must sign. The registration
will be as joint tenants with the right of survivorship
and not as tenants in common, unless otherwise stated.
- --------------------------------------------------------------------------------------------------------
2 Enclosed is my check for $_________ (minimum of $1,000 per portfolio) made payable to
Investments "The RBB Class" GOVERNMENT SECURITIES PORTFOLIO $_________________.
My account being established with this application qualifies for a reduced sales
charge with one of the following privileges:
[ ] RIGHT OF ACCUMULATION - I agree for Right of Accumulation reduced sales charges
based on the following accounts in the RBB Class
------------------------------ --------------------------------
Portfolio Account No.
[ ] LETTER OF INTENT - I agree to the Letter of Intent provisions in the prospectus.
I plan to invest during a 13-month period a dollar amount of at least $________.
($100,000 minimum)
========================================================================================================
</TABLE>
<PAGE>
<TABLE>
========================================================================================================
<S> <C>
3 Under penalties of perjury, I certify with my signature below that the number shown
Taxpayer in this section of the application is my correct taxpayer identification number and
Identification that I am not subject to backup withholdings as a result of a failure to report all
interest or dividends, or the Internal Revenue Service has notified me that I am no
longer subject to backup withholding.
If you are subject to backup withholding, check the box in front of the following
statement.
[ ] The Internal Revenue Service has notified me that I am subject to backup withholding.
------------------------------ or -------------------------------- or
(Owner's Social Security #) (Tax Identification #)
------------------------------
(Minor's Social Security #)
- --------------------------------------------------------------------------------------------------------
4 A. DIVIDEND ELECTION
Options Unless you elect otherwise, all dividends and capital gains distributions will be
automatically reinvested in additional shares. If you prefer to be paid in cash each
month check the appropriate box below. Pay all:
[ ] dividends and capital gains in cash.
[ ] dividends in cash and reinvest capital gains.
[ ] capital gains in cash and reinvest dividends.
[ ] I request the above distributions be sent to the special payee whose address is
specified in Section B below.
- --------------------------------------------------------------------------------------------------------
B. SYSTEMATIC WITHDRAWAL
Systematic withdrawal plan minimum account of $10,000 in shares at the current offering price. Minimum
withdrawal $100. Each withdrawal redemption will be processed about the 25th of the month and mailed
as soon as possible thereafter. SHAREHOLDERS HOLDING SHARE CERTIFICATES ARE NOT ELIGIBLE FOR THE
SYSTEMATIC WITHDRAWAL PLAN BECAUSE SHARE CERTIFICATES MUST ACCOMPANY ALL WITHDRAWAL REQUESTS.
Start (month) __________________________________ $(amount)____________________________
[ ] Monthly [ ] Quarterly [ ] Semi-annually [ ] Annually
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Provide the following information only if distribution or withdrawal checks are to be payable to a
person or organization different than as registered.
Name of Bank or Individual: ________________________________________________________
Bank Account # (if applicable)______________________________________________________
Street_______________________________City_________________State________Zip__________
C. AUTOMATIC INVESTING
This program provides for investments to be made automatically, by authorizing PFPC to withdraw funds
from your bank account. An initial minimum investment of $1,000, and subsequent investment of at least
$100 are required. The program requires additional information so that PFPC may contact your bank to
make sure the arrangement is properly established. This may not be used with a Systematic Withdrawal
Program.
[ ] Check here and the proper form will be sent to you.
========================================================================================================
5 Citizenship: [ ] U.S. [ ] Other________________________
Signatures Please provide Phone Number (___)________________
Sign below exactly as printed in Registration.
I(we) am (are) of legal age and have read the prospectus. I(we) hereby certify that
each of the persons listed below has been duly elected, and is now legally holding
the office set below his name and has the authority to make this authorization.
Please print titles below if signing on behalf of a business or trust.
NOTE: YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU
ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE YOU HAVE FAILED TO REPORT ALL
INTEREST AND DIVIDENDS ON YOUR TAX RETURN. THE INTERNAL REVENUE SERVICE DOES NOT
REQUIRE YOUR CONSENT TO ANY PROVISIONS OF THIS DOCUMENT OTHER THAN THE CERTIFICATION
REQUIRED TO AUDIT BACKUP WITHHOLDING.
-------------------------------------------------------------
Signature
-------------------------------------------------------------
(President, Trustee, General Partner or Agent)
-------------------------------------------------------------
Signature
-------------------------------------------------------------
(Co-owner, Secretary of Corporation, Co-trustee, etc.)
- --------------------------------------------------------------------------------------------------------
6 MUST BE COMPLETED BY DEALER
Investment Dealer
-------------------------------------------------------------
Firm Name
-------------------------------------------------------------
Branch Street Address
-------------------------------------------------------------
Representative's Signature
-------------------------------------------------------------
Representative's name (print)
-------------------------------------------------------------
Representative Number
-------------------------------------------------------------
Date
========================================================================================================
</TABLE>
<PAGE>
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<PAGE>
("Authorized Dealers") for the provision of certain shareholder support services
to customers of such Authorized Dealers who are shareholders of the Portfolio.
The services provided and the fees payable by the Fund for these services are
described in the Statement of Additional Information under "Investment Advisory,
Distribution and Servicing Arrangements."
DISTRIBUTOR
Provident Distributors, Inc., with a principal business address at Four
Falls Corporate Center, West Conshohocken, Pennsylvania, acts as Distributor for
the Portfolio pursuant to a distribution agreement dated May 29, 1998 (the
"Distribution Agreement").
EXPENSES
The expenses of the Portfolio are deducted from its total income before
dividends are paid. Any general expenses of the Fund that are not readily
identifiable as belonging to a particular investment portfolio of the Fund will
be allocated among all investment portfolios of the Fund based upon the relative
net assets of the investment portfolios. The RBB Class of the Fund pays its own
distribution fees, and may pay a different share than other classes of the Fund
of other expenses (excluding advisory and custodial fees) if those expenses are
actually incurred in a different amount by the RBB Class or if it receives
different services.
The investment adviser may assume additional expenses of the Portfolio from
time to time. In certain circumstances, it may assume such expenses on the
condition that it is reimbursed by the Portfolio for such amounts prior to the
end of a fiscal year. In such event, the reimbursement of such amounts will have
the effect of increasing the Portfolio's expense ratio and of decreasing yield
to investors.
For the Fund's fiscal year ended August 31, 1998, the Fund's total expenses
were 1.71% of the average daily net assets of the RBB Class of the Portfolio
(not taking into account waivers and reimbursements of 1.01%).
PORTFOLIO TRANSACTIONS
The Portfolio's adviser may consider a number of factors in determining
which brokers to use in purchasing or selling the Portfolio's securities. These
factors, which are more fully discussed in the Statement of Additional
Information, include, but are not limited to, research services, the
reasonableness of commissions and quality of services and execution.
Transactions for the Portfolio may be effected through Authorized Dealers,
subject to the requirements of best execution. The Portfolio may enter into
brokerage transactions with and pay brokerage commissions to brokers that are
affiliated persons (as such term is defined in the 1940 Act) provided that the
terms of the brokerage transactions comply with the provisions of the 1940 Act.
DISTRIBUTION OF SHARES
- --------------------------------------------------------------------------------
The Board of Directors of the Fund approved and adopted the Distribution
Agreement and a Plan of Distribution for the Portfolio (the "Plan") pursuant to
Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to
receive from the Class a distribution fee, which is accrued daily and paid
monthly, of up to .65% on an annualized basis of the average daily net assets of
the Class. The actual amount of such compensation under the Plan is agreed upon
by the Fund's Board of Directors and by the Distributor. Under the Distribution
Agreement, the Distributor has agreed to accept compensation for its services
thereunder and under the Plan in the amount of .40% of the average daily net
assets of the Class on an annualized basis in any year. Such compensation may be
increased, up to the amount permitted in the Plan, with the approval of the
Fund's Board of Directors. Pursuant to the conditions of an exemptive order
granted by the Securities and Exchange Commission (the "SEC"), the Distributor
has agreed to waive its fee with respect to the
11
<PAGE>
Class on any day to the extent necessary to ensure that the fee required to be
accrued by the Class does not exceed the income of the Class on such day. In
addition, the Distributor may, in its discretion, from time to time waive
voluntarily all or any portion of its distribution fee.
Under the dealer agreements in effect with respect to the Class, the
Distributor may reallocate up to all of the compensation it receives for its
services under the Distribution Agreement and the Plan to Authorized Dealers,
based upon the aggregate investment amounts maintained by customers of such
Authorized Dealers in the Portfolio. The Distributor may also reimburse
Authorized Dealers for other expenses incurred in the promotion of the sale of
Fund Shares. The Distributor and/or Authorized Dealers pay for the cost of
printing (excluding typesetting) and mailing to prospective investors
prospectuses and other materials relating to the Portfolio as well as for
related direct mail, advertising and promotional expenses.
The Plan obligates the Fund, during the period it is in effect, to accrue
and pay to the Distributor on behalf of the Fund the fee agreed to under the
Distribution Plan. Payments under the Plan are not tied exclusively to expenses
actually incurred by the Distributor, and the payments may exceed distribution
expenses actually incurred.
HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------
GENERAL
Shares representing interests in the Portfolio are offered continuously for
sale by the Distributor and may be purchased through Authorized Dealers. Shares
representing interests in the Portfolio may be purchased initially by completing
the application included in this Prospectus and forwarding the application,
through the designated Authorized Dealer, to the Fund's transfer agent, PFPC.
Subsequent purchases of Shares may be effected through an Authorized Dealer or
by mailing a check or Federal Reserve Draft, payable to the order of "The RBB
Class" to The RBB Class, c/o PFPC, P.O. Box 8916, Wilmington, Delaware 19899.
The name of the Portfolio for which Shares are being purchased must also appear
on the check or Federal Reserve Draft. Federal Reserve Drafts are available at
national banks or any state bank which is a member of the Federal Reserve
System. Initial investments in the Portfolio must be at least $1,000 and
subsequent investments must be at least $100. The Fund reserves the right to
reject any purchase order.
Shares may be purchased on any Business Day. A "Business Day" is any day
that the New York Stock Exchange (the "NYSE") is open for business. Currently,
the NYSE is closed on weekends and New Year's Day, Dr. Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and the preceding Friday or subsequent Monday
when one of these holidays falls on Saturday or Sunday. Shares are offered at
the next determined net asset value per share, plus a sales load as described
below.
The price paid for Shares purchased is based on the net asset value next
computed (plus a sales charge, if no sales charge has been previously imposed
with respect to such Shares) after a purchase order is received in good order by
the Fund's transfer agent. Such price will be the net asset value next computed
(plus any applicable sales charge) after an order is received by an Authorized
Dealer provided such order is transmitted to and received by the Fund's transfer
agent prior to its close of business on such day. It is the responsibility of
Authorized Dealers to transmit orders received by them to the Fund's transfer
agent so they will be received prior to such time. On any Business Day, orders
received by the Fund's transfer agent from an Authorized Dealer after its close
of business are priced at the net asset value next determined (plus any
applicable sales charge) on the following Business Day. Orders of less than $500
are mailed by an Authorized Dealer. In those cases where an investor pays for
Shares by check, the purchase will be effected at the net asset value (plus any
applicable sales charge) next determined after the Fund's transfer agent
receives the order and Federal Funds are available to the Fund, which is
generally two Business Days after a purchase order is received.
12
<PAGE>
Shareholders whose shares are held in the street name account of an
Authorized Dealer and who desire to transfer such shares to the street name
account of another Authorized Dealer should contact their current Authorized
Dealer.
SALES CHARGES--GENERAL. The following table shows sales charges generally
applicable to Shares at various investment levels. Sales charges are reduced on
a graduated scale on single purchases of Shares of $100,000 or more. Sales
charges are imposed regardless of whether Shares are purchased through
Authorized Dealers or by direct investment. During special promotions, as much
as the entire sales load may be reallowed to Authorized Dealers, and at such
times such Authorized Dealers may, by virtue of such reallowance, be deemed to
be "underwriters" under the 1933 Act.
<TABLE>
<CAPTION>
SALES SALES REALLOWANCE
CHARGE AS CHARGE AS TO AUTHORIZED
PERCENTAGE PERCENTAGE DEALERS (AS
OF NET OF OFFERING % OF OFFERING
AMOUNT OF TRANSACTION AT OFFERING PRICE ASSET VALUE PRICE PRICE)
- -------------------------------------------------- ----------- ----------- -------------
<S> <C> <C> <C>
Less than $100,000 ............................... 4.99% 4.75% 4.25%
$100,000 but less than $250,000 .................. 4.17 4.00 3.50
$250,000 but less than $500,000 .................. 3.09 3.00 2.50
$500,000 but less than $1,000,000 ................ 2.04 2.00 1.60
$1,000,000 but less than $2,000,000 .............. 1.01 1.00 .80
$2,000,000 but less than $4,000,000 .............. 50 .50 .40
$4,000,000 and above ............................. -0- -0- -0-
</TABLE>
The foregoing schedule of sales charges applies to purchases of Shares made
at any one time by the following: (a) any individual; (b) any individual, his or
her spouse, and their children under the age of 21; (c) a trustee or fiduciary
of a single trust estate or single fiduciary account; or (d) any organized group
which has been in existence for more than six months, provided that it is not
organized for the purpose of buying redeemable securities of a registered
investment company, and provided that the purchase is made through a central
administration, or through a single dealer, or by other means which result in
economy of sales effort or expense. An organized group does not include a group
of individuals whose sole organizational connection is participation as credit
card holders of a company, policyholders of an insurance company, customers of
either a bank or broker-dealer or clients of an investment adviser. Purchases
made by an organized group may include, for example, a trustee or other
fiduciary purchasing for a single fiduciary account or other employee benefit
plan purchases made through a payroll deduction plan.
The foregoing schedule applies to single purchases and to purchases made
under a Letter of Intent or pursuant to the Right of Accumulation, both of which
are described below.
RIGHT OF ACCUMULATION. Under the Right of Accumulation, the current value
of an investor's existing Shares may be combined with the amount of the
investor's current purchase of Shares in determining the sales charge. IN ORDER
TO RECEIVE THE CUMULATIVE QUANTITY REDUCTION, PREVIOUS PURCHASES OF SHARES MUST
BE CALLED TO THE ATTENTION OF THE FUND'S TRANSFER AGENT AT THE TIME OF THE
CURRENT PURCHASE.
LETTER OF INTENT. An investor may qualify for a reduced sales charge on a
purchase of Shares immediately by signing a nonbinding Letter of Intent stating
the investor's intention to invest in Shares during the next 13 months a
specified amount which, if made at one time, would qualify for a reduced sales
charge. Any redemptions made during the 13-month period will be subtracted from
the amount of purchases in determining whether the Letter of Intent has been
completed. During the term of a Letter of Intent, the Fund's transfer agent will
hold Shares representing 5% of the indicated amount in escrow for payment of a
higher sales load if the full amount indicated in the Letter of Intent is not
purchased. The escrowed Shares will be released when the full amount indicated
has been purchased. If the full amount indicated is not purchased within the
13-month period, the investor will be required to pay an amount equal to the
dif-
13
<PAGE>
ference in the dollar amount of sales charge actually paid and the amount of
sales charge the investor would have had to pay on his or her aggregate
purchases if the total of such purchases had been made at a single time.
The following persons associated with the Fund, the Distributor, or BIMC,
PNC Bank or PFPC may buy Shares without paying a sales charge: (a) officers,
directors and partners; (b) employees and retirees; (c) registered
representatives of Authorized Dealers and of the Distributor; (d) spouses or
children of any such persons; and (e) any trust, pension, profit-sharing or
other benefit plan for any of the persons set forth in (a) through (d) above.
The following persons may also buy Shares without paying a sales charge,
provided any such person informs the Portfolio's transfer agent at the time of
purchase that it believes it qualifies for a sales charge waiver: (a) a trust
department of a bank or law firm; (b) a 501(c)(3) organization and a charitable
remainder trust or a life income pool established for the benefit of a
charitable organization; (c) a registered investment adviser for its own account
or on behalf of its clients; (d) an employee benefit or retirement plan
(including 401(k) plans, 403(b) plans, 457 plans, profit-sharing plans, SEP-IRAs
and qualified plans for self-employed individuals, but excluding regular IRAs,
IRA transfers, IRA rollovers and non-working spousal IRAs): and (e) a financial
planner that charges a fee and makes the qualifying purchases through a
financial institution's net asset value purchase program (provided the purchase
program is recognized by the Fund, and the Portfolio whose shares are being
purchased is listed as part of the purchase program).
AUTOMATIC INVESTING
Additional investments in Shares may be made automatically by authorizing
the Fund's transfer agent to withdraw funds from your bank account. Investors
desiring to participate in the automatic investing program should call the
Fund's transfer agent, PFPC, at (800) 430-9618 to obtain the appropriate forms.
RETIREMENT PLANS
Shares may be purchased in conjunction with individual retirement accounts
("IRAs") and rollover IRAs where PNC Bank acts as custodian. For further
information as to applications and annual fees, contact the Distributor or an
Authorized Dealer. To determine whether the benefits of an IRA are available
and/or appropriate, a shareholder should consult with a tax adviser.
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
NORMAL REDEMPTION
Shareholders may redeem for cash some or all of their Shares of the
Portfolio at any time. To do so, a written request in proper form must be sent
directly to The RBB Class, c/o PFPC, P.O. Box 8916, Wilmington, Delaware 19899.
There is no charge for a redemption. Shareholders may also place redemption
requests through an Authorized Dealer, but such Authorized Dealer might charge a
fee for this service.
A request for redemption must be signed by all persons in whose names the
Shares are registered. Signatures must conform exactly to the account
registration. If the proceeds of the redemption would exceed $10,000, or if the
proceeds are not to be paid to the record owner at the record address, or if the
shareholder is a corporation, partnership, trust or fiduciary, signature(s) must
be guaranteed. A signature guarantee may be obtained from a domestic bank or
trust company, broker, dealer, clearing agency or savings association who are
participants in a medallion program recognized by the Securities Transfer
Association. The three recognized medallion programs are Securities Transfer
Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP) and
New York Stock Exchange, Inc. Medallion Signature Program (MSP). Signature
guarantees that are not part of these programs will not be accepted.
14
<PAGE>
Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption. In some cases, however,
other documents may be necessary. For example, the Fund will issue share
certificates for Shares if a written request has been made to the Fund's
transfer agent. In the case of shareholders holding share certificates, the
certificates for the shares being redeemed must accompany the redemption
request. Additional documentary evidence of authority is also required by the
Fund's transfer agent in the event redemption is requested by a corporation,
partnership, trust, fiduciary, executor or administrator.
SYSTEMATIC WITHDRAWAL PLAN
If your account has a value of at least $10,000, you may establish a
Systematic Withdrawal Plan for the Portfolio and receive regular periodic
payments. A request to establish a Systematic Withdrawal Plan must be submitted
in writing to the Fund's transfer agent, PFPC, P.O. Box 8916, Wilmington,
Delaware 19899. SHAREHOLDERS HOLDING SHARE CERTIFICATES ARE NOT ELIGIBLE TO
ESTABLISH A SYSTEMATIC WITHDRAWAL PLAN BECAUSE SHARE CERTIFICATES MUST ACCOMPANY
ALL WITHDRAWAL REQUESTS. Each withdrawal redemption will be processed about the
25th of the month and mailed as soon as possible thereafter. There are no
service charges for maintenance; the minimum amount that you may withdraw each
period is $100. (This is merely the minimum amount allowed and should not be
mistaken for a recommended amount.) The holder of a Systematic Withdrawal Plan
will have any income dividends and any capital gains distributions reinvested in
full and fractional shares at net asset value. To provide funds for payment,
shares of the Portfolio will be redeemed in such amount as is necessary at the
redemption price, which is net asset value next determined after the Fund's
receipt of a redemption request. Redemption of shares may reduce or possibly
exhaust the Shares in your account, particularly in the event of a market
decline. As with other redemptions, a redemption to make a withdrawal payment is
a sale for federal income tax purposes. Payments made pursuant to a Systematic
Withdrawal Plan cannot be considered as actual yield or income since part of
such payments may be a return of capital.
The maintenance of a Systematic Withdrawal Plan for a Class concurrently
with purchases of additional Shares would be disadvantageous because of the
sales commission involved in the additional purchases. You will ordinarily not
be allowed to make additional investments of less than the aggregate annual
withdrawals under the Systematic Withdrawal Plan during the time you have the
plan in effect and, while a Systematic Withdrawal Plan is in effect, you may not
make periodic investments under Automatic Investing. You will receive a
confirmation of each transaction showing the sources of the payment and the
share and cash balance remaining in your plan. The plan may be terminated on
written notice by the shareholder or by the Fund with respect to the Portfolio
and it will terminate automatically if all Shares are liquidated or withdrawn
from the account or upon the death or incapacity of the shareholder. You may
change the amount and schedule of withdrawal payments or suspend such payments
by giving written notice to the Fund's transfer agent at least seven Business
Days prior to the end of the month preceding a scheduled payment.
INVOLUNTARY REDEMPTION
The Fund reserves the right to redeem a shareholder's account in the
Portfolio at any time the net asset value of the account in such Portfolio falls
below $500 as the result of a redemption request. Shareholders will be notified
in writing that the value of their account in a Portfolio is less than $500 and
will be allowed 30 days to make additional investments before the redemption is
processed.
PAYMENT OF REDEMPTION PROCEEDS
In all cases, the redemption price is the net asset value per share next
determined after the request for redemption is received in proper form by the
Fund's transfer agent. Payment for Shares redeemed is made by check mailed
within seven days after acceptance by the Fund's transfer agent of the request
and any other necessary documents in proper order. Such payment may be postponed
or the right of redemption suspended as provided by the rules of the SEC. If
15
<PAGE>
the Shares to be redeemed have been recently purchased by check, the Fund's
transfer agent may delay mailing a redemption check, which may be a period of up
to 15 days, pending a determination that the check has cleared.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value of each class of the Portfolio is calculated as of the
close of regular trading on the NYSE on each Business Day. The net asset value
for each class of a portfolio is calculated by adding the value of the
proportionate interest of the class in the portfolio's securities, cash and
other assets, deducting the actual and accrued liabilities of the class and
dividing the result by the total number of outstanding shares of the class. The
net asset value of each class is calculated separately from each other class.
Valuation of securities held by the Portfolio is as follows: securities
traded on a national securities exchange or on the NASDAQ National Market System
are valued at the last reported sale price that day; securities traded on a
national securities exchange or on the NASDAQ National Market System for which
there were no sales on that day and securities traded on other over-the-counter
markets for which market quotations are readily available are valued at the mean
of the bid and asked prices; and securities for which market quotations are not
readily available are valued at fair market value as determined in good faith by
or under the direction of the Fund's Board of Directors. The amortized cost
method of valuation may also be used with respect to debt obligations with sixty
days or less remaining to maturity.
With the approval of the Board of Directors, the Portfolio may use a
pricing service, bank or broker-dealer experienced in such matters to value the
Portfolio's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Portfolio to the Portfolio's
shareholders. All distributions are reinvested in the form of additional full
and fractional Shares of the Portfolio unless a shareholder elects otherwise.
The Portfolio will declare and pay dividends from net investment income
monthly, generally near the end of each month. Net realized capital gains
(including net short-term capital gains), if any, will be distributed at least
annually.
TAXES
- --------------------------------------------------------------------------------
The following discussion is only a brief summary of some of the important
tax considerations generally affecting the Portfolio and its shareholders and is
not intended as a substitute for careful tax planning. Accordingly, investors in
the Portfolio should consult their tax advisers with specific reference to their
own tax situation.
The Portfolio will elect to be taxed as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended. So long as
the Portfolio qualifies for this tax treatment, it will be relieved of federal
income tax on amounts distributed to shareholders, but shareholders, unless
otherwise exempt, will pay income or capital gains taxes on amounts so
distributed (except distributions that constitute "exempt interest dividends" or
that are treated as a return of capital) regardless of whether such
distributions are paid in cash or reinvested in additional shares.
Distributions out of the "net capital gain" (the excess of net long-term
capital gain over net short-term capital loss), if any, of the Portfolio, and
out of the portion of such net capital gain that constitutes long-term capital
gain, will be taxed to shareholders as long-term capital gain, regardless of the
length of time a shareholder has held his shares, whether such gain was
reflected in the price paid for the shares, or whether such gain was
attributable to bonds bear-
16
<PAGE>
ing tax-exempt interest. All other distributions, to the extent they are
taxable, are taxed to shareholders as ordinary income. The current nominal
maximum marginal rate on ordinary income for individuals, trusts and estates is
generally 39% while the maximum rate imposed on long-term capital gain of such
taxpayers is 20%. Corporate taxpayers are taxed at the same rates on both
ordinary income and capital gains.
The Fund will send written notices to shareholders annually regarding the
tax status of distributions made by the Portfolio. Dividends declared in
October, November or December of any year payable to shareholders of record on a
specified date in such a month will be deemed to have been received by the
shareholders on December 31, provided such dividends are paid during January of
the following year. The Portfolio intends to make sufficient actual or deemed
distributions prior to the end of each calendar year to avoid liability for
federal excise tax.
Investors should be careful to consider the tax implications of buying
shares just prior to a distribution. The price of shares purchased at that time
will reflect the amount of the forthcoming distribution. Those investors
purchasing just prior to a distribution will nevertheless be taxed on the entire
amount of the distribution received.
Shareholders who exchange shares representing interests in one portfolio
for shares representing interests in another portfolio will generally recognize
capital gain or loss for federal income tax purposes. Under certain provisions
of the Code, some shareholders may be subject to a 31% "backup" withholding tax
on reportable dividends, capital gains distributions and redemption payments.
Shareholders who are nonresident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships may be subject to
different U.S. federal income tax treatment.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
The Fund has authorized capital of thirty billion shares of Common Stock,
$.001 par value per share, of which 18.326 billion shares are currently
classified into 97 different classes of Common Stock (see "Description of
Shares" in the Statement of Additional Information).
Shares of a class of Common Stock in the Cash Preservation Family may be
exchanged for another class of Common Stock in such Family as well as for shares
of the RBB Class. Otherwise, no exchanges between Families or classes are
permitted.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE GOVERNMENT SECURITIES PORTFOLIO OF THE RBB CLASS
AND DESCRIBE ONLY THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS
AND OTHER MATTERS RELATING TO THIS PORTFOLIO.
Each share that represents an interest in the Portfolio has an equal
proportionate interest in the assets belonging to such Portfolio with each other
share that represents an interest in such Portfolio, even where a share has a
different class designation than another share representing an interest in that
Portfolio. Shares of the Fund do not have preemptive or conversion rights. When
issued for payment as described in this Prospectus, shares of the Fund will be
fully paid and non-assessable.
The Fund currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
Holders of shares of the Portfolio will vote in the aggregate and not by
class on all matters, except where otherwise required by law. Further,
shareholders of all investment portfolios of the Fund will vote in the aggregate
and not
17
<PAGE>
by portfolio except as otherwise required by law or when the Board of Directors
determines that the matter to be voted upon affects only the interests of the
shareholders of a particular investment portfolio. (See the Statement of
Additional Information under "Additional Information Concerning Fund Shares" for
examples when the 1940 Act requires voting by investment portfolio or by class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of Common Stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of the
Fund.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC, the
Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (800) 430-9618.
PERFORMANCE INFORMATION
From time to time, the Portfolio may advertise its performance, including
comparisons to other mutual funds with similar investment objectives and to
stock or other relevant indices. All such advertisements will show the average
annual total return, net of the Portfolio's maximum sales charge, over one, five
and ten year periods or, if such periods have not yet elapsed, shorter periods
corresponding to the life of the Portfolio. Such total return quotations will be
computed by finding the compounded average annual total return for each time
period that would equate the assumed initial investment, of $1,000 to the ending
redeemable value, net of the maximum sales charge and other fees, according to a
required standardized calculation. The standard calculation is required by the
SEC to provide consistency and comparability in investment company advertising.
The Portfolio may also from time to time include in such advertising an
aggregate total return figure or a total return figure that is not calculated
according to the standardized formula in order to compare more accurately the
Portfolio's performance with other measures of investment return. For example,
the Portfolio's total return may be compared with data published by Lipper
Analytical Services, Inc., CDA Investment Technologies, Inc. or Weisenberger
Investment Company Service, or with the performance of the Standard & Poor's 500
Stock Index or the Dow Jones Industrial Average. For these purposes, the
performance of a portfolio, as well as the performance published by such
services or experienced by such indices, will usually not reflect sales charges,
the inclusion of which would reduce performance results. All advertisements
containing performance data will include a legend disclosing that such
performance data represent past performance and that the investment return and
principal value of an investment will fluctuate so that an investor's Shares,
when redeemed, may be worth more or less than their original cost. If the
Portfolio advertises non-standard computations, however, the Portfolio will
disclose the maximum sales charge and will also disclose that the performance
data do not reflect sales charges and that inclusion of sales charges would
reduce the performance quoted.
From time to time, the Portfolio may also advertise its "30-day yield." The
yield of the Portfolio refers to the income generated by an investment in the
Portfolio over the 30-day period identified in the advertisement, and is
computed by dividing the net investment income per share earned by the Portfolio
during the period by the maximum public offering price per share of the last day
of the period. This income is "annualized" by assuming that the amount of income
18
<PAGE>
is generated each month over a one-year period and is compounded semi-annually.
The annualized income is then shown as a percentage of the net asset value.
The yield on Shares of the Portfolio will fluctuate and is not necessarily
representative of future results. Shareholders should remember that yield is
generally a function of portfolio quality and maturity, type of instrument,
operating expenses and market conditions. Any fees charged by broker/dealers
directly to their customers in connection with investments in the Portfolio are
not reflected in the yields on the Portfolio's Shares, and such fees, if
charged, will reduce the actual return received by shareholders on their
investments. The yield on Shares of the RBB Class may differ from yields on
shares of other classes of the Fund that also represent interests in the same
Portfolio depending on the allocation of expenses to each of the classes of that
Portfolio. See "Expenses."
19
<PAGE>
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR ITS
DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR BY
THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE
MADE.
--------------------------------
TABLE OF CONTENTS
PAGE
Introduction............................................................. 2
Financial Highlights..................................................... 4
Investment Objectives and Policies....................................... 6
Year 2000................................................................ 9
Investment Limitations................................................... 9
Management............................................................... 10
Distribution of Shares................................................... 11
How to Purchase Shares................................................... 12
How to Redeem Shares..................................................... 14
Net Asset Value.......................................................... 16
Dividends and Distributions.............................................. 16
Taxes.................................................................... 16
Description of Shares.................................................... 17
Other Information........................................................ 18
Account Application...................................................... Center
INVESTMENT ADVISER
BlackRock Institutional Management Corporation
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
ADMINISTRATOR AND TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
================================================================================
<PAGE>
BEAR
STEARNS
[LOGO OMITTED]
MONEY MARKET
PORTFOLIO
Prospectus & Application
December 29, 1998
FOR INFORMATION ABOUT THE BEAR STEARNS FUNDS, CONSULT THE FOLLOWING PROSPECTUS
<PAGE>
THE BEAR STEARNS FUNDS
245 PARK AVENUE, NEW YORK, NY 10167 1-800-766-4111
PROSPECTUS
Money Market Portfolio
of
The RBB Fund, Inc.
THE BEDFORD SHARES OF THE MONEY MARKET PORTFOLIO are a class of shares of common
stock of The RBB Fund, Inc. (the "Fund"), an open-end management investment
company. Shares of the Bedford Class offered by this Prospectus represent
interests in the Fund's Money Market Portfolio.
[ARROW] The investment objective of the Money Market Portfolio is to
provide as high a level of current interest income as is
consistent with maintaining liquidity and stability of principal.
It seeks to achieve such objective by investing in a diversified
portfolio of U.S. dollar-denominated money market instruments.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK AND
SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN SHARES OF THE
FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THERE
CAN BE NO ASSURANCE THAT THE MONEY MARKET PORTFOLIO WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.
BlackRock Institutional Management Corporation serves as investment adviser for
the Portfolio, PFPC Trust Company serves as custodian for the Fund and PFPC Inc.
serves as the administrator and transfer and dividend disbursing agent for the
Fund. Provident Distributors, Inc. acts as distributor for the Fund.
----------------------------------
This Prospectus contains concise information that a prospective investor needs
to know before investing. Please keep it for future reference. A Statement of
Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference into this
Prospectus. It may be obtained upon request free of charge from the Fund by
calling (800) 430-9618. The Prospectus and Statement of Additional Information
are also available for reference, along with other related materials, on the SEC
Internet Website (http://www.sec.gov).
----------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
DECEMBER 29, 1998
<PAGE>
Table of Contents
PAGE
Introduction ............................................................. 3
Fee Table ................................................................ 4
Financial Highlights ..................................................... 6
Investment Objectives and Policies ....................................... 7
Year 2000 ................................................................ 9
Investment Limitations ................................................... 10
Purchase, Redemption and Exchange of Shares .............................. 11
Net Asset Value .......................................................... 16
Management ............................................................... 16
Distribution of Shares ................................................... 18
Dividends and Distributions .............................................. 19
Taxes .................................................................... 19
Description of Shares .................................................... 19
Other Information ........................................................ 20
Account Application ..................................................... Center
2
<PAGE>
Introduction
The RBB Fund, Inc. (the "Fund") is an open-end management investment company
incorporated under the laws of the State of Maryland on February 29, 1988. The
Fund is currently operating or proposing to operate seventeen separate
investment portfolios. The shares ("Shares") of the Bedford Class (the "Bedford
Class" or the "Class") of common stock of the Fund offered by this Prospectus
represent interests in the Fund's Money Market Portfolio (the "Money Market
Portfolio" or the "Portfolio").
The MONEY MARKET PORTFOLIO'S investment objective is to provide as high a level
of current interest income as is consistent with maintaining liquidity and
stability of principal. It seeks to achieve such objective by investing in a
diversified portfolio of U.S. dollar-denominated money market instruments which
meet certain ratings criteria and present minimal credit risks. In pursuing its
investment objective, the Money Market Portfolio invests in a broad range of
government, bank and commercial obligations that may be available in the money
markets.
The Portfolio seeks to maintain a net asset value of $1.00 per share; however,
there can be no assurance that the Portfolio will be able to maintain a stable
net asset value of $1.00 per share.
The Portfolio's investment adviser is BlackRock Institutional Management
Corporation ("BIMC"). PFPC Trust Company serves as custodian to the Fund and
PFPC Inc. ("PFPC" or the "Administrator" or "Transfer Agent") serves as
administrator and transfer and dividend disbursing agent to the Fund. Provident
Distributors, Inc. ("PDI" or the "Distributor") acts as distributor of the
Fund's Shares.
An investor may purchase and redeem Shares of the Class through his broker or by
direct purchases or redemptions. See "Purchase and Redemption of Shares."
An investment in the Shares is subject to certain risks, as set forth in detail
under "Investment Objective and Policies." The Portfolio, to the extent set
forth under "Investment Objective and Policies," may engage in the following
investment practices: the use of repurchase agreements and reverse repurchase
agreements, the purchase of asset-backed securities, the purchase of securities
on a "when-issued" or "forward commitment" basis, the purchase of stand-by
commitments and the lending of securities. All of these transactions involve
certain special risks, as set forth under "Investment Objective and Policies."
3
<PAGE>
Fee Table
The Fee Table below contains a summary of the annual operating expenses incurred
by the Bedford Class of the Portfolio after fee waivers and expense
reimbursements for the fiscal year ended August 31, 1998, as a percentage of
average daily net assets. An example based on the summary is also shown.
ANNUAL FUND OPERATING EXPENSES (BEDFORD CLASS)
AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS
- --------------------------------------------------------------------------------
MONEY MARKET
PORTFOLIO
- --------------------------------------------------------------------------------
Management Fees (after waivers)(1) ........................... .23%
12b-1 Fees(1) ................................................ .54%
Other Expenses ............................................... .20%
---
Total Operating Expenses (Bedford Class)
(after waivers)(1) ........................................... .97%
===
- ---------
(1) Management Fees and 12b-1 Fees are based on average daily net assets and are
calculated daily and paid monthly. Before waivers for the Money Market
Portfolio, Management Fees would be .36% and Total Fund Operating Expenses
would be 1.10%.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
- --------------------------------------------------------------------------------
MONEY MARKET
PORTFOLIO*
- --------------------------------------------------------------------------------
1 YEAR ....................................................... $ 10
3 YEARS ...................................................... $ 31
5 YEARS ...................................................... $ 54
10 YEARS ..................................................... $119
- ----------
*Other classes of this Portfolio are sold with different fees and expenses.
The Example in the Fee Table assumes that all dividends and distributions are
reinvested and that the amounts listed under "Annual Fund Operating Expenses"
remain the same in the years shown. THE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN. Long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charges permitted by the National
Association of Securities Dealers, Inc.
The Fee Table is designed to assist an investor in understanding the various
costs and expenses that an investor in the Bedford Class of the Fund will bear
directly or indirectly. (For more complete descriptions of the various costs and
expenses, see "Management -- Investment Adviser," and "Distribution of Shares"
below.) The expense figures are based on actual costs and fees charged to the
Class. The Fee Table reflects expense reimbursements and a voluntary waiver of
Management Fees for the Class. However, there can be no assurance that any
future expense reimbursements and waivers of Management Fees will not vary from
the figures reflected in the Fee Table. To the extent that any service providers
assume additional expenses of the Portfolio, such assumption will have the
effect of lowering such Portfolio's overall expense ratio and increasing its
yield to investors.
4
<PAGE>
From time to time the Portfolio advertises its "total return", "yield" and
"effective yield." TOTAL RETURN AND YIELD FIGURES ARE BASED ON HISTORICAL
EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. The "yield" of the
Portfolio refers to the income generated by an investment in the Portfolio over
a seven-day period (which period will be stated in the advertisement). This
income is then "annualized." That is, the amount of income generated by the
investment during that week is assumed to be generated each week over a 52-week
period and is shown as a percentage of the investment. The "effective yield" is
calculated similarly but, when annualized, the income earned by an investment in
a Portfolio is assumed to be reinvested. The "effective yield" will be slightly
higher than the "yield" because of the compounding effect of this assumed
reinvestment.
The total return and yield of any investment is generally a function of
portfolio quality and maturity, type of investment and operating expenses. The
total return and yield on Shares will fluctuate and is not necessarily
representative of future results. Any fees charged by broker/dealers directly to
their customers in connection with investments in Shares are not reflected in
the total returns and yields of the Shares, and such fees, if charged, will
reduce the actual return received by shareholders on their investments. The
total return and yield on Shares of the Class may differ from the total return
and yields on shares of other classes of the Fund that also represent interests
in the same Portfolio depending on the allocation of expenses to each class of
the Portfolio.
5
<PAGE>
Financial Highlights
The table below sets forth certain information concerning the investment results
of the Bedford Class of the Fund representing interests in the Money Market
Portfolio for the years indicated. The financial data included in this table for
each of the periods ended August 31, 1994 through 1998 are a part of the Fund's
financial statements for the Portfolio, which are incorporated by reference into
the Statement of Additional Information and have been audited by
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), the Fund's independent
accountants. The financial data for the periods ended August 31, 1989, 1990,
1991, 1992 and 1993 are a part of previous financial statements audited by
PricewaterhouseCoopers. The financial data included in this table should be read
in conjunction with the financial statements and related notes. Further
information about the performance of the Portfolio is available in the Annual
Report to Shareholders. Both the Statement of Additional Information and the
Annual Report to Shareholders may be obtained from the Fund free of charge by
calling the telephone number on Page 1 of the Prospectus.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (c)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -------------------------------------------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1998 1997 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ---------- ---------- -------- -------- -------- --------
Income from investment
operations:
Net investment income 0.0473 0.0462 0.0469 0.0486 0.0278 0.0243 0.0375
Net gains on securities
(both realized and
unrealized) -- -- -- -- -- -- 0.0007
-------- ---------- ---------- -------- -------- -------- --------
Total from investment
operations 0.0473 0.0462 0.0469 0.0486 0.0278 0.0243 0.0382
-------- ---------- ---------- -------- -------- -------- --------
Less distributions
Dividends (from net
investment income) (0.0473) (0.0462) (0.0469) (0.0486) (0.0278) (0.0243) (0.0375)
Distributions (from
capital gains) -- -- -- -- -- -- (0.0007)
-------- ---------- ---------- -------- -------- -------- --------
Total distributions (0.0473) (0.0462) (0.0469) (0.0486) (0.0278) (0.0243) (0.0382)
-------- ---------- ---------- -------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========== ========== ======== ======== ======== ========
Total return 4.84% 4.72% 4.79% 4.97% 2.81% 2.46% 3.89%
Ratios/Supplemental Data
Net assets,
end of period (000) $762,739 $1,392,911 $1,109,334 $935,821 $710,737 $782,153 $736,842
Ratios of expenses to
average net assets .97%(a) .97%(a) .97%(a) .96%(a) .95%(a) .95%(a) .95%(a)
Ratios of net investment
income to average net
assets 4.73% 4.62% 4.69% 4.86% 2.78% 2.43% 3.75%
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
- -----------------------------------------------------------------------------
FOR THE PERIOD
SEPTEMBER 30, 1988
FOR THE FOR THE (COMMENCEMENT
YEAR ENDED YEAR ENDED OF OPERATIONS) TO
AUGUST 31, AUGUST 31, AUGUST 31,
1991 1990 1989
---------- ---------- ------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00
-------- -------- --------
Income from investment
operations:
Net investment income 0.0629 0.0765 0.0779
Net gains on securities
(both realized and
unrealized) -- -- --
-------- -------- --------
Total from investment
operations 0.0629 0.0765 0.0779
-------- -------- --------
Less distributions
Dividends (from net
investment income) (0.0629) (0.0765) (0.0779)
Distributions (from
capital gains) -- -- --
-------- -------- --------
Total distributions (0.0629) (0.0765) (0.0779)
-------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
======== ======== ========
Total return 6.48% 7.92% 8.81%(b)
Ratios/Supplemental Data
Net assets,
end of period (000) $747,530 $709,757 $152,311
Ratios of expenses to
average net assets .92%(a) .92%(a) .93%(a)(b)
Ratios of net investment
income to average net
assets 6.29% 7.65% 8.61%(b)
<FN>
- ------------
(a) Without the waiver of advisory fees and without their reimbursement of
certain operating expenses, the ratios of expenses to average net assets for
the Money Market Portfolio would have been 1.10%, 1.12%, 1.14%, 1.17%,
1.16%, 1.19%, 1.20%, 1.17% and 1.16% for the years ended August 31, 1998,
1997, 1996, 1995, 1994, 1993, 1992, 1991 and 1990, respectively, and 1.27%
annualized for the period ended August 31, 1989.
(b) Annualized.
(c) Financial Highlights relate solely to the Class of Shares of the Fund within
the Portfolio.
</FN>
</TABLE>
6
<PAGE>
Investment Objectives and Policies
MONEY MARKET PORTFOLIO
The Money Market Portfolio's investment objective is to provide as high a level
of current interest income as is consistent with maintaining liquidity and
stability of principal. Portfolio obligations held by the Money Market Portfolio
have remaining maturities of 397 calendar days or less (exclusive of securities
subject to repurchase agreements). In pursuing its investment objective, the
Money Market Portfolio invests in a diversified portfolio of U.S.
dollar-denominated instruments, such as government, bank and commercial
obligations, that may be available in the money markets ("Money Market
Instruments") and that meet certain ratings criteria and present minimal credit
risks to the Money Market Portfolio. See "Eligible Securities." There is no
assurance that the investment objective of the Money Market Portfolio will be
achieved. The following descriptions illustrate the types of Money Market
Instruments in which the Money Market Portfolio invests.
BANK OBLIGATIONS.
The Portfolio may purchase obligations of issuers in the banking industry, such
as short-term obligations of bank holding companies, certificates of deposit,
bankers' acceptances and time deposits, including U.S. dollar-denominated
instruments issued or supported by the credit of U.S. or foreign banks or
savings institutions having total assets at the time of purchase in excess of $1
billion. The Portfolio may invest substantially in obligations of foreign banks
or foreign branches of U.S. banks where the investment adviser deems the
instrument to present minimal credit risks. Such investments may nevertheless
entail risks in addition to those of domestic issuers, including higher
transaction costs, less complete financial information, less stringent
regulatory requirements and less market liquidity. The Portfolio may also make
interest-bearing savings deposits in commercial and savings banks in amounts not
in excess of 5% of its total assets.
COMMERCIAL PAPER.
The Portfolio may purchase commercial paper (i) rated (at the time of purchase)
in the two highest rating categories of at least two nationally recognized
statistical rating organizations ("Rating Organizations") or, by the only Rating
Organization providing a rating; or (ii) issued by issuers (or, in certain cases
guaranteed by persons) with short-term debt having such rating. These rating
categories are described in the Appendix to the Statement of Additional
Information. The Portfolio may also purchase unrated commercial paper provided
that such paper is determined to be of comparable quality by the Portfolio's
investment adviser in accordance with guidelines approved by the Fund's Board of
Directors.
Commercial paper purchased by the Portfolio may include instruments issued by
foreign issuers, such as Canadian Commercial Paper ("CCP"), which is U.S.
dollar-denominated commercial paper issued by a Canadian corporation or a
Canadian counterpart of a U.S. corporation, and in Europaper, which is U.S.
dollar-denominated commercial paper of a foreign issuer, subject to the criteria
stated above for other commercial paper issuers.
VARIABLE RATE DEMAND NOTES.
The Portfolio may purchase variable rate demand notes, which are unsecured
instruments that permit the indebtedness thereunder to vary and provide for
periodic adjustment in the interest rate. Although the notes are not normally
traded and there may be no active secondary market in the notes, the Portfolio
will be able (at any time or during the specified periods not exceeding 13
months, depending upon the note involved) to demand payment of the principal of
a note. The notes are not typically rated by credit rating agencies, but issuers
of variable rate demand notes must satisfy the same criteria as set forth above
for issuers of commercial paper. If an issuer of a variable rate demand note
defaulted on its payment obligation, the Portfolio might be unable to dispose of
the note because of the absence of an active secondary market. For this or other
reasons, the Portfolio might suffer a loss to the extent of the default. The
Portfolio invests in variable rate demand notes only when the Portfolio's
investment adviser deems the investment to involve minimal credit risk. The
Portfolio's investment adviser also monitors the continuing creditworthiness of
issuers of such notes to determine whether the Portfolio should continue to hold
such notes.
7
<PAGE>
REPURCHASE AGREEMENTS.
The Portfolio may agree to purchase securities from financial institutions
subject to the seller's agreement to repurchase them at an agreed-upon time and
price ("repurchase agreements"). The securities held subject to a repurchase
agreement may have stated maturities exceeding 13 months, provided the
repurchase agreement itself matures in less than 13 months. Default by or
bankruptcy of the seller would, however, expose the Portfolio to possible loss
because of adverse market action or delays in connection with the disposition of
the underlying obligations.
U.S. GOVERNMENT OBLIGATIONS.
The Portfolio may purchase obligations issued or guaranteed by the U.S.
Government or its agencies and instrumentalities. Obligations of certain
agencies and instrumentalities of the U.S. Government are backed by the full
faith and credit of the United States. Others are backed by the right of the
issuer to borrow from the U.S. Treasury or are backed only by the credit of the
agency or instrumentality issuing the obligation.
ASSET-BACKED SECURITIES.
The Portfolio may invest in asset-backed securities which are backed by
mortgages, installment sales contracts, credit card receivables or other assets
and collateralized mortgage obligations ("CMOs") issued or guaranteed by U.S.
Government agencies and instrumentalities or issued by private companies.
Asset-backed securities also include adjustable rate securities. The estimated
life of an asset-backed security varies with the repayment experience with
respect to the underlying debt instruments. For this and other reasons, an
asset-backed security's stated maturity may be shortened, and the security's
total return may be difficult to predict precisely. Such difficulties are not
expected, however, to have a significant effect on the Portfolio since the
remaining maturity of any asset-backed security acquired will be 13 months or
less. Asset-backed securities are considered an industry for industry
concentration purposes. See "Investment Limitations." In periods of falling
interest rates, the rate of mortgage repayments tends to increase. During these
periods, the reinvestment of proceeds by a portfolio will generally be at lower
rates than the rates on the prepaid obligations.
REVERSE REPURCHASE AGREEMENTS.
The Portfolio may enter into reverse repurchase agreements with respect to
portfolio securities. A reverse repurchase agreement involves a sale by a
portfolio of securities that it holds concurrently with an agreement by the
Portfolio to repurchase them at an agreed upon time and price. Reverse
repurchase agreements involve the risk that the market value of the securities
sold by the Portfolio may decline below the price at which the Portfolio is
obligated to repurchase them. Reverse repurchase agreements are considered to be
borrowings by the Portfolio under the Investment Company Act of 1940 ("1940
Act").
MUNICIPAL OBLIGATIONS.
In addition, the Portfolio may, when deemed appropriate by its investment
adviser in light of the Portfolio's investment objective, invest without
limitation in high quality, short-term Municipal Obligations issued by state and
local governmental issuers, the interest on which may be taxable or tax-exempt
for federal income tax purposes, provided that such obligations carry yields
that are competitive with those of other types of Money Market Instruments of
comparable quality. For a more complete discussion of Municipal Obligations, see
Statement of Additional Information under "Investment Objectives and Policies."
GUARANTEED INVESTMENT CONTRACTS.
The Portfolio may make investments in obligations, such as guaranteed investment
contracts and similar funding agreements (collectively "GICs"), issued by highly
rated U.S. insurance companies. A GIC is a general obligation of the issuing
insurance company and not a separate account. The Portfolio's investments in
GICs are not expected to exceed 5% of its total assets at the time of purchase
absent unusual market conditions. GIC investments are subject to the Fund's
policy regarding investments in illiquid securities.
STAND-BY COMMITMENTS.
The Portfolio may acquire "stand-by commitments" with respect to Municipal
Obligations held in its portfolio. Under a stand-by commitment, a dealer would
agree to purchase at the Portfolio's option specified Municipal Obligations at a
specified price. The acquisition of a stand-by commitment may
8
<PAGE>
increase the cost, and thereby reduce the yield, of the Municipal Obligation to
which such commitment relates. The Portfolio will acquire stand-by commitments
solely to facilitate portfolio liquidity and does not intend to exercise its
rights thereunder for trading purposes.
WHEN-ISSUED SECURITIES.
The Portfolio may purchase portfolio securities on a "when-issued" basis.
When-issued securities are securities purchased for delivery beyond the normal
settlement date at a stated price and yield. The Portfolio will generally not
pay for such securities or start earning interest on them until they are
received. Securities purchased on a when-issued basis are recorded as an asset
at the time of the commitment is entered into and are subject to changes in
value prior to delivery based upon changes in the general level of interest
rates. The Portfolio expects that commitments to purchase when-issued securities
will not exceed 25% of the value of its total assets absent unusual market
conditions. The Portfolio does not intend to purchase when-issued securities for
speculative purposes but only in furtherance of its investment objective.
ELIGIBLE SECURITIES.
The Portfolio will only purchase "eligible securities" that present minimal
credit risks as determined by the Portfolio's investment adviser pursuant to
guidelines adopted by the Board of Directors. Eligible securities generally
include: (1) U.S. Government securities, (2) securities that are rated at the
time of purchase in the two highest rating categories by at least two Rating
Organizations ("Rating Organizations") (e.g. commercial paper rated "A-1" or
"A-2" by Standard & Poor's Ratings Services ("S&P")), (3) securities that are
rated at the time of purchase by the only Rating Organization rating the
security in one of its two highest rating categories for such securities, (4)
securities issued by issuers (or, in certain cases guaranteed by persons) with
short-term debt having such ratings, and (5) securities that are not rated and
are issued by an issuer that does not have comparable obligations rated by
Rating Organization ("Unrated Securities"), provided that such securities are
determined to be of comparable quality to eligible rated securities. For a more
complete description of eligible securities, see "Investment Objectives and
Policies" in the Statement of Additional Information.
ILLIQUID SECURITIES.
The Portfolio will not invest more than 10% of its net assets in illiquid
securities, including repurchase agreements which have a maturity of longer than
seven days, time deposits with maturities in excess of seven days, variable rate
demand notes with demand periods in excess of seven days unless the Portfolio's
investment adviser determines that such notes are readily marketable and could
be sold promptly at the prices at which they are valued, GICs, and other
securities that are illiquid by virtue of the absence of a readily available
market or legal or contractual restrictions on resale. Repurchase agreements
subject to demand are deemed to have a maturity equal to the notice period.
Securities that have legal or contractual restrictions on resale but have a
readily available market are not deemed illiquid for purposes of this
limitation. The Portfolio's investment adviser will monitor the liquidity of
such restricted securities under the supervision of the Board of Directors. See
"Investment Objectives and Policies -- Illiquid Securities" in the Statement of
Additional Information.
Year 2000
Like other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer systems
used by the Adviser and the Fund's other service providers, or persons with whom
they deal, do not properly process and calculate date-related information and
data from and after January 1, 2000. This possibility is commonly known as the
"Year 2000 Problem." The Year 2000 Problem could also hurt companies whose
securities the Fund holds or securities markets generally. The Fund has been
advised by the Adviser, the Administrators and the Custodian that they are
actively taking steps to address the Year 2000 Problem with respect to the
computer systems that they use and to obtain assurances that comparable steps
are being taken by the Fund's other major service providers. While there can be
no assurance that the Fund's service providers will be Year 2000 compliant, the
Fund's service providers expect that their plans to be compliant will be
achieved.
9
<PAGE>
Investment Limitations
The Money Market Portfolio's investment objective and policies described above
may be changed by the Fund's Board of Directors without shareholder approval.
The Portfolio may not, however, change the investment limitations summarized
below without such a vote of shareholders. (A more detailed description of the
following investment limitations, together with other investment limitations
that cannot be changed without a vote of shareholders, is contained in the
Statement of Additional Information under "Investment Objectives and Policies.")
THE MONEY MARKET PORTFOLIO MAY NOT:
1. Purchase any securities other than Money Market Instruments, some
of which may be subject to repurchase agreements, but the Portfolio may
make interest-bearing savings deposits in amounts not in excess of 5% of
the value of the Portfolio's assets and may make time deposits.
2. Borrow money, except from banks for temporary purposes and except
for reverse repurchase agreements, and then in amounts not in excess of 10%
of the value of the Portfolio's assets at the time of such borrowing, and
only if after such borrowing there is asset coverage of at least 300% for
all borrowings of the Portfolio; or mortgage, pledge or hypothecate any of
its assets except in connection with any such borrowing and in amounts not
in excess of 10% of the value of the Portfolio's assets at the time of such
borrowing; or purchase portfolio securities while borrowings are in excess
of 5% of the Portfolio's net assets are outstanding. (This borrowing
provision is not for investment leverage, but solely to facilitate
management of the Portfolio's securities by enabling the Portfolio to meet
redemption requests where the liquidation of portfolio securities is deemed
to be disadvantageous or inconvenient.)
3. Purchase any securities which would cause, at the time of purchase,
less than 25% of the value of the total assets of the Portfolio to be
invested in the obligations of issuers in the banking industry, or in
obligations, such as repurchase agreements, secured by such obligations
(unless the Portfolio is in a temporary defensive position) or which would
cause, at the time of purchase, more than 25% of the value of its total
assets to be invested in the obligations of issuers in any other industry.
4. Purchase securities of any one issuer, other than securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities,
if immediately after and as a result of such purchase more than 5% of the
value of its total assets would be invested in the securities of such
issuer, or more than 10% of the outstanding voting securities of such
issuer would be owned by the Portfolio, except that up to 25% of the value
of the Portfolio's total assets may be invested without regard to such 5%
limitation.
So long as it values its portfolio securities on the basis of the amortized cost
method of valuation pursuant to Rule 2a-7 under the 1940 Act, the Money Market
Portfolio will meet the following limitations on its investments in addition to
the fundamental investment limitations described above. These limitations may be
changed without a vote of shareholders of the Money Market Portfolio.
1. The Money Market Portfolio will limit its purchases of the
securities of any one issuer, other than issuers of U.S. Government
securities, to 5% of its total assets, except that the Money Market
Portfolio may invest more than 5% of its total assets in First Tier
Securities of one issuer for a period of up to three Business Days, (as
defined below). "First Tier Securities" include eligible securities that
(i) if rated by more than one Rating Organization, are rated (at the time
of purchase) by two or more Rating Organizations in the highest rating
category for such securities, (ii) if rated by only one Rating
Organization, are rated by such Rating Organization in its highest rating
category for such securities, (iii) have no short-term rating and are
comparable in priority and security to a class of short-term obligations of
the issuer of such securities that have been rated in accordance with (i)
or (ii) above, or (iv) are Unrated Securities that are determined to be of
comparable quality to such securities. Purchases of First Tier Securities
that come within categories (ii) and (iv) above will be approved or
ratified by the Board of Directors.
2. The Money Market Portfolio will limit its purchases of Second Tier
Securities, which are eligible securities other than First Tier Securities,
to 5% of its total assets.
3. The Money Market Portfolio will limit its purchases of Second Tier
Securities of one issuer to the greater of 1% of its total assets or $1
million.
10
<PAGE>
THE BEAR STEARNS FUNDS
ACCOUNT INFORMATION FORM
Please Note: Do not use this form to open a retirement plan account. For
retirement plan forms call 1-800-766-4111. For assistance in completing this
form, contact PFPC at 1-800-447-1139.
1. ACCOUNT TYPE (Please print; indicate only one registration type)
[__] INDIVIDUAL [__] JOINT TENANT
-----------------------------------------------------------------------
NAME
-----------------------------------------------------------------------
JOINT REGISTRANT, IF ANY (SEE NOTES 1 AND 2)
--------------------------------------- ------------------------------
SOCIAL SECURITY NUMBER OF PRIMARY OWNER TAXPAYER IDENTIFICATION NUMBER
(1) Use only the Social Security number or Taxpayer Identification
Number of the first listed joint tenant.
(2) For joint registrations, the account registrants will be joint
tenants with right of survivorship and not tenants in common
unless tenants in common or community property registrations
are requested.
------------------------------ -------------------------------
[__] UNIFORM GIFT TO MINORS, OR [__] UNIFORM TRANSFER TO MINORS
(WHERE ALLOWED BY LAW)
-----------------------------------------------------------------------
NAME OF ADULT CUSTODIAN (ONLY ONE PERMITTED)
-----------------------------------------------------------------------
NAME OF MINOR (ONLY ONE PERMITTED)
Under the ________________________ Uniform Gift/Transfers to Minors Act
STATE RESIDENCE OF MINOR
------/------/------ --------------------------
MINOR'S DATE OF BIRTH MINOR'S SOCIAL SECURITY NUMBER
(REQUIRED TO OPEN ACCOUNT)
[__] Corporation [__] Partnership [__] Trust* [__] Other
-----------------------------------------------------------------------
NAME OF CORPORATION, PARTNERSHIP, OR OTHER
-----------------------------------------------------------------------
NAME(S) OF TRUSTEE(S) DATE OF THE TRUST AGREEMENT
-------------------------- ------------------------------
SOCIAL SECURITY NUMBER TAXPAYER IDENTIFICATION NUMBER
(REQUIRED TO OPEN ACCOUNT) (REQUIRED TO OPEN ACCOUNT)
*If a Trust, include date of trust instrument and list of trustees if they
are to be named in the registration.
NOT PART OF THE PROSPECTUS
<PAGE>
2. MAILING ADDRESS
-----------------------------------------------------------------------
STREET OR P.O. BOX APARTMENT NUMBER
-----------------------------------------------------------------------
CITY STATE ZIP CODE
( ) ( )
-----------------------------------------------------------------------
DAY TELEPHONE EVENING TELEPHONE
3. INVESTMENT INFORMATION
METHOD OF INVESTMENT
[__] I have enclosed a check for a minimum initial investment of
$1,000 per Fund.
[__] I have enclosed a check for a minimum subsequent investment of
$250 per Fund or completed the Systematic Investment Plan
information in Section 13.
[__] I purchased _____________ shares of __________________________
through my broker on __/__/__. Conform #___________.
PLEASE MAKE MY INVESTMENT IN THE FUNDS DESIGNATED BELOW:
<TABLE>
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A CLASS C CLASS Y BEAR STEARNS FUNDS INVESTMENT AMOUNT
---------------------------------------------------------------------------------------------
_______ _______ _______ S&P STARS Portfolio $________________
_______ _______ _______ Large Cap Value Portfolio $________________
_______ _______ _______ Small Cap Value Portfolio $________________
_______ _______ _______ Total Return Bond Portfolio $________________
_______ _______ _______ The Insiders Select Fund $________________
_______ _______ _______ Emerging Markets Debt Portfolio $________________
_______ _______ _______ Money Market Portfolio $________________
TOTAL INVESTMENT AMOUNT $================
</TABLE>
Note: All shares purchased will be held in a shareholder account for
the investor at the Transfer Agent. Checks drawn on foreign banks and
checks made payable to persons or entities other than the Fund will not
be accepted. Checks should be made payable to the Fund which you are
investing in. If no class is designated, your investment will be made
in Class A shares.
4. REDUCED SALES CHARGE (AVAILABLE FOR CLASS A SHARES ONLY)
Method of Investment
Are you a shareholder in another Bear Stearns Fund? [__] Yes [__] No
[__] I apply for Right of Accumulation reduced sales charges
based on the following Bear Stearns Fund Accounts
(excluding Class C Shares).
-----------------------------------------------------------------------
FUND ACCOUNT NUMBER OR SOCIAL SECURITY NUMBER
-----------------------------------------------------------------------
FUND ACCOUNT NUMBER OR SOCIAL SECURITY NUMBER
-----------------------------------------------------------------------
FUND ACCOUNT NUMBER OR SOCIAL SECURITY NUMBER
LETTER OF INTENT
NOT PART OF THE PROSPECTUS
<PAGE>
[__] I am already investing under an existing Letter of Intent.
[__] I agree to the Letter of Intent provisions in the Fund's current
prospectus. During a 13-month period, I plan to invest a dollar
amount of at least:
[__] $50,000 [__] $100,000 [__] $250,000
[__] $500,000 [__] $750,000 [__] $1,000,000
NET ASSET VALUE PURCHASE
[__] I qualify for an exemption from the sales charge by meeting the
conditions set forth in the prospectus. (Please attach
certification to this form.)
[__] I qualify to purchase shares at net asset value, with
proceeds received from a mutual fund or closed-end fund
not distributed by Bear Stearns. (Please attach proof of
fund share redemption.)
5. DISTRIBUTION OPTIONS
DIVIDENDS AND CAPITAL GAINS MAY BE REINVESTED OR PAID BY CHECK. IF NO
OPTIONS ARE SELECTED BELOW, BOTH DIVIDENDS AND CAPITAL GAINS WILL BE
REINVESTED IN ADDITIONAL FUND SHARES.
DIVIDENDS [__] Pay by check. [__] Reinvest.
CAPITAL GAINS [__] Pay by check. [__] Reinvest.
The Redirected Distribution Option allows an investor to have dividends
and any other distributions from a Fund automatically used to purchase
shares of the same class of any other Fund. The receiving account must
be in the same name as your existing account.
[__] Please reinvest dividends and capital gains from the
_____________________ to the _______________________.
(NAME OF FUND) (NAME OF FUND)
If you elect to have distributions paid by check, distributions will be
sent to the address of record. Distributions may also be sent to
another payee:
-----------------------------------------------------------------------
NAME
-----------------------------------------------------------------------
STREET OR P.O. BOX APARTMENT NUMBER
-----------------------------------------------------------------------
CITY STATE ZIP CODE
-----------------------------------------------------------------------
OPTIONAL FEATURES
6. AUTOMATIC WITHDRAWAL PLAN
[__] Fund Name _________________________ [__] Amount ______________
[__] Startup month _____________________
Frequency option:
[__] Monthly [__] Every other month [__] Quarterly [__] Semiannually
[__] Annually
o A minimum account value of $5,000 in a single account is required
to establish an automatic withdrawal plan.
o Payments will be made on or near the 25th of the month.
o Shareholders holding share certificates are not eligible for the
Automatic Withdrawal Plan.
NOT PART OF THE PROSPECTUS
<PAGE>
[__] Please mail checks to Address of Record (Named in Section 2)
[__] Please electronically credit my Bank of Record
(Named in Section 9)
[__] Special payee as specified below:
-----------------------------------------------------------------------
NAME
-----------------------------------------------------------------------
STREET OR P.O. BOX APARTMENT NUMBER
-----------------------------------------------------------------------
CITY STATE ZIP CODE
7. TELEPHONE EXCHANGE PRIVILEGE
Unless indicated below, I authorize the Transfer Agent to accept
instructions from any persons to exchange shares in my account(s) by
telephone, in accordance with the procedures and conditions set forth
in the Fund's current prospectus.
[__] I DO NOT want the Telephone Exchange Privilege.
8. TELEPHONE REDEMPTION PRIVILEGE
[__] I authorize the Transfer Agent to accept instructions from any
person to redeem shares in my account(s) by telephone, in accordance
with the procedures and conditions set forth in the Fund's current
prospectus.
Checks for redemption of proceeds will be sent by check via U.S. Mail
to the address to record, unless the information in Section 9 is
completed for redemption by wire of $500 or more.
9. BANK OF RECORD (FOR TELEPHONE REDEMPTIONS AND/OR SYSTEMATIC INVESTMENT
PLANS) PLEASE ATTACH A VOIDED CHECK (FOR ELECTRONIC CREDIT TO YOUR
CHECKING ACCOUNT) IN THE SPACE PROVIDED IN SECTION 13.
-----------------------------------------------------------------------
BANK NAME
-----------------------------------------------------------------------
STREET OR P.O. BOX APARTMENT NUMBER
-----------------------------------------------------------------------
CITY STATE ZIP CODE
-----------------------------------------------------------------------
BANK ABA NUMBER BANK ACCOUNT NUMBER
-----------------------------------------------------------------------
ACCOUNT NAME
10. SIGNATURE AND TAXPAYER CERTIFICATION
The undersigned warrants that I(we) have full authority and, if a
natural person, I(we) am(are) of legal age to purchase shares pursuant
to this Account Information Form, and have received a current
prospectus for the Bear Stearns Fund(s) in which I(we) am(are)
investing. THE UNDERSIGNED ACKNOWLEDGES THAT THE TELEPHONE EXCHANGE
PRIVILEGE IS AUTOMATIC AND THAT I(WE) MAY BEAR THE RISK OF LOSS IN
EVENT OF FRAUDULENT USE OF THE PRIVILEGE. If I(we) do not want the
Telephone Exchange Privilege, I(we) have so indicated on this Account
Information Form.
Under the Interest and Dividend Tax Compliance Act of 1983, the Fund is
required to have the following certification:
Under penalty of perjury, I certify that:
NOT PART OF THE PROSPECTUS
<PAGE>
(1) The number shown on this form is my correct taxpayer
identification number (or I am waiting for a number to be issued to
me), and
(2) I am not subject to backup withholding because (a) I am exempt from
backup withholding or (b) I have not been notified by the Internal
Revenue Service that I am subject to 31% backup withholding as a result
of a failure to report all interest or dividends or (c) the IRS has
notified me that I am no longer subject to backup withholding.
Certification Instructions - You must cross out item (2) above if you
have been notified by the IRS that you are currently subject to backup
withholding because of underreporting of interest or dividends on your
tax return. MUTUAL FUND SHARES ARE NOT DEPOSITS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION, NOR ARE THEY INSURED BY THE FDIC.
INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL.
[__] Exempt from backup withholding
[__] Nonresident alien (Form W-8 attached) ___________________________
COUNTRY OF CITIZENSHIP
-----------------------------------------------------------------------
AUTHORIZED SIGNATURE TITLE DATE
-----------------------------------------------------------------------
AUTHORIZED SIGNATURE TITLE DATE
11. FOR AUTHORIZED DEALER USE ONLY (Please Print)
We hereby authorize the Transfer Agent to act as our agent in
connection with the transactions authorized by the Account Information
Form and agree to notify the Transfer Agent of any purchases made under
a Letter of Intent or Right of Accumulation. If this Account
Information Form includes a Telephone Exchange Privilege authorization,
a Telephone Redemption Privilege authorization or an Automatic
Withdrawal Plan request, we guarantee the signature(s) above.
-----------------------------------------------------------------------
DEALER'S NAME DEALER NUMBER
-----------------------------------------------------------------------
MAIN OFFICE ADDRESS BRANCH NUMBER
-----------------------------------------------------------------------
REPRESENTATIVE'S NAME REP. NUMBER
( )
-----------------------------------------------------------------------
BRANCH ADDRESS TELEPHONE NUMBER
-----------------------------------------------------------------------
AUTHORIZED SIGNATURE OF DEALER TITLE DATE
12. ADDITIONAL ACCOUNT STATEMENTS (Please Print)
In addition to myself and my representative, please send copies of my
account statements to:
-----------------------------------------------------------------------
NAME NAME
-----------------------------------------------------------------------
ADDRESS ADDRESS
-----------------------------------------------------------------------
CITY, STATE, ZIP CODE CITY, STATE, ZIP CODE
NOT PART OF THE PROSPECTUS
<PAGE>
13. SYSTEMATIC INVESTMENT PLAN
The Systematic Investment Plan, which is available to shareholders of
the Bear Stearns Funds, makes possible regularly scheduled purchases of
Fund shares to allow dollar-cost averaging. The Funds' Transfer Agent
can arrange for an amount of money selected by you ($100 minimum) to be
deducted from your checking account and used to purchase shares of a
specified Bear Stearns Fund. A $250 minimum initial investment is
required. This may not be used in conjunction with the Automatic
Withdrawal Plan.
Please debit $__________ from my checking account (named in Section 9)
on or about the 20th of the month. Depending on the Application receipt
date, the Plan may take 10 to 20 days to be in effect.
[__] Monthly [__] Every alternate month
[__] Quarterly [__] Other _______________
$____________ into the _______________ Fund ______________ Start Month.
$100 MINIMUM
$____________ into the _______________ Fund ______________ Start Month.
$100 MINIMUM
$____________ into the _______________ Fund ______________ Start Month.
$100 MINIMUM
If you are applying for the Telephone Redemption Privilege or
Systematic Investment Plan, please tape your voided check on top of our
sample below.
[TAPE CHECK HERE]
SERVICE ASSISTANCE MAILING INSTRUCTIONS
Our knowledgeable Client Services Mail your completed Account
Representatives are available to Information Form and check to:
assist you between 8:30 a.m. and THE BEAR STEARNS FUNDS
5:00 p.m. Eastern Time at: C/O PFPC INC.
1-800-447-1139 P.O. BOX 8960
WILMINGTON, DE 19899-8960
Bear Stearns & Co, Inc.
NOT PART OF THE PROSPECTUS
<PAGE>
Purchase, Redemption and Exchange of Shares
PURCHASE PROCEDURES
GENERAL.
Bedford Shares are sold without a sales load on a continuous basis by the Fund's
Distributor. The Distributor is located at Four Falls Corporate Center, West
Conshohocken, Pennsylvania 19428. Investors may purchase Bedford Shares either
directly, through an exchange from accounts invested in shares of any open-end
investment company ("The Bear Stearns Funds") either sponsored by or advised by
Bear, Stearns & Co. Inc. ("Bear Stearns"), or its affiliates, or through an
account (the "Account") maintained by the investor with certain brokerage firms
and may also purchase Shares directly by mail or wire. The minimum initial
investment is $1,000, and the minimum subsequent investment is $250. The Fund in
its sole discretion may accept or reject any order for purchases of Bedford
Shares.
All payments for initial and subsequent investments should be in U.S. dollars.
Purchases will be effected at the net asset value next determined after PFPC,
the Fund's transfer agent, has received a purchase order in good order and the
Fund's custodian has Federal Funds immediately available to it. In those cases
where payment is made by check, Federal Funds will generally become available
two Business Days after the check is received. Orders which are accompanied by
Federal Funds, and received by the Fund by 12:00 noon Eastern Time, and orders
as to which payment has been converted into Federal Funds by 12:00 noon Eastern
Time, will be executed as of 12:00 noon that Business Day. A "Business Day" is
any day that both the New York Stock Exchange (the "NYSE") and the Federal
Reserve Bank of Philadelphia (the "FRB") are open. On any Business Day, orders
which are accompanied by Federal Funds and received by PFPC after 12:00 noon
Eastern Time but prior to the close of regular trading on the NYSE (generally
4:00 p.m. Eastern Time), and orders as to which payment has been converted into
Federal Funds after 12:00 noon Eastern Time but prior to the close of regular
trading on the NYSE on any Business Day of the Fund, will be executed as of the
close of regular trading on the NYSE on that Business Day but will not be
entitled to receive dividends declared on such Business Day. Orders which are
accompanied by Federal Funds and received by the Fund as of the close of regular
trading on the NYSE or later, and orders as to which payment has been converted
to Federal Funds as of the close of regular trading on the NYSE or later on a
Business Day will be processed as of 12:00 noon Eastern Time on the following
Business Day.
If a broker makes special arrangements under which orders for Bedford Shares are
received by PFPC prior to 12:00 noon Eastern Time, and the broker guarantees
that payment for such Shares will be made in Federal Funds to the Fund's
custodian prior to the close of regular trading on the NYSE on the same day,
such purchase orders will be effective and Shares will be purchased at the
offering price in effect as of 12:00 noon Eastern Time on the date the purchase
order is received by PFPC.
PURCHASES THROUGH AN ACCOUNT.
Purchases of Shares may be effected through brokers (other than Bears Stearns or
brokers who have clearing arrangements with Bear Stearns) and may be made by
check (except that a check drawn on a foreign bank will not be accepted),
Federal Reserve draft or by wiring Federal Funds with funds held in the
brokerage accounts. Checks or Federal Reserve drafts should be made payable as
follows: (i) to an investor's broker or (ii) to "The RBB Fund-Money Market
Portfolio (Bedford Class)" if purchased directly from the Portfolio, and should
be directed to the Transfer Agent: PFPC Inc., Attention: The RBB Fund-Money
Market Portfolio (Bedford Class), P.O. Box 8960, Wilmington, Delaware 19899. The
investor's broker is responsible for forwarding payment promptly to the Fund's
custodian, PFPC Trust Company. An investor's bank or broker may impose a charge
for this service.
In the event of a purchase effected through an investor's Account with his
broker through procedures established in connection with the requirements of
Accounts at such broker, beneficial ownership of Shares will be recorded by the
broker and will be reflected in the Account statements provided by the broker to
such investors. A broker may impose minimum investor Account requirements. Even
if a broker does not impose a sales charge for purchases of Bedford Shares,
depending on the terms of an investor's Account with his broker, the broker may
charge an investor's Account fees for automatic investment and other services
provided to the Account. Information concerning Account requirements, services
and charges should be obtained from an investor's broker, and this Prospectus
should be read in conjunction with any information received from a broker.
Shareholders whose shares are held in the
11
<PAGE>
street name account of a broker/dealer and who desire to transfer such shares to
the street name account of another broker/dealer should contact their current
broker/dealer.
A Shareholder of The Bear Stearns Funds may purchase Bedford Shares of the
Portfolio in exchange for his shares of The Bear Stearns Funds. This exchange
privilege is available for an investor with an existing account. See "Exchange
of Shares" below.
For distribution services with respect to Bedford Shares of the Portfolio held
by clients of Bear Stearns, the Fund's Distributor will pay Bear Stearns up to
.50% of the annual average value of such accounts.
DIRECT PURCHASES.
Investors may purchase the Portfolio's shares by mail by completing and signing
an Account Information Form (the "Application"), a copy of which is attached to
this Prospectus, and mailing it, together with a check payable to "The RBB
Fund--Money Market Portfolio (Bedford Class)," to Bedford Money Market
Portfolio, c/o PFPC, P.O. Box 8960, Wilmington, Delaware 19899. The check must
specify the name of The RBB Fund -- Money Market Portfolio (Bedford Class).
Subsequent purchases may be made by forwarding payment to the Fund's transfer
agent at the foregoing address.
Provided that the investment is at least $2,500, an investor may also purchase
Shares by having his bank or his broker wire Federal Funds to PNC Bank. An
investor's bank or broker may impose a charge for this service. In order to
ensure prompt receipt of an investor's Federal Funds wire, for an initial
investment, it is important that an investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (800) 447-1139
and provide your name, address, telephone number, Social Security or Tax
Identification Number, the Bedford Class selected, the amount being wired,
and by which bank. PFPC will then provide an investor with a Fund account
number. (Investors with existing accounts should also notify the Fund's
transfer agent prior to wiring funds.)
B. Instruct your bank or broker to wire the specified amount, together
with your assigned account number, to PFPC's account with PNC Bank:
PNC Bank, N.A.
ABA-0310-0005-3.
CREDIT ACCOUNT NUMBER: 86-1030-3398
FROM: (name of investor)
ACCOUNT NUMBER: (investor's account number with the Portfolio)
FOR PURCHASE OF: (name of the Portfolio)
AMOUNT: (amount to be invested)
C. Complete and sign the Application and mail it to the address shown
thereon. PFPC will not process initial purchases until it receives a
completed and signed Application.
For subsequent investments, an investor should follow steps A and B above.
RETIREMENT PLANS.
Shares may be purchased in conjunction with individual retirement accounts
("IRAs") and rollover IRAs where PFPC Trust Company acts as custodian. For
further information as to applications and annual fees, contact the Distributor
or your broker. To determine whether the benefits of an IRA are available and/or
appropriate, a shareholder should consult with a tax adviser.
REDEMPTION PROCEDURES
Redemption orders are effected at the net asset value per share next determined
after receipt of the order in proper form by the Fund's transfer agent, PFPC.
Investors may redeem all or some of their Shares in accordance with one of the
procedures described below.
REDEMPTION OF SHARES IN AN ACCOUNT.
An investor who beneficially owns Shares in an Account may redeem Shares in his
Account in accordance with instructions and limitations pertaining to his
Account by contacting his broker. If such notice is received by PFPC from the
broker by 12:00 noon Eastern Time on any Business Day, the redemption will be
effective as of 12:00 noon Eastern Time on that day. Payment of the redemption
proceeds will be made after 12:00 noon Eastern Time on the day the redemption is
effected, provided that the Fund's custodian is open for business. If the
custodian is not open, payment will be made on the next
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bank business day. If the redemption request is received between 12:00 noon and
the close of regular trading on the NYSE on a Business Day, the redemption will
be effective as of the close of regular trading on the NYSE on such Business Day
and payment will be made on the next bank business day following receipt of the
redemption request. If all Shares are redeemed, all accrued but unpaid dividends
on those Shares will be paid with the redemption proceeds.
Each brokerage firm reserves the right to waive or modify criteria for
participation in an Account or to terminate participation in an Account for any
reason.
REDEMPTION OF SHARES OWNED DIRECTLY.
An investor may redeem any number of Shares by sending a written request to The
RBB Fund Money Market Portfolio (Bedford Class), c/o PFPC, P.O. Box 8960,
Wilmington, Delaware 19899. Redemption requests must be signed by each
shareholder in the same manner as the Shares are registered. Redemption requests
for joint accounts require the signature of each joint owner. On redemption
requests of $5,000 or more, a signature guarantee is required. A signature
guarantee may be obtained from a domestic bank or trust company, broker, dealer,
clearing agency or savings association who are participants in a medallion
program recognized by the Securities Transfer Association. The three recognized
medallion programs are Securities Transfer Agents Medallion Program (STAMP),
Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange, Inc.
Medallion Signature Program (MSP). Signature guarantees that are not part of
these programs will not be accepted.
Investors may redeem or exchange shares without charge by telephone if they have
completed and returned an account application containing the appropriate
telephone election. To add a telephone option to an existing account that
previously did not provide for this option, a Telephone Authorization Form must
be filed with PFPC. This form is available from PFPC. Once this election has
been made, the shareholder may simply contact PFPC by telephone to request the
redemption by calling (888) 261-4073. Neither the Fund, the Portfolio, the
Distributor, PFPC nor any other Fund agent will be liable for any loss,
liability, cost or expense for following the procedures below or for following
instructions communicated by telephone that they reasonably believe to be
genuine.
The Fund's telephone transaction procedures include the following measures: (1)
requiring the appropriate telephone transaction privilege forms; (2) requiring
the caller to provide the names of the account owners, the account social
security number and name of the Portfolio, all of which must match the Fund's
records; (3) requiring the Fund's service representative to complete a telephone
transaction form, listing all of the above caller identification information;
(4) requiring that redemption proceeds be sent only by check to the account
owners of record at the address of record, or by wire only to the owners of
record at the bank account of record; (5) sending a written confirmation for
each telephone transaction to the owners of record at the address of record
within five (5) business days of the call; and (6) maintaining tapes of
telephone transactions for six months, if the Fund elects to record shareholder
telephone transactions. For accounts held of record by broker-dealers or other
industry professionals, additional documentation or information regarding the
scope of a caller's authority is required. Finally, for telephone transactions
in accounts held jointly, additional information regarding other account holders
is required. Telephone transactions will not be permitted in connection with IRA
or other retirement plan accounts or by an attorney-in-fact under power of
attorney.
Redemption proceeds of a telephone redemption request will be mailed by check to
an investor's registered address unless he has designated in his Application or
Telephone Authorization Form that such proceeds are to be sent by wire transfer
to a specified checking or savings account. If redemption proceeds are to be
sent by wire transfer, a telephone redemption request received prior to the
close of regular trading on the NYSE will result in redemption proceeds being
wired to the investor's bank account on the next bank business day. The minimum
redemption for proceeds sent by wire transfer is $2,500. There is no maximum for
proceeds sent by wire transfer. The Fund may modify this redemption service at
any time or charge a service fee upon prior notice to shareholders, although no
fee is currently contemplated.
REDEMPTION BY CHECK.
Upon request, the Fund will provide any direct investor and any investor who
does not have check writing privileges for his Account with forms of drafts
("checks") payable through PNC Bank. These checks may be made payable to the
order of anyone. The minimum amount of a check is $250; however, a broker may
establish a higher minimum. An investor wishing to use this check writing
redemption procedure should complete specimen signature cards (available from
PFPC), and then forward
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such signature cards to PFPC. PFPC will then arrange for the checks to be
honored by PNC Bank. Investors who own shares through an Account should contact
their brokers for signature cards. Investors of joint accounts may elect to have
checks honored with a single signature. Check redemptions will be subject to PNC
Bank's rules governing checks. An investor will be able to stop payment on a
check redemption. The Fund or PNC Bank may terminate this redemption service at
any time, and neither shall incur any liability for honoring checks, for
effecting redemptions to pay checks, or for returning checks which have not been
accepted.
When a check is presented to PNC Bank for clearance, PNC Bank, as the investor's
agent, will cause the Fund to redeem a sufficient number of full and fractional
shares owned by the investor to cover the amount of the check. This procedure
enables the investor to continue to receive dividends on those Shares
representing the amount being redeemed by check until such time as the check is
presented to PNC Bank. Pursuant to rules under the 1940 Act, checks may not be
presented for cash payment at the offices of PNC Bank. This limitation does not
affect checks used for the payment of bills or cash at other banks.
Written redemption instructions, indicating the Portfolio from which shares are
to be redeemed, and duly endorsed stock certificates, if previously issued, must
be received by the transfer agent in proper form and signed exactly as the
shares are registered. All signatures must be guaranteed as described above
under "Redemption of Shares Owned Directly." Redemption requests by corporate
and fiduciary shareholders must be accompanied by appropriate documentation
establishing the authority of the person seeking to act on behalf of the
account. Investors may obtain from the Fund or the transfer agent forms of
resolutions and other documentation which have been prepared in advance to
assist compliance with the Portfolio's procedures.
During times of drastic economic or market conditions, investors may experience
difficulty in contacting Bear Stearns, the Distributor or the investor's broker
by telephone to request a redemption of Portfolio shares. In such cases,
investors should consider using the other redemption procedures described
herein. Use of these other redemption procedures may result in the redemption
request being processed at a later time than it would have been if telephone
redemption had been used.
AUTOMATIC WITHDRAWAL.
Automatic withdrawal permits investors to request withdrawal of a specified
dollar amount (minimum of $25) on either a monthly or quarterly basis if the
investor has a $5,000 minimum account. An application for automatic withdrawal
can be obtained from Bear Stearns, the Distributor, the investor's broker, or
the transfer agent. Automatic withdrawal may be ended at any time by the
investor, the Fund or the transfer agent. Shares for which certificates have
been issued may not be redeemed through automatic withdrawal. Purchases of
additional shares concurrently with withdrawals generally are undesirable.
ADDITIONAL REDEMPTION INFORMATION.
The Fund ordinarily will make payment for all Shares redeemed within seven days
after receipt by PFPC of a redemption request in proper form. Although the Fund
will redeem Shares purchased by check before the check clears, payment of the
redemption proceeds may be delayed for a period of up to fifteen days after
purchase, pending a determination that the check has cleared. This procedure
does not apply to Shares purchased by wire payment. Investors should consider
purchasing Shares using a certified or bank check or money order if they
anticipate an immediate need for redemption proceeds. During the period prior to
the time Shares are redeemed, dividends on such Shares will accrue and be
payable.
The Fund imposes no charge when Shares are redeemed, except as described below.
The Fund reserves the right to redeem any account in the Class involuntarily, on
30 days' notice, if such account falls below $500 and during such 30-day period
the amount invested in such account is not increased to at least $500. Payment
for Shares redeemed may be postponed or the right of redemption suspended as
provided by the rules of the Securities and Exchange Commission.
A shareholder may have redemption proceeds of $1 million or more wired to the
shareholder's brokerage account or a commercial bank account designated by the
shareholder. A transaction fee of $7.50 will be charged for payments by wire.
Questions about this option, or redemption requirements generally, should be
referred to the shareholder's Bear Stearns account executive, to the investor's
broker, or to the transfer agent if the shares are not held in a brokerage
account.
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EXCHANGE OF SHARES
EXCHANGE PRIVILEGE.
The exchange privilege enables an investor to purchase shares of the Portfolio
in exchange for shares of the other mutual funds sponsored or advised by Bear
Stearns, to the extent such shares are offered for sale in the investor's state
of residence. These funds have different investment objectives than the Money
Market Portfolio. To use this privilege, investors should consult their account
executive at Bear Stearns, their investment dealers who have sales agreements
with Bear Stearns, the Distributor, the investor's broker or the Transfer Agent
to determine if it is available and whether any conditions are imposed on its
use. Currently, exchanges may be made among the following portfolios (and such
additional portfolios which may be added in the future):
(ARROW) Emerging Markets Debt Portfolio
(ARROW) S&P STARS Portfolio
(ARROW) Large Cap Value Portfolio
(ARROW) Small Cap Value Portfolio
(ARROW) Total Return Bond Portfolio
(ARROW) The Insiders Select Fund
To effect an exchange of Shares, exchange instructions must be given to the
transfer agent in writing or by telephone. A shareholder wishing to make an
exchange may do so by sending a written request to PFPC, Attention: The RBB
Fund--Money Market Portfolio (Bedford Class), P.O. Box 8960, Wilmington,
Delaware 19899. Shareholders are automatically provided with telephone exchange
privileges when opening an account, unless they indicate otherwise on the
account application. Shareholders holding share certificates are not eligible to
exchange shares of the Portfolio by phone because share certificates must
accompany all exchange requests. To add this feature to an existing account that
previously did not provide for this option, a Telephone Authorization Form must
be filed with the transfer agent. This form is available from the transfer
agent. Once this election has been made, the shareholder may contact the
Transfer Agent by telephone at (800) 447-1139 to request the exchange. See
"Redemption Procedures--Redemption of Shares Owned Directly" for a description
of the Fund's telephone transaction procedures. During periods of substantial
economic or market change, telephone exchanges may be difficult to complete and
shareholders may have to submit exchange requests to the transfer agent in
writing.
If the exchanging shareholder does not currently own shares of the Portfolio or
fund whose shares are being acquired, a new account will be established with the
same registration, dividend and capital gain options and the same dealer of
record as the account from which shares are exchanged, unless otherwise
specified in writing by the shareholder with all signatures guaranteed as
described above. To participate in the Systematic Investment Plan or establish
automatic withdrawal for the new account, however, an exchanging shareholder
must file a specific written request. The exchange privilege may be modified or
terminated at any time, or from time to time, by the Fund on 60 days' notice to
affected portfolio or fund shareholders.
Before any exchange, the investor must obtain and should review a copy of the
current prospectus of the portfolio or fund into which the exchange is being
made. Prospectuses may be obtained from Bear Stearns. Except in the case of
Personal Retirement Plans, the Shares being exchanged must have a current value
of at least $250; furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum initial
investment required for the portfolio or fund into which the exchange is being
made. If making an exchange to an existing account, the dollar value must equal
or exceed the applicable minimum for subsequent investments. If any amount
remains in the investment portfolio from which the exchange is being made, such
amount must not be below the minimum account value required by the portfolio or
fund.
Shares will be exchanged at the next determined public offering price. To
qualify for the exchange privilege, at the time of the exchange, the investor
must notify Bear Stearns, the Distributor, his investment dealer or the transfer
agent. Any such qualification is subject to confirmation of the investor's
holdings through a check of appropriate records. No fees currently are charged
shareholders directly in connection with exchanges, although the Fund reserves
the right, upon not less than 60 days' written notice, to charge shareholders a
$5.00 fee in accordance with rules promulgated by the Securities
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<PAGE>
and Exchange Commission. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege may be modified or
terminated at any time upon notice to shareholders.
The exchange of shares of one portfolio or fund for shares of another is treated
for federal income tax purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may realize a taxable gain
or loss.
REDIRECTED DISTRIBUTION OPTION.
The Redirected Distribution Option enables a shareholder to invest automatically
dividends or dividends and capital gain distributions, if any, paid by the
Portfolio in shares of another portfolio of the Fund or a fund advised or
sponsored by Bear Stearns of which the shareholder is an investor. Shares of the
other portfolio or fund will be purchased at the then current public offering
price; however, a sales load may be charged with respect to investments in
shares of a portfolio or fund sold with a sales load. If the shareholder is
investing in a fund that charges a sales load, such shareholder may qualify for
share prices which do not include the sales load or which reflect a reduced
sales load.
This privilege is available only for existing accounts and may not be used to
open new accounts. Minimum subsequent investments do not apply. The Fund may
modify or terminate this privilege at any time or charge a service fee. No such
fee currently is contemplated.
Net Asset Value
The net asset value per share of each class of the Portfolio for the purpose of
pricing purchase and redemption orders is determined twice each day, once as of
12:00 noon Eastern Time and once as of the close of regular trading on the NYSE
on each weekday with the exception of those holidays on which either the NYSE or
the FRB is closed. Currently, the NYSE is closed on weekends and the customary
national business holidays of New Year's Day, Dr. Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and on the preceding Friday or subsequent
Monday when one of these holidays falls on a Saturday or Sunday. The FRB is
currently closed on weekends and the same holidays as the NYSE is closed as well
as Veterans' Day and Columbus Day. The net asset value for each class of the
Fund is calculated by adding the value of the proportionate interest of the
class in the securities, cash and other assets of the Portfolio, deducting the
actual and accrued liabilities of such class and dividing the result by the
number of outstanding shares of the class. The net asset value per share of each
class of a portfolio is determined independently of any of the Fund's other
classes.
The Fund seeks to maintain for the Portfolio a net asset value of $1.00 per
share for purposes of purchases and redemptions and values its portfolio
securities on the basis of the amortized cost method of valuation described in
the Statement of Additional Information under the heading "Valuation of Shares."
There can be no assurance that net asset value per share will not vary.
With the approval of the Board of Directors, the Portfolio may use a pricing
service, bank or broker dealer experienced in such matters to value the
Portfolio's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.
Management
BOARD OF DIRECTORS
The business and affairs of the Fund and each investment portfolio are managed
under the direction of the Fund's Board of Directors. The Fund currently
operates or proposes to operate seventeen separate investment portfolios. The
Class represents interests in the Fund's Money Market Portfolio.
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INVESTMENT ADVISER
BIMC, an indirect majority-owned subsidiary of PNC Bank, serves as the
investment adviser for the Portfolio. BIMC has its principal offices at Bellevue
Park Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware 19809. PNC
Bank and its subsidiaries currently manage over $45.9 billion of assets, of
which approximately $31.4 billion are mutual funds. PNC Bank, a national bank
whose principal business address is 1600 Market Street, Philadelphia,
Pennsylvania 19103, is a wholly-owned subsidiary of PNC Bancorp, Inc. PNC
Bancorp, Inc. is a bank holding company and a wholly-owned subsidiary of PNC
Bank Corp., a multi-bank holding company.
As investment adviser to the Portfolio, BIMC manages such Portfolio and is
responsible for all purchases and sales of portfolio securities. In entering
into Portfolio transactions for the Portfolio with a broker, BIMC may take into
account the sale by such broker of shares of the Fund, subject to the
requirements of best execution. The agreement between BIMC and RBB with respect
to the Money Market Portfolio provides for BIMC to also assist generally in
supervising the operations of such Portfolio, and to maintain the Portfolio's
financial accounts and records. These administrative responsibilities have been
delegated to PFPC, as described below.
For the services provided to and expenses assumed by it for the benefit of the
Money Market Portfolio, BIMC is entitled to receive the following fees, computed
daily and payable monthly based on a Portfolio's average daily net assets: .45%
of the first $250 million; .40% of the next $250 million; and .35% of net assets
in excess of $500 million.
BIMC may in its discretion from time to time agree to waive voluntarily all or
any portion of its advisory fee for the Portfolio.
For the Fund's fiscal year ended August 31, 1998, the Fund paid investment
advisory fees aggregating .23% of the average daily net assets of the Money
Market Portfolio. For that same year, BIMC waived approximately .13% of the
average daily net assets of the Money Market Portfolio.
PNC Bank was formerly sub-adviser to the Portfolio and provided research, credit
analysis and recommendations with respect to the Portfolio's investments and
supplied certain computer facilities, personnel and other services. The
facilities, personnel, services and related expenses have been transferred to
BIMC and in return, BIMC's obligation to pay a portion of the sub-advisory fee
to PNC Bank has been terminated. For its sub-advisory services, PNC Bank was
entitled to receive from BIMC an amount equal to 75% of the investment advisory
fee paid by the Portfolio to BIMC (subject to adjustment in certain
circumstances). The sub-advisory fees paid by BIMC to PNC Bank had no effect on
the investment advisory fees payable by the Fund to BIMC. The services provided
by BIMC and the fees payable by the Fund for these services are described
further in the Statement of Additional Information under "Management of the
Company."
ADMINISTRATOR
Pursuant to its advisory agreement with the Fund with respect to the Money
Market Portfolio, BIMC provides administrative services to such Portfolio, and
is entitled to receive an administration fee, computed daily and payable monthly
at a rate of .10% of the average daily net assets of the Portfolio. BIMC has
delegated to PFPC all of its accounting and administrative obligations under
such agreement. The Fund has agreed to pay directly to PFPC the fees for
accounting and administrative services which PFPC would have received directly
from BIMC. Such arrangement has no effect on the total advisory and
administrative fees payable by such Portfolio to BIMC. PFPC's principal business
address is 400 Bellevue Parkway, Wilmington, Delaware 19809.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN
PFPC Trust Company, an indirect wholly owned subsidiary of PNCBank Corp., serves
as the Fund's custodian and PFPC, an indirect wholly-owned subsidiary of PNC
Bank Corp., serves as the Fund's transfer agent and dividend disbursing agent.
PFPC may enter into shareholder servicing agreements with registered
broker/dealers who have entered into dealer agreements with the Distributor for
the provision of certain shareholder support services to customers of such
broker/dealers who are shareholders of the Portfolio. The services provided and
the fees payable by the Fund for these services are described in the Statement
of Additional Information under "Investment Advisory, Distribution and Servicing
Arrangements."
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DISTRIBUTOR
Provident Distributors, Inc., with a principal business address at Four Falls
Corporate Center, West Conshohocken, Pennsylvania 19428, acts as Distributor of
the Fund pursuant to a distribution agreement dated May 29, 1998 (the
"Distribution Agreement").
EXPENSES
The expenses of each Portfolio are deducted from the total income of such
Portfolio before dividends are paid. Any general expenses of the Fund that are
not readily identifiable as belonging to a particular investment portfolio of
the Fund will be allocated among all investment portfolios of the Fund based on
the relative net assets of the investment portfolios at the time such expenses
were accrued. The Bedford Class of the Fund pays its own distribution fees, and
may pay a different share than other classes of the Fund of other expenses
(excluding advisory and custodial fees) if these expenses are actually incurred
in a different amount by the Bedford Class or if it receives different services.
The investment adviser may assume expenses of the Portfolio from time to time.
In certain circumstances, it may assume such expenses on the condition that it
is reimbursed by the Portfolio for such amounts prior to the end of a fiscal
year. In such event, the reimbursement of such amounts will have the effect of
lowering a Portfolio's expense ratio and of increasing yield to investors.
For the Fund's fiscal year ended August 31, 1998, the Fund's total expenses were
1.10% of the average daily net assets with respect to the Class of the Money
Market Portfolio (not taking into account waivers and reimbursements of .13%).
Distribution of Shares
The Board of Directors of the Fund approved and adopted the Distribution
Agreement and separate Plan of Distribution for the Class (the "Plan") pursuant
to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to
receive from the Class a distribution fee, which is accrued daily and paid
monthly, of up to .65% on an annualized basis of the average daily net assets of
the Class. Under the Distribution Agreement, the Distributor has agreed to
accept compensation for its services thereunder and under the Plan in the amount
of .60% of the average daily net assets of the Class on an annualized basis in
any year. The actual amount of such compensation is agreed upon from time to
time by the Fund's Board of Directors and the Distributor. Pursuant to the
conditions of an exemptive order granted by the Securities and Exchange
Commission, the Distributor has agreed to waive its fee with respect to the
Class on any day to the extent necessary to assure that the fee required to be
accrued by the Class does not exceed the income of the Class on that day. In
addition, the Distributor may, in its discretion, voluntarily waive from time to
time all or any portion of its distribution fee.
Under the Distribution Agreement and the Plan, the Distributor may reallocate an
amount up to the full fee that it receives to financial institutions, including
Dealers, based upon the aggregate investment amounts maintained by and services
provided to shareholders of the Class serviced by such financial institutions.
The Distributor may also reimburse Dealers for other expenses incurred in the
promotion of the sale of Fund shares. The Distributor and/or Dealers pay for the
cost of printing (excluding typesetting) and mailing to prospective investors
prospectuses and other materials relating to the Fund as well as for related
direct mail, advertising and promotional expenses.
The Plan obligates the Fund, during the period it is in effect, to accrue and
pay to the Distributor on behalf of the Class the fee agreed to under the
Distribution Agreement. Payments under the Plan are not based on expenses
actually incurred by the Distributor, and the payments may exceed distribution
expenses actually incurred.
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Dividends and Distributions
The Fund will distribute substantially all of the net investment income and net
realized capital gains, if any, of the Portfolio to the Portfolio's
shareholders. All distributions are reinvested in the form of additional full
and fractional Shares of the Class unless a shareholder elects otherwise.
The net investment income (not including any net short-term capital gains)
earned by the Portfolio will be declared as a dividend on a daily basis and paid
monthly. Dividends are payable to shareholders of record immediately prior to
the determination of net asset value made as of the close of regular trading on
the NYSE. Net short-term capital gains, if any, will be distributed at least
annually.
Taxes
Distributions from the Money Market Portfolio will generally be taxable to
shareholders. It is expected that all, or substantially all, of these
distributions will consist of ordinary income. You will be subject to income tax
on these distributions regardless whether they are paid in cash or reinvested in
additional shares. The one major exception to these tax principles is that
distributions on shares held in an IRA (or other tax-qualified plan) will not be
currently taxable.
The foregoing is only a summary of certain tax considerations under the current
law, which may be subject to change in the future. You should consult your tax
adviser for further information regarding federal, state, local and/or foreign
tax consequences relevant to your specific situation.
Description of Shares
The Fund has authorized capital of thirty billion shares of Common Stock, $.001
par value per share, of which 18.326 billion shares are currently classified
into 97 different classes of Common Stock ( see "Description of Shares" in the
Statement of Additional Information).
The Fund offers multiple classes of shares in the Money Market Portfolio to
expand its marketing alternatives and to broaden its range of services to
different investors. The expenses of the various classes within these Portfolios
vary based upon the services provided, which may affect performance. Each class
of Common Stock of the Fund has a separate Rule 12b-1 distribution plan. Under
the Distribution Agreements entered into with the Distributor and pursuant to
each of the distribution plans, the Distributor is entitled to receive from each
class as compensation for distribution services provided to that class a
distribution fee based on average daily net assets. A salesperson or any other
person entitled to receive compensation for servicing Fund shares may receive
different compensation with respect to different classes in a Portfolio of the
Fund. An investor may contact the Fund's Distributor by calling 1-800-888-9723
to request more information concerning other classes available.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED HEREIN
RELATE PRIMARILY TO THE BEDFORD SHARES OF THE MONEY MARKET PORTFOLIO AND
DESCRIBE ONLY THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS AND
OTHER MATTERS RELATING TO THE BEDFORD SHARES OF THE MONEY MARKET PORTFOLIO.
Each share that represents an interest in a Portfolio has an equal proportionate
interest in the assets belonging to such Portfolio with each other share that
represents an interest in such Portfolio, even where a share has a different
class designation than another share representing an interest in that Portfolio.
Shares of the Fund do not have preemptive or conversion rights. When issued for
payment as described in this Prospectus, Shares of the Fund will be fully paid
and non-assessable.
The Fund currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
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Holders of shares of the Portfolio will vote in the aggregate and not by class
on all matters, except where otherwise required by law. Further, shareholders of
all investment portfolios of the Fund will vote in the aggregate and not by
portfolio except as otherwise required by law or when the Board of Directors
determines that the matter to be voted upon affects only the interests of the
shareholders of a particular investment portfolio. (See the Statement of
Additional Information under "Additional Information Concerning Fund Shares" for
examples of when the 1940 Act requires voting by investment portfolio or by
class.) Shareholders of the Fund are entitled to one vote for each full share
held (irrespective of class or portfolio) and fractional votes for fractional
shares held. Voting rights are not cumulative and, accordingly, the holders of
more than 50% of the aggregate shares of Common Stock of the Fund may elect all
of the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record or
beneficially 25% or more of the outstanding shares of all classes of the Fund.
Other Information
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the Fund's
investment operations and annual financial statements audited by independent
accountants. Shareholder inquiries should be addressed to PFPC, the Fund's
transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (800) 447-1139.
26
<PAGE>
The
Bear Stearns
Funds
235 PARK AVENUE
NEW YORK, NY 10167
1-800-766-4111
MONEY MARKET PORTFOLIO
INVESTMENT ADVISER
BlackRock Institutional Management Corporation
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
ADMINISTRATOR AND TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
BSF-P-004-02
<PAGE>
================================================================================
BEDFORD
MUNICIPAL
MONEY MARKET
PORTFOLIO
Prospectus
December 29, 1998
<PAGE>
BEDFORD
MUNICIPAL MONEY MARKET PORTFOLIO
OF
THE RBB FUND, INC.
The Bedford Shares of the Municipal Money Market Portfolio (THE "MUNICIPAL
MONEY MARKET PORTFOLIO" OR THE "PORTFOLIO") are a class of shares of common
stock of The RBB Fund, Inc. (the "Fund"), an open-end management investment
company. Shares of the class offered by this Prospectus represent interests in
the Portfolio.
The investment objective of the Municipal Money Market Portfolio is to
provide as high a level of current interest income exempt from federal income
taxes as is consistent with maintaining liquidity and stability of principal.
The Municipal Money Market Portfolio seeks to achieve such objective by
investing substantially all of its assets in a diversified portfolio of
short-term Municipal Obligations. "Municipal Obligations" are obligations issued
by or on behalf of states, territories and possessions of the United States, the
District of Columbia and their political subdivisions, agencies,
instrumentalities and authorities. During periods of normal market conditions,
at least 80% of the net assets of the Portfolio will be invested in Municipal
Obligations, the interest on which is exempt from the regular federal income tax
but which may constitute an item of tax preference for purposes of the federal
alternative minimum tax.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK
AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENT IN
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. THERE CAN BE NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
BlackRock Institutional Management Corporation serves as investment adviser
for the Portfolio. PFPC Trust Company serves as custodian for the Fund and PFPC
Inc. serves as administrator of the Portfolio and the transfer and dividend
disbursing agent for the Fund. Provident Distributors, Inc. acts as distributor
for the Fund.
This Prospectus contains concise information that a prospective investor
needs to know before investing. Please keep it for future reference. A Statement
of Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained upon request free of charge from the Fund by
calling (800) 430-9618. The Prospectus and Statement of Additional Information
are also available for reference, along with other related materials, on the SEC
Internet Website (http://www.sec.gov).
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
The RBB Fund, Inc. is an open-end management investment company
incorporated under the laws of the State of Maryland on February 29, 1988. The
Fund is currently operating or proposing to operate seventeen separate
investment portfolios. The shares ("Shares") of the Bedford Class (the "Class")
of common stock of the Fund offered by this Prospectus represent interests in
the Fund's Municipal Money Market Portfolio.
The investment objective of the Municipal Money Market Portfolio is to
provide as high a level of current interest income exempt from federal income
taxes as is consistent with maintaining liquidity and stability of principal. To
achieve this objective, the Municipal Money Market Portfolio invests
substantially all of its assets in a diversified portfolio of short-term
Municipal Obligations which meet certain ratings criteria and present minimal
credit risks to the Portfolio. During periods of normal market conditions, at
least 80% of the net assets of the Portfolio will be invested in Municipal
Obligations, the interest on which is exempt from the regular federal income
tax, but which may constitute an item of tax preference for purposes of the
federal alternative minimum tax.
The Portfolio seeks to maintain a net asset value of $1.00 per share;
however, there can be no assurance that the Portfolio will be able to maintain a
stable net asset value of $1.00 per share.
The Portfolio's investment adviser is BlackRock Institutional Management
Corporation ("BIMC"). PFPC Trust Company serves as custodian to the Fund and
PFPC Inc. ("PFPC") serves as the administrator to the Portfolio and transfer and
dividend disbursing agent to the Fund. Provident Distributors, Inc. (the
"Distributor") acts as distributor of the Fund's Shares.
An investor may purchase and redeem Shares through his broker or by direct
purchases or redemptions. See "Purchase and Redemption of Shares."
An investment in the Portfolio is subject to certain risks, as set forth in
detail under "Investment Objectives and Policies." The Portfolio, to the extent
set forth under "Investment Objectives and Policies," may engage in the purchase
of securities on a "when-issued" or "forward commitment" basis, and the purchase
of stand-by commitments. These transactions involve certain special risks, as
set forth under "Investment Objective and Policies."
FEE TABLE
The Fee Table below contains a summary of the annual operating expenses of
the Bedford Class of the Municipal Money Market Portfolio based on expenses
incurred for the fiscal year ended August 31, 1998, as a percentage of average
daily net assets. An example based on the summary is also shown.
ANNUAL FUND OPERATING EXPENSES (BEDFORD CLASS)
AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS
Management Fees (after waivers)(1) ....................................... .08%
12b-1 fees(1) ............................................................ .58%
Other Expenses(1) ........................................................ .23%
---
Total Fund Operating Expenses (Bedford Class) (after waivers
and reimbursements)(1) .............................................. .89%
===
(1) Management Fees and 12b-1 Fees are based on average daily net assets and are
calculated daily and paid monthly. Before waivers for the Bedford Municipal
Money Market Portfolio, Management Fees would be .34%, and Total Fund
Operating Expenses would be 1.15%.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Municipal Money Market Portfolio* .. $9 $28 $49 $110
* Other Classes of this Portfolio are sold with different fees and expenses.
2
<PAGE>
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. Long-term Shareholders may pay more than
the economic equivalent of the maximum front-end sales charges permitted by the
National Association of Securities Dealers, Inc.
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Bedford Class of the
Portfolio will bear directly or indirectly. (For more complete descriptions of
the various costs and expenses, see "Management -- Investment Adviser," and
"Distribution of Shares" below.) Expense figures are based on actual costs and
fees charged to the Class. The Fee Table reflects a voluntary waiver of
Management Fees for the Class. However, there can be no assurance that any
future waivers of Management Fees will not vary from the figures reflected in
the Fee Table. To the extent that any service providers assume additional
expenses of the Portfolio, such assumption will have the effect of lowering the
Portfolio's overall expense ratio and increasing its yield to investors.
From time to time the Class advertises its "total return," "yield" and
"effective yield." Total return and yield figures are based on historical
earnings and are not intended to indicate future performance. The "yield" of the
Class refers to the income generated by an investment in the Class over a
seven-day period (which period will be stated in the advertisement). This income
is then "annualized." That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Class
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of this assumed reinvestment. The
"tax-equivalent yield" of the Class may also be quoted from time to time, which
shows the level of taxable yield needed to produce an after-tax equivalent to
the tax-free yield of the Class. This is done by increasing the yield of the
Class (calculated as above) by the amount necessary to reflect the payment of
federal income tax at a stated tax rate.
The total return and yield of any investment is generally a function of
portfolio quality and maturity, type of investment and operating expenses. The
total return and yield on Shares will fluctuate and is not necessarily
representative of future results. Any fees charged by broker/dealers directly to
their shareholders in connection with investments in the Class are not reflected
in the total return and yield of the Shares, and such fees, if charged, will
reduce the actual return received by shareholders on their investments. The
total return and yield on Shares of the Class may differ from the total return
and yields on shares of other classes of the Fund that also represent interests
in the Portfolio depending on the allocation of expenses to each class of the
Portfolio. See "Expenses."
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth certain information concerning the investment
results of the Bedford Class of the Municipal Money Market Portfolio for the
periods indicated. The financial data included in this table for each of the
periods ended August 31, 1994 through August 31, 1998, are a part of the Fund's
financial statements for the Portfolio which are incorporated by reference into
the Statement of Additional Information and have been audited by
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), the Fund's independent
accountants. The financial data for the Portfolio for the periods ended August
31, 1989, 1990, 1991, 1992 and 1993 are a part of previous financial statements
audited by PricewaterhouseCoopers. The financial data included in the table
should be read in conjunction with the financial statements and notes thereto.
Further information about the performance of the Portfolio is available in the
Annual Report to Shareholders. Both the Statement of Additional Information, and
the Annual Report to Shareholders may be obtained free of charge by calling the
telephone number on page 1 of this Prospectus.
3
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC. FINANCIAL HIGHLIGHTS (c)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO
-----------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1998 1997 1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income ... 0.0286 0.0285 0.0288 0.0297 0.0195 0.0195 0.0287 0.0431
Net gains on securities
(both realized
and unrealized) ....... -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Total from
investment
operations ........ 0.0286 0.0285 0.0288 0.0297 0.0195 0.0195 0.0287 0.0431
-------- -------- -------- -------- -------- -------- -------- --------
Less distributions
Dividends (from net
investment income) .... (0.0286) (0.0285) (0.0288) (0.0297) (0.0195) (0.0195) (0.0287) (0.0431)
Distributions (from
capital gains) ........ -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Total distributions . (0.0286) (0.0285) (0.0288) (0.0297) (0.0195) (0.0195) (0.0287) (0.0431)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value,
end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========
Total Return ............... 2.97% 2.88% 2.92% 3.01% 1.97% 1.96% 2.90% 4.40%
Ratios/Supplemental Data
Net assets, end of
period (000) .......... $147,633 $213,034 $201,940 $198,425 $182,480 $215,577 $176,950 $215,140
Ratios of expenses to
average net assets .... .89%(a) .85%(a) .84%(a) .82%(a) .77%(a) .77%(a) .77%(a) .74%(a)
Ratios of net investment
income to average
net assets ............ 2.86% 2.85% 2.88% 2.97% 1.95% 1.95% 2.87% 4.31%
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO
--------------------------------
FOR THE PERIOD
SEPTEMBER 30, 1988
FOR THE (COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
AUGUST 31, AUGUST 31,
1990 1989
---------- -----------------
<S> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00
-------- --------
Income from investment
operations:
Net investment income ... 0.0522 0.0513
Net gains on securities
(both realized
and unrealized) ....... -- --
-------- --------
Total from
investment
operations ........ 0.0522 0.0513
-------- --------
Less distributions
Dividends (from net
investment income) .... (0.0522) (0.0513)
Distributions (from
capital gains) ........ -- --
-------- --------
Total distributions . (0.0522) (0.0513)
-------- --------
Net asset value,
end of period .......... $ 1.00 $ 1.00
======== ========
Total Return ............... 5.35% 5.72%
Ratios/Supplemental Data
Net assets, end of
period (000) .......... $195,566 $ 85,806
Ratios of expenses to
average net assets .... .75%(a) .73%(a)(b)
Ratios of net investment
income to average
net assets ............ 5.22% 5.70%
<FN>
(a) Without the waiver of advisory and administration fees, and without the
reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Municipal Money Market Portfolio would have been
1.15%, 1.14%, 1.12%, 1.14%, 1.12%, 1.16%, 1.15%, 1.13% and 1.14% for the
years ended August 31, 1998, 1997, 1996, 1995, 1994, 1993, 1992, 1991 and
1990, respectively, and 1.27% annualized for the period ended August 31,
1989.
(b) Annualized.
(c) Financial Highlights relate solely to the Bedford Class of Shares within the
Portfolio.
</FN>
</TABLE>
4
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
The Municipal Money Market Portfolio's investment objective is to provide
as high a level of current interest income exempt from federal income taxes as
is consistent with maintaining liquidity and stability of principal. The
Municipal Money Market Portfolio invests substantially all of its assets in a
diversified portfolio of short-term Municipal Obligations, the interest on
which, in the opinion of bond counsel or counsel to the issuer, as the case may
be, is exempt from the regular federal income tax and which meet certain ratings
criteria and present minimal credit risks. See "Eligible Securities". During
periods of normal market conditions, at least 80% of the net assets of the
Municipal Money Market Portfolio will be invested in Municipal Obligations.
Municipal Obligations include securities, the interest on which is exempt from
the regular federal income tax and is not an item of tax preference for purposes
of the federal alternative minimum tax ("Tax-Exempt Interest"), although to the
extent the Portfolio invests in certain private activity bonds issued after
August 7, 1986 ("Alternative Minimum Tax Securities"), a portion of the interest
earned by the Portfolio may constitute an item of tax preference for purposes of
the federal alternative minimum tax ("AMT Interest"). There is no assurance that
the investment objective of the Portfolio will be achieved.
MUNICIPAL OBLIGATIONS. The Portfolio invests in short-term Municipal
Obligations which are determined by the Portfolio's investment adviser to
present minimal credit risks and that meet certain ratings criteria pursuant to
guidelines established by the Fund's Board of Directors. The Portfolio may also
purchase securities that are unrated at the time of purchase provided that such
securities are determined to be of comparable quality to eligible rated
securities. The applicable Municipal Obligations ratings are described in the
Appendix to the Statement of Additional Information.
The Portfolio may hold uninvested cash reserves pending investment during
temporary defensive periods or if, in the opinion of the Portfolio's investment
adviser, suitable obligations bearing Tax-Exempt Interest or AMT Interest are
unavailable. There is no percentage limitation on the amount of assets which may
be held uninvested during temporary defensive periods. Uninvested cash reserves
will not earn income.
The two principal classifications of Municipal Obligations are "general
obligation" securities and "revenue" securities. General obligation securities
are secured by the issuer's pledge of its full faith, credit and taxing power
for the payment of principal and interest. Revenue securities are payable only
from the revenues derived from a particular facility or class of facilities or,
in some cases, from the proceeds of a special excise tax or other specific
excise tax or other specific revenue source such as the user of the facility
being financed. Revenue securities include private activity bonds which are not
payable from the unrestricted revenues of the issuer. Consequently, the credit
quality of private activity bonds is usually directly related to the credit
standing of the corporate user of the facility involved.
Municipal Obligations may also include "moral obligation" bonds, which are
normally issued by special purpose public authorities. If the issuer of moral
obligation bonds is unable to meet its debt service obligations from current
revenues, it may draw on a reserve fund, the restoration of which is a moral
commitment but not a legal obligation of the state or municipality which created
the issuer.
Although the Municipal Money Market Portfolio may invest more than 25% of
its net assets in (i) Municipal Obligations whose issuers are in the same state,
(ii) Municipal Obligations the interest on which is paid solely from revenues of
similar projects, and (iii) private activity bonds bearing Tax-Exempt Interest,
it does not currently intend to do so on a regular basis. To the extent the
Municipal Money Market Portfolio's assets are concentrated in Municipal
Obligations that are payable from the revenues of similar projects or are issued
by issuers located in the same state, the Portfolio will be subject to the
peculiar risks presented by the laws and economic conditions relating to such
states or projects to a greater extent than it would be if its assets were not
so concentrated.
TAX-EXEMPT DERIVATIVE SECURITIES. The Municipal Money Market Portfolio may
invest in tax-exempt derivative securities such as tender option bonds,
custodial receipts, participations, beneficial interests in trusts and
partnership interests. A typical tax-exempt derivative security involves the
purchase of an interest in a pool of Municipal Obligations
5
<PAGE>
which interest includes a tender option, demand or other feature, allowing the
Portfolio to tender the underlying Municipal Obligation to a third party at
periodic intervals and to receive the principal amount thereof. In some cases,
Municipal Obligations are represented by custodial receipts evidencing rights to
future principal or interest payments, or both, on underlying municipal
securities held by a custodian and such receipts include the option to tender
the underlying securities to the sponsor (usually a bank, broker-dealer or other
financial institution). Although the Internal Revenue Service has not ruled on
whether the interest received on derivative securities in the form of
participation interests or custodial receipts is Tax-Exempt Interest, opinions
relating to the validity of, and the tax-exempt status of payments received by
the Portfolio from such derivative securities are rendered by counsel to the
respective sponsors of such derivatives and relied upon by the Portfolio in
purchasing such securities. Neither the Portfolio nor its investment adviser
will review the proceedings relating to the creation of any tax-exempt
derivative securities or the basis for such legal opinions.
WHEN-ISSUED SECURITIES. The Portfolio may also purchase portfolio
securities on a "when-issued" basis. When-issued securities are securities
purchased for delivery beyond the normal settlement date at a stated price and
yield. The Portfolio will generally not pay for such securities or start earning
interest on them until they are received. Securities purchased on a when-issued
basis are recorded as an asset at the time the commitment is entered into and
are subject to changes in value prior to delivery based upon changes in the
general level of interest rates. The Portfolio expects that commitments to
purchase when-issued securities will not exceed 25% of the value of its total
assets absent unusual market conditions. The Portfolio does not intend to
purchase when-issued securities for speculative purposes but only in furtherance
of its investment objective.
STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, a dealer would agree to purchase at the Portfolio's option specified
Municipal Obligations at a specified price. The acquisition of a stand-by
commitment may increase the cost, and thereby reduce the yield, of the Municipal
Obligation to which such commitment relates. The Portfolio will acquire stand-by
commitments solely to facilitate portfolio liquidity and does not intend to
exercise its rights thereunder for trading purposes.
ELIGIBLE SECURITIES. The Portfolio will only purchase "eligible securities"
that present minimal credit risks as determined by the Portfolio's investment
adviser pursuant to guidelines adopted by the Board of Directors. Eligible
securities generally include: (1) U.S. Government securities, (2) securities
that are rated at the time of purchase in the two highest rating categories by
at least two Rating Organizations ("Rating Organizations") for such securities
(e.g., commercial paper rated "A-1" or "A-2" by Standard & Poor's Ratings
Services ("S&P"), or rated "Prime-1" or "Prime-2" by Moody's Investors Service,
Inc. ("Moody's")), (3) securities that are rated at the time of purchase by the
only Rating Organization rating the security in one of its two highest
categories for such securities; (4) securities issued by issuers (or, in certain
cases guaranteed by persons) with short-term debt having such ratings, and (5)
and securities that are not rated and are issued by an issuer that does not have
comparable obligations rated by a Rating Organization ("Unrated Securities"),
provided that such securities are determined to be of comparable quality to
eligible rated securities. For a more complete description of eligible
securities, see "Investment Objectives and Policies" in the Statement of
Additional Information.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days, time deposits with maturities in excess of
seven days, variable rate demand notes with demand periods in excess of seven
days unless the Portfolio's investment adviser determines that such notes are
readily marketable and could be sold promptly at the prices at which they are
valued, GICs and other securities that are illiquid by virtue of the absence of
a readily available market or legal or contractual restrictions on resale.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the notice period. Securities that have legal or contractual restrictions on
resale but have a readily available market are not deemed illiquid for purposes
of this limitation. The Portfolio's investment adviser will monitor the
liquidity of such
6
<PAGE>
restricted securities under the supervision of the Board of Directors. See
"Investment Objectives and Policies--Illiquid Securities" in the Statement of
Additional Information.
YEAR 2000
- --------------------------------------------------------------------------------
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Municipal Money Market Portfolio's investment objective and the
policies described above may be changed by the Fund's Board of Directors without
shareholder approval. The Portfolio may not, however, change the following
investment limitations without such a vote of shareholders. (A more detailed
description of the following investment limitations, together with other
investment limitations that cannot be changed without a vote of shareholders, is
contained in the Statement of Additional Information under "Investment
Objectives and Policies.")
The Municipal Money Market Portfolio may not:
1. Purchase the securities of any issuer, other than securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities,
if immediately after and as a result of such purchase more than 5% of the
value of its total assets would be invested in the securities of such
issuer, or more than 10% of the outstanding voting securities of such
issuer would be owned by the Portfolio, except that up to 25% of the value
of the Portfolio's total assets may be invested without regard to this 5%
limitation.
2. Borrow money, except from banks for temporary purposes and except
for reverse repurchase agreements, and then in amounts not in excess of 10%
of the value of the Portfolio's assets at the time of such borrowing, and
only if after such borrowing there is asset coverage of at least 300% for
all borrowings of the Portfolio; or mortgage, pledge or hypothecate any of
its assets except in connection with any such borrowing and in amounts not
in excess of 10% of the value of the Portfolio's assets at the time of such
borrowing; or purchase portfolio securities while borrowings are in excess
of 5% of the Portfolio's net assets. (This borrowing provision is not for
investment leverage, but solely to facilitate management of the Portfolio's
securities by enabling the Portfolio to meet redemption requests where the
liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient.)
3. Purchase any securities which would cause more than 25% of the value
of the total assets of the Portfolio to be invested at the time of purchase
in obligations of issuers in the same industry.
In addition, the Portfolio may not, without Shareholder approval, change
its policy of investing during normal market conditions at least 80% of its net
assets in obligations the interest on which is Tax-Exempt Interest or AMT
Interest.
So long as it values its portfolio securities on the basis of the amortized
cost method of valuation pursuant to Rule 2a-7 under the Investment Company Act
of 1940 (the "1940 Act"), the Municipal Money Market Portfolio will meet the
7
<PAGE>
following limitation on its investments in addition to the fundamental
investment limitations described above. This limitation may be changed without a
vote of shareholders of the Municipal Money Market Portfolio.
1. The Municipal Money Market Portfolio will not purchase any Put if
after the acquisition of the Put the Municipal Money Market Portfolio has
more than 5% of its total assets invested in instruments issued by or
subject to Puts from the same institution, except that the foregoing
condition shall only be applicable with respect to 75% of the Municipal
Money Market Portfolio's total assets. A "Put" means a right to sell a
specified underlying instrument within a specified period of time and at a
specified exercise price that may be sold, transferred or assigned only
with the underlying instrument.
PURCHASE AND REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
PURCHASE PROCEDURES
GENERAL. Shares are sold without a sales load on a continuous basis by the
Distributor. The Distributor is located at Four Falls Corporate Center, West
Conshohocken, Pennsylvania 19428. Investors may purchase Shares through an
account maintained by the investor with his brokerage firm (an "Account") and
may also purchase Shares directly by mail or wire. The minimum initial
investment is $1,000, and the minimum subsequent investment is $100. The Fund in
its sole discretion may accept or reject any order for purchases of Shares.
All payments for initial and subsequent investments should be in U.S.
dollars. Purchases will be effected at the net asset value next determined after
PFPC, the Fund's transfer agent, has received a purchase order in good order and
the Fund's custodian has Federal Funds immediately available to it. In those
cases where payment is made by check, Federal Funds will generally become
available two Business Days after the check is received. A "Business Day" is any
day that both the New York Stock Exchange (the "NYSE") and the Federal Reserve
Bank of Philadelphia (the "FRB") are open. On any Business Day, orders which are
accompanied by Federal Funds and received by PFPC by 12:00 noon Eastern Time,
and orders as to which payment has been converted into Federal Funds by 12:00
noon Eastern Time, will be executed as of 12:00 noon that Business Day. Orders
which are accompanied by Federal Funds and received by PFPC after 12:00 noon
Eastern Time but prior to the close of regular trading on the NYSE (generally
4:00 p.m. Eastern Time), and orders as to which payment has been converted into
Federal Funds after 12:00 noon Eastern Time but prior to the close of regular
trading on the NYSE on any Business Day of the Fund, will be executed as of the
close of regular trading on the NYSE on that Business Day but will not be
entitled to receive dividends declared on such Business Day. Orders which are
accompanied by Federal Funds and received by PFPC as of the close of regular
trading on the NYSE or later, and orders as to which payment has been converted
to Federal Funds as of the close of regular trading on the NYSE or later on a
Business Day will be processed as of 12:00 noon Eastern Time on the following
Business Day.
PURCHASES THROUGH AN ACCOUNT. Purchases of Shares may be effected through
an investor's Account with his broker through procedures established in
connection with the requirements of Accounts at such broker. In such event,
beneficial ownership of Shares will be recorded by the broker and will be
reflected in the Account statements provided by the broker to such investors. A
broker may impose minimum investor Account requirements. Even if a broker does
not impose a sales charge for purchases of Shares, depending on the terms of an
investor's Account with his broker, the broker may charge an investor's Account
fees for automatic investment and other services provided to the Account.
Information concerning Account requirements, services and charges should be
obtained from an investor's broker. This Prospectus should be read in
conjunction with any information received from a broker. Shareholders whose
shares are held in the street name account of a broker and who desire to
transfer such shares to the street name account of another broker should contact
their current broker.
A broker may offer investors maintaining Accounts the ability to purchase
Shares under an automatic purchase program (a "Purchase Program") established by
a participating broker. An investor who participates in a Purchase
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Program will have his "free-credit" cash balances in his Account automatically
invested in Shares. The frequency of investments and the minimum investment
requirement will be established by the broker and the Fund. In addition, the
broker may require a minimum amount of cash and/or securities to be deposited in
an Account for participants in its Purchase Program. The description of the
particular broker's Purchase Program should be read for details, and any
inquiries concerning an Account under a Purchase Program should be directed to
the broker.
If a broker makes special arrangements under which orders for Shares are
received by PFPC prior to 12:00 noon Eastern Time and the broker guarantees that
payment for such Shares will be made in available Federal Funds to the Fund's
custodian prior to the close of regular trading on the NYSE, on the same day,
such purchase orders will be effective and Shares will be purchased at the
offering price in effect as of 12:00 noon Eastern Time on the date the purchase
order is received by PFPC.
DIRECT PURCHASES. An investor may also make direct investments in Shares at
any time through any broker that has entered into a dealer agreement with the
Distributor (a "Dealer"). An investor may make an initial investment by mail by
fully completing and signing an application obtained from a Dealer (an
"Application") and mailing it, together with a check payable to "Bedford
Municipal Money Market" to "Bedford Municipal Money Market," c/o PFPC, P.O. Box
8950, Wilmington, Delaware 19899. An Application will be returned to the
investor unless it contains the name of the Dealer from whom it was obtained.
Subsequent purchases may be made through a Dealer or by forwarding payment to
the Fund's transfer agent at the foregoing address.
Provided that the investment is at least $2,500, an investor may also
purchase Shares by having his bank or Dealer wire Federal Funds to the Fund's
custodian, PNC Bank. An investor's bank or Dealer may impose a charge for this
service. The Fund does not currently charge for effecting wire transfers but
reserves the right to do so in the future. In order to ensure prompt receipt of
an investor's Federal Funds wire, for an initial investment, it is important
that an investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (800)533-7719 (in
Delaware call collect (302) 791-1196), and provide your name, address, telephone
number, Social Security or Tax Identification Number, the amount being wired,
and by which bank or Dealer. PFPC will then provide an investor with a Fund
account number. (Investors with existing accounts should also notify PFPC prior
to wiring funds.)
B. Instruct your bank or Dealer to wire the specified amount, together with
your assigned account number, to PFPC's account with PNC Bank:
PNC Bank, N.A., Philadelphia, PA
ABA-0310-0005-3.
FROM: (name of investor)
ACCOUNT NUMBER: (investor's account number with the Portfolio)
FOR PURCHASE OF: (name of Portfolio)
AMOUNT: (amount to be invested)
C. Complete and sign the Application and mail it to the address shown
thereon. PFPC will not process initial purchase orders until it receives a
completed and signed Application.
For subsequent investments, an investor should follow steps A and B above.
RETIREMENT PLANS. Shares may be purchased in conjunction with individual
retirement accounts ("IRAs") and rollover IRAs where PFPC Trust Company acts as
custodian. For further information as to applications and annual fees, contact
the Distributor or your broker. To determine whether the benefits of an IRA are
available and/or appropriate, a shareholder should consult with a tax adviser.
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REDEMPTION PROCEDURES
Redemption orders are effected at the net asset value per share next
determined after receipt of the order in proper form by the Fund's transfer
agent, PFPC. Investors may redeem all or some of their Shares in accordance with
one of the procedures described below.
It is the responsibility of the Dealer to transmit promptly to PFPC a
customer's redemption request. In the case of shareholders holding share
certificates, the certificates must accompany the redemption request. Investors
may redeem all or some of their Shares in accordance with one of the procedures
described below.
REDEMPTION OF SHARES IN AN ACCOUNT. An investor who beneficially owns
Shares through an Account may redeem Shares in his Account in accordance with
instructions and limitations pertaining to his Account by contacting his broker.
If such notice is received by PFPC by 12:00 noon Eastern Time on any Business
Day, the redemption will be effective as of 12:00 noon Eastern Time on that day.
Payment of the redemption proceeds will be made after 12:00 noon Eastern Time on
the day the redemption is effected, provided that the Fund's custodian is open
for business. If the custodian is not open, payment will be made on the next
bank business day. If the redemption request is received between 12:00 noon and
the close of regular trading on the NYSE on a Business Day, the redemption will
be effective as of the close of regular trading on the NYSE on such Business Day
and payment will be made on the next bank business day following receipt of the
redemption request. If all Shares are redeemed, all accrued but unpaid dividends
on those Shares will be paid with the redemption proceeds.
An investor's brokerage firm may also redeem each day a sufficient number
of Shares to cover debit balances created by transactions in the Account or
instructions for cash disbursements. Shares will be redeemed on the same day
that a transaction occurs that results in such a debit balance or charge.
Each brokerage firm reserves the right to waive or modify criteria for
participation in an Account or to terminate participation in an Account for any
reason.
REDEMPTION OF SHARES OWNED DIRECTLY. A direct investor may redeem any
number of Shares by sending a written request to "Bedford Municipal Money
Market," c/o PFPC, P.O. Box 8950, Wilmington, Delaware 19899. Redemption
requests must be signed by each shareholder in the same manner as the Shares are
registered. Redemption requests for joint accounts require the signature of each
joint owner. On redemption requests of $5,000 or more, each signature must be
guaranteed. A signature guarantee may be obtained from a domestic bank or trust
company, broker, dealer, clearing agency or savings association who are
participants in a medallion program recognized by the Securities Transfer
Association. The three recognized medallion programs are the Securities Transfer
Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP) and
New York Stock Exchange, Inc. Medallion Signature Program (MSP). Signature
guarantees that are not part of these programs will not be accepted.
Direct investors may redeem Shares without charge by telephone if they have
completed and returned an account application containing the appropriate
telephone election. To add a telephone option to an existing account that
previously did not provide for this option, a Telephone Authorization Form must
be filed with PFPC. This form is available from PFPC. Once this election has
been made, the shareholder may simply contact PFPC by telephone to request the
redemption by calling (888) 261-4073. Neither the Fund, the Portfolio, the
Distributor, PFPC nor any other Fund agent will be liable for any loss,
liability, cost or expense for following the procedures below or for following
instructions communicated by telephone that they reasonably believe to be
genuine.
The Fund's telephone transaction procedures include the following measures:
(1) requiring the appropriate telephone transaction privilege forms; (2)
requiring the caller to provide the names of the account owners, the account
social security number and name of the Portfolio, all of which must match the
Fund's records; (3) requiring the Fund's service representative to complete a
telephone transaction form, listing all of the above caller identification
information; (4) requiring that redemption proceeds be sent only by check to the
account owners of record at the address of record,
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or by wire only to the owners of record at the bank account of record; (5)
sending a written confirmation for each telephone transaction to the owners of
record at the address of record within five (5) business days of the call; (6)
and maintaining tapes of telephone transactions for six months, if the Fund
elects to record shareholder telephone transactions. For accounts held of record
by broker-dealers (other than the Distributor), financial institutions,
securities dealers, financial planners or other industry professionals,
additional documentation or information regarding the scope of a caller's
authority is required. Finally, for telephone transactions in accounts held
jointly, additional information regarding other account holders is required.
Telephone transactions will not be permitted in connection with IRA or other
retirement plan accounts or by an attorney-in-fact under power of attorney.
The proceeds of a telephone redemption request will be mailed by check to
an investor's registered address unless he has designated in his Application or
Telephone Authorization Form that such proceeds are to be sent by wire transfer
to a specified checking or savings account. If proceeds are to be sent by wire
transfer, a telephone redemption request received prior to the close of regular
trading on the NYSE, will result in redemption proceeds being wired to the
investor's bank account on the next bank business day. The minimum redemption
for proceeds sent by wire transfer is $2,500. There is no maximum for proceeds
sent by wire transfer. There is no minimum redemption for proceeds mailed by
check; however, the maximum redemption for proceeds mailed by check is $25,000.
The Fund may modify this redemption service at any time or charge a service fee
upon prior notice to shareholders, although no fee is currently contemplated.
REDEMPTION BY CHECK. Upon request, the Fund will provide any direct
investor and any investor who does not have check writing privileges for his
Account with forms of drafts ("checks") payable through PNC Bank. These checks
may be made payable to the order of anyone. The minimum amount of a check is
$100; however, a broker may establish a higher minimum. An investor wishing to
use this check writing redemption procedure should complete specimen signature
cards (available from PFPC), and then forward such signature cards to PFPC. PFPC
will then arrange for the checks to be honored by PNC Bank. Investors who own
Shares through an Account should contact their brokers for signature cards.
Investors with joint accounts may elect to have checks honored with a single
signature. Check redemptions will be subject to PNC Bank's rules governing
checks. An investor will be able to stop payment on a check redemption. The Fund
or PNC Bank may terminate this redemption service at any time, and neither shall
incur any liability for honoring checks, for effecting redemptions to pay
checks, or for returning checks which have not been accepted.
When a check is presented to PNC Bank for clearance, PNC Bank, as the
investor's agent, will cause the Fund to redeem a sufficient number of full and
fractional Shares owned by the investor to cover the amount of the check. This
procedure enables the investor to continue to receive dividends on those Shares
representing the amount being redeemed by check until such time as the check is
presented to PNC Bank. Pursuant to rules under the 1940 Act, checks may not be
presented for cash payment at the offices of PNC Bank. This limitation does not
affect checks used for the payment of bills or cashed at other banks.
ADDITIONAL REDEMPTION INFORMATION. The Fund ordinarily will make payment
for all Shares redeemed within seven days after receipt by PFPC of a redemption
request in proper form. Although the Fund will redeem Shares purchased by check
before the check clears, payment of redemption proceeds may be delayed for a
period of up to fifteen days after their purchase, pending a determination that
the check has cleared. This procedure does not apply to Shares purchased by wire
payment. Investors should consider purchasing Shares with a certified or bank
check or money order if they anticipate an immediate need for redemption
proceeds.
The Fund imposes no charge when Shares are redeemed. The Fund reserves the
right to redeem any account in the Class involuntarily, on 30 days' notice, if
such account falls below $500 and during such 30-day notice period the amount
invested in such account is not increased to at least $500. Payment for Shares
redeemed may be postponed or the right of redemption suspended as provided by
the rules of the Securities and Exchange Commission.
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<PAGE>
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value per share of each class of the Portfolio for the
purpose of pricing purchase and redemption orders is determined twice each day
once as of 12:00 noon Eastern Time and once, as of the close of regular trading
of the NYSE on each weekday with the exception of those holidays on which either
the NYSE or the FRB is closed. Currently, the NYSE is closed on weekends and the
customary national business holidays of New Year's Day, Dr. Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day and on the preceding Friday or
subsequent Monday when one of these holidays falls on a Saturday or Sunday. The
FRB is currently closed on weekends and the same holidays on which the NYSE is
closed as well as Veterans' Day and Columbus Day. The net asset value per share
of each class of the Portfolio is calculated by adding the value of the
proportionate interest of the class in the securities, cash and other assets of
the Portfolio, deducting the actual and accrued liabilities of the class and
dividing the result by the number of outstanding shares of the class. The net
asset value per share of each class of the Fund is determined independently of
any of the Fund's other classes.
The Fund seeks to maintain for the Portfolio a net asset value of $1.00 per
share for purposes of purchases and redemptions and values its portfolio
securities on the basis of the amortized cost method of valuation described in
the Statement of Additional Information under the heading "Valuation of Shares."
There can be no assurance that net asset value per share will not vary.
With the approval of the Board of Directors, the Portfolio may use a
pricing service, bank or broker-dealer experienced in such matters to value the
Portfolio's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of the Fund and each investment portfolio of the
Fund are managed under the direction of the Fund's Board of Directors. The Fund
currently operates or proposes to operate seventeen investment portfolios. The
Municipal Money Market Portfolio is one of these portfolios.
INVESTMENT ADVISER
BIMC, an indirect majority-owned subsidiary of PNC Bank, serves as the
investment adviser for the Municipal Money Market Portfolio. BIMC has its
principal offices at Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809. PNC Bank and its subsidiaries currently manage over
$45.9 billion of assets, of which approximately $31.4 billion are mutual funds.
PNC Bank, a national bank whose principal business address is 1600 Market
Street, Philadelphia, Pennsylvania 19103, is a wholly-owned subsidiary of PNC
Bancorp, Inc. PNC Bancorp Inc. is a bank holding company and a wholly-owned
subsidiary of PNC Bank Corp., a multi-bank holding company.
As investment adviser to the Portfolio, BIMC manages the Portfolio and is
responsible for all purchases and sales of portfolio securities. In entering
into portfolio transactions for the Portfolio with a broker, BIMC may take into
account the sale by such broker of shares of the Fund, subject to the
requirements of best execution.
For the services provided to and expenses assumed by it for the benefit of
the Portfolio, BIMC is entitled to receive from the Portfolio a fee, computed
daily and payable monthly, at an annual rate of .35% of the first $250 million
of the Portfolio's average daily net assets, .30% of the next $250 million of
the Portfolio's average daily net assets and .25% of the average daily net
assets of the Portfolio in excess of $500 million. BIMC may in its discretion
from time to time agree to waive voluntarily all or any portion of its advisory
fee for the Portfolio.
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For the Fund's fiscal year ended August 31, 1998, the Fund paid investment
advisory fees aggregating .08% of the average net assets of the Portfolio. For
that same year, BIMC waived approximately .26% of investment advisory fees
payable to it with respect to the Portfolio.
PNC Bank was formerly sub-adviser to the Portfolio and provided research,
credit analysis and recommendations with respect to the Portfolio's investments
and supplied certain computer facilities, personnel and other services. The
facilities, personnel, services and related expenses have been transferred to
BIMC and in return, BIMC's obligation to pay a portion of the sub-advisory fee
to PNC Bank has been terminated. For its sub-advisory services, PNC Bank was
entitled to receive from BIMC an amount equal to 75% of the investment advisory
fee paid by the Portfolio to BIMC (subject to adjustment in certain
circumstances). The sub-advisory fees paid by BIMC to PNC Bank had no effect on
the investment advisory fees payable by the Portfolio to BIMC. The services
provided by BIMC and the fees payable by the Portfolio for these services are
described further in the Statement of Additional Information under "Management
of the Company."
ADMINISTRATOR
PFPC serves as the administrator for the Municipal Money Market Portfolio
and generally assists the Portfolio in all aspects of its administration and
operation, including matters relating to the maintenance of financial records
and accounting. PFPC is entitled to an administration fee, computed daily and
payable monthly at a rate of .10% of the average daily net assets of the
Portfolio. PFPC's principal business address is 400 Bellevue Parkway,
Wilmington, Delaware 19809.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholder servicing
agreements with registered broker-dealers who have entered into dealer
agreements with the Distributor ("Authorized Dealers") for the provision of
certain shareholder support services to customers of such Authorized Dealers who
are shareholders of the Fund. The services provided and the fees payable by the
Fund for these services are described in the Statement of Additional Information
under "Investment Advisory, Distribution and Servicing Arrangements."
DISTRIBUTOR
Provident Distributors, Inc., with a principal business address at Four
Falls Corporate Center, West Conshohocken, Pennsylvania 19428, acts as
Distributor of the Shares pursuant to a distribution agreement dated May 29,
1998 (the "Distribution Agreement").
EXPENSES
The expenses of each Portfolio are deducted from the total income of such
Portfolio before dividends are paid. Any general expenses of the Fund that are
not readily identifiable as belonging to a particular investment portfolio of
the Fund will be allocated among all investment portfolios of the Fund based on
the relative net assets of the investment portfolios at the time such expenses
were accrued. The Bedford Classes of the Fund pay their own distribution fees,
and may pay a different share than other classes of the Fund of other expenses
(excluding advisory and custodial fees) if these expenses are actually incurred
in a different amount by the Bedford Classes or if they receive different
services.
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<PAGE>
The investment adviser may assume additional expenses of the Portfolio from
time to time. In certain circumstances, it may assume such expenses on the
condition that it is reimbursed by the Portfolio for such amounts prior to the
end of a fiscal year. In such event, reimbursement of such amounts will have the
effect of increasing the Portfolio's expense ratio and of lowering yield to
investors.
For the fiscal year ended August 31, 1998, total expenses were 1.15% of
average net assets with respect to the Bedford Class of the Municipal Money
Market Portfolio (not taking into account waivers of .26%).
DISTRIBUTION OF SHARES
- --------------------------------------------------------------------------------
The Board of Directors of the Fund approved and adopted the Distribution
Agreement and separate Plan of Distribution for the Class (the "Plan") pursuant
to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to
receive from the Class a distribution fee, which is accrued daily and paid
monthly, of up to .65% on an annualized basis of the average daily net assets of
the Class. The actual amount of such compensation is agreed upon from time to
time by the Fund's Board of Directors and the Distributor. Under the
Distribution Agreement, the Distributor has agreed to accept compensation for
its services thereunder and under the Plan in the amount of .60% of the average
daily net assets of the Class on an annualized basis in any year. Such
compensation may be increased, up to the amount permitted in the Plan, with the
approval of the Fund's Board of Directors. Pursuant to the conditions of an
exemptive order granted by the Securities and Exchange Commission, the
Distributor has agreed to waive its fee with respect to the Class on any day to
the extent necessary to assure that the fee required to be accrued by such Class
does not exceed the income of such Class on that day. In addition, the
Distributor may, in its discretion, voluntarily waive from time to time all or
any portion of its distribution fee.
Under the Distribution Agreement and the Plan, the Distributor may
reallocate an amount up to the full fee that it receives to Dealers based upon
the aggregate investment amounts maintained by and services provided to
shareholders of the Class serviced by such Dealers. The Distributor may also
reimburse Dealers for other expenses incurred in the promotion of the sale of
Fund shares. The Distributor and/or Dealers pay for the cost of printing
(excluding typesetting) and mailing to prospective investors prospectuses and
other materials relating to the Fund as well as for related direct mail,
advertising and promotional expenses.
The Plan obligates the Fund, during the period it is in effect, to accrue
and pay to the Distributor on behalf of the Class the fee agreed to under the
Distribution Agreement. Payments under the Plan are not based on expenses
actually incurred by the Distributor, and the payments may exceed distribution
expenses actually incurred.
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Municipal Money Market Portfolio to
the Portfolio's shareholders. All distributions are reinvested in the form of
additional full and fractional Shares unless a shareholder elects otherwise.
The net investment income (not including any net short-term capital gains)
earned by the Portfolio will be declared as a dividend on a daily basis and paid
monthly. Dividends are payable to shareholders of record immediately prior to
the determination of net asset value made as of the close of regular trading on
the NYSE. Net short-term capital gains, if any, will be distributed at least
annually.
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TAXES
- --------------------------------------------------------------------------------
Distributions from the Municipal Money Market Portfolio will generally
constitute tax-exempt income for shareholders for federal income tax purposes.
It is possible, depending upon the Portfolio's investments, that a portion of
the Portfolio's distributions could be taxable to shareholders as ordinary
income or capital gains, but it is not expected that this will be the case.
Although distributions from the Municipal Money Market Portfolio are exempt
for federal income tax purposes, they will generally constitute taxable income
for state and local income tax purposes except that, subject to limitations that
vary depending on the state, distributions from interest paid by a state or
municipal entity may be exempt from tax in that state.
Interest on indebtedness incurred by a shareholder to purchase or carry
shares of the Municipal Money Market Portfolio generally will not be deductible
for federal income tax purposes.
You should note that a portion of the exempt-interest dividends paid by the
Municipal Money Market Portfolio may constitute an item of tax preference for
purposes of determining federal alternative minimum tax liability.
Exempt-interest dividends will also be considered along with other adjusted
gross income in determining whether any Social Security or railroad retirement
payments received by you are subject to federal income taxes.
The foregoing is only a summary of certain tax considerations under the
current law, which may be subject to change in the future. You should consult
your tax adviser for further information regarding federal, state, local and/or
foreign tax consequences relevant to your specific situation.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
The Fund has authorized capital of thirty billion shares of Common Stock,
$.001 par value per share, of which 18.326 billion shares are currently
classified into 97 different classes of Common Stock (see "Description of
Shares" in the Statement of Additional Information).
The Fund offers multiple classes of shares in the Municipal Money Market
Portfolio to expand its marketing alternatives and to broaden its range of
services to different investors. The expenses of the various classes within
these Portfolios vary based upon the services provided, which may affect
performance. Each class of common stock of the Fund has a separate Rule 12b-1
distribution plan. Under the Distribution Agreement and pursuant to each of the
distribution plans, the Distributor is entitled to receive from each class as
compensation for distribution services provided to that class a distribution fee
based on average daily net assets. A salesperson or any other person entitled to
receive compensation for servicing Fund shares may receive different
compensation with respect to different classes in a Portfolio of the Fund. An
investor may contact the Fund's distributor by calling 1-800-888-9723 to request
more information concerning other classes available.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE BEDFORD CLASS OF THE MUNICIPAL MONEY MARKET
PORTFOLIO AND DESCRIBE ONLY THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS,
CONTRACTS AND OTHER MATTERS RELATING TO SUCH CLASS OF THIS PORTFOLIO.
Each share that represents an interest in the Portfolio has an equal
proportionate interest in the assets belonging to the Portfolio with each other
share that represents an interest in the Portfolio, even where a share has a
different class designation than another share representing an interest in the
Portfolio. Shares of the Fund do not have preemptive or conversion rights. When
issued for payment as described in this Prospectus, Shares will be fully paid
and non-assessable.
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<PAGE>
The Fund currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
Holders of shares of the Portfolio will vote in the aggregate and not by
class on all matters, except where otherwise required by law. Further,
shareholders of all investment portfolios of the Fund will vote in the aggregate
and not by portfolio except as otherwise required by law or when the Board of
Directors determines that the matter to be voted upon affects only the interests
of the shareholders of a particular investment portfolio. (See the Statement of
Additional Information under "Additional Information Concerning Fund Shares" for
examples when the 1940 Act requires voting by investment portfolio or by class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of common stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of the
Fund.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC, the
Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (800) 533-7719 (in Delaware call collect
(302) 791-1196).
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
--------------------
CONTENTS
PAGE
Introduction ........................................................... 2
Financial Highlights ................................................... 3
Investment Objectives and Policies. .................................... 5
Year 2000 .............................................................. 7
Investment Limitations ................................................. 7
Purchase And Redemption Of Shares. ..................................... 8
Net Asset Value. ....................................................... 12
Management ............................................................. 12
Distribution Of Shares ................................................. 14
Dividends And Distributions. ........................................... 14
Taxes. ................................................................. 15
Description Of Shares. ................................................. 15
Other Information. ..................................................... 16
INVESTMENT ADVISER
BlackRock Institutional Management Corporation
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
ADMINISTRATOR AND TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
<PAGE>
================================================================================
BEDFORD
GOVERNMENT
OBLIGATIONS
MONEY MARKET
PORTFOLIO
Prospectus
December 29, 1998
<PAGE>
BEDFORD
GOVERNMENT OBLIGATIONS
MONEY MARKET PORTFOLIO
OF
THE RBB FUND, INC.
The investment objective of the Government Obligations Money Market
Portfolio is to provide as high a level of current interest income as is
consistent with maintaining liquidity and stability of principal. The Government
Obligations Money Market Portfolio seeks to achieve such objective by investing
in short-term U.S. Treasury bills and notes and other obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, and
entering into repurchase agreements relating to such obligations. The Bedford
shares of the Government Obligations Money Market Portfolio (the "Government
Obligations Money Market Portfolio" or the "Portfolio") are a class of shares of
common stock of The RBB Fund, Inc. (the "Fund"), an open-end management
investment company. Shares of the Class are offered by this Prospectus and
represent interests in the Portfolio.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK
AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. THERE CAN BE NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO MAINTAIN
A STABLE NOT ASSET VALUE OF $1.00 PER SHARE.
BlackRock Institutional Management Corporation serves as investment adviser
for the Portfolio, PFPC Trust Company serves as custodian for the Fund, and PFPC
Inc. serves as administrator and transfer and dividend disbursing agent for the
Fund. Provident Distributors, Inc. acts as distributor for the Fund.
This Prospectus contains concise information that a prospective investor
needs to know before investing. Please keep it for future reference. A Statement
of Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained upon request free of charge from the Fund by
calling (800) 430-9618. The Prospectus and Statement of Additional Information
are also available for reference, along with other related materials, on the
Internet Website (http://www.sec.gov).
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
The RBB Fund, Inc. is an open-end management investment company
incorporated under the laws of the State of Maryland on February 29, 1988. The
Fund is currently operating or proposing to operate seventeen separate
investment portfolios. The shares ("Shares") offered by this Prospectus are a
class ("Class") of the shares of common stock of the Fund and represent
interests in the Fund's Government Obligations Money Market Portfolio.
The investment objective of the Portfolio is to provide as high a level of
current interest income as is consistent with maintaining liquidity and
stability of principal. To achieve its objective, the Portfolio invests
exclusively in short-term U.S. Treasury bills and notes and other obligations
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, and enters into repurchase agreements relating to such
obligations.
The Portfolio seeks to maintain a net asset value of $1.00 per share;
however, there can be no assurance that the Portfolio will be able to maintain a
stable net asset value of $1.00 per share.
The Portfolio's investment adviser is BlackRock Institutional Management
Corporation ("BIMC"). PFPC Trust Company serves as custodian for the Fund and
PFPC Inc. ("PFPC") serves as administrator and transfer and dividend disbursing
agent for the Fund. Provident Distributors, Inc. (the "Distributor") acts as
distributor of the Fund's shares.
An investor may purchase and redeem Shares through his broker or by direct
purchases or redemptions. See "Purchase and Redemption of Shares."
An investment in the Portfolio is subject to certain risks, as set forth in
detail under "Investment Objective and Policies." The Portfolio, to the extent
set forth under "Investment Objective and Policies," may engage in the following
investment practices among others: the use of repurchase agreements and reverse
repurchase agreements, the purchase of mortgage-related securities and the
lending of securities. All of these transactions involve certain special risks,
as set forth under "Investment Objective and Policies."
FEE TABLE
The Fee Table below contains a summary of annual fund operating expenses
incurred by the Government Obligations Money Market Portfolio during the fiscal
year ended August 31, 1998 as a percentage of average daily net assets. An
example based on the summary is also provided.
ANNUAL FUND OPERATING EXPENSES (BEDFORD CLASS)
AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS
Management Fees (after waivers)(1) ................................... .30%
12b-1 Fees(1) ........................................................ .57
Other Expenses(1) .................................................... .105
----
Total Fund Operating Expenses (Bedford Class) (after waivers)(1) ..... .975%
====
(1) Management Fees and 12b-1 Fees are based on average daily net assets and are
calculated daily and paid monthly. Before waivers for the Government
Obligations Money Market Portfolio, Management Fees would be .42% and Total
Fund Operating Expenses would be 1.10%.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Government Obligations
Money Market Portfolio*
(Bedford Class) .............. $10 $31 $54 $120
* Other classes of this Portfolio are sold with different fees and expenses.
2
<PAGE>
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating Expenses
(Bedford Class)" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. Long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc.
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Bedford Class of the
Portfolio will bear directly or indirectly. (For more complete descriptions of
the various costs and expenses, see "Management -- Investment Adviser" and
"Distribution of Shares" below.) Expense figures are based on actual costs and
fees charged to the Class. The Fee Table reflects a voluntary waiver of
Management Fees for the Portfolio. However, there can be no assurance that any
future waivers of Management Fees will not vary from the figures reflected in
the Fee Table. To the extent that any service providers assume additional
expenses of a Portfolio, such assumption will have the effect of lowering such
Portfolio's overall expense ratio and increasing its yield to investors.
From time to time, the Class advertises its "total return", "yield" and
"effective yield." TOTAL RETURN AND YIELD FIGURES ARE BASED ON HISTORICAL
EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. The "yield" of the
Class refers to the income generated by an investment in the Class over a
seven-day period (which period will be stated in the advertisement). This income
is then "annualized." That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Class
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of this assumed reinvestment.
The total return and yield of any investment is generally a function of
portfolio quality and maturity, type of investment and operating expenses. The
total return and yield on Shares will fluctuate and is not necessarily
representative of future results. Any fees charged by broker/dealers directly to
their customers in connection with investments in the Class are not reflected in
the total return and yield of Shares, and such fees, if charged, will reduce the
actual return received by shareholders on their investments. The total return
and yield on Shares of the Class may differ from the total return and yields on
shares of other classes of the Fund that also represent interests in the
Portfolio depending on the allocation of expenses to each class of the
Portfolio. See "Expenses."
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth certain information concerning the investment
results of the Bedford Class of the Government Obligations Money Market
Portfolio for the periods indicated. The financial data included in this table
for each of the periods ended August 31, 1994 through August 31, 1998 are part
of the Fund's financial statements for the Portfolio, which have been
incorporated by reference into the Statement of Additional Information and have
been audited by PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), the
Fund's independent accountants. The financial data for the Portfolio for the
periods ended August 31, 1989, 1990, 1991, 1992 and 1993 are part of previous
financial statements audited by PricewaterhouseCoopers. The financial data
should be read in conjunction with the financial statements and notes thereto.
Further information about the performance of the Portfolio is available in the
Annual Report to Shareholders. Both the Statement of Additional Information and
the Annual Report to Shareholders may be obtained free of charge by calling the
telephone number on page 1 of this Prospectus.
3
<PAGE>
BEDFORD CLASS OF THE GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
THE RBB FUND INC. FINANCIAL HIGHLIGHTS (c)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1998 1997 1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income ... 0.0463 0.0449 0.0458 0.0475 0.0270 0.0231 0.0375 0.0604
Net gains on securities
(both realized
and unrealized) ....... -- -- -- -- -- -- 0.0009 --
-------- -------- -------- -------- -------- -------- -------- --------
Total from
investment
operations ........ 0.0463 0.0449 0.0458 0.0475 0.0270 0.0231 0.0384 0.0604
-------- -------- -------- -------- -------- -------- -------- --------
Less distributions
Dividends (from net
investment income) .... (0.0463) (0.0449) (0.0458) (0.0475) (0.0270) (0.0231) (0.0375) (0.0604)
Distributions (from
capital gains) ........ -- -- -- -- -- -- (0.0009) --
-------- -------- -------- -------- -------- -------- -------- --------
Total distributions . (0.0463) (0.0449) (0.0458) (0.0475) (0.0270) (0.0231) (0.0384) (0.0604)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value,
end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========
Total Return ............... 4.74% 4.59% 4.68% 4.86% 2.73% 2.33% 3.91% 6.21%
Ratios/Supplemental Data
Net assets, end of
period (000) .......... $128,447 $209,715 $192,599 $163,398 $166,418 $213,741 $225,101 $368,899
Ratios of expenses to
average net assets .... .975%(a) .975%(a) .975%(a) .975%(a) .975%(a) .975%(a) .975%(a) .95%(a)
Ratios of net investment
income to average
net assets ............ 4.63% 4.49% 4.58% 4.75% 2.70% 2.31% 3.75% 6.04%
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
---------------------------------------------
FOR THE PERIOD
SEPTEMBER 30, 1988
FOR THE (COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
AUGUST 31, AUGUST 31,
1990 1989
---------- ------------------
<S> <C> <C>
Net asset value,
beginning of period ......... $ 1.00 $ 1.00
-------- --------
Income from investment
operations:
Net investment income ....... 0.0748 0.0725
Net gains on securities
(both realized
and unrealized) ........... -- --
-------- --------
Total from
investment
operations ............ 0.0748 0.0725
-------- --------
Less distributions
Dividends (from net
investment income) ........ (0.0748) (0.0725)
Distributions (from
capital gains) ............ -- --
-------- --------
Total distributions ..... (0.0748) (0.0725)
-------- --------
Net asset value,
end of period ............... $ 1.00 $ 1.00
======== ========
Total Return ................... 7.74% 8.64%(b)
Ratios/Supplemental Data
Net assets, end of
period (000) .............. $209,378 $ 66,281
Ratios of expenses to
average net assets ........ .95%(a) .96%(a)(b)
Ratios of net investment
income to average
net assets ................ 7.48% 8.34%(b)
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of certain
operating expenses, the ratios of expenses to average net assets for the
Government Obligations Money Market Portfolio would have been 1.10%, 1.09%,
1.10%, 1.13%, 1.17%, 1.18%, 1.12%, 1.13% and 1.17% for the years ended
August 31, 1998, 1997, 1996, 1995, 1994, 1993, 1992, 1991 and 1990,
respectively, and 1.40% annualized for the period ended August 31, 1989.
(b) Annualized.
(c) Financial Highlights relate solely to the Bedford Class of shares of the
Government Obligations Money Market Portfolio.
</FN>
</TABLE>
4
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Government Obligations Money Market Portfolio's investment objective is
to provide as high a level of current interest income as is consistent with
maintaining liquidity and stability of principal. It seeks to achieve such
objective by investing in short-term U.S. Treasury bills, notes and other
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, and entering into repurchase agreements relating to such
obligations. The types of U.S. Government obligations in which the Portfolio may
invest include a variety of U.S. Treasury obligations, which differ only in
their interest rates, maturities, and times of issuance, and obligations issued
or guaranteed by the U.S. Government or its agencies or instrumentalities,
including mortgage-related securities. Obligations of certain agencies and
instrumentalities of the U.S. Government, such as the Government National
Mortgage Association and the Export-Import Bank of the United States, are
supported by the full faith and credit of the U.S. Treasury; others, such as
those of the Federal National Mortgage Association, are supported by the right
of the issuer to borrow from the Treasury; others are supported by the
discretionary authority of the U.S. Government to purchase the agency's
obligations; still others, such as those of the Federal Farm Credit Banks or the
Federal Home Loan Mortgage Corporation, are supported only by the credit of the
instrumentality. No assurance can be given that the U.S. Government would
provide financial support to U.S. Government-sponsored agencies or
instrumentalities if it is not obligated to do so under law. The Portfolio will
invest in the obligations of such agencies or instrumentalities only when the
investment adviser believes that the credit risk with respect thereto is
minimal. There is no assurance that the investment objective of the Government
Obligations Money Market Portfolio will be achieved.
Securities issued or guaranteed by the U.S. Government, its agencies and
instrumentalities have historically involved little risk of loss of principal if
held to maturity. However, due to fluctuations in interest rates, the market
value of such securities may vary during the period a shareholder owns Shares
representing interests in the Portfolio. Certain government securities held by
the Portfolio may have remaining maturities exceeding 397 days if such
securities provide for adjustments in their interest rates not less frequently
than every 397 days and the adjustments are sufficient to cause the securities
to have market values, after adjustment, which approximate their par values.
REPURCHASE AGREEMENTS. The Portfolio may agree to purchase government
securities from financial institutions subject to the seller's agreement to
repurchase them at an agreed-upon time and price ("repurchase agreements"). The
securities held subject to a repurchase agreement may have stated maturities
exceeding 13 months, provided the repurchase agreement itself matures in less
than 13 months. Default by or bankruptcy of the seller would, however, expose
the Portfolio to possible loss because of adverse market action or delay in
connection with the disposition of the underlying obligations.
REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow funds by entering
into reverse repurchase agreements in accordance with the investment
restrictions described below. A reverse repurchase agreement involves a sale by
a portfolio of securities that it holds concurrently with an agreement by the
Portfolio to repurchase them at an agreed upon time and price. Reverse
repurchase agreements involve the risk that the market value of the portfolio
securities sold by the Portfolio may decline below the price at which the
Portfolio is obligated to repurchase them. The Portfolio would consider entering
into reverse repurchase agreements to avoid otherwise selling securities during
unfavorable market conditions to meet redemptions. Reverse repurchase agreements
are considered to be borrowings by the Portfolio under the Investment Company
Act of 1940 (the "1940 Act").
MORTGAGE-RELATED SECURITIES. Mortgage-related securities consist of
mortgage loans, which are assembled into pools, the interests on which are
issued and guaranteed by an agency or instrumentality of the U.S. Government,
though not necessarily by the U.S. Government itself.
5
<PAGE>
ASSET-BACKED SECURITIES. The Portfolio may invest in asset-backed
securities which are backed by mortgages, installment sales contracts, credit
card receivables or other assets and collateralized mortgage obligations
("CMOs") issued or guaranteed by U.S. Government agencies and instrumentalities
or issued by private companies. Asset-backed securities also include adjustable
rate securities. The estimated life of an asset-backed security varies with the
prepayment experience with respect to the underlying debt instruments. For this
and other reasons, an asset-backed security's stated maturity may be shortened,
and the security's total return may be difficult to predict precisely. Such
difficulties are not expected, however, to have a significant effect on the
Portfolio since the remaining maturity of any asset-backed security acquired
will be 13 months or less. Asset-backed securities are considered an industry
for industry concentration purposes. See "Investment Limitations." In periods of
falling interest rates, the rate of mortgage prepayments tends to increase.
During these periods, the reinvestment of proceeds by a portfolio will generally
be at lower rates than the rates on the prepaid obligations.
LENDING OF SECURITIES. The Portfolio may also lend its portfolio securities
to financial institutions in accordance with the investment restrictions
described below. Such loans would involve risks of delay in receiving additional
collateral in the event the value of the collateral decreased below the value of
the securities loaned or of delay in recovering the securities loaned or even
loss of rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers deemed by the
Portfolio's investment adviser to be of good standing and only when, in the
adviser's judgment, the income to be earned from the loans justifies the
attendant risks. Any loans of the Portfolio's securities will be fully
collateralized and marked to market daily.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days and other securities that are illiquid by
virtue of the absence of a readily available market or legal or contractual
restrictions on resale. Repurchase agreements subject to demand are deemed to
have a maturity equal to the notice period. Securities that have legal or
contractual restrictions on resale but have a readily available market are not
deemed illiquid for purposes of this limitation. The Portfolio's investment
adviser will monitor the liquidity of such restricted securities under the
supervision of the Board of Directors. See "Investment Objectives and
Policies--Illiquid Securities" in the Statement of Additional Information.
YEAR 2000
- --------------------------------------------------------------------------------
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
6
<PAGE>
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Portfolio's investment objective and policies described above may be
changed by the Fund's Board of Directors without shareholder approval. The
investment limitations summarized below may not be changed, however, without
shareholder approval. (A more detailed description of the following investment
limitations is contained in the Statement of Additional Information under
"Investment Objectives and Policies.")
The Portfolio may not:
1. Purchase securities other than U.S. Treasury bills, notes and other
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, and repurchase agreements relating to such obligations.
2. Borrow money, except from banks for temporary purposes, and except
for reverse repurchase agreements, and then in an amount not exceeding 10%
of the value of the Portfolio's total assets, and only if after such
borrowing there is asset coverage of at least 300% for all borrowings of
the Portfolio; or mortgage, pledge or hypothecate its assets except in
connection with any such borrowing and in amounts not in excess of 10% of
the value of the Portfolio's assets at the time of such borrowing; or
purchase portfolio securities while borrowings in excess of 5% of the
Portfolio's net assets are outstanding. (This borrowing provision is not
for investment leverage, but solely to facilitate management of the
Portfolio by enabling the Portfolio to meet redemption requests where
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous.)
3. Make loans except that the Portfolio may purchase or hold debt
obligations in accordance with its investment objective, policies and
limitations, may enter into repurchase agreements for securities, and may
lend portfolio securities against collateral, consisting of cash or
securities which are consistent with the Portfolio's permitted investments,
which is equal at all times to at least 100% of the value of the securities
loaned. There is no investment restriction on the amount of securities that
may be loaned, except that payments received on such loans, including
amounts received during the loan on account of interest on the securities
loaned, may not (together with all non-qualifying income) exceed 10% of the
Portfolio's annual gross income (without offset for realized capital gains)
unless, in the opinion of counsel to the Fund, such amounts are qualifying
income under federal income tax provisions applicable to regulated
investment companies.
PURCHASE AND REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
PURCHASE PROCEDURES
GENERAL. Shares are sold without a sales load on a continuous basis by the
Distributor. The Distributor is located at Four Falls Corporate Center, West
Conshohocken, Pennsylvania 19428. Investors may purchase Shares through an
account maintained by the investor with his brokerage firm (an "Account") and
may also purchase Shares directly by mail or wire. The minimum initial
investment is $1,000, and the minimum subsequent investment is $100. The Fund in
its sole discretion may accept or reject any order for purchases of Shares.
All payments for initial and subsequent investments should be in U.S.
dollars. Purchases will be effected at the net asset value next determined after
PFPC, the Fund's transfer agent, has received a purchase order in good order and
the Fund's custodian has Federal Funds immediately available to it. In those
cases where payment is made by check, Federal Funds will generally become
available two Business Days after the check is received. A "Business Day" is any
day that both the New York Stock Exchange (the "NYSE") and the Federal Reserve
Bank of Philadelphia (the "FRB") are open. On any Business Day, orders which are
accompanied by Federal Funds and received by PFPC by 12:00 noon Eastern Time,
and orders as to which payment has been converted into Federal Funds by 12:00
noon Eastern Time, will be executed as of 12:00 noon that Business Day. Orders
which are accompanied by Federal Funds and received by PFPC after
7
<PAGE>
12:00 noon Eastern Time but prior to the close of regular trading on the NYSE
(generally 4:00 p.m. Eastern Time), and orders as to which payment has been
converted into Federal Funds after 12:00 noon Eastern Time but prior to the
close of regular trading on the NYSE on any Business Day of the Fund, will be
executed as of the close of regular trading on the NYSE on that Business Day but
will not be entitled to receive dividends declared on such Business Day. Orders
which are accompanied by Federal Funds and received by the Fund as of the close
of regular trading on the NYSE or later, and orders as to which payment has been
converted to Federal Funds as of the close of regular trading on the NYSE or
later on a Business Day will be processed as of 12:00 noon Eastern Time on the
following Business Day.
PURCHASES THROUGH AN ACCOUNT. Purchases of Shares may be effected through
an investor's Account with his broker through procedures established in
connection with the requirements of Accounts at such broker. In such event,
beneficial ownership of Shares will be recorded by the broker and will be
reflected in the Account statements provided by the broker to such investors. A
broker may impose minimum investment Account requirements. Even if a broker does
not impose a sales charge for purchases of Shares, depending on the terms of an
investor's Account with his broker, the broker may charge investors Account fees
for automatic investment and other services provided to the Account. Information
concerning Account requirements, services and charges should be obtained from an
investor's broker, and this Prospectus should be read in conjunction with any
information received from a broker.
Shareholders whose shares are held in the street name account of a broker
and who desire to transfer such shares to the street name account of another
broker should contact their current broker.
A broker may offer investors maintaining Accounts the ability to purchase
Shares under an automatic purchase program (a "Purchase Program") established by
a participating broker. An investor who participates in a Purchase Program will
have his "free-credit" cash balances in his Account automatically invested in
Shares. The frequency of investments and the minimum investment requirement will
be established by the broker and the Fund. In addition, the broker may require a
minimum amount of cash and/or securities to be deposited in an Account for
participants in its Purchase Program. The description of the particular broker's
Purchase Program should be read for details, and any inquiries concerning an
Account under a Purchase Program should be directed to the broker.
If a broker makes special arrangements under which orders for Shares are
received by PFPC prior to 12:00 noon Eastern Time, and the broker guarantees
that payment for such Shares will be made in available Federal Funds to the
Fund's custodian prior to the close of regular trading on the NYSE, on the same
day, such purchase orders will be effective and Shares will be purchased at the
offering price in effect as of 12:00 noon Eastern Time on the date the purchase
order is received by PFPC.
DIRECT PURCHASES. An investor may also make direct investments in Shares at
any time through any broker that has entered into a dealer agreement with the
Distributor (a "Dealer"). An investor may make an initial investment by mail by
fully completing and signing an application obtained from a Dealer (an
"Application") and mailing it, together with a check payable to "Bedford
Government Obligations Money Market" to Bedford Government Obligations Money
Market Portfolio, c/o PFPC, P.O. Box 8950, Wilmington, Delaware 19899. An
Application will be returned to the investor unless it contains the name of the
Dealer from whom it was obtained. Subsequent purchases may be made through a
Dealer or by forwarding payment to the Fund's transfer agent at the foregoing
address.
Provided that the investment is at least $2,500, an investor may also
purchase Shares by having his bank or Dealer wire Federal Funds to the Fund's
custodian, PNC Bank. An investor's bank or Dealer may impose a charge for this
service. The Fund does not currently charge for effecting wire transfers but
reserves the right to do so in the future. In order to ensure prompt receipt of
an investor's Federal Funds wire for an initial investment, it is important that
an investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (800) 533-7719
(in Delaware call collect (302) 791-1196), and provide your name, address,
telephone number, Social Security or Tax Identification Number,
8
<PAGE>
the amount being wired, and by which bank or Dealer. PFPC will then
provide an investor with a Fund account number. (Investors with existing
accounts should also notify PFPC prior to wiring funds.)
B. Instruct your bank or Dealer to wire the specified amount, together
with your assigned account number, to PFPC's account with PNC Bank:
PNC Bank, N.A., Philadelphia, PA
ABA-0310-0005-3
FROM: (name of investor)
ACCOUNT NUMBER: (investor's account number with the Portfolio)
FOR PURCHASE OF: (name of Portfolio)
AMOUNT: (amount to be invested)
C. Fully complete and sign the Application and mail it to the address
shown thereon. PFPC will not process initial purchases until it receives a
fully completed and signed Application.
For subsequent investments, an investor should follow steps A and B above.
RETIREMENT PLANS. Shares may be purchased in conjunction with individual
retirement accounts ("IRAs") and rollover IRAs where PFPC Trust Company acts as
custodian. For further information as to applications and annual fees, contact
the Distributor or your broker. To determine whether the benefits of an IRA are
available and/or appropriate, a shareholder should consult with a tax adviser.
REDEMPTION PROCEDURES
Redemption orders are effected at the net asset value per share next
determined after receipt of the order in proper form by the Fund's transfer
agent, PFPC. Investors may redeem all or some of their Shares in accordance with
one of the procedures described below.
REDEMPTION OF SHARES IN AN ACCOUNT. An investor who beneficially owns
Shares through an Account may redeem Shares in his Account in accordance with
instructions and limitations pertaining to his Account by contacting his broker.
If such notice is received by PFPC by 12:00 noon Eastern Time on any Business
Day, the redemption will be effective as of 12:00 noon Eastern Time on that day.
Payment of the redemption proceeds will be made after 12:00 noon Eastern Time on
the day the redemption is effected, provided that the Fund's custodian is open
for business. If the custodian is not open, payment will be made on the next
bank business day. If the redemption request is received between 12:00 noon and
the close of regular trading of the NYSE on a Business Day, the redemption will
be effective as of the close of regular trading of the NYSE on such Business Day
and payment will be made on the next bank business day following receipt of the
redemption request. If all Shares are redeemed, all accrued but unpaid dividends
on those Shares will be paid with the redemption proceeds.
An investor's brokerage firm may also redeem each day a sufficient number
of Shares to cover debit balances created by transactions in the Account or
instructions for cash disbursements. Shares will be redeemed on the same day
that a transaction occurs that results in such a debit balance or charge.
Each brokerage firm reserves the right to waive or modify criteria for
participation in an Account or to terminate participation in an Account for any
reason.
REDEMPTION OF SHARES OWNED DIRECTLY. A direct investor may redeem any
number of Shares by sending a written request, to Bedford Government Obligations
Money Market, c/o PFPC, P.O. Box 8950, Wilmington, Delaware 19899. Redemption
requests must be signed by each shareholder in the same manner as the Shares are
registered. Redemption requests for joint accounts require the signature of each
joint owner. On redemption requests of $5,000 or more, each signature must be
guaranteed. A signature guarantee may be obtained from a domestic bank or trust
9
<PAGE>
company, broker, dealer, clearing agency or savings association who are
participants in a medallion program recognized by the Securities Transfer
Association. The three recognized medallion programs are Securities Transfer
Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP) and
New York Exchange, Inc. Medallion Signature Program (MSP). Signature guarantees
that are not part of these programs will not be accepted.
Direct investors may redeem Shares without charge by telephone if they have
completed and returned an account application containing the appropriate
telephone election. To add a telephone option to an existing account that
previously did not provide for this option, a Telephone Authorization Form must
be filed with PFPC. This form is available from PFPC. Once this election has
been made, the shareholder may simply contact PFPC by telephone to request the
redemption by calling (888) 261-4073. Neither the Fund, the Portfolio, the
Distributor, PFPC nor any other Fund agent will be liable for any loss,
liability, cost or expense for following the procedures described below or for
following instructions communicated by telephone that they reasonably believe to
be genuine.
The Fund's telephone transaction procedures include the following measures:
(1) requiring the appropriate telephone transaction privilege forms; (2)
requiring the caller to provide the names of the account owners, the account
social security number and name of the portfolio, all of which must match the
Fund's records; (3) requiring the Fund's service representative to complete a
telephone transaction form, listing all of the above caller identification
information; (4) requiring that redemption proceeds be sent only by check to the
account owners of record at the address of record, or by wire only to the owners
of record at the bank account of record; (5) sending a written confirmation for
each telephone transaction to the owners of record at the address of record
within five (5) business days of the call; and (6) maintaining tapes of
telephone transactions for six months, if the Fund elects to record shareholder
telephone transactions. For accounts held of record by broker-dealers (other
than the Distributor), financial institutions, securities dealers, financial
planners or other industry professionals, additional documentation or
information regarding the scope of a caller's authority is required. Finally,
for telephone transactions in accounts held jointly, additional information
regarding other account holders is required. Telephone transactions will not be
permitted in connection with IRA or other retirement plan accounts or by
attorney-in-fact under power of attorney.
Proceeds of a telephone redemption request will be mailed by check to an
investor's registered address unless he has designated in his Application or
Telephone Authorization Form that such proceeds are to be sent by wire transfer
to a specified checking or savings account. If proceeds are to be sent by wire
transfer, a telephone redemption request received prior to the close of regular
trading of the NYSE will result in redemption proceeds being wired to the
investor's bank account on the next bank business day. The minimum redemption
for proceeds sent by wire transfer is $2,500. There is no maximum for proceeds
sent by wire transfer. The Fund may modify this redemption service at any time
or charge a service fee upon prior notice to shareholders, although no fee is
currently contemplated.
REDEMPTION BY CHECK. Upon request, the Fund will provide any direct
investor and any investor who does not have check writing privileges for his
Account with forms of drafts ("checks") payable through PNC Bank. These checks
may be made payable to the order of anyone. The minimum amount of a check is
$100; however, a broker may establish a higher minimum. An investor wishing to
use this check writing redemption procedure should complete specimen signature
cards (available from PFPC), and then forward such signature cards to PFPC. PFPC
will then arrange for the checks to be honored by PNC Bank. Investors who own
Shares through an Account should contact their brokers for signature cards.
Investors of joint accounts may elect to have checks honored with a single
signature. Check redemptions will be subject to PNC Bank's rules governing
checks. An investor will be able to stop payment on a check redemption. The Fund
or PNC Bank may terminate this redemption service at any time, and neither shall
incur any liability for honoring checks, for effecting redemptions to pay
checks, or for returning checks which have not been accepted.
When a check is presented to PNC Bank for clearance, PNC Bank, as the
investor's agent, will cause the Fund to redeem a sufficient number of full and
fractional Shares owned by the investor to cover the amount of the check. This
procedure enables the investor to continue to receive dividends on those Shares
representing the amount being redeemed by check until such time as the check is
presented to PNC Bank. Pursuant to rules under the 1940 Act, checks
10
<PAGE>
may not be presented for cash payment at the offices of PNC Bank. This
limitation does not affect checks used for the payment of bills or cashed at
other banks.
ADDITIONAL REDEMPTION INFORMATION. The Fund ordinarily will make payment
for all Shares redeemed within seven days after receipt by PFPC of a redemption
request in proper form. Although the Fund will redeem Shares purchased by check
before the check clears, payment of the redemption proceeds may be delayed for a
period of up to fifteen days after their purchase, pending a determination that
the check has cleared. This procedure does not apply to Shares purchased by wire
payment. Investors should consider purchasing Shares using a certified or bank
check or money order if they anticipate an immediate need for redemption
proceeds.
The Fund imposes no charge when Shares are redeemed. The Fund reserves the
right to redeem any account in the Class involuntarily, on thirty days' notice,
if such account falls below $500 and during such 30-day notice period the amount
invested in such account is not increased to at least $500. Payment for Shares
redeemed may be postponed or the right of redemption suspended as provided by
the rules of the Securities and Exchange Commission.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value per share of each class of the Portfolio for the
purpose of pricing purchase and redemption orders is determined twice each day,
once as of 12:00 noon Eastern Time and once as of the close of regular trading
on the NYSE on each weekday, with the exception of those holidays on which
either the NYSE or the FRB is closed. Currently, the NYSE is closed on weekends
and the customary national business holidays of New Year's Day, Dr. Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day and the preceding Friday or
subsequent Monday when one of these holidays falls on a Saturday or Sunday. The
FRB is currently closed on weekends and the same holidays on which the NYSE is
closed, as well as Veterans' Day and Columbus Day. The net asset value per share
of each class is calculated by adding the value of the proportionate interest of
the class in the securities, cash and other assets of the Portfolio, subtracting
the actual and accrued liabilities of such class and dividing the result by the
number of outstanding shares of the class. The net asset value per share of each
class of the Portfolio is determined independently of any of the Fund's other
classes.
The Fund seeks to maintain for the Portfolio a net asset value of $1.00 per
share for purposes of purchases and redemptions and values its portfolio
securities on the basis of the amortized cost method of valuation described in
the Statement of Additional Information under the heading "Valuation of Shares."
There can be no assurance that net asset value per share will not vary.
With the approval of the Board of Directors, the Portfolio may use a
pricing service, bank or broker-dealer experienced in such matters to value the
Portfolio's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of the Fund and Portfolio are managed under the
direction of the Fund's Board of Directors. The Fund currently operates or
proposes to operate seventeen investment portfolios. The Government Obligations
Money Market Portfolio is one of these portfolios.
INVESTMENT ADVISER
BIMC, an indirect majority-owned subsidiary of PNC Bank, serves as the
investment adviser for the Portfolio. BIMC has its principal offices at Bellevue
Park Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware 19809. PNC
11
<PAGE>
Bank and its subsidiaries currently manage over $45.9 billion of assets, of
which approximately $31.4 billion are mutual funds. PNC Bank, a national bank
whose principal business address is 1600 Market Street, Philadelphia,
Pennsylvania 19103, is a wholly-owned subsidiary of PNC Bancorp Inc. PNC
Bancorp, Inc. is a bank holding company and a wholly-owned subsidiary of PNC
Bank Corp., a multi-bank holding company.
As investment adviser to the Portfolio, BIMC manages the Portfolio and is
responsible for all purchases and sales of portfolio securities. In entering
into transactions for the Portfolio with a broker, BIMC may take into account
the sale by such broker of shares of the Fund, subject to the requirements of
best execution. The agreement between BIMC and RBB with respect to the
Government Obligations Money Market Portfolio provides for BIMC to also assist
generally in supervising the operations of such Portfolio, and to maintain the
Portfolio's financial account and records. These administrative responsibilities
have been delegated to PFPC, as described below.
For the services provided to and expenses assumed by it for the benefit of
the Portfolio, BIMC is entitled to receive the following fees, computed daily
and payable monthly based on the Portfolio's average daily net assets: .45% of
the first $250 million; .40% of the next $250 million; and .35% of net assets in
excess of $500 million. BIMC may in its discretion from time to time agree to
waive voluntarily all or any portion of its advisory fee for the Portfolio.
For the Fund's fiscal year ended August 31, 1998 the Fund paid investment
advisory fees aggregating .30% of the average net assets of the Portfolio. For
that same year, BIMC waived approximately .12% of the advisory fees payable with
respect to the Portfolio.
PNC Bank was formerly sub-adviser to the Portfolio and provided research,
credit analysis and recommendations with respect to the Portfolio's investments
and supplied certain computer facilities, personnel and other services. The
facilities, personnel, services and related expenses have been transferred to
BIMC and in return, BIMC's obligation to pay a portion of the sub-advisory fee
to PNC Bank has been terminated. For its sub-advisory services, PNC Bank was
entitled to receive from BIMC an amount equal to 75% of the investment advisory
fee paid by the Portfolio to BIMC. Such sub-advisory fees paid by BIMC to PNC
Bank had no effect on the investment advisory fees payable by the Portfolio to
BIMC. The services provided by BIMC and the fees payable by the Portfolio for
these services are described further in the Statement of Additional Information
under "Management of the Company."
ADMINISTRATOR
Pursuant to its advisory agreement with the Fund with respect to the
Government Obligations Portfolio, BIMC provides administrative services to the
Portfolio, and is entitled to an administration fee, computed daily and payable
monthly at .10% of average daily net assets of the Portfolio. BIMC has delegated
to PFPC all of its accounting and administrative obligations under such advisory
agreement. The Fund has agreed to pay directly to PFPC the fees for accounting
and administrative services to the Government Obligations Portfolio which PFPC
would have received directly from BIMC. Such arrangement has no effect on the
total advisory and administrative fees payable by such Portfolio to BIMC. PFPC's
principal business address is 400 Bellevue Parkway, Wilmington, Delaware 19809.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholder servicing
agreements with registered broker-dealers who have entered into dealer
agreements with the Distributor ("Authorized Dealers") for the provision of
certain shareholder support services to customers of such Authorized Dealers who
are shareholders of the Fund. The services provided and the fees payable by the
Fund for these services are described in the Statement of Additional Information
under "Investment Advisory, Distribution and Servicing Arrangements."
12
<PAGE>
DISTRIBUTOR
Provident Distributors, Inc., with a principal business address at Four
Falls Corporate Center, West Conshohocken, Pennsylvania 19428, acts as
distributor of the Shares pursuant to a distribution agreement dated May 29,
1998 (the "Distribution Agreement").
EXPENSES
The expenses of the Portfolio are deducted from the total income of the
Portfolio before dividends are paid. Any general expenses of the Fund that are
not readily identifiable as belonging to a particular investment portfolio of
the Fund will be allocated among all investment portfolios of the Fund based
upon the relative net assets of the investment portfolios. The Bedford Class of
the Fund pays its own distribution fees, and may pay a different share than
other classes of the Fund of other expenses (excluding advisory and custodial
fees) if these expenses are actually incurred in a different amount by the
Bedford Class or if it received different services.
The investment adviser may assume expenses of the Portfolio from time to
time. In certain circumstances, it may assume such expenses on the condition
that it is reimbursed by the Portfolio for such amounts prior to the end of a
fiscal year. In such event, the reimbursement of such amounts will have the
effect of increasing the Portfolio's expense ratio and of lowering yield to
investors.
For the Fund's fiscal year ended August 31, 1998, the Fund's total expenses
were 1.10% of average net assets with respect to the Bedford Class of the
Portfolio (not taking into account waivers and reimbursements of .125%).
DISTRIBUTION OF SHARES
- --------------------------------------------------------------------------------
The Board of Directors of the Fund approved and adopted the Distribution
Agreement and separate Plan of Distribution for the Class (the "Plan") pursuant
to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to
receive from the Class a distribution fee, which is accrued daily and paid
monthly, of up to .65% on an annualized basis of the average daily net assets of
the Class. Under the Distribution Agreement, the Distributor has agreed to
accept compensation for its services thereunder and under the Plan in the amount
of .60% of the average daily net assets of the Class on an annualized basis in
any year. The actual amount of such compensation is agreed upon from time to
time by the Fund's Board of Directors and the Distributor. Pursuant to the
conditions of an exemptive order granted by the Securities and Exchange
Commission, the Distributor has agreed to waive its fee with respect to the
Class on any day to the extent necessary to assure that the fee required to be
accrued by such Class does not exceed the income of such Class on that day. In
addition, the Distributor may, in its discretion, voluntarily waive from time to
time all or any portion of its distribution fee.
Under the Distribution Agreement and the Plan, the Distributor may
reallocate an amount up to the full fee that it receives to financial
institutions, including Dealers, based upon the aggregate investment amounts
maintained by and services provided to shareholders of the Class serviced by
such financial institutions. The Distributor may also reimburse Dealers for
other expenses incurred in the promotion of the sale of Fund shares. The
Distributor and/or Dealers pay for the cost of printing (excluding typesetting)
and mailing to prospective investors prospectuses and other materials relating
to the Fund as well as for related direct mail, advertising and promotional
expenses.
The Plan obligates the Fund, during the period it is in effect, to accrue
and pay to the Distributor on behalf of the Class the fee agreed to under the
Distribution Agreement. Payments under the Plan are not based on expenses
actually incurred by the Distributor and the payments may exceed distribution
expenses actually incurred.
13
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Portfolio to the Portfolio's
shareholders. All distributions are reinvested in the form of additional full
and fractional Shares unless a shareholder elects otherwise.
The net investment income (not including any net short-term capital gains)
earned by the Portfolio will be declared as a dividend on a daily basis and paid
monthly. Dividends are payable to shareholders of record immediately prior to
the determination of net asset value made as of the close of regular trading on
the NYSE. Net short-term capital gains, if any, will be distributed at least
annually.
TAXES
- --------------------------------------------------------------------------------
Distributions from the Government Obligations Money Market Portfolio will
generally be taxable to shareholders. It is expected that all, or substantially
all, of these distributions will consist of ordinary income. You will be subject
to income tax on these distributions regardless whether they are paid in cash or
reinvested in additional shares. The one major exception to these tax principles
is that distributions on shares held in an IRA (or other tax-qualified plan)
will not be currently taxable.
The foregoing is only a summary of certain tax considerations under the
current law, which may be subject to change in the future. You should consult
your tax adviser for further information regarding federal, state, local and/or
foreign tax consequences relevant to your specific situation.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
The Fund has authorized capital of thirty billion shares of Common Stock,
$.001 par value per share, of which 18.326 billion shares are currently
classified into 97 different classes of Common Stock (see "Description of
Shares" in the Statement of Additional Information).
The Fund offers multiple classes of shares in the Portfolio to expand its
marketing alternatives and to broaden its range of services to different
investors. The expenses of the various classes within this Portfolio vary based
upon the services provided, which may affect performance. Each class of Common
Stock of the Fund has a separate Rule 12b-1 distribution plan. Under the
Distribution Agreements entered into with the Distributor and pursuant to each
of the distribution plans, the Distributor is entitled to receive from each
class as compensation for distribution services provided to that class a
distribution fee based on average daily net assets. A salesperson or any other
person entitled to receive compensation for servicing Fund shares may receive
different compensation with respect to different classes in a Portfolio of the
Fund. An investor may contact the Fund's Distributor by calling 1-800-888-9723
to request more information concerning other classes available.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE BEDFORD CLASS OF THE GOVERNMENT OBLIGATIONS MONEY
MARKET PORTFOLIO AND DESCRIBE ONLY THE INVESTMENT OBJECTIVE AND POLICIES,
OPERATIONS, CONTRACTS AND OTHER MATTERS RELATING TO THIS PORTFOLIO.
Each share that represents an interest in the Portfolio has an equal
proportionate interest in the assets belonging to the Portfolio with each other
share that represents an interest in the Portfolio, even where a share has a
different class designation than another share representing an interest in the
Portfolio. Shares of the Fund do not have preemptive or conversion rights. When
issued for payment as described in this Prospectus, Shares of the Fund will be
fully paid and non-assessable.
14
<PAGE>
The Fund currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
Holders of shares of the Portfolio will vote in the aggregate and not by
class on all matters, except where otherwise required by law. Further,
shareholders of all investment portfolios of the Fund will vote in the aggregate
and not by portfolio except as otherwise required by law or when the Board of
Directors determines that the matter to be voted upon affects only the interests
of the shareholders of a particular investment portfolio. (See the Statement of
Additional Information under "Additional Information Concerning Fund Shares" for
examples when the 1940 Act requires voting by investment portfolio or by class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of Common Stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of the
Fund.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC, the
Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (800) 533-7719 (in Delaware call collect
(302) 791-1196).
15
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
-----------------
CONTENTS
PAGE
Introduction.......................................................... 2
Financial Highlights.................................................. 3
Investment Objective and Policies..................................... 5
Year 2000............................................................. 6
Investment Limitations................................................ 7
Purchase and Redemption of Shares..................................... 7
Net Asset Value....................................................... 11
Management............................................................ 11
Distribution of Shares................................................ 13
Dividends and Distributions........................................... 14
Taxes................................................................. 14
Description of Shares................................................. 14
Other Information..................................................... 15
INVESTMENT ADVISER
BlackRock Institutional Management Corporation
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
ADMINISTRATOR AND TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
<PAGE>
================================================================================
PROSPECTUS
THE BEDFORD FAMILY
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
MUNICIPAL MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
DECEMBER 29, 1998
================================================================================
<PAGE>
THE BEDFORD FAMILY
OF
THE RBB FUND, INC.
The three classes of common stock (each, a "Bedford Class") of The RBB
Fund, Inc. (the "Fund"), an open-end management investment company, offered by
this Prospectus represent interests in a taxable money market portfolio, a
municipal money market portfolio and a U.S. Government obligations money market
portfolio (together, the "Portfolios"). The investment objectives of each
investment portfolio described in this Prospectus are as follows:
MONEY MARKET PORTFOLIO -- to provide as high a level of current interest
income as is consistent with maintaining liquidity and stability of principal.
It seeks to achieve such objective by investing in a diversified portfolio of
U.S. dollar-denominated money market instruments.
MUNICIPAL MONEY MARKET PORTFOLIO -- to provide as high a level of current
interest income exempt from federal income taxes as is consistent with
maintaining liquidity and stability of principal. It seeks to achieve such
objective by investing substantially all of its assets in a diversified
portfolio of short-term Municipal Obligations. "Municipal Obligations" are
obligations issued by or on behalf of states, territories and possessions of the
United States, the District of Columbia and their political subdivisions,
agencies, instrumentalities and authorities. During periods of normal market
conditions, at least 80% of the net assets of the Portfolio will be invested in
Municipal Obligations, the interest on which is exempt from the regular federal
income tax but which may constitute an item of tax preference for purposes of
the federal alternative minimum tax.
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO -- to provide as high a level
of current interest income as is consistent with maintaining liquidity and
stability of principal. It seeks to achieve such objective by investing in
short-term U.S. Treasury bills, notes and other obligations issued or guaranteed
by the U.S. Government or its agencies or instrumentalities, and repurchase
agreements relating to such obligations.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK
AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. THERE CAN BE NO ASSURANCE THAT THE PORTFOLIOS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
BlackRock Institutional Management Corporation serves as investment adviser
for the Portfolios, PFPC Trust Company, serves as custodian for the Fund and
PFPC Inc. serves as administrator and transfer and dividend disbursing agent for
the Fund. Provident Distributors, Inc. acts as distributor for the Fund.
This Prospectus contains concise information that a prospective investor
needs to know before investing. Please keep it for future reference. A Statement
of Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained upon request free of charge from the Fund by
calling (800) 430-9618. The Prospectus and Statement of Additional Information
are also available for reference, along with other related materials, on the SEC
Internet Website (http://www.sec.gov).
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
The RBB Fund, Inc. is an open-end management investment company
incorporated under the laws of the State of Maryland on February 29, 1988. The
Fund is currently operating or proposing to operate seventeen separate
investment portfolios. Each of the three classes of the Fund's shares
(collectively, the "Bedford Shares" or "Shares") offered by this Prospectus
represents interests in one of the following of such investment portfolios: the
Money Market Portfolio, the Municipal Money Market Portfolio and the Government
Obligations Money Market Portfolio.
The MONEY MARKET PORTFOLIO'S investment objective is to provide as high a
level of current interest income as is consistent with maintaining liquidity and
stability of principal. It seeks to achieve such objective by investing in a
diversified portfolio of U.S. dollar-denominated money market instruments which
meet certain ratings criteria and present minimal credit risks. In pursuing its
investment objective, the Money Market Portfolio invests in a broad range of
government, bank and commercial obligations that may be available in the money
markets.
The MUNICIPAL MONEY MARKET PORTFOLIO'S investment objective is to provide
as high a level of current interest income exempt from federal income taxes as
is consistent with maintaining liquidity and stability of principal. To achieve
this objective, the Municipal Money Market Portfolio invests substantially all
of its assets in a diversified portfolio of short-term Municipal Obligations
which meet certain ratings criteria and present minimal credit risks. During
periods of normal market conditions, at least 80% of the net assets of the
Portfolio will be invested in Municipal Obligations, the interest on which is
exempt from the regular federal income tax but which may constitute an item of
tax preference for purposes of the federal alternative minimum tax.
The GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO'S investment objective is
to provide as high a level of current interest income as is consistent with
maintaining liquidity and stability of principal. To achieve its objective, the
Portfolio invests exclusively in short-term U.S. Treasury bills, notes and other
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, and enters into repurchase agreements relating to such
obligations.
Each of the Portfolios seeks to maintain a net asset value of $1.00 per
share; however, there can be no assurance that the Portfolios will be able to
maintain a stable net asset value of $1.00 per share.
The Portfolios' investment adviser is BlackRock Institutional Management
Corporation ("BIMC"). PFPC Trust Company serves as custodian to the Fund and
PFPC Inc. ("PFPC") serves as the administrator and the transfer and dividend
disbursing agent to the Fund. Provident Distributors, Inc. (the "Distributor")
acts as distributor of the Fund's Shares.
An investor may purchase and redeem Shares of any of the Bedford Classes
through his broker or by direct purchases or redemptions. See "Purchase and
Redemption of Shares."
An investment in any of the Bedford Shares is subject to certain risks, as
set forth in detail under "Investment Objectives and Policies." Any or all of
the Portfolios, to the extent set forth under "Investment Objectives and
Policies," may engage in the following investment practices: the use of
repurchase agreements and reverse repurchase agreements, the purchase of
mortgage-related securities, the purchase of securities on a "when-issued" or
"forward commitment" basis, the purchase of stand-by commitments and the lending
of securities. All of these transactions involve certain special risks, as set
forth under "Investment Objectives and Policies."
2
<PAGE>
FEE TABLE
ANNUAL FUND OPERATING EXPENSES (BEDFORD CLASSES)
AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS
The Fee Table below contains a summary of the annual operating expenses of
the Bedford Classes of the Portfolios based on expenses incurred for the fiscal
year ended August 31, 1998, as a percentage of average daily net assets. An
example based on the summary is also shown.
<TABLE>
<CAPTION>
GOVERNMENT
MUNICIPAL OBLIGATIONS
MONEY MARKET MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------
<S> <C> <C> <C>
Management fees (after waivers)(1) ........................... .23% .08% .30%
12b-1 fees ................................................... .54 .58 .57
Other Expenses ............................................... .20 .23 .105
--- --- ----
Total Fund Operating Expenses (Bedford Classes)
(after waivers)(1) ........................................ .97% .89% .975%
=== === ====
<FN>
(1) Management Fees and 12b-1 Fees are based on average daily net assets and are
calculated daily and paid monthly. Before waivers for the Money Market
Portfolio, Municipal Money Market Portfolio and Government Obligations Money
Market Portfolio, Management Fees would be .36%, .34%, and .42%,
respectively, and Total Fund Operating Expenses would be 1.10%, 1.15%, and
1.10%, respectively.
</FN>
</TABLE>
EXAMPLE
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Money Market* $10 $31 $54 $119
Municipal Money Market* $ 9 $28 $49 $110
Government Obligations Money Market* $10 $31 $54 $120
* Other classes of these Portfolios are sold with different fees and expenses.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating Expenses
(Bedford Classes)" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. Long-term Shareholders may pay more than
the economic equivalent of the maximum front-end sales charges permitted by the
National Association of Securities Dealers, Inc.
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Bedford Classes of the Fund
will bear directly or indirectly. (For more complete descriptions of the various
costs and expenses, see "Management -- Investment Adviser" and "Distribution of
Shares" below.) Expense figures are based on actual costs and fees charged to
each class. The Fee Table reflects a voluntary waiver of Management Fees for
each Portfolio. However, there can be no assurance that any future waivers of
Management Fees will not vary from the figures reflected in the Fee Table. To
the extent that any service providers assume additional expenses of the
Portfolios, such assumption will have the effect of lowering a Portfolio's
overall expense ratio and increasing its yield to investors.
3
<PAGE>
From time to time a Portfolio advertises its "total return," "yield" and
"effective yield." TOTAL RETURN AND YIELD FIGURES ARE BASED ON HISTORICAL
EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. The "yield" of a
Portfolio refers to the income generated by an investment in a Portfolio over a
seven-day period (which period will be stated in the advertisement). This income
is then "annualized." That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in a
Portfolio is assumed to be reinvested. The "effective yield" will be slightly
higher than the "yield" because of the compounding effect of this assumed
reinvestment. The Municipal Money Market Portfolio's "tax-equivalent yield" may
also be quoted from time to time, which shows the level of taxable yield needed
to produce an after-tax equivalent to such Portfolio's tax-free yield. This is
done by increasing such Portfolio's yield (calculated as above) by the amount
necessary to reflect the payment of federal income tax at a stated tax rate.
The total returns yield of any investment is generally a function of
portfolio quality and maturity, type of investment and operating expenses. The
total returns yield on Shares of any of the Bedford Classes will fluctuate and
is not necessarily representative of future results. Any fees charged by
broker/dealers directly to their customers in connection with investments in
Bedford Shares are not reflected in the total returns yield of Shares of the
Bedford Classes, and such fees, if charged, will reduce the actual return
received by shareholders on their investments. The total returns yield on Shares
of the Bedford Classes may differ from total returns yield on shares of other
classes of the Fund that also represent interests in the same Portfolio
depending on the allocation of expenses to each of the classes of that
Portfolio. See "Expenses."
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth certain information concerning the investment
results of the Bedford Classes representing interests in the Money Market,
Municipal Money Market and Government Obligations Money Market Portfolios for
the periods indicated. The financial data included in this table for each of the
periods ended August 31, 1994 through August 31, 1998 are a part of the Fund's
financial statements for each of the Portfolios, which are incorporated by
reference into the Statement of Additional Information and have been audited by
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), the Fund's independent
accountants. The financial data for each of the Portfolios for the periods ended
August 31, 1989, 1990, 1991, 1992 and 1993 are a part of previous financial
statements audited by PricewaterhouseCoopers. The financial data should be read
in conjunction with the financial statements and notes thereto. Further
information about the performance of the Portfolios is available in the Annual
Report to Shareholders. Both the Statement of Additional Information and the
Annual Report to Shareholders may be obtained free of charge by calling the
telephone number on page 1 of this Prospectus.
4
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC. FINANCIAL HIGHLIGHTS (c)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1998 1997 1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ---------- ---------- -------- -------- -------- -------- ---------
Income from investment
operations:
Net investment income ... 0.0473 0.0462 0.0469 0.0486 0.0278 0.0243 0.0375 0.0629
Net gains on securities
(both realized
and unrealized) ....... -- -- -- -- -- -- 0.0007 --
-------- ---------- ---------- -------- -------- -------- -------- ---------
Total from
investment
operations ........ 0.0473 0.0462 0.0469 0.0486 0.0278 0.0243 0.0382 0.0629
-------- ---------- ---------- -------- -------- -------- -------- ---------
Less distributions
Dividends (from net
investment income) .... (0.0473) (0.0462) (0.0469) (0.0486) (0.0278) (0.0243) (0.0375) (0.0629)
Distributions (from
capital gains) ........ -- -- -- -- -- -- (0.0007) --
-------- ---------- ---------- -------- -------- -------- -------- ---------
Total distributions . (0.0473) (0.0462) (0.0469) (0.0486) (0.0278) (0.0243) (0.0382) (0.0629)
-------- ---------- ---------- -------- -------- -------- -------- ---------
Net asset value,
end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========== ========== ======== ======== ======== ======== =========
Total Return ............... 4.84% 4.72% 4.79% 4.97% 2.81% 2.46% 3.89% 6.48%
Ratios/Supplemental Data
Net assets, end of
period (000) .......... $762,739 $1,392,911 $1,109,334 $935,821 $710,737 $782,153 $736,842 $747,530
Ratios of expenses to
average net assets .... .97%(a) .97%(a) .97%(a) .96%(a) .95%(a) .95%(a) .95%(a) .92%(a)
Ratios of net investment
income to average
net assets ............ 4.73% 4.62% 4.69% 4.86% 2.78% 2.43% 3.75% 6.29%
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
------------------------------
FOR THE PERIOD
SEPTEMBER 30, 1988
FOR THE (COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
AUGUST 31, AUGUST 31,
1990 1989
---------- -----------------
<S> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00
-------- --------
Income from investment
operations:
Net investment income ... 0.0765 0.0779
Net gains on securities
(both realized
and unrealized) ....... -- --
-------- --------
Total from
investment
operations ........ 0.0765 0.0779
-------- --------
Less distributions
Dividends (from net
investment income) .... (0.0765) (0.0779)
Distributions (from
capital gains) ........ -- --
-------- --------
Total distributions . (0.0765) (0.0779)
-------- --------
Net asset value,
end of period ........... $ 1.00 $ 1.00
======== ========
Total Return ............... 7.92% 8.81%(b)
Ratios/Supplemental Data
Net assets, end of
period (000) .......... $709,757 $152,311
Ratios of expenses to
average net assets .... .92%(a) .93%(a)(b)
Ratios of net investment
income to average
net assets ............ 7.65% 8.61%(b)
<FN>
(a) Without the waiver of advisory and administration fees, and without the
reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Money Market Portfolio would have been 1.10%,
1.12%, 1.14%, 1.17%, 1.16%, 1.19%, 1.20%, 1.17% and 1.16% for the years
ended August 31, 1998, 1997, 1996, 1995, 1994, 1993, 1992, 1991 and 1990,
respectively, and 1.27% annualized for the period ended August 31, 1989.
(b) Annualized.
(c) Financial Highlights relate solely to the Bedford Class of shares within the
Portfolio.
</FN>
</TABLE>
5
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC. FINANCIAL HIGHLIGHTS (c)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO
-----------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1998 1997 1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income ... 0.0286 0.0285 0.0288 0.0297 0.0195 0.0195 0.0287 0.0431
Net gains on securities
(both realized
and unrealized) ....... -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Total from
investment
operations ........ 0.0286 0.0285 0.0288 0.0297 0.0195 0.0195 0.0287 0.0431
-------- -------- -------- -------- -------- -------- -------- --------
Less distributions
Dividends (from net
investment income) .... (0.0286) (0.0285) (0.0288) (0.0297) (0.0195) (0.0195) (0.0287) (0.0431)
Distributions (from
capital gains) ........ -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Total distributions . (0.0286) (0.0285) (0.0288) (0.0297) (0.0195) (0.0195) (0.0287) (0.0431)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value,
end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========
Total Return ............... 2.97% 2.88% 2.92% 3.01% 1.97% 1.96% 2.90% 4.40%
Ratios/Supplemental Data
Net assets, end of
period (000) .......... $147,633 $213,034 $201,940 $198,425 $182,480 $215,577 $176,950 $215,140
Ratios of expenses to
average net assets .... .89%(a) .85%(a) .84%(a) .82%(a) .77%(a) .77%(a) .77%(a) .74%(a)
Ratios of net investment
income to average
net assets ............ 2.86% 2.85% 2.88% 2.97% 1.95% 1.95% 2.87% 4.31%
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO
--------------------------------
FOR THE PERIOD
SEPTEMBER 30, 1988
FOR THE (COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
AUGUST 31, AUGUST 31,
1990 1989
---------- -----------------
<S> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00
-------- --------
Income from investment
operations:
Net investment income ... 0.0522 0.0513
Net gains on securities
(both realized
and unrealized) ....... -- --
-------- --------
Total from
investment
operations ........ 0.0522 0.0513
-------- --------
Less distributions
Dividends (from net
investment income) .... (0.0522) (0.0513)
Distributions (from
capital gains) ........ -- --
-------- --------
Total distributions . (0.0522) (0.0513)
-------- --------
Net asset value,
end of period .......... $ 1.00 $ 1.00
======== ========
Total Return ............... 5.35% 5.72%(b)
Ratios/Supplemental Data
Net assets, end of
period (000) .......... $195,566 $ 85,806
Ratios of expenses to
average net assets .... .75%(a) .33%(a)(b)
Ratios of net investment
income to average
net assets ............ 5.22% 5.70%(b)
<FN>
(a) Without the waiver of advisory and administration fees, and without the
reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Municipal Money Market Portfolio would have been
1.15%, 1.14%, 1.12%, 1.14%, 1.12%,1.16%, 1.15%, 1.13% and 1.14% for the
years ended August 31, 1998, 1997, 1996, 1995, 1994, 1993, 1992, 1991 and
1990, respectively, and 1.27% annualized for the period ended August 31,
1989.
(b) Annualized.
(c) Financial Highlights relate solely to the Bedford Class of shares within the
Portfolio.
</FN>
</TABLE>
6
<PAGE>
THE BEDFORD FAMILY
THE RBB FUND, INC. FINANCIAL HIGHLIGHTS (c)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1998 1997 1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income ... 0.0463 0.0449 0.0458 0.0475 0.0270 0.0231 0.0375 0.0604
Net gains on securities
(both realized
and unrealized) ....... -- -- -- -- -- -- 0.0009 --
-------- -------- -------- -------- -------- -------- -------- --------
Total from
investment
operations ........ 0.0463 0.0449 0.0458 0.0475 0.0270 0.0231 0.0384 0.0604
-------- -------- -------- -------- -------- -------- -------- --------
Less distributions
Dividends (from net
investment income) .... (0.0463) (0.0449) (0.0458) (0.0475) (0.0270) (0.0231) (0.0375) (0.0604)
Distributions (from
capital gains) ........ -- -- -- -- -- -- (0.0009) --
-------- -------- -------- -------- -------- -------- -------- --------
Total distributions . (0.0463) (0.0449) (0.0458) (0.0475) (0.0270) (0.0231) (0.0384) (0.0604)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value,
end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========
Total Return ............... 4.74% 4.59% 4.68% 4.86% 2.73% 2.33% 3.91% 6.21%
Ratios/Supplemental Data
Net assets, end of
period (000) .......... $128,447 $209,715 $192,599 $163,398 $166,418 $213,741 $225,101 $368,899
Ratios of expenses to
average net assets .... .975%(a) .975%(a) .975%(a) .975%(a) .975%(a) .975%(a) .975%(a) .95%(a)
Ratios of net investment
income to average
net assets ............ 4.63% 4.49% 4.58% 4.75% 2.70% 2.31% 3.75% 6.04%
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
---------------------------------------------
FOR THE PERIOD
SEPTEMBER 30, 1988
FOR THE (COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
AUGUST 31, AUGUST 31,
1990 1989
---------- -----------------
<S> <C> <C>
Net asset value,
beginning of period ........... $ 1.00 $ 1.00
-------- --------
Income from investment
operations:
Net investment income ......... 0.0748 0.0725
Net gains on securities
(both realized
and unrealized) ............. -- --
-------- --------
Total from
investment
operations .............. 0.0748 0.0725
-------- --------
Less distributions
Dividends (from net
investment income) .......... (0.0748) (0.0725)
Distributions (from
capital gains) .............. -- --
-------- --------
Total distributions ....... (0.0748) (0.0725)
-------- --------
Net asset value,
end of period ................. $ 1.00 $ 1.00
======== ========
Total Return ..................... 7.74% 8.64%(b)
Ratios/Supplemental Data
Net assets, end of
period (000) ................ $209,378 $ 66,281
Ratios of expenses to
average net assets .......... .95%(a) .96%(a)(b)
Ratios of net investment
income to average
net assets .................. 7.48% 8.34%(b)
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of certain
operating expenses, the ratios of expenses to average net assets for the
Government Obligations Money Market Portfolio would have been 1.10%, 1.09%,
1.10%, 1.13%, 1.17%, 1.18%, 1.12%, 1.13% and 1.17% for the years ended
August 31, 1998, 1997, 1996, 1995, 1994, 1993, 1992, 1991 and 1990,
respectively, and 1.40% annualized for the period ended August 31, 1989.
(b) Annualized.
(c) Financial Highlights relate solely to the Bedford Class of shares within the
Portfolio.
</FN>
</TABLE>
7
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
The Money Market Portfolio's investment objective is to provide as high a
level of current interest income as is consistent with maintaining liquidity and
stability of principal. Portfolio obligations held by the Money Market Portfolio
have remaining maturities of 397 days or less (exclusive of securities subject
to repurchase agreements). In pursuing its investment objective, the Money
Market Portfolio invests in a diversified portfolio of U.S. dollar-denominated
instruments, such as government, bank and commercial obligations, that may be
available in the money markets ("Money Market Instruments") and that meet
certain ratings criteria and present minimal credit risks to the Money Market
Portfolio. See "Eligible Securities." There is no assurance that the Portfolio
will achieve its investment objective. The following descriptions illustrate the
types of Money Market Instruments in which the Money Market Portfolio invests.
BANK OBLIGATIONS. The Portfolio may purchase obligations of issuers in the
banking industry, such as short-term obligations of bank holding companies,
certificates of deposit, bankers' acceptances and time deposits, including U.S.
dollar-denominated instruments issued or supported by the credit of U.S. or
foreign banks or savings institutions having total assets at the time of
purchase in excess of $1 billion. The Portfolio may invest substantially in
obligations of foreign banks or foreign branches of U.S. banks where the
investment adviser deems the instrument to present minimal credit risks. Such
investments may nevertheless entail risks in addition to those of domestic
issuers, including higher transaction costs, less complete financial
information, less stringent regulatory requirements and less market liquidity.
The Portfolio may also make interest-bearing savings deposits in commercial and
savings banks in amounts not in excess of 5% of its total assets.
COMMERCIAL PAPER. The Portfolio may purchase commercial paper rated (i) (at
the time of purchase) in the two highest rating categories of at least two
nationally recognized statistical rating organizations ("Rating Organization")
or, by the only Rating Organization providing a rating; or (ii) issued by
issuers (or, in certain cases guaranteed by persons) with short-term debt having
such ratings. These rating categories are described in the Appendix to the
Statement of Additional Information. The Portfolio may also purchase unrated
commercial paper provided that such paper is determined to be of comparable
quality by the Portfolio's investment adviser in accordance with guidelines
approved by the Fund's Board of Directors.
Commercial paper purchased by the Portfolio may include instruments issued
by foreign issuers, such as Canadian Commercial Paper ("CCP"), which is U.S.
dollar-denominated commercial paper issued by a Canadian corporation or a
Canadian counterpart of a U.S. corporation, and in Europaper, which is U.S.
dollar-denominated commercial paper of a foreign issuer, subject to the criteria
stated above for other commercial paper issuers.
VARIABLE RATE DEMAND NOTES. The Portfolio may purchase variable rate demand
notes, which are unsecured instruments that permit the indebtedness thereunder
to vary and provide for periodic adjustment in the interest rate. Although the
notes are not normally traded and there may be no active secondary market in the
notes, the Portfolio will be able (at any time or during the specified periods
not exceeding 13 months, depending upon the note involved) to demand payment of
the principal of a note. The notes are not typically rated by credit rating
agencies, but issuers of variable rate demand notes must satisfy the same
criteria as set forth above for issuers of commercial paper. If an issuer of a
variable rate demand note defaulted on its payment obligation, the Portfolio
might be unable to dispose of the note because of the absence of an active
secondary market. For this or other reasons, the Portfolio might suffer a loss
to the extent of the default. The Portfolio invests in variable rate demand
notes only when the Portfolio's investment adviser deems the investment to
involve minimal credit risk. The Portfolio's investment adviser also monitors
the continuing creditworthiness of issuers of such notes to determine whether
the Portfolio should continue to hold such notes.
8
<PAGE>
REPURCHASE AGREEMENTS. The Portfolio may agree to purchase securities from
financial institutions subject to the seller's agreement to repurchase them at
an agreed-upon time and price ("repurchase agreements"). The securities held
subject to a repurchase agreement may have stated maturities exceeding 13
months, provided the repurchase agreement itself matures in less than 13 months.
Default by or bankruptcy of the seller would, however, expose the Portfolio to
possible loss because of adverse market action or delays in connection with the
disposition of the underlying obligations.
U.S. GOVERNMENT OBLIGATIONS. The Portfolio may purchase obligations issued
or guaranteed by the U.S. Government or its agencies and instrumentalities.
Obligations of certain agencies and instrumentalities of the U.S. Government are
backed by the full faith and credit of the United States. Others are backed by
the right of the issuer to borrow from the U.S. Treasury or are backed only by
the credit of the agency or instrumentality issuing the obligation.
ASSET-BACKED SECURITIES. The Portfolio may invest in asset-backed
securities which are backed by mortgages, installment sales contracts, credit
card receivables or other assets and collateralized mortgage obligations
("CMOs") issued or guaranteed by U.S. Government agencies and instrumentalities
or issued by private companies. Asset-backed securities also include adjustable
rate securities. The estimated life of an asset-backed security varies with the
prepayment experience with respect to the underlying debt instruments. For this
and other reasons, an asset-backed security's stated maturity may be shortened,
and the security's total return may be difficult to predict precisely. Such
difficulties are not expected, however, to have a significant effect on the
Portfolio since the remaining maturity of any asset-backed security acquired
will be 13 months or less. Asset-backed securities are considered an industry
for industry concentration purposes. See "Investment Limitations." In periods of
falling interest rates, the rate of mortgage prepayments tends to increase.
During these periods, the reinvestment of proceeds by a Portfolio will generally
be at lower rates than the rates on the prepaid obligations.
REVERSE REPURCHASE AGREEMENTS. The Portfolio may enter into reverse
repurchase agreements with respect to portfolio securities. A reverse repurchase
agreement involves a sale by a Portfolio of securities that it holds
concurrently with an agreement by the Portfolio to repurchase them at an agreed
upon time and price. Reverse repurchase agreements involve the risk that the
market value of the securities sold by the Portfolio may decline below the price
at which the Portfolio is obligated to repurchase them. Reverse repurchase
agreements are considered to be borrowings by the Portfolio under the Investment
Company Act of 1940 (the "1940 Act").
GUARANTEED INVESTMENT CONTRACTS. The Portfolio may make investments in
obligations, such as guaranteed investment contracts and similar funding
agreements (collectively, "GICs"), issued by highly rated U.S. insurance
companies. A GIC is a general obligation of the issuing insurance company and
not a separate account. The Portfolio's investments in GICs are not expected to
exceed 5% of its total assets at the time of purchase absent unusual market
conditions. GIC investments are subject to the Fund's policy regarding
investment in illiquid securities.
MUNICIPAL OBLIGATIONS. In addition, the Portfolio may, when deemed
appropriate by its investment adviser in light of the Portfolio's investment
objective, invest without limitation in high quality, short-term Municipal
Obligations issued by state and local governmental issuers, the interest on
which may be taxable or tax-exempt for federal income tax purposes, provided
that such obligations carry yields that are competitive with those of other
types of Money Market Instruments of comparable quality. For a more complete
discussion of Municipal Obligations, see "Investment Objectives and Policies
- -Municipal Money Market Portfolio -- Municipal Obligations."
STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, a dealer would agree to purchase at the Portfolio's option specified
Municipal Obligations at a specified price. The acquisition of a stand-by
commitment may increase the cost, and thereby reduce the yield, of the Municipal
Obligation to which such commitment relates. The Portfolio will acquire stand-by
commitments solely to facilitate portfolio liquidity and does not intend to
exercise its rights thereunder for trading purposes.
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WHEN-ISSUED SECURITIES. The Portfolio may purchase portfolio securities on
a "when-issued" basis. When-issued securities are securities purchased for
delivery beyond the normal settlement date at a stated price and yield. The
Portfolio will generally not pay for such securities or start earning interest
on them until they are received. Securities purchased on a when-issued basis are
recorded as an asset at the time the commitment is entered into and are subject
to changes in value prior to delivery based upon changes in the general level of
interest rates. The Portfolio expects that commitments to purchase when-issued
securities will not exceed 25% of the value of its total assets absent unusual
market conditions. The Portfolio does not intend to purchase when-issued
securities for speculative purposes but only in furtherance of its investment
objective.
ELIGIBLE SECURITIES. The Portfolio will only purchase "eligible securities"
that present minimal credit risks as determined by the Portfolio's investment
adviser pursuant to guidelines adopted by the Board of Directors. Eligible
securities generally include: (1) U.S. Government securities, (2) securities
that are rated at the time of purchase in the two highest rating categories by
at least two Rating Organizations ("Rating Organizations") (e.g., commercial
paper rated "A-1" or "A-2" by Standard & Poor's Ratings Services ("S&P")), (3)
securities that are rated at the time of purchase by the only Rating
Organization rating the security in one of its two highest rating categories for
such securities, (4) securities issued by issuers (or, in certain cases
guaranteed by persons) with short-term debt having such ratings, and (5)
securities that are not rated and are issued by an issuer that does not have
comparable obligations rated by a Rating Organization ("Unrated Securities"),
provided that such securities are determined to be of comparable quality to
eligible rated securities. For a more complete description of eligible
securities, see "Investment Objectives and Policies" in the Statement of
Additional Information.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days, time deposits with maturities in excess of
seven days, variable rate demand notes with demand periods in excess of seven
days unless the Portfolio's investment adviser determines that such notes are
readily marketable and could be sold promptly at the prices at which they are
valued, GICs, and other securities that are illiquid by virtue of the absence of
a readily available market or legal or contractual restrictions on resale.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the notice period. Securities that have legal or contractual restrictions on
resale but have a readily available market are not deemed illiquid for purposes
of this limitation. The Portfolio's investment adviser will monitor the
liquidity of such restricted securities under the supervision of the Board of
Directors. See "Investment Objectives and Policies -- Illiquid Securities" in
the Statement of Additional Information.
MUNICIPAL MONEY MARKET PORTFOLIO
The Municipal Money Market Portfolio's investment objective is to provide
as high a level of current interest income exempt from federal income taxes as
is consistent with maintaining liquidity and stability of principal. The
Municipal Money Market Portfolio invests substantially all of its assets in a
diversified portfolio of short-term Municipal Obligations, the interest on
which, in the opinion of bond counsel or counsel to the issuer, as the case may
be, is exempt from the regular federal income tax. During periods of normal
market conditions, at least 80% of the net assets of the Municipal Money Market
Portfolio will be invested in Municipal Obligations. Municipal Obligations
include securities, the interest on which is Tax-Exempt Interest, although to
the extent the Portfolio invests in certain private activity bonds issued after
August 7, 1986 ("Alternative Minimum Tax Securities"), a portion of the interest
earned by the Portfolio may constitute an item of tax preference for purposes of
the federal alternative minimum tax ("AMT Interest"). There is no assurance that
the investment objective of the Portfolio will be achieved.
MUNICIPAL OBLIGATIONS. The Portfolio invests in short-term Municipal
Obligations which are determined by the Portfolio's investment adviser to
present minimal credit risks and that meet certain ratings criteria pursuant to
guidelines established by the Fund's Board of Directors. The Portfolio may also
purchase Unrated Securities provided that
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such securities are determined to be of comparable quality to eligible rated
securities. The applicable Municipal Obligations ratings are described in the
Appendix to the Statement of Additional Information.
The Portfolio may hold uninvested cash reserves pending investment during
temporary defensive periods or if, in the opinion of the Portfolio's investment
adviser, suitable obligations bearing Tax-Exempt Interest or AMT Interest are
unavailable. There is no percentage limitation on the amount of assets which may
be held uninvested during temporary defensive periods. Uninvested cash reserves
will not earn income.
The two principal classifications of Municipal Obligations are "general
obligation" securities and "revenue" securities. General obligation securities
are secured by the issuer's pledge of its full faith, credit and taxing power
for the payment of principal and interest. Revenue securities are payable only
from the revenues derived from a particular facility or class of facilities or,
in some cases, from the proceeds of a special excise tax or other specific
excise tax or other specific revenue source such as the user of the facility
being financed. Revenue securities include private activity bonds which are not
payable from the unrestricted revenues of the issuer. Consequently, the credit
quality of private activity bonds is usually directly related to the credit
standing of the corporate user of the facility involved.
Municipal Obligations may also include "moral obligation" bonds, which are
normally issued by special purpose public authorities. If the issuer of moral
obligation bonds is unable to meet its debt service obligations from current
revenues, it may draw on a reserve fund, the restoration of which is a moral
commitment but not a legal obligation of the state or municipality which created
the issuer.
Although the Municipal Money Market Portfolio may invest more than 25% of
its net assets in (i) Municipal Obligations whose issuers are in the same state,
(ii) Municipal Obligations the interest on which is paid solely from revenues of
similar projects, and (iii) private activity bonds bearing Tax-Exempt Interest,
it does not currently intend to do so on a regular basis. To the extent the
Municipal Money Market Portfolio's assets are concentrated in Municipal
Obligations that are payable from the revenues of similar projects or are issued
by issuers located in the same state, the Portfolio will be subject to the
peculiar risks presented by the laws and economic conditions relating to such
states or projects to a greater extent than it would be if its assets were not
so concentrated.
TAX-EXEMPT DERIVATIVE SECURITIES. The Municipal Money Market Portfolio may
invest in tax-exempt derivative securities such as tender option bonds,
custodial receipts, participations, beneficial interests in trusts and
partnership interests. A typical tax-exempt derivative security involves the
purchase of an interest in a pool of Municipal Obligations which interest
includes a tender option, demand or other feature, allowing the Portfolio to
tender the underlying Municipal Obligation to a third party at periodic
intervals and to receive the principal amount thereof. In some cases, Municipal
Obligations are represented by custodial receipts evidencing rights to future
principal or interest payments, or both, on underlying municipal securities held
by a custodian and such receipts include the option to tender the underlying
securities to the sponsor (usually a bank, broker-dealer or other financial
institution). Although the Internal Revenue Service has not ruled on whether the
interest received on derivative securities in the form of participation
interests or custodial receipts is Tax-Exempt Interest, opinions relating to the
validity of, and the tax-exempt status of, payments received by the Portfolio
from such derivative securities are rendered by counsel to the respective
sponsors of such derivatives and relied upon by the Portfolio in purchasing such
securities. Neither the Portfolio nor its investment adviser will review the
proceedings relating to the creation of any tax-exempt derivative securities or
the basis for such legal opinions.
WHEN-ISSUED SECURITIES. The Portfolio may also purchase portfolio
securities on a "when-issued" basis as described under "Investment Objectives
and Policies -- Money Market Portfolio -- When-Issued Securities."
STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio as described under
"Investment Objectives and Policies -- Money Market Portfolio -- Stand-By
Commitments."
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<PAGE>
ELIGIBLE SECURITIES. The Municipal Money Market Portfolio will only
purchase "eligible securities" that present minimal credit risks as determined
by the Portfolio's investment adviser pursuant to guidelines adopted by the
Board of Directors. For a more complete description of eligible securities, see
"Investment Objectives and Policies -- Money Market Portfolio -- Eligible
Securities" and "Investment Objectives and Policies" in the Statement of
Additional Information.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities as described under "Investment Objectives and
Policies -- Illiquid Securities" in the Statement of Additional Information.
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
The Government Obligations Money Market Portfolio's investment objective is
to provide as high a level of current interest income as is consistent with
maintaining liquidity and stability of principal. It seeks to achieve such
objective by investing in short-term U.S. Treasury bills, notes and other
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, and entering into repurchase agreements relating to such
obligations. The types of U.S. Government obligations in which the Portfolio may
invest include a variety of U.S. Treasury obligations, which differ only in
their interest rates, maturities, and times of issuance, and obligations issued
or guaranteed by the U.S. Government or its agencies or instrumentalities,
including mortgage-related securities. Obligations of certain agencies and
instrumentalities of the U.S. Government, such as the Government National
Mortgage Association and the Export-Import Bank of the United States, are
supported by the full faith and credit of the U.S. Treasury; others, such as
those of the Federal National Mortgage Association, are supported by the right
of the issuer to borrow from the Treasury, others are supported by the
discretionary authority of the U.S. Government to purchase the agency's
obligations; still others, such as those of the Federal Farm Credit Banks or the
Federal Home Loan Mortgage Corporation, are supported only by the credit of the
instrumentality. No assurance can be given that the U.S. Government would
provide financial support to U.S. Government-sponsored agencies or
instrumentalities if it is not obligated to do so under law. The Portfolio will
invest in the obligations of such agencies or instrumentalities only when the
investment adviser believes that the credit risk with respect thereto is
minimal. There is no assurance that the investment objective of the Portfolio
will be achieved.
Due to fluctuations in interest rates, the market values of securities
issued or guaranteed by the U.S. Government, its agencies and instrumentalities
may vary. Certain government securities held by the Portfolio may have remaining
maturities exceeding 397 days if such securities provide for adjustments in
their interest rates not less frequently than every 397 days and the adjustments
are sufficient to cause the securities to have market values, after adjustment,
which approximate their par values.
REPURCHASE AGREEMENTS. The Portfolio may agree to purchase government
securities from financial institutions subject to the seller's agreement to
repurchase them at an agreed-upon time and price ("repurchase agreements"). For
a more complete description of repurchase agreements, see "Investment Objectives
and Policies -- Money Market Portfolio -- Repurchase Agreements."
REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow funds by entering
into reverse repurchase agreements in accordance with the investment
restrictions described below. The Portfolio would consider entering into reverse
repurchase agreements to avoid otherwise selling securities during unfavorable
market conditions and to meet redemptions. For a more complete description of
reverse repurchase agreements, see "Investment Objectives and Policies -- Money
Market Portfolio -- Reverse Repurchase Agreements."
MORTGAGE-RELATED AND ASSET-BACKED SECURITIES. Mortgage-related securities
consist of mortgage loans which are assembled into pools, the interests in which
are issued and guaranteed by an agency or instrumentality of the U.S.
Government, though not necessarily by the U.S. Government itself. The Fund may
also acquire asset-backed securities as described under "Investment Objectives
and Policies -- Money Market Portfolio -- Asset Backed Securities."
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<PAGE>
LENDING OF SECURITIES. The Portfolio may also lend its portfolio securities
to financial institutions in accordance with the investment restrictions
described below. Such loans would involve risks of delay in receiving additional
collateral in the event the value of the collateral decreased below the value of
the securities loaned or of delay in recovering the securities loaned or even
loss of rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers deemed by the
Portfolio's investment adviser to be of good standing and only when, in the
adviser's judgment, the income to be earned from the loans justifies the
attendant risks. Any loans of the Portfolio's securities will be fully
collateralized and marked to market daily.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities as described under "Investment Objectives and
Policies--Money Market Portfolio -- Illiquid Securities" and "Investment
Objectives and Policies -- Illiquid Securities" in the Statement of Additional
Information.
YEAR 2000
- --------------------------------------------------------------------------------
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Money Market, Municipal Money Market and Government Obligations Money
Market Portfolios' respective investment objectives and the policies described
above may be changed by the Fund's Board of Directors without shareholder
approval. The Portfolios may not, however, change the following investment
limitations (except as noted) without such a vote of their respective
shareholders. (A more detailed description of the following investment
limitations, together with other investment limitations that cannot be changed
without a vote of shareholders, is contained in the Statement of Additional
Information under "Investment Objectives and Policies.")
The Portfolios may not borrow money, except from banks for temporary
purposes and except for reverse repurchase agreements, and then in amounts not
in excess of 10% of the value of a Portfolio's assets at the time of such
borrowing, and only if after such borrowing there is asset coverage of at least
300% for all borrowings of the Portfolio; or mortgage, pledge or hypothecate any
of its assets except in connection with any such borrowing and in amounts not in
excess of 10% of the value of a Portfolio's assets at the time of such
borrowing; or purchase portfolio securities while borrowings in excess of 5% of
the Portfolio's net assets are outstanding. (This borrowing provision is not for
investment leverage, but solely to facilitate management of a Portfolio's
securities by enabling the Portfolio to meet redemption requests where the
liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient.)
The Money Market and Municipal Money Market Portfolios may not:
1. Purchase securities of any one issuer, other than securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities,
if immediately after and as a result of such purchase more than 5% of the
value of its total assets would be invested in the securities of such
issuer, or more than 10% of the outstanding voting securities of such
issuer would be owned by a Portfolio, except that up to 25% of the value of
a Portfolio's total assets may be invested without regard to such 5%
limitation.
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<PAGE>
The Money Market Portfolio may not:
1. Purchase any securities other than Money Market Instruments, some of
which may be subject to repurchase agreements, but the Portfolio may make
interest-bearing savings deposits in amounts not in excess of 5% of the
value of the Portfolio's assets and may make time deposits.
2. Purchase any securities which would cause, at the time of purchase,
less than 25% of the value of the total assets of the Portfolio to be
invested in the obligations of issuers in the banking industry, or in
obligations, such as repurchase agreements, secured by such obligations
(unless the Portfolio is in a temporary defensive position) or which would
cause, at the time of purchase, more than 25% of the value of its total
assets to be invested in the obligations of issuers in any other industry.
So long as it values its portfolio securities on the basis of the amortized
cost method of valuation pursuant to Rule 2a-7 under the 1940 Act, the Money
Market Portfolio will meet the following limitations on its investments in
addition to the fundamental investment limitations described above. These
limitations may be changed without a vote of shareholders of the Money Market
Portfolio.
1. The Money Market Portfolio will limit its purchases of the
securities of any one issuer, other than issuers of U.S. Government
securities, to 5% of its total assets, except that the Money Market
Portfolio may invest more than 5% of its total assets in First Tier
Securities of one issuer for a period of up to three Business Days (as
defined below). "First Tier Securities" include eligible securities that
(i) if rated by more than one Rating Organization, are rated (at the time
of purchase) by two or more Rating Organizations in the highest rating
category for such securities, (ii) if rated by only one Rating
Organization, are rated by such Rating Organization in its highest rating
category for such securities, (iii) have no short-term rating and are
comparable in priority and security to a class of short-term obligations of
the issuer of such securities that have been rated in accordance with (i)
or (ii) above, or (iv) are Unrated Securities that are determined to be of
comparable quality to such securities. Purchases of First Tier Securities
that come within categories (ii) and (iv) above will be approved or
ratified by the Board of Directors.
2. The Money Market Portfolio will limit its purchases of Second Tier
Securities, which are eligible securities other than First Tier Securities,
to 5% of its total assets.
3. The Money Market Portfolio will limit its purchases of Second Tier
Securities of one issuer to the greater of 1% of its total assets or $1
million.
The Municipal Money Market Portfolio may not:
1. Purchase any securities which would cause more than 25% of the value
of the total assets of the Portfolio to be invested in obligations at the
time of purchase to be invested in issuers in the same industry.
In addition, without shareholder approval, the Portfolio may not change its
policy of investing during normal market conditions at least 80% of its net
assets in obligations the interest on which is Tax-Exempt Interest or AMT
Interest.
The Government Obligations Money Market Portfolio may not:
1. Purchase securities other than U.S. Treasury bills, notes and other
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, and repurchase agreements relating to such obligations.
2. Make loans except that the Portfolio may purchase or hold debt
obligations in accordance with its investment objective, policies and
limitations, may enter into repurchase agreements for securities, and may
lend portfolio securities against collateral, consisting of cash or
securities which are consistent with the Portfolio's permitted investments,
which is equal at all times to at least 100% of the value of the securities
loaned. There is no investment restriction on the amount of securities that
may be loaned, except that payments received on such loans, including
amounts received during the loan on account of interest on the securities
loaned, may not
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(together with all non-qualifying income) exceed 10% of the Portfolio's
annual gross income (without offset for realized capital gains) unless, in
the opinion of counsel to the Fund, such amounts are qualifying income
under federal income tax provisions applicable to regulated investment
companies.
PURCHASE AND REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
PURCHASE PROCEDURES
GENERAL. Bedford Shares are sold without a sales load on a continuous basis
by the Distributor. The Distributor is located at Four Falls Corporate Center,
West Conshohocken, Pennsylvania. Investors may purchase Bedford Shares through
an account maintained by the investor with his brokerage firm (the "Account")
and may also purchase Shares directly by mail or wire. The minimum initial
investment is $1,000, and the minimum subsequent investment is $100. The Fund in
its sole discretion may accept or reject any order for purchases of Bedford
Shares.
All payments for initial and subsequent investments should be in U.S.
dollars. Purchases will be effected at the net asset value next determined after
PFPC, the Fund's transfer agent, has received a purchase order in good order and
the Fund's custodian has Federal Funds immediately available to it. In those
cases where payment is made by check, Federal Funds will generally become
available two Business Days after the check is received. A "Business Day" is any
day that both the New York Stock Exchange (the "NYSE") and the Federal Reserve
Bank of Philadelphia (the "FRB") are open. On any Business Day, orders which are
accompanied by Federal Funds and received by the Fund by 12:00 noon Eastern
Time, and orders as to which payment has been converted into Federal Funds by
12:00 noon Eastern Time, will be executed as of 12:00 noon that Business Day.
Orders which are accompanied by Federal Funds and received by PFPC after 12:00
noon Eastern Time but prior to the close of regular trading on the NYSE
(generally 4:00 p.m. Eastern Time), and orders as to which payment has been
converted into Federal Funds after 12:00 noon Eastern Time but prior to the
close of regular trading on the NYSE on any Business Day of the Fund, will be
executed as of the closed of regular trading on the NYSE on that Business Day,
but will not be entitled to receive dividends declared on such Business Day.
Orders which are accompanied by Federal Funds and received by the Fund as of the
close of regular trading on the NYSE or later, and orders as to which payment
has been converted to Federal Funds as of the close of regular trading on the
NYSE or later on a Business Day will be processed as of 12:00 noon Eastern Time
on the following Business Day.
PURCHASES THROUGH AN ACCOUNT. Purchases of Shares may be effected through
an investor's Account with his broker through procedures established in
connection with the requirements of Accounts at such broker. In such event,
beneficial ownership of Bedford Shares will be recorded by the broker and will
be reflected in the Account statements provided by the broker to such investors.
A broker may impose minimum investment Account requirements. Even if a broker
does not impose a sales charge for purchases of Bedford Shares, depending on the
terms of an investor's Account with his broker, the broker may charge an
investor's Account fees for automatic investment and other services provided to
the Account. Information concerning Account requirements, services and charges
should be obtained from an investor's broker, and this Prospectus should be read
in conjunction with any information received from a broker. Shareholders whose
shares are held in the street name account of a broker and who desire to
transfer such shares to the street name account of another broker should contact
their current broker.
A broker may offer investors maintaining Accounts the ability to purchase
Bedford Shares under an automatic purchase program (a "Purchase Program")
established by a participating broker. An investor who participates in a
Purchase Program will have his "free-credit" cash balances in his Account
automatically invested in Shares of the Bedford Class designated by the investor
as the "Primary Bedford Class" for his Purchase Program. The frequency of
investments and the minimum investment requirement will be established by the
broker and the Fund. In addition, the broker may require a minimum amount of
cash and/or securities to be deposited in an Account for participants in its
Purchase Program. The description of the particular broker's Purchase Program
should be read for details, and any
15
<PAGE>
inquiries concerning an Account under a Purchase Program should be directed to
the broker. A participant in a Purchase Program may change the designation of
the Primary Bedford Class at any time by so instructing his broker.
If a broker makes special arrangements under which orders for Bedford
Shares are received by PFPC prior to 12:00 noon Eastern Time, and the broker
guarantees that payment for such Shares will be made in available Federal Funds
to the Fund's custodian prior to the close of regular trading on the NYSE on the
same day, such purchase orders will be effective and Shares will be purchased at
the offering price in effect as of 12:00 noon Eastern Time on the date the
purchase order is received by PFPC.
DIRECT PURCHASES. An investor may also make direct investments at any time
in any Bedford Class he selects through any broker that has entered into a
dealer agreement with the Distributor (a "Dealer"). An investor may make an
initial investment in any of the Bedford Classes by mail by fully completing and
signing an application obtained from a Dealer (the "Application"), specifying
the Portfolio in which he wishes to invest, and mailing it, together with a
check payable to "The Bedford Family" to the Bedford Family, c/o PFPC, P.O. Box
8950, Wilmington, Delaware 19899. The check must specify the name of the
Portfolio for which shares are being purchased. An Application will be returned
to the investor unless it contains the name of the Dealer from whom it was
obtained. Subsequent purchases may be made through a Dealer or by forwarding
payment to the Fund's transfer agent at the foregoing address.
Provided that the investment is at least $2,500, an investor may also
purchase Shares in any of the Bedford Classes by having his bank or Dealer wire
Federal Funds to the Fund's Custodian, PFPC Trust Company. An investor's bank or
Dealer may impose a charge for this service. The Fund does not currently charge
for effecting wire transfers but reserves the right to do so in the future. In
order to ensure prompt receipt of an investor's Federal Funds wire, for an
initial investment, it is important that an investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (800)533-7719 (in
Delaware call collect (302) 791-1196), and provide your name, address, telephone
number, Social Security or Tax Identification Number, the Bedford Class
selected, the amount being wired, and by which bank or Dealer. PFPC will then
provide an investor with a Fund account number. (Investors with existing
accounts should also notify PFPC prior to wiring funds.)
B. Instruct your bank or Dealer to wire the specified amount, together with
your assigned account number, to PFPC's account with PNC Bank.
PNC Bank, N.A., Philadelphia, PA
ABA-0310-0005-3.
FROM: (name of investor)
ACCOUNT NUMBER: (investor's account number with the Portfolio)
FOR PURCHASE OF: (name of the Portfolio)
AMOUNT: (amount to be invested)
C. Fully complete and sign the Application and mail it to the address shown
thereon. PFPC will not process initial purchases until it receives a fully
completed and signed Application.
For subsequent investments, an investor should follow steps A and B above.
RETIREMENT PLANS. Bedford Shares may be purchased in conjunction with
individual retirement accounts ("IRAs") and rollover IRAs where PFPC Trust
Company acts as custodian. For further information as to applications and annual
fees, contact the Distributor or your broker. To determine whether the benefits
of an IRA are available and/or appropriate, a shareholder should consult with a
tax adviser.
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<PAGE>
REDEMPTION PROCEDURES
Redemption orders are effected at the net asset value per share next
determined after receipt of the order in proper form by the Fund's transfer
agent, PFPC. Investors may redeem all or some of their Shares in accordance with
one of the procedures described below.
REDEMPTION OF SHARES IN AN ACCOUNT. An investor who beneficially owns
Bedford Shares through an Account may redeem Bedford Shares in his Account in
accordance with instructions and limitations pertaining to his Account by
contacting his broker. If such notice is received by PFPC by 12:00 noon Eastern
Time on any Business Day, the redemption will be effective as of 12:00 noon
Eastern Time on that day. Payment of the redemption proceeds will be made after
12:00 noon Eastern Time on the day the redemption is effected, provided that the
Fund's custodian is open for business. If the custodian is not open, payment
will be made on the next bank business day. If the redemption request is
received between 12:00 noon and the close of regular trading on the NYSE on a
Business Day, the redemption will be effective as of the close of regular
trading on the NYSE on such Business Day and payment will be made on the next
bank business day following receipt of the redemption request. If all Shares are
redeemed, all accrued but unpaid dividends on those Shares will be paid with the
redemption proceeds.
An investor's brokerage firm may also redeem each day a sufficient number
of Shares of the Primary Bedford Class to cover debit balances created by
transactions in the Account or instructions for cash disbursements. Shares will
be redeemed on the same day that a transaction occurs that results in such a
debit balance or charge.
Each brokerage firm reserves the right to waive or modify criteria for
participation in an Account or to terminate participation in an Account for any
reason.
REDEMPTION OF SHARES OWNED DIRECTLY. A direct investor may redeem any
number of Shares by sending a written request to The Bedford Family c/o PFPC,
P.O. Box 8950, Wilmington, Delaware 19899. Redemption requests must be signed by
each shareholder in the same manner as the Shares are registered. Redemption
requests for joint accounts require the signature of each joint owner. On
redemption requests of $5,000 or more, each signature must be guaranteed. A
signature guarantee may be obtained from a domestic bank or trust company,
broker, dealer, clearing agency or savings association who are participants in a
medallion program recognized by the Securities Transfer Association. The three
recognized medallion programs are Securities Transfer Agents Medallion Program
(STAMP), Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange,
Inc. Medallion Signature Program (MSP). Signature guarantees that are not part
of these programs will not be accepted.
Direct investors may redeem Shares without charge by telephone if they have
completed and returned an account application containing the appropriate
telephone election. To add a telephone option to an existing account that
previously did not provide for this option, a Telephone Authorization Form must
be filed with PFPC. This form is available from PFPC. Once this election has
been made, the shareholder may simply contact PFPC by telephone to request the
redemption by calling (888) 261-4073. Neither the Fund, the Distributor, the
Portfolios, the Administrator nor any other Fund agent will be liable for any
loss, liability, cost or expense for following the procedures below or for
following instructions communicated by telephone that they reasonably believe to
be genuine.
The Fund's telephone transaction procedures include the following measures:
(1) requiring the appropriate telephone transaction privilege forms; (2)
requiring the caller to provide the names of the account owners, the account
social security number and name of the portfolio, all of which must match the
Fund's records; (3) requiring the Fund's service representative to complete a
telephone transaction form, listing all of the above caller identification
information; (4) requiring that redemption proceeds be sent only by check to the
account owners of record at the address of record, or by wire only to the owners
of record at the bank account of record; (5) sending a written confirmation for
each telephone transaction to the owners of record at the address of record
within five (5) business days of the call; and (6) maintaining tapes of
telephone transactions for six months, if the Fund elects to record shareholder
telephone transactions. For accounts held of record by broker-dealers (other
than the Distributor), financial institutions, securities deal-
17
<PAGE>
ers, financial planners or other industry professionals, additional
documentation or information regarding the scope of a caller's authority is
required. Finally, for telephone transactions in accounts held jointly,
additional information regarding other account holders is required. Telephone
transactions will not be permitted in connection with IRA or other retirement
plan accounts or by attorney-in-fact under power of attorney.
Proceeds of a telephone redemption request will be mailed by check to an
investor's registered address unless he has designated in his Application or
Telephone Authorization Form that such proceeds are to be sent by wire transfer
to a specified checking or savings account. If proceeds are to be sent by wire
transfer, a telephone redemption request received prior to the close of regular
trading on the NYSE will result in redemption proceeds being wired to the
investor's bank account on the next day that a wire transfer can be effected.
The minimum redemption for proceeds sent by wire transfer is $2,500. There is no
maximum for proceeds sent by wire transfer. The Fund may modify this redemption
service at any time or charge a service fee upon prior notice to shareholders,
although no fee is currently contemplated.
REDEMPTION BY CHECK. Upon request, the Fund will provide any direct
investor and any investor who does not have check writing privileges for his
Account with forms of drafts ("checks") payable through PNC Bank. These checks
may be made payable to the order of anyone. The minimum amount of a check is
$100; however, a broker may establish a higher minimum. An investor wishing to
use this check writing redemption procedure should complete specimen signature
cards (available from PFPC), and then forward such signature cards to PFPC. PFPC
will then arrange for the checks to be honored by PNC Bank. Investors who own
Shares through an Account should contact their brokers for signature cards.
Investors of joint accounts may elect to have checks honored with a single
signature. Check redemptions will be subject to PNC Bank's rules governing
checks. An investor will be able to stop payment on a check redemption. The Fund
or PNC Bank may terminate this redemption service at any time, and neither shall
incur any liability for honoring checks, for effecting redemptions to pay
checks, or for returning checks which have not been accepted.
When a check is presented to PNC Bank for clearance, PNC Bank, as the
investor's agent, will cause the Fund to redeem a sufficient number of full and
fractional Shares owned by the investor to cover the amount of the check. This
procedure enables the investor to continue to receive dividends on those Shares
representing the amount being redeemed by check until such time as the check is
presented to PNC Bank. Pursuant to rules under the 1940 Act, checks may not be
presented for cash payment at the offices of PNC Bank. This limitation does not
affect checks used for the payment of bills or cash at other banks.
ADDITIONAL REDEMPTION INFORMATION. The Fund ordinarily will make payment
for all Shares redeemed within seven days after receipt by PFPC of a redemption
request in proper form. Although the Fund will redeem Shares purchased by check
before the check clears, payment of the redemption proceeds may be delayed for a
period of up to fifteen days after their purchase, pending a determination that
the check has cleared. This procedure does not apply to Shares purchased by wire
payment. Investors should consider purchasing Shares using a certified or bank
check or money order if they anticipate an immediate need for redemption
proceeds.
The Fund imposes no charge when Shares are redeemed. The Fund reserves the
right to redeem any account in a Bedford Class involuntarily, on thirty days'
notice, if such account falls below $500 and during such 30-day notice period
the amount invested in such account is not increased to at least $500. Payment
for Shares redeemed may be postponed or the right of redemption suspended as
provided by the rules of the Securities and Exchange Commission.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value per share of each class of the Portfolios for the
purpose of pricing purchase and redemption orders is determined twice each day,
once as of 12:00 noon Eastern Time and once as of the close of regular trading
18
<PAGE>
on the NYSE on each weekday with the exception of those holidays on which either
the NYSE or the FRB is closed. Currently, the NYSE is closed on weekends and the
customary national business holidays of New Year's Day, Dr. Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day and the preceding Friday or subsequent
Monday when one of these holidays falls on a Saturday or Sunday. The FRB is
currently closed on weekends and the same holidays on which the NYSE is closed
as well as Veterans' Day and Columbus Day. The net asset value per share of each
class is calculated by adding the proportionate interest of each class in the
value of the securities, cash and other assets of the Portfolio, subtracting the
accrued and actual liabilities of the class and dividing the result by the
number of outstanding shares of the class. The net asset value per share of each
class of the Fund is determined independently of any of the Fund's other
classes.
The Fund seeks to maintain for each of the Portfolios a net asset value of
$1.00 per share for purposes of purchases and redemptions and values its
portfolio securities on the basis of the amortized cost method of valuation
described in the Statement of Additional Information under the heading
"Valuation of Shares." There can be no assurance that net asset value per share
will not vary.
With the approval of the Board of Directors, a Portfolio may use a pricing
service, bank or broker-dealer experienced in such matters to value the
Portfolio's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of the Fund and each investment portfolio are
managed under the direction of the Fund's Board of Directors. The Fund currently
operates or proposes to operate seventeen investment portfolios. Each of the
Bedford Classes represents interests in one of the following portfolios: the
Money Market Portfolio, the Municipal Money Market Portfolio and the Government
Obligations Money Market Portfolio.
INVESTMENT ADVISER
BIMC, an indirect majority-owned subsidiary of PNC Bank, serves as the
investment adviser for each of the Portfolios. BIMC has its principal offices at
Bellevue Park Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware
19809. PNC Bank and its subsidiaries currently manage over $45.9 billion of
assets, of which approximately $31.4 billion are mutual funds. PNC Bank, a
national bank whose principal business address is 1600 Market Street,
Philadelphia, Pennsylvania 19103, is a wholly-owned subsidiary of PNC Bancorp,
Inc. PNC Bancorp, Inc. is a bank holding company and a wholly-owned subsidiary
of PNC Bank Corp., a multi-bank holding company.
As investment adviser to the Portfolios, BIMC manages such Portfolios and
is responsible for all purchases and sales of portfolio securities. In entering
into Portfolio transactions for a Portfolio with a broker, BIMC may take into
account the sale by such broker of shares of the Fund, subject to the
requirements of best execution. The agreements between BIMC and RBB, with
respect to the Money Market and Government Obligations Money Market Portfolios,
respectively, provide for BIMC to also assist generally in supervising the
operations of such Portfolios, and to maintain such Portfolio's financial
accounts and records. These administrative responsibilities have been delegated
to PFPC as described below.
For the services provided to and expenses assumed by it for the benefit of
each of the Money Market and Government Obligations Money Market Portfolios,
BIMC is entitled to receive the following fees, computed daily and payable
monthly based on a Portfolio's average daily net assets: .45% of the first $250
million; .40% of the next $250 million; and .35% of net assets in excess of $500
million.
19
<PAGE>
For the services provided and expenses assumed by it with respect to the
Municipal Money Market Portfolio, BIMC is entitled to receive the following
fees, computed daily and payable monthly based on the Portfolio's average daily
net assets: .35% of the first $250 million; .30% of the next $250 million; and
.25% of net assets in excess of $500 million.
BIMC may in its discretion from time to time agree to waive voluntarily all
or any portion of its advisory fee for any Portfolio.
For the Fund's fiscal year ended August 31, 1998, the Fund paid investment
advisory fees aggregating .24% of the average net assets of the Money Market
Portfolio, .08% of the average net assets of the Municipal Money Market
Portfolio and .30% of the average net assets of the Government Obligations Money
Market Portfolio. For that same year, BIMC waived approximately .12%, .26% and
.12% of average net assets of the Money Market Portfolio, Municipal Money Market
Portfolio and the Government Obligations Money Market Portfolio, respectively.
PNC Bank was formerly sub-adviser to the Money Market, Municipal Money
Market and Government Obligations Portfolios and provided research, credit
analysis and recommendations with respect to each such Portfolio's investments
and supplied certain computer facilities, personnel and other services. The
facilities, personnel, services and related expenses have been transferred to
BIMC and in return, BIMC's obligation to pay a portion of the sub-advisory fee
to PNC Bank has been terminated. For its sub-advisory services, PNC Bank was
entitled to receive from BIMC an amount equal to 75% of the investment advisory
fee paid by each such Portfolio to BIMC (subject to adjustment in certain
circumstances). The sub-advisory fees paid by BIMC to PNC Bank had no effect on
the investment advisory fees payable by such Portfolios to BIMC. The services
provided by BIMC and the fees payable by the Portfolio for these services are
described further in the Statement of Additional Information under "Management
of the Company."
ADMINISTRATOR
PFPC serves as the administrator for the Municipal Money Market Portfolio
and generally assists the Portfolio in all aspects of its administration and
operations, including matters relating to the maintenance of financial records
and accounting. PFPC is entitled to an administration fee, computed daily and
payable monthly at .10% of the average daily net assets of the Portfolio.
Pursuant to its advisory agreements with the Fund with respect to the Money
Market and Government Obligations Money Market Portfolios, BIMC provides
administrative services to such Portfolios pursuant to the same terms, but has
delegated to PFPC all of its accounting and administrative obligations under
such advisory agreements. The Fund has agreed to pay directly to PFPC the fees
for accounting and administrative services to the Money Market and Government
Obligations Money Market Portfolios which PFPC would have received directly from
BIMC. Such arrangement has no effect on the total advisory and administrative
fees payable by such Portfolios to BIMC. PFPC's principal business address is
400 Bellevue Parkway, Wilmington, Delaware 19809.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN
PFPC Trust Company of PFPC, an indirect wholly owned subsidiary of PNC Bank
Corp., will succeed PNC Bank, National Association ("PNC Bank") as the Fund's
Custodian pursuant to an assignment. PNC Bank will continue to provide certain
services to PFPC Trust Company. PFPC serves as the Fund's transfer agent and
dividend disbursing agent. The principal offices of PFPC are located at 400
Bellevue Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholder
servicing agreements with Dealers for the provision of certain shareholder
support services to customers of such Dealers who are shareholders of the
Portfolios. The services provided and the fees payable by the Fund for these
services are described in the Statement of Additional Information under
"Investment Advisory, Distribution and Servicing Arrangements."
20
<PAGE>
DISTRIBUTOR
Provident Distributors, Inc., with a principal business address at Four
Falls Corporate Center, West Conshohocken, Pennsylvania 19428, acts as
Distributor of the Shares of each of the Bedford Classes of the Fund pursuant to
a distribution agreement dated May 29, 1998 (the "Distribution Agreement").
EXPENSES
The expenses of each Portfolio are deducted from the total income of such
Portfolio before dividends are paid. Any general expenses of the Fund that are
not readily identifiable as belonging to a particular investment portfolio of
the Fund will be allocated among all investment portfolios of the Fund based
upon the relative net assets of the investment portfolios. The Bedford Classes
of the Fund pay their own distribution fees and may pay a different share than
other classes of the Fund of other expenses (excluding advisory and custodial
fees) if those expenses are actually incurred in a different amount by the
Bedford Class or if they receive different services.
The investment adviser may assume expenses of the Portfolios from time to
time. In certain circumstances, it may assume such expenses on the condition
that it is reimbursed by the Portfolios for such amounts prior to the end of a
fiscal year. In such event, the reimbursement of such amounts will have the
effect of increasing a Portfolio's expense ratio and of lowering yield to
investors.
For the Fund's fiscal year ended August 31, 1998, the Fund's total expenses
were 1.10% of the average net assets with respect to the Bedford Class of the
Money Market Portfolio (not taking into account waivers of .13%), were 1.15% of
the average net assets with respect to the Bedford Class of the Municipal Money
Market Portfolio (not taking into account waivers of .26%) and were 1.10% of the
average net assets with respect to the Bedford Class of the Government
Obligations Money Market Portfolio (not taking into account waivers of .125%).
DISTRIBUTION OF SHARES
- --------------------------------------------------------------------------------
The Board of Directors of the Fund approved and adopted the Distribution
Agreement and separate Plans of Distribution for each of the Classes
(collectively, the "Plans") pursuant to Rule 12b-1 under the 1940 Act. Under
each of the Plans, the Distributor is entitled to receive from the relevant
Bedford Class a distribution fee, which is accrued daily and paid monthly, of up
to .65% on an annualized basis of the average daily net assets of the relevant
Bedford Class. The actual amount of such compensation is agreed upon from time
to time by the Fund's Board of Directors and the Distributor. Under the
Distribution Agreement, the Distributor has agreed to accept compensation for
its services thereunder and under the Plans in the amount of .60% of the average
daily net assets of the relevant Class on an annualized basis in any year.
Pursuant to the conditions of an exemptive order granted by the Securities and
Exchange Commission, the Distributor has agreed to waive its fee with respect to
a Bedford Class on any day to the extent necessary to assure that the fee
required to be accrued by such Class does not exceed the income of such Class on
that day. In addition, the Distributor may, in its discretion, voluntarily waive
from time to time all or any portion of its distribution fee.
Under the Distribution Agreement and the relevant Plan, the Distributor may
reallocate an amount up to the full fee that it receives to financial
institutions, including broker/dealers, based upon the aggregate investment
amounts maintained by and services provided to shareholders of any relevant
Class serviced by such financial institutions. The Distributor may also
reimburse broker/dealers for other expenses incurred in the promotion of the
sale of Fund shares. The Distributor and/or broker/dealers pay for the cost of
printing (excluding typesetting) and mailing to prospective investors
prospectuses and other materials relating to the Fund as well as for related
direct mail, advertising and promotional expenses.
21
<PAGE>
Each of the Plans obligates the Fund, during the period it is in effect, to
accrue and pay to the Distributor on behalf of each Bedford Class the fee agreed
to under the Distribution Agreement. Payments under the Plans are not based on
expenses actually incurred by the Distributor, and the payments may exceed
distribution expenses actually incurred.
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of each of the Portfolios to each
Portfolio's shareholders. All distributions are reinvested in the form of
additional full and fractional Shares of the relevant Bedford Class unless a
shareholder elects otherwise.
The net investment income (not including any net short-term capital gains)
earned by each Portfolio will be declared as a dividend on a daily basis and
paid monthly. Dividends are payable to shareholders of record immediately prior
to the determination of net asset value made as of the close of trading of the
NYSE. Net short-term capital gains, if any, will be distributed at least
annually.
TAXES
- --------------------------------------------------------------------------------
Distributions from the Money Market Portfolio and the Government
Obligations Money Market Portfolio will generally be taxable to shareholders. It
is expected that all, or substantially all, of these distributions will consist
of ordinary income. You will be subject to income tax on these distributions
regardless whether they are paid in cash or reinvested in additional shares. The
one major exception to these tax principles is that distributions on shares held
in an IRA (or other tax-qualified plan) will not be currently taxable.
Distributions from the Municipal Money Market Portfolio will generally
constitute tax-exempt income for shareholders for federal income tax purposes.
It is possible, depending upon the Portfolio's investments, that a portion of
the Portfolio's distributions could be taxable to shareholders as ordinary
income or capital gains, but it is not expected that this will be the case.
Although distributions from the Municipal Money Market Portfolio are exempt
for federal income tax purposes, they will generally constitute taxable income
for state and local income tax purposes except that, subject to limitations that
vary depending on the state, distributions from interest paid by a state or
municipal entity may be exempt from tax in that state.
Interest on indebtedness incurred by a shareholder to purchase or carry
shares of the Municipal Money Market Portfolio generally will not be deductible
for federal income tax purposes.
You should note that a portion of the exempt-interest dividends paid by the
Municipal Money Market Portfolio may constitute an item of tax preference for
purposes of determining federal alternative minimum tax liability.
Exempt-interest dividends will also be considered along with other adjusted
gross income in determining whether any Social Security or railroad retirement
payments received by you are subject to federal income taxes.
The foregoing is only a summary of certain tax considerations under the
current law, which may be subject to change in the future. You should consult
your tax adviser for further information regarding federal, state, local and/or
foreign tax consequences relevant to your specific situation.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
The Fund has authorized capital of thirty billion shares of Common Stock,
$.001 par value per share, of which 18.326 billion shares are currently
classified into 97 different classes of Common Stock (see "Description of
Shares" in the Statement of Additional Information).
22
<PAGE>
The Fund offers multiple classes of shares in each of its Money Market,
Municipal Money Market and Government Obligations Money Market Portfolios to
expand its marketing alternatives and to broaden its range of services to
different investors. The expenses of the various classes within these Portfolios
vary based upon the services provided, which may affect performance. Each class
of Common Stock of the Fund has a separate Rule 12b-1 distribution plan. Under
the Distribution Agreement entered into with the Distributor and pursuant to
each of the distribution plans, the Distributor is entitled to receive from each
class as compensation for distribution services provided to that class a
distribution fee based on average daily net assets. A salesperson or any other
person entitled to receive compensation for servicing Fund shares may receive
different compensation with respect to different classes in a Portfolio of the
Fund. An investor may contact the Fund's Distributor by calling 1-800-888-9723
to request more information concerning other classes available.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE BEDFORD CLASSES OF THE MONEY MARKET, MUNICIPAL
MONEY MARKET AND GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIOS AND DESCRIBE
ONLY THE INVESTMENT OBJECTIVES AND POLICIES, OPERATIONS, CONTRACTS AND OTHER
MATTERS RELATING TO THE BEDFORD CLASSES OF THESE PORTFOLIOS.
Each share that represents an interest in a Portfolio has an equal
proportionate interest in the assets belonging to such Portfolio with each other
share that represents an interest in such Portfolio, even where a share has a
different class designation than another share representing an interest in that
Portfolio. Shares of the Fund do not have preemptive or conversion rights. When
issued for payment as described in this Prospectus, Shares of the Fund will be
fully paid and non-assessable.
The Fund currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
Holders of shares of each of the Portfolios will vote in the aggregate and
not by class on all matters, except where otherwise required by law. Further,
shareholders of all investment portfolios of the Fund will vote in the aggregate
and not by portfolio except as otherwise required by law or when the Board of
Directors determines that the matter to be voted upon affects only the interests
of the shareholders of a particular investment portfolio. (See the Statement of
Additional Information under "Additional Information Concerning Fund Shares" for
examples of when the 1940 Act requires voting by investment portfolio or by
class.) Shareholders of the Fund are entitled to one vote for each full share
held (irrespective of class or portfolio) and fractional votes for fractional
shares held. Voting rights are not cumulative and, accordingly, the holders of
more than 50% of the aggregate shares of Common Stock of the Fund may elect all
of the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all of the classes of
the Fund.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC, the
Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (800) 533-7719 (in Delaware call collect
(302) 791-1196).
23
<PAGE>
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
--------------------
CONTENTS
PAGE
Introduction ........................................................... 2
Financial Highlights ................................................... 4
Investment Objectives and Policies ..................................... 8
Year 2000 .............................................................. 13
Investment Limitations ................................................. 13
Purchase and Redemption of Shares ...................................... 15
Net Asset Value ........................................................ 18
Management ............................................................. 19
Distribution of Shares ................................................. 21
Dividends and Distributions ............................................ 22
Taxes .................................................................. 22
Description of Shares .................................................. 22
Other Information ...................................................... 23
INVESTMENT ADVISER
BlackRock Institutional Management Corporation
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
ADMINISTRATOR AND TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
================================================================================
<PAGE>
================================================================================
CASH PRESERVATION
PORTFOLIOS
[LOGO OMITTED]
OF
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
AND
MUNICIPAL MONEY MARKET
PORTFOLIO
Prospectus
December 29, 1998
================================================================================
<PAGE>
CASH PRESERVATION
PORTFOLIOS
[LOGO OMITTED]
CASH PRESERVATION PORTFOLIOS
OF
THE RBB FUND, INC.
The Cash Preservation Portfolios consist of two classes of common stock of
The RBB Fund, Inc. (the "Fund"), an open-end management investment company. The
shares of the Cash Preservation Classes offered by this Prospectus represent
interests in a taxable money market portfolio and a municipal money market
portfolio. The investment objectives of each investment portfolio described in
this Prospectus are as follows:
MONEY MARKET PORTFOLIO -- to provide as high a level of current interest
income as is consistent with maintaining liquidity and stability of principal.
It seeks to achieve such objective by investing in a diversified portfolio of
U.S. dollar-denominated money market instruments.
MUNICIPAL MONEY MARKET PORTFOLIO -- to provide as high a level of current
interest income exempt from federal income taxes as is consistent with
maintaining liquidity and stability of principal. It seeks to achieve such
objective by investing substantially all of its assets in a diversified
portfolio of short-term Municipal Obligations. "Municipal Obligations" are
obligations issued by or on behalf of states, territories and possessions of the
United States, the District of Columbia and their political subdivisions,
agencies, instrumentalities and authorities. During periods of normal market
conditions, at least 80% of the net assets of the Portfolio will be invested in
Municipal Obligations, the interest on which is exempt from the regular federal
income tax but which may constitute an item of tax preference for purposes of
the federal alternative minimum tax.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK
AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. THERE CAN BE NO ASSURANCE THAT THE PORTFOLIOS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
BlackRock Institutional Management Corporation serves as investment adviser
for these Portfolios and PFPC Trust Company serves as custodian for the Fund.
PFPC Inc. serves as administrator and transfer and dividend disbursing agent for
the Fund. Provident Distributors, Inc. acts as distributor for the Fund.
This Prospectus contains concise information that a prospective investor
needs to know before investing. Please keep it for future reference. A Statement
of Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained upon request free of charge from the Fund by
calling (800) 430-9618. The Prospectus and Statement of Additional Information
are also available for reference, along with other related materials, on the SEC
Internet Website (http://www.sec.gov).
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
The RBB Fund, Inc. is an open-end management investment company
incorporated under the laws of the State of Maryland on February 29, 1988. The
Fund is currently operating or proposing to operate seventeen separate
investment portfolios. Each of the two classes (collectively, the "Cash
Preservation Classes") of the Fund's shares ("Cash Preservation Shares" or
"Shares") offered by this Prospectus represents interests in one of the
following of such investment portfolios: the Money Market Portfolio and the
Municipal Money Market Portfolio (together, the "Portfolios").
The MONEY MARKET PORTFOLIO'S investment objective is to provide as high a
level of current interest income as is consistent with maintaining liquidity and
stability of principal. It seeks to achieve such objective by investing in a
diversified portfolio of U.S. dollar-denominated money market instruments which
meet certain ratings criteria and present minimal credit risks. In pursuing its
investment objective, the Money Market Portfolio invests in a broad range of
U.S. dollar denominated instruments, such as government, bank and commercial
obligations, that may be available in the money markets.
The MUNICIPAL MONEY MARKET PORTFOLIO'S investment objective is to provide
as high a level of current interest income exempt from federal income taxes as
is consistent with maintaining liquidity and stability of principal. To achieve
this objective, the Municipal Money Market Portfolio invests substantially all
of its assets in a diversified portfolio of short-term Municipal Obligations
which meet certain ratings criteria and present minimal credit risks. During
periods of normal market conditions, at least 80% of the net assets of the
Portfolio will be invested in Municipal Obligations, the interest on which is
exempt from the regular federal income tax but which may constitute an item of
tax preference for purposes of the federal alternative minimum tax.
Each of the Portfolios seeks to maintain a net asset value of $1.00 per
share; however, there can be no assurance that the Portfolios will be able to
maintain a stable net asset value of $1.00 per share.
The Portfolios' investment adviser is Blackrock Institutional Management
Corporation ("BIMC"). PFPC Trust Company serves as custodian to the Fund, and
PFPC Inc. ("PFPC") serves as the administrator to the Portfolios and the
transfer and dividend disbursing agent to the Fund. Provident Distributors, Inc.
(the "Distributor") acts as distributor of the Fund's Shares.
An investor may purchase Shares of either of the Cash Preservation Classes
by mail, bank wire or by payment from insurance policies. An investor may redeem
Shares of either of the Cash Preservation Classes by mail, Fund check, or by
telephone. For more detailed information of how to purchase or redeem Cash
Preservation Shares, please refer to the section of this Prospectus entitled
"Purchase and Redemption of Shares."
An investment in either of the Cash Preservation Classes is subject to
certain risks, as set forth in detail under "Investment Objectives and
Policies." Either or both of the Portfolios, to the extent set forth under
"Investment Objectives and Policies," may engage in the following investment
practices: the use of repurchase agreements and reverse repurchase agreements,
the purchase of securities on a "when-issued" or "forward commitment" basis and
the purchase of stand-by commitments. All of these transactions involve certain
special risks, as set forth under "Investment Objectives and Policies."
2
<PAGE>
FEE TABLE
The Fee Table below contains a summary of the annual operating expenses of
the Cash Preservation Classes of the Portfolios based on expenses incurred for
the fiscal year ended August 31, 1998, as a percentage of average daily net
assets. An example based on the summary is also shown.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (CASH PRESERVATION CLASSES)
AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS MUNICIPAL
MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO
------------ ------------
<S> <C> <C>
Management fees (after waivers)(1) .24% .08%
12b-1 fees(1) .40 .40
Other Expenses (after waivers)(1) .31 .50
--- ---
Total Fund Operating Expenses (Cash Preservation Classes) (after waivers)(1) .95% .98%
=== ===
<FN>
(1) Management Fees and 12b-1 Fees are based on average daily net assets and are
calculated daily and paid monthly. Before waivers for the Money Market
Portfolio and Municipal Money Market Portfolio, Management Fees would be
.36% and .34%, respectively, Other Expenses would be 9.08% and 22.41%,
respectively, and Total Fund Operating Expenses would be 9.84% and 23.15%
respectively.
</FN>
</TABLE>
EXAMPLE
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Money Market*................. $10 $30 $53 $117
Municipal Money Market*....... $10 $31 $54 $120
* Other classes of these Portfolios are sold with different fees and expenses.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating Expenses
(Cash Preservation Classes)" remain the same in the years shown. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. Long-term shareholders may pay
more than the economic equivalent of the maximum front-end sales charges
permitted by the National Association of Securities Dealers, Inc.
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Cash Preservation Classes of
the Fund will bear directly or indirectly. (For more complete descriptions of
the various costs and expenses, see "Management--Investment Adviser" and
"Distribution of Shares" below.) Expense figures are based on actual costs and
fees charged to each class. The Fee Table reflects a voluntary waiver of
Management Fees for each Portfolio. However, there can be no assurance that any
future waivers of Management Fees will not vary from the figures reflected in
the Fee Table. In addition, the investment adviser is currently voluntarily
assuming additional expenses of the Portfolios. There can be no assurance that
the investment adviser will continue to assume such expenses. Assumption of
additional expenses will have the effect of lowering a Portfolio's overall
expense ratio and increasing its yield to investors.
3
<PAGE>
From time to time a Portfolio advertises its "total return," "yield" and
"effective yield." TOTAL RETURN AND YIELD FIGURES ARE BASED ON HISTORICAL
EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. The "yield" of a
Portfolio refers to the income generated by an investment in a Portfolio over a
seven-day period (which period will be stated in the advertisement). This income
is then "annualized." That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in a
Portfolio is assumed to be reinvested. The "effective yield" will be slightly
higher than the "yield" because of the compounding effect of this assumed
reinvestment. The Municipal Money Market Portfolio's "tax-equivalent yield" may
also be quoted from time to time, which shows the level of taxable yield needed
to produce an after-tax equivalent to such Portfolio's tax-free yield. This is
done by increasing such Portfolio's yield (calculated as above) by the amount
necessary to reflect the payment of federal income tax at a stated tax rate.
The total return and yield of any investment is generally a function of
portfolio quality and maturity, type of investment and operating expenses. The
total return and yield on Shares of either of the Cash Preservation Classes will
fluctuate and is not necessarily representative of future results. Any fees
charged by broker/dealers directly to their customers in connection with
investments in the Cash Preservation Classes are not reflected in the total
return and yields of the Cash Preservation Shares, and such fees, if charged,
will reduce the actual return received by shareholders on their investments. The
total return and yield on Shares of the Cash Preservation Classes may differ
from the total return and yields on shares of other classes of the Fund that
also represent interests in the same Portfolio depending on the allocation of
expenses to each of the classes of that Portfolio.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth certain information concerning the investment
results of the Cash Preservation Classes representing interests in the Money
Market and Municipal Money Market Portfolios for the periods indicated. The
financial data included in this table for each of the periods ended August 31,
1994 through August 31, 1998 are part of the Fund's financial statements for
each of the Portfolios, which have been incorporated by reference into the
Statement of Additional Information and have been audited by
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), the Fund's independent
accountants. The financial data for each of the Portfolios for the periods ended
August 31, 1989, 1990, 1991, 1992 and 1993 are a part of previous financial
statements audited by PricewaterhouseCoopers. The financial data should be read
in conjunction with the financial statements and notes thereto. Further
information about the performance of the Portfolios is available in the Annual
Report to Shareholders. Both the Statement of Additional Information and the
Annual Report to Shareholders may be obtained free of charge by calling the
telephone number on page 1 of this Prospectus.
4
<PAGE>
CASH PRESERVATION CLASSES
CASH PRESERVATION FAMILY
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS (c)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
-----------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1998 1997 1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income ... 0.0474 0.0464 0.0471 0.0487 0.0278 0.0243 0.0375 0.0626
Net gains on securities
(both realized
and unrealized) ....... -- -- -- -- -- -- 0.0007 --
-------- -------- -------- -------- -------- -------- -------- --------
Total from
investment
operations ........ 0.0474 0.0464 0.0471 0.0487 0.0278 0.0243 0.0382 0.0626
-------- -------- -------- -------- -------- -------- -------- --------
Less distributions
Dividends (from net
investment income) .... (0.0474) (0.0464) (0.0471) (0.0487) (0.0278) (0.0243) (0.0375) (0.0626)
Distributions (from
capital gains) ........ -- -- -- -- -- -- (0.0007) --
-------- -------- -------- -------- -------- -------- -------- --------
Total distributions . (0.0474) (0.0464) (0.0471) (0.0487) (0.0278) (0.0243) (0.0382) (0.0626)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value,
end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========
Total Return ............... 4.86% 4.74% 4.81% 4.98% 2.81% 2.46% 3.89% 6.45%
Ratios/Supplemental Data
Net assets, end of
period (000) .......... $ 226 $ 242 $ 202 $ 236 $ 231 $ 1,229 $ 1,233 $ 1,412
Ratios of expenses to
average net assets .... .95%(a) .95%(a) .95%(a) .95%(a) .95%(a) .95%(a) .95%(a) .95%(a)
Ratios of net investment
income to average
net assets ............ 4.74% 4.64% 4.71% 4.87% 2.78% 2.43% 3.75% 6.26%
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
--------------------------------
FOR THE PERIOD
SEPTEMBER 30, 1988
FOR THE (COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
AUGUST 31, AUGUST 31,
1990 1989
---------- ------------------
<S> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00
------- --------
Income from investment
operations:
Net investment income ... 0.0763 0.0780
Net gains on securities
(both realized
and unrealized) ....... -- --
------- --------
Total from
investment
operations ........ 0.0763 0.0780
------- --------
Less distributions
Dividends (from net
investment income) .... (0.0763) (0.0780)
Distributions (from
capital gains) ........ -- --
------- --------
Total distributions . (0.0763) (0.0780)
------- --------
Net asset value,
end of period .......... $ 1.00 $ 1.00
======= ========
Total Return ............... 7.90% 8.81%(b)
Ratios/Supplemental Data
Net assets, end of
period (000) .......... $ 1,799 $ 2,213
Ratios of expenses to
average net assets .... .94%(a) .95%(a)(b)
Ratios of net investment
income to average
net assets ............ 7.63% 8.59%(b)
<FN>
(a) Without the waiver of advisory and transfer agency fees and without the
reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Money Market Portfolio would have been 9.84%,
10.68%, 12.08%, 9.34%, 2.52%, 2.25%, 2.30%, 2.13% and 1.69% for the years
ended August 31, 1998, 1997, 1996, 1995, 1994, 1993, 1992, 1991 and 1990,
respectively, and 1.59% annualized for the period ended August 31, 1989.
(b) Annualized.
(c) Financial Highlights relate solely to the Cash Preservation Class of Shares
within the Portfolio.
</FN>
</TABLE>
5
<PAGE>
CASH PRESERVATION CLASSES
CASH PRESERVATION FAMILY
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS (c)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO
-----------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1998 1997 1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income .. 0.0274 0.0272 0.0274 0.0281 0.0174 0.0174 0.0266 0.0408
Net gains on securities
(both realized
and unrealized) ...... -- -- -- -- -- -- -- --
-------- -------- ------- -------- -------- -------- -------- --------
Total from
investment
operations ....... 0.0274 0.0272 0.0274 0.0281 0.0174 0.0174 0.0266 0.0408
-------- -------- ------- -------- -------- -------- -------- --------
Less distributions
Dividends (from net
investment income) ... (0.0274) (0.0272) (0.0274) (0.0281) (0.0174) (0.0174) (0.0266) (0.0408)
Distributions (from
capital gains) ....... -- -- -- -- -- -- -- --
-------- -------- ------- -------- -------- -------- -------- --------
Total distributions (0.0274) (0.0272) (0.0274) (0.0281) (0.0174) (0.0174) (0.0266) (0.0408)
-------- -------- ------- -------- -------- -------- -------- --------
Net asset value,
end of period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======= ======== ======== ======== ======== ========
Total Return .............. 2.82% 2.76% 2.78% 2.84% 1.75% 1.75% 2.69% 4.16%
Ratios/Supplemental Data
Net assets, end of
period (000) ......... $ 92 $ 97 $ 116 $ 161 $ 201 $ 157 $ 214 $ 281
Ratios of expenses to
average net assets ... .98%(a) .98%(a) .98%(a) .98%(a) .98%(a) .98%(a) .98%(a) .97%(a)
Ratios of net investment
income to average
net assets ........... 2.78% 2.72% 2.74% 2.81% 1.74% 1.74% 2.66% 4.08%
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO
--------------------------------
FOR THE PERIOD
SEPTEMBER 30, 1988
FOR THE (COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
AUGUST 31, AUGUST 31,
1990 1989
---------- -----------------
<S> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00
-------- --------
Income from investment
operations:
Net investment income ... 0.0499 0.0497
Net gains on securities
(both realized
and unrealized) ....... -- --
-------- --------
Total from
investment
operations ........ 0.0499 0.0497
-------- --------
Less distributions
Dividends (from net
investment income) .... (0.0499) (0.0497)
Distributions (from
capital gains) ........ -- --
-------- --------
Total distributions . (0.0499) (0.0497)
-------- --------
Net asset value,
end of period .......... $ 1.00 $ 1.00
======== ========
Total Return ............... 5.11% 5.53%(b)
Ratios/Supplemental Data
Net assets, end of
period (000) .......... $ 236 $ 36
Ratios of expenses to
average net assets .... .98%(a) .94%(a)(b)
Ratios of net investment
income to average
net assets ............ 4.99% 5.49%(b)
<FN>
(a) Without the waiver of advisory, administration and transfer agency fees and
without the reimbursement of certain operating expenses, the ratios of
expenses to average net assets for the Municipal Money Market Portfolio
would have been 23.15% 26.58%, 19.20%, 10.80%, 11.52%, 8.95%, 5.91%, 5.59%
and 15.08% for the years ended August 31, 1998, 1997, 1996, 1995, 1994,
1993, 1992, 1991 and 1990, respectively, and 51.02% annualized for the
period ended August 31, 1989.
(b) Annualized.
(c) Financial Highlights relate solely to the Cash Preservation Class of Shares
within the Portfolio.
</FN>
</TABLE>
6
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
The Money Market Portfolio's investment objective is to provide as high a
level of current interest income as is consistent with maintaining liquidity and
stability of principal. Portfolio obligations held by the Money Market Portfolio
have remaining maturities of 397 days or less (exclusive of securities subject
to repurchase agreements). In pursuing its investment objective, the Money
Market Portfolio invests in a diversified portfolio of U.S. dollar-denominated
instruments, such as government, bank and commercial obligations, that may be
available in the money markets ("Money Market Instruments") and that meet
certain ratings criteria and present minimal credit risks to the Money Market
Portfolio. See "Eligible Securities." There is no assurance that the Portfolio
will achieve its investment objective. The following descriptions illustrate the
types of Money Market Instruments in which the Money Market Portfolio invests.
BANK OBLIGATIONS. The Portfolio may purchase obligations of issuers in the
banking industry, such as short-term obligations of bank holding companies,
certificates of deposit, bankers' acceptances and time deposits, including U.S.
dollar-denominated instruments issued or supported by the credit of U.S. or
foreign banks or savings institutions having total assets at the time of
purchase in excess of $1 billion. The Portfolio may invest substantially in
obligations of foreign banks or foreign branches of U.S. banks where the
investment adviser deems the instrument to present minimal credit risks. Such
investments may nevertheless entail risks in addition to those of domestic
issuers, including higher transaction costs, less complete financial
information, less stringent regulatory requirements and less market liquidity.
The Portfolio may also make interest-bearing savings deposits in commercial and
savings banks in amounts not in excess of 5% of its total assets.
COMMERCIAL PAPER. The Portfolio may purchase commercial paper rated (i) (at
the time of purchase) in the two highest rating categories of at least two
nationally recognized statistical rating organizations ("Rating Organizations")
or, by the only Rating Organization providing a rating; or (ii) issued by
issuers (or, in certain cases guaranteed by persons) with short-term debt having
such ratings. These rating categories are described in the Appendix to the
Statement of Additional Information. The Portfolio may also purchase unrated
commercial paper provided that such paper is determined to be of comparable
quality by the Portfolio's investment adviser in accordance with guidelines
approved by the Fund's Board of Directors.
Commercial paper purchased by the Portfolio may include instruments issued
by foreign issuers, such as Canadian Commercial Paper ("CCP"), which is U.S.
dollar-denominated commercial paper issued by a Canadian corporation or a
Canadian counterpart of a U.S. corporation, and in Europaper, which is U.S.
dollar-denominated commercial paper of a foreign issuer, subject to the criteria
stated above for other commercial paper issuers.
VARIABLE RATE DEMAND NOTES. The Portfolio may purchase variable rate demand
notes, which are unsecured instruments that permit the indebtedness thereunder
to vary and provide for periodic adjustment in the interest rate. Although the
notes are not normally traded and there may be no active secondary market in the
notes, the Portfolio will be able (at any time or during specified periods not
exceeding 13 months, depending upon the note involved) to demand payment of the
principal of a note. The notes are not typically rated by credit rating
agencies, but issuers of variable rate demand notes must satisfy the same
criteria as set forth above for issuers of commercial paper. If an issuer of a
variable rate demand note defaulted on its payment obligation, the Portfolio
might be unable to dispose of the note because of the absence of an active
secondary market. For this or other reasons, the Portfolio might suffer a loss
to the extent of the default. The Portfolio invests in variable rate demand
notes only when the Portfolio's investment adviser deems the investment to
involve minimal credit risk. The Portfolio's investment adviser also monitors
the continuing creditworthiness of issuers of such notes to determine whether
the Portfolio should continue to hold such notes.
7
<PAGE>
REPURCHASE AGREEMENTS. The Portfolio may agree to purchase securities from
financial institutions subject to the seller's agreement to repurchase them at
an agreed upon time and price ("repurchase agreements"). The securities held
subject to a repurchase agreement may have stated maturities exceeding 13
months, provided the repurchase agreement itself matures in less than 13 months.
Default by or bankruptcy of the seller would, however, expose the Portfolio to
possible loss because of adverse market action or delays in connection with the
disposition of the underlying obligations.
U.S. GOVERNMENT OBLIGATIONS. The Portfolio may purchase obligations issued
or guaranteed by the U.S. Government or its agencies and instrumentalities.
Obligations of certain agencies and instrumentalities of the U.S. Government are
backed by the full faith and credit of the United States. Others are backed by
the right of the issuer to borrow from the U.S. Treasury or are backed only by
the credit of the agency or instrumentality issuing the obligation.
ASSET-BACKED SECURITIES. The Portfolio may invest in asset-backed
securities which are backed by mortgages, installment sales contracts, credit
card receivables or other assets and collateralized mortgage obligations
("CMOs") issued or guaranteed by U.S. Government agencies and, instrumentalities
or issued by private companies. Asset-backed securities also include adjustable
rate securities. The estimated life of an asset-backed security varies with the
prepayment experience with respect to the underlying debt instruments. For this
and other reasons, an asset-backed security's stated maturity may be shortened,
and the security's total return may be difficult to predict precisely. Such
difficulties are not expected, however, to have a significant effect on the
Portfolio since the remaining maturity of any asset-backed security acquired
will be 13 months or less. Asset-backed securities are considered an industry
for industry concentration purposes. See "Investment Limitations." In periods of
falling interest rates, the rate of mortgage prepayments tends to increase.
During these periods, the reinvestment of proceeds by a Portfolio will generally
be at lower rates than the rates on the prepaid obligations.
REVERSE REPURCHASE AGREEMENTS. The Portfolio may enter into reverse
repurchase agreements with respect to portfolio securities. A reverse repurchase
agreement involves a sale by a Portfolio of securities that it holds
concurrently with an agreement by the Portfolio to repurchase them at an agreed
upon time and price. Reverse repurchase agreements involve the risk that the
market value of the securities sold by the Portfolio may decline below the price
at which the Portfolio is obligated to repurchase them. Reverse repurchase
agreements are considered to be borrowings by the Portfolio under the Investment
Company Act of 1940 (the "1940 Act").
GUARANTEED INVESTMENT CONTRACTS. The Portfolio may make investments in
obligations, such as guaranteed investment contracts and similar funding
agreements (collectively, "GICs"), issued by highly rated U.S. insurance
companies. A GIC is a general obligation of the issuing insurance company and
not a separate account. The Portfolio's investments in GICs are not expected to
exceed 5% of its total assets at the time of purchase absent unusual market
conditions. GIC investments are subject to the Fund's policy regarding
investment in illiquid securities.
MUNICIPAL OBLIGATIONS. In addition, the Portfolio may, when deemed
appropriate by its investment adviser in light of the Portfolio's investment
objective, invest without limitation in high quality, short-term Municipal
Obligations issued by state and local governmental issuers, the interest on
which may be taxable or tax-exempt for federal income tax purposes, provided
that such obligations carry yields that are competitive with those of other
types of Money Market Instruments of comparable quality. For a more complete
discussion of Municipal Obligations, see "Investment Objectives and
Policies--Municipal Money Market Portfolio--Municipal Obligations."
STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, a dealer would agree to purchase at the Portfolio's option specified
Municipal Obligations at a specified price. The acquisition of a stand-by
commitment may increase the cost, and thereby reduce the yield, of the Municipal
Obligation to which such commitment relates. The Portfolio will acquire stand-by
commitments solely to facilitate portfolio liquidity and does not intend to
exercise its rights thereunder for trading purposes.
8
<PAGE>
WHEN-ISSUED SECURITIES. The Portfolio may purchase portfolio securities on
a "when-issued" basis. When issued securities are securities purchased for
delivery beyond the normal settlement date at a stated price and yield. The
Portfolio will generally not pay for such securities or start earning interest
on them until they are received. Securities purchased on a when-issued basis are
recorded as an asset at the time the commitment is entered into and are subject
to changes in value prior to delivery based upon changes in the general level of
interest rates. The Portfolio expects that commitments to purchase when-issued
securities will not exceed 25% of the value of its total assets absent unusual
market conditions. The Portfolio does not intend to purchase when-issued
securities for speculative purposes but only in furtherance of its investment
objective.
ELIGIBLE SECURITIES. The Portfolio will only purchase "eligible securities"
that present minimal credit risks as determined by the Portfolio's investment
adviser pursuant to guidelines adopted by the Board of Directors. Eligible
securities generally include: (1) U.S. Government securities, (2) securities
that are rated at the time of purchase in the two highest rating categories by
at least two Rating Organizations (e.g., commercial paper rated "A-1" or "A-2"
by Standard & Poor's Ratings Services ("S&P")), (3) securities that are rated at
the time of purchase by the only Rating Organization rating the security in one
of its two highest rating categories for such securities, (4) securities issued
by issuers (or, in certain cases guaranteed by persons) with short-term debt
having such ratings, and (5) securities that are not rated and are issued by an
issuer that does not have comparable obligations rated by a Rating Organization
("Unrated Securities"), provided that such securities are determined to be of
comparable quality to eligible rated securities. For a more complete description
of eligible securities, see "Investment Objectives and Policies" in the
Statement of Additional Information.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days, time deposits with maturities in excess of
seven days, variable rate demand notes with demand periods in excess of seven
days unless the Portfolio's investment adviser determines that such notes are
readily marketable and could be sold promptly at the prices at which they are
valued, GICs, and other securities that are illiquid by virtue of the absence of
a readily available market or legal or contractual restrictions on resale.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the notice period. Securities that have legal or contractual restrictions on
resale but have a readily available market are not deemed illiquid for purposes
of this limitation. The Portfolio's investment adviser will monitor the
liquidity of such restricted securities under the supervision of the Board of
Directors. See "Investment Objectives and Policies--Illiquid Securities" in the
Statement of Additional Information.
MUNICIPAL MONEY MARKET PORTFOLIO
The Municipal Money Market Portfolio's investment objective is to provide
as high a level of current interest income exempt from federal income taxes as
is consistent with maintaining liquidity and stability of principal. The
Municipal Money Market Portfolio invests substantially all of its assets in a
diversified portfolio of short-term Municipal Obligations, the interest on
which, in the opinion of bond counsel or counsel to the issuer, as the case may
be, is exempt from the regular federal income tax. During periods of normal
market conditions, at least 80% of the net assets of the Municipal Money Market
Portfolio will be invested in Municipal Obligations. Municipal Obligations
include securities the interest on which is Tax-Exempt Interest, although to the
extent the Portfolio invests in certain private activity bonds issued after
August 7, 1986 ("Alternative Minimum Tax Securities"), a portion of the interest
earned by the Portfolio may constitute an item of tax preference for purposes of
the federal alternative minimum tax ("AMT Interest").There is no assurance that
the investment objective of the Portfolio will be achieved.
MUNICIPAL OBLIGATIONS. The Portfolio invests in short-term Municipal
Obligations which are determined by the Portfolio's investment adviser to
present minimal credit risks and that meet certain ratings criteria pursuant to
guidelines established by the Fund's Board of Directors. The Portfolio may also
purchase Unrated Securities provided that
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such securities are determined to be of comparable quality to eligible rated
securities. The applicable Municipal Obligations ratings are described in the
Appendix to the Statement of Additional Information.
The Portfolio may hold uninvested cash reserves pending investment during
temporary defensive periods or if, in the opinion of the Portfolio's investment
adviser, suitable obligations bearing Tax-Exempt Interest or AMT Interest are
unavailable. There is no percentage limitation on the amount of assets which may
be held uninvested during temporary defensive periods. Uninvested cash reserves
will not earn income.
The two principal classifications of Municipal Obligations are "general
obligation" securities and "revenue" securities. General obligation securities
are secured by the issuer's pledge of its full faith, credit and taxing power
for the payment of principal and interest. Revenue securities are payable only
from the revenues derived from a particular facility or class of facilities or,
in some cases, from the proceeds of a special excise tax or other specific
excise tax or other specific revenue source, such as the user of the facility
being financed. Revenue securities include private activity bonds which are not
payable from the unrestricted revenues of the issuer. Consequently, the credit
quality of private activity bonds is usually directly related to the credit
standing of the corporate user of the facility involved.
Municipal Obligations may also include "moral obligation" bonds, which are
normally issued by special purpose public authorities. If the issuer of moral
obligation bonds is unable to meet its debt service obligations from current
revenues, it may draw on a reserve fund, the restoration of which is a moral
commitment but not a legal obligation of the state or municipality which created
the issuer.
Although the Municipal Money Market Portfolio may invest more than 25% of
its net assets in (i) Municipal Obligations whose issuers are in the same state,
(ii) Municipal Obligations the interest on which is paid solely from revenues of
similar projects, and (iii) private activity bonds bearing Tax-Exempt Interest,
it does not currently intend to do so on a regular basis. To the extent the
Portfolio's assets are concentrated in Municipal Obligations that are payable
from the revenues of similar projects or are issued by issuers located in the
same state, the Portfolio will be subject to the peculiar risks presented by the
laws and economic conditions relating to such states or projects to a greater
extent than it would be if its assets were not so concentrated.
TAX-EXEMPT DERIVATIVE SECURITIES. The Municipal Money Market Portfolio may
invest in tax-exempt derivative securities such as tender option bonds,
custodial receipts, participations, beneficial interests in trusts and
partnership interests. A typical tax-exempt derivative security involves the
purchase of an interest in a pool of Municipal Obligations which interest
includes a tender option, demand or other feature, allowing the Portfolio to
tender the underlying Municipal Obligation to a third party at periodic
intervals and to receive the principal amount thereof. In some cases, Municipal
Obligations are represented by custodial receipts evidencing rights to future
principal or interest payments, or both, on underlying municipal securities held
by a custodian and such receipts include the option to tender the underlying
securities to the sponsor (usually a bank, broker-dealer or other financial
institution). Although the Internal Revenue Service has not ruled on whether the
interest received on derivative securities in the form of participation
interests or custodial receipts is Tax-Exempt Interest, opinions relating to the
validity of, and the tax-exempt status of payments received by, the Portfolio
from such derivative securities are rendered by counsel to the respective
sponsors of such derivatives and relied upon by the Portfolio in purchasing such
securities. Neither the Portfolio nor its investment adviser will review the
proceedings relating to the creation of any tax-exempt derivative securities or
the basis for such legal opinions.
WHEN-ISSUED SECURITIES. The Portfolio may also purchase portfolio
securities on a "when-issued" basis as described under "Investment Objectives
and Policies--Money Market Portfolio--When-Issued Securities."
STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio such as described under
"Investment Objectives and Policies--Money Market Portfolio--Stand-By
Commitments."
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ELIGIBLE SECURITIES. The Municipal Money Market Portfolio will only
purchase "eligible securities" that present minimal credit risks as determined
by the Portfolio's investment adviser pursuant to guidelines adopted by the
Board of Directors. For a more complete description of eligible securities, see
"Investment Objectives and Policies--Money Market Portfolio--Eligible
Securities" and "Investment Objectives and Policies in the Statement of
Additional Information."
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities. For a more complete description of illiquid
securities, see "Investment Objectives and Policies--Money Market
Portfolio--Illiquid Securities" and "Investment Objectives and
Policies--Illiquid Securities" in the Statement of Additional Information.
YEAR 2000
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Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
INVESTMENT LIMITATIONS
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The Money Market and Municipal Money Market Portfolios' investment
objectives and policies described above may be changed by the Fund's Board of
Directors without shareholder approval. The Portfolios may not, however, change
the following investment limitations (except as noted) without such a vote of
their respective shareholders. (A more detailed description of the following
investment limitations, together with other investment limitations that cannot
be changed without a vote of shareholders, is contained in the Statement of
Additional Information under "Investment Objectives and Policies.")
The Portfolios may not:
1. Purchase securities of any one issuer, other than securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities,
if immediately after and as a result of such purchase more than 5% of the
value of a Portfolio's total assets would be invested in the securities of
such issuer, or more than 10% of the outstanding voting securities of such
issuer would be owned by a Portfolio, except that up to 25% of the value of
a Portfolio's total assets may be invested without regard to such 5%
limitation.
2. Borrow money, except from banks for temporary purposes and except
for reverse repurchase agreements and then in amounts not in excess of 10%
of the value of a Portfolio's assets at the time of such borrowing, and
only if after such borrowing there is asset coverage of at least 300% for
all borrowings of a Portfolio; or mortgage, pledge or hypothecate any of
its assets except in connection with any such borrowing and in amounts not
in excess of 10% of the value of a Portfolio's assets at the time of such
borrowing; or purchase portfolio securities while borrowing in excess of 5%
of a Portfolio's net assets are outstanding. (This borrowing provision is
not for investment leverage, but solely to facilitate management of a
Portfolio's securities by enabling a Portfolio to meet redemption requests
where the liquidation of portfolio securities is deemed to be
disadvantageous or inconvenient.)
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The Money Market Portfolio may not:
1. Purchase any securities other than Money Market Instruments, some of
which may be subject to repurchase agreements, but the Portfolio may make
interest-bearing savings deposits in amounts not in excess of 5% of the
value of the Portfolio's assets and may make time deposits.
2. Purchase any securities which would cause, at the time of purchase,
less than 25% of the value of the total assets of the Portfolio to be
invested in the obligations of issuers in the banking industry, or in
obligations, such as repurchase agreements, secured by such obligations
(unless the Portfolio is in a temporary defensive position) or which would
cause, at the time of purchase, more than 25% of the value of its total
assets to be invested in the obligations of issuers in any other industry.
So long as it values its portfolio securities on the basis of the amortized
cost method of valuation pursuant to Rule 2a-7 under the 1940 Act, the Money
Market Portfolio will meet the following limitations on its investments in
addition to the fundamental investment limitations described above. These
limitations may be changed without a vote of shareholders of the Money Market
Portfolio.
1. The Money Market Portfolio will limit its purchases of the
securities of any one issuer, other than issuers of U.S. Government
securities, to 5% of its total assets, except that the Money Market
Portfolio may invest more than 5% of its total assets in First Tier
Securities of one issuer for a period of up to three business days. "First
Tier Securities" include eligible securities that (i) if rated by more than
one Rating Organization, are rated (at the time of purchase) by two or more
Rating Organizations in the highest rating category for such securities,
(ii) if rated by only one Rating Organization, are rated by such Rating
Organization in its highest rating category for such securities, (iii) have
no short-term rating and are comparable in priority and security to a class
of short-term obligations of the issuer of such securities that have been
rated in accordance with (i) or (ii) above, or (iv) are Unrated Securities
that are determined to be of comparable quality to such securities.
Purchases of First Tier Securities that come within categories (ii) and
(iv) above will be approved or ratified by the Board of Directors.
2. The Money Market Portfolio will limit its purchases of Second Tier
Securities, which are eligible securities other than First Tier Securities,
to 5% of its total assets.
3. The Money Market Portfolio will limit its purchases of Second Tier
Securities of one issuer to the greater of 1% of its total assets or $1
million.
The Municipal Money Market Portfolio may not:
1. Purchase any securities which would cause more than 25% of the value
of the total assets of the Portfolio to be invested at the time of purchase
in obligations of issuers in the same industry.
In addition, without shareholder approval, the Portfolio may not change its
policy of investing during normal market conditions at least 80% of its net
assets in obligations the interest on which is Tax-Exempt Interest or AMT
Interest.
PURCHASE AND REDEMPTION OF SHARES
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PURCHASE PROCEDURES
Cash Preservation Shares are sold without a sales load on a continuous
basis by the Distributor. The Distributor is located at Four Falls Corporate
Center, Conshohocken, Pennsylvania. Investors may purchase Cash Preservation
Shares by mail, wire or exchange from another Cash Preservation Class as
described below. The minimum initial investment in each Portfolio is $1,000.
Subsequent investments must be at least $100 ($1,000 if the investment is
transmitted by wire). The Fund reserves the right to reject any purchase order.
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Shareholders whose shares are held in the street name account of a
broker/dealer and who desire to transfer such shares to the street name account
of another broker/dealer should contact their current broker/dealer.
Purchases will be effected at the net asset value next determined after
PFPC, the Fund's transfer agent, has received a purchase order in good order and
the Fund's custodian has Federal Funds immediately available to it. In those
cases where payment is made by check, Federal Funds will generally become
available two Business Days after the check is received. A "Business Day" is any
day that both the New York Stock Exchange (the "NYSE") and the Federal Reserve
Bank of Philadelphia (the "FRB") are open. On any Business Day, orders which are
accompanied by Federal Funds and received by the Fund by 12:00 noon Eastern
Time, and orders as to which payment has been converted into Federal Funds by
12:00 noon Eastern Time, will be executed as of 12:00 noon that Business Day.
Orders which are accompanied by Federal Funds and received by the Fund after
12:00 noon Eastern Time but prior to the close of regular trading on the NYSE
(generally 4:00 p.m. Eastern Time) and orders as to which payment has been
converted into Federal Funds after 12:00 noon Eastern Time but prior to the
close of regular trading on the NYSE on any Business Day of the Fund, will be
executed as of the close of regular trading on the NYSE on that Business Day but
will not be entitled to receive dividends declared on such Business Day. Orders
which are accompanied by Federal Funds and received by the Fund as of the close
of regular trading on the NYSE or later, and orders as to which payment has been
converted to Federal Funds as of the close of regular trading on the NYSE or
later on a Business Day will be processed as of 12:00 noon Eastern Time on the
following Business Day.
INITIAL INVESTMENT
BY MAIL--You may purchase Shares in either of the Cash Preservation Classes
by mail by completing and signing the attached application (the "Application"),
specifying the Portfolio in which you wish to invest, and mailing it, together
with a check payable to the order of "Cash Preservation" to Cash Preservation
Portfolios, c/o PFPC, P.O. Box 8916, Wilmington, Delaware 19899. The check must
also specify the name of the Portfolio in which you wish to invest. An
Application will be returned to an investor unless it contains the name of the
Authorized Dealer from whom it was obtained.
BY BANK WIRE--You may purchase Shares in either of the Cash Preservation
Classes by having your bank wire Federal Funds to the Fund's custodian, PFPC
Trust Company. Your bank may impose a charge for this service. The Fund
currently does not charge for effecting wire transfers but reserves the right to
do so in the future. In order to ensure prompt receipt of your Federal Funds
wire, it is important that you follow these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (800) 430-9618 and
provide your name, address, telephone number, Social Security or Tax
Identification Number, the Cash Preservation Class selected, the amount being
wired, and by which bank. PFPC will then provide you with a Fund account number.
(Investors with existing accounts should also notify PFPC prior to wiring
funds.)
B. Instruct your bank to wire the specified amount, together with your
assigned account number, to the custodian:
PFPC Trust Company, Wilmington, DE
ABA-0310-0005-3.
FROM: (name of investor)
ACCOUNT NUMBER: (investor's account number with the Portfolio)
FOR PURCHASE OF: (name of the Portfolio)
AMOUNT: (amount to be invested)
C. Complete and sign the Application and mail it to the address shown
thereon. PFPC will not process initial purchases until it receives a fully
completed and signed Application. An Application will be returned to an investor
unless it contains the name of the Authorized Dealer (a dealer who has entered
into a dealer agreement with the Distributor) from whom it was obtained
generally.
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Federal Funds must be received by PFPC by 12:00 noon Eastern Time for it to
process an order as of 12:00 noon on such day. Federal Funds received after
12:00 noon but prior to the close of regular trading on the NYSE (generally 4:00
p.m. Eastern Time) on a Business Day will be processed as of the close of
regular trading on the NYSE on that Business Day but the Shares acquired will
not be entitled to receive dividends declared on such Business Day. Federal
Funds received after the close of regular trading on the NYSE on a Business Day
will be processed as of 12:00 noon Eastern Time on the following Business Day.
BY PAYMENT FROM INSURANCE POLICIES--If you are a recipient of certain
insurance policy payments, you may purchase Shares by completing and signing an
Application, including the section which authorizes your insurance company to
forward policy payments to the Cash Preservation Class indicated on the
Application, and mailing it to PFPC at the address shown thereon. An Application
will be returned to an investor unless it contains the name of the Authorized
Dealer from whom it was obtained.
Cash Preservation Shares may be purchased in conjunction with individual
retirement accounts ("IRAs") and rollover IRAs where PFPC Trust Company acts as
custodian. For further information as to applications and annual fees, contact
the Distributor or an Authorized Dealer. To determine whether the benefits of an
IRA are available and/or appropriate, an investor should consult with a tax
adviser.
SUBSEQUENT INVESTMENTS
Once an account has been opened, additional investments may be made by
mail, wire, exchange, or the automatic investment program. The minimum
subsequent investment is $100 ($1,000 if payment is by wire).
BY MAIL--Payment may be made by check or a Federal Reserve Draft payable to
the order of "Cash Preservation." The check or draft must also specify the name
of the Portfolio in which you wish to invest. Mail your payment to Cash
Preservation c/o PFPC, P.O. Box 8950, Wilmington, Delaware 19899. Federal
Reserve Drafts are available at national banks or any state bank which is a
member of the Federal Reserve System.
BY BANK WIRE--Follow steps A and B above given under "Initial Investment --
By Bank Wire."
BY EXCHANGE--Follow the procedures given under "Redemption and Exchange of
Shares -- Exchange Privilege" below.
BY AUTOMATIC INVESTING--Additional investments may be made automatically by
authorizing PFPC to withdraw funds from your bank account. Investors desiring to
participate in the automatic investing program should call PFPC at (800)
430-9618 to obtain the appropriate form.
REDEMPTION AND EXCHANGE OF SHARES
Redemption orders are effected at the net asset value per Share next
determined after receipt of the order in proper form by the Fund's transfer
agent, PFPC. Investors may redeem all or some of their Shares in accordance with
one of the procedures described below.
BY MAIL--An investor may redeem any number of Shares by sending a written
request, together with any share certificates issued to the investor, to the
Fund's transfer agent, PFPC, P.O. Box 8916, Wilmington, Delaware 19899
Attention: Cash Preservation Portfolios. It is recommended that such request be
sent by registered or certified mail if share certificates accompany the
request. Redemption requests must be signed by each shareholder in the same
manner as the Shares are registered. Redemption requests for joint accounts
require the signature of each joint owner. On redemption requests of $5,000 or
more, each signature must be guaranteed according to the procedures described
below under "Exchange Privilege."
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CASH PRESERVATION PORTFOLIOS NEW ACCOUNT APPLICATION
Mail completed application to: PFPC - Attention: Cash Preservation, P.O. Box 8916, Wilmington, DE 19899
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1 PLEASE PRINT / / Individual
Registration _______________________________________________________________________________________ / / Joint Tenant
- ---------------- Owner / / Custodian
_______________________________________________________________________________________ / / UGMA__(State)
Co-owner*, minor, trust / / Trust
_______________________________________________________________________________________ / / Corporation
Street Address / / Other___________
_______________________________________________________________________________________
City State Zip Code
* For joint registration, both must sign. The registration will be as joint tenants with the right of
survivorship and not as tenants in common, unless otherwise stated.
- ---------------- -----------------------------------------------------------------------------------------------------------------
2 Total amount invested (minimum of $1,000 per portfolio) ___________________
Investments MONEY MARKET PORTFOLIO $ ___________________ MUNICIPAL MONEY MARKET PORTFOLIO $ ___________________
- ---------------- / / BY CHECK. Made payable to "Cash Preservation."
/ / BY WIRE. Call PFPC Inc. ("PFPC") directly at (800) 430-9618 to obtain a Fund account number and for further
instructions. Then, fill in your new fund account number ___________________ .
/ / BY PAYMENT FROM INSURANCE POLICY. Recipients of certain insurance policy payments may purchase shares by
authorizing and directing the issuing insurance company to forward payments to the fund. Complete the
"Payment Authorization Form" at the bottom of this application.
- ---------------- -----------------------------------------------------------------------------------------------------------------
3 Under penalties of perjury, I certify with my signature below that the number shown in this section of the
Taxpayer application is my correct taxpayer identification number and that I am not subject to backup withholdings as a
Identification result of a failure to report all interest or dividends, or the Internal Revenue Service has notified me that I
- ----------------- am no longer subject to backup withholding.
If you are subject to backup withholding, check the box in front of the following statement.
/ / The Internal Revenue Service has notified me that I am subject to backup withholding.
__________________________________ or __________________________________ or _________________________________
(Owner's Social Security Number) (Tax Identification Number) (Minor's Social Security Number)
- ---------------- -----------------------------------------------------------------------------------------------------------------
4 A. DIVIDEND ELECTION
Options Unless you elect otherwise, all dividends will be automatically reinvested in additional shares. If you prefer to
be paid in cash each month, check the appropriate box below.
/ / Pay all dividends in cash.
- ---------------- / / I request the above distributions be sent to the special payee whose address is specified in Section B below.
B. WITHDRAWAL BY TELEPHONE
If you wish to have the convenience of making withdrawals by telephone without obtaining the usual signature guarantees, please
furnish the information below. Then, when you wish to withdraw funds, all you need to do is call PFPC toll-free at (800) 430-9618
and they will process your request. SHAREHOLDERS HOLDING SHARE CERTIFICATES ARE NOT ELIGIBLE FOR THE SYSTEMATIC WITHDRAWAL PLAN
BECAUSE SHARE CERTIFICATES MUST ACCOMPANY ALL WITHDRAWAL REQUESTS. It is understood that neither PFPC nor the Fund will be liable
for any loss, liability, cost or expense for acting upon such instructions.
Name in which bank account is established____________________________________________ Bank account number __________________________
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Transit Number _________________ Full name of commercial bank (not savings bank) ___________________________________________
Address ___________________________________ City _________________________________________ State ______ Zip _______________
C. TELEPHONE EXCHANGE
Your account will automatically provide for telephone exchange of shares of one class for shares of another class. Then, when you
wish to exchange shares, all you need to do is call PFPC Inc. ("PFPC"), toll-free at (800) 430-9618. SHAREHOLDERS HOLDING SHARE
CERTIFICATES, HOWEVER, MAY NOT EXCHANGE SHARES BY TELEPHONE BECAUSE SHARE CERTIFICATES MUST ACCOMPANY ALL EXCHANGE REQUESTS. The
same registration and address will be used as listed on this form under "Registration." It is understood that neither PFPC nor the
Fund will be liable for any loss, liability, cost or expense for following the procedures described below or for following
instructions communicated by telephone that if reasonably believes to be genuine.
IF YOU DO NOT WISH THIS PRIVILEGE, PLEASE CHECK THIS BOX. / /
The Fund's telephone transaction procedures include the following measures: (1) requiring the appropriate telephone transaction
privilege forms; (2) requiring the caller to provide the names of the account owners, the account social security number and name of
the Fund, all of which must match the Fund's records; (3) requiring the Fund's service representative to complete a telephone
transaction form, listing all of the above caller identification information; (4) permitting exchanges only if the two account
registrations are identical; (5) requiring that redemption proceeds be sent only by check to the account owners of record at the
address of record, or by wire only to the owners of record at the bank account of record; (6) sending a written confirmation for
each telephone transaction to the owners of record at the address of record within five (5) business days of the call; and
maintaining tapes of telephone transactions for six months, if the Fund elects to record shareholder telephone transactions.
For accounts held of record by a broker-dealer, trustee, custodian or other agent, additional documentation or information regarding
the scope of a caller's authority is required. Finally, for telephone transactions in accounts held jointly, additional information
regarding other account holders is required. Telephone transactions will not be permitted in connection with IRA or other retirement
plan accounts or by attorney-in-fact under power of attorney.
D. ADDITIONAL EXCHANGE PRIVILEGE
/ / I accept the Additional Exchange provisions on the reverse side of this Application with respect to the Participating Classes.
--------------------------------------
(Signature)
E. AUTOMATIC INVESTING
This program provides for investments to be made automatically, by authorizing PFPC to withdraw funds from your bank account. An
initial minimum investment of $1,000, and subsequent investment of at least $100 are required. The program requires additional
information so that PFPC may contact your bank to make sure the arrangement is properly established.
/ / Check here and the proper form will be sent to you.
F. FREE CHECK WRITING PRIVILEGE
/ / Check box if you wish to take advantage of the Free Check Writing Privilege. SHAREHOLDERS HOLDING SHARE CERTIFICATES ARE NOT
ELIGIBLE FOR CHECK WRITING PRIVILEGES BECAUSE SHARE CERTIFICATES MUST ACCOMPANY ALL TRANSACTION REQUESTS. If you have checked the
box above, please be sure to complete the signature card below. Your checkbook should arrive within three to four weeks. A separate
checkbook is issued for each Cash Preservation Portfolio.
PLEASE TURN OVER TO COMPLETE APPLICATION.
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CASH PRESERVATION PORTFOLIOS SIGNATURE CARD
Complete only if check writing privilege is selected.
Registration:___________________________________________________________________________________________________
____________________________________________________________________________________________________
Please fill out exactly as in "Registration" in Section 1 of the New Account Application.
Authorizing signatures(s)* Date Signed: ___________________________________________________
1. __________________________________________________________ 2._______________________________________________
/ / Check if one signature is required. / / Check if two signatures are required.
* All owners must sign. If a corporation, a corporate resolution naming the individual(s) authorized above must
accompany this signature card.
For internal use of PFPC only: Acct. #___________________________________
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CHECK WRITING CONDITIONS
I/we hereby authorize PNC Bank, National Association ("PNC Bank") to honor checks drawn by me/us on this (these)
account(s).
I/we fully understand that:
(1) if this card is signed by more than one person, all checks will require all signatures unless indicated to
the contrary on the reverse on this card;
(2) if any of the shares in this (these) account(s) is (are) represented by share certificates, this privilege
does not apply;
(3) checks must be drawn for $100 or more;
(4) this privilege may be terminated at any time by PNC Bank or the Fund, and neither shall incur any liability
to me/us for honoring such checks, for effecting redemptions to pay such checks, or for returning checks
which have not been accepted; and
(5) this privilege is subject to the terms and conditions set forth in the prospectus of the Cash Preservation
Portfolios.
For assistance in completing this Application call COUNSELLORS (800) 888-9723
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- ---------------- -----------------------------------------------------------------------------------------------------------------
5 Citizenship: / / U.S. / / Other ______________________ Please provide Phone Number(______)______________________
Signatures
Sign below exactly as printed in Registration.
I (we) am (are) of legal age and have read the prospectus. I (we) hereby certify that each of the persons listed
- ---------------- below has been duly elected, and is now legally holding the office set below his name and has the authority to
make this authorization.
Please print titles below if signing on behalf of a business or trust.
______________________________________________________ ______________________________________________________
(Signature) (Signature)
______________________________________________________ ______________________________________________________
(President, Trustee, General Partner or Agent) (Co-owner, Secretary of Corporation, Co-trustee, etc.)
- ---------------- -----------------------------------------------------------------------------------------------------------------
6 MUST BE COMPLETED BY DEALER
Investment
Dealer ______________________________________________________ ______________________________________________________
Firm Name Representative's Name (print)
- ----------------
______________________________________________________ ______________________________________________________
Branch Street Address Representative Number
______________________________________________________ ______________________________________________________
Representative's Signature Date
- ---------------- -----------------------------------------------------------------------------------------------------------------
7 COMPLETE ONLY IF INVESTING THROUGH AN INSURANCE COMPANY
Insurance PAYMENT AUTHORIZATION FORM
Proceeds
- ---------------- TO:____________________________________________________ RE:___________________________________________________
Insurance Company Investor Name
______________________________________________________ ___________________________________________________
Address Policy Number
______________________________________________________ ___________________________________________________
City, State, Zip Code Policy Number
You are hereby authorized to issue all checks representing policy payment(s)
under the above referenced policy (policies) to "Cash Preservation" and to
send such payments directly to such fund at the following address:
c/o PFPC Inc. ____________________________________________________
P.O. Box 8916 Signature of Investor
Wilmington, Delaware 19899
____________________________________________________
Date
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BY FUND CHECK--An investor may request that the Fund provide redemption
checks drawn on a particular Cash Preservation Class. SHAREHOLDERS HOLDING SHARE
CERTIFICATES ARE NOT ELIGIBLE FOR THIS CHECK WRITING PRIVILEGE BECAUSE SHARE
CERTIFICATES MUST ACCOMPANY ALL REDEMPTION REQUESTS. Checks will be sent only to
the registered owner(s) and only to the address of record. Investors may issue
checks made payable to the order of any person in the amount of $100 or more.
The redemption is not effective until the check is processed and cleared by the
transfer agent, and dividends are earned until the redemption is effected.
Because dividends accrue daily, a check should not be used to close an account
as a small balance is likely to result. There is no charge to the investor for
redemption by check. If a shareholder who has check writing privileges exchanges
funds from one Cash Preservation Class into another Cash Preservation Class, he
or she will automatically receive a checkbook for the new account (allow three
to four weeks for delivery). The Fund or PNC Bank may terminate this redemption
service at any time, and neither shall incur any liability for honoring checks,
for effecting redemptions to pay checks, or for returning checks which have not
been accepted.
PAYMENT OF REDEMPTION PROCEEDS
Redemption proceeds will be mailed by check to your registered address
unless you have designated in your Application or Telephone Authorization Form
that such proceeds are to be sent by wire transfer to a specified checking or
savings account. If proceeds are to be sent by wire transfer, a telephone
redemption request received prior to the close of regular trading on the NYSE
will result in redemption proceeds being wired to the investor's bank account on
the next day that a wire transfer can be effected. The minimum redemption for
proceeds sent by wire transfer is $1,000. There is no maximum redemption for
proceeds sent by wire transfer. The Fund may modify this redemption service at
any time or charge a service fee upon prior notice to shareholders. No fee is
currently contemplated.
ADDITIONAL REDEMPTION INFORMATION
The Fund ordinarily will make payment for all Shares redeemed within seven
days after receipt by the Fund's transfer agent of a request in proper form.
However, Shares purchased by check will not be redeemed for a period up to
fifteen days after their purchase, pending a determination that the check has
cleared. This procedure does not apply to Shares purchased by wire payment.
During the period prior to the time the Shares are redeemed, dividends on such
Shares will accrue and be payable, and an investor will be entitled to exercise
all other rights of beneficial ownership.
The Fund imposes no charge when Shares are redeemed. The Fund reserves the
right to redeem any account in a Cash Preservation Class involuntarily, on
thirty days' notice, if such account drops below $500 and during such 30-day
period the shareholder does not increase such account to at least $500. Payment
for Shares redeemed may be postponed or the right of redemption suspended as
provided by the rules of the Securities and Exchange Commission.
EXCHANGE PRIVILEGE
Shareholders who wish to exchange Shares of one Cash Preservation Class for
another Cash Preservation Class may do so by mail or by telephone. In addition
to exchanges between Cash Preservation Classes, shareholders may exchange Shares
of a Cash Preservation Class for shares of the RBB Class of the Government
Securities Portfolio (the "Participating Class") by mail or telephone provided
they have completed the appropriate section of the Application beforehand.
Shares of the Participating Class may be acquired by exchange at the next
determined public offering price, including sales charges, if any, applicable to
such shares. In order to establish a systematic withdrawal plan for the new
account, an exchanging shareholder must file a written request. The Fund and
PFPC reserve the right to limit, amend or terminate these exchange privileges at
any time upon 60 days written notice to shareholders. No exchange fee is
currently imposed for exchanges; however, the Fund reserves the right to charge
shareholders an exchange fee of $5.00 for each exchange. In the case of
shareholders holding share certificates, the certificates must accompany the
request for an exchange. An exchange of Shares will be treated as a sale for
federal tax purposes.
15
<PAGE>
DETAILED INSTRUCTIONS REQUIRED. A request for an exchange of Shares must be
sufficiently detailed to enable PFPC to complete the exchange in accordance with
the shareholder's wishes. The request must name the Portfolio and account number
from which the exchange is to be made. It must also name the Portfolio to which
the exchange is to be made and the account number, if to an existing account.
The request must specify the amount of money or Shares to be exchanged. New
accounts will be established with the same registration and address, and with
the same options as the account from which the exchange is made--an Application
is not needed. If the registration or address of the new account is to be
different in any respect, the request must be in writing with all signatures
guaranteed. A signature guarantee may be obtained from a domestic bank or trust
company, broker, dealer, clearing agency or savings associations who are
participants in a medallion program recognized by the Securities Transfer
Association. The three recognized medallion programs are the Securities Transfer
Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP) and
New York Stock Exchange, Inc. Medallion Signature Program (MSP). Signature
guarantees that are not part of these programs will not be accepted.
EXCHANGE BY MAIL--Send a written request (together with any share
certificates issued to the investor) to: Cash Preservation c/o PFPC, P.O. Box
8916, Wilmington, Delaware 19899. The request must be signed by all shareholders
exactly as their names appear on the Fund's records.
ACCOUNT MINIMUMS. If the exchange is to a new account, the dollar value of
Shares acquired must equal or exceed the Portfolio's minimum for a new account;
if to an existing account, the dollar value must equal or exceed the Portfolio's
minimum for subsequent investments. If any amount remains in the Cash
Preservation Class from which the exchange is being made, such amount must not
drop below the minimum account value required by that Portfolio.
TELEPHONE TRANSACTIONS
Shareholders are automatically provided with this option when opening an
account, unless they indicate on the Application that they do not wish to use
this privilege. SHAREHOLDERS HOLDING SHARE CERTIFICATES MAY NOT REDEEM OR
EXCHANGE SHARES BY TELEPHONE BECAUSE SHARE CERTIFICATES MUST ACCOMPANY ALL
EXCHANGE AND REDEMPTION REQUESTS. To add this feature to an existing account
that previously did not provide for this option, a Telephone Exchange
Authorization Form must be filed with PFPC. This form is available from PFPC.
Once this election has been made, the shareholder may simply contact PFPC by
telephone to request the redemption or exchange by calling (800) 430-9618.
Neither the Fund, the Portfolios, the Distributor, PFPC nor any other Fund
Agent, will be liable for any loss, liability, cost or expense for following the
Fund's telephone transaction procedures described below or for following
instructions communicated by telephone that they reasonably believe to be
genuine.
The Fund's telephone transaction procedures include the following measures:
(1) requiring the appropriate telephone transaction privilege forms; (2)
requiring the caller to provide the names of the account owners, the account
social security number and name of the portfolio, all of which must match the
Fund's records; (3) requiring the Fund's service representative to complete a
telephone transaction form, listing all of the above caller identification
information; (4) permitting exchanges only if the two account registrations are
identical; (5) requiring that redemption proceeds be sent only by check to the
account owners of record at the address of record, or by wire only to the owners
of record at the bank account of record; (6) sending a written confirmation for
each telephone transaction to the owners of record at the address of record
within five (5) business days of the call; and (7) maintaining tapes of
telephone transactions for six months, if the Fund elects to record shareholder
telephone transactions. For accounts held of record by broker-dealers (other
than the Distributor), financial institutions, securities dealers, financial
planners or other industry professionals, trustee, custodian or other agent,
additional documentation or information regarding the scope of a caller's
authority is required. Finally, for telephone transactions in accounts held
jointly, additional information regarding other account holders is required.
Telephone transactions will not be permitted in connection with IRA or other
retirement plan accounts or by attorney-in-fact under power of attorney.
16
<PAGE>
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value per share of each class of the Portfolios for the
purpose of pricing purchase and redemption orders is determined twice each day,
once as of 12:00 noon Eastern Time and once as of the close of regular trading
on the NYSE on each weekday with the exception of those holidays on which either
the NYSE or the FRB is closed. Currently, the NYSE is closed on weekends and the
customary national business holidays of New Year's Day, Dr. Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day and on the preceding Friday or
subsequent Monday when one of these holidays falls on a Saturday or Sunday. The
FRB is currently closed on weekends and the same holidays on which the NYSE is
closed, as well as Veterans' Day and Columbus Day. The net asset value per share
of each class of a Portfolio is calculated by adding the value of the
proportionate interest of the class in the Portfolio's securities, cash and
other assets, deducting the actual and accrued liabilities of the class and
dividing the result by the number of outstanding shares of the class. The net
asset value per share of each class of the Fund is determined independently of
any of the Fund's other classes.
The Fund seeks to maintain for each of the Portfolios a net asset value of
$1.00 per share for purposes of purchases and redemptions and values its
portfolio securities on the basis of the amortized cost method of valuation
described in the Statement of Additional Information under the heading
"Valuation of Shares." There can be no assurance that net asset value per share
will not vary.
With the approval of the Board of Directors, a Portfolio may use a pricing
service, bank or broker-dealer experienced in such matters to value the
Portfolio's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of the Fund and each investment portfolio are
managed under the direction of the Fund's Board of Directors. The Fund currently
operates or proposes to operate seventeen separate investment portfolios. Each
of the Cash Preservation Classes represents interests in one of the following
such investment portfolios: the Money Market Portfolio and the Municipal Money
Market Portfolio.
INVESTMENT ADVISER
BIMC, an indirect majority-owned subsidiary of PNC Bank, serves as the
investment adviser for each of the Portfolios. BIMC has its principal offices at
Bellevue Park Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware,
19809. PNC Bank and its subsidiaries currently manage over $45.9 billion of
assets, of which approximately $31.4 billion are mutual funds. PNC Bank, a
national bank whose principal business address is 1600 Market Street,
Philadelphia, Pennsylvania 19103, is a wholly-owned subsidiary of PNC Bancorp,
Inc. PNC Bancorp, Inc. is a bank holding company and a wholly-owned subsidiary
of PNC Bank Corp., a multi-bank holding company.
As investment adviser to the Portfolios, BIMC manages such Portfolios and
is responsible for all purchases and sales of portfolio securities. In entering
into Portfolio transactions for a Portfolio with a broker, BIMC may take into
account the sale by such broker of shares of the Fund, subject to the
requirements of best execution. The agreement between BIMC and RBB, with respect
to the Money Market Portfolio, provides for BIMC to also assist generally in
supervising the operations of such Portfolio, and to maintain the Portfolio's
financial accounts and records. These administrative responsibilities have been
delegated to PFPC, as described below.
17
<PAGE>
For the services provided to and expenses assumed by it with respect to the
Money Market Portfolio, BIMC is entitled to receive the following fees, computed
daily and payable monthly based on a Portfolio's average daily net assets: .45%
of the first $250 million; .40% of the next $250 million; and .35% of net assets
in excess of $500 million. For the services provided to and expenses assumed by
it with respect to the Municipal Money Market Portfolio, BIMC is entitled to
receive the following fees, computed daily and payable monthly based on the
Portfolio's average daily net assets: .35% of the first $250 million; .30% of
the next $250 million; and .25% of net assets in excess of $500 million. BIMC
may in its discretion from time to time agree to waive voluntarily all or any
portion of its advisory fee for any Portfolio.
For the Fund's fiscal year ended August 31, 1998, the Fund paid investment
advisory fees aggregating .24% and .08% of the average net assets of the Money
Market Portfolio and the Municipal Money Market Portfolio, respectively. For
that same period, BIMC waived approximately .12% and .26% of the average net
assets of the Money Market Portfolio and the Municipal Money Market Portfolio,
respectively.
PNC Bank was formerly sub-adviser to the Portfolios and provided research,
credit analysis and recommendations with respect to the Portfolios' investments
and supplied certain computer facilities, personnel and other services. The
facilities, personnel, services and related expenses have been transferred to
BIMC and in return, BIMC's obligation to pay a portion of the sub-advisory fee
to PNC Bank has been terminated. For its sub-advisory services, PNC Bank was
entitled to receive from BIMC an amount equal to 75% of the investment advisory
fee paid by the Portfolios to BIMC. The sub-advisory fees paid by BIMC to PNC
Bank had no effect on the services provided by BIMC and the fees payable by the
Portfolios for these services are described further in the Statement of
Additional Information under "Management of the Company."
ADMINISTRATOR
PFPC serves as the administrator for the Municipal Money Market Portfolio
and generally assists such Portfolio in all aspects of its administration and
operations, including matters relating to the maintenance of financial records
and accounting. PFPC is entitled to an administration fee, computed daily and
payable monthly at .10% of average daily net assets of the Municipal Money
Market Portfolio. Pursuant to its advisory agreement with the Fund with respect
to the Money Market Portfolio, BIMC provides administrative services to such
Portfolio pursuant to the same terms, but has delegated to PFPC all of its
accounting and administrative obligations under such advisory agreement. The
Fund has agreed to pay directly to PFPC the fees for accounting and
administrative services to the Money Market Portfolio which PFPC would have
received directly from BIMC. Such arrangement has no effect on the total
advisory and administrative fees payable by such Portfolio to BIMC. PFPC's
principal business address is 400 Bellevue Parkway, Wilmington, Delaware 19809.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN
PFPC Trust Company serves as the Fund's custodian and PFPC, an indirect
wholly-owned subsidiary of PNC Bank Corp., will succeed PNC Bank, National
Association ("PNC Bank") as the Fund's custodian pursuant to an assignment. PFPC
serves as the Fund's transfer agent and dividend disbursing agent. PFPC may
enter into shareholder servicing agreements with registered broker/dealers who
have entered into dealer agreements with the Distributor for the provision of
certain shareholder support services to customers of such broker/dealers who are
shareholders of the Portfolios. The services provided and the fees payable by
the Fund for these services are described in the Statement of Additional
Information under "Investment Advisory, Distribution and Servicing
Arrangements."
DISTRIBUTOR
Provident Distributors, Inc. (the "Distributor"), with a principal business
address at Four Falls Corporate Center, West Conshohocken, Pennsylvania 19428,
acts as distributor of the Shares of each of the Cash Preservation Classes of
the Fund pursuant to a distribution agreement dated May 29, 1998 (the
"Distribution Agreement").
18
<PAGE>
EXPENSES
The expenses of each Portfolio are deducted from the total income of such
Portfolio before dividends are paid. Any general expenses of the Fund that are
not readily identifiable as belonging to a particular investment portfolio of
the Fund will be allocated among all investment portfolios of the Fund based on
the relative net assets of the investment portfolios at the time such expenses
were accrued. The Cash Preservation Classes of the Fund pay their own
distribution fees, and may pay a different share than other classes of the Fund
of other expenses (excluding advisory and custodial fees) if these expenses are
actually incurred in a different amount by the Cash Preservation Classes or if
they receive different services.
The investment adviser may assume additional expenses of the Portfolios
from time to time. In certain circumstances, it may assume such expenses on the
condition that it is reimbursed by the Portfolios for such amounts prior to the
end of a fiscal year. In such event, the reimbursement of such amounts will have
the effect of increasing a Portfolio's expense ratio and of lowering yield to
investors.
For the Fund's fiscal year ended August 31, 1998 the Fund's total expenses
were 9.84% of the average daily net assets with respect to the Cash Preservation
Class of the Money Market Portfolio (not taking into account waivers and
reimbursements of 8.89%) and were 23.15% of the average daily net assets with
respect to the Cash Preservation Class of the Municipal Money Market Portfolio
(not taking into account waivers and reimbursements of 22.17%).
DISTRIBUTION OF SHARES
- --------------------------------------------------------------------------------
The Board of Directors of the Fund approved and adopted the Distribution
Agreement and separate Plans of Distribution for each of the Classes
(collectively, the "Plans") pursuant to Rule 12b-1 under the 1940 Act. Under
each of the Plans, the Distributor is entitled to receive from the relevant Cash
Preservation Class a distribution fee, which is accrued daily and paid monthly,
of up to .65% on an annualized basis of the average daily net assets of the
relevant Cash Preservation Class. The actual amount of such compensation under
the Plans is agreed upon by the Fund's Board of Directors and by the
Distributor. Under each of the Distribution Agreement, the Distributor has
agreed to accept compensation for its services thereunder and under the relevant
Plan in the amount of .40% on an annualized basis of the average daily net
assets of the relevant Cash Preservation Class in any year. Such compensation
may be increased, up to the amount permitted in the Plan, with the approval of
the Fund's Board of Directors. Pursuant to the conditions of an exemptive order
granted by the Securities and Exchange Commission (the "SEC"), the Distributor
has agreed to waive its fee with respect to a Cash Preservation Class on any day
to the extent necessary to assure that the fee required to be accrued by such
Class does not exceed the income of such Class on that day. In addition, the
Distributor may, in its discretion, voluntarily waive from time to time all or
any portion of its distribution fee.
Under the Distribution Agreement and the relevant Plan, the Distributor may
reallocate an amount up to the full fee that it receives to financial
institutions, including to Authorized Dealers, based upon the aggregate
investment amounts maintained by and services provided to shareholders of any
relevant Class serviced by such financial institutions. The Distributor may also
reimburse Authorized Dealers for other expenses incurred in the promotion of the
sale of Fund shares. The Distributor and/or Authorized Dealers pay for the cost
of printing (excluding typesetting) and mailing to prospective investors
prospectuses and other materials relating to the Fund as well as for related
direct mail, advertising and promotional expenses.
Each of the Plans obligates the Fund, during the period it is in effect, to
accrue and pay to the Distributor on behalf of each Cash Preservation Class the
fee agreed to under the Distribution Agreement. Payments under the Plans are not
based on expenses actually incurred by the Distributor, and the payments may
exceed distribution expenses actually incurred.
19
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of each of the Portfolios to each
Portfolio's shareholders. All distributions are reinvested in the form of
additional full and fractional Shares of the relevant Cash Preservation Class
unless a shareholder elects otherwise.
The net investment income (not including any net short-term capital gains)
earned by each Portfolio will be declared as a dividend on a daily basis and
paid monthly. Dividends are payable to shareholders of record immediately prior
to the determination of net asset value made as of the close of regular trading
on the NYSE. Net short-term capital gains, if any, will be distributed at least
annually.
TAXES
- --------------------------------------------------------------------------------
Distributions from the Money Market Portfolio will generally be taxable to
shareholders. It is expected that all, or substantially all, of these
distributions will consist of ordinary income. You will be subject to income tax
on these distributions regardless whether they are paid in cash or reinvested in
additional shares. The one major exception to these tax principles is that
distributions on shares held in an IRA (or other tax-qualified plan) will not be
currently taxable.
Distributions from the Municipal Money Market Portfolio will generally
constitute tax-exempt income for shareholders for federal income tax purposes.
It is possible, depending upon the Portfolio's investments, that a portion of
the Portfolio's distributions could be taxable to shareholders as ordinary
income or capital gains, but it is not expected that this will be the case.
Although distributions from the Municipal Money Market Portfolio are exempt
for federal income tax purposes, they will generally constitute taxable income
for state and local income tax purposes except that, subject to limitations that
vary depending on the state, distributions from interest paid by a state or
municipal entity may be exempt from tax in that state.
Interest on indebtedness incurred by a shareholder to purchase or carry
shares of the Municipal Money Market Portfolio generally will not be deductible
for federal income tax purposes.
You should note that a portion of the exempt-interest dividends paid by the
Municipal Money Market Portfolio may constitute an item of tax preference for
purposes of determining federal alternative minimum tax liability.
Exempt-interest dividends will also be considered along with other adjusted
gross income in determining whether any Social Security or railroad retirement
payments received by you are subject to federal income taxes.
The foregoing is only a summary of certain tax considerations under the
current law, which may be subject to change in the future. You should consult
your tax adviser for further information regarding federal, state, local and/or
foreign tax consequences relevant to your specific situation.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
The Fund has authorized capital of thirty billion shares of Common Stock,
$.001 par value per share, of which 18.326 billion shares are currently
classified into 97 different classes of Common Stock (see "Description of
Shares" in the Statement of Additional Information).
The Fund offers multiple classes of shares in each of its Money Market
Portfolio and Municipal Money Market Portfolio to expand its marketing
alternatives and to broaden its range of services to different investors. The
expenses of the various classes within these Portfolios vary based upon the
services provided, which may affect performance.
20
<PAGE>
Each class of Common Stock of the Fund has a separate Rule 12b-1 distribution
plan. Under the Distribution Agreement and pursuant to each of the distribution
plans, the Distributor is entitled to receive from each class as compensation
for distribution services provided to that class a distribution fee based on
average daily net assets. A salesperson or any other person entitled to receive
compensation for servicing Fund shares may receive different compensation with
respect to different classes in a Portfolio of the Fund. An investor may contact
the Fund's distributor by calling 1-800-888-9723 to request more information
concerning other classes available.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE CASH PRESERVATION CLASSES OF THE MONEY MARKET AND
MUNICIPAL MONEY MARKET PORTFOLIOS AND DESCRIBE ONLY THE INVESTMENT OBJECTIVE AND
POLICIES, OPERATIONS, CONTRACTS AND OTHER MATTERS RELATING TO THE CASH
PRESERVATION CLASSES OF THESE PORTFOLIOS.
Each share that represents an interest in a Portfolio has an equal
proportionate interest in the assets belonging to such Portfolio with each other
share that represents an interest in such Portfolio, even where a share has a
different class designation than another share representing an interest in that
Portfolio. Shares of the Fund do not have preemptive or conversion rights. When
issued for payment as described in this Prospectus, Shares of the Fund will be
fully paid and non-assessable.
The Fund currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
Holders of shares of each of the Portfolios will vote in the aggregate and
not by class on all matters, except where otherwise required by law. Further,
shareholders of all investment portfolios of the Fund will vote in the aggregate
and not by portfolio except as otherwise required by law or when the Board of
Directors determines that the matter to be voted upon affects only the interests
of the shareholders of a particular investment portfolio. (See the Statement of
Additional Information under "Additional Information Concerning Fund Shares" for
examples of when the 1940 Act requires voting by investment portfolio or class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of Common Stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of the
Fund.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC, the
Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809 (800) 430-9618.
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<PAGE>
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
----------------
CONTENTS
PAGE
INTRODUCTION ............................................................ 2
FINANCIAL HIGHLIGHTS .................................................... 4
INVESTMENT OBJECTIVES AND POLICIES ...................................... 7
Year 2000 ............................................................... 11
INVESTMENT LIMITATIONS .................................................. 11
PURCHASE AND REDEMPTION OF SHARES ....................................... 12
NET ASSET VALUE ......................................................... 17
MANAGEMENT .............................................................. 17
DISTRIBUTION OF SHARES .................................................. 19
DIVIDENDS AND DISTRIBUTIONS ............................................. 20
TAXES ................................................................... 20
DESCRIPTION OF SHARES ................................................... 20
OTHER INFORMATION ....................................................... 21
INVESTMENT ADVISER
BlackRock Institutional Management Corporation
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
ADMINISTRATOR AND TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
================================================================================
<PAGE>
================================================================================
JANNEY MONTGOMERY SCOTT (LOGO)
[GRAPHIC OMITTED]
PROSPECTUS
THE JANNEY
MONTGOMERY SCOTT
MONEY FUNDS
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
MUNICIPAL
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
NEW YORK MUNICIPAL
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
DECEMBER 29, 1998
================================================================================
<PAGE>
THE JANNEY MONTGOMERY SCOTT MONEY FUNDS
OF THE RBB FUND, INC.
The Janney Montgomery Scott Money Funds consists of four classes of common
stock (collectively, the "Janney Classes") of The RBB Fund, Inc. (the "Fund"),
an open-end management investment company incorporated under the laws of the
State of Maryland on February 29, 1988. The Fund is currently operating or
proposing to operate seventeen separate investment portfolios. The shares of the
classes (collectively, the "Janney Shares" or "Shares") offered by this
Prospectus represent interests in a taxable money market portfolio, a municipal
money market portfolio, a U.S. Government obligations money market portfolio,
and a New York municipal money market portfolio (collectively, the
"Portfolios"). The investment objectives of each investment portfolio described
in this Prospectus are as follows:
MONEY MARKET PORTFOLIO -- to provide as high a level of current
interest income as is consistent with maintaining liquidity and stability
of principal. It seeks to achieve such objective by investing in a
diversified portfolio of U.S. dollar-denominated money market instruments.
MUNICIPAL MONEY MARKET PORTFOLIO -- to provide as high a level of
current interest income exempt from federal income taxes as is consistent
with maintaining liquidity and stability of principal. It seeks to achieve
such objective by investing substantially all of its assets in a
diversified portfolio of short-term Municipal Obligations. "Municipal
Obligations" are obligations issued by or on behalf of states, territories
and possessions of the United States, the District of Columbia and their
political subdivisions, agencies, instrumentalities and authorities. During
periods of normal market conditions, at least 80% of the net assets of the
Portfolio will be invested in Municipal Obligations, the interest on which
is exempt from the regular federal income tax but which may constitute an
item of tax preference for purposes of the federal alternative minimum tax.
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO -- to provide as high a
level of current interest income as is consistent with maintaining
liquidity and stability of principal. It seeks to achieve such objective by
investing in short-term U.S. Treasury bills, notes and other obligations
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements relating to such obligations.
NEW YORK MUNICIPAL MONEY MARKET PORTFOLIO -- to provide as high a level
of current income that is exempt from federal, New York State and New York
City personal income taxes as is consistent with preservation of capital
and liquidity. It seeks to achieve its objective by investing primarily in
Municipal Obligations, the interest on which is exempt from the regular
federal income tax and is not an item of tax preference for purposes of the
federal alternative minimum tax ("Tax-Exempt Interest") and is exempt from
New York State and New York City personal income taxes and which meet
certain ratings criteria and present minimal credit risks. The New York
Municipal Money Market Portfolio may invest a significant percentage of its
assets in a single issuer, and therefore investment in this Portfolio may
be riskier than an investment in other types of money market funds.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR
ENDORSED BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK
AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. THERE CAN BE NO ASSURANCE THAT THE PORTFOLIOS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
An investor may purchase and redeem Shares of any of the Janney Classes
through Janney Montgomery Scott ("JMS"). See "Purchase and Redemption of
Shares."
BlackRock Institutional Management Corporation ("BIMC") serves as
investment adviser for the Portfolios and PFPC Trust Company serves as custodian
for the Fund. PFPC Inc. ("PFPC") serves as administrator and transfer and
dividend disbursing agent for the Fund. Provident Distributors, Inc. (the
"Distributor") acts as distributor for the Fund
This Prospectus contains concise information that a prospective investor
needs to know before investing. Please keep it for future reference. A Statement
of Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained upon request free of charge from the Fund by
calling (800)430-9618. The Prospectus and Statement of Additional Information
are also available for reference, along with other related materials, on the SEC
Internet Website (http://www.sec.gov).
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
FEE TABLE
ANNUAL FUND OPERATING EXPENSES (JANNEY SHARES)
The Fee Table below contains a summary of the annual operating expenses of
the Janney Classes of the Portfolios based on expenses incurred for the fiscal
year ended August 31, 1998, as a percentage of average daily net assets. An
example based on the summary is also shown.
<TABLE>
<CAPTION>
GOVERNMENT NEW YORK
MUNICIPAL OBLIGATIONS MUNICIPAL
MONEY MARKET MONEY MARKET MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Management Fees (after waivers)(1) ......... .24% .08% .30% .05%
12b-1 Fees(1) .............................. .60 .58 .57 .56
Other Expenses (after waivers)(1) .......... .16 .20 .13 .19
---- ---- ---- ----
Total Fund Operating Expenses
(Janney Classes) (after waivers
and reimbursements)(1) .................. 1.00% .86% 1.00% .80%
==== ==== ==== ===
<FN>
(1) Management Fees and 12b-1 Fees are based on average daily net assets and are
calculated daily and paid monthly. Before waivers for the Money Market
Portfolio, Municipal Money Market Portfolio, Government Obligations Money
Market Portfolio and New York Municipal Money Market Portfolio, Management
Fees would be .36%, .34%, .44%, and .35%, respectively; Other Expenses would
be .25%, .24%, .22%, and .29%, respectively; and Total Fund Operating
Expenses would be 1.21%, 1.16%, 1.23%, and 1.20%, respectively.
</FN>
</TABLE>
EXAMPLE
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market* .................................. $10 $32 $55 $122
Municipal Money Market* ........................ $ 9 $27 $48 $106
Government Obligations Money Market* ........... $10 $32 $55 $122
New York Municipal Money Market* ............... $ 8 $26 $44 $99
<FN>
* Other classes of these Portfolios are sold with different fees and expenses.
</FN>
</TABLE>
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating Expenses
(Janney Classes)" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. Long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charges permitted by the
National Association of Securities Dealers, Inc.
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Janney Classes of the Fund
will bear directly or indirectly. (For more complete descriptions of the various
costs and expenses, see "Management--Investment Adviser" and "Distribution of
Shares" below.) Expense figures are based on actual costs and fees charged to
each class. The Fee Table reflects a voluntary waiver of Management Fees for
each Portfolio. However, there can be no assurance that any future waivers of
Management Fees will not vary from
2
<PAGE>
the figures reflected in the Fee Table. To the extent that any service providers
assume additional expenses of the Portfolios, such assumption will have the
effect of lowering a Portfolio's overall expense ratio and increasing its yield
to investors.
From time to time a Portfolio advertises its "total return," "yield" and
"effective yield." Total return and yield figures are based on historical
earnings and are not intended to indicate future performance. The "yield" of a
Portfolio refers to the income generated by an investment in a Portfolio over a
seven-day period (which period will be stated in the advertisement). This income
is then "annualized." That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in a
Portfolio is assumed to be reinvested. The "effective yield" will be slightly
higher than the "yield" because of the compounding effect of this assumed
reinvestment. Each of the Municipal Money Market Portfolio's and the New York
Municipal Money Market Portfolio's "tax-equivalent yield" may also be quoted
from time to time, which shows the level of taxable yield needed to produce an
after-tax equivalent to such Portfolio's tax-free yield. This is done by
increasing the Municipal Money Market Portfolio's yield (calculated as above) by
the amount necessary to reflect the payment of federal income tax at a stated
tax rate and by increasing the New York Municipal Money Market Portfolio's yield
(calculated as above) by the amount necessary to reflect the payment of federal,
New York State and New York City personal income taxes at stated rates.
The total return and yield of any investment is generally a function of
portfolio quality and maturity, type of investment and operating expenses. The
total return and yield on Shares of any of the Janney Classes will fluctuate and
is not necessarily representative of future results. Any fees charged by JMS
directly to their customers in connection with investments in the Janney Classes
are not reflected in the total return and yields of the Janney Shares, and such
fees, if charged, will reduce the actual return received by shareholders on
their investments. The total return and yield on Shares of the Janney Classes
may differ from total return and yields on shares of other classes of the Fund
that also represent interests in the same Portfolio depending on the allocation
of expenses to each of the classes of that Portfolio. See "Expenses."
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth certain information concerning the investment
results of the Janney Classes representing interests in the Money Market,
Municipal Money Market, Government Obligations Money Market and New York
Municipal Money Market Portfolios for the periods indicated. The financial data
included in this table for each of the periods ended August 31, 1995 through
1998 are part of the Fund's financial statements for each of the Portfolios,
which are incorporated by reference into the Statement of Additional Information
and have been audited by PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"),
the Fund's independent accountants. The financial data should be read in
conjunction with such financial statements and notes thereto. Further
information about the performance of the Portfolios is available in the Annual
Report to Shareholders. Both the Annual Report to Shareholders and the Statement
of Additional Information may be obtained free of charge by calling the
telephone number on page 1 of this Prospectus.
3
<PAGE>
THE JANNEY MONTGOMERY SCOTT MONEY FUNDS
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS (c)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE PERIOD
JUNE 12, 1995
FOR THE FOR THE FOR THE (COMMENCEMENT OF
YEAR ENDED YEAR ENDED YEAR ENDED OPERATIONS) TO
AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995
--------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
Income from investment operations:
Net investment income ............................ 0.0469 0.0459 0.0465 0.0112
-------- -------- -------- --------
Total from investment operations ............... 0.0469 0.0459 0.0465 0.0112
-------- -------- -------- --------
Less distributions
Dividends (from net investment income) ........... (0.0469) (0.0459) (0.0465) (0.0112)
-------- -------- -------- --------
Total distributions ............................ (0.0469) (0.0459) (0.0465) (0.0112)
-------- -------- -------- --------
Net asset value, end of period ...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total Return ........................................ 4.81% 4.69% 4.76% 5.30%(b)
Ratios/Supplemental Data
Net assets, end of period (000) .................. $904,526 $736,855 $561,865 $443,645
Ratios of expenses to average net assets ......... 1.00%(a) 1.00%(a) 1.00%(a) 1.00%(a)(b)
Ratios of net investment income to
average net assets ............................. 4.69% 4.59% 4.65% 5.04%(b)
<FN>
(a) Without the waiver of advisory, administration and transfer agent fees and
without the reimbursement of certain operating expenses, the ratios of
expenses to average net assets for the Money Market Portfolio would have
been 1.21%, 1.22%, 1.23%, and 1.23% for the years ended August 31, 1998,
1997 and 1996 and the period ended August 31, 1995, respectively.
(b) Annualized.
(c) Financial Highlights relate solely to the Janney Class of shares within the
Money Market Portfolio.
</FN>
</TABLE>
4
<PAGE>
THE JANNEY MONTGOMERY SCOTT MONEY FUNDS
THE RBB FUND, INC.
MUNICIPAL MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS (c)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE PERIOD
JUNE 12, 1995
FOR THE FOR THE FOR THE (COMMENCEMENT OF
YEAR ENDED YEAR ENDED YEAR ENDED OPERATIONS) TO
AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995
--------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- -------- ------- --------
Income from investment operations:
Net investment income ............................ 0.0290 0.0285 0.0278 0.0063
------- -------- ------- --------
Total from investment operations ............... 0.0290 0.0285 0.0278 0.0063
------- -------- ------- --------
Less distributions
Dividends (from net investment income) ........... (0.0290) (0.0285) (0.0278) (0.0063)
------- -------- ------- --------
Total distributions ............................ (0.0290) (0.0285) (0.0278) (0.0063)
------- -------- ------- --------
Net asset value, end of period ...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======== ======= ========
Total return ........................................ 2.94% 2.89% 2.81% 2.87%(b)
Ratios/Supplemental Data
Net assets, end of period (000) .................. $97,445 $108,826 $89,428 $113,256
Ratios of expenses to average net assets ......... 0.86%(a) 0.85%(a) 0.94%(a) 1.00%(a)(b)
Ratios of net investment income to
average net assets ............................. 2.90% 2.85% 2.78% 2.83%(b)
<FN>
(a) Without the waiver of advisory, administration and transfer agent fees and
without the reimbursement of certain operating expenses, the ratios of
expenses to average net assets for the Municipal Money Market Portfolio
would have been 1.16%, 1.13%, 1.23%, and 1.30%, for the years ended August
31, 1998, 1997 and 1996 and the period ended August 31, 1995, respectively.
(b) Annualized.
(c) Financial Highlights relate solely to the Janney Class of shares within the
Municipal Money Market Portfolio.
</FN>
</TABLE>
5
<PAGE>
THE JANNEY MONTGOMERY SCOTT MONEY FUNDS
THE RBB FUND, INC.
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS (c)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE PERIOD
JUNE 12, 1995
FOR THE FOR THE FOR THE (COMMENCEMENT OF
YEAR ENDED YEAR ENDED YEAR ENDED OPERATIONS) TO
AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995
--------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
Income from investment operations:
Net investment income ............................ 0.0460 0.0447 0.0456 0.0109
-------- -------- -------- --------
Total from investment operations ............... 0.0460 0.0447 0.0456 0.0109
-------- -------- -------- --------
Less distributions
Dividends (from net investment income) ........... (0.0460) (0.0447) (0.0456) (0.0109)
-------- -------- -------- --------
Total distributions ............................ (0.0460) (0.0447) (0.0456) (0.0109)
-------- -------- -------- --------
Net asset value, end of period ...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total return ........................................ 4.71% 4.56% 4.66% 5.03%(b)
Ratios/Supplemental Data
Net assets, end of period (000) .................. $379,065 $352,950 $306,757 $302,585
Ratios of expenses to average net assets ......... 1.00%(a) 1.00%(a) 1.00%(a) 1.00%(a)(b)
Ratios of net investment income to
average net assets ............................. 4.60% 4.47% 4.56% 4.91%(b)
<FN>
(a) Without the waiver of advisory, administration and transfer agent fees and
without the reimbursement of certain operating expenses, the ratios of
expenses to average net assets for the Government Obligations Money Market
Portfolio would have been 1.23%, 1.23%, 1.25%, and 1.28%, for the years
ended August 31, 1998, 1997 and 1996 and the period ended August 31, 1995,
respectively.
(b) Annualized.
(c) Financial Highlights relate solely to the Janney Class of shares within the
Government Obligations Money Market Portfolio.
</FN>
</TABLE>
6
<PAGE>
THE JANNEY MONTGOMERY SCOTT MONEY FUNDS
THE RBB FUND, INC.
NEW YORK MUNICIPAL MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS (c)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE PERIOD
JUNE 12, 1995
FOR THE FOR THE FOR THE (COMMENCEMENT OF
YEAR ENDED YEAR ENDED YEAR ENDED OPERATIONS) TO
AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1996 AUGUST 31, 1995
--------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------
Income from investment operations:
Net investment income ............................ 0.0273 0.0276 0.0262 0.0062
------- ------- ------- -------
Total from investment operations ............... 0.0273 0.0276 0.0262 0.0062
------- ------- ------- -------
Less distributions
Dividends (from net investment income) ........... (0.0273) (0.0276) (0.0262) (0.0062)
------- ------- ------- -------
Total distributions ............................ (0.0273) (0.0276) (0.0262) (0.0062)
------- ------- ------- -------
Net asset value, end of period ...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======
Total return ........................................ 2.77% 2.80% 2.65% 2.72%(b)
Ratios/Supplemental Data
Net assets, end of period (000) .................. $31,055 $30,442 $20,032 $14,671
Ratios of expenses to average net assets ......... .80%(a) .80%(a) .93%(a) 1.00%(a)(b)
Ratios of net investment income to
average net assets ............................. 2.73% 2.76% 2.62% 2.68%(b)
<FN>
(a) Without the waiver of advisory, administration and transfer agent fees and
without the reimbursement of certain operating expenses, the ratios of
expenses to average net assets for the New York Municipal Money Market
Portfolio would have been 1.20%, 1.13%, 1.25%, and 1.28%, for the years
ended August 31, 1998, 1997 and 1996 and the period ended August 31, 1995,
respectively.
(b) Annualized.
(c) Financial Highlights relate solely to the Janney Class of shares within the
New York Municipal Money Market Portfolio.
</FN>
</TABLE>
7
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
The Money Market Portfolio's investment objective is to provide as high a
level of current interest income as is consistent with maintaining liquidity and
stability of principal. Portfolio obligations held by the Money Market Portfolio
have remaining maturities of 397 days or less (exclusive of securities subject
to repurchase agreements). In pursuing its investment objective, the Money
Market Portfolio invests in a diversified portfolio of U.S. dollar-denominated
instruments, such as government, bank and commercial obligations, that may be
available in the money markets ("Money Market Instruments") and that meet
certain ratings criteria and present minimal credit risks to the Money Market
Portfolio. See "Eligible Securities." There is no assurance that the Portfolio
will achieve its investment objective. The following descriptions illustrate the
types of Money Market Instruments in which the Money Market Portfolio invests.
BANK OBLIGATIONS. The Portfolio may purchase obligations of issuers in the
banking industry such as short-term obligations of bank holding companies,
certificates of deposit, bankers' acceptances and time deposits, including U.S.
dollar-denominated instruments issued or supported by the credit of U.S. or
foreign banks or savings institutions having total assets at the time of
purchase in excess of $1 billion. The Portfolio may invest substantially in
obligations of foreign banks or foreign branches of U.S. banks where the
investment adviser deems the instrument to present minimal credit risks. Such
investments may nevertheless entail risks in addition to those of domestic
issuers, including higher transaction costs, less complete financial
information, less stringent regulatory requirements and less market liquidity.
The Portfolio may also make interest-bearing savings deposits in commercial and
savings banks in amounts not in excess of 5% of its total assets.
COMMERCIAL PAPER. The Portfolio may purchase commercial paper (i) rated (at
the time of purchase) in the two highest rating categories of at least two
nationally recognized statistical rating organizations ("Rating Organization")
or, by the only Rating Organization; or (ii) issued by issuers (or, in certain
cases guaranteed by persons) with short-term debt having such ratings. These
rating categories are described in the Appendix to the Statement of Additional
Information. The Portfolio may also purchase unrated commercial paper provided
that such paper is determined to be of comparable quality by the Portfolio's
investment adviser in accordance with guidelines approved by the Fund's Board of
Directors.
Commercial paper purchased by the Portfolio may include instruments issued
by foreign issuers, such as Canadian Commercial Paper ("CCP"), which is U.S.
dollar-denominated commercial paper issued by a Canadian corporation or a
Canadian counterpart of a U.S. corporation, and in Europaper, which is U.S.
dollar-denominated commercial paper of a foreign issuer, subject to the criteria
stated above for other commercial paper issuers.
VARIABLE RATE DEMAND NOTES. The Portfolio may purchase variable rate demand
notes, which are unsecured instruments that permit the indebtedness thereunder
to vary and provide for periodic adjustment in the interest rate. Although the
notes are not normally traded and there may be no active secondary market in the
notes, the Portfolio will be able (at any time or during the specified periods
not exceeding 13 months, depending upon the note involved) to demand payment of
the principal of a note. The notes are not typically rated by credit rating
agencies, but issuers of variable rate demand notes must satisfy the same
criteria as set forth above for issuers of commercial paper. If an issuer of a
variable rate demand note defaulted on its payment obligation, the Portfolio
might be unable to dispose of the note because of the absence of an active
secondary market. For this or other reasons, the Portfolio might suffer a loss
to the extent of the default. The Portfolio invests in variable rate demand
notes only when the Portfolio's investment adviser deems the investment to
involve minimal credit risk. The Portfolio's investment adviser also monitors
the continuing creditworthiness of issuers of such notes to determine whether
the Portfolio should continue to hold such notes.
8
<PAGE>
REPURCHASE AGREEMENTS. The Portfolio may agree to purchase securities from
financial institutions subject to the seller's agreement to repurchase them at
an agreed upon time and price ("repurchase agreements"). The securities held
subject to a repurchase agreement may have stated maturities exceeding 13
months, provided the repurchase agreement itself matures in less than 13 months.
Default by or bankruptcy of the seller would, however, expose the Portfolio to
possible loss because of adverse market action or delays in connection with the
disposition of the underlying obligations.
U.S. GOVERNMENT OBLIGATIONS. The Portfolio may purchase obligations issued
or guaranteed by the U.S. Government or its agencies and instrumentalities.
Obligations of certain agencies and instrumentalities of the U.S. Government are
backed by the full faith and credit of the United States. Others are backed by
the right of the issuer to borrow from the U.S. Treasury or are backed only by
the credit of the agency or instrumentality issuing the obligation.
ASSET-BACKED SECURITIES. The Portfolio may invest in asset-backed
securities which are backed by mortgages, installment sales contracts, credit
card receivables or other assets and collateralized mortgage obligations
("CMOs") issued or guaranteed by U.S. Government agencies and, instrumentalities
or issued by private companies. Asset-backed securities also include adjustable
rate securities. The estimated life of an asset-backed security varies with the
prepayment experience with respect to the underlying debt instruments. For this
and other reasons, an asset-backed security's stated maturity may be shortened,
and the security's total return may be difficult to predict precisely. Such
difficulties are not expected, however, to have a significant effect on the
Portfolio since the remaining maturity of any asset-backed security acquired
will be 13 months or less. Asset-backed securities are considered an industry
for industry concentration purposes. See "Investment Limitations." In periods of
falling interest rates, the rate of mortgage prepayments tends to increase.
During these periods, the reinvestment of proceeds by a Portfolio will generally
be at lower rates than the rates on the prepaid obligations.
REVERSE REPURCHASE AGREEMENTS. The Portfolio may enter into reverse
repurchase agreements with respect to portfolio securities. A reverse repurchase
agreement involves a sale by a Portfolio of securities that it holds
concurrently with an agreement by the Portfolio to repurchase them at an agreed
upon time and price. Reverse repurchase agreements involve the risk that the
market value of the securities sold by the Portfolio may decline below the price
at which the Portfolio is obligated to repurchase them. Reverse repurchase
agreements are considered to be borrowings by the Portfolio under the Investment
Company Act of 1940 (the "1940 Act").
GUARANTEED INVESTMENT CONTRACTS. The Portfolio may make investments in
obligations, such as guaranteed investment contracts and similar funding
agreements (collectively, "GICs"), issued by highly rated U.S. insurance
companies. A GIC is a general obligation of the issuing insurance company and
not a separate account. The Portfolio's investments in GICs are not expected to
exceed 5% of its total assets at the time of purchase absent unusual market
conditions. GIC investments are subject to the Fund's policy regarding
investment in illiquid securities.
MUNICIPAL OBLIGATIONS. In addition, the Portfolio may, when deemed
appropriate by its investment adviser in light of the Portfolio's investment
objective, invest without limitation in high quality, short-term Municipal
Obligations issued by state and local governmental issuers, the interest on
which may be taxable or tax-exempt for federal income tax purposes, provided
that such obligations carry yields that are competitive with those of other
types of Money Market Instruments of comparable quality. For a more complete
discussion of Municipal Obligations, see "Investment Objectives and
Policies--Municipal Money Market Portfolio--Municipal Obligations."
STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, a dealer would agree to purchase at the Portfolio's option specified
Municipal Obligations at a specified price. The acquisition of a stand-by
commitment may increase the cost, and thereby reduce the yield, of the Municipal
Obligation to which such commitment relates. The Portfolio will acquire stand-by
commitments solely to facilitate portfolio liquidity and does not intend to
exercise its rights thereunder for trading purposes.
9
<PAGE>
WHEN-ISSUED SECURITIES. The Portfolio may purchase portfolio securities on
a "when-issued" basis. When issued securities are securities purchased for
delivery beyond the normal settlement date at a stated price and yield. The
Portfolio will generally not pay for such securities or start earning interest
on them until they are received. Securities purchased on a when-issued basis are
recorded as an asset at the time the commitment is entered into and are subject
to changes in value prior to delivery based upon changes in the general level of
interest rates. The Portfolio expects that commitments to purchase when-issued
securities will not exceed 25% of the value of its total assets absent unusual
market conditions. The Portfolio does not intend to purchase when-issued
securities for speculative purposes but only in furtherance of its investment
objective.
ELIGIBLE SECURITIES. The Portfolio will only purchase "eligible securities"
that present minimal credit risks as determined by the Portfolio's investment
adviser pursuant to guidelines adopted by the Board of Directors. Eligible
securities generally include: (1) U.S. Government securities, (2) securities
that are rated at the time of purchase in the two highest rating categories by
at least two Rating Organizations ("Rating Organizations") (e.g., commercial
paper rated "A-1" or "A-2" by Standard & Poor's Ratings Services ("S&P"), (3)
securities that are rated at the time of purchase by the only Rating
Organization rating the security in one of its two highest rating categories for
such securities, (4) securities issued by issuers (or, in certain cases
guaranteed by persons) with short-term debt having such ratings, and (5)
securities that are not rated and are issued by an issuer that does not have
comparable obligations rated by a Rating Organization ("Unrated Securities"),
provided that such securities are determined to be of comparable quality to
eligible rated securities. For a more complete description of eligible
securities, see "Investment Objectives and Policies" in the Statement of
Additional Information.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days, time deposits with maturities in excess of
seven days, variable rate demand notes with demand periods in excess of seven
days unless the Portfolio's investment adviser determines that such notes are
readily marketable and could be sold promptly at the prices at which they are
valued, GICs, and other securities that are illiquid by virtue of the absence of
a readily available market or legal or contractual restrictions on resale.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the notice period. Securities that have legal or contractual restrictions on
resale but have a readily available market are not deemed illiquid for purposes
of this limitation. The Portfolio's investment adviser will monitor the
liquidity of such restricted securities under the supervision of the Board of
Directors. See "Investment Objectives and Policies--Illiquid Securities" in the
Statement of Additional Information.
MUNICIPAL MONEY MARKET PORTFOLIO
The Municipal Money Market Portfolio's investment objective is to provide
as high a level of current interest income exempt from federal income taxes as
is consistent with maintaining liquidity and stability of principal. The
Municipal Money Market Portfolio invests substantially all of its assets in a
diversified portfolio of short-term Municipal Obligations, the interest on
which, in the opinion of bond counsel or counsel to the issuer, as the case may
be, is exempt from the regular federal income tax. During periods of normal
market conditions, at least 80% of the net assets of the Municipal Money Market
Portfolio will be invested in Municipal Obligations. Municipal Obligations
include securities, the interest on which is Tax-Exempt Interest, although to
the extent the Portfolio invests in certain private activity bonds issued after
August 7, 1986 ("Alternative Minimum Tax Securities"), a portion of the interest
earned by the Portfolio may constitute an item of tax preference for purposes of
the federal alternative minimum tax ("AMT Interest"). There is no assurance that
the investment objective of the Portfolio will be achieved.
10
<PAGE>
MUNICIPAL OBLIGATIONS. The Portfolio invests in short-term Municipal
Obligations which are determined by the Portfolio's investment adviser to
present minimal credit risks and that meet certain ratings criteria pursuant to
guidelines established by the Fund's Board of Directors. The Portfolio may also
purchase Unrated Securities provided that such securities are determined to be
of comparable quality to eligible rated securities. The applicable Municipal
Obligations ratings are described in the Appendix to the Statement of Additional
Information.
The Portfolio may hold uninvested cash reserves pending investment during
temporary defensive periods, or if, in the opinion of the Portfolio's investment
adviser, suitable obligations bearing Tax-Exempt Interest or AMT Interest are
unavailable. There is no percentage limitation on the amount of assets which may
be held uninvested during temporary defensive periods. Uninvested cash reserves
will not earn income.
The two principal classifications of Municipal Obligations are "general
obligation" securities and "revenue" securities. General obligation securities
are secured by the issuer's pledge of its full faith, credit and taxing power
for the payment of principal and interest. Revenue securities are payable only
from the revenues derived from a particular facility or class of facilities or,
in some cases, from the proceeds of a special excise tax or other specific
excise tax or other specific revenue source such as the user of the facility
being financed. Revenue securities include private activity bonds which are not
payable from the unrestricted revenues of the issuer. Consequently, the credit
quality of private activity bonds is usually directly related to the credit
standing of the corporate user of the facility involved.
Municipal Obligations may also include "moral obligation" bonds, which are
normally issued by special purpose public authorities. If the issuer of moral
obligation bonds is unable to meet its debt service obligations from current
revenues, it may draw on a reserve fund, the restoration of which is a moral
commitment but not a legal obligation of the state or municipality which created
the issuer.
Although the Municipal Money Market Portfolio may invest more than 25% of
its net assets in (i) Municipal Obligations whose issuers are in the same state,
(ii) Municipal Obligations the interest on which is paid solely from revenues of
similar projects, and (iii) private activity bonds bearing Tax-Exempt Interest,
it does not currently intend to do so on a regular basis. To the extent the
Municipal Money Market Portfolio's assets are concentrated in Municipal
Obligations that are payable from the revenues of similar projects or are issued
by issuers located in the same state, the Portfolio will be subject to the
peculiar risks presented by the laws and economic conditions relating to such
states or projects to a greater extent than it would be if its assets were not
so concentrated.
TAX-EXEMPT DERIVATIVE SECURITIES. The Municipal Money Market Portfolio may
invest in tax-exempt derivative securities such as tender option bonds,
custodial receipts, participations, beneficial interests in trusts and
partnership interests. A typical tax-exempt derivative security involves the
purchase of an interest in a pool of Municipal Obligations which interest
includes a tender option, demand or other feature, allowing the Portfolio to
tender the underlying Municipal Obligation to a third party at periodic
intervals and to receive the principal amount thereof. In some cases, Municipal
Obligations are represented by custodial receipts evidencing rights to future
principal or interest payments, or both, on underlying municipal securities held
by a custodian and such receipts include the option to tender the underlying
securities to the sponsor (usually a bank, broker-dealer or other financial
institution). Although the Internal Revenue Service has not ruled on whether the
interest received on derivative securities in the form of participation
interests or custodial receipts is Tax-Exempt Interest, opinions relating to the
validity of, and the tax-exempt status of payments received by, the Portfolio
from such derivative securities are rendered by counsel to the respective
sponsors of such derivatives and relied upon by the Portfolio in purchasing such
securities. Neither the Portfolio nor its investment adviser will review the
proceedings relating to the creation of any tax-exempt derivative securities or
the basis for such legal opinions.
WHEN-ISSUED SECURITIES. The Portfolio may also purchase portfolio
securities on a "when-issued" basis as described under "Investment Objectives
and Policies--Money Market Portfolio--When-Issued Securities."
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STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio as described under
"Investment Objectives and Policies--Money Market Portfolio--Stand-By
Commitments."
ELIGIBLE SECURITIES. The Municipal Money Market Portfolio will only
purchase "eligible securities" that present minimal credit risks as determined
by the Portfolio's investment adviser pursuant to guidelines adopted by the
Board of Directors. For a more complete description of eligible securities, see
"Investment Objectives and Policies--Money Market Portfolio--Eligible
Securities" and "Investment Objectives and Policies" in the Statement of
Additional Information.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities as described under "Investment Objectives and
Policies--Money Market Portfolio--Illiquid Securities" and "Investment
Objectives and Policies--Illiquid Securities" in the Statement of Additional
Information.
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
The Government Obligations Money Market Portfolio's investment objective is
to provide as high a level of current interest income as is consistent with
maintaining liquidity and stability of principal. It seeks to achieve such
objective by investing in short-term U.S. Treasury bills, notes and other
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, and entering into repurchase agreements relating to such
obligations. The types of U.S. Government obligations in which the Portfolio may
invest include a variety of U.S. Treasury obligations, which differ only in
their interest rates, maturities, and times of issuance, and obligations issued
or guaranteed by the U.S. Government or its agencies or instrumentalities,
including mortgage-related securities. Obligations of certain agencies and
instrumentalities of the U.S. Government, such as the Government National
Mortgage Association and the Export-Import Bank of the United States, are
supported by the full faith and credit of the U.S. Treasury; others, such as
those of the Federal National Mortgage Association, are supported by the right
of the issuer to borrow from the Treasury; others are supported by the
discretionary authority of the U.S. Government to purchase the agency's
obligations; still others, such as those of the Federal Farm Credit Banks or the
Federal Home Loan Mortgage Corporation, are supported only by the credit of the
instrumentality. No assurance can be given that the U.S. Government would
provide financial support to U.S. Government-sponsored agencies or
instrumentalities if it is not obligated to do so under law. The Portfolio will
invest in the obligations of such agencies or instrumentalities only when the
investment adviser believes that the credit risk with respect thereto is
minimal. There is no assurance that the investment objective of the Portfolio
will be achieved.
Due to fluctuations in interest rates, the market values of securities
issued or guaranteed by the U.S. Government, its agencies and instrumentalities
may vary. Certain government securities held by the Portfolio may have remaining
maturities exceeding 397 days if such securities provide for adjustments in
their interest rates not less frequently than every 397 days and the adjustments
are sufficient to cause the securities to have market values, after adjustment,
which approximate their par values.
REPURCHASE AGREEMENTS. The Portfolio may agree to purchase government
securities from financial institutions subject to the seller's agreement to
repurchase them at an agreed-upon time and price ("repurchase agreements"). For
a more complete description of repurchase agreements, see "Investment Objectives
and Policies--Money Market Portfolio--Repurchase Agreements."
REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow funds by entering
into reverse repurchase agreements in accordance with the investment
restrictions described below. The Portfolio would consider entering into reverse
repurchase agreements to avoid otherwise selling securities during unfavorable
market conditions and to meet redemptions. For a more complete description of
reverse repurchase agreements, see "Investment Objectives and Policies--Money
Market Portfolio--Reverse Repurchase Agreements."
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MORTGAGE-RELATED AND ASSET-BACKED SECURITIES. Mortgage-related securities
consist of mortgage loans which are assembled into pools, the interests in which
are issued and guaranteed by an agency or instrumentality of the U.S.
Government, though not necessarily by the U.S. Government itself. The Fund may
also acquire asset-backed securities as described under "Investment Objectives
and Policies--Money Market Portfolio--Asset-Backed Securities."
LENDING OF SECURITIES. The Portfolio may also lend its portfolio securities
to financial institutions in accordance with the investment restrictions
described below. Such loans would involve risks of delay in receiving additional
collateral in the event the value of the collateral decreased below the value of
the securities loaned or of delay in recovering the securities loaned or even
loss of rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers deemed by the
Portfolio's investment adviser to be of good standing and only when, in the
adviser's judgment, the income to be earned from the loans justifies the
attendant risks. Any loans of the Portfolio's securities will be fully
collateralized and marked to market daily.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities as described under "Investment Objectives and
Policies--Money Market Portfolio--Illiquid Securities" and "Investment
Objectives and Policies--Illiquid Securities" in the Statement of Additional
Information.
NEW YORK MUNICIPAL MONEY MARKET PORTFOLIO
The New York Municipal Money Market Portfolio's investment objective is to
provide as high a level of current interest income that is exempt from federal,
New York State and New York City personal income taxes as is consistent with
preservation of capital and liquidity. During periods of normal market
conditions, at least 80% of the assets will be invested in Municipal
Obligations, the interest on which is Tax-Exempt Interest and which meet certain
ratings criteria and present minimal credit risks to the Portfolio. Portfolio
obligations held by the New York Municipal Money Market Portfolio will have
remaining maturities of 397 days or less ("short-term obligations"). Dividends
paid by the Portfolio which are derived from interest attributable to tax-exempt
obligations of the State of New York and its political subdivisions, as well as
of certain other governmental issuers such as Puerto Rico ("New York Municipal
Obligations"), will be excluded from gross income for federal income tax
purposes and exempt from New York State and New York City personal income taxes,
but will be subject to corporate franchise taxes. Dividends derived from
interest on tax-exempt obligations of other governmental issuers will be
excluded from gross income for federal income tax purposes, but will be subject
to New York State and New York City personal income taxes. The Fund expects
that, except during temporary defensive periods or when acceptable securities
are unavailable for investment by the Fund, at least 65% of the Fund's assets
will be invested in New York Municipal Obligations. There is no assurance that
the investment objective of the New York Municipal Money Market Portfolio will
be achieved.
MUNICIPAL OBLIGATIONS. The Portfolio invests in short-term Municipal
Obligations. For a more complete discussion of Municipal Obligations, see
"Investment Objectives and Policies--Municipal Money Market Portfolio--Municipal
Obligations."
Up to 20% of the Portfolio's assets may be invested in Alternative Minimum
Tax Securities. Investors should be aware of the possibility of federal, state
and local alternative minimum or minimum income tax liability on interest from
Alternative Minimum Tax Securities.
Although the New York Municipal Money Market Portfolio may invest more than
25% of its net assets in (i) Municipal Obligations the interest on which is paid
solely from revenues of similar projects, and (ii) private activity bonds
bearing Tax-Exempt Interest, it does not currently intend to do so on a regular
basis. To the extent the New York Municipal Money Market Portfolio's assets are
concentrated in Municipal Obligations that are payable from the revenues of
similar projects, the Portfolio will be subject to the peculiar risks presented
by the laws and economic conditions relating to such states or projects to a
greater extent than it would be if its assets were not so concentrated.
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TAX-EXEMPT DERIVATIVE SECURITIES. The Portfolio may invest in tax-exempt
derivative securities such as tender option bonds, custodial receipts,
participations, beneficial interests in trusts and partnership interests. For a
more complete description of such securities, see "Investment Objectives and
Policies--Municipal Money Market Portfolio--Tax-Exempt Derivative Securities."
WHEN-ISSUED SECURITIES. The Portfolio may also purchase portfolio
securities on a "when-issued" basis as described under "Investment Objectives
and Policies--Money Market Portfolio--When-Issued Securities."
STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio such as described under
"Investment Objectives and Policies--Money Market Portfolio--Stand-By
Commitments."
TAXABLE INVESTMENTS. The Portfolio may for defensive or other purposes
invest in certain short-term taxable securities when the Portfolio's investment
adviser believes that it would be in the best interests of the Portfolio's
investors to do so. Taxable securities in which the Portfolio may invest on a
short-term basis are obligations of the U.S. Government, its agencies or
instrumentalities, including repurchase agreements with banks or securities
dealers involving such securities; time deposits maturing in not more than seven
days; other debt securities rated within the two highest ratings assigned by
Moody's Investors Service, Inc. ("Moody's") or S&P; commercial paper rated in
the highest grade by Moody's or S&P; and certificates of deposit issued by
United States branches of United States banks with assets of $1 billion or more.
At no time will more than 20% of the Portfolio's total assets be invested in
taxable short-term securities unless the Portfolio's investment adviser has
determined to temporarily adopt a defensive investment policy in the face of an
anticipated softening in the market for Municipal Obligations in general.
ELIGIBLE SECURITIES. The New York Municipal Money Market Portfolio will
only purchase "eligible securities" that present minimal credit risks as
determined by the Portfolio's investment adviser pursuant to guidelines. For a
more complete description of eligible securities, see "Investment Objectives and
Policies--Money Market Portfolio--Eligible Securities" and "Investment
Objectives and Policies" in the Statement of Additional Information.
SPECIAL CONSIDERATIONS. As a non-diversified investment company, the
Portfolio may invest a greater proportion of its assets in the obligations of a
smaller number of issuers relative to a diversified portfolio. As a result, the
value of a non-diversified investment portfolio will fluctuate to a greater
degree upon changes in the value of each underlying security than a diversified
portfolio. In the opinion of the Portfolio's investment adviser, any risk to the
Portfolio would be mitigated by its policies restricting investments to
obligations with short-term maturities and obligations which qualify as eligible
securities.
The Portfolio's ability to meet its investment objective is dependent upon
the ability of issuers of New York Municipal Obligations to meet their
continuing obligations for the payment of principal and interest on their
securities. New York State and New York City face long-term economic problems
that could seriously affect their ability and that of other issuers of New York
Municipal Obligations to meet their financial obligations.
Investors should be aware that certain substantial issuers of New York
Municipal Obligations (including issuers whose obligations may be acquired by
the Portfolio) have experienced serious financial difficulties in recent years.
These difficulties have at times jeopardized the credit standing and impaired
the borrowing abilities of all New York issuers and have generally contributed
to higher interest costs for their borrowing and fewer markets for their
outstanding debt obligations. Although, several different issues of municipal
securities of New York State and its agencies and instrumentalities and of New
York City have been downgraded by S&P and Moody's. In recent years, the most
recent actions of S&P and Moody's have been to place the debt obligations of New
York State and New York City on creditwatch with positive implications and to
upgrade the debt obligations of New York City, respectively. Strong demand for
New York Municipal Obligations has also at times had the effect of permitting
New York Municipal Obligations to be issued with yields relatively lower, and
after issuance to trade in the market at prices relatively higher, than
comparably rated municipal obligations issued by other jurisdictions. A
recurrence of the financial difficulties
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previously experienced by such issuers of New York Municipal Obligations could
result in defaults or declines in the market values of those issuers' existing
obligations and, possibly, in the obligations of other issuers of New York
Municipal Obligations. Although no issuers of New York Municipal Obligations
were as of the date of this Prospectus in default with respect to the payment of
their debt obligations, the occurrence of any such default could adversely
affect the market values and marketability of all New York Municipal Obligations
and consequently, the net asset value of the Portfolio's shares. Some of the
significant financial considerations relating to the Fund's investments in New
York Municipal Obligations are summarized in the Statement of Additional
Information.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities as described under "Investment Objectives and
Policies--Money Market Portfolio--Illiquid Securities " and "Investment
Objectives and Policies--Illiquid Securities" in the Statement of Additional
Information.
YEAR 2000
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Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Money Market, Municipal Money Market, Government Obligations Money
Market and New York Municipal Money Market Portfolios' respective investment
objectives and the policies described above may be changed by the Fund's Board
of Directors without shareholder approval. The Portfolios may not, however,
change the following investment limitations (except as noted) without such a
vote of their respective shareholders. (A more detailed description of the
following investment limitations, together with other investment limitations
that cannot be changed without a vote of shareholders, is contained in the
Statement of Additional Information under "Investment Objectives and Policies.")
The Portfolios may not borrow money, except from banks for temporary
purposes and except for reverse repurchase agreements, and then in amounts not
in excess of 10% of the value of a Portfolio's assets at the time of such
borrowing, and only if after such borrowing there is asset coverage of at least
300% for all borrowings of the Portfolio; or mortgage, pledge or hypothecate any
of its assets except in connection with any such borrowing and in amounts not in
excess of 10% of the value of a Portfolio's assets at the time of such
borrowing; or purchase portfolio securities while borrowings in excess of 5% of
the Portfolio's net assets are outstanding. (This borrowing provision is not for
investment leverage, but solely to facilitate management of a Portfolio's
securities by enabling the Portfolio to meet redemption requests where the
liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient.)
The Money Market and Municipal Money Market Portfolios may not:
1. Purchase securities of any one issuer, other than securities issued
or guaranteed by the U.S. Government or its agencies and
instrumentalities, if immediately after and as a result of such purchase
more than 5% of the value of its total assets would be invested in the
securities of such issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by a Portfolio, except that up
to 25% of the value of a Portfolio's total assets may be invested
without regard to such 5% limitation.
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<PAGE>
The Money Market Portfolio may not:
1. Purchase any securities other than Money Market Instruments, some of
which may be subject to repurchase agreements, but the Portfolio may
make interest-bearing savings deposits in amounts not in excess of 5% of
the value of the Portfolio's assets and may make time deposits.
2. Purchase any securities which would cause, at the time of purchase,
less than 25% of the value of the total assets of the Portfolio to be
invested in the obligations of issuers in the banking industry, or in
obligations, such as repurchase agreements, secured by such obligations
(unless the Portfolio is in a temporary defensive position) or which
would cause, at the time of purchase, more than 25% of the value of its
total assets to be invested in the obligations of issuers in any other
industry.
So long as it values its portfolio securities on the basis of the amortized
cost method of valuation pursuant to Rule 2a-7 under the 1940 Act, the Money
Market Portfolio will meet the following limitations on its investments in
addition to the fundamental investment limitations described above. These
limitations may be changed without a vote of shareholders of the Money Market
Portfolio.
1. The Money Market Portfolio will limit its purchases of the securities
of any one issuer, other than issuers of U.S. Government securities, to
5% of its total assets, except that the Money Market Portfolio may
invest more than 5% of its total assets in First Tier Securities of one
issuer for a period of up to three Business Days (as defined below).
"First Tier Securities" include eligible securities that (i) if rated by
more than one Rating Organization, are rated (at the time of purchase)
by two or more Rating Organizations in the highest rating category for
such securities, (ii) if rated by only one Rating Organization, are
rated by such Rating Organization in its highest rating category for
such securities, (iii) have no short-term rating and are comparable in
priority and security to a class of short-term obligations of the issuer
of such securities that have been rated in accordance with (i) or (ii)
above, or (iv) are Unrated Securities that are determined to be of
comparable quality to such securities. Purchases of First Tier
Securities that come within categories (ii) and (iv) above will be
approved or ratified by the Board of Directors.
2. The Money Market Portfolio will limit its purchases of Second Tier
Securities, which are eligible securities other than First Tier
Securities, to 5% of its total assets.
3. The Money Market Portfolio will limit its purchases of Second Tier
Securities of one issuer to the greater of 1% of its total assets or $1
million.
The Municipal Money Market Portfolio may not:
1. Purchase any securities which would cause more than 25% of the value
of the total assets of the Portfolio to be invested in obligations at
the time of purchase to be invested in issuers in the same industry.
In addition, without shareholder approval, the Portfolio may not change its
policy of investing during normal market conditions at least 80% of its net
assets in obligations the interest on which is Tax-Exempt Interest or AMT
Interest.
The Government Obligations Money Market Portfolio may not:
1. Purchase securities other than U.S. Treasury bills, notes and other
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, and repurchase agreements relating to such
obligations.
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<PAGE>
2. Make loans except that the Portfolio may purchase or hold debt
obligations in accordance with its investment objective, policies and
limitations, may enter into repurchase agreements for securities, and
may lend portfolio securities against collateral, consisting of cash or
securities which are consistent with the Portfolio's permitted
investments, which is equal at all times to at least 100% of the value
of the securities loaned. There is no investment restriction on the
amount of securities that may be loaned, except that payments received
on such loans, including amounts received during the loan on account of
interest on the securities loaned, may not (together with all
non-qualifying income) exceed 10% of the Portfolio's annual gross income
(without offset for realized capital gains) unless, in the opinion of
counsel to the Fund, such amounts are qualifying income under federal
income tax provisions applicable to regulated investment companies.
The New York Municipal Money Market Portfolio may not:
1. Purchase any securities which would cause 25% or more of the value of
the Portfolio's total assets at the time of purchase to be invested in
the securities of issuers conducting their principal business activities
in the same industry; provided that this limitation shall not apply to
Municipal Obligations or governmental guarantees of Municipal
Obligations; and provided, further, that for the purpose of this
limitation only, private activity bonds that are considered to be issued
by non-governmental users (see the second investment limitation above)
shall not be deemed to be Municipal Obligations.
In addition, without shareholder approval, the Portfolio may not change its
policy of investing during normal market conditions at least 80% of its net
assets in obligations the interest on which is Tax-Exempt Interest.
PURCHASE AND REDEMPTION OF SHARES
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PURCHASE PROCEDURES
GENERAL. Janney Shares are sold without a sales load on a continuous basis.
Investors may purchase Janney Shares through an account maintained by the
investor with JMS ("the Account"). The Fund in its sole discretion may accept or
reject any order for purchases of Janney Shares.
All payments for initial and subsequent investments should be in U.S.
dollars. JMS is responsible for the prompt transmission of the order to the
Fund's transfer agent. Purchases will be effected at the net asset value next
determined after PFPC, the Fund's transfer agent, has received a purchase order
in good order from JMS and the Fund's custodian has Federal Funds immediately
available to it. In those cases where payment is made by check, Federal Funds
will generally become available two Business Days after the check is received by
JMS. A "Business Day" is any day that both the New York Stock Exchange (the
"NYSE") and the Federal Reserve Bank of Philadelphia (the "FRB") are open. On
any Business Day, orders which are accompanied by Federal Funds and received by
PFPC by 12:00 noon Eastern Time, and orders as to which payment has been
converted into Federal Funds by 12:00 noon Eastern Time, will be executed as of
12:00 noon that Business Day. Orders which are accompanied by Federal Funds and
received by the Fund after 12:00 noon Eastern Time but prior to the close of
regular trading on the NYSE (generally 4:00 p.m. Eastern Time), and orders as to
which payment has been converted into Federal Funds after 12:00 noon Eastern
Time but prior to the close of regular trading on the NYSE on any Business Day
of the Fund, will be executed as of the close of regular trading on the NYSE on
that Business Day, but will not be entitled to receive dividends declared on
such Business Day. Orders which are accompanied by Federal Funds and received by
the Fund as of the close of regular trading on the NYSE or later, and orders as
to which payment has been converted to Federal Funds as of the close of regular
trading on the NYSE or later on a Business Day will be processed as of 12:00
noon Eastern Time on the following Business Day.
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<PAGE>
PURCHASES THROUGH AN ACCOUNT. Purchases of Shares may be effected through
an investor's Account with JMS through procedures established in connection with
the requirements of Accounts at JMS. In such event, beneficial ownership of
Janney Shares will be recorded by JMS and will be reflected in the Account
statements provided by JMS to such investors. JMS may impose minimum investment
Account requirements. Although JMS does not impose a sales charge for purchases
of Janney Shares, depending on the terms of an investor's Account with JMS, JMS
may charge an investor's Account fees for automatic investment and other
services provided to the Account. Information concerning Account requirements,
services and charges should be obtained from JMS, and this Prospectus should be
read in conjunction with any information received from JMS.
JMS may offer investors the ability to purchase Janney Shares under an
automatic purchase program (a "Purchase Program") established by it. An investor
who participates in a Purchase Program will have his "free-credit" cash balances
in his Account with JMS automatically invested in Shares of Janney Class
designated by the investor as the "Primary Janney Class" for his Purchase
Program. The frequency of investments and the minimum investment requirement may
be established by JMS and the Fund. In addition, JMS may require a minimum
amount of cash and/or securities to be deposited in an Account for participants
in its Purchase Program. The description of the particular JMS's Purchase
Program should be read for details, and any inquiries concerning an Account
under a Purchase Program should be directed to JMS. A participant in a Purchase
Program may change the designation of the Primary Janney Class at any time by so
instructing JMS.
If JMS makes special arrangements under which orders for Janney Shares are
received by PFPC prior to 12:00 noon Eastern Time, and the JMS guarantees that
payment for such Shares will be made in available Federal Funds to the Fund's
custodian prior to the close of regular trading on the NYSE, on the same day,
such purchase orders will be effective and Shares will be purchased at the
offering price in effect as of 12:00 noon Eastern Time on the date the purchase
order is received by PFPC.
REDEMPTION PROCEDURES
Redemption orders are effected at the net asset value per share next
determined after receipt of the order in proper form by the Fund's transfer
agent, PFPC. Investors may redeem all or some of their Shares in accordance with
one of the procedures described below.
REDEMPTION OF SHARES IN AN ACCOUNT. An investor who beneficially owns
Janney Shares through an Account may redeem Janney Shares in his Account in
accordance with instructions and limitations pertaining to his Account by
contacting JMS. It is the responsibility of JMS to transmit purchase and
redemption orders to PFPC and credit its investors' accounts with the redemption
proceeds on a timely basis. If such notice is received by PFPC by 12:00 noon
Eastern Time on any Business Day, the redemption will be effective as of 12:00
noon Eastern Time on that day. Payment of the redemption proceeds will be made
after 12:00 noon Eastern Time on the day the redemption is effected, provided
that the Fund's custodian is open for business. If the custodian is not open,
payment will be made on the next bank business day. If the redemption request is
received between 12:00 noon and the close of regular trading on the NYSE on a
Business Day, the redemption will be effective as of the close of regular
trading on the NYSE on such Business Day and payment will be made on the next
bank business day following receipt of the redemption request. If all Shares are
redeemed, all accrued but unpaid dividends on those Shares will be paid with the
redemption proceeds.
JMS will also redeem each day a sufficient number of Shares of the Primary
Janney Class to cover debit balances created by transactions in the Account or
instructions for cash disbursements. Janney Shares will be redeemed on the same
day that a transaction occurs that results in such a debit balance or charge.
JMS reserves the right to waive or modify criteria for participation in an
Account or to terminate participation in an Account for any reason.
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<PAGE>
REDEMPTION BY CHECK. The Fund provides investors with forms of drafts
("checks") payable through PNC Bank. These checks may be made payable to the
order of anyone. An investor wishing to use this check writing redemption
procedure should complete specimen signature cards (available from PFPC), and
then forward such signature cards to JMS. JMS will then arrange for the checks
to be honored by PNC Bank. Investors who own Janney Shares through an Account
should contact JMS for signature cards. Investors of joint accounts may elect to
have checks honored with a single signature. Check redemptions will be subject
to PNC Bank's rules governing checks. An investor will be able to stop payment
on a check redemption. The Fund or PNC Bank may terminate this redemption
service at any time, and neither shall incur any liability for honoring checks,
for effecting redemptions to pay checks, or for returning checks which have not
been accepted.
When a check is presented to PNC Bank for clearance, PNC Bank, as the
investor's agent, will cause the Fund to redeem a sufficient number of full and
fractional Shares owned by the investor to cover the amount of the check. This
procedure enables the investor to continue to receive dividends on those Shares
representing the amount being redeemed by check until such time as the check is
presented to PNC Bank. Pursuant to rules under the 1940 Act, checks may not be
presented for cash payment at the offices of PNC Bank. This limitation does not
affect checks used for the payment of bills or cash at other banks.
ADDITIONAL REDEMPTION INFORMATION. The Fund ordinarily will make payment
for all Shares redeemed within seven days after receipt by PFPC of a redemption
request in proper form. Although the Fund will redeem Shares purchased by check
before the check clears, payment of the redemption proceeds may be delayed for a
period of up to fifteen days after their purchase, pending a determination that
the check has cleared. This procedure does not apply to Shares purchased by wire
payment. Investors should consider purchasing Shares using a certified or bank
check or money order if they anticipate an immediate need for redemption
proceeds.
The Fund imposes no charge when Shares are redeemed. The Fund reserves the
right to redeem any account in a Janney Class involuntarily, on thirty days'
notice, if such account falls below $500 and during such thirty day notice
period the amount invested in such account is not increased to at least $500.
Payment for Shares redeemed may be postponed or the right of redemption
suspended as provided by the rules of the Securities and Exchange Commission.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value per share of each class of the Portfolios for the
purpose of pricing purchase and redemption orders is determined twice each day,
once as of 12:00 noon Eastern Time and once as of the close of regular trading
on the NYSE on each weekday with the exception of those holidays on which either
the NYSE or the FRB is closed. Currently, the NYSE is closed on weekends and the
customary national business holidays of New Year's Day, Dr. Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day and the preceding Friday or subsequent
Monday when one of these holidays falls on a Saturday or Sunday. The FRB is
currently closed on weekends and the same holidays on which the NYSE is closed
as well as Veterans' Day and Columbus Day. The net asset value per share of each
class is calculated by adding the proportionate interest of each class in the
value of the securities, cash and other assets of the Portfolio, subtracting the
accrued and actual liabilities of the class and dividing the result by the
number of outstanding shares of the class. The net asset value per share of each
class of the Fund is determined independently of any of the Fund's other
classes.
The Fund seeks to maintain for each of the Portfolios a net asset value of
$1.00 per share for purposes of purchases and redemptions and values its
portfolio securities on the basis of the amortized cost method of valuation
described in the Statement of Additional Information under the heading
"Valuation of Shares." There can be no assurance that net asset value per share
will not vary.
19
<PAGE>
With the approval of the Board of Directors, a Portfolio may use a pricing
service, bank or broker-dealer experienced in such matters to value the
Portfolio's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of the Fund and each investment portfolio are
managed under the direction of the Fund's Board of Directors. The Fund currently
operates or proposes to operate seventeen investment portfolios. Each of the
Janney Classes represents interests in one of the following portfolios: the
Money Market Portfolio, the Municipal Money Market Portfolio, the Government
Obligations Money Market Portfolio and the New York Municipal Money Market
Portfolio.
INVESTMENT ADVISER
BIMC, an indirect majority-owned subsidiary of PNC Bank, serves as the
investment adviser for each of the Portfolios. BIMC has its principal offices at
Bellevue Park Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware
19809. PNC Bank and its subsidiaries currently manage over $45.9 billion of
assets, of which approximately $31.4 billion are mutual funds. PNC Bank, a
national bank whose principal business address is 1600 Market Street,
Philadelphia, Pennsylvania 19103, is a wholly-owned subsidiary of PNC Bancorp,
Inc. PNC Bancorp, Inc. is a bank holding company and a wholly-owned subsidiary
of PNC Bank Corp., a multi-bank holding company.
As investment adviser to the Portfolios, BIMC manages such Portfolios and
is responsible for all purchases and sales of portfolio securities. In entering
into Portfolio transactions for a Portfolio with a broker, BIMC may take into
account the sale by such broker of shares of the Fund, subject to the
requirements of best execution. The agreements between BIMC and RBB, with
respect to the money market and government obligations money market portfolios,
respectively, provide for BIMC to also assist generally in supervising the
operations of such portfolios, and to maintain such portfolios' financial
accounts and records. These administrative responsibilities have been delegated
to PFPC, as described below.
For the services provided to and expenses assumed by it for the benefit of
each of the Money Market and Government Obligations Money Market Portfolios,
BIMC is entitled to receive the following fees, computed daily and payable
monthly based on a Portfolio's average daily net assets: .45% of the first $250
million; .40% of the next $250 million; and .35% of net assets in excess of $500
million.
For the services provided and expenses assumed by it with respect to the
Municipal Money Market and New York Municipal Money Market Portfolios, BIMC is
entitled to receive the following fees, computed daily and payable monthly based
on the Portfolio's average daily net assets: .35% of the first $250 million;
.30% of the next $250 million; and .25% of net assets in excess of $500 million.
BIMC may in its discretion from time to time agree to waive voluntarily all
or any portion of its advisory fee for any Portfolio.
For the Fund's fiscal year ended August 31, 1998, the Fund paid investment
advisory fees aggregating .24% of the average net assets of the Money Market
Portfolio, .08% of the average net assets of the Municipal Money Market
Portfolio, .30% of the average net assets of the Government Obligations Money
Market Portfolio and .05% of the average net assets of the New York Municipal
Money Market Portfolio. For that same year, BIMC waived approximately .12%,
.26%, .14%, and .30% of the average net assets of the Money Market Portfolio,
the Municipal Money Market
20
<PAGE>
Portfolio, the Government Obligations Money Market Portfolio and the New York
Municipal Money Market Portfolio, respectively.
PNC Bank was formerly sub-adviser to the money market, municipal money
market and government obligations portfolios and provided research, credit
analysis and recommendations with respect to each such portfolio's investments
and supplied certain computer facilities, personnel and other services. The
facilities, personnel, services and related expenses have been transferred to
bimc and in return, BIMC'S obligation to pay a portion of the sub-advisory fee
to PNC Bank has been terminated. For its sub-advisory services, PNC Bank was
entitled to receive from bimc an amount equal to 75% of the investment advisory
fee paid by each such portfolio to BIMC. The sub-advisory fees paid by BIMC to
PNC Bank had no effect on the investment advisory fees payable by such
portfolios to BIMC. The services provided by BIMC and the fees payable by the
portfolio for these services are described further in the statement of
additional information under "Management of the Company."
ADMINISTRATOR
PFPC serves as the administrator for the Municipal Money Market and New
York Municipal Money Market Portfolios and generally assists those Portfolios in
all aspects of its administration and operations, including matters relating to
the maintenance of financial records and accounting. PFPC is entitled to an
administration fee, computed daily and payable monthly at .10% of the average
daily net assets of each of these Portfolios. Pursuant to its advisory
agreements with the Fund with respect to the Money Market and Government
Obligations Money Market Portfolios, BIMC provides administrative services to
such Portfolios pursuant to the same terms, but has delegated to PFPC all of its
accounting and administrative obligations under such advisory agreements. The
Fund has agreed to pay directly to PFPC the fees for accounting and
administrative services to the Money Market and Government Obligations Money
Market Portfolios which PFPC would have received directly from BIMC. Such
arrangement has no effect on the total advisory and administrative fees payable
by such Portfolios to BIMC. PFPC's principal business address is 400 Bellevue
Parkway, Wilmington, Delaware 19809.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN
PFPC Trust Company serves as the Fund's custodian and PFPC, an indirect
wholly-owned subsidiary of PNC Bank Corp., will succeed PNC Bank, National
Association ("PNC Bank") as the Fund's custodian pursuant to an assignment.
PNCBank will continue to provide certain services to PFPC Trust Company. PFPC
serves as the Fund's transfer agent and dividend disbursing agent. The principal
offices of PFPC are located at 400 Bellevue Parkway, Wilmington, Delaware 19809.
PFPC may enter into shareholder servicing agreements with registered
broker-dealers who have entered into dealer agreements with the Distributor for
the provision of certain shareholder support services to customers of such
Authorized Dealers who are shareholders of the Fund. The services provided and
the fees payable by the Fund for these services are described in the Statement
of Additional Information under "Investment Advisory, Distribution and Servicing
Arrangements."
DISTRIBUTOR
Provident Distributors, Inc. (the "Distributor"), with a principal business
address at Four Falls Corporate Center, West Conshohocken, Pennsylvania, 19428,
acts as distributor of the Shares of each of the Janney Classes of the Fund
pursuant to a distribution agreement dated May 29, 1998 (the "Distribution
Agreement").
21
<PAGE>
EXPENSES
The expenses of each Portfolio are deducted from the total income of such
Portfolio before dividends are paid. Any general expenses of the Fund that are
not readily identifiable as belonging to a particular investment portfolio of
the Fund will be allocated among all investment portfolios of the Fund based
upon the relative net assets of the investment portfolios. The Janney Classes of
the Fund pay their own distribution fees and may pay a different share than
other classes of the Fund of other expenses (excluding advisory and custodial
fees) if those expenses are actually incurred in a different amount by the
Janney Classes or if they receive different services.
The investment adviser may assume expenses of the Portfolios from time to
time. In certain circumstances, it may assume such expenses on the condition
that it is reimbursed by the Portfolios for such amounts prior to the end of a
fiscal year. In such event, the reimbursement of such amounts will have the
effect of increasing a Portfolio's expense ratio and of lowering yield to
investors.
For the Fund's fiscal year ended August 31, 1998, the Fund's total expenses
were 1.21% of the average net assets with respect to the Janney Class of the
Money Market Portfolio (not taking into account waivers and reimbursements of
.21%), 1.16% of the average net assets with respect to the Janney Class of the
Municipal Money Market Portfolio (not taking into account waivers and
reimbursements of .30%), 1.23% of the average net assets with respect to the
Janney Class of the Government Obligations Money Market Portfolio (not taking
into account waivers and reimbursements of .23%) and 1.20% of the average net
assets with respect to the Janney Class of the New York Municipal Money Market
Portfolios (not taking into account waivers and reimbursements of .40%).
DISTRIBUTION OF SHARES
- --------------------------------------------------------------------------------
The Board of Directors of the Fund approved and adopted the Distribution
Agreement and separate Plans of Distribution for each of the Classes
(collectively, the "Plans") pursuant to Rule 12b-1 under the 1940 Act. Under
each of the Plans, the Distributor is entitled to receive from the relevant
Janney Class a distribution fee, which is accrued daily and paid monthly, of up
to .65% on an annualized basis of the average daily net assets of the relevant
Janney Class. The actual amount of such compensation is agreed upon from time to
time by the Fund's Board of Directors and the Distributor. Under the
Distribution Agreement, the Distributor has agreed to accept compensation for
its services thereunder and under the Plans in the amount of .60% of the average
daily net assets of the relevant Class on an annualized basis in any year.
Pursuant to the conditions of an exemptive order granted by the Securities and
Exchange Commission, the Distributor has agreed to waive its fee with respect to
a Janney Class on any day to the extent necessary to assure that the fee
required to be accrued by such Class does not exceed the income of such Class on
that day. In addition, the Distributor may, in its discretion, voluntarily waive
from time to time all or any portion of its distribution fee.
Under the Distribution Agreement and the relevant Plan, the Distributor may
re-allocate an amount up to the full fee that it receives to financial
institutions, including Dealers, based upon the aggregate investment amounts
maintained by and services provided to shareholders of any relevant Class
serviced by such financial institutions. The Distributor may also reimburse
Dealers for other expenses incurred in the promotion of the sale of Fund shares.
The Distributor and/or Dealers pay for the cost of printing (excluding
typesetting) and mailing to prospective investors prospectuses and other
materials relating to the Fund as well as for related direct mail, advertising
and promotional expenses.
Each of the Plans obligates the Fund, during the period it is in effect, to
accrue and pay to the Distributor on behalf of each Janney Class the fee agreed
to under the Distribution Agreement. Payments under the Plans are not based on
expenses actually incurred by the Distributor, and the payments may exceed
distribution expenses actually incurred.
22
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of each of the Portfolios to each
Portfolio's shareholders. All distributions are reinvested in the form of
additional full and fractional Shares of the relevant Janney Class unless a
shareholder elects otherwise.
The net investment income (not including any net short-term capital gains)
earned by each Portfolio will be declared as a dividend on a daily basis and
paid monthly. Dividends are payable to shareholders of record immediately prior
to the determination of net asset value made as of the close of regular trading
on the NYSE. Net short-term capital gains, if any, will be distributed at least
annually.
TAXES
- --------------------------------------------------------------------------------
Distributions from the Money Market Portfolio and the Government
Obligations Money Market Portfolio will generally be taxable to shareholders. It
is expected that all, or substantially all, of these distributions will consist
of ordinary income. You will be subject to income tax on these distributions
regardless whether they are paid in cash or reinvested in additional shares. The
one major exception to these tax principles is that distributions on shares held
in an IRA (or other tax-qualified plan) will not be currently taxable.
Distributions from the Municipal Money Market Portfolio and the New York
Municipal Money Market Portfolio will generally constitute tax-exempt income for
shareholders for federal income tax purposes. It is possible, depending upon the
Portfolios' investments, that a portion of the Portfolios' distributions could
be taxable to shareholders as ordinary income or capital gains, but it is not
expected that this will be the case.
Although distributions from the Municipal Money Market Portfolio and the
New York Municipal Money Market Portfolio are exempt for federal income tax
purposes, they will generally constitute taxable income for state and local
income tax purposes except that, subject to limitations that vary depending on
the state, distributions from interest paid by a state or municipal entity may
be exempt from tax in that state.
Interest on indebtedness incurred by a shareholder to purchase or carry
shares of the Municipal Money Market Portfolio and the New York Municipal Money
Market Portfolio generally will not be deductible for federal income tax
purposes.
You should note that a portion of the exempt-interest dividends paid by the
Municipal Money Market Portfolio and the New York Municipal Money Market
Portfolio may constitute an item of tax preference for purposes of determining
federal alternative minimum tax liability. Exempt-interest dividends will also
be considered along with other adjusted gross income in determining whether any
Social Security or railroad retirement payments received by you are subject to
federal income taxes.
Exempt interest dividends derived from interest on New York Municipal
Obligations will be exempt from New York State and New York City personal income
(but not corporate franchise) taxes. The New York Municipal Money Market
Portfolio will determine annually the percentage amounts exempt from New York
State and New York City personal income taxes, and the amounts, if any, subject
to such taxes. The exclusion or exemption of interest income for federal income
tax purposes, or New York State or New York City personal income tax purposes,
in most cases does not result in an exemption under the tax laws of any other
state or local authority.
The foregoing is only a summary of certain tax considerations under the
current law, which may be subject to change in the future. You should consult
your tax adviser for further information regarding federal, state, local and/or
foreign tax consequences relevant to your specific situation.
23
<PAGE>
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
The Fund has authorized capital of thirty billion shares of Common Stock,
$.001 par value per share, of which 18.326 billion shares are currently
classified into 97 different classes of Common Stock (see "Description of
Shares" in the Statement of Additional Information).
The Fund offers multiple classes of shares in each of its Money Market,
Municipal Money Market, Government Obligations Money Market and New York
Municipal Money Market Portfolios to expand its marketing alternatives and to
broaden its range of services to different investors. The expenses of the
various classes within these Portfolios vary based upon the services provided,
which may affect performance. Each class of Common Stock of the Fund has a
separate Rule 12b-1 distribution plan. Under the Distribution Agreement entered
into with the Distributor and pursuant to each of the distribution plans, the
Distributor is entitled to receive from each class as compensation for
distribution services provided to that class a distribution fee based on average
daily net assets. A salesperson or any other person entitled to receive
compensation for servicing Fund shares may receive different compensation with
respect to different classes in a Portfolio of the Fund. An investor may contact
the Fund's Distributor by calling 1-800-888-9723 to request more information
concerning other classes available.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE JANNEY CLASSES OF THE MONEY MARKET, MUNICIPAL
MONEY MARKET, GOVERNMENT OBLIGATIONS MONEY MARKET AND NEW YORK MUNICIPAL MONEY
MARKET PORTFOLIOS AND DESCRIBE ONLY THE INVESTMENT OBJECTIVES AND POLICIES,
OPERATIONS, CONTRACTS AND OTHER MATTERS RELATING TO THE JANNEY CLASSES OF THESE
PORTFOLIOS.
Each share that represents an interest in a Portfolio has an equal
proportionate interest in the assets belonging to such Portfolio with each other
share that represents an interest in such Portfolio, even where a share has a
different class designation than another share representing an interest in that
Portfolio. Shares of the Fund do not have preemptive or conversion rights. When
issued for payment as described in this Prospectus, Shares of the Fund will be
fully paid and non-assessable.
The Fund currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
Holders of shares of each of the Portfolios will vote in the aggregate and
not by class on all matters, except where otherwise required by law. Further,
shareholders of all investment portfolios of the Fund will vote in the aggregate
and not by portfolio except as otherwise required by law or when the Board of
Directors determines that the matter to be voted upon affects only the interests
of the shareholders of a particular investment portfolio. (See the Statement of
Additional Information under "Additional Information Concerning Fund Shares" for
examples when the 1940 Act requires voting by investment portfolio or by class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of Common Stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
beneficially 25% or more of the outstanding shares of all of the classes of the
Fund.
24
<PAGE>
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to Janney
Montgomery Scott, 1801 Market Street, Philadelphia, PA 19103-1675; toll free
1-800-JANNEYS.
25
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK.)
<PAGE>
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
--------------------
TABLE OF CONTENTS
PAGE
Fee Table ................................................................ 2
Financial Highlights ..................................................... 3
Investment Objectives and Policies ....................................... 8
Year 2000 ................................................................ 15
Investment Limitations ................................................... 15
Purchase and Redemption of Shares ........................................ 17
Net Asset Value .......................................................... 19
Management ............................................................... 20
Distribution of Shares ................................................... 22
Dividends and Distributions .............................................. 23
Taxes .................................................................... 23
Description of Shares .................................................... 24
Other Information ........................................................ 25
INVESTMENT ADVISER
BlackRock Institutional Management Corporation
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
ADMINISTRATOR AND TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
================================================================================
<PAGE>
RBB
Select Money Market Portfolio
Prospectus and Summary Description
for the Select Shares of the
Money Market Portfolio
December 29, 1998
<PAGE>
RBB
SELECT MONEY MARKET PORTFOLIO
OF
THE RBB FUND, INC.
The Select Class consists of one class of common stock of The RBB Fund,
Inc. (the "Fund"), an open-end management investment company. The shares offered
by this Prospectus ("Select Shares" or "Shares") represent interests in the
Fund's Money Market Portfolio.
The investment objective of the Money Market Portfolio is to provide as
high a level of current interest income as is consistent with maintaining
liquidity and stability of principal. It seeks to achieve such objective by
investing in a diversified portfolio of U.S. dollar-denominated money market
instruments.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK
AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINICIPAL. THERE CAN BE NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
BlackRock Institutional Management Corporation serves as investment adviser
for the Portfolio, PFPC Trust Company serves as custodian for the Fund and PFPC
Inc. serves as administrator and transfer and dividend disbursing agent for the
Fund. Provident Distributors, Inc. acts as distributor for the Fund.
Select Shares are sold by the Fund's distributor to investment advisers
maintaining accounts with PNC Bank or its affiliates. Select Shares will also be
sold to customers, including individuals, trusts, partnerships and corporations,
who maintain accounts with PNC Bank or its affiliates, and who have authorized
PNC Bank or its affiliates to invest their assets in the Fund. Shares are sold
and redeemed without any purchase or redemption charge imposed by the Fund,
although PNC Bank or its affiliates may charge their customers in connection
with the management of their accounts.
This Prospectus contains concise information that a prospective investor
needs to know before investing. Please keep it for future reference. A Statement
of Additional Information, dated December 29, 1998 has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained free of charge by calling the Fund at
1-800-430-9618. The Prospectus and Statement of Additional Information are also
available for reference, along with other related material on the SEC Internet
Website (http://www.sec.gov).
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
The RBB Fund, Inc. is an open-end management investment company
incorporated under the laws of the State of Maryland on February 29, 1988. The
Fund is currently operating or proposing to operate seventeen investment
portfolios. Shares of the Select Class ("Select Class" or "Class") of the Fund
offered by this Prospectus represent interests in the Fund's Money Market
Portfolio (the "Money Market Portfolio" or the "Portfolio").
The investment objective of the Portfolio is to provide as high a level of
current interest income as is consistent with maintaining liquidity and
stability of principal. It seeks to achieve such objective by investing in a
diversified portfolio of U.S. dollar-denominated money market instruments which
meet certain ratings criteria and which present minimal credit risks. In
pursuing its investment objective, the Money Market Portfolio invests in a broad
range of government, bank and commercial obligations that may be available in
the money markets.
The Portfolio seeks to maintain a net asset value of $1.00 per share;
however, there can be no assurance that it will be able to maintain a stable net
asset value of $1.00 per share.
The Portfolio's investment adviser is BlackRock Institutional Management
Corporation ("BIMC"). PFPC Trust Company serves as custodian to the Fund and
PFPC Inc. ("PFPC") serves as administrator and transfer and dividend disbursing
agent to the Fund. Provident Distributors, Inc. (the "Distributor") acts as
distributor of the Fund's shares.
An investment in the Portfolio is subject to certain risks, as set forth in
detail under "Investment Objective and Policies." The Portfolio, to the extent
set forth under "Investment Objective and Policies," may engage in the following
investment practices: the use of repurchase agreements and reverse repurchase
agreements; the purchase of asset-backed securities; the purchase of securities
on a "when-issued" or "forward commitment" basis; the purchase of stand-by
commitments; and the lending of securities. All of these transactions involve
certain special risks, as set forth under "Investment Objective and Policies."
For detailed information of how to purchase or redeem Select Shares, please
refer to the section of this Prospectus entitled "Purchase and Redemption of
Shares."
FEE TABLE
The following table illustrates the estimated annual operating expenses for
Select Shares of the Portfolio (after expected fee waivers and expense
reimbursements) for the current fiscal period. An example based on the summary
is also shown.
ANNUAL FUND OPERATING EXPENSES (SELECT SHARES) MONEY MARKET
AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS PORTFOLIO
------------
Management fees (after waivers)(1) .............................. .22%
Other Expenses .................................................. .05
----
Total Fund Operating Expenses (after waivers)(1) ................ .27%
====
(1) Management Fees are based on average daily net assets and are calculated
daily and paid monthly. Before waivers, Management Fees would be .37% and Total
Fund Operating Expenses would be .42%.
2
<PAGE>
EXAMPLE*
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time period:
1 YEAR 3 YEARS
------ -------
Money Market Portfolio* ..................... $3 $9
* Other Classes of this Portfolio are sold with different fees and expenses.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN.
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in Select Shares of the Fund will
bear directly or indirectly. (For more complete descriptions of the various
costs and expenses, see "Management--Investment Adviser" below.) The figure
shown in the Fee Table for "Management Fees" is based on actual fees incurred by
the Portfolio during its last fiscal year. "Other Expenses" is estimated for the
current fiscal year. The Fee Table reflects a voluntary waiver of Management
Fees for the Portfolio. However, there can be no assurance that any future
waivers of Management Fees will not vary from the figure reflected in the Fee
Table. In addition, the investment adviser is currently voluntarily assuming
additional expenses of the Portfolio. There can be no assurance that the
investment adviser will continue to assume such expenses. Assumption of
additional expenses will have the effect of lowering a Portfolio's overall
expense ratio and increasing its yield to investors.
From time to time the Portfolio may advertise the "total return," "yield"
and "effective yield" of its Select Shares. TOTAL RETURN AND YIELD FIGURES WILL
BE BASED ON HISTORICAL EARNINGS AND WILL NOT BE INDICATIVE OF FUTURE
PERFORMANCE. The "yield" of the Portfolio refers to the income generated by an
investment in Select Shares of the Portfolio over a seven-day period (which
period shall be stated in the advertisement). This income is then "annualized."
That is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The "effective yield" is calculated similarly but,
when annualized, the income earned by an investment in Select Shares of the
Portfolio is assumed to be reinvested. The "effective yield" will be slightly
higher than the "yield" because of the compounding effect of this assumed
reinvestment.
The total return and yield of any investment is generally a function of
portfolio quality and maturity, type of investment, operating expenses and
market conditions. The total return and yield on Shares will fluctuate and is
not necessarily representative of future results. Any fees charged by PNC Bank
or its affiliates directly to their customers in connection with their
investment accounts will not be reflected in the total return and yields on the
Portfolio's Shares, and such fees, if charged, will reduce the actual return
received by customers on their investments. The total return and yield on Shares
of the Select Class may differ from total return and total return and yields on
shares of other classes of the Portfolio depending on the allocation of expenses
to each of the classes of the Portfolio.
INVESTMENT OBJECTIVE AND POLICIES
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The Money Market Portfolio's investment objective is to provide as high a
level of current interest income as is consistent with maintaining liquidity and
stability of principal. Portfolio obligations held by the Money Market Portfolio
have remaining maturities of 397 days or less (exclusive of securities subject
to repurchase agreements). In pursuing its investment objective, the Money
Market Portfolio invests in a diversified portfolio of U.S. dollar-denominated
instruments, such as government, bank and commercial obligations, that may be
available in the money markets ("Money Market Instruments") and that meet
certain ratings criteria and present minimal credit risks to the Money Market
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<PAGE>
Portfolio. See "Eligible Securities." There is no assurance that the Portfolio
will achieve its investment objective. The following descriptions illustrate the
types of Money Market Instruments in which the Money Market Portfolio invests.
BANK OBLIGATIONS. The Portfolio may purchase obligations of issuers in the
banking industry, such as short-term obligations of bank holding companies,
certificates of deposit, bankers' acceptances and time deposits, including U.S.
dollar-denominated instruments issued or supported by the credit of U.S. or
foreign banks or savings institutions having total assets at the time of
purchase in excess of $1 billion. The Portfolio may invest substantially in
obligations of foreign banks or foreign branches of U.S. banks where the
investment adviser deems the instrument to present minimal credit risks. Such
investments may nevertheless entail risks in addition to those of domestic
issuers, including higher transaction costs, less complete financial
information, less stringent regulatory requirements and less market liquidity.
The Portfolio may also make interest-bearing savings deposits in commercial and
savings banks in amounts not in excess of 5% of its total assets.
COMMMERCIAL PAPER. The Portfolio may purchase commercial paper (i) rated
(at the time of purchase) in the two highest rating categories of at least two
nationally recognized statistical rating organizations ("Rating Organization")
or, by the only Rating Organization providing a rating; or (ii) issued by
issuers (or, in certain cases guaranteed by persons) with short-term debt having
such ratings. These rating categories are described in the Appendix to the
Statement of Additional Information. The Portfolio may also purchase unrated
commercial paper provided that such paper is determined to be of comparable
quality by the Portfolio's investment adviser in accordance with guidelines
approved by the Fund's Board of Directors.
Commercial paper purchased by the Portfolio may include instruments issued
by foreign issuers, such as Canadian Commercial Paper ("CCP"), which is U.S.
dollar-denominated commercial paper issued by a Canadian corporation or a
Canadian counterpart of a U.S. corporation, and in Europaper, which is a U.S.
dollar-denominated commercial paper of a foreign issuer, subject to the criteria
stated above for other commercial paper issuers.
VARIABLE RATE DEMAND NOTES. The Portfolio may purchase variable rate demand
notes, which are unsecured instruments that permit the indebtedness thereunder
to vary and provide for periodic adjustment in the interest rate. Although the
notes are not normally traded and there may be no active secondary market in the
notes, the Portfolio will be able (at any time or during specified periods not
exceeding 13 months, depending upon the note involved) to demand payment of the
principal of a note. The notes are not typically rated by credit rating
agencies, but issuers of variable rate demand notes must satisfy the same
criteria as set forth above for issuers of commercial paper. If an issuer of a
variable rate demand note defaulted on its payment obligation, the Portfolio
might be unable to dispose of the note because of the absence of an active
secondary market. For this or other reasons, the Portfolio might suffer a loss
to the extent of the default. The Portfolio invests in variable rate demand
notes only when the Portfolio's investment adviser deems the investment to
involve minimal credit risk. The Portfolio's investment adviser also monitors
the continuing creditworthiness of issuers of such notes to determine whether
the Portfolio should continue to hold such notes.
REPURCHASE AGREEMENTS. The Portfolio may agree to purchase securities from
financial institutions subject to the seller's agreement to repurchase them at
an agreed upon time and price ("repurchase agreements"). The securities held
subject to a repurchase agreement may have stated maturities exceeding 13
months, provided the repurchase agreement itself matures in less than 13 months.
Default by or bankruptcy of the seller would, however, expose the Portfolio to
possible loss because of adverse market action or delays in connection with the
disposition of the underlying obligations.
U.S. GOVERNMENT OBLIGATIONS. The Portfolio may purchase obligations issued
or guaranteed by the U.S. Government or its agencies and instrumentalities.
Obligations of certain agencies and instrumentalities of the U.S. Government are
backed by the full faith and credit of the United States. Others are backed by
the right of the issuer to borrow from the U.S. Treasury or are backed only by
the credit of the agency or instrumentality issuing the obligation.
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<PAGE>
ASSET-BACKED SECURITIES. The Portfolio may invest in asset-backed
securities which are backed by mortgages, installment sales contracts, credit
card receivables or other assets and collateralized mortgage obligations
("CMOs") issued and guaranteed by U.S. Government Agencies and instrumentalities
or issued by private companies. Asset backed securities also include adjustable
rate securities. The estimated life of an asset-backed security varies with the
prepayment experience with respect to the underlying debt instruments. For this
and other reasons, an asset-backed security's stated maturity may be shortened,
and the security's total return may be difficult to predict precisely. Such
difficulties are not expected, however, to have a significant effect on the
Portfolio since the remaining maturity of any asset-backed security acquired
will be 13 months or less. Asset-backed securities are considered an industry
for industry concentration purposes. See "Investment Limitations." In periods of
falling interest rates, the rate of mortgage prepayments tends to increase.
During these periods, the reinvestment of proceeds by a portfolio will generally
be at lower rates than the rates on the prepaid obligations.
REVERSE REPURCHASE AGREEMENTS. The Portfolio may enter into reverse
repurchase agreements with respect to portfolio securities. A reverse repurchase
agreement involves a sale by a portfolio of securities that it holds
concurrently with an agreement by the portfolio to repurchase them at an agreed
upon time and price. Reverse repurchase agreements involve the risk that the
market value of the securities sold by the Portfolio may decline below the price
at which the Portfolio is obligated to repurchase them. Reverse repurchase
agreements are considered to be borrowings by the Portfolio under the Investment
Company Act of 1940 (the "1940 Act").
MUNICIPAL OBLIGATIONS. In addition, the Portfolio may, when deemed
appropriate by its investment adviser in light of the Portfolio's investment
objective, invest without limitation in high quality, short-term Municipal
Obligations issued by state and local governmental issuers, the interest on
which may be taxable or tax-exempt for federal income tax purposes, provided
that such obligations carry yields that are competitive with those of other
types of Money Market Instruments of comparable quality. For a more complete
discussion of Municipal Obligations, see Statement of Additional Information
under "Investment Objectives and Policies."
GUARANTEED INVESTMENT CONTRACTS. The Portfolio may make investments in
obligations such as guaranteed investment contracts and similar funding
agreements (collectively, "GICs"), issued by highly rated U.S. insurance
companies. A GIC is a general obligation of the issuing insurance company and
not a separate account. The Portfolio's investments in GICs are not expected to
exceed 5% of its total assets at the time of purchase absent unusual market
conditions. GIC investments are subject to the Fund's policy regarding
investment in illiquid securities.
STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, a dealer would agree to purchase at the Portfolio's option specified
Municipal Obligations at a specified price. The acquisition of a stand-by
commitment may increase the cost and thereby reduce the yield, of the Municipal
Obligation to which such commitment relates. The Portfolio will acquire stand-by
commitments solely to facilitate portfolio liquidity and does not intend to
exercise its rights thereunder for trading purposes.
WHEN-ISSUED SECURITIES. The Portfolio may purchase portfolio securities on
a "when-issued" basis. When-issued securities are securities purchased for
delivery beyond the normal settlement date at a stated price and yield. The
Portfolio will generally not pay for such securities or start earning interest
on them until they are received. Securities purchased on a when-issued basis are
recorded as an asset at the time the commitment is entered into and are subject
to changes in value prior to delivery based upon changes in the general level of
interest rates. The Portfolio expects that commitments to purchase when-issued
securities will not exceed 25% of the value of its total assets absent unusual
market conditions. The Portfolio does not intend to purchase when-issued
securities for speculative purposes but only in furtherance of its investment
objective.
5
<PAGE>
ELIGIBLE SECURITIES. The Portfolio will only purchase "eligible securities"
that present minimal credit risks as determined by the Portfolio's investment
adviser pursuant to guidelines adopted by the Board of Directors. Eligible
securities generally include: (1) U.S. Government securities, (2) securities
that are rated (or whose issuer or, in certain cases, guarantor, is rated) at
the time of purchase in the two highest rating categories by at least two Rating
Organizations ("Rating Organizations") (e.g., commercial paper rated "A-1" or
"A-2" by Standard & Poor's Ratings Services ("S&P")), (3) securities that are
rated (or whose issuer or, in certain cases, guarantor, is rated) at the time of
purchase by the only Rating Organization rating the security in one of its two
highest rating categories for such securities, (4) securities issued by issuers
(or, in certain cases guaranteed by persons) with short-term debt having such
ratings, and (5) securities (including guarantees) that are not rated and are
issued by an issuer that does not have comparable obligations rated by a Rating
Organization ("Unrated Securities"), provided that such securities are
determined to be of comparable quality to eligible rated securities. For a more
complete description of eligible securities, see "Investment Objectives and
Policies" in the Statement of Additional Information.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days, time deposits with maturities in excess of
seven days, variable rate demand notes with demand periods in excess of seven
days unless the Portfolio's investment adviser determines that such notes are
readily marketable and could be sold promptly at the prices at which they are
valued, GICs, and other securities that are illiquid by virtue of the absence of
a readily available market or legal or contractual restrictions on resale.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the notice period. Securities that have legal or contractual restrictions on
resale but have a readily available market are not deemed illiquid for purposes
of this limitation. The Portfolio's investment adviser will monitor the
liquidity of such restricted securities under the supervision of the Board of
Directors. See "Investment Objectives and Policies - Illiquid Securities" in the
Statement of Additional Information.
YEAR 2000
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Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant the Fund's service providers expect that their plans to be compliant
will be achieved.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Portfolio's investment objective and policies described above may be
changed by the Fund's Board of Directors without shareholder approval. The
Portfolio may not, however, change the investment limitations summarized below
without such a vote of shareholders. (A more detailed description of the
following investment limitations, together with other investment limitations
that cannot be changed without a vote of shareholders, is contained in the
Statement of Additional Information under "Investment Objectives and Policies.")
6
<PAGE>
The Money Market Portfolio may not:
1. Purchase any securities other than Money Market Instruments, some of
which may be subject to repurchase agreements, but the Portfolio may make
interest-bearing savings deposits in amounts not in excess of 5% of the
value of the Portfolio's assets and may make time deposits.
2. Borrow money, except from banks for temporary purposes and except
for reverse repurchase agreements and then in amounts not in excess of 10%
of the value of the Portfolio's assets at the time of such borrowing, and
only if after such borrowing there is asset coverage of at least 300% for
all borrowings of the Portfolio; or mortgage, pledge or hypothecate any of
its assets except in connection with any such borrowing and in amounts not
in excess of 10% of the value of the Portfolio's assets at the time of such
borrowing; or purchase portfolio securities while borrowings in excess of
5% of the Portfolio's net assets are outstanding. (This borrowing provision
is not for investment leverage, but solely to facilitate management of the
Portfolio's securities by enabling the Portfolio to meet redemption
requests where the liquidation of portfolio securities is deemed to be
disadvantageous or inconvenient.)
3. Purchase any securities which would cause, at the time of purchase,
less than 25% of the value of the total assets of the Portfolio to be
invested in the obligations of issuers in the banking industry, or in
obligations, such as repurchase agreements, secured by such obligations
(unless the Portfolio is in a temporary defensive position) or which would
cause, at the time of purchase, more than 25% of the value of its total
assets to be invested in the obligations of issuers in any other industry.
4. Purchase securities of any one issuer, other than securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities,
if immediately after and as a result of such purchase more than 5% of the
value of its total assets would be invested in the securities of such
issuer, or more than 10% of the outstanding voting securities of such
issuer would be owned by the Portfolio, except that up to 25% of the value
of the Portfolio's total assets may be invested without regard to such 5%
limitation.
So long as it values its portfolio securities on the basis of the amortized
cost method of valuation pursuant to Rule 2a-7 under the 1940 Act, the Portfolio
will meet the following limitations on its investments in addition to the
fundamental investment limitations described above. These limitations may be
changed without a shareholder vote.
1. The Portfolio will limit its purchases of the securities (other than
securities with certain types of guarantees) of any one issuer, other than
issuers of U.S. Government securities, to 5% of its total assets, except
that the Portfolio may invest more than 5% of its total assets in First
Tier Securities of one issuer for a period of up to three Business Days (as
defined below). "First Tier Securities" generally include eligible
securities that (i) if rated (or guaranteed by a person which has been
rated) by more than one Rating Organization, are rated (at the time of
purchase) by two or more Rating Organizations in the highest rating
category for such securities, (ii) if rated (or guaranteed by a person
which has been rated) by only one Rating Organization, are rated by such
Rating Organization in its highest rating category for such securities,
(iii) have no short-term rating and are comparable in priority and security
to a class of short-term obligations of the issuer of such securities that
have been rated in accordance with (i) or (ii) above (or have a guarantee
which satisfies this standard), or (iv) are Unrated Securities that are
determined to be of comparable quality to such securities (or have a
guarantee which satisfies this standard). The Portfolio's compliance with
this diversification requirement is deemed to be compliance with the
fundamental diversification limit in paragraph 4 above.
2. The Portfolio will limit its purchases of Second Tier Securities,
which are eligible securities other than First Tier Securities, to 5% of
its total assets.
3. The Portfolio will limit its purchases of Second Tier Securities of
one issuer to the greater of 1% of its total assets or $1 million.
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<PAGE>
PURCHASE AND REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
PURCHASE PROCEDURES
GENERAL. Select Shares are sold without a sales load on a continuous basis.
The minimum initial investment by an investor is $200 million. The Fund reserves
the right to waive this minimum investment requirement in its sole discretion.
There is no minimum subsequent investment. The Fund in its sole discretion may
accept or reject any order for purchases of Select Shares.
Investors may purchase Select Shares through an account maintained by the
investor with PNC Bank or its affiliates ("the Account"). All payments for
initial and subsequent investments should be in U.S. dollars. PNC Bank or its
affiliates are responsible for the prompt transmission of its customers' orders
to the Fund's transfer agent. Purchases will be effected at the net asset value
next determined after PFPC, the Fund's transfer agent, has received a purchase
order in good order from PNC Bank or its affiliates and the Fund's custodian has
Federal Funds immediately available to it. In those cases where payment is made
by check, Federal Funds will generally become available two Business Days after
the check is received by PNC Bank or its affiliates. A "Business Day" is any day
that both the New York Stock Exchange (the "NYSE") and the Federal Reserve Bank
of Philadelphia (the "FRB") are open. On any Business Day, orders which are
accompanied by Federal Funds and received by PFPC by 12:00 noon Eastern Time,
and orders as to which payment has been converted into Federal Funds by 12:00
noon Eastern Time, will be executed as of 12:00 noon that Business Day. Orders
which are accompanied by Federal Funds and received by the Fund after 12:00 noon
Eastern Time but prior to the close of regular trading on the NYSE (generally
4:00 p.m. Eastern Time), and orders as to which payment has been converted into
Federal Funds after 12:00 noon Eastern Time but prior to the close of regular
trading on the NYSE on any Business Day of the Fund, will be executed as of the
close of regular trading on the NYSE on that Business Day, but will not be
entitled to receive dividends declared on such Business Day. Orders which are
accompanied by Federal Funds and received by the Fund as of the close of regular
trading on the NYSE or later, and orders as to which payment has been converted
to Federal Funds as of the close of regular trading on the NYSE or later on a
Business Day will be processed as of 12:00 noon Eastern Time on the following
Business Day.
PURCHASES THROUGH AN ACCOUNT. Purchases of Select Shares may be effected
through an investor's Account with PNC Bank or its affiliates through procedures
established in connection with the requirements of Accounts at PNC Bank or its
affiliates. In such event, beneficial ownership of Shares will be recorded by
PNC Bank or its affiliates and will be reflected in the Account statements
provided by PNC Bank or its affiliates to such investors. PNC Bank or its
affiliates may impose minimum investment Account requirements. Although PNC Bank
or its affiliates do not impose a sales charge for purchases of Shares,
depending on the terms of an investor's Account with PNC Bank or its affiliates,
PNC Bank or its affiliates may charge an investor's Account fees for automatic
investment and other services provided to the Account. Information concerning
Account requirements, services and charges should be obtained from PNC Bank or
its affiliates, and this Prospectus should be read in conjunction with any
information received from PNC Bank or its affiliates.
PNC Bank or its affiliates may offer investors the ability to purchase
Select Shares under an automatic purchase program (a "Purchase Program")
established by PNC Bank or its affiliates. An investor who participates in a
Purchase Program will have his "free-credit" cash balances in his Account with
PNC Bank or its affiliates automatically invested in Shares of the Portfolio.
The frequency of investments and the minimum investment requirement may be
established by PNC Bank or its affiliates and the Fund. In addition, PNC Bank or
its affiliates may require a minimum amount of cash and/or securities to be
deposited in an Account for participants in the Purchase Program. The
description of the Purchase Program should be read for details, and any
inquiries concerning an Account or a Purchase Program should be directed to PNC
Bank or its affiliates.
8
<PAGE>
If PNC Bank or its affiliates makes special arrangements under which orders
for Select Shares are received by PFPC prior to 12:00 noon Eastern Time, and PNC
Bank or its affiliates guarantees that payment for such Shares will be made in
available Federal Funds to the Fund's custodian prior to the close of regular
trading on the NYSE, on the same day, such purchase orders will be effective and
Shares will be purchased at the offering price in effect as of 12:00 noon
Eastern Time on the date the purchase order is received by PFPC.
REDEMPTION PROCEDURES
Redemption orders are effected at the net asset value per share next
determined after receipt of the order in proper form by the Fund's transfer
agent, PFPC. Investors may redeem all or some of their Shares in accordance with
one of the procedures described below.
REDEMPTION OF SHARES IN AN ACCOUNT. An investor who beneficially owns
Select Shares through an Account may redeem Select Shares in his Account in
accordance with instructions and limitations pertaining to his Account by
contacting PNC Bank or its affiliates. It is the responsibility of PNC Bank or
its affiliates to transmit purchase and redemption orders to PFPC and credit its
investors' accounts with the redemption proceeds on a timely basis. If such
notice is received by PFPC by 12:00 noon Eastern Time on any Business Day, the
redemption will be effective as of 12:00 noon Eastern Time on that day. Payment
of the redemption proceeds will be made after 12:00 noon Eastern Time on the day
the redemption is effected, provided that the Fund's custodian is open for
business. If the custodian is not open, payment will be made on the next bank
business day. If the redemption request is received between 12:00 noon and the
close of regular trading on the NYSE on a Business Day, the redemption will be
effective as of the close of regular trading on the NYSE on such Business Day
and payment will be made on the next bank business day following receipt of the
redemption request. If all Shares are redeemed, all accrued but unpaid dividends
on those Shares will be paid with the redemption proceeds.
PNC Bank or its affiliates will also redeem each day a sufficient number of
Shares to cover debit balances created by transactions in the Account or
instructions for cash disbursements. Shares will be redeemed on the same day
that a transaction occurs that results in such a debit balance or charge.
PNC Bank or its affiliates reserves the right to waive or modify criteria
for participation in an Account or to terminate participation in an Account for
any reason.
ADDITIONAL REDEMPTION INFORMATION. The Fund ordinarily will make payment
for all Shares redeemed within seven days after receipt by PFPC of a redemption
request in proper form. Although the Fund will redeem Shares purchased by check
before the check clears, payment of the redemption proceeds may be delayed for a
period of up to fifteen days after their purchase, pending a determination that
the check has cleared. This procedure does not apply to Shares purchased by wire
payment. Investors should consider purchasing Shares using a certified or bank
check or money order if they anticipate an immediate need for redemption
proceeds.
The Fund imposes no charge when Shares are redeemed. The Fund reserves the
right to redeem any account in the Select Class involuntarily, on thirty days'
notice, if such account falls below $500 million and during such thirty day
notice period the amount invested in such account is not increased to at least
$500 million. Payment for Shares redeemed may be postponed or the right of
redemption suspended as provided by the rules of the Securities and Exchange
Commission.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value per share of the Select Class of the Portfolio for the
purpose of pricing purchase and redemption orders is determined twice each day,
once as of 12:00 noon Eastern Time and once as of the close of regular trading
on the NYSE on each weekday with the exception of those holidays on which either
the NYSE or the FRB is closed.
9
<PAGE>
Currently, the NYSE is closed on weekends and the customary national business
holidays of New Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day and on the preceding Friday or subsequent Monday when one of these
holidays falls on a Saturday or Sunday. The FRB is currently closed on weekends
and the same holidays as the NYSE is closed as well as Veterans' Day and
Columbus Day. The net asset value per share of each class of the Portfolio is
calculated by adding the value of the proportionate interest of the class in the
securities, cash and other assets of the Portfolio, deducting actual and accrued
liabilities of the class and dividing the result by the number of outstanding
shares of the class. The net asset value of each class of the Portfolio is
calculated independently of each other class.
The Fund seeks to maintain a net asset value of $1.00 per Share for
purposes of purchases and redemptions and values its portfolio securities on the
basis of the amortized cost method of valuation described in the Statement of
Additional Information under the heading "Valuation of Shares." There can be no
assurance that net asset value per share will not vary.
With the approval of the Board of Directors, the Portfolio may use a
pricing service, bank or broker-dealer experienced in such matters to value the
Portfolio's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of the Fund and each of its investment portfolios
are managed under the direction of the Fund's Board of Directors. The Fund
currently operates or proposes to operate seventeen separate investment
portfolios. The Select Class represents interests in the Money Market Portfolio.
INVESTMENT ADVISER
BIMC, an indirect majority-owned subsidiary of PNC Bank, serves as the
investment adviser for the Portfolio. BIMC has its principal offices at Bellevue
Park Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware 19809. PNC
Bank and its subsidiaries currently manage over $45.9 billion of assets, of
which approximately $31.4 billion are mutual funds. PNC Bank, a national bank
whose principal business address is 1600 Market Street, Philadelphia,
Pennsylvania 19103, is a wholly-owned subsidiary of PNC Bancorp, Inc. PNC
Bancorp, Inc. is a bank holding company and a wholly-owned subsidiary of PNC
Bank Corp., a multi-bank holding company.
As investment adviser to the Portfolio, BIMC manages such Portfolio and is
responsible for all purchases and sales of Portfolio securities. In entering
into Portfolio transactions for the Portfolio with a broker, BIMC may take into
account the sale by such broker of shares by the Fund, subject to the
requirements of best execution. The agreement between BIMC and RBB, with respect
to the Money Market Portfolio, provides for BIMC to also assist generally in
supervising the operations of the Portfolio, and to maintain the Portfolio's
financial accounts and records. These administrative responsibilities have been
delegated to PFPC, as described below.
For the services provided to and expenses assumed by it for the benefit of
the Money Market Portfolio, BIMC is entitled to receive the following fees,
computed daily and payable monthly based on the Portfolio's average daily net
assets: .45% of the first $250 million; .40% of the next $250 million; and .35%
of the average daily net assets of such Portfolio in excess of $500 million.
BIMC may in its discretion from time to time agree to waive voluntarily all or
any portion of its advisory fee for the Portfolio.
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<PAGE>
For the period ended August 31, 1998, the Fund paid investment advisory
fees aggregating .24% of the average net assets of the Portfolio. For the same
period, BIMC waived fees of approximately .13% of the average net assets of the
Portfolio.
PNC Bank was formerly sub-adviser to the Portfolio and provided research,
credit analysis and recommendations with respect to the Portfolio's investments
and supplied certain computer facilities, personnel and other services. The
facilities, personnel, services and related expenses have been transferred to
BIMC and in return, BIMC's obligation to pay a portion of the sub-advisory fee
to PNC bank has been terminated. For its sub-advisory services, PNC Bank was
entitled to receive from BIMC an amount equal to 75% of the investment advisory
fee paid by the Portfolio to BIMC (subject to adjustment in certain
circumstances). The sub-advisory fees paid by BIMC to PNC Bank had no effect on
the investment advisory fees payable by the Portfolio to BIMC. The services
provided by BIMC and the fees payable by the Portfolio for these services are
described further in the Statement of Additional Information under "Management
of the Company."
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington,Delaware 19809. PFPC may enter into shareholder servicing
agreements with registered broker-dealers who have entered into dealer
agreements with the Distributor ("Authorized Dealers") for the provision of
certain shareholder support services to customers of such Authorized Dealers who
are shareholders of the Fund. The services provided and the fees payable by the
Fund for these services are described in the Statement of Additional Information
under "Investment Advisory, Distribution and Servicing Arrangements."
ADMINISTRATOR
Pursuant to its advisory agreement with the Fund, BIMC provides
administrative services to the Portfolio, and is entitled to an administration
fee, computed daily and payable monthly at .10% of average daily net assets of
the Portfolio. BIMC has delegated to PFPC all of its accounting and
administrative obligations under such advisory agreement. The Fund has agreed to
pay directly to PFPC the fees for accounting and administrative services to the
Money Market Portfolio which PFPC would have received directly from BIMC. Such
arrangement has no effect on the total advisory and administrative fees payable
by such Portfolio to BIMC. PFPC's principal business address is 400 Bellevue
Parkway, Wilmington, Delaware 19809.
DISTRIBUTOR
Provident Distributors, Inc., with a principal business address at Four
Falls Corporate Center, West Conshohocken, Pennsylvania 19428, acts as
Distributor for the Fund pursuant to a distribution agreement dated May 29, 1998
(the "Distribution Agreement").
EXPENSES
The expenses of the Portfolio are deducted from the total income of the
Portfolio before dividends are paid. Any general expenses of the Fund that are
not readily identifiable as belonging to a particular investment portfolio of
the Fund will be allocated among all investment portfolios of the Fund based on
the relative net assets of the investment portfolios at the time such expenses
were accrued. The Select Class of the Portfolio may pay a different share than
other classes of the Portfolio of other expenses (excluding advisory and
custodial fees) if those expenses are actually incurred in a different amount by
the Select Class.
11
<PAGE>
The investment adviser may assume expenses of the Portfolio from time to
time. In certain circumstances, it may assume such expenses on the condition
that it be reimbursed by the Portfolio for such amounts prior to the end of a
fiscal year. The assumption of expenses by the investment adviser will have the
effect of lowering the Portfolio's expense ratio and of increasing its yield to
investors.
BANKING LAWS
Banking laws and regulations currently prohibit a bank holding company
registered under the Federal Bank Holding Company Act of 1956 or any bank or
non-bank affiliate thereof from sponsoring, organizing, controlling, or
distributing the shares of a registered, open-end investment company
continuously engaged in the issuance of its shares, and prohibit banks generally
from issuing, underwriting, selling or distributing securities, but such banking
laws and regulations do not prohibit such a holding company or affiliate or
banks generally from acting as investment adviser, transfer agent or custodian
to such an investment company, or from purchasing shares of such a company as
agent for and upon the order of such a customer. PNC Bank, BIMC and PFPC are
subject to such banking laws and regulations. In addition, state securities laws
on this issue may differ from the interpretations of federal law expressed
herein and banks and financial institutions may be required to register as
dealers pursuant to state law.
Should future legislative, judicial or administrative action prohibit or
restrict the activities of banks in connection with the provision of support
services to their customers, the Fund might be required to alter materially or
cause the Fund to discontinue its arrangements with banks generally and change
its method of operations with respect to the Select Shares. It is not
anticipated, however, that any change in the Fund's method of operations would
affect its net asset value per share or result in a financial loss to any
customer.
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Portfolio to the Portfolio's
shareholders. All distributions are reinvested in the form of additional full
and fractional Shares of the Select Class unless a shareholder elects otherwise.
The net investment income (not including any net short-term capital gains)
earned by the Portfolio will be declared as a dividend on a daily basis and paid
monthly. Dividends are payable to shareholders of record immediately prior to
the determination of net asset value made as of the close of regular trading of
the NYSE. Net short-term capital gains, if any, will be distributed at least
annually.
TAXES
- --------------------------------------------------------------------------------
Distributions from the Portfolio will generally be taxable to shareholders.
It is expected that all, or substantially all, of these distributions will
consist of ordinary income. You will be subject to income tax on these
distributions regardless whether they are paid in cash or reinvested in
additional shares. The one major exception to these tax principles is that
distributions on shares held in an IRA (or other tax-qualified plan) will not be
currently taxable.
The foregoing is only a summary of certain tax considerations under the
current law, which may be subject to change in the future. You should consult
your tax adviser for further information regarding federal, state, local and/or
foreign tax consequences relevant to your specific situation.
12
<PAGE>
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
The Fund has authorized capital of thirty billion shares of Common Stock,
$.001 par value per share, of which 18.326 billion shares are currently
classified into 97 different classes of Common Stock (see "Description of
Shares" in the Statement of Additional Information).
The Fund offers multiple classes of shares in the Money Market Portfolio to
expand its marketing alternatives and to broaden its range of services to
different investors. The expenses of the various classes within the Portfolio
vary based upon the services provided, which may affect performance. A
salesperson or any other person entitled to receive compensation for servicing
Fund shares may receive different compensation with respect to different classes
in the Portfolio. An investor may contact the Fund's Distributor by calling
1-800-888-9723 to request more information concerning other classes available.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE EXCLUSIVELY TO THE SELECT CLASS OF THE MONEY MARKET PORTFOLIO AND
DESCRIBE ONLY THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS AND
OTHER MATTERS RELATING TO THE SELECT SHARES OF THE PORTFOLIO.
Each share that represents an interest in the Portfolio has an equal
proportionate interest in the assets belonging to the Portfolio with each other
share that represents an interest in the Portfolio, even where a share has a
different class designation than another share representing an interest in the
Portfolio. Shares of the Fund do not have preemptive or conversion rights. When
issued for payment as described in this Prospectus, shares of the Fund will be
fully paid and non-assessable.
The Fund currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
Holders of shares of the Portfolio will vote in the aggregate and not by
class on all matters, except where otherwise required by law. Further,
shareholders of all investment portfolios of the Fund will vote in the aggregate
and not by portfolio except as otherwise required by law or when the Board of
Directors determines that the matter to be voted upon affects only the interests
of the shareholders of a particular investment portfolio. (See the Statement of
Additional Information under "Additional Information Concerning Fund Shares" for
examples of when the 1940 Act requires voting by investment portfolio or by
class.) Shareholders of the Fund are entitled to one vote for each full share
held (irrespective of class or portfolio) and fractional votes for fractional
shares held. Voting rights are not cumulative and, accordingly, the holders of
more than 50% of the aggregate shares of Common Stock of the Fund may elect all
of the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of the
Fund.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholders may direct inquiries to the Fund's
transfer agent, 400 Bellevue Parkway, Wilmington, DE 19809, or call
1-800-430-9618.
13
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
---------------------------------------
CONTENTS
PAGE
Introduction .............................................................. 2
Investment Objective and Policies ......................................... 3
Year 2000 ................................................................. 6
Investment Limitations .................................................... 6
Purchase and Redemptions of Shares ........................................ 8
Net Asset Value ........................................................... 9
Management ................................................................ 10
Dividends and Distributions ............................................... 12
Taxes ..................................................................... 12
Description of Shares ..................................................... 13
Other Information ......................................................... 13
INVESTMENT ADVISER
BlackRock Institutional Management Corporation
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
ADMINISTRATOR AND TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
<PAGE>
The Sansom Street Family
The RBB Fund, Inc.
PROVIDED THROUGH ROBERTSON STEPHENS
December 29, 1998
FUNDProspectus
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THEFUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
----------------
CONTENTS
PAGE
----
Introduction ........................................................... 2
Financial Highlights ................................................... 3
Investment Objectives and Policies ..................................... 5
Year 2000 .............................................................. 7
Investment Limitations ................................................. 8
Purchase and Redemption of Shares ...................................... 9
Net Asset Value ........................................................ 12
Distribution of Shares ................................................. 12
Shareholder Servicing .................................................. 13
Management ............................................................. 13
Dividends and Distributions ............................................ 16
Taxes .................................................................. 16
Description of Shares .................................................. 16
Other Information ...................................................... 17
INVESTMENT ADVISER
BlackRock Institutional Management Corporation
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
ADMINISTRATOR AND TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
<PAGE>
THE SANSOM STREET FAMILY
OF
THE RBB FUND, INC.
The Sansom Street Family consists of three classes of common stock of The
RBB Fund, Inc. (the "Fund"), an open-end management investment company. The
shares of one such class are offered by this Prospectus and represent interests
in the Fund's Money Market Portfolio.
The investment objective of the Money Market Portfolio is to provide as
high a level of current interest income as is consistent with maintaining
liquidity and stability of principal. It seeks to achieve such objective by
investing in a diversified portfolio of U.S. dollar-denominated money market
instruments.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK
AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. THERE CAN BE NO ASSURANCE THAT THE PORTFOLIOS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
BlackRock Institutional Management Corporation serves as investment adviser
for these Portfolios and PFPC Trust Company serves as custodian for the Fund.
PFPC Inc. serves as administrator and as transfer and dividend disbursing agent
for the Fund. Provident Distributors, Inc. acts as distributor for the Fund.
Sansom Street Shares are sold by the Fund's distributor to customers
maintaining accounts with banks affiliated with PNC Bank Corp. (the "Banks").
Sansom Street Shares will be sold to customers, including individuals, trusts,
partnerships and corporations, who maintain accounts (such as custody, trust or
escrow accounts) with the Banks, and who have authorized the Banks to invest in
the Fund. Shares are sold and redeemed without any purchase or redemption charge
imposed by the Fund, although the Banks may receive compensation from the Fund
and charge their customer accounts for services provided in connection with the
purchase or redemption of shares. See "Shareholder Servicing." Sansom Street
Shares are also sold through dealers that have entered into a dealer agreement
with the Fund's Distributor.
This Prospectus contains concise information that a prospective investor
needs to know before investing. Please keep it for future reference. A Statement
of Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained upon request free of charge from the Fund by
calling (800) 430-9618. The Prospectus and Statement of Additional Information
are also available for reference, along with other related materials, on the SEC
Internet Website (http://www.sec.gov).
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
The RBB Fund, Inc. is an open-end management investment company
incorporated under the laws of the State of Maryland on February 29, 1988. The
Fund is currently operating or proposing to operate seventeen investment
portfolios. Shares ("Sansom Street Shares" or "Shares") of the Sansom Street
Class ("Sansom Street Class" or "Class") of the Fund offered by this Prospectus
represent interests in the Fund's Money Market Portfolio (the "Money Market
Portfolio" or the "Portfolio").
The investment objective of the Portfolio is to provide as high a level of
current interest income as is consistent with maintaining liquidity and
stability of principal. It seeks to achieve such objective by investing in a
diversified portfolio of U.S. dollar-denominated money market instruments which
meet certain ratings criteria and which present minimal credit risks. In
pursuing its investment objective, the Money Market Portfolio invests in a broad
range of government, bank and commercial obligations that may be available in
the money markets.
The Portfolio seeks to maintain a net asset value of $1.00 per share;
however, there can be no assurance that it will be able to maintain a stable net
asset value of $1.00 per share.
The Portfolio's investment adviser is BlackRock Institutional Management
Corporation ("BIMC"). PFPC Trust Company serves as custodian to the Fund and
PFPC Inc. ("PFPC") serves as administrator and transfer and dividend disbursing
agent to the Fund. Provident Distributors, Inc. (the "Distributor") acts as
distributor of the Fund's shares.
An investment in the Portfolio is subject to certain risks, as set forth in
detail under "Investment Objectives and Policies." The Portfolio, to the extent
set forth under "Investment Objectives and Policies," may engage in the
following investment practices: the use of repurchase agreements and reverse
repurchase agreements, the purchase of asset-backed securities, the purchase of
securities on a "when-issued" or "forward commitment basis," the purchase of
stand-by commitments and the lending of securities. All of these transactions
involve certain special risks, as set forth under "Investment Objectives and
Policies."
For detailed information of how to purchase or redeem Sansom Street Shares,
please refer to the section of this Prospectus entitled "Purchase and Redemption
of Shares."
FEE TABLE
The Fee Table below contains a summary of the annual operating expenses
incurred by the Sansom Street Class of the Money Market Portfolio after fee
waivers and expense reimbursements for the fiscal year ended August 31, 1998 as
a percentage of average daily net assets. An example based on the summary is
also shown.
ANNUAL FUND OPERATING EXPENSES (SANSOM STREET CLASS)
AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS
MONEY MARKET
PORTFOLIO
------------
Management fees (after waivers)(1) .24%
12b-1 fees(1) .05
Other Expenses .20
---
Total Fund Operating Expenses (Sansom Street Class)
(after waivers)(1) .49%
===
(1) Management Fees and 12b-1 Fees are each based on average daily net assets
and are calculated daily and paid monthly. Before waivers for the Money
Market Portfolio, Management Fees would be .37% and Total Fund Operating
Expenses would be .62%.
2
<PAGE>
EXAMPLE
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Money Market Portfolio* ........... $5 $16 $27 $62
* Other classes of this Portfolio are sold with different fees and expenses.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN.
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Sansom Street Class of the
Fund will bear directly or indirectly. (For more complete descriptions of the
various costs and expenses, see "Management--Investment Adviser," "Distribution
of Shares" and "Shareholder Servicing" below.) Expense figures are based on
actual costs and fees incurred by the Class. The Fee Table reflects a voluntary
waiver of Management Fees for the Portfolio. However, there can be no assurance
that any future waivers of Management Fees will not vary from the figures
reflected in the Fee Table. In addition, the investment adviser is currently
voluntarily assuming additional expenses of the Class. There can be no assurance
that the investment adviser will continue to assume such expenses. Assumption of
additional expenses will have the effect of lowering a Portfolio's overall
expense ratio and increasing its yield to investors.
From time to time the Portfolio advertises its "total return," "yield" and
"effective yield." TOTAL RETURN AND YIELD FIGURES ARE BASED ON HISTORICAL
EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. The "yield" of the
Portfolio refers to the income generated by an investment in the Portfolio over
a seven-day period (which period shall be stated in the advertisement). This
income is then "annualized." That is, the amount of income generated by the
investment during that week is assumed to be generated each week over a 52-week
period and is shown as a percentage of the investment. The "effective yield" is
calculated similarly but, when annualized, the income earned by an investment in
the Portfolio is assumed to be reinvested. The "effective yield" will be
slightly higher than the "yield" because of the compounding effect of this
assumed reinvestment.
The total return and yield of any investment is generally a function of
portfolio quality and maturity, type of investment, operating expenses and
market conditions. The total return and yield on Shares of the Sansom Street
Class will fluctuate and is not necessarily representative of future results.
Any fees charged by the Banks or broker-dealers directly to their customers in
connection with investments in the Portfolio are not reflected in the total
return and yields on the Portfolio's shares, and such fees, if charged, will
reduce the actual return received by customers on their investments. The total
return and yield on Shares of the Sansom Street Class may differ from total
return and yields on shares of other classes of the Fund that also represent
interests in the same Portfolio depending on the allocation of expenses to each
of the classes of that Portfolio.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth certain information concerning the investment
results of the Sansom Street Class for the periods indicated. The financial data
included in this table for each of the periods ended August 31, 1994 through
August 31, 1998 are part of the Fund's financial statements for the Portfolio,
which are incorporated by reference into the Statement of Additional Information
and have been audited by PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"),
the Fund's independent accountants. The financial data for such Portfolio for
the periods ended August 31, 1989, 1990, 1991, 1992 and 1993 are a part of
previous financial statements audited by PricewaterhouseCoopers. The financial
data included in this table should be read in conjunction with the financial
statement and related notes. Further information about the Portfolio is
available in the Fund's Annual Report to Shareholders. Both the Statement of
Additional Information and the Annual Report to Shareholders may be obtained
from the Fund free of charge by calling the telephone number on page 1 of this
Prospectus.
3
<PAGE>
SANSOM STREET CLASS
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS (c)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
-----------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1998 1997 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- --------- --------- -------- -------- -------- --------
Income from investment
operations:
Net investment income ...... .0520 0.0510 0.0518 0.0543 0.0334 0.0304 0.0435
Net gains on securities
(both realized
and unrealized) .......... -- -- -- -- -- -- 0.0007
-------- --------- --------- -------- -------- -------- --------
Total from
investment
operations ........... .0520 0.0510 0.0518 0.0543 0.0334 0.0304 0.0442
-------- --------- --------- -------- -------- -------- --------
Less distributions
Dividends (from net
investment income) ....... (.0520) (0.0510) (0.0518) (0.0543) (0.0334) (0.0304) (0.0435)
Distributions (from
capital gains) ........... -- -- -- -- -- -- (0.0007)
-------- --------- --------- -------- -------- -------- --------
Total distributions .... (.0520) (0.0510) (0.0518) (0.0543) (0.0334) (0.0304) (0.0442)
-------- --------- --------- -------- -------- -------- --------
Net asset value,
end of period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========= ========= ======== ======== ======== ========
Total return .................. 5.34% 5.22% 5.30% 5.57% 3.39% 3.08% 4.51%
Ratios/Supplemental Data
Net Assets, end of
period (000) ............. $684,066 $ 570,018 $ 524,359 $441,614 $373,745 $190,794 $228,079
Ratios of expenses to
average net assets ....... .49%(a) .49%(a) .48%(a) .39%(a) .39%(a) .34%(a) .35%(a)
Ratios of net investment
income to average
net assets ............... 5.20% 5.10% 5.18% 5.43% 3.34% 3.04% 4.35%
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
--------------------------------------------
FOR THE PERIOD
SEPTEMBER 30, 1988
FOR THE FOR THE (COMMENCEMENT
YEAR ENDED YEAR ENDED OF OPERATIONS) TO
AUGUST 31, AUGUST 31, AUGUST 31,
1991 1990 1989
---------- ---------- ------------------
<S> <C> <C> <C>
Net asset value,
beginning of period ........ $ 1.00 $ 1.00 $ 1.00
-------- -------- --------
Income from investment
operations:
Net investment income ...... 0.0684 0.0810 0.0818
Net gains on securities
(both realized
and unrealized) .......... -- -- --
-------- -------- --------
Total from
investment
operations ........... 0.0684 0.0810 0.0818
-------- -------- --------
Less distributions
Dividends (from net
investment income) ....... (0.0684) (0.0810) (0.0818)
Distributions (from
capital gains) ........... -- -- --
-------- -------- --------
Total distributions .... (0.0684) (0.0810) (0.0818)
-------- -------- --------
Net asset value,
end of period .............. $ 1.00 $ 1.00 $ 1.00
======== ======== ========
Total return .................. 7.06% 8.40% 9.25%(b)
Ratios/Supplemental Data
Net Assets, end of
period (000) ............. $138,418 $106,743 $ 79,656
Ratios of expenses to
average net assets ....... .37%(a) .47%(a) .50%(a)(b)
Ratios of net investment
income to average
net assets ............... 6.84% 8.10% 9.04%(b)
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of certain
operating expenses, the ratios of expenses to average net assets for the
Money Market Portfolio would have been .62%, .64%, .65%, .59%, .60%, .60%,
.61%, .61% and .73% for the years ended August 31, 1998, 1997, 1996, 1995,
1994, 1993, 1992, 1991, and 1990, respectively, and .83% annualized for the
period ended August 31, 1989.
(b) Annualized.
(c) Financial Highlights relate solely to the Sansom Street Class of Shares
within the portfolio.
</FN>
</TABLE>
4
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
The Money Market Portfolio's investment objective is to provide as high a
level of current interest income as is consistent with maintaining liquidity and
stability of principal. Portfolio obligations held by the Money Market Portfolio
have remaining maturities of 397 days or less (exclusive of securities subject
to repurchase agreements). In pursuing its investment objective, the Money
Market Portfolio invests in a diversified portfolio of U.S. dollar-denominated
instruments, such as government, bank and commercial obligations, that may be
available in the money markets ("Money Market Instruments") and that meet
certain ratings criteria and present minimal credit risks to the Money Market
Portfolio. See "Eligible Securities." There is no assurance that the investment
objective of the Portfolio will be achieved. The following descriptions
illustrate the types of Money Market Instruments in which the Money Market
Portfolio invests.
BANK OBLIGATIONS. The Portfolio may purchase obligations of issuers in the
banking industry, such as short-term obligations of bank holding companies,
certificates of deposit, bankers' acceptances and time deposits, including U.S.
dollar-denominated instruments issued or supported by the credit of U.S. or
foreign banks or savings institutions having total assets at the time of
purchase in excess of $1 billion. The Portfolio may invest substantially in
obligations of foreign banks or foreign branches of U.S. banks where the
investment adviser deems the instrument to present minimal credit risks. Such
investments may nevertheless entail risks in addition to those of domestic
issuers, including higher transaction costs, less complete financial
information, less stringent regulatory requirements and less market liquidity.
The Portfolio may also make interest-bearing savings deposits in commercial and
savings banks in amounts not in excess of 5% of its total assets.
COMMERCIAL PAPER. The Portfolio may purchase commercial paper (i) rated (at
the time of purchase) in the two highest rating categories of at least two
nationally recognized statistical rating organizations ("Rating Organization")
or, by the only Rating Organization; or (ii) issued by issuers (or, in certain
cases guaranteed by persons) with short-term debt having such ratings. These
rating categories are described in the Appendix to the Statement of Additional
Information. The Portfolio may also purchase unrated commercial paper provided
that such paper is determined to be of comparable quality by the Portfolio's
investment adviser in accordance with guidelines approved by the Fund's Board of
Directors.
Commercial paper purchased by the Portfolio may include instruments issued
by foreign issuers, such as Canadian Commercial Paper ("CCP"), which is U.S.
dollar-denominated commercial paper issued by a Canadian corporation or a
Canadian counterpart of a U.S. corporation, and in Europaper, which is U.S.
dollar-denominated commercial paper of a foreign issuer, subject to the criteria
stated above for other commercial paper issuers.
VARIABLE RATE DEMAND NOTES. The Portfolio may purchase variable rate demand
notes, which are unsecured instruments that permit the indebtedness thereunder
to vary and provide for periodic adjustment in the interest rate. Although the
notes are not normally traded and there may be no active secondary market in the
notes, the Portfolio will be able (at any time or during specified periods not
exceeding 13 months, depending upon the note involved) to demand payment of the
principal of a note. The notes are not typically rated by credit rating
agencies, but issuers of variable rate demand notes must satisfy the same
criteria as set forth above for issuers of commercial paper. If an issuer of a
variable rate demand note defaulted on its payment obligation, the Portfolio
might be unable to dispose of the note because of the absence of an active
secondary market. For this or other reasons, the Portfolio might suffer a loss
to the extent of the default. The Portfolio invests in variable rate demand
notes only when the Portfolio's investment adviser deems the investment to
involve minimal credit risk. The Portfolio's investment adviser also monitors
the continuing creditworthiness of issuers of such notes to determine whether
the Portfolio should continue to hold such notes.
REPURCHASE AGREEMENTS. The Portfolio may agree to purchase securities from
financial institutions subject to the seller's agreement to repurchase them at
an agreed-upon time and price ("repurchase agreements"). The securities held
subject to a repurchase agreement may have stated maturities exceeding 13
months, provided the repurchase agreement
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<PAGE>
itself matures in less than 13 months. Default by or bankruptcy of the seller
would, however, expose the Portfolio to possible loss because of adverse market
action or delays in connection with the disposition of the underlying
obligations.
U.S. GOVERNMENT OBLIGATIONS. The Portfolio may purchase obligations issued
or guaranteed by the U.S. Government or its agencies and instrumentalities.
Obligations of certain agencies and instrumentalities of the U.S. Government are
backed by the full faith and credit of the United States. Others are backed by
the right of the issuer to borrow from the U.S. Treasury or are backed only by
the credit of the agency or instrumentality issuing the obligation.
ASSET-BACKED SECURITIES. The Portfolio may invest in asset-backed
securities which are backed by mortgages, installment sales contracts, credit
card receivables or other assets and collateralized mortgage obligations
("CMOs") issued or guaranteed by U.S. Government agencies and instrumentalities
or issued by private companies. Asset-backed securities also include adjustable
rate securities. The estimated life of an asset-backed security varies with the
prepayment experience with respect to the underlying debt instruments. For this
and other reasons, an asset-backed security's stated maturity may be shortened,
and the security's total return may be difficult to predict precisely. Such
difficulties are not expected, however, to have a significant effect on the
Portfolio since the remaining maturity of any asset-backed security acquired
will be 13 months or less. Asset-backed securities are considered an industry
for industry concentration purposes. See "Investment Limitations." In periods of
falling interest rates, the rate of mortgage prepayments tends to increase.
During these periods the reinvestment of proceeds by a portfolio will generally
be at lower rates than the rates on the prepaid obligations.
REVERSE REPURCHASE AGREEMENTS. The Portfolio may enter into reverse
repurchase agreements with respect to portfolio securities. A reverse repurchase
agreement involves a sale by a portfolio of securities that it holds
concurrently with an agreement by the portfolio to repurchase them at an agreed
upon time and price. Reverse repurchase agreements involve the risk that the
market value of the securities sold by the Portfolio may decline below the price
at which the Portfolio is obligated to repurchase them. Reverse repurchase
agreements are considered to be borrowings by the Portfolio under the Investment
Company Act of 1940 (the "1940 Act").
MUNICIPAL OBLIGATIONS. In addition, the Portfolio may, when deemed
appropriate by its investment adviser in light of the Portfolio's investment
objective, invest without limitation in high quality, short-term Municipal
Obligations issued by state and local governmental issuers, the interest on
which may be taxable or tax-exempt for federal income tax purposes, provided
that such obligations carry yields that are competitive with those of other
types of Money Market Instruments of comparable quality. For a more complete
discussion of Municipal Obligations, see Statement of Additional Information
under "Investment Objectives and Policies."
GUARANTEED INVESTMENT CONTRACTS. The Portfolio may make investments in
obligations, such as guaranteed investment contracts and similar funding
agreements (collectively, "GICs"), issued by highly rated U.S. insurance
companies. A GIC is a general obligation of the issuing insurance company and
not a separate account. The Portfolio's investments in GICs are not expected to
exceed 5% of its total assets at the time of purchase absent unusual market
conditions. GIC investments are subject to the Fund's policy regarding
investment in illiquid securities.
STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, a dealer would agree to purchase at the Portfolio's option specified
Municipal Obligations at a specified price. The acquisition of a stand-by
commitment may increase the cost, and thereby reduce the yield, of the Municipal
Obligation to which such commitment relates. The Portfolio will acquire stand-by
commitments solely to facilitate portfolio liquidity and does not intend to
exercise its rights thereunder for trading purposes.
WHEN-ISSUED SECURITIES. The Portfolio may purchase portfolio securities on
a "when-issued" basis. When-issued securities are securities purchased for
delivery beyond the normal settlement date at a stated price and yield. The
Portfolio will generally not pay for such securities or start earning interest
on them until they are received. Securities purchased on a when-issued basis are
recorded as an asset at the time the commitment is entered into and are sub-
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<PAGE>
ject to changes in value prior to delivery based upon changes in the general
level of interest rates. The Portfolio expects that commitments to purchase
when-issued securities will not exceed 25% of the value of its total assets
absent unusual market conditions. The Portfolio does not intend to purchase
when-issued securities for speculative purposes but only in furtherance of its
investment objective.
ELIGIBLE SECURITIES. The Portfolio will only purchase "eligible securities"
that present minimal credit risks as determined by the Portfolio's investment
adviser pursuant to guidelines adopted by the Board of Directors. Eligible
securities generally include: (1) U.S. Government securities, (2) securities
that are rated at the time of purchase in the two highest rating categories by
at least two Rating Organizations ("Rating Organizations") (e.g., commercial
paper rated "A-1" or "A-2" by Standard & Poor's Ratings Services ("S&P")), (3)
securities that are rated at the time of purchase by the only Rating
Organization rating the security in one of its two highest rating categories for
such securities (4) securities issued by issuers (or, in certain cases
guaranteed by persons) with short-term debt having such ratings, and (5)
securities that are not rated and are issued by an issuer that does not have
comparable obligations rated by a Rating Organization ("Unrated Securities"),
provided that such securities are determined to be of comparable quality to
eligible rated securities. For a more complete description of eligible
securities, see "Investment Objectives and Policies" in the Statement of
Additional Information.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days, time deposits with maturities in excess of
seven days, variable rate demand notes with demand periods in excess of seven
days unless the Portfolio's investment adviser determines that such notes are
readily marketable and could be sold promptly at the prices at which they are
valued, GICs, and other securities that are illiquid by virtue of the absence of
a readily available market or legal or contractual restrictions on resale.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the notice period. Securities that have legal or contractual restrictions on
resale but have a readily available market are not deemed illiquid for purposes
of this limitation. The Portfolio's investment adviser will monitor the
liquidity of such restricted securities under the supervision of the Board of
Directors. See "Investment Objectives and Policies -- Illiquid Securities" in
the Statement of Additional Information.
YEAR 2000
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Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
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<PAGE>
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Portfolio's investment objective and policies described above may be
changed by the Fund's Board of Directors without shareholder approval. The
Portfolio may not, however, change the investment limitations summarized below
without such a vote of shareholders. (A more detailed description of the
following investment limitations, together with other investment limitations
that cannot be changed without a vote of shareholders, is contained in the
Statement of Additional Information under "Investment Objectives and Policies.")
The Money Market Portfolio may not:
1. Purchase any securities other than Money Market Instruments, some of
which may be subject to repurchase agreements, but the Portfolio may make
interest-bearing savings deposits in amounts not in excess of 5% of the
value of the Portfolio's assets and may make time deposits.
2. Borrow money, except from banks for temporary purposes and except
for reverse repurchase agreements, and then in amounts not in excess of 10%
of the value of a Portfolio's assets at the time of such borrowing, and
only if after such borrowing there is asset coverage of at least 300% for
all borrowings of the Portfolio; or mortgage, pledge or hypothecate any of
its assets except in connection with any such borrowing and in amounts not
in excess of 10% of the value of the Portfolio's assets at the time of such
borrowing; or purchase portfolio securities while borrowings are in excess
of 5% of the Portfolio's net assets. (This borrowing provision is not for
investment leverage, but solely to facilitate management of the Portfolio's
securities by enabling the Portfolio to meet redemption requests where the
liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient.)
3. Purchase any securities which would cause, at the time of purchase,
less than 25% of the value of the total assets of the Portfolio to be
invested in the obligations of issuers in the banking industry, or in
obligations, such as repurchase agreements, secured by such obligations
(unless the Portfolio is in a temporary defensive position) or which would
cause, at the time of purchase, more than 25% of the value of its total
assets to be invested in the obligations of issuers in any other industry.
4. Purchase securities of any one issuer, other than securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities,
if immediately after and as a result of such purchase more than 5% of the
value of its total assets would be invested in the securities of such
issuer, or more than 10% of the outstanding voting securities of such
issuer would be owned by the Portfolio, except that up to 25% of the value
of the Portfolio's total assets may be invested without regard to such 5%
limitation.
So long as it values its portfolio securities on the basis of the amortized
cost method of valuation pursuant to Rule 2a-7 under the 1940 Act, the Portfolio
will meet the following limitations on its investments in addition to the
fundamental investment limitations described above. These limitations may be
changed without a shareholder vote.
1. The Portfolio will limit its purchases of the securities of any one
issuer, other than issuers of U.S. Government securities, to 5% of its
total assets, except that the Portfolio may invest more than 5% of its
total assets in First Tier Securities of one issuer for a period of up to
three Business Days (as defined below). "First Tier Securities" include
eligible securities that (i) if rated by more than one Rating Organization,
are rated (at the time of purchase) by two or more Rating Organizations in
the highest rating category for such securities, (ii) if rated by only one
Rating Organization, are rated by such Rating Organization in its highest
rating category for such securities, (iii) have no short-term rating and
are comparable in priority and security to a class of short-term
obligations of the issuer of such securities that have been rated in
accordance with (i) or (ii) above, or (iv) are Unrated Securities that are
determined to be of comparable quality to such securities. Purchases of
First Tier Securities that come within categories (ii) and (iv) above will
be approved or ratified by the Board of Directors.
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<PAGE>
2. The Portfolio will limit its purchases of Second Tier Securities,
which are eligible securities other than First Tier Securities, to 5% of
its total assets.
3. The Portfolio will limit its purchases of Second Tier Securities
of one issuer to the greater of 1% of its total assets or $1 million.
PURCHASE AND REDEMPTION OF SHARES
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PURCHASE PROCEDURES
Sansom Street Shares are sold without a sales load on a continuous basis by
the Fund's Distributor. Purchase of Shares may be made through the Banks acting
on behalf of their customers, including individuals, trusts, partnerships and
corporations who maintain accounts (such as custody, trust or escrow accounts)
with the Banks and who have authorized the Bank to invest in the Fund on the
customer's behalf. Investors may also purchase shares through any broker that
has entered into a dealer agreement with the Fund's Distributor (a "Dealer").
The minimum initial investment by an investor is $1,500. There is no minimum
subsequent investment.
Purchases of Shares may be effected through the customer's accounts at the
Banks or investor accounts with the Dealer through procedures established in
connection with the requirements of accounts at the Banks or at such Dealer.
Confirmations of share purchases and redemptions will be sent to the Banks or
such Dealer. Beneficial ownership of Sansom Street Shares will be recorded by
the Banks or such Dealer and reflected in the account statements provided by
such Banks or by such Dealer to investors. If you wish to purchase Sansom Street
Shares, contact your Bank or a Dealer.
The Banks may also impose minimum customer account requirements. Although
the Banks do not impose a sales charge for purchases of Sansom Street Shares,
depending upon the terms of the particular customer account, the Banks may
charge the account fees for automatic investment and other cash management
services. Information concerning these minimum account requirements, services
and any charges will be provided by the Banks before the customer authorizes the
initial purchase of shares. This Prospectus should be read in conjunction with
any information received from the Banks. See "Shareholder Servicing."
The shares of the Sansom Street Class of the Portfolio are also available
through Robertson Stephens, a registered broker-dealer that has entered into a
dealer Agreement with the Fund's Distributor. For distribution services with
respect to of shares of the Portfolio held by this firm, the Fund's Distributor
pays Robertson Stephens up to .25% of the average annual daily net asset value
of such accounts. Purchases made through this program do not require customers
to pay a transaction fee.
DIRECT PURCHASES THROUGH A DEALER. An investor may make an initial
investment by mail by completing and signing an application obtained from a
Dealer (an "Application") and mailing it, together with a check payable to
"Sansom Street Money Market," to "Sansom Street Money Market," c/o PFPC, P.O.
Box 8950, Wilmington, Delaware 19899. An Application will be returned to the
investor unless it contains the name of the Dealer from whom it was obtained.
Subsequent purchases may be made through a Dealer or by forwarding payment to
the Fund's transfer agent at the foregoing address.
The Fund reserves the right to reject any purchase order.
All payments for initial and subsequent investments should be in U.S.
dollars. Purchases will be effected at the net asset value next determined after
receipt of the purchase order in good order and Federal Funds are available to
the Fund. Purchase orders received after its close of business are priced at the
net asset value next determined on the following "Business Day." In those cases
in which an investor pays for Shares by check, Federal Funds will generally
become available two days after the check is received. A "Business Day" is any
day that both the New York Stock
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Exchange (the "NYSE") and the Federal Reserve Bank of Philadelphia (the "FRB")
are open. Purchase orders for Shares are accepted only on Business Days.
Conflict of interest restrictions may apply to an institution's receipt of
compensation paid by the Fund in connection with the investment of fiduciary
funds in Sansom Street Shares. Institutions, including banks regulated by the
Comptroller of the Currency and investment advisers and other money managers
subject to the jurisdiction of the Securities and Exchange Commission, the
Department of Labor or state securities commissions, are urged to consult their
legal advisers before investing fiduciary funds in Sansom Street Shares. See
"Management-Banking Laws."
REDEMPTION OF SHARES
Redemption orders are effected at the net asset value per share next
determined after receipt of the order in proper form by the Fund's transfer
agent, PFPC. It is the responsibility of the Banks and the Dealers to transmit
promptly to PFPC a customer's redemption request. In the case of shareholders
holding share certificates, the certificates must accompany the redemption
request. Investors may redeem all or some of their Shares in accordance with one
of the procedures described below.
REDEMPTION OF SHARES IN AN ACCOUNT FOR BANK CUSTOMERS. A customer may
redeem all or part of his Sansom Street Shares in accordance with instructions
and limitations pertaining to his account at the Bank. Redemption orders are
effected at the net asset value per share determined after receipt of the order
by PFPC. Payment for redemption orders received by PFPC on a Business Day before
12:00 noon Eastern Time will be wired the same day in Federal Funds to the
customer's account at the Bank, provided that the Fund's custodian is open for
business. If the custodian is not open, payment will be made on the next bank
business day. Payment for redemption orders which are received between 12:00
noon Eastern Time and the close of regular trading on the NYSE (generally 4:00
p.m. Eastern Time) on a Business Day will be wired in Federal Funds to the
customers account on the next bank business day following receipt of the
redemption request. No charge for wiring redemption payments is imposed by the
Fund, although the Banks may charge customer accounts for redemption services.
If all shares are redeemed, all accrued but unpaid dividends on those shares
will be paid with the redemption proceeds.
REDEMPTION OF SHARES IN AN ACCOUNT FOR NON-BANK CUSTOMERS. An investor who
beneficially owns Shares may redeem Shares in his account in accordance with
instructions and limitations pertaining to his Account by contacting his broker.
If such notice is received by PFPC by 12:00 noon Eastern Time on any Business
Day, the redemption will be effective as of 12:00 noon Eastern Time on that day.
Payment of the redemption proceeds will be made after 12:00 noon Eastern Time on
the day the redemption is effected, provided that the Fund's custodian is open
for business. If the custodian is not open, payment will be made on the next
bank business day. If the redemption request is received between 12:00 noon and
the close of regular trading of the NYSE on a Business Day, the redemption will
be effective as of the close of regular trading of the NYSE on such Business Day
and payment will be made on the next bank business day following receipt of the
redemption request. If all Shares are redeemed, all accrued but unpaid dividends
on those Shares will be paid with the redemption proceeds.
An investor's brokerage firm will also redeem each day a sufficient number
of Shares to cover debit balances created by transactions in the Account or
instructions for cash disbursements. Shares will be redeemed on the same day
that a transaction occurs that results in such a debit balance or charge.
Each brokerage firm reserves the right to waive or modify criteria for
participation in an Account or to terminate participation in an Account for any
reason.
REDEMPTION OF SHARES OWNED DIRECTLY. A direct investor may redeem any
number of Shares by sending a written request to Sansom Street Money Market, c/o
PFPC, P.O. Box 8950, Wilmington, Delaware 19899. It is recommended that such
requests be sent by registered or certified mail if share certificates accompany
the request. Redemption requests must be signed by each shareholder in the same
manner as the Shares are registered. Redemption requests
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<PAGE>
for joint accounts require the signature of each joint owner. On redemption
requests of $5,000 or more, a signature guarantee is required. A signature
guarantee may be obtained from a domestic bank or trust company, broker, dealer,
clearing agency or foreign association who are participants in a medallion
program recognized by the Securities Transfer Association. The three recognized
medallion programs are Securities Transfer Agents Medallion Program (STAMP),
Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange, Inc.
Medallion Signature Program (MSP). Signature guarantees that are not part of
these programs will not be accepted.
Direct investors may redeem Shares without charge by telephone if they have
completed and returned an account application containing the appropriate
telephone election. To add a telephone option to an existing account that
previously did not provide for this option, a Telephone Authorization Form must
be filed with PFPC. This form is available from PFPC. Once this election has
been made, the shareholder may simply contact PFPC by telephone to request the
redemption by calling (888) 261-4073. Neither the Fund, the Portfolio, the
Distributor, PFPC nor any other Fund agent will be liable for any loss,
liability, cost or expense for following the procedures described below or for
following instructions communicated by telephone that they reasonably believe to
be genuine.
The Fund's telephone transaction procedures include the following measures:
(1) requiring the appropriate telephone transaction privilege forms; (2)
requiring the caller to provide the names of the account owners, the account
social security number and the name of the Portfolio, all of which must match
the Fund's records; (3) requiring the Fund's service representative to complete
a telephone transaction form, listing all of the above caller identification
information; (4) requiring that redemption proceeds be sent only by check to the
account owners of record at the address of record, or by wire only to the owners
of record at the bank account of record; (5) sending a written confirmation for
each telephone transaction to the owners of record at the address of record
within five (5) business days of the call; and (6) maintaining tapes of
telephone transactions for six months, if the Fund elects to record shareholder
telephone transactions. For accounts held of record by broker-dealers, financial
institutions, securities dealers, financial planners or other industry
professionals, additional documentation or information regarding the scope of a
caller's authority is required. Finally, for telephone transactions in accounts
held jointly, additional information regarding other account holders is
required. Telephone transactions will not be permitted in connection with IRA or
other retirement plan accounts or by an attorney-in-fact under power of
attorney.
Proceeds of a telephone redemption request will be mailed by check to an
investor's registered address unless he has designated in his Application or
Telephone Authorization Form that such proceeds are to be sent by wire transfer
to a specified checking or savings account. If proceeds are to be sent by wire
transfer, a telephone redemption request received prior to the close of regular
trading on the NYSE will result in redemption proceeds being wired to the
investor's bank account on the next bank business day. The minimum redemption
for proceeds sent by wire transfer is $2,500. There is no maximum for proceeds
sent by wire transfer. The Fund may modify this redemption service at any time
or charge a service fee upon prior notice to shareholders, although no fee is
currently contemplated.
REDEMPTION BY CHECK. Upon request, the Fund will provide any direct
investor and any investor who does not have check writing privileges for his
Account with forms of drafts ("checks") payable through PNC Bank. These checks
may be made payable to the order of anyone. The minimum amount of a check is
$100; however, a broker may establish a higher minimum. An investor wishing to
use this check writing redemption procedure should complete specimen signature
cards (available from PFPC), and then forward such signature cards to PFPC. PFPC
will then arrange for the checks to be honored by PNC Bank. Investors who own
Shares through an Account should contact their brokers for signature cards.
Investors with joint accounts may elect to have checks honored with a single
signature. Check redemptions will be subject to PNC Bank's rules governing
checks. An investor will be able to stop payment on a check redemption. The Fund
or PNC Bank may terminate this redemption service at any time, and neither shall
incur any liability for honoring checks, for effecting redemptions to pay
checks, or for returning checks which have not been accepted.
When a check is presented to PNC Bank for clearance, PNC Bank, as the
investor's agent, will cause the Fund to redeem a sufficient number of full and
fractional Shares owned by the investor to cover the amount of the check. This
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<PAGE>
procedure enables the investor to continue to receive dividends on those Shares
representing the amount being redeemed by check until such time as the check is
presented to PNC Bank. Pursuant to rules under the 1940 Act, checks may not be
presented for cash payment at the offices of PNC Bank. This limitation does not
affect checks used for the payment of bills or cashed at other banks.
OTHER REDEMPTION INFORMATION
The Fund ordinarily will make payment for all Shares redeemed within seven
days after receipt by the Fund's transfer agent of a request in proper form.
Although the Fund will redeem Shares purchased by check before the check clears,
payment of redemption proceeds may be delayed for a period up to fifteen days
after their purchase, pending a determination that the check has cleared. This
procedure does not apply to Shares purchased by wire payment. Investors should
consider purchasing Shares using a certified or bank check or money order if
they anticipate an immediate need for redemption proceeds.
The Fund imposes no charge when Shares are redeemed. The Fund reserves the
right to redeem any account in a Sansom Street Class involuntarily, on thirty
days' notice, if such account drops below $500 and during such thirty-day notice
period the shareholder does not increase such account to at least $500. Payment
for Shares redeemed may be postponed or the right of redemption suspended as
provided by the rules of the Securities and Exchange Commission.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value per share of the Sansom Street Class of the Portfolio
for the purpose of pricing purchase and redemption orders is determined twice
each day, once as of 12:00 noon Eastern Time and once as of the close of regular
trading on the NYSE on each weekday with the exception of those holidays on
which either the NYSE or the FRB, is closed. Currently, the NYSE is closed on
weekends and the customary national business holidays of New Year's Day, Dr.
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day and on the
preceding Friday or subsequent Monday when one of these holidays falls on a
Saturday or Sunday. The FRB is currently closed on weekends and the same
holidays as the NYSE is closed, as well as Veterans' Day and Columbus Day. The
net asset value per share of each class of the Portfolio is calculated by adding
the value of the proportionate interest of the class in the securities, cash,
and other assets of the Portfolio, deducting actual and accrued liabilities of
the class and dividing the result by the number of outstanding shares of the
class. The net asset value per share of each class of the Fund is determined
independently of any of the Fund's other classes.
The Fund seeks to maintain for the Sansom Street Class of the Portfolio a
net asset value of $1.00 per share for purposes of purchases and redemptions and
values its portfolio securities on the basis of the amortized cost method of
valuation described in the Statement of Additional Information under the heading
"Valuation of Shares." There can be no assurance that net asset value per share
will not vary.
With the approval of the Board of Directors, the Portfolio may use a
pricing service, bank or broker-dealer experienced in such matters to value the
Portfolio's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.
DISTRIBUTION OF SHARES
- --------------------------------------------------------------------------------
The Board of Directors of the Fund approved and adopted the Distribution
Agreement and separate Plan of Distribution for the Sansom Street Class (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the
Distributor is entitled to receive from the Sansom Street Class a distribution
fee, which is accrued daily and paid monthly, of up to .20% on an annualized
basis of the daily net assets of the Sansom Street Class. The actual amount of
such
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<PAGE>
compensation under the Plan is agreed upon by the Fund's Board of Directors and
by the Distributor. Pursuant to the conditions of an exemptive order granted by
the SEC, the Distributor has agreed to waive its fee with respect to the Sansom
Street Class on any day to the extent necessary to assure that the fee required
to be accrued by such Class does not exceed the income of such Class on that
day. In addition, the Distributor may, in its discretion, voluntarily waive from
time to time all or any portion of its distribution fee.
Under the Distribution Agreement and the relevant Plan, the Distributor may
reallocate an amount up to the full fee that it receives to Dealers, based upon
the aggregate investment amounts maintained by and services provided to
shareholders of any relevant Class serviced by such financial institutions. The
Distributor may also reimburse Dealers for other expenses incurred in the
promotion of the sale of Fund shares. The Distributor and/or Dealers pay for the
cost of printing (excluding typesetting) and mailing to prospective investors
prospectuses and other materials relating to the Fund as well as for related
direct mail, advertising and promotional expenses.
The Plan obligates the Fund, during the period it is in effect, to accrue
and pay to the Distributor on behalf of the Sansom Street Class the fee set
forth above. Payments under the Plan are not based on expenses actually incurred
by the Distributor, and the payments may exceed distribution expenses actually
incurred.
SHAREHOLDER SERVICING
- --------------------------------------------------------------------------------
The Fund has and will continue to enter into service agreements with the
Banks pursuant to which the Banks will render certain support services to their
customers in consideration for payment of .25% (on an annualized basis) of the
average daily net asset value of such Shares. Such services may include
aggregating and processing purchase and redemption requests from their customers
and placing net purchase and redemption orders with PFPC; processing dividend
payments from the Fund on behalf of their customers; providing information
periodically to their customers showing their positions in the Sansom Street
Class; providing sub-accounting with respect to the Sansom Street Shares
beneficially owned by their customers or the information necessary for
sub-accounting; and providing certain statistical and factual information. In
accordance with the conditions of an exemptive order granted by the Securities
and Exchange Commission, each service agreement will provide that a Bank will
waive its servicing fee with respect to the Sansom Street Class on any day to
the extent necessary to assure that the servicing fee required to be accrued by
that Class does not exceed the income of that Class on that day. Their customers
who are beneficial owners of Sansom Street Shares should read this Prospectus in
light of the terms governing their accounts with the Banks.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of the Fund and each of its investment portfolios
are managed under the direction of the Fund's Board of Directors. The Fund
currently operates or proposes to operate seventeen separate investment
portfolios. The Sansom Street Class represents interests in the Money Market
Portfolio.
INVESTMENT ADVISER
BIMC, an indirect majority-owned subsidiary of PNC Bank, serves as the
investment adviser for the Portfolio. BIMC has its principal offices at Bellevue
Park Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware 19809. PNC
Bank and its subsidiary currently manage over $45.9 billion of assets, of which
approximately $31.4 billion are mutual funds. PNC Bank, a national bank whose
principal business address is 1600 Market Street, Philadelphia, Pennsylvania
19103, is a wholly-owned subsidiary of PNC Bancorp, Inc. PNC Bancorp, Inc., is a
bank holding company and a wholly-owned subsidiary of PNC Bank Corp., a
multi-bank holding company.
13
<PAGE>
As investment adviser to the Portfolio, BIMC manages such Portfolio and is
responsible for all purchases and sales of Portfolio securities. In entering
into Portfolio transactions for the Portfolio with a broker, BIMC may take into
account the sale by such broker of shares by the Fund, subject to the
requirements of best execution. The agreement between BIMC and RBB with respect
to the Money Market Portfolio provides for BIMC to also assist generally in
supervising the operations of such Portfolio, and to maintain the Portfolio's
financial accounts and records. These administrative responsibilities have been
delegated to PFPC, as described below.
For the services provided to and expenses assumed by it for the benefit of
the Money Market Portfolio, BIMC is entitled to receive the following fees,
computed daily and payable monthly based on the Portfolio's average daily net
assets: .45% of the first $250 million; .40% of the next $250 million; and .35%
of the average daily net assets of such Portfolio in excess of $500 million.
BIMC may in its discretion from time to time agree to waive voluntarily all or
any portion of its advisory fee for the Portfolio.
For the Fund's fiscal year ended August 31, 1998, the Fund paid investment
advisory fees aggregating .37% of the average net assets of the Portfolio. For
the same period, BIMC waived fees of approximately .13% of the average net
assets of the Portfolio.
Pursuant to its advisory agreement with Fund relating to the Portfolio,
BIMC may enter into agreements with its affliates in which it delegates some or
all of its accounting and administrative obligations under the advisory
agreement. Any such arrangement has no effect on the advisory fees payable by
the Portfolio to BIMC. BIMC has delegated to PFPC all of its accounting and
administrative obligations under its advisory agreement with the Fund relating
to the Portfolio. PFPC generally assists the Portfolio in all aspects of its
administration and operation, including matters relating to the maintenance of
financial records and accounting. PFPC is entitled to receive from BIMC an
administration fee, computed daily and payable monthly at a rate of .10% of the
average daily net assets of the Portfolio. This has no effect on the advisory
fees payable by the Portfolio to BIMC. PFPC's principal address is 400 Bellevue
Parkway, Wilmington, Delaware 19809.
PNC Bank was formerly sub-adviser to the Money Market, Municipal Money
Market and Government Obligations Portfolios and provided research, credit
analysis and recommendations with respect to each such Portfolio's investments
and supplied certain computer facilities, personnel and other services. The
facilities, personnel, services and related expenses have been transferred to
BIMC and in return, BIMC's obligation to pay a portion of the sub-advisory fee
to PNC Bank has been terminated. For its sub-advisory services, PNC Bank was
entitled to receive from BIMC an amount equal to 75% of the investment advisory
fee paid by each such portfolio to BIMC. The sub-advisory fees paid by BIMC to
PNC Bank had no effect on the investment advisory fees payable by such
portfolios to BIMC. The services provided by BIMC and the fees payable by the
portfolio for these services are described further in the Statement of
Additional Information under "Management of the Company."
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholder servicing
agreements with registered broker-dealers who have entered into dealer
agreements with the Distributor ("Authorized Dealers") for the provision of
certain shareholder support services to customers of such Authorized Dealers who
are shareholders of the Fund. The services provided and the fees payable by the
Fund for these services are described in the Statement of Additional Information
under "Investment Advisory, Distribution and Servicing Arrangements."
14
<PAGE>
ADMINISTRATOR
Pursuant to its advisory agreement with the Fund with respect to the Money
Market Portfolio, BIMC provides administrative services to the Portfolio, and is
entitled to an administration fee, computed daily and payable monthly at .10% of
average daily net assets of the Portfolio. BIMC has delegated to PFPC all of its
accounting and administrative obligations under such advisory agreement. The
Fund has agreed to pay directly to PFPC the fees for accounting and
administrative services to the Money Market Portfolio which PFPC would have
received directly from BIMC. Such arrangement has no effect on the total
advisory and administrative fees payable by such Portfolio to BIMC. PFPC's
principal business address is 400 Bellevue Parkway, Wilmington, Delaware 19809.
DISTRIBUTOR
Provident Distributors, Inc., with a principal business address at Four
Falls Corporate Center, West Conshohocken, Pennsylvania 19428, acts as
distributor for the Sansom Street Class of the Fund pursuant to a distribution
agreement dated May 29, 1998 (the "Distribution Agreement").
EXPENSES
The expenses of each Portfolio are deducted from the total income of such
Portfolio before dividends are paid. Any general expenses of the Fund that are
not readily identifiable as belonging to a particular investment portfolio of
the Fund will be allocated among all investment portfolios of the Fund based on
the relative net assets of the investment portfolios at the time such expenses
were accrued. The Sansom Street Classes of the Fund pay their own distribution
fees, and may pay a different share than other classes of the Fund of other
expenses (excluding advisory and custodial fees) if those expenses are actually
incurred in a different amount by the Sansom Street Classes or if they receive
different services.
The investment adviser may assume expenses of the Portfolios from time to
time. In certain circumstances, it may assume such expenses on the condition
that it is reimbursed by the Portfolio for such amounts prior to the end of a
fiscal year. In such event, the reimbursement of such amounts will have the
effect of increasing a Portfolio's expense ratio and of decreasing yield to
investors.
For the fiscal year ended August 31, 1998, the total expenses were .62% of
average net assets with respect to the Sansom Street Class of the Money Market
Portfolio (not taking into account waivers of .13%).
BANKING LAWS
Banking laws and regulations currently prohibit a bank holding company
registered under the Federal Bank Holding Act of 1956 or any bank or non-bank
affiliate thereof from sponsoring, organizing, controlling, or distributing the
shares of a registered, open-end investment company continuously engaged in the
issuance of its shares, and prohibit banks generally from issuing, underwriting,
selling or distributing securities, but such banking laws and regulations do not
prohibit such a holding company or affiliate or banks generally from acting as
investment adviser, transfer agent or custodian to such an investment company,
or from purchasing shares of such a company as agent for and upon the order of
such a customer. PNC Bank, BIMC, PFPC, as well as the Banks, are subject to such
banking laws and regulations. In addition, state securities laws on this issue
may differ from the interpretations of federal law expressed herein and banks
and financial institutions may be required to register as dealers pursuant to
state law.
15
<PAGE>
Should future legislative, judicial or administrative action prohibit or
restrict the activities of Banks in connection with the provision of support
services to their customers, the Fund might be required to alter materially or
cause the Fund to discontinue its arrangements with Banks generally and change
its method of operations with respect to the Sansom Street Shares. It is not
anticipated, however, that any change in the Fund's method of operations would
affect its net asset value per share or result in a financial loss to any
customer.
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Portfolio to the Portfolio's
shareholders. All distributions are reinvested in the form of additional full
and fractional Shares of the Sansom Street Class unless a shareholder elects
otherwise.
The net investment income (not including any net short-term capital gains)
earned by the Portfolio will be declared as a dividend on a daily basis and paid
monthly. Dividends are payable to shareholders of record immediately prior to
the determination of net asset value made as of the close of regular trading of
the NYSE. Net short-term capital gains, if any, will be distributed at least
annually.
TAXES
- --------------------------------------------------------------------------------
Distributions from the Money Market Portfolio will generally be taxable to
shareholders. It is expected that all, or substantially all, of these
distributions will consist of ordinary income. You will be subject to income tax
on these distributions regardless whether they are paid in cash or reinvested in
additional shares. The one major exception to these tax principles is that
distributions on shares held in an IRA (or other tax-qualified plan) will not be
currently taxable.
The foregoing is only a summary of certain tax considerations under the
current law, which may be subject to change in the future. You should consult
your tax adviser for further information regarding federal, state, local and/or
foreign tax consequences relevant to your specific situation.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
The Fund has authorized capital of thirty billion shares of Common Stock,
$.001 par value per share, of which 18.326 billion shares are currently
classified into 97 different classes of Common Stock (see "Description of
Shares" in the Statement of Additional Information).
The Fund offers multiple classes of shares in the Money Market Portfolio to
expand its marketing alternatives and to broaden its range of services to
different investors. The expenses of the various classes within these Portfolios
vary based upon the services provided, which may affect performance. Each class
of Common Stock of the Fund has a separate Rule 12b-1 distribution plan. Under
the Distribution Agreement and pursuant to each of the distribution plans, the
Distributor is entitled to receive from each class as compensation for
distribution services provided to that class a distribution fee based on average
daily net assets. A salesperson or any other person entitled to receive
compensation for servicing Fund shares may receive different compensation with
respect to different classes in a Portfolio of the Fund. An investor may contact
the Fund's Distributor by calling 1-800-888-9723 to request more information
concerning other classes available.
16
<PAGE>
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE SANSOM STREET CLASS OF THE MONEY MARKET PORTFOLIO
AND DESCRIBE ONLY THE INVESTMENT OBJECTIVES AND POLICIES, OPERATIONS, CONTRACTS
AND OTHER MATTERS RELATING TO THE SANSOM STREET CLASS OF THIS PORTFOLIO.
Each share that represents an interest in a Portfolio has an equal
proportionate interest in the assets belonging to such Portfolio with each other
share that represents an interest in such Portfolio, even where a share has a
different class designation than another share representing an interest in that
Portfolio. Shares of the Fund do not have preemptive or conversion rights. When
issued for payment as described in this Prospectus, shares of the Fund will be
fully paid and non-assessable.
The Fund currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
Holders of shares of the Portfolios will vote in the aggregate and not by
class on all matters, except where otherwise required by law. Further,
shareholders of all investment portfolios of the Fund will vote in the aggregate
and not by portfolio except as otherwise required by law or when the Board of
Directors determines that the matter to be voted upon affects only the interests
of the shareholders of a particular investment portfolio. (See the Statement of
Additional Information under "Additional Information Concerning Fund Shares" for
examples when the 1940 Act requires voting by investment portfolio or by class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of Common Stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all of the classes of
the Fund.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC, the
Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll free (800) 430-9618.
17
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THEFUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THEDISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE
MADE.
<PAGE>
ROBERTSON
STEPHENS
FUNDS
[LOGO OMITTED]
555 California Street, Suite 2600
San Francisco, California 94104
FUND NEWS &
INFORMATION
ROBERTSON STEPHENS
INVESTOR SERVICES
(BULLET) Licensed mutual fund representatives
(BULLET) Automated access to daily net asset values
(BULLET) Toll-free shareholder service line
1-800-766-3863
ON THE WEB
http://www.rsim.com
VIA E-MAIL
[email protected]
ACCOUNTLINK
Automated account information,
24 hours a day.
1-800-624-8025
<PAGE>
THE SANSOM
STREET
FAMILY
MONEY MARKET PORTFOLIO
MUNICIPAL MONEY
MARKET PORTFOLIO
AND
GOVERNMENT OBLIGATIONS
MONEY MARKET PORTFOLIO
Prospectus
December 29, 1998
<PAGE>
THE SANSOM STREET FAMILY
OF
THE RBB FUND, INC.
The Sansom Street Family consists of three classes of common stock of The
RBB Fund, Inc. (the "Fund"), an open-end management investment company. The
shares of the Sansom Street Classes offered by this Prospectus represent
interests in a taxable money market portfolio, a municipal money market
portfolio and a U.S. Government obligations money market portfolio. The
investment objectives of each investment portfolio described in this Prospectus
are as follows:
MONEY MARKET PORTFOLIO--to provide as high a level of current interest
income as is consistent with maintaining liquidity and stability of
principal. It seeks to achieve such objective by investing in a diversified
portfolio of U.S. dollar-denominated money market instruments.
MUNICIPAL MONEY MARKET PORTFOLIO--to provide as high a level of current
interest income exempt from federal income taxes as is consistent with
maintaining liquidity and stability of principal. It seeks to achieve such
objective by investing substantially all of its assets in a diversified
portfolio of short-term Municipal Obligations. "Municipal Obligations" are
obligations issued by or on behalf of states, territories and possessions
of the United States, the District of Columbia, and their political
subdivisions, agencies, instrumentalities and authorities. During periods
of normal market conditions, at least 80% of the net assets of the
Portfolio will be invested in Municipal Obligations, the interest on which
is exempt from the regular federal income tax but which may constitute an
item of tax preference for purposes of the federal alternative minimum tax.
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO--to provide as high a
level of current interest income as is consistent with maintaining
liquidity and stability of principal. It seeks to achieve such objective by
investing in short-term U.S. Treasury bills, notes and other obligations
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements relating to such obligations.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK
AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. THERE CAN BE NO ASSURANCE THAT THE PORTFOLIOS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
BlackRock Institutional Management Corporation serves as investment adviser
for these Portfolios and PFPC Trust Company serves as custodian for the Fund.
PFPC Inc. serves as administrator and as transfer and dividend disbursing agent
for the Fund. Provident Distributors, Inc. acts as distributor for the Fund.
Sansom Street Shares are sold by the Fund's distributor to customers
maintaining accounts with banks affiliated with PNC Bank Corp. (the "Banks").
Sansom Street Shares will be sold to customers, including individuals, trusts,
partnerships and corporations, who maintain accounts (such as custody, trust or
escrow accounts) with the Banks, and who have authorized the Banks to invest in
the Fund. Shares are sold and redeemed without any purchase or redemption charge
imposed by the Fund, although the Banks may receive compensation from the Fund
and charge their customer accounts for services provided in connection with the
purchase or redemption of shares. See "Shareholder Servicing." Sansom Street
Shares are also sold through dealers that have entered into a dealer agreement
with the Fund's Distributor.
This Prospectus contains concise information that a prospective investor
needs to know before investing. Please keep it for future reference. A Statement
of Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained upon request free of charge from the Fund by
calling (800) 430-9618. The Prospectus and Statement of Additional Information
are also available for reference, along with other related materials, on the SEC
Internet Website (http://www.sec.gov).
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
The RBB Fund, Inc. is an open-end management investment company
incorporated under the laws of the State of Maryland on February 29, 1988. The
Fund is currently operating or proposing to operate seventeen separate
investment portfolios. Each of the three classes (collectively, the "Sansom
Street Classes") of the Fund's shares (collectively, the "Sansom Street Shares"
or "Shares") offered by this Prospectus represents interests in one of the
following investment portfolios: the Money Market Portfolio, the Municipal Money
Market Portfolio and the Government Obligations Money Market Portfolio
(together, the "Portfolios").
The MONEY MARKET PORTFOLIO'S investment objective is to provide as high a
level of current interest income as is consistent with maintaining liquidity and
stability of principal. It seeks to achieve such objective by investing in a
diversified portfolio of U.S. dollar-denominated money market instruments which
meet certain ratings criteria and which present minimal credit risks. In
pursuing its investment objective, the Money Market Portfolio invests in a broad
range of government, bank and commercial obligations that may be available in
the money markets.
The MUNICIPAL MONEY MARKET PORTFOLIO'S investment objective is to provide
as high a level of current interest income exempt from federal income taxes as
is consistent with maintaining liquidity and stability of principal. To achieve
this objective the Municipal Money Market Portfolio invests substantially all of
its assets in a diversified portfolio of short-term Municipal Obligations which
meet certain ratings criteria and which present minimal credit risks. During
periods of normal market conditions, at least 80% of the net assets of the
Portfolio will be invested in Municipal Obligations, the interest on which is
exempt from the regular federal income tax but which may constitute an item of
tax preference for purposes of the federal alternative minimum tax.
The GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO'S investment objective is
to provide as high a level of current interest income as is consistent with
maintaining liquidity and stability of principal. To achieve its objective, the
Government Obligations Money Market Portfolio invests exclusively in short-term
U.S. Treasury bills, notes and other obligations issued or guaranteed by the
U.S. Government or its agencies or instrumentalities, and enters into repurchase
agreements relating to such obligations.
Each of the Portfolios seeks to maintain a net asset value of $1.00 per
share; however, there can be no assurance that the Portfolios will be able to
maintain a stable net asset value of $1.00 per share.
The Portfolios' investment adviser is BlackRock Institutional Management
Corporation ("BIMC"). PFPC Trust Company serves as custodian to the Fund and
PFPC Inc. ("PFPC") serves as administrator and transfer and dividend disbursing
agent to the Fund. Provident Distributors, Inc. (the "Distributor") acts as
distributor of the Fund's shares.
An investment in any of the Portfolios is subject to certain risks, as set
forth in detail under "Investment Objectives and Policies." Some or all of the
Portfolios, to the extent set forth under "Investment Objectives and Policies,"
may engage in the following investment practices: the use of repurchase
agreements and reverse repurchase agreements, the purchase of mortgage-related
securities, the purchase of securities on a "when-issued" or "forward commitment
basis," the purchase of stand-by commitments and the lending of securities. All
of these transactions involve certain special risks, as set forth under
"Investment Objectives and Policies."
For detailed information of how to purchase or redeem Sansom Street Shares,
please refer to the section of this Prospectus entitled "Purchase and Redemption
of Shares."
2
<PAGE>
FEE TABLE
The Fee Table below contains a summary of the annual operating expenses
incurred by the Sansom Street Class of the Money Market Portfolio for the fiscal
year ended August 31, 1998 as a percentage of average daily net assets. The
figures shown for the Sansom Street Classes of the Municipal Money Market
Portfolio and Government Obligations Money Market Portfolio are based on
expenses expected to be incurred by such Classes of these Portfolios in the
current fiscal period in the event that Shares of these Classes are offered to
the public. No shares of these Classes were offered during the fiscal year ended
August 31, 1998. An example based on the summary is also shown.
ANNUAL FUND OPERATING EXPENSES (SANSOM STREET CLASSES)
AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS
<TABLE>
<CAPTION>
GOVERNMENT
MUNICIPAL OBLIGATIONS
MONEY MARKET MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------
<S> <C> <C> <C>
Management fees (after waivers)(1) ........................... .24% .08% .30%
12b-1 fees(1) ................................................ .05 .05 .05
Other Expenses ............................................... .20 .30 .24
---- ---- ----
Total Fund Operating Expenses (Sansom Street Classes)
(after waivers)(1) ........................................ .49% .43% .59%
==== ==== ====
<FN>
(1) Management Fees and 12b-1 Fees are each based on average daily net assets
and are calculated daily and paid monthly. Before waivers for the Money
Market Portfolio, Municipal Money Market Portfolio and Government
Obligations Money Market Portfolio, Management Fees would be .37%, .34% and
.42%, respectively, and Total Fund Operating Expenses would be .62%, .69%
and .71%, respectively.
</FN>
</TABLE>
EXAMPLE
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Money Market* ............................. $5 $16 $27 $62
Municipal Money Market* ................... $4 $13 $22 $49
Government Obligations Money Market* ...... $6 $19 $33 $74
* Other classes of these Portfolios are sold with different fees and expenses.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN.
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Sansom Street Classes of the
Fund will bear directly or indirectly. (For more complete descriptions of the
various costs and expenses, see "Management--Investment Adviser," "Distribution
of Shares" and "Shareholder Servicing" below.) Expense figures are based on
actual costs and fees charged to each class. The Fee Table reflects a voluntary
waiver of Management Fees for each Portfolio. However, there can be no assurance
that any future waivers of Management Fees will not vary from the figures
reflected in the Fee Table. In addition, the investment adviser is currently
voluntarily assuming additional expenses of the Money Market Portfolio. There
can be no assurance that the investment adviser will continue to assume such
expenses. Assumption of additional expenses will have the effect of lowering a
Portfolio's overall expense ratio and increasing its yield to investors.
3
<PAGE>
From time to time a Portfolio advertises its "total return," "yield" and
"effective yield." TOTAL RETURN AND YIELD FIGURES ARE BASED ON HISTORICAL
EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. The "yield" of a
Portfolio refers to the income generated by an investment in a Portfolio over a
seven-day period (which period will be stated in the advertisement). This income
is then "annualized." That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in a
Portfolio is assumed to be reinvested. The "effective yield" will be slightly
higher than the "yield" because of the compounding effect of this assumed
reinvestment. The Municipal Money Market Portfolio's "tax-equivalent yield" may
also be quoted from time to time, which shows the level of taxable yield needed
to produce an after-tax equivalent to such Portfolio's tax-free yield. This is
done by increasing the Portfolio's yield (calculated as above) by the amount
necessary to reflect the payment of federal income tax at a stated tax rate.
The total return and yield of any investment is generally a function of
portfolio quality and maturity, type of investment, operating expenses and
market conditions. The total return and yield on Shares of each of the Sansom
Street Classes will fluctuate and is not necessarily representative of future
results. Any fees charged by the Banks or broker/dealers directly to their
customers in connection with investments in a Portfolio are not reflected in the
total return and yields on a Portfolio's Shares, and such fees, if charged, will
reduce the actual return received by shareholders on their investments. The
total return and yield on Shares of Sansom Street Classes may differ from total
return and yields on shares of other classes of the Fund that also represent
interests in the same Portfolio depending on the allocation of expenses to each
of the classes of that Portfolio.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth certain information concerning the investment
results of the Sansom Street Classes for the periods indicated. The financial
data included in this table for each of the periods ended August 31, 1994
through August 31, 1998 are part of the Fund's financial statements for each of
the Portfolios, which have been incorporated by reference into the Statement of
Additional Information and have been audited by PricewaterhouseCoopers LLP
("PricewaterhouseCoopers"), the Fund's independent accountants. The financial
data for each such Portfolio for the periods ended August 31, 1989, 1990, 1991,
1992 and 1993 are a part of previous financial statements audited by
PricewaterhouseCoopers. No financial data for the periods ended August 31, 1994,
1995, 1996, 1997 and 1998 are included for the Sansom Street Class of the
Municipal Money Market Portfolio as no shares of such Class had been sold to the
public during these periods and for the Sansom Street Class of the Government
Obligations Money Market Portfolio as such Class ceased operations on December
4, 1991. The financial data included in the table should be read in conjunction
with the financial statements and notes thereto. Further information about the
performance of the Portfolios is available in the Annual Report to Shareholders.
Both the Statement of Additional Information and the Annual Report to
Shareholders may be obtained free of charge by calling the telephone number on
page 1 of this Prospectus.
4
<PAGE>
SANSOM STREET CLASSES
THE SANSOM STREET FAMILY
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS (c)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1998 1997 1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- --------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income ... .0520 0.0510 0.0518 0.0543 0.0334 0.0304 0.0435 0.0684
Net gains on securities
(both realized
and unrealized) ....... -- -- -- -- -- -- 0.0007 --
-------- --------- -------- -------- -------- -------- -------- --------
Total from
investment
operations ........ .0520 0.0510 0.0518 0.0543 0.0334 0.0304 0.0442 0.0684
-------- --------- -------- -------- -------- -------- -------- --------
Less distributions
Dividends (from net
investment income) .... (.0520) (0.0510) (0.0518) (0.0543) (0.0334) (0.0304) (0.0435) (0.0684)
Distributions (from
capital gains) ........ -- -- -- -- -- -- (0.0007) --
-------- --------- -------- -------- -------- -------- -------- --------
Total distributions . (.0520) (0.0510) (0.0518) (0.0543) (0.0334) (0.0304) (0.0442) (0.0684)
-------- --------- -------- -------- -------- -------- -------- --------
Net asset value,
end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========= ======== ======== ======== ======== ======== ========
Total Return ............... 5.34% 5.22% 5.30% 5.57% 3.39% 3.08% 4.51% 7.06%
Ratios/Supplemental Data
Net Assets, end of
period (000) .......... $684,066 $ 570,018 $524,359 $441,614 $373,745 $190,794 $228,079 $138,418
Ratios of expenses to
average net assets .... .49%(a) .49%(a) .48%(a) .39%(a) .39%(a) .34%(a) .35%(a) .37%(a)
Ratios of net investment
income to average
net assets ............ 5.20% 5.10% 5.18% 5.43% 3.34% 3.04% 4.35% 6.84%
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
-------------------------------
FOR THE PERIOD
SEPTEMBER 30, 1988
FOR THE (COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
AUGUST 31, AUGUST 31,
1990 1989
---------- ------------------
<S> <C> <C>
Net asset value,
beginning of period ..... $ 1.00 $ 1.00
-------- ---------
Income from investment
operations:
Net investment income ... 0.0810 0.0818
Net gains on securities
(both realized
and unrealized) ....... -- --
-------- ---------
Total from
investment
operations ........ 0.0810 0.0818
-------- ---------
Less distributions
Dividends (from net
investment income) .... (0.0810) (0.0818)
Distributions (from
capital gains) ........ -- --
-------- ---------
Total distributions . (0.0810) (0.0818)
-------- ---------
Net asset value,
end of period ........... $ 1.00 $ 1.00
======== =========
Total Return ............... 8.40% 9.25%(b)
Ratios/Supplemental Data
Net Assets, end of
period (000) .......... $106,743 $ 79,656
Ratios of expenses to
average net assets .... .47%(a) .50%(a)(b)
Ratios of net investment
income to average
net assets ............ 8.10% 9.04%(b)
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of certain
operating expenses, the ratios of expenses to average net assets for the
Money Market Portfolio would have been .62%, .64%, .65%, .59%, .60%, .60%,
.61%, .61% and .73% for the years ended August 31, 1998, 1997, 1996, 1995,
1994, 1993, 1992, 1991, and 1990, respectively, and .83% annualized for the
period ended August 31, 1989.
(b) Annualized.
(c) Financial Highlights relate solely to the Sansom Street Class of Shares
within the Portfolio.
</FN>
</TABLE>
5
<PAGE>
SANSOM STREET CLASSES
THE SANSOM STREET FAMILY
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS(c)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)(d)
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO
-------------------------------------------------------------------------------------
FOR THE PERIOD
SEPTEMBER 30, 1988
FOR THE FOR THE FOR THE FOR THE (COMMENCEMENT OF
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED OPERATIONS) TO
AUGUST 31, 1993 AUGUST 31, 1992 AUGUST 31, 1991 AUGUST 31, 1990 AUGUST 31, 1989
--------------- --------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ---------- ----------- ----------- -----------
Income from investment operations:
Net investment income ................... 0.0233 0.0325 0.0471 0.0559 0.0537
Net gains on securities (both realized
and unrealized) ....................... -- -- -- -- --
------- ---------- ----------- ----------- -----------
Total from investment operations .... 0.0233 0.0325 0.0471 0.0559 0.0537
------- ---------- ----------- ----------- -----------
Less distributions
Dividends (from net investment income) .. (0.0233) (0.0325) (0.0471) (0.0559) (0.0537)
Distributions (from capital gains) ...... -- -- -- -- --
------- ---------- ----------- ----------- -----------
Total distributions ................. (0.0233) (0.0325) (0.0471) (0.0559) (0.0537)
------- ---------- ----------- ----------- -----------
Net asset value, end of period ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ========== =========== =========== ===========
Total Return ............................... 2.35% 3.30% 4.81% 5.74% 5.99%(b)
Ratios/Supplemental Data
Net assets, end of period (000) ......... $ 928 $3,025,781 $15,289,016 $24,781,689 $21,470,715
Ratios of expenses to average
net assets ............................ .39%(a) .39%(a) .34%(a) .38%(a) .50%(a)(b)
Ratios of net investment income
to average net assets ................. 2.33% 3.25% 4.71% 5.59% 5.93%(b)
<FN>
(a) Without the waiver of advisory, administration, and transfer agency fees and
without the reimbursement of certain operating expenses, the ratios of
expenses to average net assets for the Municipal Money Market Portfolio is
not reported for the periods ended August 31, 1998, 1997, 1996, 1995 and
1994 and would have been 3.02%, .87%, .73% and .77% for the years ended
August 31, 1993, 1992, 1991, and 1990, respectively, and .95% annualized for
the period ended August 31, 1989.
(b) Annualized.
(c) Financial Highlights relate solely to the Sansom Street Class of Shares
within the Portfolio.
(d) No Shares of this class had been sold to the public during the periods ended
August 31, 1998, 1997, 1996, 1995 and 1994.
</FN>
</TABLE>
6
<PAGE>
SANSOM STREET CLASSES
THE SANSOM STREET FAMILY
THE RBB FUND, INC.
FINANCIAL HIGHLIGHTS(c)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
------------------------------------------------------------------------
FOR THE PERIOD
OCTOBERR 18, 1988
FOR THE FOR THE FOR THE (COMMENCEMENT OF
YEAR ENDED YEAR ENDED YEAR ENDED OPERATIONS) TO
AUGUST 31, 1992(d) AUGUST 31, 1991 AUGUST 31, 1990 AUGUST 31, 1989
------------------ --------------- --------------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------
Income from investment operations:
Net investment income .................................. 0.0153 0.0699 0.0843 0.0816
Net gains on securities (both realized and unrealized) . -- -- -- --
------- ------- ------- -------
Total from investment operations ................... 0.0153 0.0699 0.0843 0.0816
------- ------- ------- -------
Less distributions
Dividends (from net investment income) ................. (0.0153) (0.0699) (0.0843) (0.0816)
Distributions (from capital gains) ..................... -- -- -- --
------- ------- ------- -------
Total distributions ................................ (0.0153) (0.0699) (0.0843) (0.0816)
------- ------- ------- -------
Net asset value, end of period ............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======
Total Return .............................................. 6.02%(b) 7.23% 8.79% 9.31%(b)
Ratios/Supplemental Data
Net assets, end of period (000) ........................ -- $ 125 $ 117 $ 108
Ratios of expenses to average net assets ............... --(a) --(a) --(a) --(a)
Ratios of net investment income to average net assets .. 5.85% 6.99% 8.43% 8.91%(b)
<FN>
(a) Without the waiver of advisory, distribution and transfer agency fees and
without the reimbursement of certain operating expenses, the ratios of
expenses to average net assets for the Government Obligations Money Market
Portfolio is not reported for the periods ended December 4, 1991, August 31,
1991, 1990 and 1989 as no shares of the Sansom Street Class of that
Portfolio had been sold to the public during such years.
(b) Annualized.
(c) Financial Highlights relate solely to the Sansom Street Class of Shares
within the Portfolio.
(d) This Class of shares ceased operations on December 4, 1991.
</FN>
</TABLE>
7
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
The Money Market Portfolio's investment objective is to provide as high a
level of current interest income as is consistent with maintaining liquidity and
stability of principal. Portfolio obligations held by the Money Market Portfolio
have remaining maturities of 397 days or less (exclusive of securities subject
to repurchase agreements). In pursuing its investment objective, the Money
Market Portfolio invests in a diversified portfolio of U.S. dollar-denominated
instruments, such as government, bank and commercial obligations, that may be
available in the money markets ("Money Market Instruments") and that meet
certain ratings criteria and present minimal credit risks to the Money Market
Portfolio. See "Eligible Securities." There is no assurance that the Portfolio
will achieve its investment objective. The following descriptions illustrate the
types of Money Market Instruments in which the Money Market Portfolio invests.
BANK OBLIGATIONS. The Portfolio may purchase obligations of issuers in the
banking industry, such as short-term obligations of bank holding companies,
certificates of deposit, bankers' acceptances and time deposits, including U.S.
dollar-denominated instruments issued or supported by the credit of U.S. or
foreign banks or savings institutions having total assets at the time of
purchase in excess of $1 billion. The Portfolio may invest substantially in
obligations of foreign banks or foreign branches of U.S. banks where the
investment adviser deems the instrument to present minimal credit risks. Such
investments may nevertheless entail risks in addition to those of domestic
issuers, including higher transaction costs, less complete financial
information, less stringent regulatory requirements and less market liquidity.
The Portfolio may also make interest-bearing savings deposits in commercial and
savings banks in amounts not in excess of 5% of its total assets.
COMMERCIAL PAPER. The Portfolio may purchase commercial paper (i) rated (at
the time of purchase) in the two highest rating categories of at least two
nationally recognized statistical rating organizations ("Rating Organization")
or, by the only Rating Organization; or (ii) issued by issuers (or, in certain
cases guaranteed by persons) with short-term debt having such rating. These
rating categories are described in the Appendix to the Statement of Additional
Information. The Portfolio may also purchase unrated commercial paper provided
that such paper is determined to be of comparable quality by the Portfolio's
investment adviser in accordance with guidelines approved by the Fund's Board of
Directors.
Commercial paper purchased by the Portfolio may include instruments issued
by foreign issuers, such as Canadian Commercial Paper ("CCP"), which is U.S.
dollar-denominated commercial paper issued by a Canadian corporation or a
Canadian counterpart of a U.S. corporation, and in Europaper, which is U.S.
dollar-denominated commercial paper of a foreign issuer, subject to the criteria
stated above for other commercial paper issuers.
VARIABLE RATE DEMAND NOTES. The Portfolio may purchase variable rate demand
notes, which are unsecured instruments that permit the indebtedness thereunder
to vary and provide for periodic adjustment in the interest rate. Although the
notes are not normally traded and there may be no active secondary market in the
notes, the Portfolio will be able (at any time or during specified periods not
exceeding 13 months, depending upon the note involved) to demand payment of the
principal of a note. The notes are not typically rated by credit rating
agencies, but issuers of variable rate demand notes must satisfy the same
criteria as set forth above for issuers of commercial paper. If an issuer of a
variable rate demand note defaulted on its payment obligation, the Portfolio
might be unable to dispose of the note because of the absence of an active
secondary market. For this or other reasons, the Portfolio might suffer a loss
to the extent of the default. The Portfolio invests in variable rate demand
notes only when the Portfolio's investment adviser deems the investment to
involve minimal credit risk. The Portfolio's investment adviser also monitors
the continuing creditworthiness of issuers of such notes to determine whether
the Portfolio should continue to hold such notes.
8
<PAGE>
REPURCHASE AGREEMENTS. The Portfolio may agree to purchase securities from
financial institutions subject to the seller's agreement to repurchase them at
an agreed-upon time and price ("repurchase agreements"). The securities held
subject to a repurchase agreement may have stated maturities exceeding 13
months, provided the repurchase agreement itself matures in less than 13 months.
Default by or bankruptcy of the seller would, however, expose the Portfolio to
possible loss because of adverse market action or delays in connection with the
disposition of the underlying obligations.
U.S. GOVERNMENT OBLIGATIONS. The Portfolio may purchase obligations issued
or guaranteed by the U.S. Government or its agencies and instrumentalities.
Obligations of certain agencies and instrumentalities of the U.S. Government are
backed by the full faith and credit of the United States. Others are backed by
the right of the issuer to borrow from the U.S. Treasury or are backed only by
the credit of the agency or instrumentality issuing the obligation.
ASSET-BACKED SECURITIES. The Portfolio may invest in asset-backed
securities which are backed by mortgages, installment sales contracts, credit
card receivables or other assets and collateralized mortgage obligations
("CMOs") issued or guaranteed by U.S. Government agencies and, instrumentalities
or issued by private companies. Asset-backed securities also include adjustable
rate securities. The estimated life of an asset-backed security varies with the
prepayment experience with respect to the underlying debt instruments. For this
and other reasons, an asset-backed security's stated maturity may be shortened,
and the security's total return may be difficult to predict precisely. Such
difficulties are not expected, however, to have a significant effect on the
Portfolio since the remaining maturity of any asset-backed security acquired
will be 13 months or less. Asset-backed securities are considered an industry
for industry concentration purposes. See "Investment Limitations." In periods of
falling interest rates, the rate of mortgage prepayments tends to increase.
During these periods the reinvestment of proceeds by a Portfolio will generally
be at lower rates than the rates on the prepaid obligations.
REVERSE REPURCHASE AGREEMENTS. The Portfolio may enter into reverse
repurchase agreements with respect to portfolio securities. A reverse repurchase
agreement involves a sale by a Portfolio of securities that it holds
concurrently with an agreement by the Portfolio to repurchase them at an agreed
upon time and price. Reverse repurchase agreements involve the risk that the
market value of the securities sold by the Portfolio may decline below the price
at which the Portfolio is obligated to repurchase them. Reverse repurchase
agreements are considered to be borrowings by the Portfolio under the Investment
Company Act of 1940 (the "1940 Act").
MUNICIPAL OBLIGATIONS. In addition, the Portfolio may, when deemed
appropriate by its investment adviser in light of the Portfolio's investment
objective, invest without limitation in high quality, short-term Municipal
Obligations issued by state and local governmental issuers, the interest on
which may be taxable or tax-exempt for federal income tax purposes, provided
that such obligations carry yields that are competitive with those of other
types of Money Market Instruments of comparable quality. For a more complete
discussion of Municipal Obligations, see "Investment Objectives and Policies --
Municipal Money Market Portfolio --Municipal Obligations."
GUARANTEED INVESTMENT CONTRACTS. The Portfolio may make investments in
obligations, such as guaranteed investment contracts and similar funding
agreements (collectively, "GICs"), issued by highly rated U.S. insurance
companies. A GIC is a general obligation of the issuing insurance company and
not a separate account. The Portfolio's investments in GICs are not expected to
exceed 5% of its total assets at the time of purchase absent unusual market
conditions. GIC investments are subject to the Fund's policy regarding
investment in illiquid securities.
STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, a dealer would agree to purchase at the Portfolio's option specified
Municipal Obligations at a specified price. The acquisition of a stand-by
commitment may increase the cost, and thereby reduce the yield, of the Municipal
Obligation to which such commitment relates. The Portfolio will acquire stand-by
commitments solely to facilitate portfolio liquidity and does not intend to
exercise its rights thereunder for trading purposes.
9
<PAGE>
WHEN-ISSUED SECURITIES. The Portfolio may purchase portfolio securities on
a "when-issued" basis. When-issued securities are securities purchased for
delivery beyond the normal settlement date at a stated price and yield. The
Portfolio will generally not pay for such securities or start earning interest
on them until they are received. Securities purchased on a when-issued basis are
recorded as an asset at the time the commitment is entered into and are subject
to changes in value prior to delivery based upon changes in the general level of
interest rates. The Portfolio expects that commitments to purchase when-issued
securities will not exceed 25% of the value of its total assets absent unusual
market conditions. The Portfolio does not intend to purchase when-issued
securities for speculative purposes but only in furtherance of its investment
objective.
ELIGIBLE SECURITIES. The Portfolio will only purchase "eligible securities"
that present minimal credit risks as determined by the Portfolio's investment
adviser pursuant to guidelines adopted by the Board of Directors. Eligible
securities generally include: (1) U.S. Government securities, (2) securities
that are rated at the time of purchase in the two highest rating categories by
at least two Rating Organizations ("Rating Organizations") (e.g., commercial
paper rated "A-1" or "A-2" by Standard & Poor's Ratings Services ("S&P")), (3)
securities that are rated at the time of purchase by the only Rating
Organization rating the security in one of its two highest rating categories for
such securities (4) securities issued by issuers (or, in certain cases
guaranteed by persons) with short-term debt having such ratings, and (5)
securities that are not rated and are issued by an issuer that does not have
comparable obligations rated by a Rating Organization ("Unrated Securities"),
provided that such securities are determined to be of comparable quality to
eligible rated securities. For a more complete description of eligible
securities, see "Investment Objectives and Policies" in the Statement of
Additional Information.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days, time deposits with maturities in excess of
seven days, variable rate demand notes with demand periods in excess of seven
days unless the Portfolio's investment adviser determines that such notes are
readily marketable and could be sold promptly at the prices at which they are
valued, GICs, and other securities that are illiquid by virtue of the absence of
a readily available market or legal or contractual restrictions on resale.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the notice period. Securities that have legal or contractual restrictions on
resale but have a readily available market are not deemed illiquid for purposes
of this limitation. The Portfolio's investment adviser will monitor the
liquidity of such restricted securities under the supervision of the Board of
Directors. See "Investment Objectives and Policies -- Illiquid Securities" in
the Statement of Additional Information.
MUNICIPAL MONEY MARKET PORTFOLIO
The Municipal Money Market Portfolio's investment objective is to provide
as high a level of current interest income exempt from federal income taxes as
is consistent with maintaining liquidity and stability of principal. The
Municipal Money Market Portfolio invests substantially all of its assets in a
diversified portfolio of short-term Municipal Obligations, the interest on
which, in the opinion of bond counsel or counsel to the issuer, as the case may
be, is exempt from the regular federal income tax. During periods of normal
market conditions, at least 80% of the net assets of the Municipal Money Market
Portfolio will be invested in Municipal Obligations. Municipal Obligations
include securities the interest on which is Tax-Exempt Interest, although to the
extent the Portfolio invests in certain private activity bonds issued after
August 7, 1986 ("Alternative Minimum Tax Securities"), a portion of the interest
earned by the Portfolio may constitute an item of tax preference for purposes of
the federal alternative minimum tax ("AMT Interest"). There is no assurance that
the investment objective of the Portfolio will be achieved.
MUNICIPAL OBLIGATIONS. The Portfolio invests in short-term Municipal
Obligations which are determined by the Portfolio's investment adviser to
present minimal credit risks and that meet certain ratings criteria pursuant to
guidelines established by the Fund's Board of Directors. The Portfolio may also
purchase Unrated Securities provided that
10
<PAGE>
such securities are determined to be of comparable quality to eligible rated
securities. The applicable Municipal Obligations ratings are described in the
Appendix to the Statement of Additional Information.
The Portfolio may hold uninvested cash reserves pending investment during
temporary defensive periods or if, in the opinion of the Portfolio's investment
adviser, suitable obligations bearing Tax-Exempt Interest or AMT Interest are
unavailable. There is no percentage limitation on the amount of assets which may
be held uninvested during temporary defensive periods. Uninvested cash reserves
will not earn income.
The two principal classifications of Municipal Obligations are "general
obligation" securities and "revenue" securities. General obligation securities
are secured by the issuer's pledge of its full faith, credit and taxing power
for the payment of principal and interest. Revenue securities are payable only
from the revenues derived from a particular facility or class of facilities or,
in some cases, from the proceeds of a special excise tax or other specific
excise tax or other specific revenue source such as the user of the facility
being financed. Revenue securities include private activity bonds which are not
payable from the unrestricted revenues of the issuer. Consequently, the credit
quality of private activity bonds is usually directly related to the credit
standing of the corporate user of the facility involved.
Municipal Obligations may also include "moral obligation" bonds, which are
normally issued by special purpose public authorities. If the issuer of moral
obligation bonds is unable to meet its debt service obligations from current
revenues, it may draw on a reserve fund, the restoration of which is a moral
commitment but not a legal obligation of the state or municipality which created
the issuer.
Although the Municipal Money Market Portfolio may invest more than 25% of
its net assets in (i) Municipal Obligations whose issuers are in the same state,
(ii) Municipal Obligations the interest on which is paid solely from revenues of
similar projects and (iii) private activity bonds bearing Tax-Exempt Interest,
it does not currently intend to do so on a regular basis. To the extent the
Municipal Money Market Portfolio's assets are concentrated in Municipal
Obligations that are payable from the revenues of similar projects or are issued
by issuers located in the same state, the Portfolio will be subject to the
peculiar risks presented by the laws and economic conditions relating to such
states or projects to a greater extent than it would be if its assets were not
so concentrated.
TAX-EXEMPT DERIVATIVE SECURITIES. The Municipal Money Market Portfolio may
invest in tax-exempt derivative securities such as tender option bonds,
custodial receipts, participations, beneficial interests in trusts and
partnership interests. A typical tax-exempt derivative security involves the
purchase of an interest in a pool of Municipal Obligations which interest
includes a tender option, demand or other feature, allowing the Portfolio to
tender the underlying Municipal Obligation to a third party at periodic
intervals and to receive the principal amount thereof. In some cases, Municipal
Obligations are represented by custodial receipts evidencing rights to future
principal or interest payments, or both, on underlying municipal securities held
by a custodian and such receipts include the option to tender the underlying
securities to the sponsor (usually a bank, broker-dealer or other financial
institution). Although the Internal Revenue Service has not ruled on whether the
interest received on derivative securities in the form of participation
interests or custodial receipts is Tax-Exempt Interest, opinions relating to the
validity of, and the tax-exempt status of payments received by, the Portfolio
from such derivative securities are rendered by counsel to the respective
sponsors of such derivatives and relied upon by the Portfolio in purchasing such
securities. Neither the Portfolio nor its investment adviser will review the
proceedings relating to the creation of any tax-exempt derivative securities or
the basis for such legal opinions.
WHEN-ISSUED SECURITIES. The Portfolio may also purchase portfolio
securities on a "when-issued" basis as described under "Investment Objectives
and Policies--Money Market Portfolio--When-Issued Securities."
STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio as described under
"Investment Objectives and Policies--Money Market Portfolio--Stand-By
Commitments."
11
<PAGE>
ELIGIBLE SECURITIES. The Municipal Money Market Portfolio will only
purchase "eligible securities" that present minimal credit risks as determined
by the Portfolio's investment adviser pursuant to guidelines adopted by the
Board of Directors. For a more complete description of eligible securities, see
"Investment Objectives and Policies--Money Market Portfolio--Eligible
Securities" and "Investment Objectives and Policies" in the Statement of
Additional Information.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities as described under "Investment Objectives and
Policies--Money Market Portfolio--Illiquid Securities" and "Investment
Objectives and Policies--Illiquid Securities" in the Statement of Additional
Information.
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
The Government Obligations Money Market Portfolio's investment objective is
to provide as high a level of current interest income as is consistent with
maintaining liquidity and stability of principal. It seeks to achieve such
objective by investing in short-term U.S. Treasury bills, notes and other
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, and entering into repurchase agreements relating to such
obligations. The types of U.S. Government obligations in which the Portfolio may
invest include a variety of U.S. Treasury obligations, which differ only in
their interest rates, maturities, and times of issuance, and obligations issued
or guaranteed by the U.S. Government or its agencies or instrumentalities,
including mortgage-related securities. Obligations of certain agencies and
instrumentalities of the U.S. Government, such as the Government National
Mortgage Association and the Export-Import Bank of the United States, are
supported by the full faith and credit of the U.S. Treasury; others, such as
those of the Federal National Mortgage Association, are supported by the right
of the issuer to borrow from the Treasury; others are supported by the
discretionary authority of the U.S. Government to purchase the agency's
obligations; still others, such as those of the Federal Farm Credit Banks or the
Federal Home Loan Mortgage Corporation, are supported only by the credit of the
instrumentality. No assurance can be given that the U.S. Government would
provide financial support to U.S. Government-sponsored agencies or
instrumentalities if it is not obligated to do so under law. The Portfolio will
invest in the obligations of such agencies or instrumentalities only when the
investment adviser believes that the credit risk with respect thereto is
minimal. There is no assurance that the investment objective of the Portfolio
will be achieved.
Due to fluctuations in interest rates, the market values of securities
issued or guaranteed by the U.S. Government, its agencies and instrumentalities
may vary. Certain government securities held by the Portfolio may have remaining
maturities exceeding 397 days if such securities provide for adjustments in
their interest rates not less frequently than every 397 days and the adjustments
are sufficient to cause the securities to have market values, after adjustment,
which approximate their par values.
REPURCHASE AGREEMENTS. The Portfolio may agree to purchase government
securities from financial institutions, subject to the seller's agreement to
repurchase them at an agreed-upon time and price ("repurchase agreements"). For
a more complete description of repurchase agreements, see "Investment Objectives
and Policies--Money Market Portfolio--Repurchase Agreements."
REVERSE REPURCHASE AGREEMENTS. The Portfolio may borrow funds by entering
into reverse repurchase agreements in accordance with the investment
restrictions described below. The Portfolio would consider entering into reverse
repurchase agreements to avoid otherwise selling securities during unfavorable
market conditions to meet redemptions. For a more complete description of
reverse repurchase agreements see "Investment Objectives and Policies--Money
Market Portfolio--Reverse Repurchase Agreements."
MORTGAGE-RELATED AND ASSET-BACKED SECURITIES. Mortgage-related securities
consist of mortgage loans which are assembled into pools, the interests in which
are issued and guaranteed by an agency or instrumentality of the U.S.
Government, though not necessarily by the U.S. Government itself. The Fund may
also acquire asset-backed securities as described under "Investment Objectives
and Policies--Money Market Portfolio--Asset-Backed Securities."
12
<PAGE>
LENDING OF SECURITIES. The Portfolio may also lend its portfolio securities
to financial institutions in accordance with the investment restrictions
described below. Such loans would involve risks of delay in receiving additional
collateral in the event the value of the collateral decreased below the value of
the securities loaned or of delay in recovering the securities loaned or even
loss of rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers deemed by the
Portfolio's investment adviser to be of good standing and only when, in the
adviser's judgment, the income to be earned from the loans justifies the
attendant risks. Any loans of the Portfolio's securities will be fully
collateralized and marked to market daily.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities as described under "Investment Objectives and
Policies--Illiquid Securities" in the Statement of Additional Information.
YEAR 2000
- --------------------------------------------------------------------------------
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
INVESTMENT LIMITATIONS
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The Money Market, Municipal Money Market and Government Obligations Money
Market Portfolios' respective investment objectives and the policies described
above may be changed by the Fund's Board of Directors without shareholder
approval. The Portfolios may not, however, change the following investment
limitations (except as noted) without such a vote of their respective
shareholders. (A more detailed description of the following investment
limitations, together with other investment limitations that cannot be changed
without a vote of shareholders, is contained in the Statement of Additional
Information under "Investment Objectives and Policies.")
The Portfolios may not borrow money, except from banks for temporary
purposes and except for reverse repurchase agreements, and then in amounts not
in excess of 10% of the value of a Portfolio's assets at the time of such
borrowing, and only if after such borrowing there is asset coverage of at least
300% for all borrowings of the Portfolio; or mortgage, pledge or hypothecate any
of its assets except in connection with any such borrowing and in amounts not in
excess of 10% of the value of a Portfolio's assets at the time of such
borrowing; or purchase portfolio securities while borrowings in excess of 5% of
the Portfolio's net assets are outstanding. (This borrowing provision is not for
investment leverage, but solely to facilitate management of a Portfolio's
securities by enabling the Portfolio to meet redemption requests where the
liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient.)
The Money Market and Municipal Money Market Portfolios may not:
1. Purchase securities of any one issuer, other than securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities,
if immediately after and as a result of such purchase more than 5% of the
value of its total assets would be invested in the securities of such
issuer, or more than 10% of the outstanding voting securities of such
issuer would be owned by a Portfolio, except that up to 25% of the value of
a Portfolio's total assets may be invested without regard to such 5%
limitation.
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The Money Market Portfolio may not:
1. Purchase any securities other than Money Market Instruments, some of
which may be subject to repurchase agreements, but the Portfolio may make
interest-bearing savings deposits in amounts not in excess of 5% of the
value of the Portfolio's assets and may make time deposits.
2. Purchase any securities which would cause, at the time of purchase,
less than 25% of the value of the total assets of the Portfolio to be
invested in the obligations of issuers in the banking industry, or in
obligations, such as repurchase agreements, secured by such obligations
(unless the Portfolio is in a temporary defensive position) or which would
cause, at the time of purchase, more than 25% of the value of its total
assets to be invested in the obligations of issuers in any other industry.
So long as it values its portfolio securities on the basis of the amortized
cost method of valuation pursuant to Rule 2a-7 under the 1940 Act, the Money
Market Portfolio will meet the following limitations on its investments in
addition to the fundamental investment limitations described above. These
limitations may be changed without a vote of shareholders of the Money Market
Portfolio.
1. The Money Market Portfolio will limit its purchases of the
securities of any one issuer, other than issuers of U.S. Government
securities, to 5% of its total assets, except that the Money Market
Portfolio may invest more than 5% of its total assets in First Tier
Securities of one issuer for a period of up to three Business Days (as
defined below). "First Tier Securities" include eligible securities that
(i) if rated by more than one Rating Organization, are rated (at the time
of purchase) by two or more Rating Organizations in the highest rating
category for such securities, (ii) if rated by only one Rating
Organization, are rated by such Rating Organization in its highest rating
category for such securities, (iii) have no short-term rating and are
comparable in priority and security to a class of short-term obligations of
the issuer of such securities that have been rated in accordance with (i)
or (ii) above, or (iv) are Unrated Securities that are determined to be of
comparable quality to such securities. Purchases of First Tier Securities
that come within categories (ii) and (iv) above will be approved or
ratified by the Board of Directors.
2. The Money Market Portfolio will limit its purchases of Second Tier
Securities, which are eligible securities other than First Tier Securities,
to 5% of its total assets.
3. The Money Market Portfolio will limit its purchases of Second Tier
Securities of one issuer to the greater of 1% of its total assets or $1
million.
The Municipal Money Market Portfolio may not:
1. Purchase any securities which would cause more than 25% of the value
of the total assets of the Portfolio to be invested in obligations at the
time of purchase in issuers in the same industry.
In addition, without shareholder approval, the Portfolio may not change its
policy of investing during normal market conditions at least 80% of its net
assets in obligations the interest on which is Tax-Exempt Interest or AMT
Interest.
The Government Obligations Money Market Portfolio may not:
1. Purchase securities other than U.S. Treasury bills, notes and other
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, and repurchase agreements relating to such obligations.
2. Make loans except that the Portfolio may purchase or hold debt
obligations in accordance with its investment objective, policies and
limitations, may enter into repurchase agreements for securities, and may
lend portfolio securities against collateral, consisting of cash or
securities which are consistent with the Portfolio's permitted investments,
which is equal at all times to at least 100% of the value of the securities
loaned. There is no investment restriction on the amount of securities that
may be loaned, except that payments received on such loans, including
amounts received during the loan on account of interest on the securities
loaned, may not
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(together with all non-qualifying income) exceed 10% of the Portfolio's
annual gross income (without offset for realized capital gains) unless, in
the opinion of counsel to the Fund, such amounts are qualifying income
under federal income tax provisions applicable to regulated investment
companies.
PURCHASE AND REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
PURCHASE PROCEDURES
Sansom Street Shares are sold without a sales load on a continuous basis by
the Fund's Distributor. Only Shares of the Sansom Street Class representing
interests in the Money Market Portfolio are currently offered to the public.
Purchase of Shares may be made through the Banks acting on behalf of their
customers, including individuals, trusts, partnerships and corporations who
maintain accounts (such as custody, trust or escrow accounts) with the Banks and
who have authorized the Bank to invest in the Fund on the customer's behalf.
Investors may also purchase Shares through broker-dealers (a "Dealer") that have
entered into a dealer agreement with the Fund's Distributor. The minimum initial
investment by an investor is $1,500. There is no minimum subsequent investment.
Purchases of Shares may be effected through the customer's accounts at the
Banks or investor accounts with the Dealer through procedures established in
connection with the requirements of accounts at the Banks or at such Dealer.
Confirmations of Share purchases and redemptions will be sent to the Banks or
such Dealer. Beneficial ownership of Sansom Street Shares will be recorded by
the Banks or such Dealer and reflected in the account statements provided by
such Banks or by such Dealer to investors. If you wish to purchase Sansom Street
Shares, contact your Bank or a Dealer.
The Banks may also impose minimum customer account requirements. Although
the Banks do not impose a sales charge for purchases of Sansom Street Shares,
depending upon the terms of the particular customer account, the Banks may
charge the account fees for automatic investment and other cash management
services. Information concerning these minimum account requirements, services
and any charges will be provided by the Banks before the customer authorizes the
initial purchase of shares. This Prospectus should be read in conjunction with
any information received from the Banks. See "Shareholder Servicing."
The Sansom Street Class of the Money Market Portfolio is also available
through Robertson Stephens, a registered broker-dealer that has entered into a
dealer Agreement with the Fund's Distributor. For distribution services with
respect to that Class of shares of the Portfolio held by this firm, the Fund's
Distributor pays Robertson Stephens up to .25% of the average annual daily net
asset value of such accounts. Purchases made through this program does not
require customers to pay a transaction fee.
DIRECT PURCHASES THROUGH A DEALER. An investor may make an initial
investment by mail by fully completing and signing an application obtained from
a Dealer (an "Application") and mailing it, together with a check payable to
"Sansom Street Money Market," to "Sansom Street Money Market," c/o PFPC, P.O.
Box 8950, Wilmington, Delaware 19899. An Application will be returned to the
investor unless it contains the name of the Dealer from whom it was obtained.
Subsequent purchases may be made through a Dealer or by forwarding payment to
the Fund's transfer agent at the foregoing address.
The Fund reserves the right to reject any purchase order.
All payments for initial and subsequent investments should be in U.S.
dollars. Purchases will be effected at the net asset value next determined after
receipt of the purchase order in good order and Federal Funds are available to
the Fund. Purchase orders received after its close of business are priced at the
net asset value next determined on the following "Business Day." A "Business
Day" is any day that both the New York Stock Exchange (the "NYSE") and the
Federal Reserve Bank of Philadelphia (the "FRB") are open. In those cases in
which an investor pays for Shares by check,
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<PAGE>
Federal Funds will generally become available two Business Days after the check
is received. Purchase orders for Shares are accepted only on Business Days.
Conflict of interest restrictions may apply to an institution's receipt of
compensation paid by the Fund in connection with the investment of fiduciary
funds in Sansom Street Shares. Institutions, including banks regulated by the
Comptroller of the Currency and investment advisers and other money managers
subject to the jurisdiction of the Securities and Exchange Commission, the
Department of Labor or state securities commissions, are urged to consult their
legal advisers before investing fiduciary funds in Sansom Street Shares.
REDEMPTION OF SHARES
Redemption orders are effected at the net asset value per share next
determined after receipt of the order in proper form by the Fund's transfer
agent, PFPC. It is the responsibility of the Banks and the Dealers to transmit
promptly to PFPC a customer's redemption request. In the case of shareholders
holding share certificates, the certificates must accompany the redemption
request. Investors may redeem all or some of their Shares in accordance with one
of the procedures described below.
REDEMPTION OF SHARES IN AN ACCOUNT FOR BANK CUSTOMERS. A customer may
redeem all or part of his Sansom Street Shares in accordance with instructions
and limitations pertaining to his account at the Bank. Redemption orders are
effected at the net asset value per share determined after receipt of the order
by PFPC. Payment for redemption orders received by PFPC on a Business Day before
12:00 noon Eastern Time will be wired the same day in Federal Funds to the
(customer's) account at the Bank, provided that the Fund's custodian is open for
business. If the custodian is not open, payment will be made on the next bank
business day. Payment for redemption orders which are received between 12:00
noon Eastern Time and the close of regular trading on the NYSE (generally 4:00
p.m. Eastern Time) on a Business Day will be wired in Federal Funds to the
customers account on the next bank business day following receipt of the
redemption request. No charge for wiring redemption payments is imposed by the
Fund, although the Banks may charge customer accounts for redemption services.
REDEMPTION OF SHARES IN AN ACCOUNT FOR NON-BANK CUSTOMERS. An investor who
beneficially owns Shares through an Account may redeem Shares in his account in
accordance with instructions and limitations pertaining to his Account by
contacting his broker. If such notice is received by PFPC from the broker by
12:00 noon Eastern Time on any Business Day, the redemption will be effective as
of 12:00 noon Eastern Time on that day. Payment of the redemption proceeds will
be made after 12:00 noon Eastern Time on the day the redemption is effected,
provided that the Fund's custodian is open for business. If the custodian is not
open, payment will be made on the next bank business day. If the redemption
request is received between 12:00 noon and the close of regular trading of the
NYSE on a Business Day, the redemption will be effective as of the close of
regular trading of the NYSE on such Business Day and payment will be made on the
next bank business day following receipt of the redemption request. If all
Shares are redeemed, all accrued but unpaid dividends on those Shares will be
paid with the redemption proceeds.
An investor's brokerage firm may also redeem each day a sufficient number
of Shares to cover debit balances created by transactions in the Account or
instructions for cash disbursements. Shares will be redeemed on the same day
that a transaction occurs that results in such a debit-balance or charge.
Each brokerage firm reserves the right to waive or modify criteria for
participation in an Account or to terminate participation in an Account for any
reason.
REDEMPTION OF SHARES OWNED DIRECTLY. A direct investor may redeem any
number of Shares by sending a written request to "Sansom Street Money Market,"
c/o PFPC, P.O. Box 8950, Wilmington, Delaware 19899. It is recommended that such
request be sent by registered or certified mail if share certificates accompany
the request. Redemption requests must be signed by each shareholder in the same
manner as the Shares are registered. Redemption requests for joint accounts
require the signature of each joint owner. On redemption requests of $5,000 or
more, a signature
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<PAGE>
guarantee is required. A signature guarantee may be obtained from a domestic
bank or trust company, broker, dealer, clearing agency or savings association
who are participants in a medallion program recognized by the Securities
Transfer Association. The three recognized medallion programs are Securities
Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program
(SEMP) and New York Stock Exchange, Inc. Medallion Signature Program (MSP).
Signature guarantees that are not part of these programs will not be accepted.
Direct investors may redeem Shares without charge by telephone if they have
completed and returned an account application containing the appropriate
telephone election. To add a telephone option to an existing account that
previously did not provide for this option, a Telephone Authorization Form must
be filed with PFPC. This form is available from PFPC. Once this election has
been made, the shareholder may simply contact PFPC by telephone to request the
redemption by calling (888) 261-4073. Neither the Fund, the Portfolios, the
Distributor, PFPC nor any other Fund agent will be liable for any loss,
liability, cost or expense for following the procedures described below or for
following instructions communicated by telephone that they reasonably believe to
be genuine.
The Fund's telephone transaction procedures include the following measures:
(1) requiring the appropriate telephone transaction privilege forms; (2)
requiring the caller to provide the names of the account owners, the account
social security number and the name of the portfolio, all of which must match
the Fund's records; (3) requiring the Fund's service representative to complete
a telephone transaction form, listing all of the above caller identification
information; (4) requiring that redemption proceeds be sent only by check to the
account owners of record at the address of record, or by wire only to the owners
of record at the bank account of record; (5) sending a written confirmation for
each telephone transaction to the owners of record at the address of record
within five (5) business days of the call; and (6) maintaining tapes of
telephone transactions for six months, if the Fund elects to record shareholder
telephone transactions. For accounts held of record by broker-dealers (other
than the Distributor), financial institutions, securities dealers, financial
planners or other industry professionals, additional documentation or
information regarding the scope of a caller's authority is required. Finally,
for telephone transactions in accounts held jointly, additional information
regarding other account holders is required. Telephone transactions will not be
permitted in connection with IRA or other retirement plan accounts or by an
attorney-in-fact under power of attorney.
The proceeds of a telephone redemption request will be mailed by check to
an investor's registered address unless he has designated in his Application or
Telephone Authorization Form that such proceeds are to be sent by wire transfer
to a specified checking or savings account. If proceeds are to be sent by wire
transfer, a telephone redemption request received prior to the close of regular
trading on the NYSE will result in redemption proceeds being wired to the
investor's bank account on the next bank business day. The minimum redemption
for proceeds sent by wire transfer is $2,500. There is no maximum for proceeds
sent by wire transfer. The Fund may modify this redemption service at any time
or charge a service fee upon prior notice to shareholders, although no fee is
currently contemplated.
REDEMPTION BY CHECK. Upon request, the Fund will provide any direct
investor and any investor who does not have check writing privileges for his
Account with forms of drafts ("checks") payable through PNC Bank. These checks
may be made payable to the order of anyone. The minimum amount of a check is
$100; however, a broker may establish a higher minimum. An investor wishing to
use this check writing redemption procedure should complete specimen signature
cards (available from PFPC), and then forward such signature cards to PFPC. PFPC
will then arrange for the checks to be honored by PNC Bank. Investors who own
Shares through an Account should contact their brokers for signature cards.
Investors with joint accounts may elect to have checks honored with a single
signature. Check redemptions will be subject to PNC Bank's rules governing
checks. An investor will be able to stop payment on a check redemption. The Fund
or PNC Bank may terminate this redemption service at any time, and neither shall
incur any liability for honoring checks, for effecting redemptions to pay
checks, or for returning checks which have not been accepted.
When a check is presented to PNC Bank for clearance, PNC Bank, as the
investor's agent, will cause the Fund to redeem a sufficient number of full and
fractional Shares owned by the investor to cover the amount of the check. This
procedure enables the investor to continue to receive dividends on those Shares
representing the amount being
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<PAGE>
redeemed by check until such time as the check is presented to PNC Bank.
Pursuant to rules under the 1940 Act, checks may not be presented for cash
payment at the offices of PNC Bank. This limitation does not affect checks used
for the payment of bills or cash at other banks.
OTHER REDEMPTION INFORMATION
The Fund ordinarily will make payment for all Shares redeemed within seven
days after receipt by the Fund's transfer agent of a redemption request in
proper form. Although the Fund will redeem Shares purchased by check before the
check clears, payment of redemption proceeds may be delayed for a period up to
fifteen days after their purchase, pending a determination that the check has
cleared. This procedure does not apply to Shares purchased by wire payment.
Investors should consider purchasing Shares using a certified or bank check or
money order if they anticipate an immediate need for redemption proceeds.
The Fund imposes no charge when Shares are redeemed. The Fund reserves the
right to redeem any account in a Sansom Street Class involuntarily, on thirty
days' notice, if such account falls below $500 and during such thirty-day notice
period the amount invested in such account is not increased to at least $500.
Payment for Shares redeemed may be postponed or the right of redemption
suspended as provided by the rules of the Securities and Exchange Commission.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value per share of each class of the Portfolios for the
purpose of pricing purchase and redemption orders is determined twice each day,
once as of 12:00 noon Eastern Time and once as of the close of regular trading
on the NYSE on each weekday, with the exception of those holidays on which
either the NYSE or the FRB is closed. Currently, the NYSE is closed on weekends
and the customary national business holidays of New Year's Day, Dr. Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day and on the preceding Friday
or subsequent Monday when one of these holidays falls on a Saturday or Sunday.
The FRB is currently closed on weekends and the same holidays as the NYSE is
closed, as well as Veterans' Day and Columbus Day. The net asset value per share
of each class is calculated by adding the proportionate interest of each class
in the value of the securities, cash, and other assets of the Portfolio,
subtracting accrued and actual liabilities of the class and dividing the result
by the number of outstanding shares of the class. The net asset value per share
of each class of the Fund is determined independently of any of the Fund's other
classes.
The Fund seeks to maintain for each of the Portfolios a net asset value of
$1.00 per share for purposes of purchases and redemptions and values its
portfolio securities on the basis of the amortized cost method of valuation
described in the Statement of Additional Information under the heading
"Valuation of Shares." There can be no assurance that net asset value per share
will not vary.
With the approval of the Board of Directors, a Portfolio may use a pricing
service, bank or broker-dealer experienced in such matters to value the
Portfolio's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.
DISTRIBUTION OF SHARES
- --------------------------------------------------------------------------------
Provident Distributors, Inc. acts as distributor for each of the Sansom
Street Classes of the Fund pursuant to a distribution agreement with the Fund
dated May 29, 1998 (the "Distribution Agreement"). The Distributor pays for the
cost of printing (excluding typesetting) and mailing to prospective investors
prospectuses and other materials relating to the Portfolios of the Fund as well
as for related direct mail, advertising expenses and promotional expenses. The
Distributor monitors the support services provided by the Banks as described in
"Shareholder Servicing" below.
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DISTRIBUTION ARRANGEMENTS
The Board of Directors of the Fund approved and adopted the Distribution
Agreement and separate Plans of Distribution for each of the Sansom Street
Classes (collectively, the "Plans") pursuant to Rule 12b-1 under the 1940 Act.
Under each of the Plans, the Distributor is entitled to receive from the
relevant Sansom Street Class a distribution fee, which is accrued daily and paid
monthly, of up to .20% on an annualized basis of the daily net assets of the
relevant Sansom Street Class. The actual amount of such compensation under the
Plans is agreed upon by the Fund's Board of Directors and by the Distributor.
Under the Distribution Agreement for the Municipal Money Market Portfolio and
the Government Obligations Money Market Portfolio, the Distributor has agreed to
accept compensation for its services thereunder and under the relevant Plan in
the amount of .05% on an annualized basis. Such compensation may be increased up
to the amount permitted under the Plan, with the approval of the Fund's Board of
Directors. Under the Distribution Agreement for the Money Market Portfolio, the
Distributor has agreed to accept compensation for its services thereunder and
under the relevant Plan in the amount of .06% on an annualized basis. Pursuant
to the conditions of an exemptive order granted by the Securities and Exchange
Commission, the Distributor has agreed to waive its fee with respect to a Sansom
Street Class on any day to the extent necessary to assure that the fee required
to be accrued by such Class does not exceed the income of such Class on that
day. In addition, the Distributor may, in its discretion, voluntarily waive from
time to time all or any portion of its distribution fee.
Each of the Plans obligates the Fund, during the period it is in effect, to
accrue and pay to the Distributor on behalf of each Sansom Street Class the fee
set forth above. Payments under the Plans are not based on expenses actually
incurred by the Distributor, and the payments may exceed distribution expenses
actually incurred.
SHAREHOLDER SERVICING
- --------------------------------------------------------------------------------
The Fund has adopted a Shareholder Servicing Plan on behalf of the Classes
under which the Fund may enter into service agreements with the Banks. As
compensation for their services under these agreements, the Plan provides that
Banks may receive up to .20% (on an annualized basis) of the average daily net
asset value of such Shares. The Fund has and will continue to enter into service
agreements with the Banks pursuant to which the Banks will render certain
support services to customers in consideration for payment of .10% (on an
annualized basis) of the average daily net asset value of such Shares. Such
services may include aggregating and processing purchase and redemption requests
from customers and placing net purchase and redemption orders with PFPC;
processing dividend payments from the Fund on behalf of customers; providing
information periodically to customers showing their positions in the Sansom
Street Classes; providing sub-accounting with respect to the Sansom Street
Shares beneficially owned by customers or the information necessary for
sub-accounting; and providing certain statistical and factual information. In
accordance with the conditions of an exemptive order granted by the Securities
and Exchange Commission, each service agreement will provide that a Bank will
waive its servicing fee with respect to a Sansom Street Class on any day to the
extent necessary to assure that the servicing fee required to be accrued by such
Class does not exceed the income of such Class on that day. Customers who are
beneficial owners of Sansom Street Shares should read this Prospectus in light
of the terms governing their accounts with the Banks. For the fiscal year ended
August 31, 1998, the Fund paid PNC Bank shareholder services fees aggregating
.10% of the average daily net assets of the Money Market Portfolio under the
Plan.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of the Fund and each investment portfolio are
managed under the direction of the Fund's Board of Directors. The Fund currently
operates or proposes to operate seventeen investment portfolios. Each of the
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Sansom Street Classes represents interests in one of the following portfolios:
the Money Market Portfolio, the Municipal Money Market Portfolio and the
Government Obligations Money Market Portfolio.
INVESTMENT ADVISER
BIMC, an indirect majority-owned subsidiary of PNC Bank, serves as the
investment adviser for each of the Portfolios. BIMC has its principal offices at
Bellevue Park Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware
19809. PNC Bank and its subsidiaries currently manage over $45.9 billion of
assets, of which approximately $31.4 billion are mutual funds. PNC Bank, a
national bank whose principal business address is 1600 Market Street,
Philadelphia, Pennsylvania 19103, is a wholly-owned subsidiary of PNC Bancorp
Inc. PNC Bancorp, Inc., is a bank holding company and a wholly-owned subsidiary
of PNC Bank Corp., a multi-bank holding company.
As investment adviser to the Portfolios, BIMC manages such Portfolios and
is responsible for all purchases and sales of portfolio securities. In entering
into Portfolio transactions for a Portfolio with a broker, BIMC may take into
account the sale by such broker of shares of the Fund, subject to the
requirements of best execution. The agreements between BIMC and RBB, with
respect to the Money Market and Government Obligations Money Market Portfolios,
respectively, provide for BIMC to also assist generally in supervising the
operations of such Portfolios, and to maintain such Portfolios' financial
accounts and records. These administrative responsibilities have been delegated
to PFPC, as described below.
For the services provided to and expenses assumed by it for the benefit of
each of the Money Market and Government Obligations Money Market Portfolios,
BIMC is entitled to receive the following fees, computed daily and payable
monthly based on a Portfolio's average daily net assets: .45% of the first $250
million; .40% of the next $250 million; and .35% of assets in excess of $500
million. For the services provided and expenses assumed by it with respect to
the Municipal Money Market Portfolio, BIMC is entitled to receive the following
fees, computed daily and payable monthly based on the Portfolio's average daily
net assets: .35% of the first $250 million; .30% of the next $250 million; and
.25% of net assets in excess of $500 million. BIMC may in its discretion from
time to time agree to waive voluntarily all or any portion of its advisory fee
for any Portfolio.
For the fiscal year ended August 31, 1998, the Fund paid investment
advisory fees aggregating .24% of the average net assets of the Money Market
Portfolio. For the same period BIMC waived approximately .13% of the average net
assets of the Money Market Portfolio.
PNC Bank was formerly sub-adviser to the Money Market, Municipal Money
Market and Government Obligations Portfolios and provided research, credit
analysis and recommendations with respect to each such Portfolio's investments
and supplied certain computer facilities, personnel and other services. The
facilities, personnel, services and related expenses have been transferred to
BIMC and in return, BIMC's obligation to pay a portion of the sub-advisory fee
to PNC Bank has been terminated. For its sub-advisory services, PNC Bank was
entitled to receive from BIMC an amount equal to 75% of the investment advisory
fee paid by each such Portfolio to BIMC. The sub-advisory fees paid by BIMC to
PNC Bank had no effect on the investment advisory fees payable by such
Portfolios to BIMC. The services provided by BIMC and the fees payable by the
Portfolio for these services are described further in the Statement of
Additional Information under "Management of the Company."
ADMINISTRATOR
PFPC serves as the administrator for the Municipal Money Market Portfolios
and generally assists the Portfolio in all aspects of its administration and
operations, including matters relating to the maintenance of financial records
and accounting. PFPC is entitled to an administration fee, computed daily and
payable monthly at .10% of the average daily net assets of the Portfolio.
Pursuant to its advisory agreements with the Fund with respect to the Money
Market and Government Obligations Money Market Portfolios, BIMC provides
administrative services to such Portfolios pursuant
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to the same terms, but has delegated to PFPC all of its accounting and
administrative obligations under such advisory agreements. The Fund has agreed
to pay directly to PFPC the fees for accounting and administrative services to
the Money Market and Government Obligations Money Market Portfolios which PFPC
would have received directly from BIMC. Such arrangement has no effect on the
total advisory and administrative fees payable by such Portfolios to BIMC.
PFPC's principal business address is 400 Bellevue Parkway, Wilmington, Delaware
19809.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholder servicing
agreements with registered broker-dealers who have entered into dealer
agreements with the Distributor ("Authorized Dealers") for the provision of
certain shareholder support services to customers of such Authorized Dealers who
are shareholders of the Fund. The services provided and the fees payable by the
Fund for these services are described in the Statement of Additional Information
under "Investment Advisory, Distribution and Servicing Arrangements."
DISTRIBUTOR
Provident Distributors, Inc., with a principal business address at Four
Falls Corporate Center, West Conshohocken, Pennsylvania 19428, acts as
Distributor of the Shares of each of the Sansom Street Classes of the Fund
pursuant to the Distribution Agreement with the Fund on behalf of each of the
Sansom Street Classes.
EXPENSES
The expenses of each Portfolio are deducted from the total income of such
Portfolio before dividends are paid. Any general expenses of the Fund that are
not readily identifiable as belonging to a particular investment portfolio of
the Fund will be allocated among all investment portfolios of the Fund based on
the relative net assets of the investment portfolios at the time such expenses
were accrued. The Sansom Street Classes of the Fund pay their own distribution
fees, and may pay a different share than other classes of the Fund of other
expenses (excluding advisory and custodial fees) if those expenses are actually
incurred in a different amount by the Sansom Street Classes or if they receive
different services.
The investment adviser may assume expenses of the Portfolios from time to
time. In certain circumstances, it may assume such expenses on the condition
that it is reimbursed by the Portfolios for such amounts prior to the end of a
fiscal year. In such event, the reimbursement of such amounts will have the
effect of increasing a Portfolio's expense ratio and of lowering yield to
investors.
For the fiscal year ended August 31, 1998, the total expenses were .62% of
average net assets with respect to the Sansom Street Class of the Money Market
Portfolio (not taking into account waivers and reimbursements of .13%). The
Sansom Street Classes of the Government Obligations Money Market Portfolio and
Municipal Money Market Portfolio did not incur any expenses, as no Shares of
such Classes had been sold to the public during the fiscal year ended August 31,
1998.
BANKING LAWS
Banking laws and regulations currently prohibit a bank holding company
registered under the Federal Bank Holding Act of 1956 or any bank or nonbank
affiliate thereof from sponsoring, organizing, controlling, or distributing the
shares of a registered, open-end investment company continuously engaged in the
issuance of its shares, and prohibit banks
21
<PAGE>
generally from issuing, underwriting, selling or distributing securities, but
such banking laws and regulations do not prohibit such a holding company or
affiliate or banks generally from acting as investment adviser, transfer agent
or custodian to such an investment company, or from purchasing shares of such a
company as agent for and upon the order of such a customer. PNC Bank, BIMC,
PFPC, as well as the Banks, are subject to such banking laws and regulations. In
addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
Should future legislative, judicial or administrative action prohibit or
restrict the activities of Banks in connection with the provision of support
services to their customers, the Fund might be required to alter materially or
cause the Fund to discontinue its arrangements with Banks generally and change
its method of operations with respect to the Sansom Street Shares. It is not
anticipated, however, that any change in the Fund's method of operations would
affect its net asset value per share or result in a financial loss to any
customer.
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of each of the Portfolios to each
Portfolio's shareholders. All distributions are reinvested in the form of
additional full and fractional Shares of the relevant Sansom Street Class unless
a shareholder elects otherwise.
The net investment income (not including any net short-term capital gains)
earned by each Portfolio will be declared as a dividend on a daily basis and
paid monthly. Dividends are payable to shareholders of record immediately prior
to the determination of net asset value made as of the close of regular trading
on the NYSE. Net short-term capital gains, if any, will be distributed at least
annually.
TAXES
- --------------------------------------------------------------------------------
Distributions from the Money Market Portfolio and the Government
Obligations Money Market Portfolio will generally be taxable to shareholders. It
is expected that all, or substantially all, of these distributions will consist
of ordinary income. You will be subject to income tax on these distributions
regardless whether they are paid in cash or reinvested in additional shares. The
one major exception to these tax principles is that distributions on shares held
in an IRA (or other tax-qualified plan) will not be currently taxable.
Distributions from the Municipal Money Market Portfolio will generally
constitute tax-exempt income for shareholders for federal income tax purposes.
It is possible, depending upon the Portfolio's investments, that a portion of
the Portfolio's distributions could be taxable to shareholders as ordinary
income or capital gains, but it is not expected that this will be the case.
Although distributions from the Municipal Money Market Portfolio are exempt
for federal income tax purposes, they will generally constitute taxable income
for state and local income tax purposes except that, subject to limitations that
vary depending on the state, distributions from interest paid by a state or
municipal entity may be exempt from tax in that state.
Interest on indebtedness incurred by a shareholder to purchase or carry
shares of the Municipal Money Market Portfolio generally will not be deductible
for federal income tax purposes.
You should note that a portion of the exempt-interest dividends paid by the
Municipal Money Market Portfolio may constitute an item of tax preference for
purposes of determining federal alternative minimum tax liability.
Exempt-interest dividends will also be considered along with other adjusted
gross income in determining whether any Social Security or railroad retirement
payments received by you are subject to federal income taxes.
22
<PAGE>
The foregoing is only a summary of certain tax considerations under the
current law, which may be subject to change in the future. You should consult
your tax adviser for further information regarding federal, state, local and/or
foreign tax consequences relevant to your specific situation.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
The Fund has authorized capital of thirty billion shares of Common Stock,
$.001 par value per share, of which 18.326 billion shares are currently
classified into 97 different classes of Common Stock (see "Description of
Shares" in the Statement of Additional Information).
The Fund offers multiple classes of shares in each of its Money Market,
Municipal Money Market and Government Obligations Money Market Portfolios to
expand its marketing alternatives and to broaden its range of services to
different investors. The expenses of the various classes within these Portfolios
vary based upon the services provided, which may affect performance. Each class
of Common Stock of the Fund has a separate Rule 12b-1 distribution plan. Under
the Distribution Agreement and pursuant to each of the distribution plans, the
Distributor is entitled to receive from each class as compensation for
distribution services provided to that class a distribution fee based on average
daily net assets. A salesperson or any other person entitled to receive
compensation for servicing Fund shares may receive different compensation with
respect to different classes in a Portfolio of the Fund. An investor may contact
the Fund's Distributor by calling 1-800-888-9723 to request more information
concerning other classes available.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE SANSOM STREET CLASSES OF THE MONEY MARKET,
MUNICIPAL MONEY MARKET AND GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIOS AND
DESCRIBE ONLY THE INVESTMENT OBJECTIVES AND POLICIES, OPERATIONS, CONTRACTS AND
OTHER MATTERS RELATING TO THE SANSOM STREET CLASSES OF THESE PORTFOLIOS.
Each share that represents an interest in a Portfolio has an equal
proportionate interest in the assets belonging to such Portfolio with each other
share that represents an interest in such Portfolio, even where a share has a
different class designation than another share representing an interest in that
Portfolio. Shares of the Fund do not have preemptive or conversion rights. When
issued for payment as described in this Prospectus, Shares of the Fund will be
fully paid and non-assessable.
The Fund currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
Holders of shares of each of the Portfolios will vote in the aggregate and
not by class on all matters, except where otherwise required by law. Further,
shareholders of all investment portfolios of the Fund will vote in the aggregate
and not by portfolio except as otherwise required by law or when the Board of
Directors determines that the matter to be voted upon affects only the interests
of the shareholders of a particular investment portfolio. (See the Statement of
Additional Information under "Additional Information Concerning Fund Shares" for
examples when the 1940 Act requires voting by investment portfolio or by class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of Common Stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all of the classes of
the Fund.
23
<PAGE>
The Fund will issue share certificates for Sansom Street Shares only upon
the written request of a shareholder sent to PFPC.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC, the
Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll free (800) 430-9618.
24
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<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
-----------------
TABLE OF CONTENTS
PAGE
Introduction ............................................................ 2
Financial Highlights .................................................... 4
Investment Objectives and Policies ...................................... 8
Year 2000 ............................................................... 13
Investment Limitations .................................................. 13
Purchase and Redemption of Shares ....................................... 15
Net Asset Value ......................................................... 18
Distribution of Shares .................................................. 18
Shareholder Servicing ................................................... 19
Management .............................................................. 19
Dividends and Distributions ............................................. 22
Taxes ................................................................... 22
Description of Shares ................................................... 23
Other Information ....................................................... 24
INVESTMENT ADVISER
BlackRock Institutional Management Corporation
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
ADMINISTRATOR AND TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers, LLP
Philadelphia, Pennsylvania
<PAGE>
THE PRINCIPAL CLASS
Prospectus
Money Market Portfolio
December 29, 1998
<PAGE>
THE PRINCIPAL CLASS
OF
THE RBB FUND, INC.
MONEY MARKET PORTFOLIO
This Prospectus offers shares of the Principal class of common stock of The
RBB Fund, Inc. (the "Fund"). The Principal class represents interests in the
Money Market Portfolio (the "Portfolio"), which is a taxable money market
portfolio of the Fund.
The investment objective of the Portfolio is to provide as high a level of
current interest income as is consistent with maintaining liquidity and
stability of principal. It seeks to achieve such objective by investing in a
diversified portfolio of U.S. dollar-denominated money market instruments.
SHARES OF THE PORTFOLIO ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER
BANK AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENT IN
SHARES OF THE PORTFOLIO INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL. THERE CAN BE NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
BlackRock Institutional Management Corporation ("BIMC") serves as
investment adviser for the Portfolio, PFPC Trust Company serves as custodian for
the Portfolio and PFPC Inc. ("PFPC") serves as administrator and the transfer
and dividend disbursing agent for the Portfolio. Provident Distributors, Inc.
(the "Distributor") acts as distributor for the Portfolio.
This Prospectus contains concise information that a prospective investor
needs to know before investing. Please keep it for future reference. A Statement
of Additional Information, dated December 29, 1998 has been filed with the
Securities and Exchange Commission and is incorporated by reference to this
Prospectus. It may be obtained upon request free of charge from the Fund's
distributor by calling (800) 888-9723.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
The RBB Fund, Inc. is an open-end management investment company
incorporated under the laws of the State of Maryland on February 29, 1988. The
Fund is currently operating or proposing to operate seventeen separate
investment portfolios. The shares (the "Principal Shares" or "Shares") offered
by this Prospectus represent interests in the Principal class (the "Principal
Class") of the Money Market Portfolio.
The MONEY MARKET PORTFOLIO'S investment objective is to provide as high a
level of current interest income as is consistent with maintaining liquidity and
stability of principal. It seeks to achieve such objective by investing in a
diversified portfolio of U.S. dollar-denominated money market instruments which
meet certain ratings criteria and present minimal credit risks. In pursuing its
investment objective, the Portfolio invests in a broad range of government, bank
and commercial obligations that may be available in the money markets.
The Portfolio seeks to maintain a net asset value of $1.00 per share;
however, there can be no assurance that the Portfolio will be able to maintain a
stable net asset value of $1.00 per share.
An investor may purchase and redeem Principal Shares through his broker or by
direct purchases or redemptions. See "Purchase and Redemption of Shares."
An investment in the Principal Shares is subject to certain risks, as set
forth in detail under "Investment Objective and Policies." The Portfolio may
engage in the following investment practices: the use of repurchase agreements
and reverse repurchase agreements, the purchase of mortgage-related securities,
the purchase of securities on a "when-issued" or "forward commitment" basis, the
purchase of stand-by commitments and the lending of securities. All of these
transactions involve certain special risks, as set forth under "Investment
Objective and Policies."
FEE TABLE
ANNUAL FUND OPERATING EXPENSES (PRINCIPAL CLASS)
AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS
The Fee Table below contains a summary of the annual operating expenses of
the Principal Class of the Portfolio based on expenses expected to be incurred
for the fiscal year ended August 31, 1999, as a percentage of average daily net
assets. An example based on the summary is also shown.
MONEY MARKET
PORTFOLIO
------------
Management fees (after waivers)(1) .................................. .23%
12b-1 Fees .......................................................... .40%
Other Expenses ...................................................... .17%
---
Total Fund Operating Expenses (Principal Class) (after waivers)(1) .. .80%
===
(1) Management Fees and 12b-1 Fees are based on average daily net assets and are
calculated daily and paid monthly. Before waivers for the Principal Class,
Management Fees would be .37%, and Total Fund Operating Expenses would be
.98%.
EXAMPLE
An investor 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:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Money Market Portfolio-Principal Class* ... $8 $26 $44 $99
* Other classes of the Portfolio are sold with different fees and expenses.
2
<PAGE>
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating Expenses
(Principal Class)" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. Long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charges permitted by the
National Association of Securities Dealers, Inc.
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Principal Class of the
Portfolio will bear directly or indirectly. (For more complete descriptions of
the various costs and expenses, see "Management -- Investment Adviser" and
"Distribution of Shares" below.) Expense figures are based on actual costs and
fees charged to the class. The Fee Table reflects a voluntary waiver of
Management Fees for the Portfolio. However, there can be no assurance that any
future waivers of Management Fees will not vary from the figures reflected in
the Fee Table. To the extent that any service providers assume additional
expenses of the Portfolio, such assumption will have the effect of lowering the
Portfolio's overall expense ratio and increasing its yield to investors.
From time to time the Portfolio advertises its "yield" and "effective
yield." BOTH YIELD FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT INTENDED
TO INDICATE FUTURE PERFORMANCE. The "yield" of the Portfolio refers to the
income generated by an investment in the Portfolio over a seven-day period
(which period will be stated in the advertisement). This income is then
"annualized." That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the
Portfolio is assumed to be reinvested. The "effective yield" will be slightly
higher than the "yield" because of the compounding effect of this assumed
reinvestment.
The yield of any investment is generally a function of portfolio quality
and maturity, type of investment and operating expenses. The yield on Principal
Shares will fluctuate and is not necessarily representative of future results.
Any fees charged by broker/dealers directly to their customers in connection
with investments in Principal Shares are not reflected in the yields of
Principal Shares, and such fees, if charged, will reduce the actual return
received by shareholders on their investments. The yield on Principal Shares may
differ from yields on shares of other classes that also represent interests in
the Portfolio depending on the allocation of expenses to each of the classes.
See "Expenses."
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Portfolio's investment objective is to provide as high a level of
current interest income as is consistent with maintaining liquidity and
stability of principal. Obligations held by the Portfolio have remaining
maturities of 397 calendar days or less (exclusive of securities subject to
repurchase agreements). The Portfolio is a diversified portfolio of U.S.
dollar-denominated instruments, such as government, bank and commercial
obligations, that may be available in the money markets ("Money Market
Instruments") and that meet certain ratings criteria and present minimal credit
risks to the Portfolio. See "Eligible Securities." There is no assurance that
the investment objective of the Portfolio will be achieved. The following
descriptions illustrate the types of Money Market Instruments in which the
Portfolio invests.
BANK OBLIGATIONS. The Portfolio may purchase obligations of issuers in the
banking industry, such as short-term obligations of bank holding companies,
certificates of deposit, bankers' acceptances and time deposits, including U.S.
dollar-denominated instruments issued or supported by the credit of U.S. or
foreign banks or savings institutions having total assets at the time of
purchase in excess of $1 billion. The Portfolio may invest substantially in
obligations of foreign banks or foreign branches of U.S. banks where the
investment adviser deems the instrument to present minimal credit risks. Such
investments may nevertheless entail risks in addition to those of domestic
issuers, including higher transaction costs, less complete financial
information, less stringent regulatory requirements and less market liquidity.
The Portfolio may also make interest-bearing savings deposits in commercial and
savings banks in amounts not in excess of 5% of its total assets.
3
<PAGE>
COMMERCIAL PAPER. The Portfolio may purchase commercial paper rated (at the
time of purchase) in the two highest rating categories of a nationally
recognized statistical rating organization ("Rating Organization"). These rating
categories are described in the Appendix to the Statement of Additional
Information. The Portfolio may also purchase unrated commercial paper provided
that such paper is determined to be of comparable quality by the Portfolio's
investment adviser in accordance with guidelines approved by the Fund's Board of
Directors.
Commercial paper purchased by the Portfolio may include instruments issued
by foreign issuers, such as Canadian Commercial Paper ("CCP"), which is U.S.
dollar-denominated commercial paper issued by a Canadian corporation or a
Canadian counterpart of a U.S. corporation, and in Europaper, which is U.S.
dollar-denominated commercial paper of a foreign issuer, subject to the criteria
stated above for other commercial paper issuers.
VARIABLE RATE DEMAND NOTES. The Portfolio may purchase variable rate demand
notes, which are unsecured instruments that permit the indebtedness thereunder
to vary and provide for periodic adjustment in the interest rate. Although the
notes are not normally traded and there may be no active secondary market in the
notes, the Portfolio will be able (at any time or during the specified periods
not exceeding 13 months, depending upon the note involved) to demand payment of
the principal of a note. The notes are not typically rated by credit rating
agencies, but issuers of variable rate demand notes must satisfy the same
criteria as set forth above for issuers of commercial paper. If an issuer of a
variable rate demand note defaulted on its payment obligation, the Portfolio
might be unable to dispose of the note because of the absence of an active
secondary market. For this or other reasons, the Portfolio might suffer a loss
to the extent of the default. The Portfolio invests in variable rate demand
notes only when the Portfolio's investment adviser deems the investment to
involve minimal credit risk. The Portfolio's investment adviser also monitors
the continuing creditworthiness of issuers of such notes to determine whether
the Portfolio should continue to hold such notes.
REPURCHASE AGREEMENTS. The Portfolio may agree to purchase securities from
financial institutions subject to the seller's agreement to repurchase them at
an agreed-upon time and price ("repurchase agreements"). The securities held
subject to a repurchase agreement may have stated maturities exceeding 13
months, provided the repurchase agreement itself matures in less than 13 months.
Default by or bankruptcy of the seller would, however, expose the Portfolio to
possible loss because of adverse market action or delays in connection with the
disposition of the underlying obligations.
U.S. GOVERNMENT OBLIGATIONS. The Portfolio may purchase obligations issued
or guaranteed by the U.S. Government or its agencies and instrumentalities.
Obligations of certain agencies and instrumentalities of the U.S. Government are
backed by the full faith and credit of the United States. Others are backed by
the right of the issuer to borrow from the U.S. Treasury or are backed only by
the credit of the agency or instrumentality issuing the obligation.
ASSET-BACKED SECURITIES. The Portfolio may invest in asset-backed
securities which are backed by mortgages, installment sales contracts, credit
card receivables or other assets and collateralized mortgage obligations
("CMOs") issued or guaranteed by U.S. Government agencies and, instrumentalities
or issued by private companies. Asset-backed securities also include adjustable
rate securities. The estimated life of an asset-backed security varies with the
prepayment experience with respect to the underlying debt instruments. For this
and other reasons, an asset-backed security's stated maturity may be shortened,
and the security's total return may be difficult to predict precisely. Such
difficulties are not expected, however, to have a significant effect on the
Portfolio since the remaining maturity of any asset-backed security acquired
will be 13 months or less. Asset-backed securities are considered an industry
for industry concentration purposes. See "Investment Limitations." In periods of
falling interest rates, the rate of mortgage prepayments tends to increase.
During these periods, the reinvestment of proceeds by the Portfolio will
generally be at lower rates than the rates on the prepaid obligations.
REVERSE REPURCHASE AGREEMENTS. The Portfolio may enter into reverse
repurchase agreements with respect to portfolio securities. A reverse repurchase
agreement involves a sale by the Portfolio of securities that it holds concur-
4
<PAGE>
rently with an agreement by the Portfolio to repurchase them at an agreed upon
time and price. Reverse repurchase agreements involve the risk that the market
value of the securities sold by the Portfolio may decline below the repurchase
price which the Portfolio is obligated to pay. Reverse repurchase agreements are
considered to be borrowings by the Portfolio under the Investment Company Act of
1940 (the "1940 Act").
GUARANTEED INVESTMENT CONTRACTS. The Portfolio may make investments in
obligations, such as guaranteed investment contracts and similar funding
agreements (collectively, "GICs"), issued by highly rated U.S. insurance
companies. A GIC is a general obligation of the issuing insurance company and
not a separate account. The Portfolio's investments in GICs are not expected to
exceed 5% of its total assets at the time of purchase absent unusual market
conditions. GIC investments are subject to the Fund's policy regarding
investment in illiquid securities.
MUNICIPAL OBLIGATIONS. In addition, the Portfolio may, when deemed
appropriate by its investment adviser in light of the Portfolio's investment
objective, invest without limitation in high quality, short-term Municipal
Obligations issued by state and local governmental issuers, the interest on
which may be taxable or tax-exempt for federal income tax purposes, provided
that such obligations carry yields that are competitive with those of other
types of Money Market Instruments of comparable quality.
STAND-BY COMMITMENTS. The Portfolio may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, a dealer would agree to purchase at the Portfolio's option specified
Municipal Obligations at a specified price. The acquisition of a stand-by
commitment may increase the cost, and thereby reduce the yield, of the Municipal
Obligation to which such commitment relates. The Portfolio will acquire stand-by
commitments solely to facilitate portfolio liquidity and does not intend to
exercise its rights thereunder for trading purposes.
WHEN-ISSUED SECURITIES. The Portfolio may purchase portfolio securities on
a "when-issued" basis. When-issued securities are securities purchased for
delivery beyond the normal settlement date at a stated price and yield. The
Portfolio will generally not pay for such securities or start earning interest
on them until they are received. Securities purchased on a when-issued basis are
recorded as an asset at the time the commitment is entered into and are subject
to changes in value prior to delivery based upon changes in the general level of
interest rates. The Portfolio expects that commitments to purchase when-issued
securities will not exceed 25% of the value of its total assets absent unusual
market conditions. The Portfolio does not intend to purchase when-issued
securities for speculative purposes but only in furtherance of its investment
objective.
ELIGIBLE SECURITIES. The Portfolio will only purchase "eligible securities"
that present minimal credit risks as determined by the Portfolio's investment
adviser pursuant to guidelines adopted by the Board of Directors. Eligible
securities generally include: (1) U.S. Government securities, (2) securities
that are rated at the time of purchase in the two highest rating categories by
one or more Rating Organizations (e.g., commercial paper rated "A-1" or "A-2" by
Standard & Poor's Ratings Services ("S&P")), (3) securities that are rated at
the time of purchase by the only Rating Organization rating the security in one
of its two highest rating categories for such securities, and (4) securities
that are not rated and are issued by an issuer that does not have comparable
obligations rated by a Rating Organization ("Unrated Securities"), provided that
such securities are determined to be of comparable quality to eligible rated
securities. For a more complete description of eligible securities, see
"Investment Objective and Policies" in the Statement of Additional Information.
ILLIQUID SECURITIES. The Portfolio will not invest more than 10% of its net
assets in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days, time deposits with maturities in excess of
seven days, variable rate demand notes with demand periods in excess of seven
days unless the Portfolio's investment adviser determines that such notes are
readily marketable and could be sold promptly at the prices at which they are
valued, GICs, and other securities that are illiquid by virtue of the absence of
a readily available market or legal or contractual restrictions on resale.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the
5
<PAGE>
notice period. Securities that have legal or contractual restrictions on resale
but have a readily available market are not deemed illiquid for purposes of this
limitation. The Portfolio's investment adviser will monitor the liquidity of
such restricted securities under the supervision of the Board of Directors. See
"Investment Objective and Policies -- Illiquid Securities" in the Statement of
Additional Information.
YEAR 2000
- --------------------------------------------------------------------------------
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem. The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Portfolio's investment objective and the policies described above may
be changed by the Fund's Board of Directors without shareholder approval. The
Portfolio may not, however, change the following investment limitations without
such a vote of its shareholders. (A more detailed description of the following
investment limitations, together with other investment limitations that cannot
be changed without a vote of shareholders, is contained in the Statement of
Additional Information under "Investment Objective and Policies.")
The Portfolio may not:
1. Borrow money, except from banks for temporary purposes and except
for reverse repurchase agreements, and then in amounts not in excess of 10%
of the value of the Portfolio's assets at the time of such borrowing, and
only if after such borrowing there is asset coverage of at least 300% for
all borrowings of the Portfolio; or mortgage, pledge or hypothecate any of
its assets except in connection with any such borrowing and in amounts not
in excess of 10% of the value of the Portfolio's assets at the time of such
borrowing; or purchase portfolio securities while borrowings are in excess
of 5% of the Portfolio's net assets. (This borrowing provision is not for
investment leverage, but solely to facilitate management of the Portfolio's
securities by enabling the Portfolio to meet redemption requests where the
liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient.)
2. Purchase securities of any one issuer, other than securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities,
if immediately after and as a result of such purchase more than 5% of the
value of its total assets would be invested in the securities of such
issuer, or more than 10% of the outstanding voting securities of such
issuer would be owned by the Portfolio, except that up to 25% of the value
of the Portfolio's total assets may be invested without regard to such 5%
limitation.
3. Purchase any securities other than Money Market Instruments, some of
which may be subject to repurchase agreements, but the Portfolio may make
interest-bearing savings deposits in amounts not in excess of 5% of the
value of the Portfolio's assets and may make time deposits.
4. Purchase any securities which would cause, at the time of purchase,
less than 25% of the value of the total assets of the Portfolio to be
invested in the obligations of issuers in the banking industry, or in
obligations, such as repurchase agreements, secured by such obligations
(unless the Portfolio is in a temporary defensive position)
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<PAGE>
or which would cause, at the time of purchase, more than 25% of the value
of its total assets to be invested in the obligations of issuers in any
other industry.
So long as it values its portfolio securities on the basis of the amortized
cost method of valuation pursuant to Rule 2a-7 under the 1940 Act, the Portfolio
will meet the following limitations on its investments in addition to the
fundamental investment limitations described above. These limitations may be
changed without a vote of shareholders of the Portfolio.
1. The Portfolio will limit its purchases of the securities of any one
issuer, other than issuers of U.S. Government securities, to 5% of its
total assets, except that the Portfolio may invest more than 5% of its
total assets in First Tier Securities of one issuer for a period of up to
three Business Days (as defined below). "First Tier Securities" include
eligible securities that (i) if rated by more than one Rating Organization,
are rated (at the time of purchase) by two or more Rating Organizations in
the highest rating category for such securities, (ii) if rated by only one
Rating Organization, are rated by such Rating Organization in its highest
rating category for such securities, (iii) have no short-term rating and
are comparable in priority and security to a class of short-term
obligations of the issuer of such securities that have been rated in
accordance with (i) or (ii) above, or (iv) are Unrated Securities that are
determined to be of comparable quality to such securities. Purchases of
First Tier Securities that come within categories (ii) and (iv) above will
be approved or ratified by the Board of Directors.
2. The Portfolio will limit its purchases of Second Tier Securities,
which are eligible securities other than First Tier Securities, to 5% of
its total assets.
3. The Portfolio will limit its purchases of Second Tier Securities
of one issuer to the greater of 1% of its total assets or $1 million.
PURCHASE AND REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
PURCHASE PROCEDURES
GENERAL. Principal Shares are sold without a sales load on a continuous
basis by the Distributor. The Distributor is located at Four Falls Corporate
Center, Conshohocken, Pennsylvania 19428. Investors may purchase Principal
Shares through an account maintained by the investor with his brokerage firm
(the "Account") and may also purchase Shares directly by mail or wire. The
minimum initial investment is $25,000 and the minimum subsequent investment is
$2,500. The Fund in its sole discretion may accept or reject any order for
purchases of Principal Shares.
All payments for initial and subsequent investments should be in U.S.
dollars. The brokerage firm which carries the Account (the "Broker") is
responsible for the prompt transmission of the order to the Fund's transfer
agent. Purchases will be effected at the net asset value next determined after
PFPC, the Fund's transfer agent, has received a purchase order in good order and
the Fund's custodian has Federal Funds immediately available to it. In those
cases where payment is made by check, Federal Funds will generally become
available two Business Days after the check is received by the Broker. A
"Business Day" is any day that both the New York Stock Exchange (the "NYSE") and
the Federal Reserve Bank of Philadelphia (the "FRB") are open. On any Business
Day, orders which are accompanied by Federal Funds and received by PFPC by 12:00
noon Eastern Time, and orders as to which payment has been converted into
Federal Funds by 12:00 noon Eastern Time, will be executed as of 12:00 noon that
Business Day. Orders which are accompanied by Federal Funds and received by PFPC
after 12:00 noon Eastern Time but prior to the close of regular trading on the
NYSE (generally 4:00 p.m. Eastern Time), and orders as to which payment has been
converted into Federal Funds after 12:00 noon Eastern Time but prior to the
close of regular trading on the NYSE on any Business Day of the Fund, will be
executed as of the close of regular trading on the NYSE on that Business Day,
but will not be entitled to receive dividends declared on such Business Day.
Orders which are accompanied by Federal Funds and received
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<PAGE>
by PFPC as of the close of regular trading on the NYSE or later, and orders as
to which payment has been converted to Federal Funds as of the close of regular
trading on the NYSE or later on a Business Day will be processed as of 12:00
noon Eastern Time on the following Business Day.
PURCHASES THROUGH AN ACCOUNT. Purchases of Shares may be effected through
an investor's Account with his Broker through procedures established in
connection with the requirements of Accounts at such Broker. The minimum initial
and subsequent investment in Shares are determined by your Broker. In such
event, beneficial ownership of Shares will be recorded by the Broker and will be
reflected in the Account statements provided by the Broker to such investors. A
Broker may impose minimum investment Account requirements. Even if a Broker does
not impose a sales charge for purchases of Shares, depending on the terms of an
investor's Account with his Broker, the Broker may charge an investor's Account
fees for automatic investment and other services provided to the Account.
Information concerning Account requirements, services and charges should be
obtained from an investor's Broker, and this Prospectus should be read in
conjunction with any information received from a Broker. Shareholders whose
shares are held in the street name account of a Broker and who desire to
transfer such shares to the street name account of another Broker should contact
their current Broker.
A Broker may offer investors maintaining Accounts the ability to purchase
Shares under an automatic purchase program (a "Purchase Program") established by
a participating Broker. An investor who participates in a Purchase Program will
have his "free-credit" cash balances in his Account automatically invested in
Principal Shares. The frequency of investments and the minimum investment
requirement will be established by the Broker and the Fund. In addition, the
Broker may require a minimum amount of cash and/or securities to be deposited in
an Account for participants in its Purchase Program. The description of the
particular Broker's Purchase Program should be read for details, and any
inquiries concerning an Account under a Purchase Program should be directed to
the Broker.
If a Broker makes special arrangements under which orders for Principal
Shares are received by PFPC prior to 12:00 noon Eastern Time, and the Broker
guarantees that payment for such Shares will be made in available Federal Funds
to the Fund's custodian prior to the close of regular trading on the NYSE on the
same day, such purchase orders will be effective and Shares will be purchased at
the offering price in effect as of 12:00 noon Eastern Time on the date the
purchase order is received by PFPC.
DIRECT PURCHASES. An investor may also make direct investments at any time
in Principal Shares through any Broker that has entered into a dealer agreement
with the Distributor (a "Dealer"). An investor also may make an initial
investment in Principal Shares by mail by fully completing and signing an
application obtained from a Dealer (the "Application"), specifying the Money
Market Portfolio, and mailing it, together with a check payable to "THE
PRINCIPAL CLASS" to THE PRINCIPAL CLASS, c/o PFPC, P.O. Box 8950, Wilmington,
Delaware 19899. An Application will be returned to the investor unless it
contains the name of the Dealer from whom it was obtained. Subsequent purchases
may be made through a Dealer or by forwarding payment to the Fund's transfer
agent at the foregoing address.
Provided that the investment is at least $5,000, an investor may also
purchase Principal Shares by having his bank or Dealer wire Federal Funds to the
Fund's Custodian, PNC Bank. An investor's bank or Dealer may impose a charge for
this service. The Fund does not currently charge for effecting wire transfers
but reserves the right to do so in the future. In order to ensure prompt receipt
of an investor's Federal Funds wire, for an initial investment, it is important
that an investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (800) 533-7719
(in Delaware call collect (302) 791-1196), and provide your name, address,
telephone number, Social Security or Tax Identification Number, specify the
Principal Class, the amount being wired, and by which bank or Dealer. PFPC will
then provide an investor with a Fund account number. (Investors with existing
accounts should also notify PFPC prior to wiring funds.)
8
<PAGE>
B. Instruct your bank or Dealer to wire the specified amount, together
with your assigned account number, to PFPC's account with PNC Bank:
PNC Bank, N.A., Philadelphia, PA
ABA-0310-0005-3
FROM: (name of investor)
ACCOUNT NUMBER: (investor's account number with the Portfolio)
FOR PURCHASE OF: (Money Market Portfolio)
AMOUNT: (amount to be invested)
C. Fully complete and sign the Application and mail it to the address
shown thereon. PFPC will not process initial purchases until it receives a fully
completed and signed Application.
For subsequent investments, an investor should follow steps A and B above.
RETIREMENT PLANS. Principal Shares may be purchased in conjunction with
individual retirement accounts ("IRAs") and rollover IRAs where PFPC Trust
Company acts as custodian. For further information as to applications and annual
fees, contact the Distributor or your Broker. To determine whether the benefits
of an IRA are available and/or appropriate, a shareholder should consult with a
tax adviser.
REDEMPTION PROCEDURES
Redemption orders are effected at the net asset value per share next
determined after receipt of the order in proper form by the Fund's transfer
agent, PFPC. Investors may redeem all or some of their Shares in accordance with
one of the procedures described below.
REDEMPTION OF SHARES IN AN ACCOUNT. An investor who beneficially owns
Principal Shares through an Account may redeem Principal Shares in his Account
in accordance with instructions and limitations pertaining to his Account by
contacting his Broker. It is the responsibility of the Broker to transmit
purchase and redemption orders to PFPC and to credit its investors' accounts
with the redemption proceeds on a timely basis. If such notice is received by
PFPC by 12:00 noon Eastern Time on any Business Day, the redemption will be
effective as of 12:00 noon Eastern Time on that day. Payment of the redemption
proceeds will be made after 12:00 noon Eastern Time on the day the redemption is
effected, provided that the Fund's custodian is open for business. If the
custodian is not open, payment will be made on the next bank business day. If
the redemption request is received between 12:00 noon and the close of regular
trading on the NYSE on a Business Day, the redemption will be effective as of
the close of regular trading on the NYSE on such Business Day and payment will
be made on the next bank business day following receipt of the redemption
request. If all Shares are redeemed, all accrued but unpaid dividends on those
Shares will be paid with the redemption proceeds.
A Broker may also redeem each day a sufficient number of Shares of the
Primary Class to cover debit balances created by transactions in the Account or
instructions for cash disbursements. Shares will be redeemed on the same day
that a transaction occurs that results in such a debit balance or charge.
Each Broker reserves the right to waive or modify criteria for
participation in an Account or to terminate participation in an Account for any
reason.
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<PAGE>
REDEMPTION OF SHARES OWNED DIRECTLY. A direct investor may redeem any
number of Shares by sending a written request to THE PRINCIPAL CLASS c/o PFPC,
P.O. Box 8950, Wilmington, Delaware 19899. Redemption requests must be signed by
each shareholder in the same manner as the Shares are registered. Redemption
requests for joint accounts require the signature of each joint owner. On
redemption requests of $5,000 or more, each signature must be guaranteed. A
signature guarantee may be obtained from a domestic bank or trust company,
broker, dealer, clearing agency or savings association who are participants in a
medallion program recognized by the Securities Transfer Association. The three
recognized medallion programs are Securities Transfer Agents Medallion (STAMP),
Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange, Inc.
Medallion Signature Program (MSP). Signature guarantees that are not part of
these programs will not be accepted.
Direct investors may redeem Shares without charge by telephone if they have
completed and returned an account application containing the appropriate
telephone election. To add a telephone option to an existing account that
previously did not provide for this option, a Telephone Authorization Form must
be filed with PFPC. This form is available from PFPC. Once this election has
been made, the shareholder may simply contact PFPC by telephone to request the
redemption by calling (888) 261-4073. Neither the Fund, the Distributor, the
Portfolio, the Administrator nor any other Fund agent will be liable for any
loss, liability, cost or expense for following the procedures below or for
following instructions communicated by telephone that they reasonably believe to
be genuine.
The Fund's telephone transaction procedures include the following measures:
(1) requiring the appropriate telephone transaction privilege forms; (2)
requiring the caller to provide the names of the account owners, the account
social security number and name of the Portfolio, all of which must match the
Fund's records; (3) requiring the Fund's service representative to complete a
telephone transaction form, listing all of the above caller identification
information; (4) requiring that redemption proceeds be sent only by check to the
account owners of record at the address of record, or by wire only to the owners
of record at the bank account of record; (5) sending a written confirmation for
each telephone transaction to the owners of record at the address of record
within five (5) business days of the call; and (6) maintaining tapes of
telephone transactions for six months, if the Fund elects to record shareholder
telephone transactions. For accounts held of record by broker-dealers (other
than the Distributor), financial institutions, securities dealers, financial
planners or other industry professionals, additional documentation or
information regarding the scope of a caller's authority is required. Finally,
for telephone transactions in accounts held jointly, additional information
regarding other account holders is required. Telephone transactions will not be
permitted in connection with IRA or other retirement plan accounts or by
attorney-in-fact under power of attorney.
Proceeds of a telephone redemption request will be mailed by check to an
investor's registered address unless he has designated in his Application or
Telephone Authorization Form that such proceeds are to be sent by wire transfer
to a specified checking or savings account. If proceeds are to be sent by wire
transfer, a telephone redemption request received prior to the close of regular
trading on the NYSE will result in redemption proceeds being wired to the
investor's bank account on the next day that a wire transfer can be effected.
The minimum redemption for proceeds sent by wire transfer is $5,000. There is no
maximum for proceeds sent by wire transfer. The Fund may modify this redemption
service at any time or charge a service fee upon prior notice to shareholders,
although no fee is currently contemplated.
REDEMPTION BY CHECK. Upon request, the Fund will provide any direct
investor and any investor who does not have check writing privileges for his
Account with forms of drafts ("checks") payable through PNC Bank. These checks
may be made payable to the order of anyone. The minimum amount of a check is
$100: however, a broker may establish a higher minimum. An investor wishing to
use this check writing redemption procedure should complete specimen signature
cards (available from PFPC), and then forward such signature cards to PFPC. PFPC
will then arrange for the checks to be honored by PNC Bank. Investors who own
Shares through an Account should contact their brokers for signature cards.
Investors of joint accounts may elect to have checks honored with a single
signature. Check
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<PAGE>
redemptions will be subject to PNC Bank's rules governing checks. An investor
will be able to stop payment on a check redemption. The Fund or PNC Bank may
terminate this redemption service at any time, and neither shall incur any
liability for honoring checks, for effecting redemptions to pay checks, or for
returning checks which have not been accepted.
When a check is presented to PNC Bank for clearance, PNC Bank, as the
investor's agent, will cause the Fund to redeem a sufficient number of full and
fractional Shares owned by the investor to cover the amount of the check. This
procedure enables the investor to continue to receive dividends on those Shares
equaling the amount being redeemed by check until such time as the check is
presented to PNC Bank. Pursuant to rules under the 1940 Act, checks may not be
presented for cash payment at the offices of PNC Bank. This limitation does not
affect checks used for the payment of bills or to obtain cash at other banks.
ADDITIONAL REDEMPTION INFORMATION. The Fund ordinarily will make payment
for all Shares redeemed within seven days after receipt by PFPC of a redemption
request in proper form. Although the Fund will redeem Shares purchased by check
before the check clears, payment of the redemption proceeds may be delayed for a
period of up to fifteen days after their purchase, pending a determination that
the check has cleared. This procedure does not apply to Shares purchased by wire
payment. Investors should consider purchasing Shares using a certified or bank
check if they anticipate an immediate need for redemption proceeds.
The Fund imposes no charge when Shares are redeemed. The Fund reserves the
right to redeem any account in the Principal Class involuntarily, on thirty
days' notice, if such account falls below $1,500 and during such 30-day notice
period the amount invested in such account is not increased to at least $1,500.
Payment for Shares redeemed may be postponed or the right of redemption
suspended as provided by the rules of the Securities and Exchange Commission.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value per share of the Principal Class of the Portfolio for
the purpose of pricing purchase and redemption orders is determined twice each
day, once as of 12:00 noon Eastern Time and once as of the close of regular
trading on the NYSE on each weekday with the exception of those holidays on
which either the NYSE or the FRB is closed. Currently, the NYSE is closed on
weekends and the customary national business holidays of New Year's Day, Dr.
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day and on the
preceding Friday or subsequent Monday when one of these holidays falls on a
Saturday or Sunday. The FRB is currently closed on weekends and the same
holidays on which the NYSE is closed as well as Veterans' Day and Columbus Day.
The net asset value per share of the Principal Class of the Portfolio is
calculated by adding the proportionate interest of each class in the value of
the securities, cash and other assets of the Portfolio, subtracting the actual
and accrued liabilities of the Principal Class and dividing the result by the
number of outstanding shares of the class. The net asset value per share of the
Portfolio is determined independently of any of the Fund's other investment
portfolios.
The Fund seeks to maintain for the Portfolio a net asset value of $1.00 per
share for purposes of purchases and redemptions and values its portfolio
securities on the basis of the amortized cost method of valuation described in
the Statement of Additional Information under the heading "Valuation of Shares."
There can be no assurance that net asset value per share will not vary.
With the approval of the Board of Directors, the Portfolio may use a
pricing service, bank or broker-dealer experienced in such matters to value the
Portfolio's securities. A more detailed discussion of net asset value and
security valuation is contained in the Statement of Additional Information.
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<PAGE>
MANAGEMENT
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BOARD OF DIRECTORS
The business and affairs of the Fund and each investment portfolio are
managed under the direction of the Fund's Board of Directors. The Fund currently
operates or proposes to operate seventeen investment portfolios. The Principal
Class represents interests in the Money Market Portfolio.
INVESTMENT ADVISER
BIMC, an indirect majority-owned subsidiary of PNC Bank, serves as the
investment adviser for the Portfolio. BIMC has its principal offices at Bellevue
Park Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware 19809. PNC
Bank and its subsidiaries currently manage over $45.9 billion of assets, of
which approximately $31.4 billion are mutual funds. PNC Bank, a national bank
whose principal business address is 1600 Market Street, Philadelphia,
Pennsylvania 19103, is a wholly-owned subsidiary of PNC Bancorp, Inc. PNC
Bancorp,Inc. is a bank holding company and a wholly-owned subsidiary of PNC Bank
Corp., a multi-bank holding company.
As investment adviser to the Portfolio, BIMC manages the Portfolio and is
responsible for all purchases and sales of portfolio securities. BIMC also
provides research and credit analysis. In entering into Portfolio transactions
for the Portfolio with a broker, BIMC may take into account the sale by such
broker of shares of the Portfolio, subject to the requirements of best
execution. The agreement between BIMC and RBB with respect to the Money Market
Portfolio provides for BIMC to also assist generally in supervising the
operations of the Portfolio, and to maintain the Portfolio's financial accounts
and records. These administrative responsibilities have been delegated to PFPC,
as further described below.
For the services provided to and expenses assumed by it for the benefit of
the Portfolio, BIMC is entitled to receive the following fees, computed daily
and payable monthly based on the Portfolio's average daily net assets: .45% of
the first $250 million; .40% of the next $250 million; and .35% of net assets in
excess of $500 million.
For the Fund's fiscal year ended August 31, 1998, the Fund paid investment
advisory fees aggregating .24% of the average net assets of the Portfolio, and
BIMC waived advisory fees aggregating .13% of the average net assets of the
Portfolio.
PNC Bank was formerly sub-adviser to the Money Market Portfolio and
provided research, credit analysis and recommendations with respect to the
Portfolio's investments and supplied certain computer facilities, personnel and
other services. The facilities, personnel, services and related expenses have
been transferred to BIMC and in return, BIMC's obligation to pay a portion of
the sub-advisory fee to PNC Bank has been terminated. For its sub-advisory
services, PNC Bank was entitled to receive from BIMC an amount equal to 75% of
the investment advisory fee paid by the Portfolio to BIMC (subject to adjustment
in certain circumstances). The sub-advisory fees paid by BIMC to PNC Bank had no
effect on the investment advisory fees payable by the Portfolio to BIMC. The
services provided by BIMC and the fees payable by the Portfolio for these
services are described further in the Statement of Additional Information under
"Management of the Company".
ADMINISTRATOR
PFPC provides administration and accounting services to the Portfolio as a
delegate of BIMC under the advisory agreement. The Fund has agreed to pay
directly to PFPC the fees for administration and accounting services to the
Money Market Portfolio which PFPC would have received directly from BIMC. Such
arrangement has no effect on the total advisory and administrative fees payable
by the Portfolio to BIMC. Pursuant to the delegation PFPC is entitled to receive
an administration fee, computed daily, and payable monthly at the annual rate of
.10% of the average daily net assets of the Portfolio. PFPC's principal business
address is 400 Bellevue Parkway, Wilmington, Delaware 19809.
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<PAGE>
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND CUSTODIAN
PFPC Trust Company, an indirect wholly owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank wil continue to provide certain services to
PFPCTrust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholder servicing
agreements with Dealers for the provision of certain shareholder support
services to customers of such Dealers who are shareholders of the Portfolios.
The services provided and the fees payable by the Fund for these services are
described in the Statement of Additional Information under "Investment Advisory,
Distribution and Servicing Arrangements."
DISTRIBUTOR
Provident Distributors, Inc., with a principal business address at Four
Falls Corporate Center, West Conshohocken, Pennsylvania 19428, acts as
Distributor of the Principal Shares pursuant to a distribution agreement dated
May 29, 1998 (the "Distribution Agreement").
EXPENSES
The expenses of the Portfolio are deducted from the total income of the
Portfolio before dividends are paid. Any general expenses of the Fund that are
not readily identifiable as belonging to a particular investment portfolio of
the Fund will be allocated among all investment portfolios of the Fund based
upon the relative net assets of the investment portfolios. The Principal Class
of the Fund pays its own distribution fees and may pay a different share than
other classes of the Fund of other expenses (excluding advisory and custodial
fees) if those expenses are actually incurred in a different amount by the
Principal Class or if it receives different services.
The investment adviser may assume expenses of the Portfolio from time to
time. In certain circumstances, it may assume such expenses on the condition
that it is reimbursed by the Portfolios for such amounts prior to the end of a
fiscal year. In such event, the reimbursement of such amounts will have the
effect of increasing the Portfolio's expense ratio and of lowering yield to
investors.
DISTRIBUTION OFSHARES
- --------------------------------------------------------------------------------
The Board of Directors of the Fund approved and adopted the Distribution
Agreement and Plan of Distribution for the Principal Class (the "Plan") pursuant
to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to
receive from the Principal Class a distribution fee, which is accrued daily and
paid monthly, of up to .50% on an annualized basis of the average daily net
assets of the Principal Class. The actual amount of such compensation is agreed
upon from time to time by the Fund's Board of Directors and the Distributor.
Under the Distribution Agreement, the Distributor has agreed to accept
compensation for its services thereunder and under the Plan in the amount of
.45% of the average daily net assets of the Principal Class on an annualized
basis in any year. The Distributor may, in its discretion, voluntarily waive
from time to time all or any portion of its distribution fee.
Under the Distribution Agreement and Plan, the Distributor may re-allocate
an amount up to the full fee that it receives to financial institutions,
including broker/dealers, based upon the aggregate investment amounts maintained
by and services provided to shareholders of the Principal Class serviced by such
financial institutions. The Distributor may also reimburse broker/dealers for
other expenses incurred in the promotion of the sale of Fund shares. The
Distributor and/or broker/dealers pay for the cost of printing (excluding
typesetting) and mailing to prospective investors prospectuses and other
materials relating to the Fund as well as for related direct mail, advertising
and promotional expenses.
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The Plan obligates the Fund, during the period it is in effect, to accrue
and pay to the Distributor on behalf of the Principal Class the fee agreed to
under the Distribution Agreement. Payments under the Plan are not based on
expenses actually incurred by the Distributor, and the payments may exceed
distribution expenses actually incurred.
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Principal Class of the Portfolio to
the shareholders of the Principal Class. All distributions are reinvested in the
form of additional full and fractional Principal Shares unless a shareholder
elects otherwise.
The net investment income (not including any net short-term capital gains)
earned by the Portfolio will be declared as a dividend on a daily basis and paid
monthly. Dividends are payable to shareholders of record immediately prior to
the determination of net asset value made as of the close of trading of the
NYSE. Net short-term capital gains, if any, will be distributed at least
annually.
TAXES
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Distributions from the Money Market Portfolio will generally be taxable to
shareholders. It is expected that all, or substantially all, of these
distributions will consist of ordinary income. You will be subject to income tax
on these distributions regardless whether they are paid in cash or reinvested in
additional shares. The one major exception to these tax principles is that
distributions on shares held in an IRA (or other tax-qualified plan) will not be
currently taxable.
The foregoing is only a summary of certain tax considerations under the
current law, which may be subject to change in the future. You should consult
your tax adviser for further information regarding federal, state, local and/or
foreign tax consequences relevant to your specific situation.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
The Fund has authorized capital of thirty billion shares of Common Stock,
$.001 par value per share, of which 18.326 billion shares are currently
classified into 97 different classes of Common Stock ( see "Description of
Shares" in the Statement of Additional Information).
The Fund offers multiple classes of shares in its Money Market Portfolio to
expand its marketing alternatives and to broaden its range of services to
different investors. The expenses of the various classes within the Portfolio
varies based upon the services provided, which may affect performance. Each
class of Common Stock of the Fund that has a Rule 12b-1 distribution plan has a
separate plan for the class. Under the Distribution Agreement entered into with
the Distributor and pursuant to each of the distribution plans, the Distributor
is entitled to receive from each class as compensation for distribution services
provided to that class a distribution fee based on average daily net assets. A
salesperson or any other person entitled to receive compensation for servicing
Fund shares may receive different compensation with respect to different classes
in the Portfolio. An investor may contact the Fund's distributor by calling
1-800-888-9723 to request more information concerning other classes available.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATES SOLELY TO THE PRINCIPAL CLASS OF THE MONEY MARKET PORTFOLIO AND
DESCRIBES ONLY THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS AND
OTHER MATTERS RELATING TO THE PRINCIPAL CLASS OF THE MONEY MARKET PORTFOLIO.
Each share that represents an interest in the Portfolio has an equal
proportionate interest in the assets belonging to such Portfolio with each other
share that represents an interest in such Portfolio, even where a share has a
different
14
<PAGE>
class designation than another share representing an interest in the Portfolio.
Shares of the Fund do not have preemptive or conversion rights. When issued for
payment as described in this Prospectus, Shares of the Fund will be fully paid
and non-assessable.
The Fund currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
Holders of shares of the Portfolio will vote in the aggregate and not by
class on all matters, except where otherwise required by law. Further,
shareholders of all investment portfolios of the Fund will vote in the aggregate
and not by portfolio except as otherwise required by law or when the Board of
Directors determines that the matter to be voted upon affects only the interests
of the shareholders of a particular investment portfolio. (See the Statement of
Additional Information under "Additional Information Concerning Fund Shares" for
examples of when the 1940 Act requires voting by investment portfolio or by
class.) Shareholders of the Fund are entitled to one vote for each full share
held (irrespective of class or portfolio) and fractional votes for fractional
shares held. Voting rights are not cumulative and, accordingly, the holders of
more than 50% of the aggregate shares of Common Stock of the Fund may elect all
of the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all of the classes of
the Fund.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC, the
Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (800) 533-7719 (in Delaware call collect
(302) 791-1196).
15
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
------------------
CONTENTS
PAGE
Introduction .......................................................... 2
Investment Objective and Policies ..................................... 3
Year 2000 ............................................................. 6
Investment Limitations ................................................ 6
Purchase and Redemption of Shares ..................................... 7
Net Asset Value ....................................................... 11
Management ............................................................ 12
Distribution of Shares ................................................ 13
Dividends and Distributions ........................................... 14
Taxes ................................................................. 14
Description of Shares ................................................. 14
Other Information ..................................................... 15
INVESTMENT ADVISER
BlackRock Institutional Management Corporation
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
ADMINISTRATOR AND TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
<PAGE>
PROSPECTUS
DECEMBER 29, 1998
BOSTON PARTNERS
LARGE CAP
VALUE FUND
(INSTITUTIONAL SHARES)
bp
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
[LOGO GRAPHIC OMITTED]
<PAGE>
BOSTON PARTNERS LARGE CAP VALUE FUND
(INSTITUTIONAL CLASS)
OF
THE RBB FUND, INC.
Boston Partners Large Cap Value Fund (the "Fund") is an investment
portfolio of The RBB Fund, Inc. ("RBB"), an open-end management investment
company. The shares of the Institutional Class ("Shares") offered by this
Prospectus represent interests in the Fund. The Fund is a diversified fund that
seeks long-term growth of capital, with current income as a secondary objective,
primarily through equity investments, such as common stocks and securities
convertible into common stocks. It seeks to achieve its objectives by investing
at least 65% of its total assets in a diversified portfolio consisting of equity
securities of issuers with a market capitalization of primarily $1 billion or
greater and identified by Boston Partners Asset Management, L.P. (the "Adviser")
as equity securities that it believes possess value characteristics. The Adviser
examines various factors in determining the value characteristics of such
issuers, including, but not limited to, price to book value ratios and price to
earnings ratios. These value characteristics are examined in the context of the
issuer's operating and financial fundamentals such as return on equity, earnings
growth and cash flow.
This Prospectus contains information that a prospective investor needs to
know before investing. Please keep it for future reference. A Statement of
Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained free of charge from the Fund by calling (888)
261-4073. The Prospectus and the Statement of Additional Information are
available for reference, along with other related materials, on the SEC Internet
Web Site (http://www.sec.gov).
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR ENDORSED
BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK AND
SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENTS IN SHARES OF THE FUND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
RBB is an open-end management company incorporated under the laws of the
State of Maryland currently operating or proposing to operate seventeen separate
investment portfolios. The Shares offered by this Prospectus represent interests
in the Boston Partners Large Cap Value Fund. RBB was incorporated in Maryland on
February 29, 1988.
FEE TABLE
The following table illustrates annual operating expenses incurred by
Institutional Shares of the Fund (after fee waivers and expense reimbursements)
for the fiscal period ended August 31, 1998, as a percentage of average daily
net assets. An example based on the summary is also shown.
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (after waivers)* ................................. .49%
12b-1 Fees ....................................................... 0.00%
Other Expenses (after waivers and reimbursements). ............... .51%
----
Total Fund Operating Expenses (after waivers and expense
reimbursements)* ................................................ 1.00%
====
* In the absence of fee waivers and expense reimbursements, Management Fees
would be 0.75%; Other Expenses would be .74%; and Total Fund Operating
Expenses would be 1.49%. Management Fees are based on average daily net assets
and are calculated daily and paid monthly.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the
Fund, assuming (1) a 5% annual return and (2) redemption at the end of each time
period:
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
Boston Partners Large Cap Value Fund ..... $10 $32 $55 $122
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. (For more complete descriptions of the various costs and expenses,
see "Management" and "Distribution of Shares" below.) The Fee Table reflects
expense reimbursements and voluntary waivers of Management Fees and
Administrative Services Fees for the Fund. However, there can be no assurance
that any future expense reimbursements and waivers of Management Fees and
Administrative Services Fees will not vary from the figures reflected in the Fee
Table.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The "Financial Highlights" presented below set forth certain investment
results for shares of the Institutional Class of the Fund for the period January
2, 1997 (date of inception) through August 31, 1997 and for the fiscal year
ended August 31, 1998. The financial data included in this table should be read
in conjunction with the financial statements and notes thereto and the
unqualified report of PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"),
RBB's independent accountant, which are incorporated by reference into the
Statement of Additional Information. Further information about the performance
of the Institutional Class of the Fund is available in the Annual Report to
Shareholders. Both the Statement of Additional Information and the Annual Report
to Shareholders may be obtained from the Fund free of charge by calling the
telephone number on page 1 of the prospectus.
2
<PAGE>
BOSTON PARTNERS LARGE CAP VALUE FUND
(FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE FISCAL JANUARY 2, 1997*
YEAR ENDED THROUGH AUGUST 31,
AUGUST 31, 1998 1997
--------------- ------------------
<S> <C> <C>
Per Share Operating Performance**
Net asset value, beginning of period ..................................... $12.46 $ 10.00
------- -------
Net investment income (1) ................................................ 0.12 0.05
Net realized and unrealized gain/(loss) on investments (2) ............... (1.31) 2.41
------- -------
Net increase/(decrease) in net assets resulting from operations .......... (1.19) 2.46
------- -------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income .................................................... (0.08) --
Net realized capital gains ............................................... (0.61) --
------- -------
Net asset value, end of period ........................................... $ 10.58 $ 12.46
======= =======
Total investment return (3) .............................................. (10.23)% 24.60%
======= =======
Ratios/Supplemental Data ................................................. $50,724 $24,603
Net assets, end of period (000)
Ratio of expenses to average net assets(1)(4) ............................ 1.00% 1.00%(5)
Ratio of net investment income to average net assets(1) .................. 0.87% 1.19%(5)
Portfolio turnover rate .................................................. 111.68% 67.16%(6)
<FN>
* Commencement of operations.
** Calculated based on shares outstanding on the first and last day of the
period, except for dividends and distributions, if any, which are based
on actual shares outstanding on the dates of distributions.
(1) Reflects waivers and reimbursements.
(2) The amount shown for a share outstanding throughout the period is not in
accord with the change in the aggregate gains and losses in investments
during the period because of the timing of sales and repurchases of Fund
shares in relation to fluctuating net asset value during the respective
periods.
(3) Total return is calculated assuming a purchase of shares on the first day
and a sale of shares on the last day of the period reported and will
include reinvestments of dividends and distributions, if any. Total
return is not annualized.
(4) Until May 29, 1998, the Institutional Class of the Fund paid .03% of its
average daily net assets to the Fund's previous Distributor in 12b-1
fees. From May 29, 1998 through August 31, 1998, the Institutional Class
of the Fund paid .03% of its average daily net assets to the
Administrative Services Agent pursuant to the Administrative Services
Plan for Institutional shares in lieu of 12b-1 fees. Without the waiver
of advisory, 12b-1, administration and transfer agent fees and without
the reimbursement of certain operating expenses, the ratio of expenses to
average net assets annualized for the period ended August 31, 1997 and
the year ended August 31, 1998 would have been 2.64% and 1.49%,
respectively, for the Institutional Class.
(5) Annualized.
(6) Not annualized.
</FN>
</TABLE>
3
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is to provide long-term growth of capital
with current income as a secondary objective. The Fund seeks to achieve its
objective by investing at least 65% of its total assets in a diversified
portfolio consisting primarily of equity securities, such as common stocks and
securities convertible into common stocks, of issuers with a market
capitalization of $1 billion or greater and identified by the Adviser as
possessing value characteristics.
The Adviser examines various factors in determining the value
characteristics of such issuers, including, but not limited to, price to book
value ratios and price to earnings ratios. These value characteristics are
examined in the context of the issuer's operating and financial fundamentals
such as return on equity, earnings growth and cash flow.
The Adviser selects securities for the Fund based on a continuous study of
trends in industries and companies, earnings power and growth and other
investment criteria. In general, the Fund's investments are broadly diversified
over a number of industries and, as a matter of policy, the Fund will not invest
25% or more of its total assets in any one industry.
The Fund may invest up to 20% of its total assets in securities of foreign
issuers. Investing in securities of foreign issuers involves considerations not
typically associated with investing in securities of companies organized and
operated in the United States. Foreign securities generally are denominated and
pay dividends or interest in foreign currencies. The Fund may hold from time to
time various foreign currencies pending their investment in foreign securities
or their conversion into U.S. dollars. The value of the assets of the Fund as
measured in U.S. dollars may therefore be affected favorably or unfavorably by
changes in exchange rates. There may be less publicly available information
concerning foreign issuers than is available with respect to U.S. issuers.
Foreign securities may not be registered with the U.S. Securities and Exchange
Commission, and generally, foreign companies are not subject to uniform
accounting, auditing and financial reporting requirements comparable to those
applicable to U.S. issuers. See "Investment Objective and Policies--Foreign
Securities" in the Statement of Additional Information.
The Fund may invest the remainder of its total assets in equity securities
of issuers with lower capitalization; derivative securities; debt securities
issued by U.S. banks, corporations and other business organizations that are
investment grade securities; and debt securities issued by the U.S. Government
or government agencies.
In accordance with the above-mentioned policies, the Fund may also invest
in indexed securities, convertible securities, repurchase and reverse repurchase
agreements and dollar rolls, financial futures contracts, options on futures
contracts and may lend portfolio securities. See "Investment Objective and
Policies" in the Statement of Additional Information.
The Fund may invest in registered investment companies and investment funds
in foreign countries subject to the provisions of the Investment Company Act of
1940 (the "1940 Act") and as discussed in "Investment Objective and Policies" in
the Statement of Additional Information. If the Fund invests in such investment
companies, the Fund will bear its proportionate share of the costs incurred by
such companies, including investment advisory fees.
While the Adviser intends to fully invest the Fund's assets at all times in
accordance with the above mentioned policies, the Fund reserves the right to
hold up to 100% of its assets, as a temporary defensive measure, in cash and
eligible U.S. dollar-denominated money market instruments. The Adviser will
determine when market conditions warrant temporary defensive measures.
The Fund's investment objective and the policies described above may be
changed by RBB's Board of Directors without the affirmative vote of the holders
of a majority of the outstanding Shares representing interests in the Fund.
4
<PAGE>
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Fund may not change the following investment limitations without
shareholder approval. (A complete list of the investment limitations that cannot
be changed without such a vote of the shareholders is contained in the Statement
of Additional Information under "Investment Objective and Policies.")
The Fund may not:
1. Purchase the securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, if immediately after and as a result of such purchases
more than 5% of the value of the Fund's total assets would be invested in
the securities of such issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by the Fund, except that up to 25%
of the value of the Fund's total assets may be invested without regard to
such limitations.
2. Purchase any securities which would cause, at the time of purchase,
25% or more of the value of the total assets of the Fund to be invested in
the obligations of issuers in any single industry, provided that there is
no limitation with respect to investments in U.S. Government obligations.
3. Borrow money or issue senior securities, except that the Fund may
borrow from banks and enter into reverse repurchase agreements and dollar
rolls for temporary purposes in amounts up to one-third of the value of its
total assets at the time of such borrowing; or mortgage, pledge or
hypothecate any assets, except in connection with any such borrowing and
then in amounts not in excess of one-third of the value of the Fund's total
assets at the time of such borrowing. The Fund will not purchase securities
while its aggregate borrowings (including reverse repurchase agreements,
dollar rolls and borrowings from banks) are in excess of 5% of its total
assets. Securities held in escrow or separate accounts in connection with
the Fund's investment practices are not considered to be borrowings or
deemed to be pledged for purposes of this limitation.
If a percentage restriction under one of the Fund's investment policies or
restrictions or the use of assets is adhered to at the time a transaction is
effected, later changes in percentage resulting from changing values will not be
considered a violation (except with respect to any restrictions that may apply
to borrowings or senior securities issued by the Fund).
RISK FACTORS
- --------------------------------------------------------------------------------
As with other mutual funds, there can be no assurance that the Fund will
achieve its objective. The net asset value per share of Shares representing
interests in the Fund will fluctuate as the values of its portfolio securities
change in response to changing conditions in the equity market. An investment in
the Fund is not intended to constitute a balanced investment program. Other risk
factors are discussed above under "Investment Objective and Policies" and in the
Statement of Additional Information under "Investment Objective and Policies."
European Currency Unification. Many European countries are about to adopt a
single European currency, the euro. On January 1, 1999, the euro will become
legal tender for all countries participating in the Economic and Monetary Union
("EMU"). A new European Central Bank will be created to manage the monetary
policy of the new unified region. On the same date, the exchange rates will be
irrevocably fixed between the EMU member countries. National currencies will
continue to circulate until they are replaced by euro coins and bank notes by
the middle of 2002.
This change is likely to significantly impact the European capital markets
in which the Fund may invest and may result in the Fund facing additional risks
in pursuing its investment objective. These risks, which include, but are not
limited to, uncertainty as to the proper tax treatment of the currency
conversion, volatility of currency exchange rates as a result of the conversion,
uncertainty as to capital market reaction, conversion costs that may affect
issuer profitability and creditworthiness, and lack of participation by some
European countries, may increase the volatility of the Fund's net asset value
per share.
5
<PAGE>
YEAR 2000
- --------------------------------------------------------------------------------
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
ASSET ALLOCATION
- --------------------------------------------------------------------------------
From time to time, the Fund may experience relatively large purchases or
redemptions due to asset allocation decisions made by the Advisor for clients
receiving Asset Allocation account management services involving investments in
the Fund. These transactions may have a material effect on the Fund, since
redemptions caused by reallocations may result in the Fund selling portfolio
securities, and purchases caused by reallocations may result in the Fund
receiving additional cash that it will have to invest. While it is impossible to
predict the overall impact of these transactions over time, there could be
adverse effects on portfolio management to the extent that the Fund may be
required to sell securities at times when it would not otherwise do so, or
receive cash that cannot be invested in an expeditious manner. These
transactions could also have tax consequences if the sale of securities results
in gains and could also increase transaction costs. The Advisor is committed to
minimizing the impact of such transactions on the Fund to the extent it is
consistent with pursuing the investment objectives of clients for which the
Advisor provides Asset Allocation account management services involving
investments in the Fund and monitors the impact of asset allocation decisions on
the Fund.
GENERAL
Investment methods described in this Prospectus are among those that the
Fund has the power to utilize. Some may be employed on a regular basis; others
may not be used at all. Accordingly, reference to any particular method or
technique carries no implication that it will be utilized or, if it is, that it
will be successful.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of RBB and the Fund are managed under the
direction of RBB's Board of Directors.
INVESTMENT ADVISER
Boston Partners Asset Management, L.P., located at 28 State Street, 21st
Floor, Boston, Massachusetts 02109, serves as the Fund's investment adviser. The
Adviser provides investment management and investment advisory services to
investment companies and other institutional accounts that had aggregate total
assets under management as of October 31, 1998 in excess of $16.0 billion. The
adviser is organized as a Delaware limited partnership whose sole general
partner is Boston Partners, Inc., a Delaware corporation.
Subject to the supervision and direction of RBB's Board of Directors, the
Adviser manages the Fund's portfolio in accordance with the Fund's investment
objective and policies, makes investment decisions for the Fund, places orders
to purchase and sell securities, and employs professional portfolio managers and
securities analysts who provide research services to the Fund. For its services
to the Fund, the Adviser is entitled to receive under the Advisory
6
<PAGE>
Agreement a monthly advisory fee computed at an annual rate of 0.75% of the
Fund's average daily net assets. The Adviser intends to limit Fund operating
expenses to 1.00% of the Fund's average daily net assets.
PORTFOLIO MANAGEMENT
The day-to-day portfolio management of the Fund is the responsibility of
Mark E. Donovan and Wayne S. Sharp who are senior portfolio managers of the
Adviser. Mr. Donovan is Chairperson of the Adviser's Equity Strategy Committee
which oversees the investment activities of the Adviser's $5.5 billion in Large
Cap Value institutional equity assets under management. Prior to joining the
Adviser on April 16, 1995, Mr. Donovan was a Senior Vice President and Vice
Chairman of The Boston Company Asset Management, Inc.'s Equity Policy Committee.
Mr. Donovan is a Chartered Financial Analyst and has over fifteen years of
investment experience. Ms. Sharp is Vice Chairperson of the Adviser's Equity
Strategy Committee and has over twenty-one years of investment experience. Prior
to joining the Adviser on April 16, 1995, Ms. Sharp was a Senior Vice President
and member of the Equity Policy Committee of The Boston Company Asset
Management, Inc. Ms. Sharp is also a Chartered Financial Analyst.
ADMINISTRATOR
PFPC Inc. ("PFPC") serves as administrator to the Fund and generally
assists the Fund in all aspects of its administration and operations, including
matters relating to the maintenance of financial records and accounting. For its
services, PFPC is entitled to receive a fee under an administration and
accounting services agreement calculated at an annual rate of .125% of the
Fund's average daily net assets with a minimum fee of $75,000 payable monthly on
a pro rata basis.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC, an indirect, wholly-owned
subsidiary of PNC Bank, are located at 400 Bellevue Parkway, Wilmington,
Delaware 19809. PFPC may enter into shareholder servicing agreements with
registered broker-dealers who have entered into dealer agreements with the
Distributor ("Authorized Dealers") for the provision of certain shareholder
support services to customers of such Authorized Dealers who are shareholders of
the Fund. The services provided and the fees payable by the Fund for these
services are described in the Statement of Additional Information under
"Investment Advisory, Distribution and Servicing Arrangements."
ADMINISTRATIVE SERVICES AGENT
Provident Distributors, Inc. ("PDI"), with a principal business address at
Four Falls Corporate Center, West Conshohocken, Pennsylvania 19428, provides
certain administrative services to the Fund's Institutional Shares not otherwise
provided by PFPC. PDI furnishes certain internal quasi-legal, executive and
administrative services to the Fund, acts as a liaison between the Fund and its
various service providers and coordinates and assists in the preparation of
reports prepared on behalf of the Fund. For its services, PDI is entitled to a
monthly fee calculated at the annual rate of .15% of the respective average
daily net assets of the Fund's Institutional Class. PDI is currently waiving
fees in excess of .03% of the average daily net assets of the Fund's
Institutional Class.
DISTRIBUTOR
PDI acts as distributor for the Shares pursuant to a distribution agreement
(the "Distribution Agreement") with RBB on behalf of the Shares.
7
<PAGE>
EXPENSES
The expenses of the Fund are deducted from its total income before
dividends are paid. Any general expenses of RBB that are not readily
identifiable as belonging to a particular investment portfolio of RBB will be
allocated among all investment portfolios of RBB based upon the relative net
assets of the investment portfolios. The Institutional Class of the Fund pays an
administrative services fee, and may pay a different share than the other
classes of the Fund of other expenses (excluding advisory and custodial fees) if
those expenses are actually incurred in a different amount by the Institutional
Class or if it receives different services.
The Adviser may assume expenses of the Fund from time to time. To the
extent any service providers assume expenses of the Fund, such assumption of
expenses will have the effect of lowering the Fund's overall expense ratio and
of increasing its yield to investors.
HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------
GENERAL
Shares representing interests in the Fund are offered continuously for sale
by the Distributor and may be purchased without imposition of a sales charge.
Shares may be purchased initially by completing the application included in this
Prospectus and forwarding the application to the Fund's transfer agent, PFPC.
Purchases of Shares may be effected by wire to an account to be specified by
PFPC or by mailing a check or Federal Reserve Draft, payable to the order of
"The Boston Partners Large Cap Value Fund," c/o PFPC Inc., P.O. Box 8852,
Wilmington, Delaware 19899-8852. Shareholders may not purchase shares of the
Boston Partners Large Cap Value Fund with a check issued by a third party and
endorsed over to the Fund. The name of the Fund, Boston Partners Large Cap Value
Fund, must also appear on the check or Federal Reserve Draft. Federal Reserve
Drafts are available at national banks or any state bank which is a member of
the Federal Reserve System. Initial investments in the Fund must be at least
$100,000 and subsequent investments must be at least $5,000. For purposes of
meeting the minimum initial purchase, clients which are part of endowments,
foundations or other related groups may be aggregated. The Fund reserves the
right to suspend the offering of Shares for a period of time or to reject any
purchase order.
Shares may be purchased on any Business Day. A "Business Day" is any day
that the New York Stock Exchange, Inc. (the "NYSE") is open for business.
Currently, the NYSE is closed on weekends and New Year's Day, Dr. Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day, and on the preceding Friday or
subsequent Monday when one of these holidays falls on a Saturday or Sunday.
The price paid for Shares purchased is based on the net asset value next
computed after a purchase order is received in good order by the Fund or its
agents. Orders received by the Fund or its agents prior to the close of the NYSE
(generally 4:00 p.m. Eastern Time) are priced at that Business Day's net asset
value. Orders received by the Fund or its agents after the close of the NYSE
(generally 4:00 p.m. Eastern Time) are priced at the net asset value next
determined on the following Business Day. In those cases where an investor pays
for Shares by check, the purchase will be effected at the net asset value next
determined after the Fund or its agents receives the order and the completed
application.
Shares may be purchased and subsequent investments may be made by
principals and employees of the Adviser, and by their spouses and children,
either directly or through their individual retirement accounts, and by any
pension and profit-sharing plan of the Adviser, without being subject to the
minimum investment limitations.
An investor may also purchase Shares by having his bank or his broker wire
Federal Funds to PFPC. An investor's bank or broker may impose a charge for this
service. The Fund does not currently impose a service charge for effecting wire
transfers but reserves the right to do so in the future. In order to ensure
prompt receipt of an investor's Federal Funds wire for an initial investment, it
is important that an investor follows these steps:
8
<PAGE>
A. Telephone the Fund's transfer agent, PFPC, toll-free (888) 261-4073,
and provide PFPC with your name, address, telephone number, Social Security
or Tax Identification Number, the Fund selected, the amount being wired,
and by which bank. PFPC will then provide an investor with a Fund account
number. Investors with existing accounts should also notify PFPC prior to
wiring funds.
B. Instruct your bank or broker to wire the specified amount, together
with your assigned account number, to PFPC's account with PNC:
PNC Bank, N.A.
Philadelphia, PA 19103
ABA NUMBER: 0310-0005-3
CREDITING ACCOUNT NUMBER: 86-1108-2507
FROM: (name of investor)
ACCOUNT NUMBER: (Investor's account number with the Fund)
FOR PURCHASE OF: Boston Partners Large Cap Value Fund
AMOUNT: (amount to be invested)
C. Fully complete and sign the application and mail it to the address
shown thereon. PFPC will not process redemptions until it receives a fully
completed and signed Application.
For subsequent investments, an investor should follow steps A and B above.
AUTOMATIC INVESTING
Additional investments in Shares may be made automatically by authorizing
the Fund's transfer agent to withdraw funds from your bank account. Investors
desiring to participate in the automatic investing program should call the
Fund's transfer agent, PFPC, at (888) 261-4073 to obtain the appropriate forms.
HOW TO REDEEM AND EXCHANGE SHARES
- --------------------------------------------------------------------------------
REDEMPTION BY MAIL
Shareholders may redeem for cash some or all of their Shares of the Fund at
any time. To do so, a written request in proper form must be sent directly to
Boston Partners Large Cap Value Fund, c/o PFPC Inc., P.O. Box 8852, Wilmington,
Delaware 19899-8852. There is no charge for a redemption.
A request for redemption must be signed by all persons in whose names the
Shares are registered. Signatures must conform exactly to the account
registration. If the proceeds of the redemption would exceed $10,000, or if the
proceeds are not to be paid to the record owner at the record address, or if the
shareholder is a corporation, partnership, trust or fiduciary, signature(s) must
be guaranteed according to the procedures described below under "How to Redeem
and Exchange Shares -- Exchange Privilege."
Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption. In some cases, however,
other documents may be necessary. In the case of shareholders holding share
certificates, the certificates for the shares being redeemed must accompany the
redemption request. Additional documentary evidence of authority is also
required by the Fund's transfer agent in the event redemption is requested by a
corporation, partnership, trust, fiduciary, executor or administrator.
9
<PAGE>
INVOLUNTARY REDEMPTION
The Fund reserves the right to redeem a shareholder's account at any time
the net asset value of the account falls below $500 as the result of a
redemption or an exchange request. Shareholders will be notified in writing that
the value of their account is less than $500 and will be allowed 30 days to make
additional investments before the redemption is processed.
PAYMENT OF REDEMPTION PROCEEDS
In all cases, the redemption price is the net asset value per share next
determined after the request for redemption is received in proper form by the
Fund or its agents. Payment for Shares redeemed is made by check mailed within
seven days after acceptance by the Fund or its agents of the request and any
other necessary documents in proper order. Such payment may be postponed or the
right of redemption suspended as permitted by the rules of the SEC. If the
Shares to be redeemed have been recently purchased by check, the Fund's transfer
agent may delay mailing a redemption check, which may be a period of up to 15
days, pending a determination that the check has cleared. The Fund has elected
to be governed by Rule 18f-1 under the 1940 Act so that a portfolio is obligated
to redeem its shares solely in cash up to the lesser of $250,000 or 1% of its
net asset value during any 90-day period for any one shareholder of a portfolio.
EXCHANGE PRIVILEGE
The exchange privilege is available to shareholders residing in any state
in which the Shares being acquired may be legally sold. A shareholder may
exchange Shares of the Fund for Institutional Shares of any other Boston
Partners Fund of RBB, subject to restrictions described under "Exchange
Privilege Limitations" below. Such exchange will be effected at the net asset
value of the exchanged Fund and the net asset value of the Fund being acquired
next determined after receipt of a request for an exchange by the Fund or its
agents. An exchange of Shares will be treated as a sale for federal income tax
purposes. See "Taxes." A shareholder wishing to make an exchange may do so by
sending a written request to PFPC.
If the exchanging shareholder does not currently own Institutional Shares
of the Boston Partners Fund into which he/she would like to exchange, a new
account will be established with the same registration, dividend and capital
gain options as the account from which shares are exchanged, unless otherwise
specified in writing by the shareholder with all signatures guaranteed. A
signature guarantee may be obtained from a domestic bank or trust company,
broker, dealer, clearing agency or savings association who are participants in a
medallion program recognized by the Securities Transfer Association. The three
recognized medallion programs are Securities Transfer Agents Medallion Program
(STAMP), Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange,
Inc. Medallion Signature Program (MSP). Signature guarantees that are not part
of these programs will not be accepted. The exchange privilege may be modified
or terminated at any time, or from time to time, by RBB, upon 60 days' written
notice to shareholders.
If an exchange is to a new account in the acquired Fund, the dollar value
of Shares acquired must equal or exceed that Fund's minimum for a new account;
if to an existing account, the dollar value must equal or exceed that Fund's
minimum for subsequent investments. If any amount remains in the Fund from which
the exchange is being made, such amount must not drop below the minimum account
value required by the Fund.
EXCHANGE PRIVILEGE LIMITATIONS
The Fund's exchange privilege is not intended to afford shareholders a way
to speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Fund and increase transactions costs, the Fund has established
a policy of limiting excessive exchange activity.
10
<PAGE>
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<PAGE>
BOSTON PARTNERS LARGE CAP VALUE FUND bp
(INSTITUTIONAL CLASS) BOSTON PARTNERS ASSET MANAGEMENT, L.P.
--------------------------------------
ACCOUNT APPLICATION
PLEASE NOTE: Do not use this form to open a retirement plan account. For an IRA
application or help with this Application, please call 1-888-261-4073.
(Please check the appropriate box(es) below.)
- -------------------
1.
Account
Registration:
- -------------------
|_| Individual |_| Joint Tenant |_| Other
- --------------------------------------------------------------------------------
Name SOCIAL SECURITY NUMBER OR TAX ID # OF PRIMARY OWNER
- --------------------------------------------------------------------------------
NAME OF JOINT OWNER JOINT OWNER SOCIAL SECURITY NUMBER OR TAX ID #
For joint accounts, the account registrants will be
joint tenants with right of survivorship and not
tenants in common unless tenants in common or community
property registrations are requested.
- -------------------
GIFT TO MINOR:
- -------------------
|_| UNIFORM GIFTS/TRANSFER TO MINOR'S ACT
- --------------------------------------------------------------------------------
NAME OF ADULT CUSTODIAN (ONLY ONE PERMITTED)
- --------------------------------------------------------------------------------
NAME OF MINOR (ONLY ONE PERMITTED)
- --------------------------------------------------------------------------------
MINOR'S SOCIAL SECURITY NUMBER AND DATE OF BIRTH
- -------------------
CORPORATION,
PARTNERSHIP, TRUST
OR OTHER ENTITY:
- -------------------
- -------------------
2.
Mailing
Address:
- -------------------
- --------------------------------------------------------------------------------
NAME OF CORPORATION, PARTNERSHIP, OR OTHER NAME(S) OF TRUSTEE(S)
- --------------------------------------------------------------------------------
TAXPAYER IDENTIFICATION NUMBER
- --------------------------------------------------------------------------------
STREET OR P.O. BOX AND/OR APARTMENT NUMBER
- --------------------------------------------------------------------------------
CITY STATE ZIP CODE
- --------------------------------------------------------------------------------
DAY PHONE NUMBER EVENING PHONE NUMBER
- -------------------
3
Investment
Information:
- -------------------
Minimum initial investment of $100,000 Amount of investment $____________
Make the check payable to Boston Partners Large Cap Value Fund.
Shareholders may not purchase shares of this Fund with a check issued by a third
party and endorsed over to the Fund.
- -------------------
DISTRIBUTION
OPTIONS:
- -------------------
NOTE: Dividends and capital gains may be reinvested or paid by check. If no
options are selected below, both dividends and capital gains will be reinvested
in additional Fund shares.
DIVIDENDS |_| Pay by check |_| Reinvest |_| CAPITAL GAINS |_| Pay by check |_|
Reinvest |_|
<PAGE>
- -------------------
4
Telephone
Redemption:
- -------------------
To use this option, you must initial the appropriate line below.
I authorize the Transfer Agent to accept instructions from any persons to redeem
or exchange shares in my account(s) by telephone in accordance with the
procedures and conditions set forth in the Fund's current prospectus.
______________________ __________________________ Redeem shares, and send
individual initial joint initial the proceeds to the
address of record.
______________________ __________________________ Exchange shares for
individual initial joint initial shares of The Boston
Partners Mid Cap Value
Fund, Bond Fund, Micro
Cap Value Fund or Market
Neutral Fund.
- -------------------
5
Automatic
Investment
Plan:
- -------------------
The Automatic Investment Plan, which is available to shareholders of the Fund,
makes possible regularly scheduled purchases of Fund shares to allow dollar-cost
averaging. The Fund's Transfer Agent can arrange for an amount of money selected
by you to be deducted from your checking account and used to purchase shares of
the Fund.
Please debit $________ from my checking account (named below) on or about the
20th of the month. Please attach an unsigned, voided check.
|_| Monthly |_| Every Alternate Month |_| Quarterly |_| Other
- -------------------
BANK OF RECORD:
- -------------------
- --------------------------------------------------------------------------------
BANK NAME STREET ADDRESS OR P.O. BOX
- --------------------------------------------------------------------------------
CITY STATE ZIP CODE
- --------------------------------------------------------------------------------
BANK ABA NUMBER BANK ACCOUNT NUMBER
- -------------------
6
Signatures:
- -------------------
The undersigned warrants that I (we) have full authority and, if a natural
person, I (we) am (are) of legal age to purchase shares pursuant to this Account
Application, and I (we) have received a current prospectus for the Fund in which
I (we) am (are) investing.
Under the Interest and Dividend Tax Compliance Act of 1983, the Fund is required
to have the following certification:
Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service
that I am subject to 31% backup withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
NOTE: YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS
THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE YOU HAVE FAILED TO
REPORT ALL INTEREST AND DIVIDENDS ON YOUR TAX RETURN. THE INTERNAL REVENUE
SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER
THAN THE CERTIFICATION REQUIRED TO AUDIT BACKUP WITHHOLDING.
- --------------------------------------------------------------------------------
SIGNATURE OF APPLICANT DATE
- --------------------------------------------------------------------------------
PRINT NAME TITLE (IF APPLICABLE)
- --------------------------------------------------------------------------------
SIGNATURE OF JOINT OWNER DATE
- --------------------------------------------------------------------------------
PRINT NAME TITLE (IF APPLICABLE)
(If you are signing for a corporation, you must indicate corporate office or
title. If you wish additional signatories on the account, please include a
corporate resolution. If signing as a fiduciary, you must indicate capacity.)
For information on additional options, such as IRA Applications, rollover
requests for qualified retirement plans, or for wire instructions, please call
us at 1-888-261-4073.
MAIL COMPLETED ACCOUNT APPLICATION AND CHECK TO: THE BOSTON PARTNERS LARGE CAP
VALUE FUND
C/O PFPC INC.
P.O. BOX 8852
WILMINGTON, DE 19899-8852
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Shareholders are entitled to six (6) exchange redemptions (at least 30 days
apart) from the Fund during any twelve-month period. Notwithstanding these
limitations, the Fund reserves the right to reject any purchase request
(including purchases by exchange) that is deemed to be disruptive to efficient
portfolio management.
TELEPHONE TRANSACTIONS
In order to request an exchange or redemption by telephone, a shareholder
must have completed and returned an account application containing the
appropriate telephone election. To add a telephone option to an existing account
that previously did not provide for this option, a Telephone Authorization Form
must be filed with PFPC. This form is available from PFPC. Once this election
has been made, the shareholder may simply contact PFPC by telephone to request
the exchange or redemption by calling (888) 261-4073. Neither RBB, the Fund, the
Distributor, the Administrator nor any Fund agent will be liable for any loss,
liability, cost or expense for following RBB's telephone transaction procedures
described below or for following instructions communicated by telephone that
they reasonably believe to be genuine.
RBB's telephone transaction procedures include the following measures: (1)
requiring the appropriate telephone transaction privilege forms; (2) requiring
the caller to provide the names of the account owners, the account social
security number and name of the Fund, all of which must match RBB's records; (3)
requiring RBB's service representative to complete a telephone transaction form,
listing all of the above caller identification information; (4) permitting
exchanges only if the two account registrations are identical; (5) requiring
that redemption proceeds be sent only by check to the account owners of record
at the address of record, or by wire only to the owners of record at the bank
account of record; (6) sending a written confirmation for each telephone
transaction to the owners of record at the address of record within five (5)
Business Days of the call; and (7) maintaining tapes of telephone transactions
for six months, if the Fund elects to record shareholder telephone transactions.
For accounts held of record by broker-dealers (other than the Distributor),
financial institutions, securities dealers, financial planners and other
industry professionals, additional documentation or information regarding the
scope of a caller's authority is required. Finally, for telephone transactions
in accounts held jointly, additional information regarding other account holders
is required. Telephone transactions will not be permitted in connection with IRA
or other retirement plan accounts or by an attorney-in-fact under a power of
attorney.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value for each class of a fund is calculated by adding the
value of the proportionate interest of the class in a fund's securities, cash
and other assets, deducting the actual and accrued liabilities of the class and
dividing by the result of outstanding shares of the class. The net asset value
of each class is calculated independently of each other class. The net asset
values are calculated as of 4:00 p.m. Eastern Time on each Business Day.
Valuation of securities held by the Fund is as follows: securities traded
on a national securities exchange or on the NASDAQ National Market System are
valued at the last reported sale price that day; securities traded on a national
securities exchange or on the NASDAQ National Market System for which there were
no sales on that day and securities traded on other over-the-counter markets for
which market quotations are readily available are valued at the mean of the bid
and asked prices; and securities for which market quotations are not readily
available are valued at fair market value as determined in good faith by or
under the direction of RBB's Board of Directors. The amortized cost method of
valuation may also be used with respect to debt obligations with sixty days or
less remaining to maturity.
With the approval of RBB's Board of Directors, the Fund may use a pricing
service, bank or broker-dealer experienced in such matters to value the Fund's
securities. A more detailed discussion of net asset value and security valuation
is contained in the Statement of Additional Information.
11
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Fund to the Fund's shareholders. All
distributions are reinvested in the form of additional full and tractional
Shares unless a shareholder elects otherwise.
The Fund will declare and pay dividends from net investment income annually
and pays them in the calendar year in which they are declared, generally in
December. Net realized capital gains (including net short-term capital gains),
if any, will be distributed at least annually.
TAXES
- --------------------------------------------------------------------------------
The following discussion is only a brief summary of some of the important
tax considerations generally affecting the Fund and its shareholders and is not
intended as a substitute for careful tax planning. Accordingly, investors in the
Fund should consult their tax advisers with specific reference to their own tax
situation.
The Fund will elect to be taxed as a regulated investment company for
federal income tax purposes. So long as the Fund qualifies for this tax
treatment, it will be relieved of federal income tax on amounts distributed to
shareholders. The Fund intends to make sufficient actual or deemed distributions
prior to the end of each calendar year to avoid liability for federal income or
excise tax.
Fund distributions to shareholders, unless otherwise exempt, will be
taxable (except distributions that are treated for federal income tax purposes
as a return of capital) regardless of whether the distributions are received in
cash or reinvested in additional shares. Distributions out of the "net capital
gain" (the excess of net long-term capital gain over net short-term capital
loss), if any, of a Fund will be taxed to shareholders as long-term capital gain
regardless of the length of time a shareholder has held his Shares. All other
taxable distributions are taxed to shareholders as ordinary income.
RBB will send written notices to shareholders annually regarding the tax
status of distributions made by the Fund. Dividends declared in October,
November or December of any year payable to shareholders of record on a
specified date in such a month will be deemed to have been received by the
shareholders on December 31, if such dividends are paid during January of the
following year.
Investors should be careful to consider the tax implications of buying
shares just prior to a distribution. The price of shares purchased at that time
will reflect the amount of the forthcoming distribution. Those investors
purchasing shares just prior to a distribution will nevertheless be taxed on the
entire amount of the distribution received, although the distribution is, in
effect, a return of capital.
Shareholders who sell or redeem shares, or exchange shares representing
interests in one Fund for shares representing interests in another Fund, will
generally recognize capital gain or loss for federal income tax purposes. The
gain or loss will be long-term capital gain or loss if the shares have been held
for more than twelve months, and short-term otherwise, except that a loss on
shares held six months or less will be treated as long-term capital loss to the
extent of any capital gains distribution received on the shares.
Shareholders who are nonresident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships are generally subject to
different U.S. Federal income tax treatment from that described above. In
particular, such shareholders will generally not be subject to U.S. federal
income tax on capital gains on or with respect to their shares, and other
distributions to them will be subject to 30% withholding tax unless such tax is
reduced or eliminated under an applicable tax treaty.
12
<PAGE>
MULTI-CLASS STRUCTURE
- --------------------------------------------------------------------------------
The Fund offers one other class of shares, Investor Shares, which are
offered directly to individual investors, pursuant to separate prospectuses.
Shares of each class represent equal pro rata interests in the Fund and accrue
dividends and calculate net asset value and performance quotations in the same
manner. The Fund will quote performance of the Investor Shares separately from
Institutional Shares. Because of different expenses paid by the Institutional
Shares, the total return on such shares can be expected, at any time, to be
different than the total return on Investor Shares. Information concerning this
other class may be obtained by calling the Fund at (888) 261-4073.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
RBB has authorized capital of thirty billion shares of Common Stock, $.001
par value per share, of which 97 billion shares are currently classified into
18.326 different classes of Common Stock. See "Description of Shares" in the
Statement of Additional Information."
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO BOSTON PARTNERS LARGE CAP VALUE FUND AND DESCRIBE
ONLY THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS AND OTHER
MATTERS RELATING TO BOSTON PARTNERS LARGE CAP VALUE FUND.
Each share that represents an interest in the Fund has an equal
proportionate interest in the assets belonging to the Fund with each other share
that represents an interest in the Fund, even where a share has a different
class designation than another share representing an interest in the Fund.
Shares of the Fund do not have preemptive or conversion rights. When issued for
payment as described in this Prospectus, Shares will be fully paid and
non-assessable.
RBB currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
Holders of Shares of the Fund will vote in the aggregate and not by class
on all matters, except where otherwise required by law. Further, shareholders of
all investment portfolios of RBB will vote in the aggregate and not by portfolio
except as otherwise required by law or when RBB's Board of Directors determines
that the matter to be voted upon affects only the interests of the shareholders
of a particular investment portfolio. (See the Statement of Additional
Information under "Additional Information Concerning Fund Shares" for examples
when the 1940 Act requires voting by investment portfolio or by class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of Common Stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of RBB.
13
<PAGE>
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to the Fund's
transfer agent, PFPC, at Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-tree (888) 261-4073.
SHARE CERTIFICATES
In the interest of economy and convenience, physical certificates
representing Shares in the Fund are not normally issued.
HISTORICAL PERFORMANCE INFORMATION
For the period from commencement of operations (January 2, 1997) through
August 31, 1998, the total return since inception (not annualized) for the
Institutional Class of Shares of the Fund was as follows:
Unannualized investment returns for the period ended August 31, 1998
Since
Inception
---------
Boston Partners Large Cap Value Fund
(Institutional Shares) ................................... 11.85%
The total return assumes reinvestment of all dividends and capital gains
and reflects expense reimbursements and investment advisory fee waivers in
effect. Without these expense reimbursements or waivers, the Fund's performance
would have been lower. Of course, past performance is no guarantee of future
results. Investment return and principal value will fluctuate, so that Shares,
when redeemed, may be worth more or less than the original cost. For more
information on performance, see "Performance Information" in the Statement of
Additional Information.
The table below presents the Composite performance history of certain of
the Adviser's managed accounts on an annualized basis for the period ended
August 31, 1998. The Composite is comprised of the Adviser's institutional
accounts and other privately managed accounts with investment objectives,
policies and strategies substantially similar to those of the Fund, although the
accounts have longer operating histories than the Fund, which commenced
operations on January 2, 1997. The Composite performance information includes
the reinvestment of dividends received in the underlying securities and reflects
investment advisory fees. The privately managed accounts in the Composite are
only available to the Adviser's institutional advisory clients. The past
performance of the accounts which comprise the Composite is not indicative of
the future performance of the Fund. These accounts have lower investment
advisory fees than the Fund, and the Composite performance figures would have
been lower if subject to the higher fees and expenses incurred by the Fund.
These private accounts are also not subject to the same investment limitations,
diversification requirements and other restrictions, which are imposed upon
mutual funds under the 1940 Act and the Internal Revenue Code, which, if
imposed, may have adversely affected the performance results of the Composite.
Listed below the performance history for the Composite is a comparative index
comprised of securities similar to those in which accounts contained in the
Composite are invested.
14
<PAGE>
Annualized investment returns for the period ended August 31, 1998
Since
One Year Inception*
-------- ----------
Composite Performance ....................... (14.68)% 6.97%
S&P 500 Stock Index ......................... 8.11% 18.64%
* The Adviser commenced managing these accounts on January 2, 1997.
The S&P 500 Stock Index is an unmanaged index of 500 selected common
stocks, most of which are listed on the NYSE.
FUTURE PERFORMANCE INFORMATION
From time to time, the Fund may advertise its performance, including
comparisons to other mutual funds with similar investment objectives and to
stock or other relevant indices. All such advertisements will show the average
annual total return over one, five and ten year periods or, if such periods have
not yet elapsed, shorter periods corresponding to the life of the Fund. Such
total return quotations will be computed by finding the compounded average
annual total return for each time period that would equate the assumed initial
investment of $1,000 to the ending redeemable value, net of fees, according to a
required standardized calculation. The standard calculation is required by the
SEC to provide consistency and comparability in investment company advertising.
The Fund may also from time to time include in such advertising an aggregate
total return figure or a total return figure that is not calculated according to
the standardized formula in order to compare more accurately the Fund's
performance with other measures of investment return. For example, the Fund's
total return may be compared with data published by Lipper Analytical Services,
Inc., CDA Investment Technologies, Inc. or Weisenberger Investment Company
Service, or with the performance of the Standard & Poor's 500 Stock Index or the
Dow Jones Industrial Average. Performance information may also include
evaluation of the Fund by nationally recognized ranking services and information
as reported in financial publications such as Business Week, Fortune,
Institutional Investor, Money Magazine, Forbes, Barron's, The Wall Street
Journal, The New York Times, or other national, regional or local publications.
All advertisements containing performance data will include a legend disclosing
that such performance data represents past performance and that the investment
return and principal value of an investment will fluctuate so that an investor's
Shares, when redeemed, may be worth more or less than their original cost.
15
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN RBB'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RBB OR ITS DISTRIBUTOR.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY RBB OR BY THE DISTRIBUTOR IN
ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
---------------------
TABLE OF CONTENTS
PAGE
----
INTRODUCTION. ........................................................... 2
FINANCIAL HIGHLIGHTS. ................................................... 2
INVESTMENT OBJECTIVES AND POLICIES. ..................................... 4
INVESTMENT LIMITATIONS. ................................................. 5
RISK FACTORS. ........................................................... 5
YEAR 2000 ............................................................... 6
ASSET ALLOCATION ........................................................ 6
MANAGEMENT. ............................................................. 6
HOW TO PURCHASE SHARES .................................................. 8
HOW TO REDEEM AND EXCHANGE SHARES. ...................................... 9
NET ASSET VALUE. ........................................................ 11
DIVIDENDS AND DISTRIBUTIONS. ............................................ 12
TAXES. .................................................................. 12
MULTI-CLASS STRUCTURE. .................................................. 13
DESCRIPTION OF SHARES. .................................................. 13
OTHER INFORMATION. ...................................................... 14
INVESTMENT ADVISER
Boston Partners Asset Management, L.P.
Boston, Massachusetts
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
TRANSFER AGENT AND ADMINISTRATOR
PFPC Inc.
Wilmington, Delaware
DISTRIBUTOR AND ADMINISTRATIVE SERVICES AGENT
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
[GRAPHIC OMITTED]
<PAGE>
PROSPECTUS
DECEMBER 29, 1998
BOSTON PARTNERS
LARGE CAP
VALUE FUND
(INVESTOR SHARES)
bp
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
[LOGO OMITTED]
<PAGE>
BOSTON PARTNERS LARGE CAP VALUE FUND
(INVESTOR CLASS)
OF
THE RBB FUND, INC.
Boston Partners Large Cap Value Fund (the "Fund") is an investment
portfolio of The RBB Fund, Inc. ("RBB"), an open-end management investment
company. The shares of the Investor Class ("Shares") offered by this Prospectus
represent interests in the Fund. The Fund is a diversified fund that seeks
long-term growth of capital, with current income as a secondary objective,
primarily through equity investments, such as common stocks and securities
convertible into common stocks. It seeks to achieve its objectives by investing
at least 65% of its total assets in a diversified portfolio consisting of equity
securities of issuers with a market capitalization of primarily $1 billion or
greater and identified by Boston Partners Asset Management, L.P. (the "Adviser")
as equity securities that it believes possess value characteristics. The Adviser
examines various factors in determining the value characteristics of such
issuers, including, but not limited to, price to book value ratios and price to
earnings ratios. These value characteristics are examined in the context of the
issuer's operating and financial fundamentals such as return on equity, earnings
growth and cash flow.
This Prospectus contains information that a prospective investor needs to
know before investing. Please keep it for future reference. A Statement of
Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained free of charge from the Fund by calling (888)
261-4073. The Prospectus and the Statement of Additional Information are
available for reference, along with other related material, on the SEC Internet
Web Site (http://www.sec.gov).
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR ENDORSED
BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK AND
SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENTS IN SHARES OF THE FUND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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PROSPECTUS December 29, 1998
<PAGE>
INTRODUCTION
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RBB is an open-end management investment company incorporated under the
laws of the State of Maryland currently operating or proposing to operate
seventeen separate investment portfolios. The Shares offered by this Prospectus
represent interests in the Boston Partners Large Cap Value Fund. RBB was
incorporated in Maryland on February 29, 1988.
FEE TABLE
The following table illustrates annual operating expenses incurred by
Investor Shares of the Fund (after fee waivers and expense reimbursements) for
the fiscal period ended August 31, 1998, as a percentage of average daily net
assets. An example based on the summary is also shown.
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (after waivers)* .................................. .49%
12b-1 Fees (after waivers)* ....................................... .25%
Other Expenses (after waivers and reimbursements)* ................ .51%
----
Total Fund Operating Expenses (after waivers and
expense reimbursements)* ....................................... 1.25%
====
* In the absence of expense reimbursements and fee waivers, Management Fees
would be 0.75%, 12b-1 Fees would be 0.25%, Other Expenses would be .74%, and
Total Fund Operating Expenses would be 1.74%. Management Fees and 12b-1 Fees
are each based on average daily net assets and are calculated daily and paid
monthly.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the
Fund, assuming (1) a 5% annual return and (2) redemption at the end of each time
period:
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
Boston Partners Large Cap Value Fund ... $12 $38 $65 $144
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. (For more complete descriptions of the various costs and expenses,
see "Management" and "Distribution of Shares" below.) The Fee Table reflects
expense reimbursements and voluntary waivers of Management Fees and 12b-1 Fees
for the Fund. However, the Adviser, the Distributor and the other service
providers are under no obligation with respect to such expense reimbursements
and waivers and there can be no assurance that any future expense reimbursements
and waivers of Management Fees and 12b-1 Fees will not vary from the figures
reflected in the Fee Table.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
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The "Financial Highlights" presented below set forth certain investment
results for shares of the Investor Class of the Fund for the period January 16,
1997 (date of inception) through August 31, 1997 and for the fiscal year ended
August 31, 1998. The financial data included in this table should be read in
conjunction with the financial statements and notes thereto and the unqualified
report of PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), RBB's inde-
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<PAGE>
pendent accountant, which are incorporated by reference into the Statement of
Additional Information. Further information about the performance of the
Investor Class of the Fund is available in the Annual Report to Shareholders.
Both the Statement of Additional Information and the Annual Report to
Shareholders may be obtained from the Fund free of charge by calling the
telephone number on page 1 of the prospectus.
BOSTON PARTNERS LARGE CAP VALUE FUND
(FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE FISCAL JANUARY 16, 1997*
YEAR ENDED THROUGH
AUGUST 31, 1998 AUGUST 31, 1997
--------------- -----------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE**
NET ASSET VALUE, BEGINNING OF PERIOD .......................................... $12.45 $10.20
------ ------
Net investment income(1) ...................................................... 0.06 0.02
Net realized and unrealized gain/(loss) on investments(2) ..................... (1.27) 2.23
------ ------
Net increase/(decrease) in net assets resulting from operations ............... (1.21) 2.25
------ ------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ......................................................... (0.06) --
Net realized capital gains .................................................... (0.48) --
------ ------
NET ASSET VALUE, END OF PERIOD ................................................ $10.70 $12.45
====== ======
Total investment return(3) .................................................... (10.28)% 22.06%
====== ======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) ..................................... $6,150 $ 683
Ratio of expenses to average net assets***(1)(4) .............................. 1.19% 1.11%(5)
Ratio of net investment income to average net assets***(1) .................... 0.68% .91%(5)
Portfolio turnover rate**** ................................................... 111.68% 67.16%(6)
<FN>
* Commencement of operations.
** Calculated based on shares outstanding on the first and last day of the
period, except dividends and distributions, if any, which are based on
actual shares outstanding on the dates of distributions.
*** Annualized.
**** Not annualized.
(1) Reflects waivers and reimbursements.
(2) The amount shown for a share outstanding throughout the period is not in
accord with the change in the aggregate gains and losses in investments
during the period because of the timing of sales and repurchases of Fund
shares in relation to fluctuating net asset value during the respective
periods.
(3) Total return is calculated assuming a purchase of shares on the first day
and a sale of shares on the last day of the period reported and will
include reinvestments of dividends and distributions, if any. Total
return is not annualized.
(4) Without the waiver of advisory, 12b-1, administration and transfer agent
fees and without the reimbursement of certain operating expenses, the
ratio of expenses to average net assets annualized for the period ended
August 31, 1997 and the year ended August 31, 1998 would have been 3.05%
and 1.74%, respectively, for the Investor Class.
(5) Annualized.
(6) Not annualized.
</FN>
</TABLE>
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INVESTMENT OBJECTIVE AND POLICIES
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The Fund's investment objective is to provide long-term growth of capital
with current income as a secondary objective. The Fund seeks to achieve its
objective by investing at least 65% of its total assets in a diversified
portfolio consisting primarily of equity securities, such as common stocks and
securities convertible into common stocks, of issuers with a market
capitalization of $1 billion or greater and identified by the Adviser as
possessing value characteristics.
The Adviser examines various factors in determining the value
characteristics of such issuers, including but not limited to price to book
value ratios and price to earnings ratios. These value characteristics are
examined in the context of the issuer's operating and financial fundamentals
such as return on equity, earnings growth and cash flow.
The Adviser selects securities for the Fund based on a continuous study of
trends in industries and companies, earnings power and growth and other
investment criteria. In general, the Fund's investments are broadly diversified
over a number of industries and, as a matter of policy, the Fund will not invest
25% or more of its total assets in any one industry.
The Fund may invest up to 20% of its total assets in securities of foreign
issuers. Investing in securities of foreign issuers involves considerations not
typically associated with investing in securities of companies organized and
operating in the United States. Foreign securities generally are denominated and
pay dividends or interest in foreign currencies. The Fund may hold from time to
time various foreign currencies pending their investment in foreign securities
or their conversion into U.S. dollars. The value of the assets of the Fund as
measured in U.S. dollars may therefore be affected favorably or unfavorably by
changes in exchange rates. There may be less publicly available information
concerning foreign issuers than is available with respect to U.S. issuers.
Foreign securities may not be registered with the U.S. Securities and Exchange
Commission, and generally, foreign companies are not subject to uniform
accounting, auditing and financial reporting requirements comparable to those
applicable to U.S. issuers. See "Investment Objective and Policies--Foreign
Securities" in the Statement of Additional Information.
The Fund may invest the remainder of its total assets in equity securities
of issuers with lower capitalizations; derivative securities; debt securities
issued by U.S. banks, corporations and other business organizations that are
investment grade securities; and debt securities issued by the U.S. Government
or government agencies.
In accordance with the above-mentioned policies, the Fund may also invest
in indexed securities, convertible securities, repurchase agreements, reverse
repurchase agreements, dollar rolls, financial futures contracts, options on
futures contracts and may lend portfolio securities. See "Investment Objective
and Policies" in the Statement of Additional Information.
The Fund may invest in registered investment companies and investment funds
in foreign countries subject to the provisions of the Investment Company Act of
1940, as amended (the "1940 Act") and as discussed in "Investment Objective and
Policies" in the Statement of Additional Information. If the Fund invests in
such investment companies, the Fund will bear its proportionate share of the
costs incurred by such companies, including investment advisory fees.
While the Adviser intends to fully invest the Fund's assets at all times in
accordance with the above-mentioned policies, the Fund reserves the right to
hold up to 100% of its assets, as a temporary defensive measure, in cash and
eligible U.S. dollar-denominated money market instruments. The Adviser will
determine when market conditions warrant temporary defensive measures.
The Fund's investment objective and the policies described above may be
changed by RBB's Board of Directors without the affirmative vote of the holders
of a majority of the outstanding Shares representing interests in the Fund.
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<PAGE>
INVESTMENT LIMITATIONS
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The Fund may not change the following investment limitations without
shareholder approval. (A complete list of the investment limitations that cannot
be changed without such a vote of the shareholders is contained in the Statement
of Additional Information under "Investment Objective and Policies.")
The Fund may not:
1. Purchase the securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, if immediately after and as a result of such purchases,
more than 5% of the value of the Fund's total assets would be invested in
the securities of such issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by the Fund, except that up to 25%
of the value of the Fund's total assets may be invested without regard to
such limitations.
2. Purchase any securities which would cause, at the time of purchase,
25% or more of the value of the total assets of the Fund to be invested in
the obligations of issuers in any single industry, provided that there is
no limitation with respect to investments in U.S. Government obligations.
3. Borrow money or issue senior securities, except that the Fund may
borrow from banks and enter into reverse repurchase agreements and dollar
rolls for temporary purposes in amounts up to one-third of the value of its
total assets at the time of such borrowing; or mortgage, pledge or
hypothecate any assets, except in connection with any such borrowing and
then in amounts not in excess of one-third of the value of the Fund's total
assets at the time of such borrowing. The Fund will not purchase securities
while its aggregate borrowings (including reverse repurchase agreements,
dollar rolls and borrowings from banks) are in excess of 5% of its total
assets. Securities held in escrow or separate accounts in connection with
the Fund's investment practices are not considered to be borrowings or
deemed to be pledged for purposes of this limitation.
If a percentage restriction under one of the Fund's investment policies or
restrictions or the use of assets is adhered to at the time a transaction is
effected, later changes in percentage resulting from changing values will not be
considered a violation (except with respect to any restrictions that may apply
to borrowings or senior securities issued by the Fund).
RISK FACTORS
- --------------------------------------------------------------------------------
As with other mutual funds, there can be no assurance that the Fund will
achieve its objective. The net asset value per share of Shares representing
interests in the Fund will fluctuate as the values of its portfolio securities
change in response to changing conditions in the equity market. An investment in
the Fund is not intended to constitute a balanced investment program. Other risk
factors are discussed above under "Investment Objective and Policies" and in the
Statement of Additional Information under "Investment Objective and Polices."
EUROPEAN CURRENCY UNIFICATION
Many European countries are about to adopt a single European currency, the
euro. On January 1, 1999, the euro will become legal tender for all countries
participating in the Economic and Monetary Union ("EMU"). A new European Central
Bank will be created to manage the monetary policy of the new unified region. On
the same date, the exchange rates will be irrevocably fixed between the EMU
member countries. National currencies will continue to circulate until they are
replaced by euro coins and bank notes by the middle of 2002.
This change is likely to significantly impact the European capital markets
in which the Fund may invest and may result in the Fund facing additional risks
in pursuing its investment objective. These risks, which include, but are not
limited to, uncertainty as to the proper tax treatment of the currency
conversion, volatility of currency exchange rates
5
<PAGE>
as a result of the conversion, uncertainty as to capital market reaction,
conversion costs that may affect issuer profitability and creditworthiness, and
lack of participation by some European countries, may increase the volatility of
the Fund's net asset value per share.
YEAR 2000
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Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
ASSET ALLOCATION
From time to time, the Fund may experience relatively large purchases or
redemptions due to asset allocation decisions made by the Advisor for clients
receiving Asset Allocation account management services involving investments in
the Fund. These transactions may have a material effect on the Fund, since
redemptions caused by reallocations may result in the Fund selling portfolio
securities, and purchases caused by reallocations may result in the Fund
receiving additional cash that it will have to invest. While it is impossible to
predict the overall impact of these transactions over time, there could be
adverse effects on portfolio mangement to the extent that the Fund may be
required to sell securities at times when it would not otherwise do so, or
receive cash that cannot be invested in an expeditious manner. These
transactions could also have tax consequences if the sale of securities results
in gains and could also increase transaction costs. The Advisor is committed to
minimizing the impact of such transactions on the Fund to the extent it is
consistent with pursuing the investment objectives of clients for which the
Advisor provides Asset Allocation account management services involving
investments in the Fund and monitors the impact of asset allocation decisions on
the Fund.
GENERAL
Investment methods described in this Prospectus are among those which the
Fund has the power to utilize. Some may be employed on a regular basis; others
may not be used at all. Accordingly, reference to any particular method or
technique carries no implication that it will be utilized or, if it is, that it
will be successful.
MANAGEMENT
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BOARD OF DIRECTORS
The business and affairs of RBB and the Fund are managed under the
direction of RBB's Board of Directors.
INVESTMENT ADVISER
Boston Partners Asset Management, L.P. located at 28 State Street, 21st
Floor, Boston, Massachusetts 02109 serves as the Fund's investment adviser. The
Adviser provides investment management and investment advisory services to
investment companies and other institutional accounts that had aggregate total
assets under management as of October 31, 1998, in excess of $16.0 billion. The
adviser is organized as a Delaware limited partnership whose sole general
partner is Boston Partners, Inc., a Delaware corporation.
6
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Subject to the supervision and direction of RBB's Board of Directors, the
Adviser manages the Fund's portfolio in accordance with the Fund's investment
objective and policies, makes investment decisions for the Fund, places orders
to purchase and sell securities, and employs professional portfolio managers and
securities analysts who provide research services to the Fund. For its services
to the Fund, the Adviser is entitled to receive under the Advisory Agreement a
monthly advisory fee computed at an annual rate of 0.75% of the Fund's average
daily net assets. The Adviser intends to limit mutual fund operation expenses to
1.25% of the Fund's average daily net assets.
PORTFOLIO MANAGEMENT
The day-to-day portfolio management of the Fund is the responsibility of
Mark E. Donovan and Wayne S. Sharp who are senior portfolio managers of the
Adviser. Mr. Donovan is Chairperson of the Adviser's Equity Strategy Committee
which oversees the investment activities of the Adviser's $5.5 billion of Large
Cap Value institutional equity assets under management. Prior to joining the
Adviser on April 16, 1995, Mr. Donovan was a Senior Vice President and Vice
Chairman of The Boston Company Asset Management, Inc.'s Equity Policy Committee.
Mr. Donovan is a Chartered Financial Analyst and has over fifteen years of
investment experience. Ms. Sharp is Vice Chairperson of the Adviser's Equity
Strategy Committee and has over twenty-one years of investment experience. Prior
to joining the Adviser on April 16, 1995, Ms. Sharp was a Senior Vice President
and member of the Equity Policy Committee of The Boston Company Asset
Management, Inc. Ms. Sharp is also a Chartered Financial Analyst.
ADMINISTRATOR
PFPC Inc. ("PFPC") serves as administrator to the Fund and generally
assists the Fund in all aspects of its administration and operations, including
matters relating to the maintenance of financial records and accounting. For its
services, PFPC is entitled to receive a fee under an administration and
accounting services agreement calculated at an annual rate of .125% of the
Fund's average daily net assets with a minimum fee of $75,000 payable monthly on
a pro rata basis.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholder servicing
agreements with registered broker-dealers who have entered into dealer
agreements with the Distributor ("Authorized Dealers") for the provision of
certain shareholder support services to customers of such Authorized Dealers who
are shareholders of the Fund. The services provided and the fees payable by the
Fund for these services are described in the Statement of Additional Information
under "Investment Advisory, Distribution and Servicing Arrangements."
DISTRIBUTOR
Provident Distributors, Inc. ("PDI"), with offices at Four Falls Corporate
Center, West Conshohocken, Pennsylvania 19428, acts as distributor for the
Shares pursuant to a distribution agreement (the "Distribution Agreement") with
RBB on behalf of the Shares.
EXPENSES
The expenses of the Fund are deducted from its total income before
dividends are paid. Any general expenses of RBB that are not readily
identifiable as belonging to a particular investment portfolio of RBB will be
allocated among all investment portfolios of RBB based upon the relative net
assets of the investment portfolios. The Investor Class of the Fund pays its own
distribution fees, and may pay a different share than the other classes of the
Fund of other expenses
7
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(excluding advisory and custodial fees) if those expenses are actually incurred
in a different amount by the Investor Class or if it receives different
services.
The Adviser may assume expenses of the Fund from time to time. To the
extent any service providers assume expenses of the Fund, such assumption of
expenses will have the effect of lowering the Fund's overall expense ratio and
increasing its yield to investors.
DISTRIBUTION OF SHARES
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The Board of Directors of RBB has approved and adopted a Distribution
Agreement and Plan of Distribution for the Shares (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to receive
from the Fund a distribution fee with respect to the Shares, which is accrued
daily and paid monthly, of up to 0.25% on an annualized basis of the average
daily net assets of the Shares. The actual amount of such compensation under the
Plan is agreed upon by RBB's Board of Directors and by the Distributor in the
Distribution Agreement. The Distributor may, in its discretion, from time to
time waive voluntarily all or any Portion of its distribution fee.
Amounts paid to the Distributor under the Plan may be used by the
Distributor to cover expenses that are related to (i) the sale of the Shares,
(ii) ongoing servicing and/or maintenance of the accounts of Shareholders, and
(iii) sub-transfer agency services, subaccounting services or administrative
services related to the sale of the Shares, all as set forth in the Plan. The
Distributor may delegate some or all of these functions to Service Agents. See
"How to Purchase Shares--Purchases Through Intermediaries."
The Plan obligates the Fund, during the period it is in effect, to accrue
and pay to the Distributor on behalf of the Shares the fee agreed to under the
Distribution Plan. Payments under the Plan are not tied exclusively to expenses
actually incurred by the Distributor, and payments may exceed distribution
expenses actually incurred.
PURCHASES THROUGH INTERMEDIARIES
Shares of the Fund may be available through certain brokerage firms,
financial institutions and programs sponsored by other industry professionals
(collectively, "Service Organizations"). Certain features of the Shares, such as
the initial and subsequent investment minimums and certain trading restrictions,
may be modified or waived by Service Organizations. Service Organizations may
impose transaction or administrative charges or other direct fees, which charges
or fees would not be imposed if Shares are purchased directly from the Fund.
Therefore, a client or customer should contact the Service Organization acting
on his behalf concerning the fees (if any) charged in connection with a purchase
or redemption of Shares and should read this Prospectus in light of the terms
governing his accounts with the Service Organization. Service Organizations will
be responsible for promptly transmitting client or customer purchase and
redemption orders to the Fund in accordance with their agreements with clients
or customers. Service Organizations or, if applicable, their designees that have
entered into agreements with the Fund or its agent may enter confirmed purchase
orders on behalf of clients and customers, with payment to follow no later than
the Fund's pricing on the following Business Day. If payment is not received by
such time, the Service Organization could be held liable for resulting fees or
losses. The Fund will be deemed to have received a purchase or redemption order
when a Service Organization, or, if applicable, its authorized designee, accepts
a purchase or redemption order in good order. Orders received by the Fund in
good order will be priced at the Fund's net asset value next computed after they
are accepted by the Service Organization or its authorized designee.
For administration, subaccounting, transfer agency and/or other services,
the Adviser or the Distributor or their affiliates may pay Service Organizations
and certain recordkeeping organizations with whom they have entered into
agreements a fee of up to .35% (the "Service Fee") of the average annual value
of accounts with the Fund maintained by such Service Organizations or
recordkeepers. The Service Fee payable to any one Service Organization or
recordkeeper is determined based upon a number of factors, including the nature
and quality of the services provided, the
8
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operations processing requirements of the relationship and the standardized fee
schedule of the Service Organization or recordkeeper.
The Adviser, the Distributor or either of their affiliates may, at their
own expense, provide promotional incentives for qualified recipients who support
the sale of Shares consisting of securities dealers who have sold Shares, or
others, including banks and other financial institutions, under special
arrangements. Incentives may include opportunities to attend business meetings,
conferences, sales or training programs for recipients, employees or clients and
other programs or events and may also include opportunities to participate in
advertising or sales campaigns and/or shareholder services and programs
regarding one or more Boston Partners Funds. Travel, meals and lodging may also
be paid in connection with these promotional activities. In some instances,
these incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or expected sale of
significant amounts of Shares.
HOW TO PURCHASE SHARES
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GENERAL
Shares representing interests in the Fund are offered continuously for sale
by the Distributor and may be purchased without imposition of a sales charge.
Shares may be purchased initially by completing the application included in this
Prospectus and forwarding the application to the Fund's transfer agent, PFPC.
Purchases of Shares may be effected by wire to an account to be specified by
PFPC or by mailing a check or Federal Reserve Draft, payable to the order of
"The Boston Partners Large Cap Value Fund," c/o PFPC Inc., P.O. Box 8852,
Wilmington, Delaware 19899-8852. The name of the Fund, Boston Partners Large Cap
Value Fund, must also appear on the check or Federal Reserve Draft. Shareholders
may not purchase shares of the Boston Partners Large Cap Value Fund with a check
issued by a third party and endorsed over to the Fund. Federal Reserve Drafts
are available at national banks or any state bank which is a member of the
Federal Reserve System. Initial investments in the Fund must be at least $2,500
and subsequent investments must be at least $100. The Fund reserves the right to
suspend the offering of Shares for a period of time or to reject any purchase
order.
Shares may be purchased on any Business Day. A "Business Day" is any day
that the New York Stock Exchange, Inc. (the "NYSE") is open for business.
Currently, the NYSE is closed on weekends and New Year's Day, Dr. Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day and on the preceding Friday or
subsequent Monday when one of these holidays falls on a Saturday or Sunday.
The price paid for Shares purchased is based on the net asset value next
computed after a purchase order is received in good order by the Fund or its
agents. Orders received by the Fund or its agents prior to the close of the NYSE
(generally 4:00 p.m. Eastern Time) are priced at that Business Day's net asset
value. Orders received by the Fund or its agents after the close of the NYSE are
priced at the net asset value next determined on the following Business Day. In
those cases where an investor pays for Shares by check, the purchase will be
effected at the net asset value next determined after the Fund or its agents
receives the order and the completed application.
Provided that the investment is at least $2,500, an investor may also
purchase Shares by having his bank or her broker wire Federal Funds to PFPC. An
investor's bank or broker may impose a charge for this service. The Fund does
not currently impose a service charge for effecting wire transfers, but reserves
the right to do so in the future. In order to ensure prompt receipt of an
investor's Federal Funds wire for an initial investment, it is important that an
investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (888) 261-4073, and
provide PFPC with your name, address, telephone number, Social Security or
Tax Identification Number, the Fund selected, the amount being wired, and
by
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<PAGE>
which bank. PFPC will then provide an investor with a Fund account number.
Investors with existing accounts should also notify PFPC prior to wiring
funds.
B. Instruct your bank or broker to wire the specified amount, together with
your assigned account number, to PFPC's account with PNC Bank:
PNC Bank, N.A.
Philadelphia, PA 19103
ABA NUMBER: 0310-0005-3
CREDITING ACCOUNT NUMBER: 86-1108-2507
FROM: (name of investor)
ACCOUNT NUMBER: (Investor's account number with the Fund)
FOR PURCHASE OF: Boston Partners Large Cap Value Fund
AMOUNT: (amount to be invested)
C. Fully complete and sign the application and mail it to the address shown
thereon. PFPC will not process redemptions until it receives a fully
completed and signed application.
For subsequent investments, an investor should follow steps A and B above.
AUTOMATIC INVESTING
Additional investments in Shares may be made automatically by authorizing
the Fund's transfer agent to withdraw funds from your bank account. Investors
desiring to participate in the Automatic Investment Plan should call the Fund's
transfer agent, PFPC, at (888) 261-4073 to obtain the appropriate forms.
RETIREMENT PLANS
Shares may be purchased in conjunction with individual retirement accounts
("IRAs") and rollover IRAs where PFPC Trust Company acts as Custodian. For
further information as to applications and annual fees, contact PFPC at (888)
261-4073. To determine whether the benefits of an IRA are available and/or
appropriate, a shareholder should consult with a tax adviser.
HOW TO REDEEM AND EXCHANGE SHARES
- --------------------------------------------------------------------------------
REDEMPTION BY MAIL
Shareholders may redeem for cash some or all of their Shares of the Fund at
any time. To do so, a written request in proper form must be sent directly to
Boston Partners Large Cap Value Fund, c/o PFPC Inc., P.O. Box 8852, Wilmington,
Delaware 19899-8852. There is no charge for a redemption.
A request for redemption must be signed by all persons in whose names the
Shares are registered. Signatures must conform exactly to the account
registration. If the proceeds of the redemption would exceed $10,000, or if the
proceeds are not to be paid to the record owner at the record address, or if the
shareholder is a corporation, partnership, trust or fiduciary, signature(s) must
be guaranteed according to the procedures described below under "How to Redeem
and Exchange Shares -- Exchange Privilege."
Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption. In some cases, however,
other documents may be necessary. In the case of shareholders holding share
certificates, the certificates for the shares being redeemed must accompany the
redemption request. Additional documentary evidence of authority is also
required by the Fund's transfer agent in the event redemption is requested by a
corporation, partnership, trust, fiduciary, executor or administrator.
10
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<PAGE>
<TABLE>
<CAPTION>
BOSTON PARTNERS LARGE CAP VALUE FUND bp
(INVESTOR CLASS) BOSTON PARTNERS ASSET MANAGEMENT, L.P.
--------------------------------------
<S> <C>
ACCOUNT APPLICATION
PLEASE NOTE: Do not use this form to open a retirement plan account. For an IRA application or help with this Application, please
call 1-888-261-4073.
(Please check the appropriate box(es) below.)
1.
Account
Registration:
|_| Individual |_| Joint Tenant |_| Other
---------------------------------------------------------------------------------------------------------
Name SOCIAL SECURITY NUMBER OR TAX ID # OF PRIMARY OWNER
---------------------------------------------------------------------------------------------------------
NAME OF JOINT OWNER JOINT OWNER SOCIAL SECURITY NUMBER OR TAX ID #
For joint accounts, the account registrants will be joint tenants with right of survivorship and not
tenants in common unless tenants in common or community property registrations are requested.
- --------------
GIFT TO MINOR: |_| Uniform Gifts/Transfer to Minor's Act
- --------------
---------------------------------------------------------------------------------------------------------
NAME OF ADULT CUSTODIAN (ONLY ONE PERMITTED)
---------------------------------------------------------------------------------------------------------
NAME OF MINOR (ONLY ONE PERMITTED)
---------------------------------------------------------------------------------------------------------
MINOR'S SOCIAL SECURITY NUMBER AND DATE OF BIRTH
- -------------
CORPORATION,
PARTNERSHIP, TRUST
OR OTHER ENTITY:
- -------------
---------------------------------------------------------------------------------------------------------
NAME OF CORPORATION, PARTNERSHIP, OR OTHER NAME(S) OF TRUSTEE(S)
---------------------------------------------------------------------------------------------------------
TAXPAYER IDENTIFICATION NUMBER
2.
Mailing
Address: ---------------------------------------------------------------------------------------------------------
STREET OR P.O. BOX AND/OR APARTMENT NUMBER
---------------------------------------------------------------------------------------------------------
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------
DAY PHONE NUMBER EVENING PHONE NUMBER
3.
Investment
Information:
Minimum initial investment of $2,500 Amount of investment $____________
Make the check payable to Boston Partners Large Cap Value Fund.
Shareholders may not purchase shares of this Fund with a check issued by a third party and endorsed
over to the Fund.
- -------------
DISTRIBUTION NOTE: Dividends and capital gains may be reinvested or paid by check. If not options are selected
OPTIONS: below, both dividends and capital gains will be reinvested in additional Fund shares.
- -------------
DIVIDENDS |_| Pay by check |_| Reinvest |_| CAPITAL GAINS |_| Pay by check |_| Reinvest |_|
- -------------
SYSTEMATIC To select this portion please fill out the information below:
WITHDRAWAL
PLAN: Amount__________________________________________ Startup Month ____________________________________
- -------------
<PAGE>
- A minimum amount value of $10,000 in a single account is required to establish a Systematic
Withdrawal Plan.
- Payments will be made on or near the 25th of the month.
Please check one of the following options: _______ Please mail checks to Address of Record
(Named in Section 2)
_______ Please electronically credit my Bank of Record
(Named in Section 5)
4.
Telephone
Redemption:
To use this option, you must initial the appropriate line below.
I authorize the Transfer Agent to accept instructions from any persons to redeem or exchange shares in
my account(s) by telephone in accordance with the procedures and conditions set forth in the Fund's
current prospectus.
________________________ ____________________ Redeem shares, and send the proceeds to
individual initial joint initial the address of record.
________________________ ____________________ Exchange shares for shares of The Boston
individual initial joint initial Partners Mid Cap Value Fund, Bond Fund,
Micro Cap Value Fund, Market Neutral Fund.
5.
Automatic The Account Investment Plan which is available to shareholders of the Fund, makes possible regularly
Investment scheduled purchases of Fund shares to allow dollar-cost averaging. The Fund's Transfer Agent can
Plan: arrange for an amount of money selected by you to be deducted from your checking account and used to
purchase shares of the Fund.
Please debit $________ from my checking account (named below on or about the 20th of the month. PLEASE
ATTACH AN UNSIGNED, VOIDED CHECK.
|_| Monthly |_| Every Alternate Month |_| Quarterly |_| Other
- ------------- ---------------------------------------------------------------------------------------------------------
BANK OF RECORD: BANK NAME STREET ADDRESS OR P.O. BOX
- -------------
---------------------------------------------------------------------------------------------------------
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------
BANK ABA NUMBER BANK ACCOUNT NUMBER
6.
Signatures
The undersigned warrants that I (we) have full authority and, if a natural person, I (we) am (are)
of legal age to purchase shares pursuant to this Account Application, and I (we) have received a
current prospectus for the Fund in which I (we) am (are) investing.
Under the Interest and Dividend Tax Compliance Act of 1983, the Fund is required to have the following
certification: Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number (or I am waiting for a
number to be issued to), and
(2) I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have
not been notified by the Internal Revenue Service that I am subject to 31% backup withholding as a result
of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
NOTE: YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY
SUBJECT TO BACKUP WITHHOLDING BECAUSE YOU HAVE FAILED TO REPORT ALL INTEREST AND DIVIDENDS ON YOUR TAX
RETURN. THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATION REQUIRED TO AUDIT BACKUP WITHHOLDING.
---------------------------------------------------------------------------------------------------------
SIGNATURE OF APPLICANT DATE
---------------------------------------------------------------------------------------------------------
PRINT NAME TITLE (IF APPLICABLE)
---------------------------------------------------------------------------------------------------------
SIGNATURE OF JOINT OWNER DATE
---------------------------------------------------------------------------------------------------------
PRINT NAME TITLE (IF APPLICABLE)
(If you are signing for a corporation, you must indicate corporate office or title. If you wish
additional signatories on the account, please include a corporate resolution. If signing as a fiduciary,
you must indicate capacity.)
For information on additional options, such as IRA Applications, rollover requests for qualified
retirement plans, or for wire instructions, please call us at 1-888-261-4073.
MAIL COMPLETED ACCOUNT APPLICATION AND CHECK TO: THE BOSTON PARTNERS LARGE CAP VALUE FUND
C/O PFPC INC.
P.O. BOX 8852
WILMINGTON, DE 19899-8852
</TABLE>
<PAGE>
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<PAGE>
SYSTEMATIC WITHDRAWAL PLAN
If your account has a value of at least $10,000, you may establish a
Systematic Withdrawal Plan and receive regular periodic payments. A request to
establish a Systematic Withdrawal Plan must be submitted in writing to PFPC at
P.O. Box 8852, Wilmington, Delaware 19899-8852. Each withdrawal redemption will
be processed on or about the 25th of the month and mailed as soon as possible
thereafter. There are no service charges for maintenance, the minimum amount
that you may withdraw each period is $100. (This is merely the minimum amount
allowed and should not be mistaken for a recommended amount.) The holder of a
Systematic Withdrawal Plan will have any income dividends and any capital gains
distributions reinvested in full and fractional shares at net asset value. To
provide funds for payment, Shares will be redeemed in such amount as is
necessary at the redemption price, which is net asset value next determined
after the Fund's receipt of a redemption request. Redemption of Shares may
reduce or possibly exhaust the Shares in your account, particularly in the event
of a market decline. As with other redemptions, a redemption to make a
withdrawal payment is a sale for federal income tax purposes. Payments made
pursuant to a Systematic Withdrawal Plan cannot be considered as actual yield or
income since part of such payments may be a return of capital.
You will ordinarily not be allowed to make additional investments of less
than the aggregate annual withdrawals under the Systematic Withdrawal Plan
during the time you have the plan in effect and, while a Systematic Withdrawal
Plan is in effect, you may not make periodic investments under the Automatic
Investment Plan. You will receive a confirmation of each transaction showing the
sources of the payment and the Share and cash balance remaining in your plan.
The plan may be terminated on written notice by the shareholder or by the Fund
and will terminate automatically if all Shares are liquidated or withdrawn from
the account or upon the death or incapacity of the shareholder. You may change
the amount and schedule of withdrawal payments or suspend such payments by
giving written notice to the Fund's transfer agent at least seven Business Days
prior to the end of the month preceding a scheduled payment.
INVOLUNTARY REDEMPTION
The Fund reserves the right to redeem a shareholder's account at any time
the net asset value of the account falls below $500 as the result of a
redemption or an exchange request. Shareholders will be notified in writing that
the value of their account is less than $500 and will be allowed 30 days to make
additional investments before the redemption is processed.
PAYMENT OF REDEMPTION PROCEEDS
In all cases, the redemption price is the net asset value per share next
determined after the request for redemption is received in proper form by the
Fund or its agents. Payment for Shares redeemed is made by check mailed within
seven days after acceptance by the Fund or its agents of the request and any
other necessary documents in proper order. Such payment may be postponed or the
right of redemption suspended as permitted by the 1940 Act. If the Shares to be
redeemed have been recently purchased by check, the Fund's transfer agent may
delay mailing a redemption check, which may be a period of up to 15 days,
pending a determination that the check has cleared. The Fund has elected to be
governed by Rule 18f-1 under the 1940 Act so that it is obligated to redeem its
shares solely in cash up to the lesser of $250,000 or 1% of its net asset value
during any 90-day period for any one shareholder of a portfolio.
EXCHANGE PRIVILEGE
The exchange privilege is available to shareholders residing in any state
in which the Shares being acquired may be legally sold. A shareholder may
exchange Shares of the Fund for Investor Shares of any other Boston Partners
Fund of RBB, subject to the restrictions described under "Exchange Privilege
Limitations" below. Such exchange will be effected at the net asset value of the
exchanged Fund and the net asset value of the Fund being acquired next
determined after receipt of a request for an exchange by the Fund or its agents.
An exchange of Shares will be treated as a sale for federal income tax purposes.
See "Taxes." A shareholder wishing to make an exchange may do so by sending a
written request to PFPC.
11
<PAGE>
If the exchanging shareholder does not currently own Investor Shares of the
Boston Partners Fund into which he would like to exchange, a new account will be
established with the same registration, dividend and capital gain options as the
account from which shares are exchanged, unless otherwise specified in writing
by the shareholder with all signatures guaranteed. A signature guarantee may be
obtained from a domestic bank or trust company, broker, dealer, clearing agency
or savings association who are participants in a medallion program recognized by
the Securities Transfer Association. The three recognized medallion programs are
Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion
Program (SEMP) and New York Stock Exchange, Inc. Medallion Signature Program
(MSP). Signature guarantees that are not part of these programs will not be
accepted. The exchange privilege may be modified or terminated at any time, or
from time to time, by RBB, upon 60 days' written notice to shareholders.
If an exchange is to a new account in the acquired Fund, the dollar value
of Investor Shares acquired must equal or exceed that Fund's minimum for a new
account; if to an existing account, the dollar value must equal or exceed that
Fund's minimum for subsequent investments. If any amount remains in the Fund
from which the exchange is being made, such amount must not drop below the
minimum account value required by the Fund.
EXCHANGE PRIVILEGE LIMITATIONS
The Fund's exchange privilege is not intended to afford shareholders a way
to speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Fund and increase transactions costs, the Fund has established
a policy of limiting excessive exchange activity.
Shareholders are entitled to six (6) exchange redemptions (at least 30 days
apart) from the Fund during any twelve-month period. Notwithstanding these
limitations, the Fund reserves the right to reject any purchase request
(including purchases by exchange) that is deemed to be disruptive to efficient
portfolio management.
TELEPHONE TRANSACTIONS
In order to request an exchange or redemption by telephone, a shareholder
must have completed and returned an account application containing the
appropriate telephone election. To add a telephone option to an existing account
that previously did not provide for this option, a Telephone Authorization Form
must be filed with PFPC. This form is available from PFPC.
Once this election has been made, the shareholder may simply contact PFPC
by telephone to request the exchange or redemption by calling (888) 261-4073.
Neither RBB, the Fund, the Distributor, the Administrator nor any other Fund
agent will be liable for any loss, liability, cost or expense for following
RBB's telephone transaction procedures described below or for following
instructions communicated by telephone that they reasonably believe to be
genuine.
RBB's telephone transaction procedures include the following measures: (1)
requiring the appropriate telephone transaction privilege forms; (2) requiring
the caller to provide the names of the account owners, the account social
security number and name of the Fund, all of which must match RBB's records; (3)
requiring RBB's service representative to complete a telephone transaction form,
listing all of the above caller identification information; (4) permitting
exchanges only if the two account registrations are identical; (5) requiring
that redemption proceeds be sent only by check to the account owners of record
at the address of record, or by wire only to the owners of record at the bank
account of record; (6) sending a written confirmation for each telephone
transaction to the owners of record at the address of record within five (5)
Business Days of the call; and (7) maintaining tapes of telephone transactions
for six months, if the Fund elects to record shareholder telephone transactions.
For accounts held of record by broker-dealers (other than the Distributor),
financial institutions, securities dealers, financial planners and other
industry professionals, additional documentation or information regarding the
scope of a caller's authority is required. Finally, for telephone transactions
in accounts held jointly, additional information regarding other account holders
is required. Telephone
12
<PAGE>
transactions will not be permitted in connection with IRA or other retirement
plan accounts or by an attorney-in-fact under a power of attorney.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value for each class of a fund is calculated by adding the
value of the proportionate interest of the class in a fund's securities, cash
and other assets, deducting the actual and accrued liabilities of the class and
dividing the result by the number of outstanding shares of the class. The net
asset value of each class is calculated independently from each other class. The
net asset values are calculated as of 4:00 p.m. Eastern Time on each Business
Day.
Valuation of securities held by the Fund is as follows: securities traded
on a national securities exchange or on the NASDAQ National Market System are
valued at the last reported sale price that day; securities traded on a national
securities exchange or on the NASDAQ National Market System for which there were
no sales on that day and securities traded on other over-the-counter markets for
which market quotations are readily available are valued at the mean of the bid
and asked prices; and securities for which market quotations are not readily
available are valued at fair market value as determined in good faith by or
under the direction of RBB's Board of Directors. The amortized cost method of
valuation may also be used with respect to debt obligations with sixty days or
less remaining to maturity.
With the approval of RBB's Board of Directors, the Fund may use a pricing
service, bank or broker-dealer experienced in such matters to value the Fund's
securities. A more detailed discussion of net asset value and security valuation
is contained in the Statement of Additional Information.
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Fund to the Fund's shareholders. All
distributions are reinvested in the form of additional full and fractional
shares unless a shareholder elects otherwise.
The Fund will declare and pay dividends from net investment income
annually, and pays them in the calendar year in which they are declared,
generally in December. Net realized capital gains (including net short-term
capital gains), if any, will be distributed at least annually.
TAXES
- --------------------------------------------------------------------------------
The following discussion is only a brief summary of some of the important
tax considerations generally affecting the Fund and its shareholders and is not
intended as a substitute for careful tax planning. Accordingly, investors in the
Fund should consult their tax advisers with specific reference to their own tax
situation.
The Fund will elect to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended. So long as the
Fund qualifies for this tax treatment, it will be relieved of federal income tax
on amounts distributed to shareholders, but shareholders, unless otherwise
exempt, will pay income or capital gains taxes on amounts so distributed (except
distributions that are treated as a return of capital) regardless of whether
such distributions are paid in cash or reinvested in additional shares.
Distributions out of the "net capital gain" (the excess of net long-term
capital gain over net short-term capital loss), if any, of the Fund will be
taxed to shareholders as long-term capital gain regardless of the length of time
a shareholder has held his shares, whether such gain was reflected in the price
paid for the shares, or whether such gain was attributable to bonds bearing
tax-exempt interest. All other distributions, to the extent they are taxable,
are taxed to shareholders as ordinary income.
13
<PAGE>
RBB will send written notices to shareholders annually regarding the tax
status of distributions made by the Fund. Dividends declared in December of any
year payable to shareholders of record on a specified date in such a month will
be deemed to have been received by the shareholders on December 31, provided
such dividends are paid during January of the following year. The Fund intends
to make sufficient actual or deemed distributions prior to the end of each
calendar year to avoid liability for federal excise tax.
Investors should be careful to consider the tax implications of buying
shares just prior to a distribution. The price of shares purchased at that time
will reflect the amount of the forthcoming distribution. Those investors
purchasing shares immediately prior to a distribution will nevertheless be taxed
on the entire amount of the distribution received, although the distribution is,
in effect, a return of capital.
Shareholders who exchange shares representing interests in one Fund for
shares representing interests in another Fund will generally recognize gain or
loss for federal income tax purposes.
Shareholders who are nonresident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships may be subject to
different U.S. federal income tax treatment.
MULTI-CLASS STRUCTURE
- --------------------------------------------------------------------------------
The Fund offers one other class of shares, Institutional Shares, which are
offered directly to institutional investors, pursuant to separate prospectuses.
Shares of each class represent equal pro rata interests in the Fund and accrue
dividends and calculate net asset value and performance quotations in the same
manner. The Fund will quote performance of the Institutional Shares separately
from Investor Shares. Because of different expenses paid by the Investor Shares,
the total return on such shares can be expected, at any time, to be different
than the total return on Institutional Shares. Information concerning these
other classes may be obtained by calling the Fund at (888) 261-4073.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
RBB has authorized capital of thirty billion shares of Common Stock, $.001
par value per share, of which 18.326 billion shares are currently classified
into 97 different classes of Common Stock. See "Description of Shares" in the
Statement of Additional Information.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE BOSTON PARTNERS LARGE CAP VALUE FUND AND DESCRIBE
ONLY THE INVESTMENT OBJECTIVES AND POLICIES, OPERATIONS, CONTRACTS AND OTHER
MATTERS RELATING TO THE BOSTON PARTNERS LARGE CAP VALUE FUND.
Each share that represents an interest in the Fund has an equal
proportionate interest in the assets belonging to the Fund with each other share
that represents an interest in the Fund, even where a share has a different
class designation than another share representing an interest in the Fund.
Shares of the Fund do not have preemptive or conversion rights. When issued for
payment as described in this Prospectus, Shares will be fully paid and
non-assessable.
RBB currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, the Fund will assist in shareholder communication in such
matters.
Holders of Shares of the Fund will vote in the aggregate and not by class
on all matters, except where otherwise required by law. Further, shareholders of
all investment portfolios of RBB will vote in the aggregate and not by portfolio
except as otherwise required by law or when RBB's Board of Directors determines
that the matter to be voted upon
14
<PAGE>
affects only the interests of the shareholders of a particular investment
portfolio. (See the Statement of Additional Information under "Additional
Information Concerning Fund Shares" for examples of when the 1940 Act requires
voting by investment portfolio or by class.) Shareholders of the Fund are
entitled to one vote for each full share held (irrespective of class or
portfolio) and fractional votes for fractional shares held. Voting rights are
not cumulative and, accordingly, the holders of more than 50% of the aggregate
shares of Common Stock of the Fund may elect all of the directors.
As of November 16, 1998 to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of RBB.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to the Fund's
transfer agent, PFPC, at Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (888) 261-4073.
SHARE CERTIFICATES
In the interest of economy and convenience, physical certificates
representing shares in the Fund are not normally issued.
HISTORICAL PERFORMANCE INFORMATION
For the period from commencement of operations (January 16, 1997) through
August 31, 1998, the total return since inception (not annualized) for the
Investor Class of Shares of the Fund was as follows:
Unannualized investment returns for the period ended August 31, 1998
Since
Inception
---------
Boston Partners Large Cap Value Fund
(Investor Shares) ....................................... 9.51%
The total return assumes the reinvestment of all dividends and capital
gains and reflects expense reimbursements and investment advisory fee and 12b-1
fee waivers in effect. Without these expense reimbursements or waivers, the
Fund's performance would have been lower. Of course, past performance is no
guarantee of future results. Investment return and principal value will
fluctuate, so that Shares, when redeemed, may be worth more or less than the
original cost. For more information on performance, see "Performance
Information" in the Statement of Additional Information.
The table below presents the Composite performance history of certain of
the Adviser's managed accounts on an annualized basis for the period ended
August 31, 1998. The Composite is comprised of the Adviser's institutional
accounts and other privately managed accounts with investment objectives,
policies and strategies substantially similar to those of the Fund, although the
accounts have longer operating histories than the Fund, which commenced
operations on January 16, 1997. The Composite performance information includes
the reinvestment of dividends received in the underlying securities and reflects
the payment of investment advisory fees. The privately managed accounts in the
Composite are only available to the Adviser's institutional advisory clients.
The past performance of the funds and accounts which comprise the Composite is
not indicative of or a substitute for the future performance of the Fund. These
accounts have lower investment advisory fees than the Fund, and the Composite
performance figures would have
15
<PAGE>
been lower if subject to the higher fees and expenses incurred by the Fund.
These private accounts are also not subject to the same investment limitations,
diversification requirements and other restrictions which are imposed upon
mutual funds under the 1940 Act and the Internal Revenue Code, which, if
imposed, may have adversely affected the performance results of the Composite.
Listed below the performance history for the Composite is a comparative index
comprised of securities similar to those in which accounts contained in the
Composite are invested.
Annualized investment returns for the period ended August 31, 1998
Since
One Year Inception
-------- ---------
Composite Performance ..................... (10.28)% 5.75%
S&P 500 Stock Index ....................... 8.11% 16.30%
* The Adviser commenced managing these accounts on June 1, 1995.
The S&P 500 Stock Index is an unmanaged index of 500 selected common
stocks, most of which are listed on the NYSE.
FUTURE PERFORMANCE INFORMATION
From time to time, the Fund may advertise its performance, including
comparisons to other mutual funds with similar investment objectives and to
stock or other relevant indices. All such advertisements will show the average
annual total return over one, five and ten year periods or, if such periods have
not yet elapsed, shorter periods corresponding to the life of the Fund. Such
total return quotations will be computed by finding the compounded average
annual total return for each time period that would equate the assumed initial
investment of $1,000 to the ending redeemable value, net of fees, according to a
required standardized calculation. The standard calculation is required by the
SEC to provide consistency and comparability in investment company advertising.
The Fund may also from time to time include in such advertising an aggregate
total return figure or a total return figure that is not calculated according to
the standardized formula in order to compare more accurately the Fund's
performance with other measures of investment return. For example, the Fund's
total return may be compared with data published by Lipper Analytical Services,
Inc., CDA Investment Technologies, Inc. or Weisenberger Investment Company
Service, or with the performance of the Standard & Poor's 500 Stock Index or the
Dow Jones Industrial Average. Performance information may also include
evaluation of the Fund by nationally recognized ranking services and information
as reported in financial publications such as Business Week, Fortune,
Institutional Investor, Money Magazine, Forbes, Barron's, The Wall Street
Journal, The New York Times, or other national, regional or local publications.
All advertisements containing performance data will include a legend disclosing
that such performance data represents past performance and that the investment
return and principal value of an investment will fluctuate so that an investor's
Shares, when redeemed, may be worth more or less than their original cost.
16
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<PAGE>
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<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR PROSPECTUS MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN RBB'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RBB OR ITS DISTRIBUTOR.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY RBB OR BY THE DISTRIBUTOR IN
ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
------------------------------------------
TABLE OF CONTENTS
PAGE
----
INTRODUCTION ................................................................ 2
FINANCIAL HIGHLIGHTS ........................................................ 2
INVESTMENT OBJECTIVES AND POLICIES .......................................... 4
INVESTMENT LIMITATIONS ...................................................... 5
RISK FACTORS ................................................................ 5
YEAR 2000 ................................................................... 6
MANAGEMENT .................................................................. 6
DISTRIBUTION OF SHARES ...................................................... 8
HOW TO PURCHASE SHARES ...................................................... 9
HOW TO REDEEM AND EXCHANGE SHARES ........................................... 10
NET ASSET VALUE ............................................................. 13
DIVIDENDS AND DISTRIBUTIONS ................................................. 13
TAXES ....................................................................... 13
MULTI-CLASS STRUCTURE ....................................................... 14
DESCRIPTION OF SHARES ....................................................... 14
OTHER INFORMATION ........................................................... 15
INVESTMENT ADVISER
Boston Partners Asset Management, L.P.
Boston, Massachusetts
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
TRANSFER AGENT AND ADMINISTRATOR
PFPC Inc.
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
[LOGO OMITTED]
<PAGE>
PROSPECTUS
DECEMBER 29, 1998
BOSTON PARTNERS
MID CAP
VALUE FUND
(INSTITUTIONAL SHARES)
bp
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
[LOGO GRAPHIC OMITTED]
<PAGE>
BOSTON PARTNERS MID CAP VALUE FUND
(INSTITUTIONAL CLASS)
OF
THE RBB FUND, INC.
Boston Partners Mid Cap Value Fund (the "Fund") is an investment portfolio
of The RBB Fund, Inc. ("RBB"), an open-end management investment company. The
shares of the Institutional Class ("Shares") offered by this Prospectus
represent interests in the Fund. The Fund is a diversified fund that seeks
long-term growth of capital, with current income as a secondary objective,
primarily through equity investments, such as common stocks. It seeks to achieve
its objectives by investing at least 65% of its total assets in a diversified
portfolio consisting of equity securities of issuers with a market
capitalization of primarily between $200 million and $6 billion, and identified
by Boston Partners Asset Management, L.P. (the "Adviser") as equity securities
that it believes possess value characteristics. The Adviser examines various
factors in determining the value characteristics of such issuers, including, but
not limited to, price to book value ratios and price to earnings ratios. These
value characteristics are examined in the context of the issuer's operating and
financial fundamentals such as return on equity, earnings growth and cash flow.
This Prospectus contains information that a prospective investor needs to
know before investing. Please keep it for future reference. A Statement of
Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained free of charge from the Fund by calling (888)
261-4073. The Prospectus and the Statement of Additional Information are
available for reference, along with other related materials, on the SEC Internet
Web Site (http://www.sec.gov).
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR ENDORSED
BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK AND
SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENTS IN SHARES OF THE FUND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
EXPENSE TABLE
- --------------------------------------------------------------------------------
The following table illustrates annual operating expenses incurred by
Institutional Shares of the Fund (after fee waivers and expense reimbursements)
for the period ended August 31, 1998, as a percentage of average daily net
assets. An example based on the summary is also shown.
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (after waivers)*. ................................. .58%
12b-1 Fees ........................................................ 0.00%
Other Expenses (after waivers and expense reimbursements)*. ....... .42%
----
Total Fund Operating Expenses (after waivers and expense
reimbursements)* ................................................. 1.00%
====
* In the absence of fee waivers and expense reimbursements, Management Fees
would be 0.80%; Other Expenses would be .77% and Total Fund Operating Expenses
would be 1.57%. Management Fees are based on average daily net assets and are
calculated daily and paid monthly.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the
Fund, assuming (1) a 5% annual return and (2) redemption at the end of each time
period:
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
Boston Partners Mid Cap Value Fund .... $10 $32 $55 $122
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. (For more complete descriptions of the various costs and expenses,
see "Management" below.) The Fee Table reflects expense reimbursements and
voluntary waivers of Management Fees and administrative services fees for the
Fund, which are expected to be in effect during the current fiscal year.
However, the Adviser, the Administrative Services Agent and the Fund's other
service providers are under no obligation with respect to such expense
reimbursements and waivers and there can be no assurance that any future expense
reimbursements and waivers of Management Fees will not vary from the figures
reflected in the Fee Table.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The "Financial Highlights" presented below set forth certain investment
results for shares of the Institutional Class of the Fund for the period June 2,
1997 (date of inception) through August 31, 1997 and for the fiscal year ended
August 31, 1998. The financial data included in this table should be read in
conjunction with the financial statements and notes thereto and the unqualified
report of PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), RBB's
independent accountant, which are incorporated by reference into the Statement
of Additional Information. Further information about the performance of the
Institutional Class of the Fund is available in the Annual Report to
Shareholders. Both the Statement of Additional Information and the Annual Report
to Shareholders may be obtained from the Fund free of charge by calling the
telephone number on page 1 of the prospectus.
2
<PAGE>
BOSTON PARTNERS MID CAP VALUE FUND
(FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE FISCAL JUNE 2, 1997*
YEAR ENDED THROUGH
AUGUST 31, 1998 AUGUST 31, 1997
--------------- ---------------
<S> <C> <C>
Per Share Operating Performance**
Net asset value, beginning of period ........................................ $11.01 $10.00
------ ------
Net investment income (1) ................................................... 0.01 .01
Net realized and unrealized gain/(loss) on investments(2) ................... (1.39) 1.00
------ ------
Net increase/(decrease) in net assets resulting
from operations .......................................................... (1.38) 1.01
------ ------
DIVIDEND TO SHAREHOLDERS FROM:
Net investment income ....................................................... (0.01) --
Net realized capital gains. ................................................. (0.14) --
------ ------
Net asset value, end of period. ............................................. $9.48 $11.01
====== ======
Total investment return(3). ................................................. (12.73)% 10.10%
====== ======
Ratios/Supplemental Data
Net assets, end of period (000) .......................................... $67,568 $3,750
Ratio of expenses to
average net assets(1)(4) ............................................... 1.00% 1.00%(5)
Ration of net investment income to
average net assets(1) .................................................. 0.13% 1.08%(5)
Portfolio turnover rate .................................................. 167.86% 21.80%(6)
<FN>
* Commencement of operations.
** Calculated based on shares outstanding on the first and last day of the
period, except for dividends and distributions, if any, which are based
on actual shares outstanding on the dates of distributions.
(1) Reflects waivers and reimbursements.
(2) The amount shown for a share outstanding throughout the period is not in
accord with the change in the aggregate gains and losses in investments
during the period because of the timing of sales and repurchases of Fund
shares in relation to fluctuating net asset value during the respective
periods.
(3) Total return is calculated assuming a purchase of shares on the first day
and a sale of shares on the last day of the period reported and will
include reinvestments of dividends and distributions, if any. Total
return is not annualized.
(4) Until May 29, 1998, the Institutional Class of the Fund paid .03% of its
average daily net assets to the Fund's previous Distributor in 12b-1
fees. From May 29, 1998 through August 31, 1998, the Institutional Class
of the Fund paid .03% of its average daily net assets to the
Administrative Services Agent pursuant to the Administrative Services
Plan for Institutional Shares, in lieu of 12b-1 fees. Without the waiver
of advisory, 12b-1, administrative services, administration and transfer
agent fees and without the reimbursement of certain operating expenses,
the ratio of expenses to average net assets annualized for the period
ended August 31, 1997 and the year ended August 31, 1998 would have been
12.37% and 1.57%, respectively, for the Institutional Class.
(5) Annualized.
(6) Not annualized.
</FN>
</TABLE>
3
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
RBB is an open-end management investment company incorporated under the
laws of the State of Maryland currently operating or proposing to operate
seventeen separate investment portfolios. The Shares offered by this Prospectus
represent interest in the Boston Partners Mid Cap Value Fund. RBB was
incorporated in Maryland on February 29, 1988.
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is to provide long-term growth of capital
with current income as a secondary objective. The Fund seeks to achieve its
objective by investing, under normal market conditions, at least 65% of its
total assets in a diversified portfolio consisting primarily of equity
securities such as common stocks of issuers with a market capitalization of
between $200 million and $6 billion and identified by the Adviser as equity
securities that it believes possess value characteristics.
The Adviser examines various factors in determining the value
characteristics of such issuers, including, but not limited to, price to book
value ratios and price to earnings ratios. These value characteristics are
examined in the context of the issuer's operating and financial fundamentals
such as return on equity, earnings growth and cash flow.
The Adviser selects securities for the Fund based on a continuous study of
trends in industries and companies, earning power and growth and other
investment criteria. In general, the Fund's investments are broadly diversified
over a number of industries and, as a matter of policy, the Fund will not invest
25% or more of its total assets in any one industry.
The Fund may invest up to 20% of its total assets in securities of foreign
issuers. Investing in securities of foreign issuers involves considerations not
typically associated with investing in securities of companies organized and
operating in the United States. Foreign securities generally are denominated and
pay dividends or interest in foreign currencies. The Fund may hold from time to
time various foreign currencies pending their investment in foreign securities
or their conversion into U.S. dollars. The value of the assets of the Fund as
measured in U.S. dollars may therefore be affected favorably or unfavorably by
changes in exchange rates. There may be less publicly available information
concerning foreign issuers than is available with respect to U.S. issuers.
Foreign securities may not be registered with the U.S. Securities and Exchange
Commission, and generally, foreign companies are not subject to uniform
accounting, auditing and financial reporting requirements comparable to those
applicable to U.S. issuers. See "Investment Objective and Policies--Foreign
Securities" in the Statement of Additional Information.
The Fund may invest the remainder of its total assets in equity securities
of issuers with lower or higher capitalizations; derivative securities; debt
securities issued by U.S. banks, corporations and other business organizations
that are investment grade securities; and debt securities issued by the U.S.
government or government agencies.
In accordance with the above-mentioned policies, the Fund may also invest
in indexed securities, repurchase agreements, reverse repurchase agreements,
dollar rolls, financial futures contracts, options on futures contracts and may
lend portfolio securities. See "Investment Objectives and Policies" in the
Statement of Additional Information.
The Fund may invest in registered investment companies and investment funds
in foreign countries subject to the provisions of the Investment Company Act of
1940, as amended (the "1940 Act"), and as discussed in "Investment Objectives
and Policies" in the Statement of Additional Information. If the Fund invests in
such investment companies, the Fund will bear its proportionate share of the
costs incurred by such companies, including investment advisory fees.
4
<PAGE>
While the Adviser intends to fully invest the Fund's assets at all times in
accordance with the above-mentioned policies, the Fund reserves the right to
hold up to 100% of its assets, as a temporary defensive measure, in cash and
eligible U.S. dollar-denominated money market instruments. The Adviser would
determine when market conditions warrant temporary defensive measures.
The Fund's investment objectives and the policies described above may be
changed by RBB's Board of Directors without the affirmative vote of the holders
of a majority of the outstanding Shares representing interests in the Fund.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Fund may not change the following investment limitations without
shareholder approval. (A complete list of the investment limitations that cannot
be changed without such a vote of the shareholders is contained in the Statement
of Additional Information under "Investment Objectives and Policies.")
The Fund may not:
1. Purchase the securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, if immediately after and as a result of such purchase
more than 5% of the value of the Fund's total assets would be invested in
the securities of such issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by the Fund, except that up to 25%
of the value of the Fund's total assets may be invested without regard to
such limitations.
2. Purchase any securities which would cause, at the time of purchase,
25% or more of the value of the total assets of the Fund to be invested in
the obligations of issuers in any single industry, provided that there is
no limitation with respect to investments in U.S. Government obligations.
3. Borrow money or issue senior securities, except that the Fund may
borrow from banks and enter into reverse repurchase agreements and dollar
rolls for temporary purposes in amounts up to one-third of the value of its
total assets at the time of such borrowing; or mortgage, pledge or
hypothecate any assets, except in connection with any such borrowing and
then in amounts not in excess of one-third of the value of the Fund's total
assets at the time of such borrowing. The Fund will not purchase securities
while its aggregate borrowings (including reverse repurchase agreements,
dollar rolls and borrowings from banks) are in excess of 5% of its total
assets. Securities held in escrow or separate accounts in connection with
the Fund's investment practices are not considered to be borrowings or
deemed to be pledged for purposes of this limitation.
If a percentage restriction under one of the Fund's investment policies or
restrictions or the use of assets is adhered to at the time a transaction is
effected, later changes in percentage resulting from changing values will not be
considered a violation (except with respect to any restrictions that may apply
to borrowings or senior securities issued by the Fund).
RISK FACTORS
- --------------------------------------------------------------------------------
As with other mutual funds, there can be no assurance that the Fund will
achieve its objective. The net asset value per share of Shares representing an
interest in the Fund will fluctuate as the values of its portfolio securities
change in response to changing conditions in the equity market. An investment in
the Fund is not intended to constitute a balanced investment program. Other risk
factors are discussed above under "Investment Objective and Policies" and in the
Statement of Additional Information under "Investment Objective and Policies."
5
<PAGE>
EUROPEAN CURRENCY UNIFICATION
Many European countries are about to adopt a single European currency, the
euro. On January 1, 1999, the euro will become legal tender for all countries
participating in the Economic and Monetary Union ("EMU"). A new European Central
Bank will be created to manage the monetary policy of the new unified region. On
the same date, the exchange rates will be irrevocably fixed between the EMU
member countries. National currencies will continue to circulate until they are
replaced by euro coins and bank notes by the middle of 2002.
This change is likely to significantly impact the European capital markets
in which the Fund may invest and may result in the Fund facing additional risks
in pursuing its investment objective. These risks, which include, but are not
limited to, uncertainty as to the proper tax treatment of the currency
conversion, volatility of currency exchange rates as a result of the conversion,
uncertainty as to capital market reaction, conversion costs that may affect
issuer profitability and creditworthiness, and lack of participation by some
European countries, may increase the volatility of the Fund's net asset value
per share.
YEAR 2000
- --------------------------------------------------------------------------------
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
GENERAL
Investment methods described in this Prospectus are among those which the
Fund has the power to utilize. Some may be employed on a regular basis; others
may not be used at all. Accordingly, reference to any particular method or
technique carries no implication that it will be utilized or, if it is, that it
will be successful.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of RBB and the Fund are managed under the
direction of RBB's Board of Directors.
INVESTMENT ADVISER
Boston Partners Asset Management, L.P., located at 28 State Street, 21st
Floor, Boston, Massachusetts 02109, serves as the Fund's investment adviser. The
Adviser provides investment management and investment advisory services to
investment companies and other institutional accounts that had aggregate total
assets under management as of October 31, 1998 in excess of $16.0 billion. The
adviser is organized as a Delaware limited partnership whose sole general
partner is Boston Partners, Inc., a Delaware corporation.
Subject to the supervision and direction of the Fund's Board of Directors,
the Adviser manages the Fund's portfolio in accordance with the Fund's
investment objective and policies, makes investment decisions for the Fund,
places orders to purchase and sell securities, and employs professional
portfolio managers and securities analysts who provide research services to the
Fund. For its services to the Fund, the Adviser is paid a monthly advisory fee
computed at
6
<PAGE>
an annual rate of 0.80% of the Fund's average daily net assets. The Adviser has
notified RBB, however, that it intends to limit total Fund operating expenses to
1.00% during the current fiscal year.
PORTFOLIO MANAGEMENT
The day-to-day portfolio management of the Fund is the responsibility of
Wayne J. Archambo who is senior portfolio manager of the Adviser and a member of
the Adviser's Equity Strategy Committee. Mr. Archambo oversees the investment
activities of the Advisers' $1.5 billion of mid-capitalization activities as
well as $1 billion in small capitalization activities. Prior to joining the
Adviser in April 1995, Mr. Archambo was employed by The Boston Company Asset
Management from 1989 through April 1995 where he was a senior portfolio manager
and a member of the firm's Equity Policy Committee. Mr. Archambo has over 15
years of investment experience and is a Chartered Financial Analyst.
ADMINISTRATOR
PFPC Inc. ("PFPC") serves as administrator to the Fund and generally
assists the Fund in all aspects of its administration and operations, including
matters relating to the maintenance of financial records and accounting. For its
services, PFPC receives a fee calculated at an annual rate of .125% of the
Fund's average daily net assets, with a minimum annual fee of $75,000 payable
monthly on a pro rata basis.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC, an indirect, wholly-owned
subsidiary of PNC Bank, are located at 400 Bellevue Parkway, Wilmington,
Delaware 19809. PFPCmay enter into shareholder servicing with registered
broker-dealers who have entered into dealer agreements with the Distributor
("Authorized Dealers") for the provision of certain shareholder support services
to customers of such Authorized Dealers who are shareholders of the Fund. The
services provided and the fees payable by the Fund for these services are
described in the Statement of Additional Information under "Investment Advisory,
Distribution and Servicing Arrangements."
ADMINISTRATIVE SERVICES AGENT
Provident Distributors, Inc. ("PDI") provides certain administrative
services to the Fund's Institutional Shares not otherwise provided by PFPC.
PDI's principal business address is Four Falls Corporate Center, West
Conshohocken, Pennsylvania 19428. PDI furnishes certain internal quasi-legal,
executive and administrative services to the Fund, acts as a liaison between the
Fund and its various service providers and coordinates and assists in the
preparation of reports prepared on behalf of the Fund. For its services, PDI is
entitled to a monthly fee calculated at the annual rate of .15% of the
respective average daily net assets of the Fund's Institutional Class. PDI is
currently waiving fees in excess of .03% of the average daily net assets of the
Fund's Institutional Class.
DISTRIBUTOR
PDI acts as distributor for the Shares pursuant to a distribution agreement
(the "Distribution Agreement") with RBB on behalf of the Shares.
EXPENSES
The expenses of the Fund are deducted from its total income before
dividends are paid. Any general expenses of RBB that are not readily
identifiable as belonging to a particular investment portfolio of RBB will be
allocated among all investment portfolios of RBB based upon the relative net
assets of the investment portfolios. The Institutional Class of the Fund pays an
administrative services fee, and may pay a different share than the Investor
Class of other expenses
7
<PAGE>
(excluding advisory and custodial fees) if those expenses are actually incurred
in a different amount by the Institutional Class or if it receives different
services.
The Adviser may assume expenses of the Fund from time to time. To the
extent any service providers assume expenses of the Fund, such assumption of
expenses will have the effect of lowering the Fund's overall expense ratio and
increasing its yield to investors.
HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------
GENERAL
Shares representing an interest in the Fund are offered continuously for
sale by the Distributor. Shares may be purchased initially by completing the
application included in this Prospectus and forwarding the application to the
Fund's transfer agent, PFPC. Purchases of Shares may be effected by wire to an
account to be specified by PFPC or by mailing a check or Federal Reserve Draft,
payable to the order of "The Boston Partners Mid Cap Value Fund," c/o PFPC Inc.,
P.O. Box 8852, Wilmington, Delaware 19899-8852. The name of the Fund, Boston
Partners Mid Cap Value Fund, must also appear on the check or Federal Reserve
Draft. Shareholders may not purchase shares of the Boston Partners Mid Cap Value
Fund with a check issued by a third party and endorsed over to the Fund. Federal
Reserve Drafts are available at national banks or any state bank which is a
member of the Federal Reserve System. Initial investments in the Fund must be at
least $100,000 and subsequent investments must be at least $5,000. For purposes
of meeting the minimum initial purchase, clients which are part of endowments,
foundation or other related groups may be aggregated. The Fund reserves the
right to suspend the offering of Shares for a period of time or to reject any
purchase order.
Shares may be purchased on any Business Day. A "Business Day" is any day
that the New York Stock Exchange, Inc. (the "NYSE") is open for business.
Currently, the NYSE is closed on weekends and New Year's Day, Dr. Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day and on the preceding Friday or
subsequent Monday when one of these holidays falls on a Saturday or Sunday.
The price paid for Shares purchased is based on the net asset value next
computed after a purchase order is received in good order by the Fund or its
agents. Orders received by the Fund or its agents prior to the close of the NYSE
(generally 4:00 p.m. Eastern Time) are priced at that Business Day's net asset
value. Orders received by the Fund or its agents after its close of the NYSE are
priced at the net asset value next determined on the following Business Day. In
those cases where an investor pays for Shares by check, the purchase will be
effected at the net asset value next determined after the Fund or its agents
receives the order and the completed application.
Shares may be purchased and subsequent investments may be made by
principals and employees of the Adviser, and by their spouses and children,
either directly or through their individual retirement accounts, and by any
pension and profit-sharing plan of the Adviser, without being subject to the
minimum investment limitations.
An investor may also purchase Shares by having his bank or his broker wire
Federal Funds to PFPC. An investor's bank or broker may impose a charge for this
service. The Fund does not currently impose a service charge for effecting wire
transfers but reserves the right to do so in the future. In order to ensure
prompt receipt of an investor's Federal Funds wire for an initial investment, it
is important that an investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (888) 261-4073, and
provide PFPC with your name, address, telephone number, Social Security or Tax
Identification Number, the Fund selected, the amount being wired, and by which
bank. PFPC will then provide an investor with a Fund account number. Investors
with existing accounts should also notify PFPC prior to wiring funds.
8
<PAGE>
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<PAGE>
<TABLE>
<CAPTION>
BOSTON PARTNERS MID CAP VALUE FUND bp
(INSTITUTIONAL CLASS) BOSTON PARTNERS ASSET MANAGEMENT, L.P.
--------------------------------------
ACCOUNT APPLICATION
PLEASE NOTE: Do not use this form to open a retirement plan account. For an IRA application or help with this Application,
please call 1-888-261-4073.
<S> <C>
(Please check the appropriate box(es) below.)
1. Account Registration:
|_| Individual |_| Joint Tenant |_| Other
---------------------------------------------------------------------------------------------------------
Name SOCIAL SECURITY NUMBER OR TAX ID # OF PRIMARY OWNER
---------------------------------------------------------------------------------------------------------
NAME OF JOINT OWNER JOINT OWNER SOCIAL SECURITY NUMBER OR TAX ID #
For joint accounts, the account registrants will be joint tenants with right of survivorship and not
tenants in common unless tenants in common or community property registrations are requested.
GIFT TO MINOR: |_| UNIFORM GIFTS/TRANSFER TO MINOR'S ACT
---------------------------------------------------------------------------------------------------------
NAME OF ADULT CUSTODIAN (ONLY ONE PERMITTED)
---------------------------------------------------------------------------------------------------------
NAME OF MINOR (ONLY ONE PERMITTED)
---------------------------------------------------------------------------------------------------------
MINOR'S SOCIAL SECURITY NUMBER AND DATE OF BIRTH
CORPORATION,
PARTNERSHIP, TRUST
OR OTHER ENTITY:
---------------------------------------------------------------------------------------------------------
NAME OF CORPORATION, PARTNERSHIP, OR OTHER NAME(S) OF TRUSTEE(S)
---------------------------------------------------------------------------------------------------------
TAXPAYER IDENTIFICATION NUMBER
2. Mailing Address: ---------------------------------------------------------------------------------------------------------
STREET OR P.O. BOX AND/OR APARTMENT NUMBER
---------------------------------------------------------------------------------------------------------
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------
DAY PHONE NUMBER EVENING PHONE NUMBER
3. Investment Information: Minimum initial investment of $100,000. Amount of investment $____________
Make the check payable to Boston Partners Mid Cap Value Fund.
Shareholders may not purchase shares of this Fund with a check issued by a third party and endorsed
over to the Fund.
DISTRIBUTION NOTE: Dividends and capital gains may be reinvested or paid by check. If no options are selected
OPTIONS: below, both dividends and capital gains will be reinvested in additional Fund shares.
DIVIDENDS |_| Pay by check |_| Reinvest |_| CAPITAL GAINS |_| Pay by check |_| Reinvest |_|
<PAGE>
4. Telephone Redemption:
To use this option, you must initial the appropriate line below.
I authorize the Transfer Agent to accept instructions from any persons
to redeem or exchange shares in my account(s) by telephone in
accordance with the procedures and conditions set forth in the Fund's current prospectus.
________________________ ____________________ Redeem shares, and send the proceeds to
individual initial joint initial the address of record.
________________________ ____________________ Exchange shares for shares of The Boston
individual initial joint initial Partners Large Cap Value Fund or Boston,
Partners Bond Fund.
5. Automatic Investment
Plan: The Automatic Investment Plan which is available to shareholders of the Fund, makes possible regularly
scheduled purchases of Fund shares to allow dollar-cost averaging. The Fund's Transfer Agent can
arrange for an amount of money selected by you to be deducted from your checking account and used to
purchase shares of the Fund.
Please debit $________ from my checking account (named below) on or about the 20th of the month. PLEASE
ATTACH AN UNSIGNED, VOIDED CHECK.
|_| Monthly |_| Every Alternate Month |_| Quarterly |_| Other
---------------------------------------------------------------------------------------------------------
BANK OF RECORD: BANK NAME STREET ADDRESS OR P.O. BOX
---------------------------------------------------------------------------------------------------------
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------
BANK ABA NUMBER BANK ACCOUNT NUMBER
6. Signatures
The undersigned warrants that I (we) have full authority and, if a natural person, I (we) am (are)
of legal age to purchase shares pursuant to this Account Application, and I (we) have received a
current prospectus for the Fund in which I (we) am (are) investing.
Under the Interest and Dividend Tax Compliance Act of 1983, the Fund is required to have the following
certification:
Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have
not been notified by the Internal Revenue Service that I am subject to 31% backup withholding as a
result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
NOTE: YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY
SUBJECT TO BACKUP WITHHOLDING BECAUSE YOU HAVE FAILED TO REPORT ALL INTEREST AND DIVIDENDS ON YOUR TAX
RETURN. THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATION REQUIRED TO AUDIT BACKUP WITHHOLDING.
---------------------------------------------------------------------------------------------------------
SIGNATURE OF APPLICANT DATE
---------------------------------------------------------------------------------------------------------
PRINT NAME TITLE (IF APPLICABLE)
---------------------------------------------------------------------------------------------------------
SIGNATURE OF JOINT OWNER DATE
---------------------------------------------------------------------------------------------------------
PRINT NAME TITLE (IF APPLICABLE)
(If you are signing for a corporation, you must indicate corporate office or title. If you wish
additional signatories on the account, please include a corporate resolution. If signing as a fiduciary,
you must indicate capacity.)
For information on additional options, such as IRA Applications, rollover requests for qualified
retirement plans, or for wire instructions, please call us at 1-888-261-4073.
MAIL COMPLETED ACCOUNT APPLICATION AND CHECK TO: THE BOSTON PARTNERS MID CAP VALUE FUND
c/o PFPC INC.
P.O. BOX 8852
WILMINGTON, DE 19899-8852
</TABLE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
B. Instruct your bank or broker to wire the specified amount, together with
your assigned account number, to PFPC's account with PNC Bank:
PNC Bank, N.A.
Philadelphia, PA 19103
ABA NUMBER: 0310-0005-3
CREDITING ACCOUNT NUMBER: 86-1108-2507
FROM: (name of investor)
ACCOUNT NUMBER: (Investor's account number with the Fund)
FOR PURCHASE OF: (name of the Fund)
AMOUNT: (amount to be invested)
C. Fully complete and sign the application and mail it to the address shown
thereon. PFPC will not process purchases until it receives a fully completed and
signed application.
For subsequent investments, an investor should follow steps A and B above.
AUTOMATIC INVESTING
Additional investments in Shares may be made automatically by authorizing
the Fund's transfer agent to withdraw funds from your bank account. Investors
desiring to participate in the automatic investing program should call the
Fund's transfer agent, PFPC, at (888) 261-4073 to obtain the appropriate forms.
HOW TO REDEEM AND EXCHANGE SHARES
- --------------------------------------------------------------------------------
REDEMPTION BY MAIL
Shareholders may redeem for cash some or all of their Shares of the Fund at
any time. To do so, a written request in proper form must be sent directly to
Boston Partners Mid Cap Value Fund, c/o PFPC Inc., P.O. Box 8852, Wilmington,
Delaware 19899-8852. There is no charge for a redemption.
A request for redemption must be signed by all persons in whose names the
Shares are registered. Signatures must conform exactly to the account
registration. If the proceeds of the redemption would exceed $10,000, or if the
proceeds are not to be paid to the record owner at the record address, or if the
shareholder is a corporation, partnership, trust or fiduciary, signature(s) must
be guaranteed according to the procedures described below under "Exchange
Privilege."
Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption. In some cases, however,
other documents may be necessary. In the case of shareholders holding share
certificates, the certificates for the shares being redeemed must accompany the
redemption request. Additional documentary evidence of authority is also
required by the Fund's transfer agent in the event redemption is requested by a
corporation, partnership, trust, fiduciary, executor or administrator.
INVOLUNTARY REDEMPTION
The Fund reserves the right to redeem a shareholder's account at any time
the net asset value of the account falls below $500 as the result of a
redemption or an exchange request. Shareholders will be notified in writing that
the value of their account is less than $500 and will be allowed 30 days to make
additional investments before the redemption is processed.
PAYMENT OF REDEMPTION PROCEEDS
In all cases, the redemption price is the net asset value per share next
determined after the request for redemption is received in proper form by the
Fund or its agents. Payment for Shares redeemed is made by check mailed within
9
<PAGE>
seven days after acceptance by the Fund or its agents of the request and any
other necessary documents in proper order. Such payment may be postponed or the
right of redemption suspended as provided by the 1940 Act. If the Shares to be
redeemed have been recently purchased by check, the Fund's transfer agent may
delay mailing a redemption check, which may be a period of up to 15 days,
pending a determination that the check has cleared. The Fund has elected to be
governed by Rule 18f-1 under the 1940 Act so that a portfolio is obligated to
redeem its shares solely in cash up to the lesser of $250,000 or 1% of its net
asset value during any 90-day period for any one shareholder of a portfolio.
EXCHANGE PRIVILEGE
The exchange privilege is available to shareholders residing in any state
in which the Shares being acquired may be legally sold. A shareholder may
exchange Shares of the Fund for Institutional Shares of any other Boston
Partners Fund of RBB, subject to restrictions described under "Exchange
Privilege Limitations" below. Such exchange will be effected at the net asset
value of the exchanged Fund and the net asset value of the Fund being acquired
next determined after receipt of a request for an exchange by the Fund or its
agents. An exchange of Shares will be treated as a sale for federal income tax
purposes. See "Taxes." A shareholder wishing to make an exchange may do so by
sending a written request to PFPC.
If the exchanging shareholder does not currently own Institutional Shares
of the Fund into which he would like to exchange, a new account will be
established with the same registration, dividend and capital gain options as the
account from which shares are exchanged, unless otherwise specified in writing
by the shareholder with all signatures guaranteed. A signature guarantee may be
obtained from a domestic bank or trust company, broker, dealer, clearing agency
or savings association who are participants in a medallion program recognized by
the Securities Transfer Association. The three recognized medallion programs are
Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion
Program (SEMP) and New York Stock Exchange, Inc. Medallion Signature Program
(MSP). Signature guarantees that are not part of these programs will not be
accepted. The exchange privilege may be modified or terminated at any time, or
from time to time, by RBB, upon 60 days' written notice to shareholders.
If an exchange is to a new account in the acquired Fund, the dollar value
of Shares acquired must equal or exceed that Fund's minimum for a new account;
if to an existing account, the dollar value must equal or exceed that Fund's
minimum for subsequent investments. If any amount remains in the Fund from which
the exchange is being made, such amount must not drop below the minimum account
value required by the Fund.
EXCHANGE PRIVILEGE LIMITATIONS
The Fund's exchange privilege is not intended to afford shareholders a way
to speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Fund and increase transactions costs, the Fund has established
a policy of limiting excessive exchange activity.
Shareholders are entitled to six (6) exchange redemptions (at least 30 days
apart) from the Fund during any twelve-month period. Notwithstanding these
limitations, the Fund reserves the right to reject any purchase request
(including purchases by exchange) that is deemed to be disruptive to efficient
portfolio management.
TELEPHONE TRANSACTIONS
In order to request a telephone exchange or redemption, a shareholder must
have completed and returned an account application containing a telephone
election. To add a telephone option to an existing account that previously did
not provide for this option, a Telephone Authorization Form must be filed with
PFPC. This form is available from PFPC. Once this election has been made, the
shareholder may simply contact PFPC by telephone to request the exchange or
redemption by calling (888) 261-4073. Neither RBB, the Fund, the Distributor,
the Administrator nor any other Fund agent will be liable for any loss,
liability, cost or expense for following RBB's telephone transaction procedures
described below or for following instructions communicated by telephone that
they reasonably believe to be genuine.
10
<PAGE>
RBB's telephone transaction procedures include the following measures: (1)
requiring the appropriate telephone transaction privilege forms; (2) requiring
the caller to provide the names of the account owners, the account social
security number and name of the Fund, all of which must match RBB's records; (3)
requiring RBB's service representative to complete a telephone transaction form,
listing all of the above caller identification information; (4) permitting
exchanges only if the two account registrations are identical; (5) requiring
that redemption proceeds be sent only by check to the account owners of record
at the address of record, or by wire only to the owners of record at the bank
account of record; (6) sending a written confirmation for each telephone
transaction to the owners of record at the address of record within five (5)
Business Days of the call; and (7) maintaining tapes of telephone transactions
for six months, if the fund elects to record shareholder telephone transactions.
For accounts held of record by broker-dealers (other than the Distributor),
financial institutions, securities dealers, financial planners and other
industry professionals, additional documentation or information regarding the
scope of a caller's authority is required. Finally, for telephone transactions
in accounts held jointly, additional information regarding other account holders
is required. Telephone transactions will not be permitted in connection with IRA
or other retirement plan accounts or by an attorney-in-fact under a power of
attorney.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value for each class of a fund is calculated by adding the
value of the proportionate interest of the class in a fund's cash, securities
and other assets, deducting actual and accrued liabilities of the class and
dividing the result by the number of outstanding shares of the class. The net
asset value of each class is calculated independently of each other class. The
net asset values are calculated as of the close of regular trading on the NYSE,
generally 4:00 p.m. Eastern Time on each Business Day.
Valuation of securities held by the Fund is as follows: securities traded
on a national securities exchange or on the NASDAQ National Market System are
valued at the last reported sale price that day; securities traded on a national
securities exchange or on the NASDAQ National Market System for which there were
no sales on that day and securities traded on other over-the-counter markets for
which market quotations are readily available are valued at the mean of the bid
and asked prices; and securities for which market quotations are not readily
available are valued at fair market value as determined in good faith by or
under the direction of RBB's Board of Directors. The amortized cost method of
valuation may also be used with respect to debt obligations with sixty days or
less remaining to maturity.
With the approval of RBB's Board of Directors, the Fund may use a pricing
service, bank or broker-dealer experienced in such matters to value the Fund's
securities. A more detailed discussion of net asset value and security valuation
is contained in the Statement of Additional Information.
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Fund to the Fund's shareholders. All
distributions are reinvested in the form of additional full and fractional
Shares unless a shareholder elects otherwise.
The Fund will declare and pay dividends from net investment income annually
and pays them in the calendar year in which they are declared, generally in
December. Net realized capital gains (including net short-term capital gains),
if any, will be distributed at least annually.
11
<PAGE>
TAXES
- --------------------------------------------------------------------------------
The following discussion is only a brief summary of some of the important
tax considerations generally affecting the Fund and its shareholders and is not
intended as a substitute for careful tax planning. Accordingly, investors in the
Fund should consult their tax advisers with specific reference to their own tax
situation.
The Fund will elect to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended. So long as the
Fund qualifies for this tax treatment, it will be relieved of federal income tax
on amounts distributed to shareholders, but shareholders, unless otherwise
exempt, will pay income or capital gains taxes on amounts so distributed (except
distributions that are treated as a return of capital) regardless of whether
such distributions are paid in cash or reinvested in additional shares.
Distributions out of the "net capital gain" (the excess of net long-term
capital gain over net short-term capital loss), if any, of the Fund will be
taxed to shareholders as long-term capital gains regardless of the length of
time a shareholder has held his Shares, whether such gain was reflected in the
price paid for the Shares, or whether such gain was attributable to bonds
bearing tax-exempt interest. All other distributions, to the extent they are
taxable, are taxed to shareholders as ordinary income.
RBB will send written notices to shareholders annually regarding the tax
status of distributions made by the Fund. Dividends declared in December of any
year payable to shareholders of record on a specified date in such a month will
be deemed to have been received by the shareholders on December 31, provided
such dividends are paid during January of the following year. The Fund intends
to make sufficient actual or deemed distributions prior to the end of each
calendar year to avoid liability for federal excise tax.
Investors should be careful to consider the tax implications of buying
shares just prior to a distribution. The price of shares purchased at that time
will reflect the amount of the forthcoming distribution. Those investors
purchasing shares just prior to a distribution will nevertheless be taxed on the
entire amount of the distribution received, although the distribution is, in
effect, a return of capital.
Shareholders who exchange shares representing interests in one Fund for
shares representing interests in another Fund will generally recognize capital
gain or loss for federal income tax purposes.
Shareholders who are nonresident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships may be subject to
different U.S. Federal income tax treatment.
MULTI-CLASS STRUCTURE
- --------------------------------------------------------------------------------
The Fund offers one other class of shares, Investor Shares, which are
offered directly to individual investors pursuant to a separate prospectus.
Shares of each class represent equal pro rata interests in the Fund and accrue
dividends and calculate net asset value and performance quotations in the same
manner. The Fund will quote performance of the Investor Shares separately from
Institutional Shares. Because of different expenses paid by the Institutional
Shares, the total return on such shares can be expected, at any time, to be
different than the total return on Investor Shares. Information concerning these
other classes may be obtained by calling the Fund at (888) 261-4073.
12
<PAGE>
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
RBB has authorized capital of thirty billion shares of Common Stock, $.001
par value per share, of which 18.326 billion shares are currently classified
into 97 different classes of Common Stock. See "Description of Shares" in the
Statement of Additional Information."
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO BOSTON PARTNERS MID CAP VALUE FUND AND DESCRIBE ONLY
THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS AND OTHER MATTERS
RELATING TO BOSTON PARTNERS MID CAP VALUE FUND.
Each share that represents an interest in the Fund has an equal
proportionate interest in the assets belonging to the Fund with each other share
that represents an interest in the Fund, even where a share has a different
class designation than another share representing an interest in the Fund.
Shares of the Fund do not have preemptive or conversion rights. When issued for
payment as described in this Prospectus, Shares will be fully paid and
non-assessable.
RBB currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, RBB will assist in shareholder communication in such matters.
Holders of Shares of the Fund will vote in the aggregate and not by class
on all matters, except where otherwise required by law. Further, shareholders of
all investment portfolios of RBB will vote in the aggregate and not by portfolio
except as otherwise required by law or when the Board of Directors determines
that the matter to be voted upon affects only the interests of the shareholders
of a particular investment portfolio. (See the Statement of Additional
Information under "Additional Information Concerning Fund Shares" for examples
when the 1940 Act requires voting by investment portfolio or by class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of Common Stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of RBB.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC Inc.,
the Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (888) 261-4073.
SHARE CERTIFICATES
In the interest of economy and convenience, physical certificates
representing Shares in the Fund are not normally issued.
13
<PAGE>
HISTORICAL PERFORMANCE INFORMATION
For the period from commencement of operations (June 2, 1997) through
August 31, 1998, the total return (not annualized) for the Institutional Class
of Shares of the Fund was as follows:
Unannualized investment returns for the period ended August 31, 1998.
Since
Inception
---------
Boston Partners Mid Cap Value Fund
(Institutional Shares) .................................... (3.92)%
The total return assumes the reinvestment of all dividends and capital
gains and reflects expense reimbursements and investment advisory fee waivers in
effect. Without these expense reimbursements or waivers, the Fund's performance
would have been lower. Of course, past performance is no guarantee of future
results. Investment return and principal value will fluctuate, so that Shares,
when redeemed, may be worth more or less than the original cost. For more
information on performance, see "Performance Information" in the Statement of
Additional Information.
The table below presents the Composite performance history of certain of
the Adviser's managed accounts on an annualized basis for the period ended
August 31, 1998. The Composite is comprised of the Adviser's institutional
accounts and other privately managed accounts with investment objectives,
policies and strategies substantially similar to those of the Fund, although the
accounts have longer operating histories than the Fund, which commenced
operations on June 2, 1997. The Composite performance information includes the
reinvestment of dividends received in the underlying securities and includes
payment of investment advisory fees. The privately managed accounts in the
Composite are only available to the Adviser's institutional advisory clients.
The past performance of the accounts which comprise the Composite is not
indicative of the future performance of the Fund. These accounts have lower
investment advisory fees than the Fund and the Composite performance figures
would have been lower if subject to the higher fees and expenses incurred by the
Fund. These private accounts are not subject to the same investment limitations,
diversification requirements and other restrictions which are imposed upon
mutual funds under the 1940 Act and the Internal Revenue Code, which, if
imposed, may have adversely affected the performance results of the Composite.
Listed below the performance history for the Composite is a comparative index
comprised of securities similar to those in which accounts contained in the
Composite are invested.
Annualized investment returns for the period ended August 31, 1998.
One Three Since
Year Years Inception
---- ----- ---------
Composite Performance ............... (12.73)% N/A (3.15)%
Russell 2500 Index .................. (16.84)% N/A (5.74)%
* The Adviser commenced managing these accounts on June 2, 1997.
The Russell 2500 Index represents the largest 3,000 companies domiciled in
the United States minus the largest 500 companies as determined by the market
value of such companies.
14
<PAGE>
FUTURE PERFORMANCE INFORMATION
From time to time, the Fund may advertise its performance, including
comparisons to other mutual funds with similar investment objectives and to
stock or other relevant indices. All such advertisements will show the average
annual total return over one, five and ten year periods or, if such periods have
not yet elapsed, shorter periods corresponding to the life of the Fund. Such
total return quotations will be computed by finding the compounded average
annual total return for each time period that would equate the assumed initial
investment of $1,000 to the ending redeemable value, net of fees, according to a
required standardized calculation. The standard calculation is required by the
SEC to provide consistency and comparability in investment company advertising.
The Fund may also from time to time include in such advertising an aggregate
total return figure or a total return figure that is not calculated according to
the standardized formula in order to compare more accurately the Fund's
performance with other measures of investment return. For example, the Fund's
total return may be compared with data published by Lipper Analytical Services,
Inc., CDA Investment Technologies, Inc. or Weisenberger Investment Company
Service, or with the performance of the Russell 2500 Index. Performance
information may also include evaluation of the Fund by nationally recognized
ranking services and information as reported in financial publications such as
Business Week, Fortune, Institutional Investor, Money Magazine, Forbes,
Barron's, The Wall Street Journal, The New York Times, or other national,
regional or local publications. All advertisements containing performance data
will include a legend disclosing that such performance data represents past
performance and that the investment return and principal value of an investment
will fluctuate so that an investor's Shares, when redeemed, may be worth more or
less than their original cost.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY PROSPECTUS
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN RBB'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY DECEMBER 29, 1998 REFERENCE, IN
CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RBB OR ITS
DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY RBB OR BY THE
DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
---------------------
TABLE OF CONTENTS
PAGE
----
EXPENSE TABLE .......................................................... 2
FINANCIAL HIGHLIGHTS ................................................... 2
INTRODUCTION ........................................................... 4
INVESTMENT OBJECTIVES AND POLICIES ..................................... 4
INVESTMENT LIMITATIONS ................................................. 5
RISK FACTORS ........................................................... 5
YEAR 2000 .............................................................. 6
MANAGEMENT ............................................................. 6
HOW TO PURCHASE SHARES ................................................. 8
HOW TO REDEEM AND EXCHANGE SHARES ...................................... 9
NET ASSET VALUE ........................................................ 11
DIVIDENDS AND DISTRIBUTIONS ............................................ 11
TAXES .................................................................. 12
MULTI-CLASS STRUCTURE .................................................. 12
DESCRIPTION OF SHARES .................................................. 13
OTHER INFORMATION ...................................................... 13
INVESTMENT ADVISER
Boston Partners Asset Management, L.P.
Boston, Massachusetts
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
TRANSFER AGENT AND ADMINISTRATOR
PFPC Inc.
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
[LOGO GRAPHIC OMITTED]
<PAGE>
PROSPECTUS
DECEMBER 29, 1998
BOSTON PARTNERS
MID CAP
VALUE FUND
(INVESTOR SHARES)
bp
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
[LOGO GRAPHIC OMITTED]
<PAGE>
BOSTON PARTNERS MID CAP VALUE FUND
(INVESTOR CLASS)
OF
THE RBB FUND, INC.
Boston Partners Mid Cap Value Fund (the "Fund") is an investment portfolio
of The RBB Fund, Inc. ("RBB"), an open-end management investment company. The
shares of the Investor Class ("Shares") offered by this Prospectus represent
interests in the Fund. The Fund is a diversified fund that seeks long-term
growth of capital, with current income as a secondary objective, primarily
through equity investments, such as common stocks. It seeks to achieve its
objectives by investing at least 65% of its total assets in a diversified
portfolio consisting of equity securities of issuers with a market
capitalization of primarily between $200 million and $6 billion, and identified
by Boston Partners Asset Management, L.P. (the "Adviser") as equity securities
that it believes possess value characteristics. The Adviser examines various
factors in determining the value characteristics of such issuers, including but
not limited to, price to book value ratios and price to earnings ratios. These
value characteristics are examined in the context of the issuer's operating and
financial fundamentals such as return on equity, earnings growth and cash flow.
This Prospectus contains information that a prospective investor needs to
know before investing. Please keep it for future reference. A Statement of
Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained free of charge from the Fund by calling (888)
261-4073. The Prospectus and the Statement of Additional Information are
available for reference, along with other related material on the SEC Internet
Web Site (http://www.sec.gov).
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR ENDORSED
BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK AND
SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENTS IN SHARES OF THE FUND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29 , 1998
<PAGE>
EXPENSE TABLE
- --------------------------------------------------------------------------------
The following table illustrates annual operating expenses incurred by
Investor Shares of the Fund (after fee waivers and expense reimbursements) for
the fiscal period ended August 31, 1998, as a percentage of average daily net
assets. An example based on the summary is also shown.
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (after waivers)*. ................................. .58%
12b-1 Fees (after waivers)* ....................................... .25%
Other Expenses (after waivers and expense reimbursements) ......... .42%
----
Total Fund Operating Expenses (after waivers and
expense reimbursements)*. ......................................... 1.25%
====
* In the absence of fee waivers and expense reimbursements, Management Fees
would be 0.80%; 12b-1 Fees would be 0.25%; Other Expenses would be .77%; and
Total Fund Operating Expenses would be 1.82%. Management Fees and 12b-1 Fees
are each based on average daily net assets and are calculated daily and paid
monthly.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the
Fund, assuming (1) a 5% annual return and (2) redemption at the end of each time
period:
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
Boston Partners Mid Cap Value Fund ...... $12 $37 $63 $140
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. (For more complete descriptions of the various costs and expenses,
see "Management" and "Distribution of Shares" below.) The Fee Table reflects
expense reimbursements and a voluntary waiver of Management Fees for the Fund,
which are expected to be in effect during the current fiscal year. However, the
Adviser and the Fund's service providers are under no obligation with respect to
such fee waivers and expense reimbursements and there can be no assurance that
any future expense reimbursements and waivers of Management Fees will not vary
from the figures reflected in the Fee Table.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The "Financial Highlights" presented below set forth certain investment
results for shares of the Investor Class of the Fund for the period June 2, 1997
(date of inception) through August 31, 1997 and for the fiscal year ended August
31, 1998. The financial data included in this table should be read in
conjunction with the financial statements and notes thereto and the unqualified
report of PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), RBB's
independent accountants, which are incorporated by reference into the Statement
of Additional Information. Further information about the performance of the
Investor Class of the Fund is available in the Annual Report to Shareholders.
Both the Statement of Additional Information and the Annual Report to
Shareholders may be obtained from the Fund free of charge by calling the
telephone number on page 1 of the prospectus.
2
<PAGE>
BOSTON PARTNERS MID CAP VALUE FUND
(FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE FISCAL JUNE 2, 1997*
YEAR ENDED THROUGH
AUGUST 31, 1998 AUGUST 31, 1997
--------------- ---------------
<S> <C> <C>
Per Share Operating Performance**
Net asset value, beginning of period .................................... $11.01 $10.00
------ ------
Net investment income (1) ............................................... 0.01 .01
Net realized and unrealized gain/(loss) on investments(2). .............. (1.38) 1.00
------ ------
Net increase/(decrease) in net assets resulting
from operations ...................................................... (1.37) 1.01
------ ------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ................................................... (0.01) --
Net realized capital gains. ............................................. (0.21) --
------ ------
Net asset value, end of period. ......................................... $ 9.42 $11.01
====== ======
Total investment return(3). ............................................. (12.77)% 10.10%
====== ======
Ratios/Supplemental Data
Net assets, end of period (000) ...................................... $1,828 $ 598
Ratio of expenses to average net assets(1)(4) ........................ 1.15% 1.10%(5)
Ratio of net investment income to average net assets(1). ............. (0.02)% .61%(5)
Portfolio turnover rate .............................................. 167.86% 21.80%(6)
<FN>
* Commencement of operations.
** Calculated based on shares outstanding on the first and last day of the
period, except for dividends and distributions, if any, which are based
on actual shares outstanding on the dates of distributions.
(1) Reflects waivers and reimbursements.
(2) The amount shown for a share outstanding throughout the period is not in
accord with the change in the aggregate gains and losses in investments
during the period because of the timing of sales and repurchases of Fund
shares in relation to fluctuating net asset value during the respective
periods.
(3) Total return is calculated assuming a purchase of shares on the first day
and a sale of shares on the last day of the period reported and will
include reinvestments of dividends and distributions, if any. Total
return is not annualized.
(4) Without the waiver of advisory 12b-1, administration and transfer agent
fees and without the reimbursement of certain operating expenses, the
ratio of expenses to average net assets annualized for the period ended
August 31, 1997 and the year ended August 31, 1998 would have been 12.62%
and 1.82%, respectively, for the Investor Class.
(5) Annualized.
(6) Not annualzied.
</FN>
</TABLE>
INTRODUCTION
- --------------------------------------------------------------------------------
RBB is an open-end management investment company incorporated under the
laws of the State of Maryland currently operating or proposing to operate
seventeen separate investment portfolios. The Shares offered by this Prospectus
represent interests in the Boston Partners Mid Cap Value Fund. RBB was
incorporated in Maryland on February 29, 1988.
3
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objectives are to provide long-term growth of capital
with current income as a secondary objective. The Fund seeks to achieve its
objectives by investing, under normal market conditions, at least 65% of its
total assets in a diversified portfolio consisting primarily of equity
securities such as common stocks of issuers with a market capitalization of
between $200 million and $6 billion, and identified by the Adviser as equity
securities that it believes possess value characteristics.
The Adviser examines various factors in determining the value
characteristics of such issuers, including but not limited to price to book
value ratios and price to earnings ratios. These value characteristics are
examined in the context of the issuer's operating and financial fundamentals
such as return on equity, earnings growth and cash flow.
The Adviser selects securities for the Fund based on a continuous study of
trends in industries and companies, earnings power and growth and other
investment criteria. In general, the Fund's investments are broadly diversified
over a number of industries and, as a matter of policy, the Fund will not invest
25% or more of its total assets in any one industry.
The Fund may invest up to 20% of its total assets in securities of foreign
issuers. Investing in securities of foreign issuers involves considerations not
typically associated with investing in securities of companies organized and
operating in the United States. Foreign securities generally are denominated and
pay dividends or interest in foreign currencies. The Fund may hold from time to
time various foreign currencies pending their investment in foreign securities
or their conversion into U.S. dollars. The value of the assets of the Fund as
measured in U.S. dollars may therefore be affected favorably or unfavorably by
changes in exchange rates. There may be less publicly available information
concerning foreign issuers than is available with respect to U.S. issuers.
Foreign securities may not be registered with the U.S. Securities and Exchange
Commission, and generally, foreign companies are not subject to uniform
accounting, auditing and financial reporting requirements comparable to those
applicable to U.S. issuers. See "Investment Objectives and Policies--Foreign
Securities" in the Statement of Additional Information.
The Fund may invest the remainder of its total assets in equity securities
of issuers with lower or higher capitalizations; derivative securities; debt
securities issued by U.S. banks, corporations and other business organizations
that are investment grade securities; and debt securities issued by the U.S.
Government or government agencies.
In accordance with the above-mentioned policies, the Fund may also invest
in indexed securities, repurchase agreements, reverse repurchase agreements,
dollar rolls, financial futures contracts, options on futures contracts and may
lend portfolio securities. See "Investment Objectives and Policies" in the
Statement of Additional Information.
The Fund may invest in registered investment companies and investment funds
in foreign countries subject to the provisions of the Investment Company Act of
1940, as amended (the "1940 Act") and as discussed in "Investment Objectives and
Policies" in the Statement of Additional Information. If the Fund invests in
such investment companies, the Fund will bear its proportionate share of the
costs incurred by such companies, including investment advisory fees.
While the Adviser intends to fully invest the Fund's assets at all times in
accordance with the above-mentioned policies, the Fund reserves the right to
hold up to 100% of its assets, as a temporary defensive measure, in cash and
eligible U.S. dollar-denominated money market instruments. The Adviser would
determine when market conditions warrant temporary defensive measures.
The Fund's investment objectives and the policies described above may be
changed by RBB's Board of Directors without the affirmative vote of the holders
of a majority of the outstanding Shares representing interests in the Fund.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Fund may not change the following investment limitations without
shareholder approval. (A complete list of the investment limitations that cannot
be changed without such a vote of the shareholders is contained in the Statement
of Additional Information under "Investment Objectives and Policies.")
4
<PAGE>
The Fund may not:
1. Purchase the securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, if immediately after and as a result of such purchase
more than 5% of the value of the Fund's total assets would be invested in
the securities of such issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by the Fund, except that up to 25%
of the value of the Fund's total assets may be invested without regard to
such limitations.
2. Purchase any securities which would cause, at the time of purchase,
25% or more of the value of the total assets of the Fund to be invested in
the obligations of issuers in any single industry, provided that there is
no limitation with respect to investments in U.S. Government obligations.
3. Borrow money or issue senior securities, except that the Fund may
borrow from banks and enter into reverse repurchase agreements and dollar
rolls for temporary purposes in amounts up to one-third of the value of its
total assets at the time of such borrowing; or mortgage, pledge or
hypothecate any assets, except in connection with any such borrowing and
then in amounts not in excess of one-third of the value of the Fund's total
assets at the time of such borrowing. The Fund will not purchase securities
while its aggregate borrowings (including reverse repurchase agreements,
dollar rolls and borrowings from banks) are in excess of 5% of its total
assets. Securities held in escrow or separate accounts in connection with
the Fund's investment practices are not considered to be borrowings or
deemed to be pledged for purposes of this limitation.
If a percentage restriction under one of the Fund's investment policies or
restrictions or the use of assets is adhered to at the time a transaction is
effected, later changes in percentage resulting from changing values will not be
considered a violation (except with respect to any restrictions that may apply
to borrowings or senior securities issued by the Fund).
RISK FACTORS
- --------------------------------------------------------------------------------
As with other mutual funds, there can be no assurance that the Fund will
achieve its objective. The net asset value per share of Shares representing
interests in the Fund will fluctuate as the values of its portfolio securities
change in response to changing conditions in the equity market. An investment in
the Fund is not intended to constitute a balanced investment program. Other risk
factors are discussed above under "Investment Objectives and Policies" and in
the Statement of Additional Information under "Investment Objectives and
Polices."
EUROPEAN CURRENCY UNIFICATION
Many European countries are about to adopt a single European currency, the
euro. On January 1, 1999, the euro will become legal tender for all countries
participating in the Economic and Monetary Union ("EMU"). A new European Central
Bank will be created to manage the monetary policy of the new unified region. On
the same date, the exchange rates will be irrevocably fixed between the EMU
member countries. National currencies will continue to circulate until they are
replaced by euro coins and bank notes by the middle of 2002.
This change is likely to significantly impact the European capital markets
in which the Fund may invest and may result in the Fund facing additional risks
in pursuing its investment objective. These risks, which include, but are not
limited to, uncertainty as to the proper tax treatment of the currency
conversion, volatility of currency exchange rates as a result of the conversion,
uncertainty as to capital market reaction, conversion costs that may affect
issuer profitability and creditworthiness, and lack of participation by some
European countries, may increase the volatility of the Fund's net asset value
per share.
YEAR 2000
- --------------------------------------------------------------------------------
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with
5
<PAGE>
whom they deal, do not properly process and calculate date-related information
and data from and after January 1, 2000. This possibility is commonly known as
the "Year 2000 Problem." The Year 2000 Problem could also hurt companies whose
securities the Fund holds on securities markets generally. The Fund has been
advised by the Adviser, the Administrators and the Custodian that they are
actively taking steps to address the Year 2000 Problem with respect to the
computer systems that they use and to obtain assurances that comparable steps
are being taken by the Fund's other major service providers. While there can be
no assurance that the Fund's service providers will be Year 2000 compliant, the
Fund's service providers expect that their plans to be compliant will be
achieved.
GENERAL
Investment methods described in this Prospectus are among those which the
Fund has the power to utilize. Some may be employed on a regular basis; others
may not be used at all. Accordingly, reference to any particular method or
technique carries no implication that it will be utilized or, if it is, that it
will be successful.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of RBB and the Fund are managed under the
direction of RBB's Board of Directors.
INVESTMENT ADVISER
Boston Partners Asset Management, L.P., located at 28 State Street, 21st
Floor, Boston, Massachusetts 02109, serves as the Fund's investment adviser. The
Adviser provides investment management and investment advisory services to
investment companies and other institutional accounts that had aggregate total
assets under management as of October 31, 1998, in excess of $16.0 billion. The
adviser is organized as a Delaware limited partnership whose sole general
partner is Boston Partners, Inc., a Delaware corporation.
Subject to the supervision and direction of RBB's Board of Directors, the
Adviser manages the Fund's portfolio in accordance with the Fund's investment
objectives and policies, makes investment decisions for the Fund, places orders
to purchase and sell securities, and employs professional portfolio managers and
securities analysts who provide research services to the Fund. For its services
to the Fund, the Adviser is paid a monthly advisory fee computed at an annual
rate of 0.80% of the Fund's average daily net assets. The Adviser has notified
RBB, however, that it intends to limit total Fund operating expenses to 1.00% of
the Fund's average daily net assets during the current fiscal year.
PORTFOLIO MANAGEMENT
The day-to-day portfolio management of the Fund is the responsibility of
Wayne J. Archambo who is a senior portfolio manager of the Adviser and a member
of the Adviser's Equity Strategy Committee. Mr. Archambo oversees the investment
activities of the Adviser's $1.5 billion mid-capitalization activities as well
as $1.0 billion in small capitalization activities. Prior to joining the Adviser
in April 1995, Mr. Archambro was employed by The Boston Company Asset Management
from 1989 through April 1995 where he was a senior portfolio manager and a
member of the Firm's Equity Policy Committee. Mr. Archambro has over 16 years of
investment experience and is a Chartered Financial Analyst.
ADMINISTRATOR
PFPC Inc. ("PFPC") serves as administrator to the Fund and generally
assists the Fund in all aspects of its administration and operations, including
matters relating to the maintenance of financial records and accounting. For its
services, PFPC receives a fee calculated at an annual rate of .125% of the
Fund's average daily net assets with a minimum annual fee of $75,000 payable
monthly on a pro rata basis.
6
<PAGE>
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPCTrust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholder servicing
agreements with registered broker-dealers who have entered into dealer
agreements with the Distributor ("Authorized Dealers") for the provision of
certain shareholder support services to customers of such Authorized Dealers who
are shareholders of the Fund. The services provided and the fees payable by the
Fund for these services are described in the Statement of Additional Information
under "Investment Advisory, Distribution and Servicing Arrangements."
DISTRIBUTOR
Provident Distributors, Inc. (the "Distributor"), with a principal business
address at Four Falls Corporate Center, West Conshohocken, Pennsylvania 19428,
acts as distributor for the Shares pursuant to a distribution agreement (the
"Distribution Agreement") with RBB on behalf of the Shares.
EXPENSES
The expenses of the Fund are deducted from its total income before
dividends are paid. Any general expenses of RBB that are not readily
identifiable as belonging to a particular investment portfolio of RBB will be
allocated among all investment portfolios of RBB based upon the relative net
assets of the investment portfolios. The Investor Class of the Fund pays its own
distribution fees, and may pay a different share than the Institutional Class of
other expenses (excluding advisory and custodial fees) if those expenses are
actually incurred in a different amount by the Investor Class or if it receives
different services.
The Adviser may assume expenses of the Fund from time to time. To the
extent any service providers assume expense of the Fund, such assumption of
expenses will have the effect of lowering the Fund's overall expense ratio and
increasing its yield to investors.
DISTRIBUTION OF SHARES
- --------------------------------------------------------------------------------
The Board of Directors of RBB has approved and adopted a Distribution
Agreement and Plan of Distribution for the Shares (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to receive
from the Fund a distribution fee with respect to the shares, which is accrued
daily and paid monthly, of up to 0.25% on an annualized basis of the average
daily net assets of the Shares. The actual amount of such compensation under the
Plan is agreed upon by RBB's Board of Directors and by the Distributor in the
Distribution Agreement. The Distributor may, in its discretion, from time to
time waive voluntarily all or any portion of its distribution fee.
Amounts paid to the Distributor under the Plan may be used by the
Distributor to cover expenses that are related to (i) the sale of the Shares,
(ii) ongoing servicing and/or maintenance of the accounts of Shareholders, and
(iii) sub-transfer agency services, subaccounting services or administrative
services related to the sale of the Shares, all as set forth in the Plan. The
Distributor may delegate some or all of these functions to Service Agents. See
"How to Purchase Shares -- Purchases Through Intermediaries."
The Plan obligates the Fund, during the period it is in effect, to accrue
and pay to the Distributor on behalf of the Shares the fee agreed to under the
Distribution Agreement. Payments under the Plan are not tied exclusively to
expenses actually incurred by the Distributor and the payments may exceed
distribution expenses actually incurred.
PURCHASES THROUGH INTERMEDIARIES
Shares of the Fund may be available through certain brokerage firms,
financial institutions and other industry professionals (collectively, "Service
Organizations"). Certain features of the Shares, such as the initial and
subsequent investment
7
<PAGE>
minimums and certain trading restrictions, may be modified or waived by Service
Organizations. Service Organizations may impose transaction or administrative
charges or other direct fees, which charges and fees would not be imposed if
Shares are purchased directly from the Fund. Therefore, a client or customer
should contact the Service Organization acting on his behalf concerning the fees
(if any) charged in connection with a purchase or redemption of Shares and
should read this Prospectus in light of the terms governing his accounts with
the Service Organization. Service Organizations will be responsible for promptly
transmitting client or customer purchase and redemption orders to the Fund in
accordance with their agreements with the Fund and with clients or customers.
Service Organizations or, if applicable, their designees that have entered into
agreements with the Fund or its agent may enter confirmed purchase orders on
behalf of clients and customers, with payment to follow no later than the Fund's
pricing on the following Business Day. If payment is not received by such time,
the Service Organization could be held liable for resulting fees or losses. The
Fund will be deemed to have received a purchase or redemption order when a
Service Organization, or, if applicable, its authorized designee, accepts a
purchase or redemption order in good order. Orders received by the Fund in good
order will be priced at the Fund's net asset value next computed after they are
accepted by the Service Organization or its authorized designee.
For administration, subaccounting, transfer agency and/or other services,
Boston Partners, the Distributor or their affiliates may pay Service
Organizations and certain recordkeeping organizations a fee of up to .35% (the
"Service Fee") of the average annual value of accounts with the Fund maintained
by such Service Organizations or recordkeepers. The Service Fee payable to any
one Service Organization is determined based upon a number of factors, including
the nature and quality of services provided, the operations processing
requirements of the relationship and the standardized fee schedule of the
Service Organization or recordkeeper.
The Adviser, the Distributor or either of their affiliates may, at their
own expense, provide promotional incentives for qualified recipients who support
the sale of Shares, consisting of securities dealers who have sold Shares or
others, including banks and other financial institutions, under special
arrangements. Incentives may include opportunities to attend business meetings,
conferences, sales or training programs for recipients, employees or clients and
other programs or events and may also include opportunities to participate in
advertising or sales campaigns and/or shareholder services and programs
regarding one or more Boston Partners Funds. Travel, meals and lodging may also
be paid in connection with these promotional activities. In some instances,
these incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or expected sale of
significant amounts of Shares.
HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------
GENERAL
Shares representing interests in the Fund are offered continuously for sale
by the Distributor and may be purchased without imposition of a sales charge.
Shares may be purchased initially by completing the application included in this
Prospectus and forwarding the application to the Fund's transfer agent, PFPC.
Purchases of Shares may be effected by wire to an account to be specified by
PFPC or by mailing a check or Federal Reserve Draft, payable to the order of
"The Boston Partners Mid Cap Value Fund," c/o PFPC Inc., P.O. Box 8852,
Wilmington, Delaware 19899-8852. The name of the Fund, Boston Partners Mid Cap
Value Fund, must also appear on the check or Federal Reserve Draft. Shareholders
may not purchase shares of the Boston Partners Mid Cap Value Fund with a check
issued by a third party and endorsed over to the fund. Federal Reserve Drafts
are available at national banks or any state bank which is a member of the
Federal Reserve System. Initial investments in the Fund must be at least $2,500
and subsequent investments must be at least $100. The Fund reserves the right to
suspend the offering of Shares for a period of time or to reject any purchase
order.
Shares may be purchased on any Business Day. A "Business Day" is any day
that the New York Stock Exchange, Inc. (the "NYSE") is open for business.
Currently, the NYSE is closed on weekends and New Year's Day, Dr. Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day and on the preceding Friday or
subsequent Monday when one of these holidays falls on a Saturday or Sunday.
8
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
BOSTON PARTNERS MID CAP VALUE FUND bp
(INVESTOR CLASS) BOSTON PARTNERS ASSET MANAGEMENT, L.P.
ACCOUNT APPLICATION
Please Note: Do not use this form to open a retirement plan account. For an IRA
application or help with this Application, please call 1-888-261-4073.
(Please check the appropriate box(es) below.)
1. / / Individual / / Joint Tenant / / Other
Account ________________________________________________________________
Registration: Name SOCIAL SECURITY NUMBER OR TAX ID# OF PRIMARY OWNER
________________________________________________________________
NAME OF JOINT OWNER JOINT OWNER SOCIAL SECURITY NUMBER OR
TAX ID#
For joint accounts, the account registrants will be joint
tenants with right of survivorship and not tenants in common
unless tenants in common or community property registrations are
requested.
GIFT TO MINOR: / / UNIFORM GIFTS/TRANSFER TO MINOR'S ACT
________________________________________________________________
NAME OF ADULT CUSTODIAN (ONLY ONE PERMITTED)
________________________________________________________________
NAME OF MINOR (ONLY ONE PERMITTED)
________________________________________________________________
MINOR'S SOCIAL SECURITY NUMBER AND DATE OF BIRTH
CORPORATION,
PARTNERSHIP,
TRUST OR
OTHER ENTITY:
________________________________________________________________
NAME OF CORPORATION, PARTNERSHIP, NAME(S) OF TRUSTEE(S)
OR OTHER
________________________________________________________________
TAXPAYER IDENTIFICATION NUMBER
2. ________________________________________________________________
Mailing STREET OR P.O. BOX AND/OR APARTMENT NUMBER
Address:
________________________________________________________________
CITY STATE ZIP CODE
________________________________________________________________
DAY PHONE NUMBER EVENING PHONE NUMBER
3. Minimum initial investment Amount of investment $___________
Investment of $100,000.
Information:
Make the check payable to Boston Partners Mid Cap Value Fund.
Shareholders may not purchase shares of this Fund with a check
issued by a third party and endorsed over to the Fund.
DISTRIBUTION NOTE: Dividends and capital gains may be reinvested or paid by
OPTIONS: check. If no options are selected below, both dividends and
capital gains will be reinvested in additional Fund shares.
DIVIDENDS / / Pay by check / / Reinvest / /
CAPITAL GAINS / / Pay by check / / Reinvest / /
SYSTEMATIC To select this portion please fill out the information below:
WITHDRAWAL Amount_________________________Startup Month____________________
PLAN:
Frequency Options: Annually / / Monthly / / Quarterly / /
<PAGE>
--A minimum account value of $10,000 in a single account is
required to establish a Systematic Withdrawal Plan
--Payments wil be made on or near the 25th of the month
Please check one of the following options:
____Please mail checks to Address of Record
(Named in Section 2)
____Please electronically credit my Bank of Record
(Named in Section 5)
4. To use this option, you must initial the appropriate line below.
Telephone I authorize the Transfer Agent to accept instructions from any
Redemption: persons to redeem or exchange shares in my account(s) by
telephone in accordance with the procedures and conditions set
forth in the Prospectus.
______________________ _________________ Redeem shares, and
individual initial joint initial send the proceeds to
the address of record.
______________________ _________________ Exchange shares for
individual initial joint initial shares of The Boston
Partners Large Cap
Value Fund or Market
Neutral Fund.
5.
Automatic The Automatic Investment Plan, which is available to shareholders
Investment of the Fund, makes possible regularly scheduled purchases of Fund
Plan: shares to allow dollar-cost averaging. The Fund's Transfer Agent
can arrange for an amount of money selected by you to be deducted
from your checking account and used to purchase shares of the
Fund.
Please debit $________ from my checking account (named below) on
or about the 20th of the month. PLEASE ATTACH AN UNSIGNED, VOIDED
CHECK.
/ / Monthly / / Every Alternate Month / / Quarterly / / Other
BANK OF _________________________________________________________________
RECORD: BANK NAME STREET ADDRESS OR P.O. BOX
_________________________________________________________________
CITY STATE ZIP CODE
_________________________________________________________________
BANK ABA NUMBER BANK ACCOUNT NUMBER
6.
Signatures The undersigned warrants that I (we) have full authority and, if
a natural person, I (we) am (are) of legal age to purchase shares
pursuant to this Account Application, and I (we) have received a
current prospectus for the Fund in which I (we) am (are)
investing.
Under the Interest and Dividend Tax Compliance Act of 1983, the
Fund is required to have the following certification:
Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer
identification number (or I am waiting for a number to be
issued to me), and
(2) I am not subject to backup withholding because (a) I am
exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service that I am subject to
31% backup withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has notified me that I
am no longer subject to backup withholding.
NOTE: YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED
BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING
BECAUSE YOU HAVE FAILED TO REPORT ALL INTEREST AND DIVIDENDS ON
YOUR TAX RETURN. THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE
YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE
CERTIFICATION REQUIRED TO AUDIT BACKUP WITHHOLDING.
_________________________________________________________________
SIGNATURE OF APPLICANT DATE
_________________________________________________________________
PRINT NAME TITLE (IF APPLICABLE)
_________________________________________________________________
SIGNATURE OF JOINT OWNER DATE
_________________________________________________________________
PRINT NAME TITLE (IF APPLICABLE)
(If you are signing for a corporation, you must indicate
corporate office or title. If you wish additional signatories on
the account, please include a corporate resolution. If signing as
a fiduciary, you must indicate capacity.)
For information on additional options, such as IRA Applications,
rollover requests for qualified retirement plans, or for wire
instructions, please call us at 1-888-261-4073.
MAIL COMPLETED ACCOUNT APPLICATION AND CHECK TO:
THE BOSTON PARTNERS MID CAP VALUE FUND
C/O PFPC INC.
P.O. BOX 8852
WILMINGTON, DE 19899-8852
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
The price paid for Shares purchased is based on the net asset value next
computed after a purchase order is received in good order by the Fund or its
agents. Orders received by the Fund or its agents prior to the close of the NYSE
(generally 4:00 p.m. Eastern Time) are priced at that Business Day's net asset
value. Orders received by the Fund or its agents after the close of the NYSE are
priced at the net asset value next determined on the following Business Day. In
those cases where an investor pays for Shares by check, the purchase will be
effected at the net asset value next determined after the Fund or its agents
receives the order and the completed application.
Provided that the investment is at least $2,500, an investor may also
purchase Shares by having his bank or his broker wire Federal Funds to PFPC. The
Fund does not currently impose a service charge for effecting wire transfers,
but reserves the right to do so in the future. An investor's bank or broker may
impose a charge for this service. In order to ensure prompt receipt of an
investor's Federal Funds wire for an initial investment, it is important that an
investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (888) 261-4073, and
provide PFPC with your name, address, telephone number, Social Security or Tax
Identification Number, the Fund selected, the amount being wired, and by which
bank. PFPC will then provide an investor with a Fund account number. Investors
with existing accounts should also notify PFPC prior to wiring funds.
B. Instruct your bank or broker to wire the specified amount, together with
your assigned account number, to PFPC's account with PNC Bank:
PNC Bank, N.A.
Philadelphia, PA 19103
ABA NUMBER: 0310-0005-3
CREDITING ACCOUNT NUMBER: 86-1108-2507
FROM: (name of investor)
ACCOUNT NUMBER: (Investor's account number with the Fund)
FOR PURCHASE OF: Boston Partners Mid Cap Value Fund
AMOUNT: (amount to be invested)
C. Fully complete and sign the application and mail it to the address shown
thereon. PFPC will not process purchases until it receives a fully completed and
signed application.
For subsequent investments, an investor should follow steps A and B above.
AUTOMATIC INVESTING
Additional investments in Shares may be made automatically by authorizing
the Fund's transfer agent to withdraw funds from your bank account. Investors
desiring to participate in the Automatic Investment Plan should call the Fund's
transfer agent, PFPC, at (888)261-4073 to obtain the appropriate forms.
RETIREMENT PLANS
Shares may be purchased in conjunction with individual retirement accounts
("IRAs") and rollover IRAs where PFPC Trust Company acts as custodian. For
further information as to applications and annual fees, contact the Fund's
transfer agent, PFPC, at (888) 261-4073. To determine whether the benefits of an
IRA are available and/or appropriate, a shareholder should consult with a tax
adviser.
9
<PAGE>
HOW TO REDEEM AND EXCHANGE SHARES
- --------------------------------------------------------------------------------
REDEMPTION BY MAIL
Shareholders may redeem for cash some or all of their Shares of the Fund at
any time. To do so, a written request in proper form must be sent directly to
Boston Partners Mid Cap Value Fund, c/o PFPC Inc., P.O. Box 8852, Wilmington,
Delaware 19899-8852. There is no charge for a redemption.
A request for redemption must be signed by all persons in whose names the
Shares are registered. Signatures must conform exactly to the account
registration. If the proceeds of the redemption would exceed $10,000, or if the
proceeds are not to be paid to the record owner at the record address, or if the
shareholder is a corporation, partnership, trust or fiduciary, signature(s) must
be guaranteed according to the procedures described below under "Exchange
Privilege."
Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption. In some cases, however,
other documents may be necessary. In the case of shareholders holding share
certificates, the certificates for the shares being redeemed must accompany the
redemption request. Additional documentary evidence of authority is also
required by the Fund's transfer agent in the event redemption is requested by a
corporation, partnership, trust, fiduciary, executor or administrator.
SYSTEMATIC WITHDRAWAL PLAN
If your account has a value of at least $10,000, you may establish a
Systematic Withdrawal Plan and receive regular periodic payments. A request to
establish a Systematic Withdrawal Plan must be submitted in writing to PFPC at
P.O. Box 8852, Wilmington, Delaware 19899-8852. Each withdrawal redemption will
be processed on or about the 25th of the month and mailed as soon as possible
thereafter. There are no service charges for maintenance; the minimum amount
that you may withdraw each period is $100. (This is merely the minimum amount
allowed and should not be mistaken for a recommended amount.) The holder of a
Systematic Withdrawal Plan will have any income dividends and any capital gains
distributions reinvested in full and fractional shares at net asset value. To
provide funds for payment, Shares will be redeemed in such amount as is
necessary at the redemption price, which is net asset value next determined
after the Fund's receipt of a redemption request. Redemption of Shares may
reduce or possibly exhaust the Shares in your account, particularly in the event
of a market decline. As with other redemptions, a redemption to make a
withdrawal payment is a sale for federal income tax purposes. Payments made
pursuant to a Systematic Withdrawal Plan cannot be considered as actual yield or
income since part of such payments may be a return of capital.
You will ordinarily not be allowed to make additional investments of less
than the aggregate annual withdrawals under the Systematic Withdrawal Plan
during the time you have the plan in effect and, while a Systematic Withdrawal
Plan is in effect, you may not make periodic investments under the Automatic
Investment Plan. You will receive a confirmation of each transaction showing the
sources of the payment and the Share and cash balance remaining in your plan.
The plan may be terminated on written notice by the shareholder or by the Fund
and will terminate automatically if all Shares are liquidated or withdrawn from
the account or upon the death or incapacity of the shareholder. You may change
the amount and schedule of withdrawal payments or suspend such payments by
giving written notice to the Fund's transfer agent at least seven Business Days
prior to the end of the month preceding a scheduled payment.
INVOLUNTARY REDEMPTION
The Fund reserves the right to redeem a shareholder's account at any time
the net asset value of the account falls below $500 as the result of a
redemption or an exchange request. Shareholders will be notified in writing that
the value of their account is less than $500 and will be allowed 30 days to make
additional investments before the redemption is processed.
PAYMENT OF REDEMPTION PROCEEDS
In all cases, the redemption price is the net asset value per share next
determined after the request for redemption is received in proper form by the
Fund or its agents. Payment for Shares redeemed is made by check mailed within
seven
10
<PAGE>
days after acceptance by the Fund or its agents of the request and any other
necessary documents in proper order. Such payment may be postponed or the right
of redemption suspended as permitted by the 1940 Act. If the Shares to be
redeemed have been recently purchased by check, the Fund's transfer agent may
delay mailing a redemption check, which may be a period of up to 15 days,
pending a determination that the check has cleared. The Fund has elected to be
governed by Rule 18f-1 under the 1940 Act so that it is obligated to redeem its
shares solely in cash up to the lesser of $250,000 or 1% of its net asset value
during any 90-day period for any one shareholder of a portfolio.
EXCHANGE PRIVILEGE
The exchange privilege is available to shareholders residing in any state
in which the Shares being acquired may be legally sold. A shareholder may
exchange Shares of the Fund for Investor Shares of any other Boston Partners
Fund RBB subject to the restrictions described under "Exchange Privilege
Limitations." Such exchange will be effected at the net asset value of the
exchanged Fund and the net asset value of the Fund being acquired next
determined after receipt of a request for an exchange by the Fund or its agents.
An exchange of Shares will be treated as a sale for federal income tax purposes.
See "Taxes." A shareholder wishing to make an exchange may do so by sending a
written request to PFPC.
If the exchanging shareholder does not currently own Investor Shares of the
Fund into which he would like to exchange, a new account will be established
with the same registration, dividend and capital gain options as the account
from which shares are exchanged, unless otherwise specified in writing by the
shareholder with all signatures guaranteed. A signature guarantee may be
obtained from a domestic bank or trust company, broker, dealer, clearing agency
or savings association who are participants in a medallion program recognized by
the Securities Transfer Association. The three recognized medallion programs are
Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion
Program (SEMP) and New York Stock Exchange, Inc. Medallion Signature Program
(MSP). Signature guarantees that are not part of these programs will not be
accepted. The exchange privilege may be modified or terminated at any time, or
from time to time, by RBB, upon 60 days' written notice to shareholders.
If an exchange is to a new account in the acquired Fund, the dollar value
of Investor Shares acquired must equal or exceed the Fund's minimum for a new
account; if to an existing account, the dollar value must equal or exceed that
Fund's minimum for subsequent investments. If any amount remains in the Fund
from which the exchange is being made, such amount must not drop below the
minimum account value required by the Fund.
EXCHANGE PRIVILEGE LIMITATIONS
The Fund's exchange privilege is not intended to afford shareholders a way
to speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Funds and increase transactions costs, the Fund has
established a policy of limiting excessive exchange activity.
Shareholders are entitled to six (6) exchange redemptions (at least 30 days
apart) from the Fund during any twelve-month period. Notwithstanding these
limitations, the Fund reserves the right to reject any purchase request
(including purchases by exchange) that is deemed to be disruptive to efficient
portfolio management.
TELEPHONE TRANSACTIONS
In order to request an exchange or redemption by telephone, a shareholder
must have completed and returned an account application containing the
appropriate telephone election. To add a telephone option to an existing account
that previously did not provide for this option, a Telephone Authorization Form
must be filed with PFPC. This form is available from PFPC. Once this election
has been made, the shareholder may simply contact PFPC by telephone to request
an exchange or redemption by calling (888) 261-4073. Neither RBB, the Fund, the
Distributor, the Administrator nor any other Fund agent will be liable for any
loss, liability, cost or expense for following RBB's telephone transaction
procedures described below or for following instructions communicated by
telephone that they reasonably believe to be genuine.
RBB's telephone transaction procedures include the following measures: (1)
requiring the appropriate telephone transaction privilege forms; (2) requiring
the caller to provide the names of the account owners, the account's social
security
11
<PAGE>
number and name of the Fund, all of which must match RBB's records; (3)
requiring RBB's service representative to complete a telephone transaction form,
listing all of the above caller identification information; (4) permitting
exchanges only if the two account registrations are identical; (5) requiring
that redemption proceeds be sent only by check to the account owners of record
at the address of record, or by wire only to the owners of record at the bank
account of record; (6) sending a written confirmation for each telephone
transaction to the owners of record at the address of record within five (5)
Business Days of the call; and (7) maintaining tapes of telephone transactions
for six months, if the Fund elects to record shareholder telephone transactions.
For accounts held of record by broker-dealers (other than the Distributor),
financial institutions, securities dealers, financial planners and other
industry professionals, additional documentation or information regarding the
scope of a caller's authority is required. Finally, for telephone transactions
in accounts held jointly, additional information regarding other account holders
is required. Telephone transactions will not be permitted in connection with IRA
or other retirement plan accounts or by an attorney-in-fact under a power of
attorney.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value for each class of a fund is calculated by adding the
value of the proportionate interest of the class in a fund's cash, securities
and other assets, deducting actual and accrued liabilities of the class and
dividing the result by the number of outstanding shares of the class. The net
asset value of each class is calculated independently of each other class. The
net asset values are calculated as of the close of regular trading on the NYSE,
generally 4:00 p.m. Eastern time on each Business Day.
Valuation of securities held by the Fund is as follows: securities traded
on a national securities exchange or on the NASDAQ National Market System are
valued at the last reported sale price that day; securities traded on a national
securities exchange or on the NASDAQ National Market System for which there were
no sales on that day and securities traded on other over-the-counter markets for
which market quotations are readily available are valued at the mean of the bid
and asked prices; and securities for which market quotations are not readily
available are valued at fair market value as determined in good faith by or
under the direction of RBB's Board of Directors. The amortized cost method of
valuation may also be used with respect to debt obligations with sixty days or
less remaining to maturity.
With the approval of RBB's Board of Directors, the Fund may use a pricing
service, bank or broker-dealer experienced in such matters to value the Fund's
securities. A more detailed discussion of net asset value and security valuation
is contained in the Statement of Additional Information.
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Fund to the Fund's shareholders. All
distributions are reinvested in the form of additional full and fractional
Shares unless a shareholder elects otherwise.
The Fund will declare and pay dividends from net investment income
annually, and pays them in the calendar year in which they are declared,
generally in December. Net realized capital gains (including net short-term
capital gains), if any, will be distributed at least annually.
TAXES
- --------------------------------------------------------------------------------
The following discussion is only a brief summary of some of the important
tax considerations generally affecting the Fund and its shareholders and is not
intended as a substitute for careful tax planning. Accordingly, investors in the
Fund should consult their tax advisers with specific reference to their own tax
situation.
12
<PAGE>
The Fund will elect to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended. So long as the
Fund qualifies for this tax treatment, it will be relieved of federal income tax
on amounts distributed to shareholders, but shareholders, unless otherwise
exempt, will pay income or capital gains taxes on amounts so distributed (except
distributions that are treated as a return of capital) regardless of whether
such distributions are paid in cash or reinvested in additional shares.
Distributions out of the "net capital gain" (the excess of net long-term
capital gain over net short-term capital loss), if any, of the Fund will be
taxed to shareholders as long-term capital gain regardless of the length of time
a shareholder has held his Shares, whether such gain was reflected in the price
paid for the Shares, or whether such gain was attributable to bonds bearing
tax-exempt interest. All other distributions, to the extent they are taxable,
are taxed to shareholders as ordinary income.
RBB will send written notices to shareholders annually regarding the tax
status of distributions made by the Fund. Dividends declared in December of any
year payable to shareholders of record on a specified date in such a month will
be deemed to have been received by the shareholders on December 31, provided
such dividends are paid during January of the following year. The Fund intends
to make sufficient actual or deemed distributions prior to the end of each
calendar year to avoid liability for federal excise tax.
Investors should be careful to consider the tax implications of buying
shares just prior to a distribution. The price of shares purchased at that time
will reflect the amount of the forthcoming distribution. Those investors
purchasing shares just prior to a distribution will nevertheless be taxed on the
entire amount of the distribution received, although the distribution is, in
effect, a return of capital.
Shareholders who exchange shares representing interests in one Fund for
shares representing interests in another Fund will generally recognize capital
gain or loss for federal income tax purposes.
Shareholders who are nonresident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships may be subject to
different U.S. federal income tax treatment.
MULTI-CLASS STRUCTURE
- --------------------------------------------------------------------------------
The Fund offers one other class of shares, Institutional Shares, which is
offered directly to institutional investors pursuant to a separate prospectus.
Shares of each class represent equal pro rata interests in the Fund and accrue
dividends and calculate net asset value and performance quotations in the same
manner. The Fund will quote performance of Institutional Shares separately from
Investor Shares. Because of different expenses paid by the Investor Shares, the
total return on such shares can be expected, at any time, to be different than
the total return on Institutional Shares. Information concerning Institutional
Shares may be obtained by calling the Fund at (888) 261-4073.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
RBB has authorized capital of thirty billion shares of Common Stock, $.001
par value per share, of which 18.326 billion shares are currently classified
into 97 different classes of Common Stock. See "Description of Shares" in the
Statement of Additional Information.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE BOSTON PARTNERS MID CAP VALUE FUND AND DESCRIBE
ONLY THE INVESTMENT OBJECTIVES AND POLICIES, OPERATIONS, CONTRACTS AND OTHER
MATTERS RELATING TO THE BOSTON PARTNERS MID CAP VALUE FUND.
Each share that represents an interest in the Fund has an equal
proportionate interest in the assets belonging to the Fund with each other share
that represents an interest in the Fund, even where a share has a different
class designation
13
<PAGE>
than another share representing an interest in that portfolio. Shares of the
Fund do not have preemptive or conversion rights. When issued for payment as
described in this Prospectus, Shares will be fully paid and non-assessable.
RBB currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, RBB will assist in shareholder communication in such matters.
Holders of Shares of the Fund will vote in the aggregate and not by class
on all matters, except where otherwise required by law. Further, shareholders of
all investment portfolios of RBB will vote in the aggregate and not by portfolio
except as otherwise required by law or when RBB's Board of Directors determines
that the matter to be voted upon affects only the interests of the shareholders
of a particular investment portfolio. (See the Statement of Additional
Information under "Additional Information Concerning Fund Shares" for examples
when the 1940 Act requires voting by investment portfolio or by class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of Common Stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of RBB.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC Inc.,
the Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (888) 261-4073.
SHARE CERTIFICATES
In the interest of economy and convenience, physical certificates
representing shares in the Fund are not normally issued.
HISTORICAL PERFORMANCE INFORMATION
For the period from commencement of operations (June 2, 1997) through
August 31, 1998, the total return (not annualized) for the Investor Class of
Shares of the Fund was as follows:
Unannualized investment returns for the period ended August 31, 1998
Since
Inception
---------
Boston Partners Mid Cap Value Fund
(Investor Shares) ..................................... (3.96)%
The total return assumes the reinvestment of all dividends and capital
gains and reflects investment advisory fee waivers and expense reimbursements in
effect. Without these waivers and expense reimbursements, the Fund's performance
would have been lower. Of course, past performance is no guarantee of future
results. Investment return and principal value will fluctuate, so that Shares,
when redeemed, may be worth more or less than the original cost. For more
information on performance, see "Performance Information" in the Statement of
Additional Information.
The table below presents the Composite performance history of certain of
the Adviser's managed accounts on an annualized basis for the period ended
August 31, 1998. The Composite is comprised of the Adviser's institutional
accounts and other privately managed accounts with investment objectives,
policies and strategies substantially similar to those of
14
<PAGE>
the Fund, although the accounts have longer operating histories than the Fund
which commenced operations on June 2, 1997. The Composite performance
information includes the reinvestment of dividends received in the underlying
securities and reflects investment advisory fees. The privately managed accounts
in the Composite are only available to the Adviser's institutional advisory
clients. The past performance of the funds and accounts that comprise the
Composite is not indicative of or a substitute for the future performance of the
Fund. These accounts have lower investment advisory fees than the Fund and the
Composite performance figures would have been lower if subject to the higher
fees and expenses incurred by the Fund. These private accounts are not subject
to the same investment limitations, diversification requirements and other
restrictions which are imposed upon mutual funds under the 1940 Act and the
Internal Revenue Code, which, if imposed, may have adversely affected the
performance results of the Composite. Listed below the performance history for
the Composite is the performance history for a comparative index comprised of
securities similar to those in which accounts contained in the Composite are
invested.
Annualized investment returns for the period ended August 31, 1998
Since Since
One Year Inception
-------- ---------
Composite Performance ....................... (12.77)% (3.19)%*
Russell 2500 Index. ......................... (16.84)% (5.74)%
* The Adviser commenced managing these accounts on June 2, 1997.
The Russell 2500 Index represents the largest 3000 companies domiciled in
the United States minus the largest 500 companies as determined by the market
value of such companies.
FUTURE PERFORMANCE INFORMATION
From time to time, the Fund may advertise its performance, including
comparisons to other mutual funds with similar investment objectives and to
stock or other relevant indices. All such advertisements will show the average
annual total return over one, five and ten year periods or, if such periods have
not yet elapsed, shorter periods corresponding to the life of the Fund. Such
total return quotations will be computed by finding the compounded average
annual total return for each time period that would equate the assumed initial
investment of $1,000 to the ending redeemable value, net of fees, according to a
required standardized calculation. The standard calculation is required by the
SEC to provide consistency and comparability in investment company advertising.
The Fund may also from time to time include in such advertising an aggregate
total return figure or a total return figure that is not calculated according to
the standardized formula in order to compare more accurately the Fund's
performance with other measures of investment return. For example, the Fund's
total return may be compared with data published by Lipper Analytical Services,
Inc., CDA Investment Technologies, Inc. or Weisenberger Investment Company
Service, or with the performance of the Russell 2500 Index. Performance
information may also include evaluation of the Fund by nationally recognized
ranking services and information as reported in financial publications such as
Business Week, Fortune, Institutional Investor, Money Magazine, Forbes,
Barron's, The Wall Street Journal, The New York Times, or other national,
regional or local publications. All advertisements containing performance data
will include a legend disclosing that such performance data represents past
performance and that the investment return and principal value of an investment
will fluctuate so that an investor's Shares, when redeemed, may be worth more or
less than their original cost.
15
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN RBB'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RBB OR ITS DISTRIBUTOR.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY RBB OR BY THE DISTRIBUTOR IN
ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
-------------------
TABLE OF CONTENTS
PAGE
----
EXPENSETABLE .......................................................... 2
FINANCIAL HIGHLIGHTS .................................................. 2
INTRODUCTION .......................................................... 3
INVESTMENT OBJECTIVES AND POLICIES .................................... 4
INVESTMENT LIMITATIONS ................................................ 4
RISK FACTORS .......................................................... 5
YEAR 2000 ............................................................. 5
MANAGEMENT ............................................................ 6
DISTRIBUTION OF SHARES ................................................ 7
HOW TO PURCHASE SHARES ................................................ 8
HOW TO REDEEM AND EXCHANGE SHARES ..................................... 10
NET ASSET VALUE ....................................................... 12
DIVIDENDS AND DISTRIBUTIONS ........................................... 12
TAXES ................................................................. 12
MULTI-CLASS STRUCTURE ................................................. 13
DESCRIPTION OF SHARES ................................................. 13
OTHER INFORMATION ..................................................... 14
INVESTMENT ADVISER
Boston Partners Asset Management, L.P.
Boston, Massachusetts
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
TRANSFER AGENT AND ADMINISTRATOR
PFPC Inc.
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers L.L.P.
Philadelphia, Pennsylvania
[LOGO GRAPHIC OMITTED]
<PAGE>
PROSPECTUS
DECEMBER 29, 1998
BOSTON PARTNERS
BOND FUND
(INSTITUTIONAL SHARES)
bp
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
[LOGO GRAPHIC OMITTED]
<PAGE>
BOSTON PARTNERS BOND FUND
(INSTITUTIONAL CLASS)
OF
THE RBB FUND, INC.
Boston Partners Bond Fund (the "Fund") is an investment portfolio of The
RBB Fund, Inc. ("RBB"), an open-end management investment company. The shares of
the Institutional Class ("Shares") offered by this Prospectus represent
interests in the Fund. The investment objectives of the Fund are to maximize
total return by investing principally in investment grade fixed income
securities, and secondarily to seek current income.
This Prospectus contains information that a prospective investor needs to
know before investing. Please keep it for future reference. A Statement of
Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained free of charge from the Fund by calling (888)
261-4073. The Prospectus and the Statement of Additional Information are
available for reference, along with other related material, on the SEC Internet
Web Site (http://www.sec.gov).
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK AND
SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENTS IN SHARES OF THE FUND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
EXPENSE TABLE
- --------------------------------------------------------------------------------
The following table illustrates annual operating expenses incurred by
Institutional shares of the Fund (after fee waivers and expense reimbursements)
for the fiscal period ended August 31, 1998 as a percentage of average daily net
assets. An example based on the summary is also shown.
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (after waivers)* ................................. 0.00%
12b-1 Fees ....................................................... 0.00%
Other Expenses (after waivers) ................................... 0.60%
----
Total Fund Operating Expenses (after waivers)* ..................... 0.60%
====
* In the absence of fee waivers, Management Fees would be .40%, Other Expenses
would be 2.07% and Total Fund Operating Expenses would be 2.47%.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the
Fund, assuming (1) a 5% annual return and (2) redemption at the end of each time
period:
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
Boston Partners Bond Fund ........ $6 $19 $33 $75
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. (For more complete descriptions of the various costs and expenses,
see "Management" below.) The Fee Table reflects a voluntary waiver of
"Management Fees" and administrative services fees for the Fund, which are
expected to be in effect during the current fiscal period. However, the Adviser
and Administrative Services Agent are under no obligation with respect to such
waivers and there can be no assurance that any future waivers of Management fees
or administrative services fees will not vary from the figures reflected in the
Fee Table.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The "Financial Highlights" presented below set forth certain investment
results for shares of the Institutional Class of the Fund for the period
indicated. Shares of the Institutional Class were first issued on December 30,
1997. The financial data included in this table should be read in conjunction
with the financial statements and notes thereto and the unqualified report of
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), RBB's independent
accountant, which are incorporated by reference into the Statement of Additional
Information. Further information about the performance of the Institutional
Class of the Fund is available in the Annual Report to Shareholders. Both the
Statement of Additional Information and the Annual Report to Shareholders may be
obtained from the Fund free of charge by calling the telephone number on page 1
of the prospectus.
2
<PAGE>
BOSTON PARTNERS BOND FUND
(FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
FOR THE PERIOD
DECEMBER 30, 1997*
THROUGH AUGUST 31,
1998
------------------
Per Share Operating Performance**
Net asset value, beginning of period .......................... $ 10.00
-------
Net investment income (1) ..................................... 0.78
Net realized and unrealized gain/(loss) on investments(2) ..... (0.31)
-------
Net increase in net assets resulting from operations .......... 0.47
-------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ......................................... (0.39)
Net realized capital gains .................................... --
-------
Net asset value, end of period ................................ $ 10.08
=======
Total investment return(3) .................................... 4.79%
=======
Ratios/Supplemental Data
Net assets, end of period (000) ............................ $15,509
Ratio of expenses to average net assets***(1)(4) ........... 0.60%
Ratio of net investment income to average net assets***(1) . 6.06%
Portfolio turnover rate****. ............................... 45.27%
* Commencement of operations.
** Calculated based on shares outstanding on the first and last day of the
period, except for dividends and distributions, if any, which are based
on actual shares outstanding on the dates of distributions.
*** Annualized.
**** Not annualized.
(1) Reflects waivers and reimbursements.
(2) The amount shown for a share outstanding throughout the period is not in
accord with the change in the aggregate gains and losses in investments
during the period because of the timing of sales and repurchases of Fund
shares in relation to fluctuating net asset value during the period.
(3) Total return is calculated assuming a purchase of shares on the first day
and a sale of shares on the last day of the period reported and will
include reinvestments of dividends and distributions, if any. Total
return is not annualized.
(4) Until May 29, 1998, the Institutional Class of the Fund paid .03% of its
average daily net assets to the Fund's previous Distributor in 12b-1
fees. From May 29, 1998 through August 31, 1998, the Institutional Class
of the Fund paid .03% of its average daily net assets to the
Administrative Services Agent pursuant to the Administrative Services
Plan for Institutional shares, in lieu of 12b-1 fees. Without the waiver
of advisory, administrative services, 12b-1, administration and transfer
agent fees and without the reimbursement of certain operating expenses,
the ratio of expenses to average net assets annualized for the period
ended August 31, 1998 would have been 2.47% for the Institutional Class.
3
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
RBB is an open-end management investment company incorporated under the
laws of the State of Maryland currently operating or proposing to operate
seventeen separate investment portfolios. The Shares offered by this Prospectus
represent interests in the Boston Partners Bond Fund. RBB was incorporated in
Maryland on February 29, 1988.
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
The investment objectives of the Fund are to maximize total return by
investing principally in investment grade fixed income securities, and
secondarily to seek current income.
The Fund will invest during normal market conditions at least 75% of its
total assets in bonds, including corporate debt obligations and mortgage-backed
and asset-backed securities (collectively, "Debt Securities") rated
investment-grade or better at the time of purchase by Standard & Poor's ("S&P")
or Moody's Investors Service, Inc. ("Moody's") or which are similarly rated by
another nationally recognized statistical rating organization ("Rating
Organization") (including Fitch IBCA, Duff & Phelps, and Thomson BankWatch), or
are unrated but deemed by Boston Partners Asset Management L.P. (the "Adviser")
to be comparable in quality to instruments so rated. The Fund may invest up to
25% of its total assets in Debt Securities rated "BB" and "B" by Moody's or "Ba"
and "B" by S&P or which are similarly rated by another Rating Organization or
are unrated but are deemed by the Adviser to be comparable in quality to
instruments that are so rated.
Investment-grade Debt Securities are those rated at the time of purchase
"AAA," "AA," "A" or "BBB" by S&P, "Aaa," "Aa," "A" or "Baa" by Moody's or which
are similarly rated by another Rating Organization or are unrated but deemed by
the Adviser to be comparable in quality to instruments that are so rated. Debt
Securities rated "BBB" by S&P, "Baa" by Moody's or the equivalent rating of
another Rating Organization, while still deemed investment-grade, are considered
to have speculative characteristics and are more sensitive to economic change
than higher rated bonds. Debt Securities rated below the four highest ratings of
S&P or Moody's are often referred to as "junk bonds." Such Debt Securities are
rated below investment-grade and carry a higher degree of risk and are regarded,
on balance, as predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the obligation. See
"Risk Factors -- Lower Rated Securities."
The Adviser will select certain mortgage-backed and asset-backed securities
which it believes have superior risk/return characteristics versus other fixed
income instruments. Mortgage-backed securities represent pools of mortgage loans
assembled for sale to investors by various governmental agencies as well as by
private issuers. Asset-backed securities represent pools of other assets (such
as automobile installment purchase obligations and credit card receivables)
similarly assembled for sale by private issuers. See "Risk Factors --
Mortgage-Backed and Asset-Backed Securities" in this prospectus and "Investment
Objective and Policies" in the Statement of Additional Information.
The Fund may also invest up to 15% of its total assets in each of the
following: collateralized mortgage obligations ("CMOs"), Yankee Bonds
(dollar-denominated debt securities of foreign issuers), non-dollar denominated
bonds of foreign or domestic issuers, securities that can be purchased and sold
privately to institutional investors pursuant to Rule 144A, and convertible Debt
Securities of U.S. and foreign issuers (including convertible preferred stock
and notes). See "Risk Factors" in this Prospectus and "Investment Objective and
Policies" in the Statement of Additional Information.
The Fund may invest in debt securities issued by the U.S. Government or
government agencies, repurchase agreements and reverse repurchase agreements,
foreign currency exchange transactions, dollar rolls, futures, option contracts
(including options on futures) and stripped securities. The Fund may make
when-issued purchases and forward commitments. See "Risk Factors" in this
Prospectus and "Investment Objective and Policies" in the Statement of
Additional Information.
4
<PAGE>
The Fund may invest in registered investment companies and investment funds
in foreign countries subject to the provisions of the Investment Company Act of
1940, as amended (the "1940 Act"), and as discussed in "Investment Objective and
Policies" in the Statement of Additional Information. If the Fund invests in
such investment companies, the Fund will bear its proportionate share of the
costs incurred by such companies, including investment advisory fees.
Although the Fund has no restriction as to the maximum or minimum duration
of any individual security held by it, during normal market conditions the
Fund's average effective duration will generally be within 5% of the duration of
the Lehman Brothers Aggregate Bond Index. "Duration" is a term used by
investment managers to express the average time to receipt of expected cash
flows (discounted to their present value) on a particular fixed income
instrument or a portfolio of instruments. Duration takes into account the
pattern of a security's cash flow over time, including how cash flow is affected
by prepayments and changes in interest rates. For example, the duration of a
five-year zero coupon bond that pays no interest or principal until the maturity
of the bond is five years. This is because a zero coupon bond produces no cash
flow until the maturity date. On the other hand, a coupon bond that pays
interest semi-annually and matures in five years will have a duration of less
than five years, which reflects the semi-annual cash flows resulting from coupon
payments. Duration also generally defines the effect of interest rate changes on
bond prices. Generally, if interest rates increase by one percent, the value of
a security having an effective duration of five years would decrease in value by
five percent.
The Fund's investment objectives and policies described above may be
changed by RBB's Board of Directors without the approval of the Fund's
shareholders.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Fund may not change the following investment limitations without
shareholder approval. (A complete list of the investment limitations that cannot
be changed without such a vote of the shareholders is contained in the Statement
of Additional Information under "Investment Objective and Policies.")
The Fund may not:
1. Purchase the securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, if immediately after and as a result of such purchase,
more than 5% of the value of the Fund's total assets would be invested in
the securities of such issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by the Fund, except that up to 25%
of the value of the Fund's total assets may be invested without regard to
such limitations.
2. Purchase any securities which would cause, at the time of purchase,
25% or more of the value of the total assets of the Fund to be invested in
the obligations of issuers in any single industry, provided that there is
no limitation with respect to investments in U.S. Government obligations.
3. Borrow money or issue senior securities, except that the Fund may
borrow from banks and enter into reverse repurchase agreements and dollar
rolls for temporary purposes in amounts up to one-third of the value of its
total assets at the time of such borrowing; or mortgage, pledge or
hypothecate any assets, except in connection with any such borrowing and
then in amounts not in excess of one-third of the value of the Fund's total
assets at the time of such borrowing. The Fund will not purchase securities
while its aggregate borrowings (including reverse repurchase agreements,
dollar rolls and borrowings from banks) are in excess of 5% of its total
assets. Securities held in escrow or separate accounts in connection with
the Fund's investment practices are not considered to be borrowings or
deemed to be pledged for purposes of this limitation.
If a percentage restriction under one of the Funds' investment policies or
restrictions or the use of assets is adhered to at the time a transaction is
effected, later changes in percentage resulting from changing values will not be
considered a violation (except with respect to any restrictions that may apply
to borrowings or senior securities issued by the Fund).
5
<PAGE>
PORTFOLIO TURNOVER
The Fund retains the right to sell securities irrespective of how long they
have been held. The Adviser estimates that the annual turnover in the Fund will
be approximately 100%. High portfolio turnover (100% or more) will generally
result in higher transaction costs to a portfolio and may result in the
realization of short-term capital gains that are taxable to shareholders as
ordinary income.
RISK FACTORS
- --------------------------------------------------------------------------------
INTEREST RATE RISK
Generally, the market value of fixed income securities is subject to
interest rate fluctuation and can be expected to vary inversely to changes in
the prevailing interest rates. Thus, the value of portfolio investments held by
the Fund is likely to decline if prevailing interest rates rise, and vice versa.
LOWER RATED SECURITIES
Investors should carefully consider the relative risks of investing in the
higher yielding (and, therefore, higher risk) debt securities rated below
investment-grade by S&P or Moody's, or which are similarly rated by another
Rating Organization or are unrated but deemed by the Adviser to be comparable to
instruments so rated.
The Fund's investments in obligations rated below the four highest ratings
of S&P and Moody's have different risks than investments in securities that are
rated "investment-grade." Risk of loss upon default by the borrower is
significantly greater because lower-rated securities are generally unsecured and
are often subordinated to other creditors of the issuer, and because the issuers
frequently have high levels of indebtedness and are more sensitive to adverse
economic conditions, such as recessions, individual corporate developments and
increasing interest rates than are investment-grade issuers. As a result, the
market price of such securities, and the net asset value of the Fund's Shares,
may be particularly volatile.
Additional risks associated with lower-rated fixed income securities are
(a) the relatively low trading market liquidity for the securities and (b) the
creditworthiness of the issuers of such securities. During an economic downturn
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. An economic downturn could also
disrupt the market for lower-rated bonds generally and adversely affect the
value of outstanding bonds and the ability of the issuers to repay principal and
interest. If the issuer of a lower-rated security held by the Fund defaulted,
the Fund could incur additional expenses to seek recovery. Adverse publicity and
investor perceptions, whether or not based on fundamental analysis, may also
decrease the values and liquidity of lower-rated securities held by the Fund,
especially in a thinly traded market. Finally, the Fund's trading in fixed
income securities entails risks that capital losses rather than gains will
result. As a result, investment in the Fund should not be considered a complete
investment program.
The Adviser will continually evaluate lower-rated securities and the
ability of their issuers to pay interest and principal. The Fund's ability to
achieve its investment objectives may be more dependent on the Adviser's credit
analysis than might be the case for a fund that invested in higher rated
securities. See the "Appendix" in the Statement of Additional Information for a
general description of securities ratings.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
Mortgage-backed securities, like other fixed income instruments, may be
subject to risks including price fluctuations due to interest rate changes. The
returns on mortgage-backed securities may also be negatively affected by changes
in principal pre-payment rates due to interest rate volatility.
6
<PAGE>
Mortgage-related securities acquired by the Fund may include collateralized
mortgage obligations ("CMOs"), a type of derivative, issued by the Federal
National Mortgage Association, the Federal Home Loan Mortgage Corporation,
Government National Mortgage Association or other U.S. Government agencies or
instrumentalities, as well as by private issuers. CMOs may involve additional
risks other than those found in other types of mortgage-related obligations in
that they may exhibit more price volatility and interest rate risk than such
obligations. During periods of rising interest rates, CMOs may lose their
liquidity as CMO market makers may choose not to repurchase, or may offer prices
based on current market conditions, which are unacceptable to a fund based on
the fund's analysis of the market value of the security. See "Investment
Objectives and Policies" in the Statement of Additional Information.
Asset-backed securities are also subject to declines in market value during
periods of rising interest rates. Due to the possibility of prepayment of the
underlying obligations, asset-backed securities have less potential for capital
appreciation than other debt securities of comparable maturities during periods
of declining interest rates. As a result, asset-backed securities may be less
effective than other fixed income securities as a means of locking in attractive
interest rates for the long term.
REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS
The Fund may enter into reverse repurchase agreements with respect to
portfolio securities for temporary purposes (such as to obtain cash to meet
redemption requests) when the liquidation of portfolio securities is deemed
disadvantageous or inconvenient by the Adviser. Reverse repurchase agreements
involve the sale of securities held by the Fund pursuant to the Fund's agreement
to repurchase the securities at an agreed-upon price, date and rate of interest.
Such agreements are considered to be borrowings under the Investment Company Act
of 1940 (the "1940 Act"), and may be entered into only for temporary or
emergency purposes. While reverse repurchase transactions are outstanding, the
Fund will maintain in a segregated account with the Fund's custodian or a
qualified sub-custodian, cash or liquid securities of an amount at least equal
to the market value of the securities, plus accrued interest, subject to the
agreement and will monitor the account to ensure that such value is maintained.
Reverse repurchase agreements involve the risk that the market value of the
securities sold by the Fund may decline below the price of the securities the
Fund is obligated to repurchase. The Fund may also enter into "dollar rolls," in
which it sells fixed income securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar (same type, coupon
and maturity) securities on a specified future date. During the roll period, the
Fund would forgo principal and interest paid on such securities. The Fund would
be compensated by the difference between the current sales price and the forward
price for the future purchase, as well as by the interest earned on the cash
proceeds of the initial sale.
FOREIGN SECURITIES RISK
The Fund may invest in foreign securities, as described above. Investing in
securities of foreign issuers involves considerations not typically associated
with investing in securities of companies organized and operating in the United
States. Foreign securities generally are denominated and pay dividends or
interest in foreign currencies. The Fund may hold from time to time various
foreign currencies pending their investment in foreign securities or their
conversion into U.S. dollars. The value of the assets of the Fund as measured in
U.S. dollars may therefore be affected favorably or unfavorably by changes in
exchange rates. There may be less publicly available information concerning
foreign issuers than is available with respect to U.S. issuers. Foreign
securities may not be registered with the U.S. Securities and Exchange
Commission, and generally, foreign companies are not subject to uniform
accounting, auditing and financial reporting requirements comparable to those
applicable to U.S. issuers. See "Investment Objectives and Policies -- Foreign
Securities" in the Statement of Additional Information.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS
Because the Fund may buy and sell securities denominated in currencies
other than the U.S. dollar, and may receive interest and sale proceeds in
currencies other than the U.S. dollar, the Fund from time to time may enter into
foreign currency exchange transactions to convert the U.S. dollar to foreign
currencies, to convert foreign currencies to the U.S. dol-
7
<PAGE>
lar and to convert foreign currencies to other foreign currencies. Forward
foreign currency exchange contracts are agreements to exchange one currency for
another -- for example, to exchange a certain amount of U.S. dollars for a
certain amount of Japanese yen -- at a future date and at a specified price.
Typically, the other party to a currency exchange contract will be a commercial
bank or other financial institution. A fund either enters into these
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market, or uses forward contracts to purchase or sell
foreign currencies.
Forward foreign currency exchange contracts also allow the Fund to hedge
the currency risk of portfolio securities denominated in a foreign currency.
This technique permits the assessment of the merits of a security to be
considered separately from the currency risk. By separating the asset and the
currency decision, it is possible to focus on the opportunities presented by the
security apart from the currency risk. Although forward foreign currency
exchange contracts are of short duration, generally between one and twelve
months, the forward foreign currency exchange contracts are rolled over in a
manner consistent with a more long-term currency decision. There is a risk of
loss to the Fund if the other party does not complete the transaction.
EUROPEAN CURRENCY UNIFICATION
Many European countries are about to adopt a single European currency, the
euro. On January 1, 1999, the euro will become legal tender for all countries
participating in the Economic and Monetary Union ("EMU"). A new European Central
Bank will be created to manage the monetary policy of the new unified region. On
the same date, the exchange rates will be irrevocably fixed between the EMU
member countries. National currencies will continue to circulate until they are
replaced by euro coins and bank notes by the middle of 2002.
This change is likely to significantly impact the European capital markets
in which the Fund may invest and may result in the Fund facing additional risks
in pursuing its investment objective. These risks, which include, but are not
limited to, uncertainty as to the proper tax treatment of the currency
conversion, volatility of currency exchange rates as a result of the conversion,
uncertainty as to capital market reaction, conversion costs that may affect
issuer profitability and creditworthiness, and lack of participation by some
European countries, may increase the volatility of the Fund's net asset value
per share.
WHEN-ISSUED PURCHASES AND FORWARD COMMITMENTS
The Fund may purchase securities on a when-issued basis or enter into
forward commitment transactions. When the Fund agrees to purchase securities on
a when-issued basis or enters into a forward commitment to purchase securities,
the Custodian will set aside cash, U.S. Government securities or other liquid
assets equal to the amount of the purchase or the commitment in a separate
account. As a result, the Fund's liquidity and ability to manage its portfolio
might be affected in the event its when-issued purchases or forward commitments
ever exceeded 25% of the value of its assets. In the case of a forward
commitment to sell portfolio securities, the Custodian will hold the portfolio
securities in a segregated account while the commitment is outstanding. When the
Fund engages in when-issued and forward commitment transactions, it relies on
the other party to consummate the trade. Failure of such party to do so may
result in the Fund incurring a loss or missing an opportunity to obtain a price
considered to be advantageous.
YEAR 2000
- --------------------------------------------------------------------------------
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer
8
<PAGE>
systems that they use and to obtain assurances that comparable steps are being
taken by the Fund's other major service providers. While there can be no
assurance that the Fund's service providers will be Year 2000 compliant, the
Fund's service providers expect that their plans to be compliant will be
achieved.
ASSET ALLOCATION
From time to time, the Fund may experience relatively large purchases or
redemptions due to asset allocation decisions made by the Advisor for clients
receiving Asset Allocation account management services involving investments in
the Fund. These transactions may have a material effect on the Fund, since
redemptions caused by reallocations may result in the Fund selling portfolio
securities, and purchases caused by reallocations may result in the Fund
receiving additional cash that it will have to invest. While it is impossible to
predict the overall impact of these transactions over time, there could be
adverse effects on portfolio management to the extent that the Fund may be
required to sell securities at times when it would not otherwise do so, or
receive cash that cannot be invested in an expeditious manner. These
transactions could also have tax consequences if the sale of securities results
in gains and could also increase transaction costs. The Advisor is committed to
minimizing the impact of such transactions on the Fund to the extent it is
consistent with pursuing the investment objectives of clients for which the
Advisor provides Asset Allocation account management services involving
investments in the Fund and monitors the impact of asset allocation decisions on
the Fund.
GENERAL
Investment methods described in this Prospectus are among those which the
Fund has the power to utilize. Some may be employed on a regular basis; others
may not be used at all. Accordingly, reference to any particular method or
technique carries no implication that it will be utilized or, if it is, that it
will be successful.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of RBB and the Fund are managed under the
direction of RBB's Board of Directors.
INVESTMENT ADVISER
Boston Partners Asset Management, L.P., located at 28 State Street, 21st
Floor, Boston, Massachusetts 02109, serves as the Fund's investment adviser. The
Adviser provides investment management and investment advisory services to
investment companies and other institutional accounts that had aggregate total
assets under management as of October 31, 1998 in excess of $16.0 billion. The
adviser is organized as a Delaware limited partnership whose sole general
partner is Boston Partners, Inc., a Delaware corporation.
Subject to the supervision and direction of RBB's Board of Directors, the
Adviser manages the Fund's portfolio in accordance with the Fund's investment
objectives and policies, makes investment decisions for the Fund, places orders
to purchase and sell securities and employs professional portfolio managers and
securities analysts who provide research services to the Fund. For its services
to the Fund, the Adviser is paid an advisory fee computed at an annual rate of
0.40% of the Fund's average daily net assets, which is calculated daily and paid
monthly. The Adviser has notified RBB, however, that it intends to limit total
fund operating expenses to .60% during the Fund's current fiscal year.
PORTFOLIO MANAGEMENT
The day-to-day portfolio management of the Fund is the responsibility of
William R. Leach who is a senior portfolio manager of the Adviser and Chairman
of the Fixed Income Strategy Committee. Prior to joining the Adviser in April
1995, Mr. Leach was employed by The Boston Company Asset Management, Inc. ("The
Boston Company") from 1988 through April 1995 where he was a senior portfolio
manager and Director of the Fixed Income Strategy Committee. Mr. Leach has over
16 years of investment experience and is a Chartered Financial Analyst ("CFA").
Mr. Leach will be assisted by Glenn
9
<PAGE>
S. Davis, Joseph F. Feeney, Jr. and Michael A. Mullaney. Mr. Davis is a Fixed
Income Portfolio Manager with the Adviser and is also a CFA. Prior to joining
the Adviser in April 1995, he was Vice President and Portfolio Manager at The
Boston Company, specializing in short and intermediate term corporate bonds.
Prior to that position, he was responsible for the Short-term Fixed Income Group
at State Street Global Advisors. He has a total of 17 years of investment
experience. Mr. Feeney is a Fixed Income Portfolio Manager with the Adviser and
also a CFA. Prior to joining the Adviser in April 1995, he was Assistant Vice
President and Mortgage-backed Securities Portfolio Manager for Putnam
Investments. Mr. Mullaney is a Fixed Income Portfolio Manager who joined the
Adviser in June 1997. From 1984 to 1997, he was employed at Putnam Investments,
most recently as Managing Director and Senior Investment Strategist,
specializing in portfolio strategy and management. His prior experience included
a position as a senior Consultant from 1981 to 1983 with Chase
Econometrics/Interactive Data Corporation, where he focused on quantitative
methodologies in fixed income and equity management. He has over 16 years of
investment experience.
ADMINISTRATOR
PFPC Inc. ("PFPC") serves as administrator to the Fund and generally
assists the Fund in all aspects of its administration and operations, including
matters relating to the maintenance of financial records and accounting. PFPC's
principal offices are located at 400 Bellevue Parkway, Wilmington, Delaware
19809. For its services, PFPC receives a fee calculated at an annual rate of
.125% of the Fund's average daily net assets, with a minimum annual fee of
$75,000 payable monthly on a pro rata basis.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholder servicing
agreements with registered broker-dealers who have entered into dealer
agreements with the Distributor ("Authorized Dealers") for the provision of
certain shareholder support services to customers of such Authorized Dealers who
are shareholders of the Fund. The services provided and the fees payable by the
Fund for these services are described in the Statement of Additional Information
under "Investment Advisory, Distribution and Servicing Arrangements."
ADMINISTRATIVE SERVICES AGENT
Provident Distributors, Inc. ("PDI") provides certain administrative
services to the Fund's Institutional Shares not otherwise provided by PFPC.
PDI's principal business address is Four Falls Corporate Center, West
Conshohocken, Pennsylvania 19428. PDI furnishes certain internal quasi-legal,
executive and administrative services to the Fund, acts as a liaison between the
Fund and its various service providers and coordinates and assists in the
preparation of reports prepared on behalf of the Fund. For its services, PDI is
entitled to a monthly fee calculated at the annual rate of .15% of the
respective average daily net assets of the Fund's Institutional Class. PDI is
currently waiving fees in excess of .03% of the average daily net assets of the
Fund's Institutional Class.
DISTRIBUTOR
PDI acts as distributor for the Shares pursuant to a distribution agreement
(the "Distribution Agreement") with RBB on behalf of the Shares.
10
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
BOSTON PARTNERS BOND FUND bp
(INSTITUTIONAL CLASS) BOSTON PARTNERS ASSET MANAGEMENT, L.P.
ACCOUNT APPLICATION
PLEASE NOTE: Do not use this form to open a retirement plan account. For an IRA
application or help with this Application, please call 1-888-261-4073
1 (Please check the appropriate box(es) below.)
Account
Registration: / / Individual / / Joint Tenant / / Other
_________________________________________________________________
NAME SOCIAL SECURITY NUMBER OR TAX ID # OF PRIMARY OWNER
_________________________________________________________________
NAME OF JOINT OWNER SOCIAL SECURITY NUMBER OR TAX ID #
JOINT OWNER
For joint accounts, the account registrants will be joint tenants
with right of survivorship and not tenants in common unless
tenants in common or community property registrations are
requested.
/ / UNIFORM GIFTS/TRANSFER TO MINOR'S ACT
GIFT TO
MINOR: _________________________________________________________________
NAME OF ADULT CUSTODIAN (ONLY ONE PERMITTED)
_________________________________________________________________
NAME OF MINOR (ONLY ONE PERMITTED)
_________________________________________________________________
MINOR'S SOCIAL SECURITY NUMBER AND DATE OF BIRTH
CORPORATION,
PARTNERSHIP,
TRUST OR
OTHER ENTITY: _________________________________________________________________
NAME OF CORPORATION, PARTNERSHIP, NAME(S) OF TRUSTEE(S)
OR OTHER
_________________________________________________________________
TAXPAYER IDENTIFICATION NUMBER
2 _________________________________________________________________
Mailing STREET OR P.O. BOX AND/OR APARTMENT NUMBER
Address:
_________________________________________________________________
CITY STATE ZIP CODE
_________________________________________________________________
DAY PHONE NUMBER EVENING PHONE NUMBER
<PAGE>
3 Minimum initial investment Amount of investment $__________
Investment of $100,000.
Information:
Make the check payable to Boston Partners Bond Fund.
Shareholders may not purchase shares of this Fund with a check
issued by a third party and endorsed over to the Fund.
NOTE: Dividends and capital gains may be reinvested or paid by
check. If no options are selected below, both dividends and
capital gains will be reinvested in additional Fund shares.
DISTRIBUTION INTEREST: Pay by check / / Reinvest / /
OPTIONS: CAPITAL GAINS: Pay by check / / Reinvest / /
4
Telephone To use this option, you must initial the appropriate line below.
Redemption
or Exchange: I authorize the Transfer Agent to accept instructions from any
persons to redeem or exchange shares in my account(s) by
telephone in accordance with the procedures and conditions set
forth in the Fund's current prospectus.
______________________ _________________ Redeem shares, and
individual initial joint initial send the proceeds to
the address of record.
______________________ _________________ Exchange shares for
individual initial joint initial shares of the Boston
Partners Large Cap
Value Fund, Mid Cap
Value Fund, Micro Cap
Value Fund or Market
Neutral Fund.
5
Automatic The Automatic Investment Plan which is available to shareholders
Investment of the Fund, makes possible regularly scheduled purchases of Fund
Plan: shares to allow dollar-cost averaging. The Fund's Transfer Agent
can arrange for an amount of money selected by you to be deducted
from your checking account and used to purchase shares of the
Fund.
Please debit $________ from my checking account (named below) on
or about the 20th of the month. PLEASE ATTACH AN UNSIGNED, VOIDED
CHECK.
/ / Monthly / / Every Alternate Month / / Quarterly / / Other
BANK OF _________________________________________________________________
RECORD: BANK NAME STREET ADDRESS OR P.O. BOX
_________________________________________________________________
CITY STATE ZIP CODE
_________________________________________________________________
BANK ABA NUMBER BANK ACCOUNT NUMBER
<PAGE>
6
Signatures: The undersigned warrants that I (we) have full authority and, if
a natural person, I (we) am (are) of legal age to purchase shares
pursuant to this Account Application, and I (we) have received a
current prospectus for the Fund in which I (we) am (are)
investing.
Under the Interest and Dividend Tax Compliance Act of 1983, the
Fund is required to have the following certification:
Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer
identification number (or I am waiting for a number to
be issued to me), and
(2) I am not subject to backup withholding because (a) I am
exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service that I am
subject to 31% backup withholding as a result of a
failure to report all interest or dividends, or (c) the
IRS has notified me that I am no longer subject to
backup withholding.
NOTE: YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED
BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING
BECAUSE YOU HAVE FAILED TO REPORT ALL INTEREST AND DIVIDENDS ON
YOUR TAX RETURN. THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE
YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE
CERTIFICATION REQUIRED TO AUDIT BACKUP WITHHOLDING.
_________________________________________________________________
SIGNATURE OF APPLICANT DATE
_________________________________________________________________
PRINT NAME TITLE (IF APPLICABLE)
_________________________________________________________________
SIGNATURE OF JOINT OWNER DATE
_________________________________________________________________
PRINT NAME TITLE (IF APPLICABLE)
(If you are signing for a corporation, you must indicate
corporate office or title. If you wish additional signatories on
the account, please include a corporate resolution. If signing as
a fiduciary, you must indicate capacity.)
For information on additional options, such as IRA Applications,
rollover requests for qualified retirement plans, or for wire
instructions, please call us at 1-888-261-4073.
MAIL COMPLETED ACCOUNT APPLICATION AND CHECK TO:
THE BOSTON PARTNERS BOND FUND
C/O PFPC INC.
P.O. BOX 8852
WILMINGTON, DE 19899-8852
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
EXPENSES
The expenses of the Fund are deducted from its total income before
dividends are paid. These expenses include, but are not limited to: fees paid to
the Adviser and PFPC; administrative services fees; fees and expenses of
officers and directors who are not affiliated with any of RBB's investment
advisers, sub-advisers or the Distributor; taxes; interest; legal fees;
custodian fees; auditing fees; brokerage fees and commissions; certain of the
fees and expenses of registering and qualifying the Fund and the Shares for
distribution under federal and state securities laws; expenses of preparing
prospectuses and statements of additional information and of printing and
distributing them annually to existing shareholders that are not attributable to
a particular class of shares of RBB; the expense of reports to shareholders,
shareholders' meetings and proxy solicitations that are not attributable to a
particular class of shares of RBB; fidelity bond and directors and officers'
liability insurance premiums; the expense of using independent pricing services;
and other expenses that are not expressly assumed by the Adviser under its
investment advisory agreement with respect to the Fund. Any general expenses of
RBB that are not readily identifiable as belonging to a particular investment
portfolio of RBB will be allocated among all investment portfolios of RBB based
upon the relative net assets of the investment portfolios. Distribution
expenses, transfer agency expenses, expenses of preparation, printing and
distributing prospectuses, statements of additional information, proxy
statements and reports to shareholders and registration fees, identified as
belonging to a particular class, are allocated to such class.
The Adviser may assume expenses of the Fund from time to time. To the
extent any service providers assume expenses of the Fund, such assumption of
expenses will have the effect of lowering the Fund's overall expense ratio and
increasing its yield to investors.
HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------
GENERAL
Shares representing interests in the Fund are offered continuously for sale
by the Distributor and may be purchased without imposition of a sales charge.
Shares may be purchased initially by completing the application included in this
Prospectus and forwarding the application to the Fund's transfer agent, PFPC.
Purchases of Shares may be effected by wire to an account to be specified by
PFPC or by mailing a check or Federal Reserve Draft, payable to the order of
"The Boston Partners Bond Fund" c/o PFPC Inc., P.O. Box 8852, Wilmington,
Delaware 19899-8852. The name of the Fund, Boston Partners Bond Fund, must also
appear on the check or Federal Reserve Draft. Shareholders may not purchase
shares of the Boston Partners Bond Fund with a check issued by a third party and
endorsed over to the Fund. Federal Reserve Drafts are available at national
banks or any state bank which is a member of the Federal Reserve System. Initial
investments in the Fund must be at least $100,000 and subsequent investments
must be at least $5,000. For purposes of meeting the minimum initial purchase,
clients which are part of endowments, foundations or other related groups may be
aggregated. The Fund reserves the right to suspend the offering of Shares for a
period of time or to reject any purchase order.
Shares may be purchased by principals and employees of the Adviser and by
their spouses and children either directly or through any trust that has the
principal, employee, spouse or child as the primary beneficiaries, their
individual retirement accounts, or any pension and profit-sharing plan of the
Adviser without being subject to the minimum investment limitations.
Shares may be purchased on any Business Day. A "Business Day" is any day
that the New York Stock Exchange (the "NYSE") is open for business. Currently,
the NYSE is closed on weekends and New Year's Day, Dr. Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and on the preceding Friday or subsequent
Monday when one of these holidays falls on a Saturday or Sunday.
The price paid for Shares purchased initially or acquired through the
exercise of an exchange privilege is based on the net asset value next computed
after a purchase order is received in good order by the Fund or its agents.
Orders received by the Fund or its agents after the close of regular trading on
the New York Stock Exchange, Inc. (currently 4 p.m., Eastern time) are priced at
the net asset value next determined on the following business day. In those
cases where an investor
11
<PAGE>
pays for Shares by check, the purchase will be effected at the net asset value
next determined after the Fund or its agents receives the order and the
completed application.
An investor may also purchase Shares by having his bank or his broker wire
Federal Funds to PFPC. An investor's bank or broker may impose a charge for this
service. The Fund does not currently impose a service charge for effecting wire
transfers but reserves the right to do so in the future. In order to ensure
prompt receipt of an investor's Federal Funds wire, for an initial investment it
is important that an investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (888) 261-4073, and
provide PFPC with your name, address, telephone number, Social Security or Tax
Identification Number, the Fund selected, the amount being wired, and by which
bank. PFPC will then provide an investor with a Fund account number. Investors
with existing accounts should also notify PFPC prior to wiring funds.
B. Instruct your bank or broker to wire the specified amount, together with
your assigned account number, to PFPC's account with PNC Bank:
PNC Bank, N.A.
Philadelphia, PA 19103
ABA NUMBER: 0310-0005-3
CREDITING ACCOUNT NUMBER: 86-1108-2507
FROM: (name of investor)
ACCOUNT NUMBER: (Investor's account number with the Fund)
FOR PURCHASE OF: Boston Partners Bond Fund
AMOUNT: (amount to be invested)
C. Fully complete and sign the application and mail it to the address shown
thereon. PFPC will not process purchases until it receives a fully completed and
signed application.
For subsequent investments, an investor should follow steps A and B above.
Additional investments in Shares may be made automatically by authorizing
the Fund's transfer agent to withdraw funds from your bank account on a regular
basis. Investors desiring to participate in the automatic investing program
should call the Fund's transfer agent, PFPC, at (888) 261-4073 to obtain the
appropriate forms.
HOW TO REDEEM AND EXCHANGE SHARES
- --------------------------------------------------------------------------------
REDEMPTION BY MAIL
Shareholders may redeem for cash some or all of their Shares of the Fund at
any time. To do so, a written request in proper form must be sent directly to
Boston Partners Bond Fund c/o PFPC Inc., P.O. Box 8852, Wilmington, Delaware
19899-8852. There is no charge for a redemption.
A request for redemption must be signed by all persons in whose names the
Shares are registered. Signatures must conform exactly to the account
registration. If the proceeds of the redemption would exceed $10,000, or if the
proceeds are not to be paid to the record owner at the record address, or if the
shareholder is a corporation, partnership, trust or fiduciary, signature(s) must
be guaranteed according to the procedures described below under "Exchange
Privilege."
Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption. In some cases, however,
other documents may be necessary. In the case of shareholders holding share
certificates, the certificates for the shares being redeemed must accompany the
redemption request. Additional documentary evidence of authority is also
required by the Fund's transfer agent in the event redemption is requested by a
corporation, partnership, trust, fiduciary, executor or administrator.
12
<PAGE>
INVOLUNTARY REDEMPTION
RBB reserves the right to redeem a shareholder's account at any time the
net asset value of the account falls below $500 as the result of a redemption or
an exchange request. Shareholders will be notified in writing that the value of
their account is less than $500 and will be allowed 30 days to make additional
investments before the redemption is processed.
PAYMENT OF REDEMPTION PROCEEDS
In all cases, the redemption price is the net asset value per share next
determined after the request for redemption is received in proper form by the
Fund or its agents. Payment for Shares redeemed is made by check mailed within
seven days after acceptance by the Fund or its agents of the request and any
other necessary documents in proper order. Such payment may be postponed or the
right of redemption suspended as provided by law. If the Shares to be redeemed
have been recently purchased by check, PFPC may delay mailing a redemption check
for up to 15 days, pending a determination that the check has cleared. The Fund
has elected to be governed by Rule 18f-1 under the 1940 Act so that it is
obligated to redeem its Shares solely in cash up to the lesser of $250,000 or 1%
of its net asset value during any 90-day period for any one shareholder of a
portfolio.
EXCHANGE PRIVILEGE
The exchange privilege is available to shareholders residing in any state
in which the Shares being acquired may be legally sold. A shareholder may
exchange Shares of the Fund for Institutional Shares of any other Boston
Partners Fund of RBB subject to restrictions described under "Exchange Privilege
Limitations" below. Such exchange will be effected at the net asset value of the
exchanged Fund and the net asset value of the Fund being acquired next
determined after receipt of a request for an exchange by the Fund or its agents.
An exchange of Shares will be treated as a sale for federal income tax purposes.
See "Taxes." A shareholder wishing to make an exchange may do so by sending a
written request to PFPC.
If the exchanging shareholder does not currently own Institutional Shares
of the Boston Partners Fund into which he/she would like to exchange, a new
account will be established with the same registration, dividend and capital
gain options as the account from which shares are exchanged, unless otherwise
specified in writing by the shareholder with all signatures guaranteed. A
signature guarantee may be obtained from a domestic bank or trust company,
broker, dealer, clearing agency or savings association who are participants in a
medallion program recognized by the Securities Transfer Association. The three
recognized medallion programs are Securities Transfer Agents Medallion Program
(STAMP), Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange,
Inc. Medallion Signature Program (MSP). Signature guarantees that are not part
of these programs will not be accepted. The exchange privilege may be modified
or terminated at any time, or from time to time, by RBB, upon 60 days' written
notice to shareholders.
If an exchange is to a new account in the Fund, the dollar value of Shares
acquired must equal or exceed that Fund's minimum for a new account; if to an
existing account, the dollar value must equal or exceed that Fund's minimum for
subsequent investments. If any amount remains in the Fund from which the
exchange is being made, such amount must not drop below the minimum account
value required by the Fund.
EXCHANGE PRIVILEGE LIMITATIONS
The Fund's exchange privilege is not intended to afford shareholders a way
to speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Funds and increase transactions costs, the Fund has
established a policy of limiting excessive exchange activity.
Shareholders are entitled to six (6) exchange redemptions (at least 30 days
apart) from the Fund during any twelve-month period. Notwithstanding these
limitations, the Fund reserves the right to reject any purchase request
(including purchases by exchange) that is deemed to be disruptive to efficient
portfolio management.
13
<PAGE>
TELEPHONE TRANSACTIONS
In order to request an exchange or redemption by telephone, a shareholder
must have completed and returned an account application containing the
appropriate telephone election. To add a telephone option to an existing account
that previously did not provide for this option, a Telephone Exchange
Authorization Form must be filed with PFPC. These forms are available from PFPC.
Once this election has been made, the shareholder may simply contact PFPC by
telephone to request the exchange or redemption by calling (888) 261-4073.
Neither RBB, the Fund, the Distributor, the Administrator nor any Fund agent
will be liable for any loss, liability, cost or expense for following RBB's
telephone transaction procedures described below or for following instructions
communicated by telephone that they reasonably believe to be genuine.
RBB's telephone transaction procedures include the following measures: (1)
requiring the appropriate telephone transaction privilege forms; (2) requiring
the caller to provide the names of the account owners, the account social
security number and name of the Fund, all of which must match RBB's records; (3)
requiring RBB's service representative to complete a telephone transaction form,
listing all of the above caller identification information; (4) permitting
exchanges only if the two account registrations are identical; (5) requiring
that redemption proceeds be sent only by check to the account owners of record
at the address of record, or by wire only to the owners of record at the bank
account of record; (6) sending a written confirmation for each telephone
transaction to the owners of record at the address of record within five (5)
business days of the call; and (7) maintaining tapes of telephone transactions
for six months, if the Fund elects to record shareholder telephone transactions.
For accounts held of record by broker-dealers (other than the Distributor),
financial institutions, securities dealers, financial planners and other
industry professionals, additional documentation or information regarding the
scope of a caller's authority is required. Finally, for telephone transactions
in accounts held jointly, additional information regarding other account holders
is required. Telephone transactions will not be permitted in connection with IRA
or other retirement plan accounts or by an attorney-in-fact under a power of
attorney.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value for each class of the Fund is calculated by adding the
value of the proportionate interest of each class in the Fund's securities, cash
and other assets, deducting the actual and accrued liabilities of each class and
dividing by the total number of outstanding shares of the class. The net asset
value is calculated as of the close of regular trading on the NYSE on each
Business Day.
Valuation of securities held by the Fund is as follows: securities traded
on a national securities exchange or on the NASDAQ National Market System are
valued at the last reported sale price that day; securities traded on a national
securities exchange or on the NASDAQ National Market System for which there were
no sales on that day and securities traded on other over-the-counter markets for
which market quotations are readily available are valued at the mean of the bid
and asked prices; and securities for which market quotations are not readily
available are valued at fair market value as determined in good faith by or
under the direction of RBB's Board of Directors. The amortized cost method of
valuation may also be used with respect to debt obligations with sixty days or
less remaining to maturity.
With the approval of the Board of Directors, the Fund may use a pricing
service, bank or broker-dealer experienced in such matters to value the Fund's
securities. A more detailed discussion of net asset value and security valuation
is contained in the Statement of Additional Information.
14
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Fund to the Fund's shareholders. All
distributions are reinvested in the form of additional full and fractional
Shares unless a shareholder elects otherwise.
The Fund will declare and pay dividends from net investment income monthly.
Net realized capital gains (including net short-term capital gains), if any,
will be distributed at least annually.
TAXES
- --------------------------------------------------------------------------------
The following discussion is only a brief summary of some of the important
tax considerations generally affecting the Fund and its shareholders and is not
intended as a substitute for careful tax planning. Accordingly, investors in the
Fund should consult their tax advisers with specific reference to their own tax
situation.
The Fund will elect to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended. So long as the
Fund qualifies for this tax treatment, it will be relieved of federal income tax
on amounts distributed to shareholders, but shareholders, unless otherwise
exempt, will pay income or capital gains taxes on amounts so distributed (except
distributions that are treated as a return of capital) regardless of whether
such distributions are paid in cash or reinvested in additional shares.
Distributions out of the "net capital gain" (the excess of net long-term
capital gain over net short-term capital loss), if any, of the Fund will be
taxed to shareholders as long-term capital gain regardless of the length of time
a shareholder has held his shares, whether such gain was reflected in the price
paid for the shares, or whether such gain was attributable to bonds bearing
tax-exempt interest. All other distributions, to the extent they are taxable,
are taxed to shareholders as ordinary income.
RBB will send written notices to shareholders annually regarding the tax
status of distributions made by the Fund. Dividends declared in December of any
year payable to shareholders of record on a specified date in such a month will
be deemed to have been received by the shareholders on December 31, provided
such dividends are paid during January of the following year. The Fund intends
to make sufficient actual or deemed distributions prior to the end of each
calendar year to avoid liability for federal excise tax.
Investors should be careful to consider the tax implications of buying
shares just prior to a distribution. The price of shares purchased at that time
will reflect the amount of the forthcoming distribution. Those investors
purchasing shares just prior to a distribution will nevertheless be taxed on the
entire amount of the distribution received, although the distribution is, in
effect, a return of capital.
Shareholders who exchange shares representing interests in one Fund for
shares representing interests in another Fund will generally recognize capital
gain or loss for federal income tax purposes.
Shareholders who are nonresident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships may be subject to
different U.S. federal income tax treatment.
15
<PAGE>
MULTI-CLASS STRUCTURE
- --------------------------------------------------------------------------------
The Fund offers one other class of shares, Investor Shares, which are
offered directly to individual investors pursuant to a separate prospectus.
Shares of each class represent equal pro rata interests in the Fund and accrue
dividends and calculate net asset value and performance quotations in the same
manner. The Fund will quote performance of the Investor Shares separately from
Institutional Shares. Because of different fees paid by the Institutional
Shares, the total return on such shares can be expected, at any time, to be
different than the total return on Investor Shares. Information concerning the
other class may be obtained by calling the Fund at (888) 261-4073.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
RBB has authorized capital of thirty billion shares of Common Stock, $.001
par value per share, of which 18.326 billion shares are currently classified
into 97 different classes of Common Stock. See "Description of Shares" in the
"Statement of Additional Information."
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE BOSTON PARTNERS BOND FUND AND DESCRIBE ONLY THE
INVESTMENT OBJECTIVES AND POLICIES, OPERATIONS, CONTRACTS AND OTHER MATTERS
RELATING TO BOSTON PARTNERS BOND FUND.
Each share that represents an interest in the Fund has an equal
proportionate interest in the assets belonging to the Fund with each other share
that represents an interest in the Fund, even where a share has a different
class designation than another share representing an interest in the Fund.
Shares of the Fund do not have preemptive or conversion rights. When issued for
payment as described in this Prospectus, Shares will be fully paid and
non-assessable.
RBB currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, RBB will assist in shareholder communications in such matters.
Holders of Shares of the Fund will vote in the aggregate and not by class
on all matters, except where otherwise required by law. Further, shareholders of
all investment portfolios of RBB will vote in the aggregate and not by portfolio
except as otherwise required by law or when the Board of Directors determines
that the matter to be voted upon affects only the interests of the shareholders
of a particular investment portfolio. (See the Statement of Additional
Information under "Additional Information Concerning Fund Shares" for examples
of when the 1940 Act requires voting by investment portfolio or by class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of Common Stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of RBB.
16
<PAGE>
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to the Fund's
transfer agent, PFPC Inc., at Bellevue Park Corporate Center, 400 Bellevue
Parkway, Wilmington, Delaware 19809, toll-free (888) 261-4073.
SHARE CERTIFICATES
In the interest of economy and convenience, physical certificates
representing Shares in the Fund are not normally issued.
HISTORICAL PERFORMANCE INFORMATION
For the period from commencement of operations (December 30, 1997) through
August 31, 1998, the total return since inception (not annualized) for the
Institutional Class of Shares of the Fund was as follows:
Unannualized investment returns for the period ended August 31, 1998
SINCE
INCEPTION
---------
Boston Partners Bond Fund
(Institutional Shares) ...................................... 4.79%
The total return assumes reinvestment of all dividends and capital gains
and reflects expense reimbursements and investment advisory fee waivers in
effect. Without these expense reimbursements waivers, the Fund's performance
would have been lower. Of course, past performance is no guarantee of future
results. Investment return and principal value will fluctuate, so that Shares,
when redeemed, may be worth more or less than the original cost. For more
information on performance, see "Performance Information" in the Statement of
Additional Information.
The table below presents the Composite performance history of certain of
the Adviser's managed accounts on an annualized basis since inception for the
period ended August 31, 1998. The Composite is comprised of all of the Adviser's
institutional accounts and other privately managed accounts with investment
objectives, policies and strategies substantially similar to those of the Fund,
although the accounts have operating histories, whereas the Fund had not
commenced operations until December 30, 1997. The Composite performance
information includes the reinvestment of interest received by the underlying
securities, realized and unrealized gains and losses, and reflects the payment
of investment advisory fees. The Composite performance does not reflect custody
fees or administrative fees that may be charged by banks, fiduciaries or other
third parties in connection with these institutional and privately managed
accounts. The privately managed accounts in the Composite are only available to
the Adviser's institutional advisory clients. The past performance of the
accounts which comprise the Composite is not indicative of the future
performance of the Fund. These accounts have lower investment advisory fees than
the Fund and the Composite performance figures would have been lower if subject
to the higher fees and expenses to be incurred by the Fund. These private
accounts are also not subject to the same investment limitations,
diversification requirements and other restrictions which are imposed upon
mutual funds under the 1940 Act and the Internal Revenue Code, which, if
imposed, may have adversely affected the performance results of the Composite.
Listed below the performance history for the Composite is a comparative index
comprised of securities similar to those in which accounts contained in the
Composite are invested.
17
<PAGE>
Average annualized investment returns for the period ended September 30,
1998
ONE SINCE
YEAR INCEPTION
-------- ---------
Composite Performance. ....................... 8.70% 9.20%
Lehman Brothers Aggregate Bond Index ......... 11.50% 8.60%
The Lehman Brothers Aggregate Bond Index is a broad market-weighted index,
which encompasses three major classes of investment-grade, fixed-income
securities with maturities greater than one year, including U.S. Treasury
securities, corporate bonds and mortgage-backed securities.
* The Adviser commenced managing these accounts on June 1, 1995
FUTURE PERFORMANCE INFORMATION
From time to time, the Fund may advertise its performance, including
comparisons to other mutual funds with similar investment objectives and to
stock or other relevant indices. All such advertisements will show the average
annual total return over one, five and ten year periods or, if such periods have
not yet elapsed, shorter periods corresponding to the life of the Fund. Such
total return quotations will be computed by finding the compounded average
annual total return for each time period that would equate the assumed initial
investment of $1,000 to the ending redeemable value, net of fees, according to a
required standardized calculation. The standard calculation is required by the
SEC to provide consistency and comparability in investment company advertising.
The Fund may also from time to time include in such advertising an aggregate
total return figure or a total return figure that is not calculated according to
the standardized formula in order to compare more accurately the Fund's
performance with other measures of investment return. For example, the Fund's
total return may be compared with data published by Lipper Analytical Services,
Inc., CDA Investment Technologies, Inc. or Weisenberger Investment Company
Service, or with the performance of the Lehman Brothers Aggregate Bond Index.
Performance information may also include evaluation of the Fund by nationally
recognized ranking services and information as reported in financial
publications such as Business Week, Fortune, Institutional Investor, Money
Magazine, Forbes, Barron's, The Wall Street Journal, The New York Times, or
other national, regional or local publications. All advertisements containing
performance data will include a legend disclosing that such performance data
represents past performance and that the investment return and principal value
of an investment will fluctuate so that an investor's Shares, when redeemed, may
be worth more or less than their original cost.
18
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN RBB'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RBB OR ITS DISTRIBUTOR.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY RBB OR BY THE DISTRIBUTOR IN
ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
-------------------
TABLE OF CONTENTS
PAGE
----
EXPENSE TABLE .......................................................... 2
FINANCIAL HIGHLIGHTS ................................................... 2
INTRODUCTION ........................................................... 4
INVESTMENT OBJECTIVES AND POLICIES ..................................... 4
INVESTMENT LIMITATIONS ................................................. 5
RISK FACTORS ........................................................... 6
YEAR 2000 .............................................................. 8
MANAGEMENT ............................................................. 9
HOW TO PURCHASE SHARES ................................................. 11
HOW TO REDEEM AND EXCHANGE SHARES ...................................... 12
NET ASSET VALUE ........................................................ 14
DIVIDENDS AND DISTRIBUTIONS ............................................ 15
TAXES .................................................................. 15
MULTI-CLASS STRUCTURE .................................................. 16
DESCRIPTION OF SHARES .................................................. 16
OTHER INFORMATION ...................................................... 17
INVESTMENT ADVISER
Boston Partners Asset Management, L.P.
Boston, Massachusetts
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
[LOGO GRAPHIC OMITTED]
<PAGE>
PROSPECTUS
DECEMBER 29, 1998
BOSTON PARTNERS
BOND FUND
(INVESTOR SHARES)
bp
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
[LOGO GRAPHIC OMITTED]
<PAGE>
BOSTON PARTNERS BOND FUND
(INVESTOR CLASS)
OF
THE RBB FUND, INC.
Boston Partners Bond Fund (the "Fund") is an investment portfolio of The
RBB Fund, Inc. ("RBB"), an open-end management investment company. The shares of
the Investor Class ("Shares") offered by this Prospectus represent interests in
the Fund. The investment objectives of the Fund are to maximize total return by
investing principally in investment grade fixed income securities, and
secondarily to seek current income.
This Prospectus contains information that a prospective investor needs to
know before investing. Please keep it for future reference. A Statement of
Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained free of charge from the Fund by calling (888)
261-4073. The Prospectus and the Statement of Additional Information are
available for reference, along with other related material on the SEC Internet
Web Site (http://www.sec.gov).
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK AND
SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENTS IN SHARES OF THE FUND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
EXPENSE TABLE
- --------------------------------------------------------------------------------
The following table illustrates annual operating expenses incurred by the
Investor shares of the Fund (after fee waivers and expense reimbursements) for
the fiscal period ended August 31, 1998 as a percentage of average daily net
assets. An example based on the summary is also shown.
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (after waivers)* ................................. 0.00%
12b-1 Fees ....................................................... 0.25%
Other Expenses (after waivers)* .................................. 0.60%
----
Total Fund Operating Expenses (after waivers)* ..................... 0.85%
====
*In the absence of fee waivers, Management Fees would be 0.40%, Other Expenses
would be 2.07% and Total Fund Operating Expenses would be 2.72%.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the
Fund, assuming (1) a 5% annual return and (2) redemption at the end of each time
period:
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
Boston Partners Bond Fund ...... $9 $27 $97 $105
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. (For more complete descriptions of the various costs and expenses,
see "Management" and "Distribution of Shares" below.) The Fee Table reflects a
voluntary waiver of "Management fees" for the Fund which is expected to be in
effect during the current fiscal year. However, the Adviser is under no
obligation with respect to such waiver and there can be no assurance that any
future waivers of Management fees will not vary from the figure reflected in the
Fee Table.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The "Financial Highlights" presented below set forth certain investment
results for shares of the Investor Class of the Fund for the period indicated.
Shares of the Investor Class were first issued on December 30, 1998. The
financial data included in this table should be read in conjunction with the
financial statements and notes thereto and the unqualified report of
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), RBB's independent
accountant, which are incorporated by reference into the Statement of Additional
Information. Further information about the performance of the Investor Class of
the Fund is available in the Annual Report to Shareholders. Both the Statement
of Additional Information and the Annual Report to Shareholders may be obtained
from the Fund free of charge by calling the telephone number on page 1 of the
prospectus.
2
<PAGE>
BOSTON PARTNERS BOND FUND
(FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
FOR THE PERIOD
DECEMBER 30, 1997*
THROUGH AUGUST 31,
1998
------------------
Per Share Operating Performance**
Net asset value, beginning of period .......................... $ 10.00
-------
Net investment income (1). .................................... 0.62
Net realized and unrealized gain/(loss) on investments(2) ..... (0.16)
-------
Net increase in net assets resulting from operations. ......... 0.46
-------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income. ........................................ (0.36)
Net realized capital gains .................................... --
-------
Net asset value, end of period ................................ $ 10.10
=======
Total investment return(3) .................................... 4.63%
=======
Ratios/Supplemental Data
Net assets, end of period (000). ........................... $198.00
Ratio of expenses to average net assets***(1)(4). .......... 0.85%
Ratio of net investment income to average net assets***(1) . 5.83%
Portfolio turnover rate****. ............................... 45.27%
* Commencement of operations.
** Calculated based on shares outstanding on the first and last day of the
period, except for dividends and distributions, if any, which are based
on actual shares outstanding on the dates of distributions.
*** Annualized.
**** Not annualized.
(1) Reflects waivers and reimbursements.
(2) The amount shown for a share outstanding throughout the period is not in
accord with the change in the aggregate gains and losses in investments
during the period because of the timing of sales and repurchases of Fund
shares in relation to fluctuating net asset value during the period.
(3) Total return is calculated assuming a purchase of shares on the first
day and a sale of shares on the last day of the period reported and will
include reinvestments of dividends and distributions, if any. Total
return is not annualized.
(4) Without the waiver of advisory, 12b-1, administration and transfer agent
fees and without the reimbursement of certain operating expenses, the
ratio of expenses to average net assets annualized for the period ended
August 31, 1998 would have been 2.72% for the Investor Class.
INTRODUCTION
- --------------------------------------------------------------------------------
RBB is an open-end management investment company incorporated under the
laws of the State of Maryland currently operating or proposing to operate
seventeen separate investment portfolios. The Shares offered by this Prospectus
represent interests in the Boston Partners Bond Fund. RBB was incorporated in
Maryland on February 29, 1988.
3
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
The investment objectives of the Fund are to maximize total return by
investing principally in investment grade fixed income securities, and
secondarily to seek current income.
The Fund will invest during normal market conditions at least 75% of its
total assets in bonds, including corporate debt obligations and mortgage-backed
and asset-backed securities (collectively, "Debt Securities") rated
investment-grade or better at the time of purchase by Standard & Poor's ("S&P")
or Moody's Investors Service, Inc. ("Moody's") or which are similarly rated by
another nationally recognized statistical rating organization ("Rating
Organization") (including Fitch IBCA, Duff & Phelps and Thomson BankWatch), or
are unrated but deemed by Boston Partners Asset Management L.P. (the "Adviser")
to be comparable in quality to instruments so rated. The Fund may invest up to
25% of its total assets in Debt Securities rated "BB" and "B" by Moody's or "Ba"
and "B" by S&P or which are similarly rated by another Rating Organization or
are unrated but are deemed by the Adviser to be comparable in quality to
instruments that are so rated.
Investment-grade Debt Securities are those rated at the time of purchase
"AAA," "AA," "A" or "BBB" by S&P, "Aaa," "Aa," "A" or "Baa" by Moody's or which
are similarly rated by another Rating Organization or are unrated but deemed by
the Adviser to be comparable in quality to instruments that are so rated. Debt
Securities rated "BBB" by S&P, "Baa" by Moody's or the equivalent rating of
another Rating Organization, while still deemed investment-grade, are considered
to have speculative characteristics and are more sensitive to economic change
than higher rated bonds. Debt Securities rated below the four highest ratings of
S&P or Moody's are often referred to as "junk bonds." Such Debt Securities are
rated below investment-grade and carry a higher degree of risk and are regarded,
on balance, as predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the obligation. See
"Risk Factors -- Lower Rated Securities."
The Adviser will select certain mortgage-backed and asset-backed securities
which it believes have superior risk/return characteristics versus other fixed
income instruments. Mortgage-backed securities represent pools of mortgage loans
assembled for sale to investors by various governmental agencies as well as by
private issuers. Asset-backed securities represent pools of other assets (such
as automobile installment purchase obligations and credit card receivables)
similarly assembled for sale by private issuers. See "Risk Factors --
Mortgage-Backed and Asset-Backed Securities" in this prospectus and "Investment
Objectives and Policies" in the Statement of Additional Information.
The Fund may also invest up to 15% of its total assets in each of the
following: collateralized mortgage obligations ("CMOs"), Yankee Bonds
(dollar-denominated debt securities of foreign issuers), non-dollar denominated
bonds of foreign or domestic issuers, securities that can be purchased and sold
privately to institutional investors pursuant to Rule 144A, and convertible Debt
Securities of U.S. and foreign issuers (including convertible preferred stock
and notes). See "Risk Factors" in this Prospectus and "Investment Objectives and
Policies" in the Statement of Additional Information.
The Fund may invest in debt securities issued by the U.S. Government or
government agencies, repurchase agreements and reverse repurchase agreements,
foreign currency exchange transactions, dollar rolls, futures, option contracts
(including options on futures) and stripped securities. The Fund may make
when-issued purchases and forward commitments. See "Risk Factors" in this
Prospectus and "Investment Objectives and Policies" in the Statement of
Additional Information.
The Fund may invest in registered investment companies and investment funds
in foreign countries subject to the provisions of the Investment Company Act of
1940, as amended (the "1940 Act"), and as discussed in "Investment Objectives
and Policies" in the Statement of Additional Information. If the Fund invests in
such investment companies, the Fund will bear its proportionate share of the
costs incurred by such companies, including investment advisory fees.
Although the Fund has no restriction as to the maximum or minimum duration
of any individual security held by it, during normal market conditions the
Fund's average effective duration will generally be within 5% of the duration of
the Lehman Brothers Aggregate Bond Index. "Duration" is a term used by
investment managers to express the average time
4
<PAGE>
to receipt of expected cash flows (discounted to their present value) on a
particular fixed income instrument or a portfolio of instruments. Duration takes
into account the pattern of a security's cash flow over time, including how cash
flow is affected by prepayments and changes in interest rates. For example, the
duration of a five-year zero coupon bond that pays no interest or principal
until the maturity of the bond is five years. This is because a zero coupon bond
produces no cash flow until the maturity date. On the other hand, a coupon bond
that pays interest semi-annually and matures in five years will have a duration
of less than five years, which reflects the semi-annual cash flows resulting
from coupon payments. Duration also generally defines the effect of interest
rate changes on bond prices. Generally, if interest rates increase by one
percent, the value of a security having an effective duration of five years
would decrease in value by five percent.
The Fund's investment objectives and policies described above may be
changed by RBB's Board of Directors without the approval of the Fund's
shareholders.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Fund may not change the following investment limitations without
shareholder approval. (A complete list of the investment limitations that cannot
be changed without such a vote of the shareholders is contained in the Statement
of Additional Information under "Investment Objectives and Policies.")
The Fund may not:
1. Purchase the securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, if immediately after and as a result of such purchase,
more than 5% of the value of the Fund's total assets would be invested in
the securities of such issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by the Fund, except that up to 25%
of the value of the Fund's total assets may be invested without regard to
such limitations.
2. Purchase any securities which would cause, at the time of purchase,
25% or more of the value of the total assets of the Fund to be invested in
the obligations of issuers in any single industry, provided that there is
no limitation with respect to investments in U.S. Government obligations.
3. Borrow money or issue senior securities, except that the Fund may
borrow from banks and enter into reverse repurchase agreements and dollar
rolls for temporary purposes in amounts up to one-third of the value of its
total assets at the time of such borrowing; or mortgage, pledge or
hypothecate any assets, except in connection with any such borrowing and
then in amounts not in excess of one-third of the value of the Fund's total
assets at the time of such borrowing. The Fund will not purchase securities
while its aggregate borrowings (including reverse repurchase agreements,
dollar rolls and borrowings from banks) are in excess of 5% of its total
assets. Securities held in escrow or separate accounts in connection with
the Fund's investment practices are not considered to be borrowings or
deemed to be pledged for purposes of this limitation.
If a percentage restriction under one of the Fund's investment policies or
restrictions or the use of assets is adhered to at the time a transaction is
effected, later changes in percentage resulting from changing values will not be
considered a violation (except with respect to any restrictions that may apply
to borrowings or senior securities issued by the Fund).
PORTFOLIO TURNOVER
The Fund retains the right to sell securities irrespective of how long they
have been held. The Adviser estimates that the annual turnover in the Fund will
be approximately 100%. High portfolio turnover (100% or more) will generally
result in higher transaction costs to a portfolio and may result in the
realization of short-term capital gains that are taxable to shareholders as
ordinary income.
5
<PAGE>
RISK FACTORS
- --------------------------------------------------------------------------------
INTEREST RATE RISK
Generally, the market value of fixed income securities is subject to
interest rate fluctuation and can be expected to vary inversely to changes in
the prevailing interest rates. Thus, the value of portfolio investments held by
the Fund is likely to decline if prevailing interest rates rise, and vice versa.
LOWER RATED SECURITIES
Investors should carefully consider the relative risks of investing in the
higher yielding (and, therefore, higher risk) debt securities rated below
investment-grade by S&P or Moody's, or which are similarly rated by another
Rating Organization or are unrated but deemed by the Adviser to be comparable to
instruments so rated.
The Fund's investments in obligations rated below the four highest ratings
of S&P and Moody's have different risks than investments in securities that are
rated "investment-grade." Risk of loss upon default by the borrower is
significantly greater because lower-rated securities are generally unsecured and
are often subordinated to other creditors of the issuer, and because the issuers
frequently have high levels of indebtedness and are more sensitive to adverse
economic conditions, such as recessions, individual corporate developments and
increasing interest rates than are investment-grade issuers. As a result, the
market price of such securities, and the net asset value of the Fund's Shares,
may be particularly volatile.
Additional risks associated with lower-rated fixed income securities are
(a) the relatively low trading market liquidity for the securities and (b) the
creditworthiness of the issuers of such securities. During an economic downturn
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. An economic downturn could also
disrupt the market for lower-rated bonds generally and adversely affect the
value of outstanding bonds and the ability of the issuers to repay principal and
interest. If the issuer of a lower-rated security held by the Fund defaulted,
the Fund could incur additional expenses to seek recovery. Adverse publicity and
investor perceptions, whether or not based on fundamental analysis, may also
decrease the values and liquidity of lower-rated securities held by the Fund,
especially in a thinly traded market. Finally, the Fund's trading in fixed
income securities entails risks that capital losses rather than gains will
result. As a result, investment in the Fund should not be considered a complete
investment program.
The Adviser will continually evaluate lower-rated securities and the
ability of their issuers to pay interest and principal. The Fund's ability to
achieve its investment objectives may be more dependent on the Adviser's credit
analysis than might be the case for a fund that invested in higher rated
securities. See the "Appendix" in the Statement of Additional Information for a
general description of securities ratings.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
Mortgage-backed securities, like other fixed income instruments, may be
subject to risks, including price fluctuations due to interest rate changes. The
returns on mortgage-backed securities may also be negatively affected by changes
in principal pre-payment rates due to interest rate volatility.
Mortgage-related securities acquired by the Fund may include collateralized
mortgage obligations ("CMOs"), a type of derivative, issued by the Federal
National Mortgage Association, the Federal Home Loan Mortgage Corporation,
Government National Mortgage Association or other U.S. Government agencies or
instrumentalities, as well as by private issuers. CMOs may involve additional
risks other than those found in other types of mortgage-related obligations in
that they may exhibit more price volatility and interest rate risk than such
obligations. During periods of rising interest rates, CMOs may lose their
liquidity as CMO market makers may choose not to repurchase, or may offer prices
based on current
6
<PAGE>
market conditions, which are unacceptable to a fund based on the fund's analysis
of the market value of the security. See "Investment Objectives and Policies" in
the Statement of Additional Information.
Asset-backed securities are also subject to declines in market value during
periods of rising interest rates. Due to the possibility of prepayment of the
underlying obligations, asset-backed securities have less potential for capital
appreciation than other debt securities of comparable maturities during periods
of declining interest rates. As a result, asset-backed securities may be less
effective than other fixed income securities as a means of locking in attractive
interest rates for the long term.
REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS
The Fund may enter into reverse repurchase agreements with respect to
portfolio securities for temporary purposes (such as to obtain cash to meet
redemption requests) when the liquidation of portfolio securities is deemed
disadvantageous or inconvenient by the Adviser. Reverse repurchase agreements
involve the sale of securities held by the Fund pursuant to the Fund's agreement
to repurchase the securities at an agreed-upon price, date and rate of interest.
Such agreements are considered to be borrowings under the Investment Company Act
of 1940 (the "1940 Act"), and may be entered into only for temporary or
emergency purposes. While reverse repurchase transactions are outstanding, the
Fund will maintain in a segregated account with the Fund's Custodian or a
qualified sub-custodian, cash or liquid securities of an amount at least equal
to the market value of the securities, plus accrued interest, subject to the
agreement and will monitor the account to ensure that such value is maintained.
Reverse repurchase agreements involve the risk that the market value of the
securities sold by the Fund may decline below the price of the securities the
Fund is obligated to repurchase. The Fund may also enter into "dollar rolls," in
which it sells fixed income securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar (same type, coupon
and maturity) securities on a specified future date. During the roll period, the
Fund would forgo principal and interest paid on such securities. The Fund would
be compensated by the difference between the current sales price and the forward
price for the future purchase, as well as by the interest earned on the cash
proceeds of the initial sale.
FOREIGN SECURITIES RISK
The Fund may invest in foreign securities, as described above. Investing in
securities of foreign issuers involves considerations not typically associated
with investing in securities of companies organized and operating in the United
States. Foreign securities generally are denominated and pay dividends or
interest in foreign currencies. The Fund may hold from time to time various
foreign currencies pending their investment in foreign securities or their
conversion into U.S. dollars. The value of the assets of the Fund as measured in
U.S. dollars may therefore be affected favorably or unfavorably by changes in
exchange rates. There may be less publicly available information concerning
foreign issuers than is available with respect to U.S. issuers. Foreign
securities may not be registered with the U.S. Securities and Exchange
Commission, and generally, foreign companies are not subject to uniform
accounting, auditing and financial reporting requirements comparable to those
applicable to U.S. issuers. See "Investment Objectives and Policies -- Foreign
Securities" in the Statement of Additional Information.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS
Because the Fund may buy and sell securities denominated in currencies
other than the U.S. dollar, and may receive interest and sale proceeds in
currencies other than the U.S. dollar, the Fund from time to time may enter into
foreign currency exchange transactions to convert the U.S. dollar to foreign
currencies, to convert foreign currencies to the U.S. dollar and to convert
foreign currencies to other foreign currencies. Forward foreign currency
exchange contracts are agreements to exchange one currency for another -- for
example, to exchange a certain amount of U.S. dollars for a certain amount of
Japanese yen -- at a future date and at a specified price.
7
<PAGE>
Typically, the other party to a currency exchange contract will be a
commercial bank or other financial institution. A fund either enters into these
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market, or uses forward contracts to purchase or sell
foreign currencies.
Forward foreign currency exchange contracts also allow the Fund to hedge
the currency risk of portfolio securities denominated in a foreign currency.
This technique permits the assessment of the merits of a security to be
considered separately from the currency risk. By separating the asset and the
currency decision, it is possible to focus on the opportunities presented by the
security apart from the currency risk. Although forward foreign currency
exchange contracts are of short duration, generally between one and twelve
months, the forward foreign currency exchange contracts are rolled over in a
manner consistent with a more long-term currency decision. There is a risk of
loss to the Fund if the other party does not complete the transaction.
EUROPEAN CURRENCY UNIFICATION
Many European countries are about to adopt a single European currency, the
euro. On January 1, 1999, the euro will become legal tender for all countries
participating in the Economic and Monetary Union ("EMU"). A new European Central
Bank will be created to manage the monetary policy of the new unified region. On
the same date, the exchange rates will be irrevocably fixed between the EMU
member countries. National currencies will continue to circulate until they are
replaced by euro coins and bank notes by the middle of 2002.
This change is likely to significantly impact the European capital markets
in which the Fund may invest and may result in the Fund facing additional risks
in pursuing its investment objective. These risks, which include, but are not
limited to, uncertainty as to the proper tax treatment of the currency
conversion, volatility of currency exchange rates as a result of the conversion,
uncertainty as to capital market reaction, conversion costs that may affect
issuer profitability and creditworthiness, and lack of participation by some
European countries, may increase the volatility of the Fund's net asset value
per share.
WHEN-ISSUED PURCHASES AND FORWARD COMMITMENTS
The Fund may purchase securities on a when-issued basis or enter into
forward commitment transactions. When the Fund agrees to purchase securities on
a when-issued basis or enters into a forward commitment to purchase securities,
the Custodian will set aside cash, U.S. Government securities or other liquid
assets equal to the amount of the purchase or the commitment in a separate
account. As a result, the Fund's liquidity and ability to manage its portfolio
might be affected in the event its when-issued purchases or forward commitments
ever exceeded 25% of the value of its assets. In the case of a forward
commitment to sell portfolio securities, the Custodian will hold the portfolio
securities in a segregated account while the commitment is outstanding. When the
Fund engages in when-issued and forward commitment transactions, it relies on
the other party to consummate the trade. Failure of such party to do so may
result in the Fund incurring a loss or missing an opportunity to obtain a price
considered to be advantageous.
YEAR 2000
- --------------------------------------------------------------------------------
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
8
<PAGE>
ASSET ALLOCATION
From time to time, the Fund may experience relatively large purchases or
redemptions due to asset allocation decisions made by the Adviser for clients
receiving Asset Allocation account management services involving investments in
the Fund. These transactions may have a material effect on the Fund, since
redemptions caused by reallocations may result in the Fund selling portfolio
securities, and purchases caused by reallocations may result in the Fund
receiving additional cash that it will have to invest. While it is impossible to
predict the overall impact of these transactions over time, there could be
adverse effects on portfolio management to the extent that the Fund may be
required to sell securities at times when it would not otherwise do so, or
receive cash that cannot be invested in an expeditious manner. These
transactions could also have tax consequences if the sale of securities results
in gains and could also increase transaction costs. The Advisor is committed to
minimizing the impact or such transactions on the Fund to the extent it is
consistent with pursuing the investment objectives of clients for which the
Advisor provides Asset Allocation account management services involving
investments in the Fund and monitors the impact of asset allocation decisions on
the Fund.
GENERAL
The Fund's use of certain investment techniques, including derivatives,
options and futures transactions, will subject the Fund to greater risk than
Funds that do not employ such techniques.
Investment methods described in this Prospectus are among those which the
Fund has the power to utilize. Some may be employed on a regular basis; others
may not be used at all. Accordingly, reference to any particular method or
technique carries no implication that it will be utilized or, if it is, that it
will be successful.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of RBB and the Fund are managed under the
direction of RBB's Board of Directors.
INVESTMENT ADVISER
Boston Partners Asset Management, L.P., located at 28 State Street, 21st
Floor, Boston, Massachusetts 02109, serves as the Fund's investment adviser. The
Adviser provides investment management and investment advisory services to
investment companies and other institutional accounts that had aggregate total
assets under management as of October 31, 1998 in excess of $16.0 billion. The
adviser is organized as a Delaware limited partnership whose sole general
partner is Boston Partners, Inc., a Delaware corporation.
Subject to the supervision and direction of RBB's Board of Directors, the
Adviser manages the Fund's portfolio in accordance with the Fund's investment
objectives and policies, makes investment decisions for the Fund, places orders
to purchase and sell securities, and employs professional portfolio managers and
securities analysts who provide research services to the Fund. For its services
to the Fund, the Adviser is paid an advisory fee computed at an annual rate of
0.40% of the Fund's average daily net assets, which is calculated daily and paid
monthly. The Adviser has notified RBB, however, that it intends to limit total
Fund operating expenses to 0.85% during the Fund's current fiscal year.
PORTFOLIO MANAGEMENT
The day-to-day portfolio management of the Fund is the responsibility of
William R. Leach who is a senior portfolio manager of the Adviser and Chairman
of the Fixed Income Strategy Committee. Prior to joining the Adviser in April
1995, Mr. Leach was employed by The Boston Company Asset Management, Inc. ("The
Boston Company") from 1988 through April 1995 where he was a senior portfolio
manager and Director of the Fixed Income Strategy Committee. Mr. Leach has over
16 years of investment experience and is a Chartered Financial Analyst ("CFA").
Mr. Leach will be assisted by Glenn S. Davis, Joseph F. Feeney, Jr. and Michael
A. Mullaney. Mr. Davis is a Fixed Income Portfolio Manager with the Adviser
9
<PAGE>
and is also a CFA. Prior to joining the Adviser in April 1995, he was Vice
President and Portfolio Manager at The Boston Company, specializing in short and
intermediate term corporate bonds. Prior to that position, he was responsible
for the Short-term Fixed Income Group at State Street Global Advisors. He has a
total of 17 years of investment experience. Mr. Feeney is a Fixed Income
Portfolio Manager with the Adviser and also a CFA. Prior to joining the Adviser
in April 1995, he was Assistant Vice President and Mortgage-backed Securities
Portfolio Manager for Putnam Investments. Mr. Mullaney is a Fixed Income
Portfolio Manager who joined the Adviser in June 1997. From 1984 to 1997, he was
employed at Putnam Investments, most recently as Managing Director and Senior
Investment Strategist, specializing in portfolio strategy and management. His
prior experience included a position as a senior Consultant from 1981 to 1983
with Chase Econometrics/Interactive Data Corporation, where he focused on
quantitative methodologies in fixed income and equity management. He has over 16
years of investment experience.
ADMINISTRATOR
PFPC Inc. ("PFPC") serves as administrator to the Fund and generally
assists the Fund in all aspects of its administration and operations, including
matters relating to the maintenance of financial records and accounting. PFPC's
principal offices are located at 400 Bellevue Parkway, Wilmington, Delaware
19809. For its services, PFPC receives a fee calculated at an annual rate of
.125% of the Fund's average daily net assets with a minimum annual fee of
$75,000 payable monthly on a pro rata basis.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholder servicing
agreements with registered broker-dealers who have entered into dealer
agreements with the Distributor ("Authorized Dealers") for the provision of
certain shareholder support services to customers of such Authorized Dealers who
are shareholders of the Fund. The services provided and the fees payable by the
Fund for these services are described in the Statement of Additional Information
under "Investment Advisory, Distribution and Servicing Arrangements."
DISTRIBUTOR
Provident Distributors, Inc. ("PDI"), whose principal business address is
Four Falls Corporate Center, West Conshohocken, Pennsylvania 19428, acts as
distributor for the Shares pursuant to a distribution agreement (the
"Distribution Agreement") with RBB on behalf of the Shares.
EXPENSES
The expenses of the Fund are deducted from its total income before
dividends are paid. These expenses include, but are not limited to: fees paid to
the Adviser and PFPC; distribution fees; fees and expenses of officers and
directors who are not affiliated with any of RBB's investment advisers,
sub-advisers or the Distributor; taxes; interest; legal fees; custodian fees;
auditing fees; brokerage fees and commissions; certain of the fees and expenses
of registering and qualifying the Fund and the Shares for distribution under
federal and state securities laws; expenses of preparing prospectuses and
statements of additional information and of printing and distributing them
annually to existing shareholders that are not attributable to a particular
class of shares of RBB; the expense of reports to shareholders, shareholders'
meetings and proxy solicitations that are not attributable to a particular class
of shares of RBB; fidelity bond and directors and officers liability insurance
premiums; the expense of using independent pricing services; and other expenses
that are not expressly assumed by the Adviser under its investment advisory
agreement with respect to the Fund. Any general expenses of RBB that are not
readily identifiable as belonging to a particular investment portfolio of RBB
will be allocated among all investment portfolios of RBB based upon the relative
net assets of the investment portfolios. Distribution expenses, transfer agency
expenses, expenses of preparation, printing and distributing prospectuses,
statements of additional information,
10
<PAGE>
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<PAGE>
BOSTON PARTNERS BOND FUND bp
(INVESTOR CLASS) BOSTON PARTNERS ASSET MANAGEMENT, L.P.
ACCOUNT APPLICATION
PLEASE NOTE: Do not use this form to open a retirement plan account. For an
IRA application or help with this Application, please call 1-888-261-4073
1 (Please check the appropriate box(es) below.)
Account
Registration: / / Individual / / Joint Tenant / / Other
_________________________________________________________________
NAME SOCIAL SECURITY NUMBER OR TAX ID# OF PRIMARY OWNER
_________________________________________________________________
NAME OF JOINT OWNER JOINT OWNER SOCIAL SECURITY NUMBER OR
TAX ID#
For joint accounts, the account registrants will be joint tenants
with right of survivorship and not tenants in common unless
tenants in common or community property registrations are
requested.
GIFT TO MINOR: / / Uniform Gifts/Transfer to Minor's Act
_________________________________________________________________
NAME OF ADULT CUSTODIAN (ONLY ONE PERMITTED)
_________________________________________________________________
NAME OF MINOR (ONLY ONE PERMITTED)
_________________________________________________________________
MINOR'S SOCIAL SECURITY NUMBER AND DATE OF BIRTH
CORPORATION,
PARTNERSHIP,
TRUST OR
OTHER ENTITY: _________________________________________________________________
NAME OF CORPORATION, PARTNERSHIP, NAME(S) OF TRUSTEE(S)
OR OTHER
_________________________________________________________________
TAXPAYER IDENTIFICATION NUMBER
_________________________________________________________________
2 STREET OR P.O. BOX AND/OR APARTMENT NUMBER
Mailing
Address: _________________________________________________________________
CITY STATE ZIP CODE
_________________________________________________________________
DAY PHONE NUMBER EVENING PHONE NUMBER
3 Minimum initial investment Amount of investment $____________
Investment of $2,500.
Information:
Make the check payable to Boston Partners Bond Fund.
Shareholders may not purchase shares of this Fund with a check
issued by a third party and endorsed over to the Fund.
NOTE: Dividends and capital gains may be reinvested or paid by
check. If no options are selected below, both dividends and
capital gains will be reinvested in additional Fund shares.
DISTRIBUTION
OPTIONS:
DIVIDENDS: Pay by check / / Reinvest / /
CAPITAL GAINS: Pay by check / / Reinvest / /
To select this portion please fill out the information below:
Amount_______________ Startup Month__________________
SYSTEMATIC
WITHDRAWAL Frequency Options: Annually / / Monthly / / Quarterly / /
PLAN:
<PAGE>
- A minimum account value of $10,000 in a single account is
required to establish a Systematic Withdrawal Plan.
- Payments will be made on or near the 25th of the month.
Please check one of the following options:
_____ Please mail checks to Address of Record (Named in
Section 2)
_____ Please electronically credit my Bank of Record
(Named in Section 5)
4 To use this option, you must initial the appropriate line below.
Telephone
Redemption I authorize the Transfer Agent to accept instructions from any
or Exchange: persons to redeem or exchange shares in my account(s) by
telephone in accordance with the procedures and conditions set
forth in the Fund's current prospectus.
______________________ _________________ Redeem shares, and
individual initial joint initial send the proceeds to
the address of record.
______________________ _________________ Exchange shares for
individual initial joint initial shares of The Boston
Partners Large Cap
Value Fund, Mid Cap
Value Fund, Micro Cap
Value Fund or Market
Neutral Fund.
5 The Automatic Investment Plan which is available to shareholders
Automatic of the Fund, makes possible regularly scheduled purchases of Fund
Investment shares to allow dollar-cost averaging. The Fund's Transfer Agent
Plan: can arrange for an amount of money selected by you to be deducted
from your checking account and used to purchase shares of the
Fund.
Please debit $________ from my checking account (named below) on
or about the 20th of the month. PLEASE ATTACH AN UNSIGNED, VOIDED
CHECK.
/ / Monthly / / Every Alternate Month / / Quarterly
/ / Other
BANK OF _________________________________________________________________
RECORD: BANK NAME STREET ADDRESS OR P.O. BOX
_________________________________________________________________
CITY STATE ZIP CODE
_________________________________________________________________
BANK ABA NUMBER BANK ACCOUNT NUMBER
6 The undersigned warrants that I (we) have full authority and, if
Signatures: a natural person, I (we) am (are) of legal age to purchase shares
pursuant to this Account Application, and I (we) have received a
current prospectus for the Fund in which I (we) am (are)
investing.
Under the Interest and Dividend Tax Compliance Act of 1983, the
Fund is required to have the following certification:
Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct
identification number (or I am waiting for a number
to be issued to me), and
(2) I am not subject to backup withholding
because (a) I am exempt from backup
withholding, or (b) I have not been notified
by the Internal Revenue Service that I am
subject to 31% backup withholding as a
result of a failure to report all Interest
or dividends, or (c) the IRS has notified me
that I am no longer subject to backup
withholding.
NOTE: YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED
BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING
BECAUSE YOU HAVE FAILED TO REPORT ALL INTEREST AND DIVIDENDS ON
YOUR TAX RETURN. THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE
YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE
CERTIFICATION REQUIRED TO AUDIT BACKUP WITHHOLDING.
_________________________________________________________________
SIGNATURE OF APPLICANT DATE
_________________________________________________________________
PRINT NAME TITLE (IF APPLICABLE)
_________________________________________________________________
SIGNATURE OF JOINT OWNER DATE
_________________________________________________________________
PRINT NAME TITLE (IF APPLICABLE)
(If you are signing for a corporation, you must indicate
corporate office or title. If you wish additional signatories on
the account, please include a corporate resolution. If signing as
a fiduciary, you must indicate capacity.)
For information on additional options, such as IRA Applications,
rollover requests for qualified retirement plans, or for wire
instructions, please call us at 1-888-261-4073.
MAIL COMPLETED ACCOUNT APPLICATION AND CHECK TO:
THE BOSTON PARTNERS BOND FUND
C/O PFPC INC.
P.O. BOX 8852
WILMINGTON, DE 19899-8852
<PAGE>
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<PAGE>
proxy statements and reports to shareholders, and registration fees, identified
as belonging to a particular class, are allocated to such class.
The Adviser may assume expenses of the Fund from time to time. To the
extent any service providers assume expenses of the Fund, such assumption of
expenses will have the effect of lowering the Fund's overall expense ratio and
increasing its yield to investors.
DISTRIBUTION OF SHARES
- --------------------------------------------------------------------------------
The Board of Directors of RBB approved and adopted a Distribution Agreement
and Plan of Distribution for the Shares (the "Plan") pursuant to Rule 12b-1
under the 1940 Act. Under the Plan, the Distributor is entitled to receive from
the Fund a distribution fee, which is accrued daily and paid monthly, of up to
0.25% on an annualized basis of the average daily net assets of the Fund. The
actual amount of such compensation under the Plan is agreed upon by RBB's Board
of Directors and by the Distributor in the Distribution Agreement. The
Distributor may, in its discretion, from time to time waive voluntarily all or
any portion of its distribution fee.
Amounts paid to the Distributor under the Plan may be used by the
Distributor to cover expenses that are related to (i) the sale of Investor
Shares of the Fund, (ii) ongoing servicing and/or maintenance of the accounts of
shareholders of the Fund, and (iii) sub-transfer agency services, subaccounting
services or administrative services related to the sale of the Investor Shares
of the Fund, all as set forth in the Plan. The Distributor may delegate some or
all of these functions to Service Agents. See "How to Purchase Shares --
Purchases Through Intermediaries."
The Plan obligates the Fund, during the period it is in effect, to accrue
and pay to the Distributor on behalf of the Fund the fee agreed to under the
Distribution Plan. Payments under the Plan are not tied exclusively to expenses
actually incurred by the Distributor, and the payments may exceed distribution
expenses actually incurred.
PURCHASES THROUGH INTERMEDIARIES
Shares of the Fund may be available through various brokerage firms,
financial institutions and programs sponsored by other industry professionals
(collectively, "Service Organizations"). Certain features of the Shares, such as
the initial and subsequent investment minimums and certain trading restrictions,
may be modified or waived by Service Organizations. Service Organizations may
impose transaction or administrative charges or other direct fees, which charges
or fees would not be imposed if Fund Shares are purchased directly from the
Fund. Therefore, a client or customer should contact the Service Organization
acting on his behalf concerning the fees (if any) charged in connection with a
purchase or redemption of Fund Shares and should read this Prospectus in light
of the terms governing his accounts with the Service Organization. Service
Organizations will be responsible for promptly transmitting client or customer
purchase and redemption orders to the Fund in accordance with their agreements
with clients or customers. Service Organizations that have entered into
agreements with the Fund or its agent may enter confirmed purchase orders on
behalf of clients and customers, with payment to follow no later than the Fund's
pricing on the following Business Day. If payment is not received by such time,
the Service Organization could be held liable for resulting fees or losses.
For administration, subaccounting, transfer agency and/or other services,
the Adviser or the Distributor or their affiliates may pay Service Organizations
and certain recordkeeping organizations with whom they have entered into
agreements a fee of up to .35% (the "Service Fee") of the average annual value
of accounts with the Fund maintained by such Service Organizations or
recordkeepers. The Service Fee payable to any one Service Organization or
recordkeeper is determined based upon a number of factors, including the nature
and quality of the services provided, the operations processing requirements of
the relationship and the standardized fee schedule of the Service Organization
or recordkeeper. The Adviser, the Distributor or either of their affiliates may,
at their own expense, provide promotional incentives for qualified recipients
who support the sale of Shares consisting of securities dealers who have sold
Fund Shares or others, including banks and other financial institutions, under
special arrangements. Incentives may include opportunities to attend business
11
<PAGE>
meetings, conferences, sales or training programs for recipients, employees or
clients and other programs or events and may also include opportunities to
participate in advertising or sales campaigns and/or shareholder services and
programs regarding one or more Boston Partners Funds. Travel, meals and lodging
may also be paid in connection with these promotional activities. In some
instances, these incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or expected sale of
significant amounts of Fund Shares.
HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------
GENERAL
Shares representing interests in the Fund are offered continuously for sale
by the Distributor and may be purchased without imposition of a sales charge.
Shares may be purchased initially by completing the application included in this
Prospectus and forwarding the application to the Fund's transfer agent, PFPC.
Purchases of Shares may be effected by wire to an account to be specified by
PFPC or by mailing a check or Federal Reserve Draft, payable to the order of
"The Boston Partners Bond Fund" c/o PFPC Inc., P.O. Box 8852, Wilmington,
Delaware 19899-8852. The name of the Fund, Boston Partners Bond Fund, must also
appear on the check or Federal Reserve Draft. Shareholders may not purchase
shares of the Boston Partners Bond Fund with a check issued by a third party and
endorsed over to the fund. Federal Reserve Drafts are available at national
banks or any state bank which is a member of the Federal Reserve System. Initial
investments in the Fund must be at least $2,500 and subsequent investments must
be at least $100. The Fund reserves the right to suspend the offering of Shares
for a period of time or to reject any purchase order.
Shares may be purchased on any Business Day. A "Business Day" is any day
that the New York Stock Exchange (the "NYSE") is open for business. Currently,
the NYSE is closed on weekends and New Year's Day, Dr. Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and on the preceding Friday or subsequent
Monday when one of these holidays falls on a Saturday or Sunday.
The price paid for Shares purchased initially or acquired through the
exercise of an exchange privilege is based on the net asset value next computed
after a purchase order is received in good order by the Fund or its agents.
Orders received by the Fund or its agents after the close of regular trading on
the New York Stock Exchange, Inc. (currently 4:00 p.m., Eastern time) are priced
at the net asset value next determined on the following business day. In those
cases where an investor pays for Shares by check, the purchase will be effected
at the net asset value next determined after the Fund or its agents receives the
order and the completed application.
Provided that the investment is at least $2,500, an investor may also
purchase Shares by having his bank or his broker wire Federal Funds to PFPC. An
investor's bank or broker may impose a charge for this service. The Fund does
not currently impose a service charge for effecting wire transfers but reserves
the right to do so in the future. In order to ensure prompt receipt of an
investor's Federal Funds wire, for an initial investment, it is important that
an investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (888) 261-4073, and
provide PFPC with your name, address, telephone number, Social Security or
Tax Identification Number, the Fund selected, the amount being wired, and
by which bank. PFPC will then provide an investor with a Fund account
number. Investors with existing accounts should also notify PFPC prior to
wiring funds.
12
<PAGE>
B. Instruct your bank or broker to wire the specified amount, together with
your assigned account number, to PFPC's account with PNC Bank:
PNC Bank, N.A.
Philadelphia, PA 19103
ABA NUMBER: 0310-0005-3
CREDITING ACCOUNT NUMBER: 86-1108-2507
FROM: (name of investor)
ACCOUNT NUMBER: (Investor's account number with the Fund)
FOR PURCHASE OF: Boston Partners Bond Fund
AMOUNT: (amount to be invested)
C. Fully complete and sign the application and mail it to the address shown
thereon. PFPC will not process purchases until it receives a fully
completed and signed application.
For subsequent investments, an investor should follow steps A and B above.
AUTOMATIC INVESTING
Additional investments in Shares may be made automatically by authorizing
the Fund's transfer agent to withdraw funds from your bank account. Investors
desiring to participate in the Automatic Investment Plan should call the Fund's
transfer agent, PFPC, at (888) 261-4073 to obtain the appropriate forms.
RETIREMENT PLANS
Shares may be purchased in conjunction with individual retirement accounts
("IRAs") and rollover IRAs where PFPC Trust Company acts as Custodian. For
further information as to applications and annual fees, contact PFPC at (888)
261-4073. To determine whether the benefits of an IRA are available and/or
appropriate, a shareholder should consult with a tax adviser.
HOW TO REDEEM AND EXCHANGE SHARES
- --------------------------------------------------------------------------------
REDEMPTION BY MAIL
Shareholders may redeem for cash some or all of their Shares of the Fund at
any time. To do so, a written request in proper form must be sent directly to
Boston Partners Bond Fund c/o PFPC Inc., P.O. Box 8852, Wilmington, Delaware
19899-8852. There is no charge for a redemption.
A request for redemption must be signed by all persons in whose names the
Shares are registered. Signatures must conform exactly to the account
registration. If the proceeds of the redemption would exceed $10,000, or if the
proceeds are not to be paid to the record owner at the record address, or if the
shareholder is a corporation, partnership, trust or fiduciary, signature(s) must
be guaranteed according to the procedures described below under "Exchange
Privilege."
Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption. In some cases, however,
other documents may be necessary. In the case of shareholders holding share
certificates, the certificates for the shares being redeemed must accompany the
redemption request. Additional documentary evidence of authority is also
required by the Fund's transfer agent in the event redemption is requested by a
corporation, partnership, trust, fiduciary, executor or administrator.
SYSTEMATIC WITHDRAWAL PLAN
If your account has a value of at least $10,000, you may establish a
Systematic Withdrawal Plan and receive regular periodic payments. A request to
establish a Systematic Withdrawal Plan must be submitted in writing to PFPC at
P.O. Box
13
<PAGE>
8852, Wilmington, Delaware 19899-8852. Each withdrawal redemption will be
processed on or about the 25th of the month and mailed as soon as possible
thereafter. There are no service charges for maintenance; the minimum amount
that you may withdraw each period is $100. (This is merely the minimum amount
allowed and should not be mistaken for a recommended amount.) The holder of a
Systematic Withdrawal Plan will have any income dividends and any capital gains
distributions reinvested in full and fractional shares at net asset value. To
provide funds for payment, Shares will be redeemed in such amount as is
necessary at the redemption price, which is net asset value next determined
after the Fund's receipt of a redemption request. Redemption of Shares may
reduce or possibly exhaust the Shares in your account, particularly in the event
of a market decline. As with other redemptions, a redemption to make a
withdrawal payment is a sale for federal income tax purposes. Payments made
pursuant to a Systematic Withdrawal Plan cannot be considered as actual yield or
income since part of such payments may be a return of capital.
You will ordinarily not be allowed to make additional investments of less
than the aggregate annual withdrawals under the Systematic Withdrawal Plan
during the time you have the plan in effect and, while a Systematic Withdrawal
Plan is in effect, you may not make periodic investments under the Automatic
Investment Plan. You will receive a confirmation of each transaction showing the
sources of the payment and the Share and cash balance remaining in your plan.
The plan may be terminated on written notice by the shareholder or by the Fund
and will terminate automatically if all Shares are liquidated or withdrawn from
the account or upon the death or incapacity of the shareholder. You may change
the amount and schedule of withdrawal payments or suspend such payments by
giving written notice to the Fund's transfer agent at least seven Business Days
prior to the end of the month preceding a scheduled payment.
INVOLUNTARY REDEMPTION
RBB reserves the right to redeem a shareholder's account at any time the
net asset value of the account falls below $500 as the result of a redemption or
an exchange request. Shareholders will be notified in writing that the value of
their account is less than $500 and will be allowed 30 days to make additional
investments before the redemption is processed.
PAYMENT OF REDEMPTION PROCEEDS
In all cases, the redemption price is the net asset value per share next
determined after the request for redemption is received in proper form by the
Fund or its agents. Payment for Shares redeemed is made by check mailed within
seven days after acceptance by the Fund or its agents of the request and any
other necessary documents in proper order. Such payment may be postponed or the
right of redemption suspended as provided by law. If the Shares to be redeemed
have been recently purchased by check, PFPC may delay mailing a redemption
check, for up to 15 days, pending a determination that the check has cleared.
The Fund has elected to be governed by Rule 18f-1 under the 1940 Act so that it
is obligated to redeem its shares solely in cash up to the lesser of $250,000 or
1% of its net asset value during any 90-day period for any one shareholder of a
portfolio.
EXCHANGE PRIVILEGE
The exchange privilege is available to shareholders residing in any state
in which the Shares being acquired may be legally sold. A shareholder may
exchange Shares of the Fund for Investor Shares of any other Boston Partners
Fund of RBB, subject to the restrictions described under "Exchange Privilege
Limitations" below. Such exchange will be effected at the net asset value of the
exchanged Fund and the net asset value of the Fund being acquired next
determined after receipt of a request for an exchange by the Fund or its agents.
An exchange of Shares will be treated as a sale for federal income tax purposes.
See "Taxes." A shareholder wishing to make an exchange may do so by sending a
written request to PFPC.
If the exchanging shareholder does not currently own Investor Shares of the
Boston Partners Fund into which he would like to exchange, a new account will be
established with the same registration, dividend and capital gain options as the
account from which shares are exchanged, unless otherwise specified in writing
by the shareholder with all signatures guaranteed. A signature guarantee may be
obtained from a domestic bank or trust company, broker, dealer, clearing agency
or savings association who are participants in a medallion program recognized by
the Securities Transfer Association. The
14
<PAGE>
three recognized medallion programs are Securities Transfer Agents Medallion
Program (STAMP), Stock Exchanges Medallion Program (SEMP) and New York Stock
Exchange, Inc. Medallion Signature Program (MSP). Signature guarantees that are
not part of these programs will not be accepted. The exchange privilege may be
modified or terminated at any time, or from time to time, by RBB, upon 60 days'
written notice to shareholders.
If an exchange is to a new account in the acquired Fund, the dollar value
of Investor Shares acquired must equal or exceed that Fund's minimum for a new
account; if to an existing account, the dollar value must equal or exceed that
Fund's minimum for subsequent investments. If any amount remains in the Fund
from which the exchange is being made, such amount must not drop below the
minimum account value required by the Fund.
EXCHANGE PRIVILEGE LIMITATIONS
The Fund's exchange privilege is not intended to afford shareholders a way
to speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Funds and increase transactions costs, the Fund has
established a policy of limiting excessive exchange activity.
Shareholders are entitled to six (6) exchange redemptions (at least 30 days
apart) from the Fund during any twelve-month period. Notwithstanding these
limitations, the Fund reserves the right to reject any purchase request
(including purchases by exchange) that is deemed to be disruptive to efficient
portfolio management.
TELEPHONE TRANSACTIONS
In order to request an exchange or redemption by telephone, a shareholder
must have completed and returned an account application containing the
appropriate telephone election. To add a telephone option to an existing account
that previously did not provide for this option, a Telephone Exchange
Authorization Form must be filed with PFPC. These forms are available from PFPC.
Once this election has been made, the shareholder may simply contact PFPC by
telephone to request the exchange or redemption by calling (888) 261-4073.
Neither RBB, the Fund, the Distributor, the Administrator nor any other Fund
agent will be liable for any loss, liability, cost or expense for following
RBB's telephone transaction procedures described below or for following
instructions communicated by telephone that they reasonably believe to be
genuine.
RBB's telephone transaction procedures include the following measures: (1)
requiring the appropriate telephone transaction privilege forms; (2) requiring
the caller to provide the names of the account owners, the account social
security number and name of the Fund, all of which must match RBB's records; (3)
requiring RBB's service representative to complete a telephone transaction form,
listing all of the above caller identification information; (4) permitting
exchanges only if the two account registrations are identical; (5) requiring
that redemption proceeds be sent only by check to the account owners of record
at the address of record, or by wire only to the owners of record at the bank
account of record; (6) sending a written confirmation for each telephone
transaction to the owners of record at the address of record within five (5)
business days of the call; and (7) maintaining tapes of telephone transactions
for six months, if the Fund elects to record shareholder telephone transactions.
For accounts held of record by broker-dealers (other than the Distributor),
financial institutions, securities dealers, financial planners and other
industry professionals, additional documentation or information regarding the
scope of a caller's authority is required. Finally, for telephone transactions
in accounts held jointly, additional information regarding other account holders
is required. Telephone transactions will not be permitted in connection with IRA
or other retirement plan accounts or by an attorney-in-fact under a power of
attorney.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value for each class of the Fund is calculated by adding the
value of the proportionate interest of each class in the Fund's securities, cash
and other assets, deducting the actual and accrued liabilities of the class and
dividing
15
<PAGE>
by the total number of outstanding shares of the class. The net asset value is
calculated as of the close of regular trading on the NYSE on each Business Day.
Valuation of securities held by the Fund is as follows: securities traded
on a national securities exchange or on the NASDAQ National Market System are
valued at the last reported sale price that day; securities traded on a national
securities exchange or on the NASDAQ National Market System for which there were
no sales on that day and securities traded on other over-the-counter markets for
which market quotations are readily available are valued at the mean of the bid
and asked prices; and securities for which market quotations are not readily
available are valued at fair market value as determined in good faith by or
under the direction of RBB's Board of Directors. The amortized cost method of
valuation may also be used with respect to debt obligations with sixty days or
less remaining to maturity.
With the approval of the Board of Directors, the Fund may use a pricing
service, bank or broker-dealer experienced in such matters to value the Fund's
securities. A more detailed discussion of net asset value and security valuation
is contained in the Statement of Additional Information.
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Fund to the Fund's shareholders. All
distributions are reinvested in the form of additional full and fractional
Shares unless a shareholder elects otherwise.
The Fund will declare and pay dividends from net investment income monthly.
Net realized capital gains (including net short-term capital gains), if any,
will be distributed at least annually.
TAXES
- --------------------------------------------------------------------------------
The following discussion is only a brief summary of some of the important
tax considerations generally affecting the Fund and its shareholders and is not
intended as a substitute for careful tax planning. Accordingly, investors in the
Fund should consult their tax advisers with specific reference to their own tax
situation.
The Fund will elect to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended. So long as the
Fund qualifies for this tax treatment, it will be relieved of federal income tax
on amounts distributed to shareholders, but shareholders, unless otherwise
exempt, will pay income or capital gains taxes on amounts so distributed (except
distributions that are treated as a return of capital) regardless of whether
such distributions are paid in cash or reinvested in additional shares.
Distributions out of the "net capital gain" (the excess of net long-term
capital gain over net short-term capital loss), if any, of the Fund will be
taxed to shareholders as long-term capital gain regardless of the length of time
a shareholder has held his Shares, whether such gain was reflected in the price
paid for the Shares, or whether such gain was attributable to bonds bearing
tax-exempt interest. All other distributions, to the extent they are taxable,
are taxed to shareholders as ordinary income.
RBB will send written notices to shareholders annually regarding the tax
status of distributions made by the Fund. Dividends declared in December of any
year payable to shareholders of record on a specified date in such a month will
be deemed to have been received by the shareholders on December 31, provided
such dividends are paid during January of the following year. The Fund intends
to make sufficient actual or deemed distributions prior to the end of each
calendar year to avoid liability for federal excise tax.
Investors should be careful to consider the tax implications of buying
shares just prior to a distribution. The price of shares purchased at that time
will reflect the amount of the forthcoming distribution. Those investors
purchasing shares
16
<PAGE>
immediately prior to a distribution will nevertheless be taxed on the entire
amount of the distribution received, although the distribution is, in effect, a
return of capital.
Shareholders who exchange shares representing interests in one Fund for
shares representing interests in another Fund will generally recognize capital
gain or loss for federal income tax purposes.
Shareholders who are nonresident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships may be subject to
different U.S. federal income tax treatment.
MULTI-CLASS STRUCTURE
- --------------------------------------------------------------------------------
The Fund offers one other class of shares, Institutional Shares, which is
offered directly to institutional investors pursuant to a separate prospectus.
Shares of each class represent equal pro rata interests in the Fund and accrue
dividends and calculate net asset value and performance quotations in the same
manner. The Fund will quote performance of Institutional Shares separately from
Investor Shares. Because of different fees paid by the Investor Shares, the
total return on such shares can be expected, at any time, to be different than
the total return on Institutional Shares. Information concerning the other class
may be obtained by calling the Fund at (888) 261-4073.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
RBB has authorized capital of thirty billion shares of Common Stock, $.001
par value per share, of which 18.326 billion shares are currently classified
into 97 different classes of Common Stock. See "Description of Shares" in the
Statement of Additional Information.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE BOSTON PARTNERS BOND FUND AND DESCRIBE ONLY THE
INVESTMENT OBJECTIVES AND POLICIES, OPERATIONS, CONTRACTS AND OTHER MATTERS
RELATING TO THE BOSTON PARTNERS BOND FUND.
Each share that represents an interest in the Fund has an equal
proportionate interest in the assets belonging to the Fund with each other share
that represents an interest in the Fund, even where a share has a different
class designation than another share representing an interest in the Fund.
Shares of the Fund do not have preemptive or conversion rights. When issued for
payment as described in this Prospectus, Shares will be fully paid and
non-assessable.
RBB currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, RBB will assist in shareholder communication in such matters.
Holders of Shares of the Fund will vote in the aggregate and not by class
on all matters, except where otherwise required by law. Further, shareholders of
all investment portfolios of RBB will vote in the aggregate and not by portfolio
except as otherwise required by law or when the Board of Directors determines
that the matter to be voted upon affects only the interests of the shareholders
of a particular investment portfolio. (See the Statement of Additional
Information under "Additional Information Concerning Fund Shares" for examples
of when the 1940 Act requires voting by investment portfolio or by class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of Common Stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of RBB.
17
<PAGE>
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to the Fund's
transfer agent, PFPC Inc., at Bellevue Park Corporate Center, 400 Bellevue
Parkway, Wilmington, Delaware 19809, toll-free (888) 261-4073.
SHARE CERTIFICATES
In the interest of economy and convenience, physical certificates
representing shares in the Fund are not normally issued.
HISTORICAL PERFORMANCE INFORMATION
For the period from commencement of operations (December 30, 1998) through
August 31, 1998, the total return since inception (not annualized) for the
Investor Class of Shares of the Fund was as follows:
Unannualized investment returns for the period ended August 31, 1998
Since
Inception
---------
Boston Partners Bond Fund
(Investor Shares) ...................................... 4.63%
The total return assumes reinvestment of all dividends and capital gains
and reflects expense reimbursements and investment advisory fee waivers in
effect. Without these expense reimbursements waivers, the Fund's performance
would have been lower. Of course, past performance is no guarantee of future
results. Investment return and principal value will fluctuate, so that Shares,
when redeemed, may be worth more or less than the original cost. For more
information on performance, see "Performance Information" in the Statement of
Additional Information.
The table below presents the Composite performance history of certain of
the Adviser's managed accounts on an annualized basis since inception and for
the year ended September 30, 1998. The Composite is comprised of all of the
Adviser's institutional accounts and other privately managed accounts with
investment objectives, policies and strategies substantially similar to those of
the Fund, although the accounts have operating histories, whereas the Fund had
not commenced operations until December 30, 1997. The Composite performance
information includes the reinvestment of interest received by the underlying
securities, realized and unrealized gains and losses, and reflects the payment
of investment advisory fees and transaction expenses. The Composite performance
does not include custody fees or administrative fees that may be charged by
banks, fiduciaries, or other third parties in connection with these
institutional and privately managed accounts. The privately managed accounts in
the Composite are only available to the Adviser's institutional advisory
clients. The past performance of the accounts which comprise the Composite is
not indicative of the future performance of the Fund. These accounts have lower
investment advisory fees than the Fund and the Composite performance figures
would have been lower if subject to the higher fees and expenses to be incurred
by the Fund. These private accounts are also not subject to the same investment
limitations, diversification requirements and other restrictions which are
imposed upon mutual funds under the 1940 Act and the Internal Revenue Code,
which, if imposed, may have adversely affected the performance results of the
Composite. Listed below the performance history for the Composite is a
comparative index comprised of securities similar to those in which accounts
contained in the Composite are invested.
18
<PAGE>
Average annualized investment returns for the period ended September 30,
1998
ONE SINCE
YEAR INCEPTION
------ ---------
Composite Performance. ........................ 8.70% 9.20%
Lehman Brothers Aggregate Bond Index .......... 11.50% 8.60%
The Lehman Brothers Aggregate Bond Index is a broad market-weighted index,
which encompasses three major classes of investment-grade, fixed-income
securities with maturities greater than one year, including U.S. Treasury
securities, corporate bonds and mortgage-backed securities.
* The Adviser commenced managing these accounts on June 1, 1995
FUTURE PERFORMANCE INFORMATION
From time to time, the Fund may advertise its performance, including
comparisons to other mutual funds with similar investment objectives and to
stock or other relevant indices. All such advertisements will show the average
annual total return over one, five and ten year periods or, if such periods have
not yet elapsed, shorter periods corresponding to the life of the Fund. Such
total return quotations will be computed by finding the compounded average
annual total return for each time period that would equate the assumed initial
investment of $1,000 to the ending redeemable value, net of fees, according to a
required standardized calculation. The standard calculation is required by the
SEC to provide consistency and comparability in investment company advertising.
The Fund may also from time to time include in such advertising an aggregate
total return figure or a total return figure that is not calculated according to
the standardized formula in order to compare more accurately the Fund's
performance with other measures of investment return. For example, the Fund's
total return may be compared with data published by Lipper Analytical Services,
Inc., CDA Investment Technologies, Inc. or Weisenberger Investment Company
Service, or with the performance of the Lehman Brothers Aggregate Bond Index.
Performance information may also include evaluation of the Fund by nationally
recognized ranking services and information as reported in financial
publications such as Business Week, Fortune, Institutional Investor, Money
Magazine, Forbes, Barron's, The Wall Street Journal, The New York Times, or
other national, regional or local publications. All advertisements containing
performance data will include a legend disclosing that such performance data
represents past performance and that the investment return and principal value
of an investment will fluctuate so that an investor's Shares, when redeemed, may
be worth more or less than their original cost.
19
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN RBB'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RBB OR ITS DISTRIBUTOR.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY RBB OR BY THE DISTRIBUTOR IN
ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
-------------------
TABLE OF CONTENTS
PAGE
----
EXPENSE TABLE ........................................................... 2
FINANCIAL HIGHLIGHTS .................................................... 2
INTRODUCTION ............................................................ 3
INVESTMENT OBJECTIVES AND POLICIES ...................................... 4
INVESTMENT LIMITATIONS .................................................. 5
RISK FACTORS ............................................................ 6
YEAR 2000 ............................................................... 8
MANAGEMENT .............................................................. 9
DISTRIBUTION OF SHARES .................................................. 11
HOW TO PURCHASE SHARES .................................................. 12
HOW TO REDEEM AND EXCHANGE SHARES ....................................... 13
NET ASSET VALUE ......................................................... 15
DIVIDENDS AND DISTRIBUTIONS ............................................. 16
TAXES ................................................................... 16
MULTI-CLASS STRUCTURE ................................................... 17
DESCRIPTION OF SHARES ................................................... 17
OTHER INFORMATION ....................................................... 18
INVESTMENT ADVISER
Boston Partners Asset Management, L.P.
Boston, Massachusetts
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
[LOGO GRAPHIC OMITTED]
<PAGE>
PROSPECTUS
DECEMBER 29, 1998
BOSTON PARTNERS
MICRO CAP
VALUE FUND
(INSTITUTIONAL SHARES)
bp
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
[LOGO OMITTED]
<PAGE>
BOSTON PARTNERS MICRO CAP VALUE FUND
(INSTITUTIONAL CLASS)
OF
THE RBB FUND, INC.
Boston Partners Micro Cap Value Fund (the "Fund") is an investment
portfolio of The RBB Fund, Inc. ("RBB"), an open-end management investment
company. The shares of the Institutional Class ("Shares") offered by this
Prospectus represent interests in the Fund. The Fund is a diversified fund that
seeks long-term growth of capital, with current income as a secondary objective,
primarily through equity investments, such as common stocks. It seeks to achieve
its objectives by investing at least 65% of its total assets in a diversified
portfolio consisting of equity securities of issuers with market capitalizations
that do not exceed $500 million when purchased by the Fund, and identified by
Boston Partners Asset Management, L.P. (the "Adviser") as equity securities that
it believes possess value characteristics. The Adviser examines various factors
in determining the value characteristics of such issuers, including, but not
limited to, price to book value ratios and price to earnings ratios. These value
characteristics are examined in the context of the issuer's operating and
financial fundamentals such as return on equity, earnings growth and cash flow.
This Prospectus contains information that a prospective investor needs to
know before investing. Please keep it for future reference. A Statement of
Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained free of charge from the Fund by calling (888)
261-4073. The Prospectus and the Statement of Additional Information are
available for reference, along with other related materials, on the SEC Internet
Web Site (http://www.sec.gov).
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR ENDORSED
BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK AND
SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENTS IN SHARES OF THE FUND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
EXPENSE TABLE
- --------------------------------------------------------------------------------
The following table illustrates the shareholder transaction and annual
operating expenses incurred by Institutional Shares of the Fund (after fee
waivers and expense reimbursements) for the fiscal period ended August 31, 1998,
as a percentage of average daily net assets. An example based on the summary is
also shown.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases ........................... None
Maximum Sales Charge Imposed on Reinvested Dividends ................ None
Maximum Deferred Sales Charge ....................................... None
Redemption Fee(1) ...................................................1.00%
Exchange Fee ........................................................ None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (after waivers)(2) ..................................0.00%
12b-1 Fees ..........................................................0.00%
Other Expenses (after expense reimbursements)(2) ....................1.55%
-----
Total Fund Operating Expenses (after waivers and expense
reimbursements)(2) ...........................................1.55%
=====
(1) To prevent the Fund from being adversely affected by the transaction costs
associated with short-term shareholder transactions, the Fund will redeem
shares at a price equal to the net asset value of the shares, less an
additional transaction fee equal to 1.00% of the net asset value of all such
shares redeemed that have been held for less than one year. Such fees are
not sales charges or contingent deferred sales charges, but are retained by
the Fund for the benefit of all shareholders.
(2) In the absence of fee waivers and expense reimbursements, Management Fees
would be 1.25%, Other Expenses would be 16.44%, and Total Fund Operating
Expenses would be 17.69%. Management Fees are based on average daily net
assets and are calculated daily and paid monthly.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the
Fund, assuming (1) a 5% annual return and (2) redemption at the end of each time
period (including the 1.00% transaction fee on redemptions made within a year of
purchase):
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Boston Partners Micro Cap Value Fund .... $16 $49 $84 $185
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. (For more complete descriptions of the various costs and expenses,
see "Management" below.) The Fee Table reflects expense reimbursements and
voluntary waivers of Management Fees for the Fund, which are expected to be in
effect during the current fiscal year. However, the Adviser, and the Fund's
other service providers are under no obligation with respect to such expense
reimbursements and waivers and there can be no assurance that any future expense
reimbursements and waivers of Management Fees will not vary from the figures
reflected in the Fee Table.
2
<PAGE>
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The "Financial Highlights" presented below set forth certain investment
results for shares of the Institutional Class of the Fund for the period July 1,
1998 (date of inception) through August 31, 1998. The financial data included in
this table should be read in conjunction with the financial statements and notes
thereto and the unqualified report of PricewaterhouseCoopers LLP
("PricewaterhouseCoopers"), RBB's independent accountant, which are incorporated
by reference into the Statement of Additional Information. Further information
about the performance of the Institutional Class of the Fund is available in the
Annual Report to Shareholders. Both the Statement of Additional Information and
the Annual Report to Shareholders may be obtained from the Fund free of charge
by calling the telephone number on page 1 of the prospectus.
3
<PAGE>
BOSTON PARTNERS MICRO CAP VALUE FUND
(FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 1, 1998*
THROUGH AUGUST 31,
1998
------------------
<S> <C>
Per Share Operating Performance**
Net asset value, beginning of period .......................................................... $10.00
------
Net investment income/(loss) (1) .............................................................. (0.01)
Net realized and unrealized gain on investments(2) ............................................ (2.37)
------
Net increase/(decrease) in net assets resulting from operations ............................... (2.38)
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ......................................................................... --
Net realized capital gains .................................................................... --
------
Net asset value, end of period ................................................................ $ 7.62
Total investment return(3)(5) ................................................................. (23.80)%
======
Ratios/Supplemental Data
Net assets, end of period (000) ............................................................... $1,120
Ratio of expenses to average net assets***(1)(4) .............................................. 1.55%
Ratio of net investment income/(loss) to average net assets***(1) ............................. (0.34)%
Portfolio turnover rate**** ................................................................... 11.97%
<FN>
* Commencement of operations.
** Calculated based on shares outstanding on the first and last day of the
period, except for dividends and distributions, if any, which are based
on actual shares outstanding on the dates of distributions.
*** Annualized.
**** Not annualized.
(1) Reflects waivers and reimbursements.
(2) The amount shown for a share outstanding throughout the period is not in
accord with the change in the aggregate gains and losses in investments
during the period because of the timing of sales and repurchases of Fund
shares in relation to fluctuating net asset value during the period.
(3) Total return is calculated assuming a purchase of shares on the first day
and a sale of shares on the last day of the period reported and will
include reinvestments of dividends and distributions, if any. Total
return is not annualized.
(4) Without the waiver of advisory, administrative services, administration
and transfer agent fees and without the reimbursement of certain
operating expenses, the ratio of expenses to average net assets
annualized for the period ended August 31, 1998 would have been 17.69%
for the Institutional Class.
(5) Redemption fee of 1.00% is not reflected in total return calculation.
</FN>
</TABLE>
4
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
RBB is an open-end management investment company incorporated under the
laws of the State of Maryland currently operating or proposing to operate
seventeen separate investment portfolios. The Shares offered by this Prospectus
represent interests in the Boston Partners Micro Cap Value Fund. RBB was
incorporated in Maryland on February 29, 1988.
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is to provide long-term growth of capital,
with current income as a secondary objective, primarily through equity
investments, such as common stocks. The Fund seeks to achieve its objective by
investing, under normal market conditions, at least 65% of its total assets in a
diversified portfolio consisting primarily of equity securities of issuers with
market capitalizations that do not exceed $500 million when purchased by the
Fund, and identified by the Adviser as equity securities that it believes
possess value characteristics.
The Fund generally invests in the equity securities of small companies. The
Adviser will seek to invest in companies it considers to be well managed and to
have attractive fundamental financial characteristics. The Adviser believes
greater potential for price appreciation exists among small companies since they
tend to be less widely followed by other securities analysts and thus may be
more likely to be undervalued by the market. The Fund may invest from time to
time a portion of its assets, not to exceed 35% (under normal conditions) at the
time of purchase, in companies with considerably larger market capitalizations.
The Fund presents greater risks than funds that invest in equity securities
of larger companies for the following reasons: Companies in which the Fund
primarily invests will include those that have limited product lines, markets,
or financial resources, or are dependent upon a small management group. In
addition, because these stocks are not well known to the investing public, do
not have significant institutional ownership, and are followed by relatively few
securities analysts, there will normally be less publicly available information
concerning these securities compared to what is available for the securities of
larger companies. Adverse publicity and investor perceptions, whether or not
based on fundamental analysis, can decrease the value and liquidity of
securities held by the Fund. Historically, small capitalization stocks have been
more volatile in price than larger capitalization stocks. Among the reasons for
the greater price volatility of these small company stocks are the less certain
growth prospects of smaller firms, the lower degree of liquidity in the markets
for such stocks, the greater sensitivity of small companies to changing economic
conditions, the fewer market makers and the wider spreads between quoted bid and
asked prices which exist in the over-the-counter market for such stocks. Besides
exhibiting greater volatility, small company stocks may, to a degree, fluctuate
independently of larger company stocks. Small company stocks may decline in
price as large company stocks rise, or rise in price as large company stocks
decline. Investors should therefore expect that the Fund will be more volatile
than, and may fluctuate independently of, broad stock market indices such as the
Standard & Poor's 500 Composite Stock Price Index.
The securities in which the Fund invests will often be traded only in the
over-the-counter market or on a regional securities exchange, may be listed only
in the quotation service commonly known as the "pink sheets," and may not be
traded every day or in the volume typical of trading on a national securities
exchange. They may be subject to wide fluctuations in market value. The trading
market for any given security may be sufficiently thin as to make it difficult
for the Fund to dispose of a substantial block of such securities. The
disposition by the Fund of portfolio securities to meet redemptions or otherwise
may require the Fund to sell these securities at a discount from market prices
or during periods when, in the Adviser's judgment, such disposition is not
desirable or to make many small sales over a lengthy period of time.
5
<PAGE>
The Adviser examines various factors in determining the value
characteristics of such issuers, including, but not limited to, price to book
value ratios and price to earnings ratios. These value characteristics are
examined in the context of the issuer's operating and financial fundamentals
such as return on equity, earnings growth and cash flow.
The Adviser selects securities for the Fund based on a fundamental analysis
of industries and companies, earning power and growth and other investment
criteria. In general, the Fund's investments are broadly diversified over a
number of industries and, as a matter of policy, the Fund will not invest 25% or
more of its total assets in any one industry.
The Fund may invest up to 25% of its total assets in securities of foreign
issuers, including American Depository Receipts ("ADRs") and European Depository
Receipts ("EDRs"). Investing in securities of foreign issuers involves
considerations not typically associated with investing in securities of
companies organized and operating in the United States. Foreign securities
generally are denominated and pay dividends or interest in foreign currencies.
The Fund may hold from time to time various foreign currencies pending their
investment in foreign securities or their conversion into U.S. dollars. The
value of the assets of the Fund as measured in U.S. dollars may therefore be
affected favorably or unfavorably by changes in exchange rates. There may be
less publicly available information concerning foreign issuers than is available
with respect to U.S. issuers. Foreign securities may not be registered with the
U.S. Securities and Exchange Commission, and generally, foreign companies are
not subject to uniform accounting, auditing and financial reporting requirements
comparable to those applicable to U.S. issuers. ADRs and EDRs are receipts
issued by a U.S. bank or trust company evidencing ownership of underlying
securities issued by a foreign issuer. ADRs and EDRs may be listed on a national
securities exchange or may trade in the over-the-counter market. ADR and EDR
prices are denominated in U.S. dollars, even though the underlying security may
be denominated in a foreign currency. The underlying security may be subject to
foreign government taxes which would reduce the yield on such securities.
Investments in such instruments involve risks similar to those of investing
directly in foreign securities. See "Investment Objectives and Policies--Foreign
Securities" in the Statement of Additional Information.
The Fund may invest the remainder of its total assets in derivative
securities; debt securities issued by U.S. banks, corporations and other
business organizations that are investment grade securities; and debt securities
issued by the U.S. Government or government agencies.
In accordance with the above-mentioned policies, the Fund may also invest
in indexed securities, repurchase agreements, reverse repurchase agreements,
dollar rolls, financial futures contracts, options on futures contracts and may
lend portfolio securities. See "Investment Objectives and Policies" in the
Statement of Additional Information.
The Fund may invest in registered investment companies and investment funds
in foreign countries subject to the provisions of the Investment Company Act of
1940, as amended (the "1940 Act"), and as discussed in "Investment Objectives
and Policies" in the Statement of Additional Information. If the Fund invests in
such investment companies, the Fund will bear its proportionate share of the
costs incurred by such companies, including investment advisory fees.
While the Adviser intends to fully invest the Fund's assets at all times in
accordance with the above-mentioned policies, the Fund reserves the right to
hold up to 100% of its assets, as a temporary defensive measure, in cash and
eligible U.S. dollar-denominated money market instruments. The Adviser would
determine when market conditions warrant temporary defensive measures.
The Fund's investment objective and the policies described above may be
changed by RBB's Board of Directors without the affirmative vote of the holders
of a majority of the outstanding Shares representing interests in the Fund.
6
<PAGE>
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Fund may not change the following investment limitations without
shareholder approval. (A complete list of the investment limitations that cannot
be changed without such a vote of the shareholders is contained in the Statement
of Additional Information under "Investment Objectives and Policies.")
The Fund may not:
1. Purchase the securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, if immediately after and as a result of such purchase
more than 5% of the value of the Fund's total assets would be invested in
the securities of such issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by the Fund, except that up to 25%
of the value of the Fund's total assets may be invested without regard to
such limitations.
2. Purchase any securities which would cause, at the time of purchase,
25% or more of the value of the total assets of the Fund to be invested in
the obligations of issuers in any single industry, provided that there is
no limitation with respect to investments in U.S. Government obligations.
3. Borrow money or issue senior securities, except that the Fund may
borrow from banks and enter into reverse repurchase agreements and dollar
rolls for temporary purposes in amounts up to one-third of the value of its
total assets at the time of such borrowing; or mortgage, pledge or
hypothecate any assets, except in connection with any such borrowing and
then in amounts not in excess of one-third of the value of the Fund's total
assets at the time of such borrowing. The Fund will not purchase securities
while its aggregate borrowings (including reverse repurchase agreements,
dollar rolls and borrowings from banks) are in excess of 5% of its total
assets. Securities held in escrow or separate accounts in connection with
the Fund's investment practices are not considered to be borrowings or
deemed to be pledged for purposes of this limitation.
If a percentage restriction under one of the Fund's investment policies or
restrictions or the use of assets is adhered to at the time a transaction is
effected, later changes in percentage resulting from changing values will not be
considered a violation (except with respect to any restrictions that may apply
to borrowings or senior securities issued by the Fund).
The Fund presently has no intention to participate as a purchaser in any
initial public offering of securities that may trade at a premium in the
secondary market when such a secondary market exists, although it reserves the
ability to participate in such offerings in the future.
PORTFOLIO TURNOVER
The Fund retains the right to sell securities irrespective of how long they
have been held. The Adviser estimates that the annual turnover in the Fund will
not exceed 150% during the current fiscal year. Such a relatively high portfolio
turnover will be accompanied by relatively high transactional (i.e., brokerage)
costs. It may also result in increased capital gains realized by the Fund and
distributed to shareholders.
RISK FACTORS
- --------------------------------------------------------------------------------
As with other mutual funds, there can be no assurance that the Fund will
achieve its objective. The net asset value per share of Shares representing an
interest in the Fund will fluctuate as the values of its portfolio securities
change in response to changing conditions in the equity market. An investment in
the Fund is not intended to constitute a balanced investment program. As of the
date of this Prospectus, U.S. stock markets were trading at or close to record
high levels and there can be no guarantee that such levels will continue. Other
risk factors are discussed above under "Investment Objectives and Policies" and
in the Statement of Additional Information under "Investment Objectives and
Policies."
7
<PAGE>
European Currency Unification. Many European countries are about to adopt a
single European currency, the euro. On January 1, 1999, the euro will become
legal tender for all countries participating in the Economic and Monetary Union
("EMU"). A new European Central Bank will be created to manage the monetary
policy of the new unified region. On the same date, the exchange rates will be
irrevocably fixed between the EMU member countries. National currencies will
continue to circulate until they are replaced by euro coins and bank notes by
the middle of 2002.
This change is likely to significantly impact the European capital markets
in which the Fund may invest and may result in the Fund facing additional risks
in pursuing its investment objective. These risks, which include, but are not
limited to, uncertainty as to the proper tax treatment of the currency
conversion, volatility of currency exchange rates as a result of the conversion,
uncertainty as to capital market reaction, conversion costs that may affect
issuer profitability and creditworthiness, and lack of participation by some
European countries, may increase the volatility of the Fund's net asset value
per share.
YEAR 2000
- --------------------------------------------------------------------------------
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
GENERAL
Investment methods described in this Prospectus are among those which the
Fund has the power to utilize. Some may be employed on a regular basis; others
may not be used at all. Accordingly, reference to any particular method or
technique carries no implication that it will be utilized or, if it is, that it
will be successful.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of RBB and the Fund are managed under the
direction of RBB's Board of Directors.
INVESTMENT ADVISER
Boston Partners Asset Management, L.P., located at 28 State Street, 21st
Floor, Boston, Massachusetts 02109, serves as the Fund's investment adviser. The
Adviser provides investment management and investment advisory services to
investment companies and other institutional accounts that had aggregate total
assets under management as of October 31, 1998, in excess of $16.0 billion. The
adviser is organized as a Delaware limited partnership whose sole general
partner is Boston Partners, Inc., a Delaware corporation.
Subject to the supervision and direction of RBB's Board of Directors, the
Adviser manages the Fund's portfolio in accordance with the Fund's investment
objective and policies, makes investment decisions for the Fund, places orders
to purchase and sell securities, and employs professional portfolio managers and
securities analysts who provide research services to the Fund. For its services
to the Fund, the Adviser is paid a monthly advisory fee computed at an
8
<PAGE>
annual rate of 1.25% of the Fund's average daily net assets. The Adviser has
notified RBB, however, that it intends to limit total Fund operating expenses
during the current fiscal year.
PORTFOLIO MANAGEMENT
The day-to-day portfolio management of the Fund is the responsibility of
David M. Dabora and Wayne J. Archambo who are portfolio managers of the Adviser.
Prior to taking on day to day responsibilities for the Micro Cap Value Fund, Mr.
Dabora was an assistant portfolio manager/analyst of the premium equity product
of the Adviser, an all-cap value institutional product. Before joining the
Adviser in April 1995, Mr. Dabora had been employed by The Boston Company Asset
Management, Inc. since 1991 as a senior equity analyst. Mr. Dabora has over 11
years of investment experience and is a Chartered Financial Analyst. Mr.
Archambo oversees the investment activities of the Adviser's $1.5 billion
mid-capitalization value equity product as well as the $120 million Mid Cap
Value Fund and small-cap assets worth $1.0 billion. Prior to joining the Adviser
in April 1995, Mr. Archambo had been employed by The Boston Company Asset
Management, Inc. since 1989 as a senior portfolio manager and a member of that
firm's Equity Policy Committee. Mr. Archambo has over 16 years of investment
experience and is a Chartered Financial Analyst.
ADMINISTRATOR
PFPC Inc. ("PFPC") serves as administrator to the Fund and generally
assists the Fund in all aspects of its administration and operations, including
matters relating to the maintenance of financial records and accounting. For its
services, PFPC receives a fee calculated at an annual rate of .125% of the
Fund's average daily net assets, with a minimum annual fee of $75,000 payable
monthly on a pro rata basis.
ADMINISTRATIVE SERVICES AGENT
Provident Distributors, Inc. ("PDI") provides certain administrative
services to the Fund's Institutional Shares not otherwise provided by PFPC.
PDI's principal business address is Four Falls Corporate Center, West
Conshohocken, Pennsylvania 19428. PDI furnishes certain internal quasi-legal,
executive and administrative services to the Fund, acts as a liaison between the
Fund and its various service providers and coordinates and assists in the
preparation of reports prepared on behalf of the Fund. For its services, PDI is
entitled to a monthly fee calculated at the annual rate of .15% of the
respective average daily net assets of the Fund's Institutional Class. PDI is
currently waiving fees in excess of .03% of the average daily net assets of the
Fund's Institutional Class.
DISTRIBUTOR
PDI acts as distributor for the Shares pursuant to a distribution agreement
(the "Distribution Agreement") with RBB on behalf of the Shares.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholders servicing
agreements with registered broker-dealers who have entered into dealer
agreements with the Distributor ("Authorized Dealers") for the provision of
certain shareholder support services to customers of such Authorized Dealers who
are shareholders of the Fund. The services provided and the fees payable by the
Fund for these services are described in the Statement of Additional Information
under "Investment Advisory, Distribution and Servicing Arrangements."
9
<PAGE>
EXPENSES
The expenses of the Fund are deducted from its total income before
dividends are paid. Any general expenses of RBB that are not readily
identifiable as belonging to a particular investment portfolio of RBB will be
allocated among all investment portfolios of RBB based upon the relative net
assets of the investment portfolios. The Institutional Class of the Fund pays
its own distribution fees, if any, and may pay a different share of other
expenses than other classes (excluding advisory and custodial fees) if those
expenses are actually incurred in a different amount by the Institutional Class
or if it receives different services.
The Adviser may assume expenses of the Fund from time to time. To the
extent any service providers assume expenses of the Fund, such assumption of
expenses will have the effect of lowering the Fund's overall expense ratio and
increasing its yield to investors.
HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------
GENERAL
Shares representing interests in the Fund are offered continuously for sale
by the Distributor. Shares may be purchased initially by completing the
application included in this Prospectus and forwarding the application to the
Fund's transfer agent, PFPC. Purchases of Shares may be effected by wire to an
account to be specified by PFPC or by mailing a check or Federal Reserve Draft,
payable to the order of "The Boston Partners Micro Cap Value Fund," c/o PFPC
Inc., P.O. Box 8852, Wilmington, Delaware 19899-8852. The name of the Fund,
Boston Partners Micro Cap Value Fund, must also appear on the check or Federal
Reserve Draft. Shareholders may not purchase shares of the Boston Partners Micro
Cap Value Fund with a check issued by a third party and endorsed over to the
Fund. Federal Reserve Drafts are available at national banks or any state bank
which is a member of the Federal Reserve System. Initial investments in the Fund
must be at least $100,000 and subsequent investments must be at least $5,000.
For purposes of meeting the minimum initial purchase, clients which are part of
endowments, foundation or other related groups may be aggregated. The Fund
reserves the right to suspend the offering of Shares for a period of time or to
reject any purchase order. As of the date of this Prospectus, the Fund intends
to suspend the offering of Shares upon the Fund's attaining $300 million in
total assets.
Shares may be purchased on any Business Day. A "Business Day" is any day
that the New York Stock Exchange, Inc. (the "NYSE") is open for business.
Currently, the NYSE is closed on weekends and New Year's Day, Dr. Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day and on the preceding Friday or
subsequent Monday when one of these holidays falls on a Saturday or Sunday.
The price paid for Shares purchased initially or acquired through the
exercise of any exchange privilege is based on the net asset value next computed
after a purchase order is received by the Fund or its agents prior to the close
of the NYSE on such day (generally 4:00 p.m. Eastern Time). Orders received by
the Fund or its agents after the close of the NYSE are priced at the net asset
value next determined on the following Business Day. In those cases where an
investor pays for Shares by check, the purchase will be effected at the net
asset value next determined after the Fund or its agents receives the order and
the completed application.
Shares may be purchased and subsequent investments may be made by
principals and employees of the Adviser, and by their spouses and children,
either directly or through their individual retirement accounts, and by any
pension and profit-sharing plan of the Adviser, without being subject to the
minimum investment limitations.
10
<PAGE>
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<PAGE>
<TABLE>
<CAPTION>
BOSTON PARTNERS MICRO CAP VALUE FUND bp
(INSTITUTIONAL CLASS) BOSTON PARTNERS ASSET MANAGEMENT, L.P.
<S> <C>
ACCOUNT APPLICATION
PLEASE NOTE: Do not use this form to open a retirement plan account. For an IRA
application or help with this Application, please call 1-888-261-4073.
+--------------+ (Please check the appropriate box(es) below.)
| 1 | |_| Individual |_| Joint Tenant |_| Other
| Account |
| Registration:| ______________________________________________________________________________________________
+--------------+ Name SOCIAL SECURITY NUMBER OR TAX ID # OF PRIMARY OWNER
______________________________________________________________________________________________
NAME OF JOINT OWNER JOINT OWNER SOCIAL SECURITY NUMBER OR TAX ID #
For joint accounts, the account registrants will be joint tenants with right of
survivorship and not tenants in common unless tenants in common or community property
registrations are requested.
GIFT TO MINOR: |_| UNIFORM GIFTS/TRANSFER TO MINOR'S ACT
______________________________________________________________________________________________
NAME OF ADULT CUSTODIAN (ONLY ONE PERMITTED)
______________________________________________________________________________________________
NAME OF MINOR (ONLY ONE PERMITTED)
______________________________________________________________________________________________
MINOR'S SOCIAL SECURITY NUMBER AND DATE OF BIRTH
CORPORATION,
PARTNERSHIP, TRUST
OR OTHER ENTITY:
______________________________________________________________________________________________
NAME OF CORPORATION, PARTNERSHIP, OR OTHER NAME(S) OF TRUSTEE(S)
______________________________________________________________________________________________
TAXPAYER IDENTIFICATION NUMBER
+--------------+ ______________________________________________________________________________________________
| 2 | STREET OR P.O. BOX AND/OR APARTMENT NUMBER
| Mailing |
| Address: | ______________________________________________________________________________________________
+--------------+ CITY STATE ZIP CODE
______________________________________________________________________________________________
DAY PHONE NUMBER EVENING PHONE NUMBER
+--------------+ Minimum initial investment of $100,000. Amount of investment $____________
| 3 |
| Investment | Make the check payable to Boston Partners Micro Cap Value Fund.
| Information: |
+--------------+ Shareholders may not purchase shares of this Fund with a check issued by a third party and
endorsed over to the Fund.
DISTRIBUTION NOTE: Dividends and capital gains may be reinvested or paid by check. If no options are selected
OPTIONS: below, both dividends and capital gains will be reinvested in additional Fund shares.
DIVIDENDS: Pay by check |_| Reinvest |_| CAPITAL GAINS: Pay by check |_| Reinvest |_|
<PAGE>
+--------------+ To use this option, you must initial the appropriate line below.
| 4 | I authorize the Transfer Agent to accept instructions from any persons to redeem or exchange
| Telephone | shares in my account(s) by telephone in accordance with the procedures and conditions set
| Redemption: | forth in the Fund's current prospectus.
+--------------+
_____________________ _______________ Redeem shares, and send the proceeds
individual initial joint initial to the address of record.
_____________________ _______________ Exchange shares for shares of The Boston
individual initial joint initial Partners Large Cap Value Fund, Mid Cap
Value Fund, Bond Fund or Market Neutral Fund.
+--------------+ The Automatic Investment Plan which is available to shareholders of the Fund,
| 5 | makes possible regularly scheduled purchases of Fund shares to allow
| Automatic | dollar-cost averaging. The Fund's Transfer Agent can arrange for an amount
| Investment | of money selected by you to be deducted from your checking account and used
| Plan: | to purchase shares of the Fund.
+--------------+
Please debit $________ from my checking account (named below) on or about the
20th of the month. PLEASE ATTACH AN UNSIGNED, VOIDED CHECK.
|_| Monthly |_| Every Alternate Month |_| Quarterly |_| Other
______________________________________________________________________________________________
BANK OF RECORD: BANK NAME STREET ADDRESS OR P.O. BOX
______________________________________________________________________________________________
CITY STATE ZIP CODE
______________________________________________________________________________________________
BANK ABA NUMBER BANK ACCOUNT NUMBER
+--------------+ The undersigned warrants that I (we) have full authority and, if a natural person, I (we) am
| 6 | (are) of legal age to purchase shares pursuant to this Account Application, and I (we) have
| | received a current prospectus for the Fund in which I (we) am (are) investing.
| Signatures: |
+--------------+ Under the Interest and Dividend Tax Compliance Act of 1983, the Fund is required
to have the following certification:
Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number (or I am
waiting for a number to be issued to), and
(2) I am not subject to backup withholding because (a) I am exempt from backup withholding,
or (b) I have not been notified by the Internal Revenue Service that I am subject to 31%
backup withholding as a result of a failure to report all interest or dividends, or (c) the
IRS has notified me that I am no longer subject to backup withholding.
NOTE: YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE YOU HAVE FAILED TO REPORT ALL INTEREST AND
DIVIDENDS ON YOUR TAX RETURN. THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO
ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATION REQUIRED TO AUDIT BACKUP
WITHHOLDING.
______________________________________________________________________________________________
SIGNATURE OF APPLICANT DATE
______________________________________________________________________________________________
PRINT NAME TITLE (IF APPLICABLE)
______________________________________________________________________________________________
SIGNATURE OF JOINT OWNER DATE
______________________________________________________________________________________________
PRINT NAME TITLE (IF APPLICABLE)
(If you are signing for a corporation, you must indicate corporate office or title. If you
wish additional signatories on the account, please include a corporate resolution. If signing
as a fiduciary, you must indicate capacity.)
For information on additional options, such as IRA Applications, rollover requests for
qualified retirement plans, or for wire instructions, please call us at 1-888-261-4073.
MAIL COMPLETED ACCOUNT APPLICATION AND CHECK TO: THE BOSTON PARTNERS MICRO CAP VALUE FUND
C/O PFPC INC.
P.O. BOX 8852
WILMINGTON, DE 19899-8852
</TABLE>
<PAGE>
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<PAGE>
An investor may also purchase Shares by having his bank or his broker wire
Federal Funds to PFPC. An investor's bank or broker may impose a charge for this
service. The Fund does not currently impose a service charge for effecting wire
transfers but reserves the right to do so in the future. In order to ensure
prompt receipt of an investor's Federal Funds wire for an initial investment, it
is important that an investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (888) 261-4073,
and provide PFPC with your name, address, telephone number, Social Security
or Tax Identification Number, the Fund selected, the amount being wired,
and by which bank. PFPC will then provide an investor with a Fund account
number. Investors with existing accounts should also notify PFPC prior to
wiring funds.
B. Instruct your bank or broker to wire the specified amount, together
with your assigned account number, to PFPC's account with PNC Bank:
PNC Bank, N.A. Philadelphia, PA 19103
ABA NUMBER: 0310-0005-3
CREDITING ACCOUNT NUMBER: 86-1108-2507
FROM: (name of investor)
ACCOUNT NUMBER: (Investor's account number with the Fund)
FOR PURCHASE OF: (name of the Fund)
AMOUNT: (amount to be invested)
C. Fully complete and sign the application and mail it to the address
shown thereon. PFPC will not process purchases until it receives a fully
completed and signed application.
For subsequent investments, an investor should follow steps A and B above.
AUTOMATIC INVESTING
Additional investments in Shares may be made automatically by authorizing
the Fund's transfer agent to withdraw funds from your bank account. Investors
desiring to participate in the automatic investing program should call the
Fund's transfer agent, PFPC, at (888) 261-4073 to obtain the appropriate forms.
HOW TO REDEEM AND EXCHANGE SHARES
- --------------------------------------------------------------------------------
REDEMPTION BY MAIL
Shareholders may redeem for cash some or all of their Shares of the Fund at
any time. To do so, a written request in proper form must be sent directly to
Boston Partners Micro Cap Value Fund, c/o PFPC Inc., P.O. Box 8852, Wilmington,
Delaware 19899-8852. There is no charge for a redemption, unless the Shareholder
has held his or her Shares for less than one year, upon which a fee equal to 1%
of the net asset value of the Shares redeemed at the time of redemption will be
imposed.
A request for redemption must be signed by all persons in whose names the
Shares are registered. Signatures must conform exactly to the account
registration. If the proceeds of the redemption would exceed $10,000, or if the
proceeds are not to be paid to the record owner at the record address, or if the
shareholder is a corporation, partnership, trust or fiduciary, signature(s) must
be guaranteed according to the procedures described below under "Exchange
Privilege."
Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption. In some cases, however,
other documents may be necessary. In the case of shareholders holding share
certificates, the certificates for the shares being redeemed must accompany the
redemption request. Additional documentary evidence of authority is also
required by the Fund's transfer agent in the event redemption is requested by a
corporation, partnership, trust, fiduciary, executor or administrator.
11
<PAGE>
TRANSACTION FEE IMPOSED ON CERTAIN REDEMPTIONS
The Fund requires the payment of a transaction fee on redemptions of Shares
of the Fund held for less than one year equal to 1.00% of the net asset value of
such Shares redeemed at the time of redemption. This additional transaction fee
is paid to the Fund, not to the adviser, distributor or transfer agent. It is
not a sales charge or a contingent deferred sales charge. The purpose of the
additional transaction fee is to indirectly allocate transaction costs
associated with redemptions to those investors making redemptions after holding
their shares for a short period, thus protecting existing shareholders. These
costs include: (1) brokerage costs; (2) market impact costs -- i.e., the
decrease in market prices which may result when the Fund sells certain
securities in order to raise cash to meet the redemption request; (3) the
realization of capital gains by the other shareholders in the Fund; and (4) the
effect of the "bid-ask" spread in the over-the-counter market. The 1.00% amount
represents the Fund's estimate of the brokerage and other transaction costs
which may be incurred by the Fund in disposing of stocks in which the Fund may
invest. Without the additional transaction fee, the Fund would generally be
selling its shares at a price less than the cost to the Fund of acquiring the
portfolio securities necessary to maintain its investment characteristics,
resulting in reduced investment performance for all shareholders in the Fund.
With the additional transaction fee, the transaction costs of selling additional
stocks are not borne by all existing shareholders, but the source of funds for
these costs is the transaction fee paid by those investors making redemptions.
INVOLUNTARY REDEMPTION
The Fund reserves the right to redeem a shareholder's account at any time
the net asset value of the account falls below $500 as the result of a
redemption or an exchange request. Shareholders will be notified in writing that
the value of their account is less than $500 and will be allowed 30 days to make
additional investments before the redemption is processed.
PAYMENT OF REDEMPTION PROCEEDS
With the exception of redemptions to which the 1.00% transaction fee
applies, the redemption price is the net asset value per share next determined
after the request for redemption is received in proper form by the Fund or its
agents. For redemptions to which the additional transaction fee applies, the
redemption price is the net asset value per share next determined after the
request for redemption is received in proper form by the Fund or its agents,
less an amount equal to 1.00% of the net asset value of such Shares redeemed
that the shareholder has held for less than one year. Payment for Shares
redeemed is made by check mailed within seven days after acceptance by the Fund
or its agents of the request and any other necessary documents in proper order.
Such payment may be postponed or the right of redemption suspended as provided
by the 1940 Act. If the Shares to be redeemed have been recently purchased by
check, the Fund's transfer agent may delay mailing a redemption check, which may
be a period of up to 15 days from the purchase date, pending a determination
that the check has cleared. The Fund has elected to be governed by Rule 18f-1
under the 1940 Act so that a portfolio is obligated to redeem its shares solely
in cash up to the lesser of $250,000 or 1% of its net asset value during any
90-day period for any one shareholder of a portfolio.
EXCHANGE PRIVILEGE
The exchange privilege is available to shareholders residing in any state
in which the Shares being acquired may be legally sold. A shareholder may
exchange Shares of the Fund for Institutional Shares of any other Boston
Partners Fund of RBB, subject to the restrictions described under "Exchange
Privilege Limitations." Such exchange will be effected at the net asset value of
the exchanged Fund and the net asset value of the Fund being acquired next
determined after receipt of a request for an exchange by the Fund or its agents.
An exchange of Shares will be treated as a sale for federal income tax purposes.
See "Taxes." A shareholder wishing to make an exchange may do so by sending a
written request to PFPC.
12
<PAGE>
If the exchanging shareholder does not currently own Institutional Shares
of the Boston Partners Fund into which he would like to exchange, a new account
will be established with the same registration, dividend and capital gain
options as the account from which shares are exchanged, unless otherwise
specified in writing by the shareholder with all signatures guaranteed. A
signature guarantee may be obtained from a domestic bank or trust company,
broker, dealer, clearing agency or savings association who are participants in a
medallion program recognized by the Securities Transfer Association. The three
recognized medallion programs are Securities Transfer Agents Medallion Program
(STAMP), Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange,
Inc. Medallion Signature Program (MSP). Signature guarantees that are not part
of these programs will not be accepted. The exchange privilege may be modified
or terminated at any time, or from time to time, by RBB, upon 60 days' written
notice to shareholders.
If an exchange is to a new account in the acquired Fund, the dollar value
of Institutional Shares acquired must equal or exceed that Fund's minimum for a
new account; if to an existing account, the dollar value must equal or exceed
that Fund's minimum for subsequent investments. If any amount remains in the
Fund from which the exchange is being made, such amount must not drop below the
minimum account value required by the Fund.
EXCHANGE PRIVILEGE LIMITATIONS
The Fund's exchange privilege is not intended to afford shareholders a way
to speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Fund and increase transaction costs, the Fund has established
a policy of limiting excessive exchange activity.
Shareholders are entitled to six (6) exchange redemptions (at least 30 days
apart) from the Fund during any twelve-month period. Notwithstanding these
limitations, the Fund reserves the right to reject any purchase request
(including purchases by exchange) that is deemed to be disruptive to efficient
portfolio management.
TELEPHONE TRANSACTIONS
In order to request a telephone exchange or redemption, a shareholder must
have completed and returned an account application containing a telephone
election. To add a telephone option to an existing account that previously did
not provide for this option, a Telephone Authorization Form must be filed with
PFPC. This form is available from PFPC. Once this election has been made, the
shareholder may simply contact PFPC by telephone to request the exchange or
redemption by calling (888) 261-4073. Neither RBB, the Fund, the Distributor,
the Administrator nor any other Fund agent will be liable for any loss,
liability, cost or expense for following RBB's telephone transaction procedures
described below or for following instructions communicated by telephone that
they reasonably believe to be genuine.
RBB's telephone transaction procedures include the following measures: (1)
requiring the appropriate telephone transaction privilege forms; (2) requiring
the caller to provide the names of the account owners, the account social
security number and name of the Fund, all of which must match RBB's records; (3)
requiring RBB's service representative to complete a telephone transaction form,
listing all of the above caller identification information; (4) permitting
exchanges only if the two account registrations are identical; (5) requiring
that redemption proceeds be sent only by check to the account owners of record
at the address of record, or by wire only to the owners of record at the bank
account of record; (6) sending a written confirmation for each telephone
transaction to the owners of record at the address of record within five (5)
Business Days of the call; and (7) maintaining tapes of telephone transactions
for six months, if the Fund elects to record shareholder telephone transactions.
For accounts held of record by broker-dealers (other than the Distributor),
financial institutions, securities dealers, financial planners and other
industry professionals, additional documentation or information regarding the
scope of a caller's authority is required. Finally, for telephone transactions
in accounts held jointly, additional information regarding other account holders
is required. Telephone transactions will not be permitted in connection with IRA
or other retirement plan accounts or by an attorney-in-fact under a power of
attorney.
13
<PAGE>
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset values for each class of a fund are calculated by adding the
value of the proportionate interest of the class in a fund's cash, securities
and other assets, deducting actual and accrued liabilities of the class and
dividing the result by the number of outstanding shares of the class. The net
asset value of each class are calculated independently of each other class. The
net asset values are calculated as of the close of regular trading on the NYSE,
generally 4:00 p.m. Eastern Time on each Business Day.
Valuation of securities held by the Fund is as follows: securities traded
on a national securities exchange or on the NASDAQ National Market System are
valued at the last reported sale price that day; securities traded on a national
securities exchange or on the NASDAQ National Market System for which there were
no sales on that day and securities traded on other over-the-counter markets for
which market quotations are readily available are valued at the mean of the bid
and asked prices; and securities for which market quotations are not readily
available are valued at fair market value as determined in good faith by or
under the direction of RBB's Board of Directors. The amortized cost method of
valuation may also be used with respect to debt obligations with sixty days or
less remaining to maturity.
With the approval of RBB's Board of Directors, the Fund may use a pricing
service, bank or broker-dealer experienced in such matters to value the Fund's
securities. A more detailed discussion of net asset value and security valuation
is contained in the Statement of Additional Information.
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Fund to the Fund's shareholders. All
distributions are reinvested in the form of additional full and fractional
Shares unless a shareholder elects otherwise.
The Fund will declare and pay dividends from net investment income annually
and will pay them in the calendar year in which they are declared, generally in
December. Net realized capital gains (including net short-term capital gains),
if any, will be distributed at least annually.
TAXES
- --------------------------------------------------------------------------------
The following discussion is only a brief summary of some of the important
tax considerations generally affecting the Fund and its shareholders and is not
intended as a substitute for careful tax planning. Accordingly, investors in the
Fund should consult their tax advisers with specific reference to their own tax
situation.
The Fund will elect to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended. So long as the
Fund qualifies for this tax treatment, it will be relieved of federal income tax
on amounts distributed to shareholders, but shareholders, unless otherwise
exempt, will pay income or capital gains taxes on amounts so distributed (except
distributions that are treated as a return of capital) regardless of whether
such distributions are paid in cash or reinvested in additional shares.
Distributions out of the "net capital gain" (the excess of net long-term
capital gain over net short-term capital loss), if any, of the Fund will be
taxed to shareholders as long-term capital gain regardless of the length of time
a shareholder has held his Shares, whether such gain was reflected in the price
paid for the Shares, or whether such gain was attributable to bonds bearing
tax-exempt interest. All other distributions, to the extent they are taxable,
are taxed to shareholders as ordinary income.
RBB will send written notices to shareholders annually regarding the tax
status of distributions made by the Fund. Dividends declared in December of any
year payable to shareholders of record on a specified date in such a month will
14
<PAGE>
be deemed to have been received by the shareholders on December 31, provided
such dividends are paid during January of the following year. The Fund intends
to make sufficient actual or deemed distributions prior to the end of each
calendar year to avoid liability for federal excise tax.
Investors should be careful to consider the tax implications of buying
shares just prior to a distribution. The price of shares purchased at that time
will reflect the amount of the forthcoming distribution. Those investors
purchasing shares just prior to a distribution will nevertheless be taxed on the
entire amount of the distribution received, although the distribution is, in
effect, a return of capital.
Shareholders who exchange shares representing interests in one Fund for
shares representing interests in another Fund will generally recognize capital
gain or loss for federal income tax purposes.
Shareholders who are nonresident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships may be subject to
different U.S. Federal income tax treatment and should consult their tax
advisers.
MULTI-CLASS STRUCTURE
- --------------------------------------------------------------------------------
The Fund offers one other class of shares, Investor Shares, which is
offered directly to individual investors pursuant to a separate prospectus.
Shares of each class represent equal pro rata interests in the Fund and accrue
dividends and calculate net asset value and performance quotations in the same
manner. The Fund will quote performance of the Investor Shares separately from
Institutional Shares. Because of different expenses paid by the Institutional
Shares, the total return on such shares can be expected, at any time, to be
different than the total return on Investor Shares. Information concerning other
classes may be obtained by calling the Fund at (800) 261-4073.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
RBB has authorized capital of thirty billion shares of Common Stock, $.001
par value per share, of which 18.326 billion shares are currently classified
into 97 different classes of Common Stock. See "Description of Shares" in the
Statement of Additional Information."
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO BOSTON PARTNERS MICRO CAP VALUE FUND AND DESCRIBE
ONLY THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS AND OTHER
MATTERS RELATING TO BOSTON PARTNERS MICRO CAP VALUE FUND.
Each share that represents an interest in the Fund has an equal
proportionate interest in the assets belonging to the Fund with each other share
that represents an interest in the Fund, even where a share has a different
class designation than another share representing an interest in the Fund.
Shares of the Fund do not have preemptive or conversion rights. When issued for
payment as described in this Prospectus, Shares will be fully paid and
non-assessable.
RBB currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, RBB will assist in shareholder communication in such matters.
Holders of Shares of the Fund will vote in the aggregate and not by class
on all matters, except where otherwise required by law. Further, shareholders of
all investment portfolios of RBB will vote in the aggregate and not by portfolio
except as otherwise required by law or when the Board of Directors determines
that the matter to be voted upon affects only the interests of the shareholders
of a particular investment portfolio. (See the Statement of Additional
Information under "Additional Information Concerning Fund Shares" for examples
when the 1940 Act requires voting
15
<PAGE>
by investment portfolio or by class.) Shareholders of the Fund are entitled to
one vote for each full share held (irrespective of class or portfolio) and
fractional votes for fractional shares held. Voting rights are not cumulative
and, accordingly, the holders of more than 50% of the aggregate shares of Common
Stock of the Fund may elect all of the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of RBB.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC Inc.,
the Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (888) 261-4073.
SHARE CERTIFICATES
In the interest of economy and convenience, physical certificates
representing Shares in the Fund are not normally issued.
FUTURE PERFORMANCE INFORMATION
From time to time, the Fund may advertise its performance, including
comparisons to other mutual funds with similar investment objectives and to
stock or other relevant indices. All such advertisements will show the average
annual total return over one, five and ten year periods or, if such periods have
not yet elapsed, shorter periods corresponding to the life of the Fund. Such
total return quotations will be computed by finding the compounded average
annual total return for each time period that would equate the assumed initial
investment of $1,000 to the ending redeemable value, net of fees, according to a
required standardized calculation. The standard calculation is required by the
SEC to provide consistency and comparability in investment company advertising.
The Fund may also from time to time include in such advertising an aggregate
total return figure or a total return figure that is not calculated according to
the standardized formula in order to compare more accurately the Fund's
performance with other measures of investment return. For example, the Fund's
total return may be compared with data published by Lipper Analytical Services,
Inc., CDA Investment Technologies, Inc. or Weisenberger Investment Company
Service, or with the performance of the Russell 2000 Index. Performance
information may also include evaluation of the Fund by nationally recognized
ranking services and information as reported in financial publications such as
Business Week, Fortune, Institutional Investor, Money Magazine, Forbes,
Barron's, The Wall Street Journal, The New York Times, or other national,
regional or local publications. All advertisements containing performance data
will include a legend disclosing that such performance data represents past
performance and that the investment return and principal value of an investment
will fluctuate so that an investor's Shares, when redeemed, may be worth more or
less than their original cost.
16
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN RBB'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RBB OR ITS DISTRIBUTOR.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY RBB OR BY THE DISTRIBUTOR IN
ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
---------------------------------
TABLE OF CONTENTS
PAGE
----
EXPENSE TABLE .......................................................... 2
FINANCIAL HIGHLIGHTS ................................................... 3
INTRODUCTION ........................................................... 5
INVESTMENT OBJECTIVES AND POLICIES ..................................... 5
INVESTMENT LIMITATIONS ................................................. 7
RISK FACTORS ........................................................... 7
YEAR 2000 .............................................................. 8
MANAGEMENT ............................................................. 8
HOW TO PURCHASE SHARES ................................................. 10
HOW TO REDEEM AND EXCHANGE SHARES. ..................................... 11
NET ASSET VALUE. ....................................................... 14
DIVIDENDS AND DISTRIBUTIONS. ........................................... 14
TAXES. ................................................................. 14
MULTI-CLASS STRUCTURE. ................................................. 15
DESCRIPTION OF SHARES. ................................................. 15
OTHER INFORMATION. ..................................................... 16
INVESTMENT ADVISER
Boston Partners Asset Management, L.P.
Boston, Massachusetts
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
TRANSFER AGENT AND ADMINISTRATOR
PFPC Inc.
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
[LOGO OMITTED]
<PAGE>
PROSPECTUS
DECEMBER 29, 1998
BOSTON PARTNERS
MICRO CAP
VALUE FUND
(INVESTOR SHARES)
bp
BOSTON PARTNERS ASSET MANAGEMENT, L.P.
[LOGO GRAPHIC OMITTED]
<PAGE>
BOSTON PARTNERS MICRO CAP VALUE FUND
(INVESTOR SHARES)
OF
THE RBB FUND, INC.
Boston Partners Micro Cap Value Fund (the "Fund") is an investment
portfolio of The RBB Fund, Inc. ("RBB"), an open-end management investment
company. The shares of the Investor Class ("Shares") offered by this Prospectus
represent interests in the Fund. The Fund is a diversified fund that seeks
long-term growth of capital, with current income as a secondary objective,
primarily through equity investments, such as common stocks. It seeks to achieve
its objectives by investing at least 65% of its total assets in a diversified
portfolio consisting of equity securities of issuers with market capitalizations
that do not exceed $500 million when purchased by the Fund, and identified by
Boston Partners Asset Management, L.P. (the "Adviser") as equity securities that
it believes possess value characteristics. The Adviser examines various factors
in determining the value characteristics of such issuers, including, but not
limited to, price to book value ratios and price to earnings ratios. These value
characteristics are examined in the context of the issuer's operating and
financial fundamentals such as return on equity, earnings growth and cash flow.
This Prospectus contains information that a prospective investor needs to
know before investing. Please keep it for future reference. A Statement of
Additional Information, dated December 29, 1998, has been filed with the
Securities and Exchange Commission and is incorporated by reference in this
Prospectus. It may be obtained free of charge from the Fund by calling (888)
261-4073. The Prospectus and the Statement of Additional Information are
available for reference, along with other related materials, on the SEC Internet
Web Site (http://www.sec.gov).
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR ENDORSED
BY PNC BANK, NATIONAL ASSOCIATION, PFPC TRUST COMPANY OR ANY OTHER BANK AND
SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENTS IN SHARES OF THE FUND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PROSPECTUS December 29, 1998
<PAGE>
EXPENSE TABLE
- --------------------------------------------------------------------------------
The following table illustrates the shareholder transaction and annual
operating expenses incurred by Investor Shares of the Fund (after fee waivers
and expense reimbursements) for the fiscal period ended August 31, 1998, as a
percentage of average daily net assets. An example based on the summary is also
shown.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases ........................ None
Maximum Sales Charge Imposed on Reinvested Dividends ............. None
Maximum Deferred Sales Charge .................................... None
Redemption Fee(1) ................................................ 1.00%
Exchange Fee ..................................................... None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (after waivers)2. ................................ 0.00%
12b-1 Fees (after waivers)2 ...................................... .25%
Other Expenses (after expense reimbursements)(2). ................ 1.55%
----
Total Fund Operating Expenses (after waivers and expense
reimbursements)(2) ............................................... 1.80%
====
(1) To prevent the Fund from being adversely affected by the transaction costs
associated with short-term shareholder transactions, the Fund will redeem
shares at a price equal to the net asset value of the shares, less an
additional transaction fee equal to 1.00% of the net asset value of all such
shares redeemed that have been held for less than one year. Such fees are
not sales charges or contingent deferred sales charges, but are retained by
the Fund for the benefit of all shareholders.
(2) In the absence of fee waivers and expense reimbursements, Management Fees
would be 1.25%, Other Expenses would be 16.44%, 12b-1 Fees would be 0.25%
and Total Fund Operating Expenses would be 17.94%. Management Fees and 12b-1
Fees are each based on average daily net assets and are calculated daily and
paid monthly.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the
Fund, assuming (1) a 5% annual return and (2) redemption at the end of each time
period (including the 1.00% transaction fee on redemptions made within a year of
purchase):
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
Boston Partners Micro Cap Value Fund ..... $18 $57 $97 $212
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. (For more complete descriptions of the various costs and expenses,
see "Management" and "Distribution of Shares" below.) The Fee Table reflects
expense reimbursements and voluntary waivers of Management Fees and 12b-1 fees
for the Fund, which are expected to be in effect during the current fiscal year.
However, the Adviser, the Distributor and the Fund's other service providers are
under no obligation with respect
2
<PAGE>
to such expense reimbursements and waivers and there can be no assurance that
any future expense reimbursements and waivers of Management Fees or 12b-1 Fees
will not vary from the figures reflected in the Fee Table.
The Example in the Fee Table assumes that all dividends and distributions
are reinvested and that the amounts listed under "Annual Fund Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The "Financial Highlights" presented below set forth certain investment
results for shares of the Investor Class of the Fund for the period July 1, 1998
(date of inception) through August 31, 1998. The financial data included in this
table should be read in conjunction with the financial statements and notes
thereto and the unqualified report of PricewaterhouseCoopers LLP
("PricewaterhouseCoopers"), RBB's independent accountant, which are incorporated
by reference into the Statement of Additional Information. Further information
about the performance of the Investor Class of the Fund is available in the
Annual Report to Shareholders. Both the Statement of Additional Information and
the Annual Report to Shareholders may be obtained from the Fund free of charge
by calling the telephone number on page 1 of the prospectus.
3
<PAGE>
BOSTON PARTNERS MICROCAP VALUE FUND
(FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
FOR THE PERIOD
JULY 1, 1998*
THROUGH AUGUST 31,
1998
------------------
INVESTOR CLASS
------------------
Per Share Operating Performance**
Net asset value, beginning of period ........................ $ 10.00
-------
Net investment income/(loss) (1) ............................ (0.01)
Net realized and unrealized gain/(loss) on investments(2) ... (2.36)
-------
Net increase/(decrease) in net assets resulting
from operations .......................................... (2.37)
-------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ....................................... --
Net realized capital gains .................................. --
-------
Net asset value, end of period .............................. $7.63
=======
Total investment return(3)(5) ............................... (23.70)%
=======
Ratios/Supplemental Data
Net assets, end of period (000) .......................... $129.00
Ratio of expenses to average net
assets***(1)(4) ........................................ 1.80%
Ratio of net investment income/(loss) to
average net assets***(1) ............................... (0.66)%
Portfolio turnover rate**** .............................. 11.97%
* Commencement of operations.
** Calculated based on shares outstanding on the first and last day of the
period, except for dividends and distributions, if any, which are based
on actual shares outstanding on the dates of distributions.
*** Annualized.
**** Not annualized.
(1) Reflects waivers and reimbursements.
(2) The amount shown for a share outstanding throughout the period is not in
accord with the change in the aggregate gains and losses in investments
during the period because of the timing of sales and repurchases of Fund
shares in relation to fluctuating net asset value during the period.
(3) Total return is calculated assuming a purchase of shares on the first
day and a sale of shares on the last day of the period reported and will
include reinvestments of dividends and distributions, if any. Total
return is not annualized.
(4) Without the waiver of advisory, 12b-1, administration and transfer agent
fees and without the reimbursement of certain operating expenses, the
ratio of expenses to average net assets annualized for the period ended
August 31, 1998 would have been 18.19% for the Investor Class.
(5) Redemption fee of 1.00% is not reflected in total return calculation.
4
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------
RBB is an open-end management investment company incorporated under the
laws of the State of Maryland currently operating or proposing to operate
seventeen separate investment portfolios. The Shares offered by this Prospectus
represent interests in the Boston Partners Micro Cap Value Fund. RBB was
incorporated in Maryland on February 29, 1988.
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is to provide long-term growth of capital,
with current income as a secondary objective, primarily through equity
investments, such as common stocks. The Fund seeks to achieve its objective by
investing, under normal market conditions, at least 65% of its total assets in a
diversified portfolio consisting primarily of equity securities of issuers with
market capitalizations that do not exceed $500 million when purchased by the
Fund, and identified by the Adviser as equity securities that it believes
possess value characteristics.
The Fund generally invests in the equity securities of small companies. The
Adviser will seek to invest in companies it considers to be well managed and to
have attractive fundamental financial characteristics. The Adviser believes
greater potential for price appreciation exists among small companies since they
tend to be less widely followed by other securities analysts and thus may be
more likely to be undervalued by the market. The Fund may invest from time to
time a portion of its assets, not to exceed 35% (under normal conditions) at the
time of purchase, in companies with considerably larger market capitalizations.
The Fund presents greater risks than funds that invest in equity securities
of larger companies for the following reasons: Companies in which the Fund
primarily invests will include those that have limited product lines, markets,
or financial resources, or are dependent upon a small management group. In
addition, because these stocks are not well known to the investing public, do
not have significant institutional ownership, and are followed by relatively few
securities analysts, there will normally be less publicly available information
concerning these securities compared to what is available for the securities of
larger companies. Adverse publicity and investor perceptions, whether or not
based on fundamental analysis, can decrease the value and liquidity of
securities held by the Fund. Historically, small capitalization stocks have been
more volatile in price than larger capitalization stocks. Among the reasons for
the greater price volatility of these small company stocks are the less certain
growth prospects of smaller firms, the lower degree of liquidity in the markets
for such stocks, the greater sensitivity of small companies to changing economic
conditions, the fewer market makers and the wider spreads between quoted bid and
asked prices which exist in the over-the-counter market for such stocks. Besides
exhibiting greater volatility, small company stocks may, to a degree, fluctuate
independently of larger company stocks. Small company stocks may decline in
price as large company stocks rise, or rise in price as large company stocks
decline. Investors should therefore expect that the Fund will be more volatile
than, and may fluctuate independently of, broad stock market indices such as the
Standard & Poor's 500 Composite Stock Price Index.
The securities in which the Fund invests will often be traded only in the
over-the-counter market or on a regional securities exchange, may be listed only
in the quotation service commonly known as the "pink sheets," and may not be
traded every day or in the volume typical of trading on a national securities
exchange. They may be subject to wide fluctuations in market value. The trading
market for any given security may be sufficiently thin as to make it difficult
for the Fund to dispose of a substantial block of such securities. The
disposition by the Fund of portfolio securities to meet redemptions or otherwise
may require the Fund to sell these securities at a discount from market prices
or during periods when, in the Adviser's judgment, such disposition is not
desirable or to make many small sales over a lengthy period of time.
The Adviser examines various factors in determining the value
characteristics of such issuers, including, but not limited to, price to book
value ratios and price to earnings ratios. These value characteristics are
examined in the context of the issuer's operating and financial fundamentals
such as return on equity, earnings growth and cash flow.
5
<PAGE>
The Adviser selects securities for the Fund based on a fundamental analysis
of industries and companies, earning power and growth and other investment
criteria. In general, the Fund's investments are broadly diversified over a
number of industries and, as a matter of policy, the Fund will not invest 25% or
more of its total assets in any one industry.
The Fund may invest up to 25% of its total assets in securities of foreign
issuers, including American Depository Receipts ("ADRs") and European Depository
Receipts ("EDRs"). Investing in securities of foreign issuers involves
considerations not typically associated with investing in securities of
companies organized and operating in the United States. Foreign securities
generally are denominated and pay dividends or interest in foreign currencies.
The Fund may hold from time to time various foreign currencies pending their
investment in foreign securities or their conversion into U.S. dollars. The
value of the assets of the Fund as measured in U.S. dollars may therefore be
affected favorably or unfavorably by changes in exchange rates. There may be
less publicly available information concerning foreign issuers than is available
with respect to U.S. issuers. Foreign securities may not be registered with the
U.S. Securities and Exchange Commission, and generally, foreign companies are
not subject to uniform accounting, auditing and financial reporting requirements
comparable to those applicable to U.S. issuers. ADRs and EDRs are receipts
issued by a U.S. bank or trust company evidencing ownership of underlying
securities issued by a foreign issuer. ADRs and EDRs may be listed on a national
securities exchange or may trade in the over-the-counter market. ADR and EDR
prices are denominated in U.S. dollars, even though the underlying security may
be denominated in a foreign currency. The underlying security may be subject to
foreign government taxes which would reduce the yield on such securities.
Investments in such instruments involve risks similar to those of investing
directly in foreign securities. See "Investment Objectives and Policies--Foreign
Securities" in the Statement of Additional Information.
The Fund may invest the remainder of its total assets in derivative
securities; debt securities issued by U.S. banks, corporations and other
business organizations that are investment grade securities; and debt securities
issued by the U.S. Government or government agencies.
In accordance with the above-mentioned policies, the Fund may also invest
in indexed securities, repurchase agreements, reverse repurchase agreements,
dollar rolls, financial futures contracts, options on futures contracts and may
lend portfolio securities. See "Investment Objectives and Policies" in the
Statement of Additional Information.
The Fund may invest in registered investment companies and investment funds
in foreign countries subject to the provisions of the Investment Company Act of
1940, as amended (the "1940 Act"), and as discussed in "Investment Objectives
and Policies" in the Statement of Additional Information. If the Fund invests in
such investment companies, the Fund will bear its proportionate share of the
costs incurred by such companies, including investment advisory fees.
While the Adviser intends to fully invest the Fund's assets at all times in
accordance with the above-mentioned policies, the Fund reserves the right to
hold up to 100% of its assets, as a temporary defensive measure, in cash and
eligible U.S. dollar-denominated money market instruments. The Adviser would
determine when market conditions warrant temporary defensive measures.
The Fund's investment objective and the policies described above may be
changed by RBB's Board of Directors without the affirmative vote of the holders
of a majority of the outstanding Shares representing interests in the Fund.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Fund may not change the following investment limitations without
shareholder approval. (A complete list of the investment limitations that cannot
be changed without such a vote of the shareholders is contained in the Statement
of Additional Information under "Investment Objectives and Policies.")
6
<PAGE>
The Fund may not:
1. Purchase the securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, if immediately after and as a result of such purchase
more than 5% of the value of the Fund's total assets would be invested in
the securities of such issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by the Fund, except that up to 25%
of the value of the Fund's total assets may be invested without regard to
such limitations.
2. Purchase any securities which would cause, at the time of purchase,
25% or more of the value of the total assets of the Fund to be invested in
the obligations of issuers in any single industry, provided that there is
no limitation with respect to investments in U.S. Government obligations.
3. Borrow money or issue senior securities, except that the Fund may
borrow from banks and enter into reverse repurchase agreements and dollar
rolls for temporary purposes in amounts up to one-third of the value of its
total assets at the time of such borrowing; or mortgage, pledge or
hypothecate any assets, except in connection with any such borrowing and
then in amounts not in excess of one-third of the value of the Fund's total
assets at the time of such borrowing. The Fund will not purchase securities
while its aggregate borrowings (including reverse repurchase agreements,
dollar rolls and borrowings from banks) are in excess of 5% of its total
assets. Securities held in escrow or separate accounts in connection with
the Fund's investment practices are not considered to be borrowings or
deemed to be pledged for purposes of this limitation.
If a percentage restriction under one of the Fund's investment policies or
restrictions or the use of assets is adhered to at the time a transaction is
effected, later changes in percentage resulting from changing values will not be
considered a violation (except with respect to any restrictions that may apply
to borrowings or senior securities issued by the Fund).
The Fund presently has no intention to participate as a purchaser in any
initial public offering of securities that may trade at a premium in the
secondary market when such a secondary market exists, although it reserves the
ability to participate in such offerings in the future.
PORTFOLIO TURNOVER
The Fund retains the right to sell securities irrespective of how long they
have been held. The Adviser estimates that the annual turnover in the Fund will
not exceed 150% during the current fiscal year. Such a relatively high portfolio
turnover will be accompanied by relatively high transactional (i.e., brokerage)
costs. It may also result in increased capital gains realized by the Fund and
distributed to shareholders.
RISK FACTORS
- --------------------------------------------------------------------------------
As with other mutual funds, there can be no assurance that the Fund will
achieve its objective. The net asset value per share of Shares representing an
interest in the Fund will fluctuate as the values of its portfolio securities
change in response to changing conditions in the equity market. An investment in
the Fund is not intended to constitute a balanced investment program. As of the
date of this Prospectus, U.S. stock markets were trading at or close to record
high levels and there can be no guarantee that such levels will continue. Other
risk factors are discussed above under "Investment Objectives and Policies" and
in the Statement of Additional Information under "Investment Objectives and
Policies."
EUROPEAN CURRENCY UNIFICATION. Many European countries are about to adopt a
single European currency, the euro. On January 1, 1999, the euro will become
legal tender for all countries participating in the Economic and Monetary Union
("EMU"). A new European Central Bank will be created to manage the monetary
policy of the new unified region. On the same date, the exchange rates will be
irrevocably fixed between the EMU member countries. National currencies will
continue to circulate until they are replaced by euro coins and bank notes by
the middle of 2002.
7
<PAGE>
This change is likely to significantly impact the European capital markets
in which the Fund may invest and may result in the Fund facing additional risks
in pursuing its investment objective. These risks, which include, but are not
limited to, uncertainty as to the proper tax treatment of the currency
conversion, volatility of currency exchange rates as a result of the conversion,
uncertainty as to capital market reaction, conversion costs that may affect
issuer profitability and creditworthiness, and lack of participation by some
European countries, may increase the volatility of the Fund's net asset value
per share.
YEAR 2000
- --------------------------------------------------------------------------------
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Year 2000 Problem could also hurt
companies whose securities the Fund holds or securities markets generally. The
Fund has been advised by the Adviser, the Administrators and the Custodian that
they are actively taking steps to address the Year 2000 Problem with respect to
the computer systems that they use and to obtain assurances that comparable
steps are being taken by the Fund's other major service providers. While there
can be no assurance that the Fund's service providers will be Year 2000
compliant, the Fund's service providers expect that their plans to be compliant
will be achieved.
GENERAL
Investment methods described in this Prospectus are among those which the
Fund has the power to utilize. Some may be employed on a regular basis; others
may not be used at all. Accordingly, reference to any particular method or
technique carries no implication that it will be utilized or, if it is, that it
will be successful.
MANAGEMENT
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
The business and affairs of RBB and the Fund are managed under the
direction of RBB's Board of Directors.
INVESTMENT ADVISER
Boston Partners Asset Management, L.P., located at 28 State Street, 21st
Floor, Boston, Massachusetts 02109, serves as the Fund's investment adviser. The
Adviser provides investment management and investment advisory services to
investment companies and other institutional accounts that had aggregate total
assets under management as of October 31, 1998, in excess of $16.0 billion. The
adviser is organized as a Delaware limited partnership whose sole general
partner is Boston Partners, Inc., a Delaware corporation.
Subject to the supervision and direction of RBB's Board of Directors, the
Adviser manages the Fund's portfolio in accordance with the Fund's investment
objective and policies, makes investment decisions for the Fund, places orders
to purchase and sell securities, and employs professional portfolio managers and
securities analysts who provide research services to the Fund. For its services
to the Fund, the Adviser is paid a monthly advisory fee computed at an annual
rate of 1.25% of the Fund's average daily net assets. The Adviser has notified
RBB, however, that it intends to limit total Fund operating expenses during the
current fiscal year.
PORTFOLIO MANAGEMENT
The day-to-day portfolio management of the Fund is the responsibility of
David M. Dabora and Wayne J. Archambo who are portfolio managers of the Adviser.
Prior to taking on day to day responsibilities for the Micro Cap Value Fund, Mr.
Dabora was an assistant portfolio manager/analyst of the premium equity product
of the Adviser, an all-cap value
8
<PAGE>
institutional product. Before joining the Adviser in April 1995, Mr. Dabora had
been employed by The Boston Company Asset Management, Inc. since 1991 as a
senior equity analyst. Mr. Dabora has over 11 years of investment experience and
is a Chartered Financial Analyst. Mr. Archambo oversees the investment
activities of the Adviser's $1.5 million of mid-capitalization value equity
product, including the $120 million Mid Cap Value Fund and small cap assets
worth $1.0 billion. Prior to joining the Adviser in April 1995, Mr. Archambo had
been employed by The Boston Company Asset Management, Inc. since 1989 as a
senior portfolio manager and a member of that firm's Equity Policy Committee.
Mr. Archambo has over 16 years of investment experience and is a Chartered
Financial Analyst.
ADMINISTRATOR
PFPC Inc. ("PFPC") serves as administrator to the Fund and generally
assists the Fund in all aspects of its administration and operations, including
matters relating to the maintenance of financial records and accounting. For its
services, PFPC receives a fee calculated at an annual rate of .125% of the
Fund's average daily net assets, with a minimum annual fee of $75,000 payable
monthly on a pro rata basis.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND CUSTODIAN
PFPC Trust Company, an indirect wholly-owned subsidiary of PNC Bank Corp.,
will succeed PNC Bank, National Association ("PNC Bank") as the Fund's custodian
pursuant to an assignment. PNC Bank will continue to provide certain services to
PFPC Trust Company. PFPC serves as the Fund's transfer agent and dividend
disbursing agent. The principal offices of PFPC are located at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PFPC may enter into shareholder servicing
agreements with registered broker-dealers who have entered into dealer
agreements with the Distributor ("Authorized Dealers") for the provision of
certain shareholder support services to customers of such Authorized Dealers who
are shareholders of the Fund. The services provided and the fees payable by the
Fund for these services are described in the Statement of Additional Information
under "Investment Advisory, Distribution and Servicing Arrangements."
DISTRIBUTOR
Provident Distributors, Inc. ("PDI"), with a principal business address at
Four Falls Corporate Center, West Conshohocken, Pennsylvania 19428, acts as
distributor for the Shares pursuant to a distribution agreement (the
"Distribution Agreement") with RBB on behalf of the Shares.
EXPENSES
The expenses of the Fund are deducted from its total income before
dividends are paid. Any general expenses of RBB that are not readily
identifiable as belonging to a particular investment portfolio of RBB will be
allocated among all investment portfolios of RBB based upon the relative net
assets of the investment portfolios. The Investor Class of the Fund pays its own
distribution fees, and may pay a different share than the Institutional Class of
other expenses (excluding advisory and custodial fees) if those expenses are
actually incurred in a different amount by the Investor Class or if it receives
different services.
The Adviser may assume expenses of the Fund from time to time. To the
extent any service providers assume expenses of the Fund, such assumption of
expenses will have the effect of lowering the Fund's overall expense ratio and
increasing its yield to investors.
DISTRIBUTION OF SHARES
- --------------------------------------------------------------------------------
The Board of Directors of RBB has approved and adopted a Distribution
Agreement and Plan of Distribution for the Shares (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to receive
from the Fund a distribution fee with respect to the Shares, which is accrued
daily and paid monthly, of up to 0.25% on an annualized basis of the average
daily net assets of the Shares. The actual amount of such compensation under the
9
<PAGE>
Plan is agreed upon by RBB's Board of Directors and by the Distributor. The
Distributor may, in its discretion, from time to time waive voluntarily all or
any portion of its distribution fee. The Distributor intends to waive all fees
under the Plan during the current fiscal year.
Amounts paid to the Distributor under the Plan may be used by the
Distributor to cover expenses that are related to (i) the sale of the Shares,
(ii) ongoing servicing and/or maintenance of the accounts of Shareholders, and
(iii) sub-transfer agency services, subaccounting services or administrative
services related to the sale of the Shares, all as set forth in the Fund's 12b-1
Plan. The Distributor may delegate some or all of these functions to Service
Agents. See "How to Purchase Shares - Purchases Through Intermediaries."
The Plan obligates the Fund, during the period it is in effect, to accrue
and pay to the Distributor on behalf of the Shares the fee agreed to under the
Distribution Agreement. Payments under the Plan are not tied exclusively to
expenses actually incurred by the Distributor, and the payments may exceed
distribution expenses actually incurred.
PURCHASES THROUGH INTERMEDIARIES
Shares of the Fund may be available through certain brokerage firms,
financial institutions and other industry professionals (collectively, "Service
Organizations"). Certain features of the Shares, such as the initial and
subsequent investment minimums and certain trading restrictions, may be modified
or waived by Service Organizations. Service Organizations may impose transaction
or administrative charges or other direct fees, which charges and fees would not
be imposed if Shares are purchased directly from the Fund. Therefore, a client
or customer should contact the Service Organization acting on his behalf
concerning the fees (if any) charged in connection with a purchase or redemption
of Shares and should read this Prospectus in light of the terms governing his
accounts with the Service Organization. Service Organizations will be
responsible for promptly transmitting client or customer purchase and redemption
orders to the Fund in accordance with their agreements with the Fund and with
clients or customers. Service Organizations or, if applicable, their designees
that have entered into agreements with the Fund or its agent may enter confirmed
purchase orders on behalf of clients and customers, with payment to follow no
later than the Fund's pricing on the following Business Day. If payment is not
received by such time, the Service Organization could be held liable for
resulting fees or losses. The Fund will be deemed to have received a purchase or
redemption order when a Service Organization, or, if applicable, its authorized
designee, accepts a purchase or redemption order in good order. Orders received
by the Fund in good order will be priced at the Fund's net asset value next
computed after they are accepted by the Service Organization or its authorized
designee.
For administration, subaccounting, transfer agency and/or other services,
Boston Partners, the Distributor or their affiliates may pay Service
Organizations and certain recordkeeping organizations a fee of up to .35% (the
"Service Fee") of the average annual value of accounts with the Fund maintained
by such Service Organizations or recordkeepers. The Service Fee payable to any
one Service Organization is determined based upon a number of factors, including
the nature and quality of services provided, the operations processing
requirements of the relationship and the standardized fee schedule of the
Service Organization or recordkeeper.
The Adviser, the Distributor or either of their affiliates may, at their
own expense, provide promotional incentives for qualified recipients who support
the sale of Shares, consisting of securities dealers who have sold Shares or
others, including banks and other financial institutions, under special
arrangements. Incentives may include opportunities to attend business meetings,
conferences, sales or training programs for recipients, employees or clients and
other programs or events and may also include opportunities to participate in
advertising or sales campaigns and/or shareholder services and programs
regarding one or more Boston Partners Funds. Travel, meals and lodging may also
be paid in connection with these promotional activities. In some instances,
these incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or expected sale of
significant amounts of Shares.
10
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<TABLE>
<CAPTION>
BOSTON PARTNERS MICRO CAP VALUE FUND bp
(INVESTOR CLASS) BOSTON PARTNERS ASSET MANAGEMENT, L.P.
--------------------------------------
<S> <C> <C> <C>
ACCOUNT APPLICATION
PLEASE NOTE: Do not use this form to open a retirement plan account. For an IRA application or help with this Application,
please call 1-888-261-4073.
+--------------+ (Please check the appropriate box(es) below.)
| 1 | |_| Individual |_| Joint Tenant |_| Other
| Account | ________________________________________________________________________________________________________
| Registration:| Name SOCIAL SECURITY NUMBER OR TAX ID # OF PRIMARY OWNER
+--------------+
________________________________________________________________________________________________________
NAME OF JOINT OWNER JOINT OWNER SOCIAL SECURITY NUMBER OR TAX ID #
For joint accounts, the account registrants will be joint tenants with right of survivorship and not
tenants in common unless tenants in common or community property registrations are requested.
- --------------
GIFT TO MINOR: |_| UNIFORM GIFTS/TRANSFER TO MINOR'S ACT
- --------------
________________________________________________________________________________________________________
NAME OF ADULT CUSTODIAN (ONLY ONE PERMITTED)
________________________________________________________________________________________________________
NAME OF MINOR (ONLY ONE PERMITTED)
________________________________________________________________________________________________________
MINOR'S SOCIAL SECURITY NUMBER AND DATE OF BIRTH
- ------------------
CORPORATION,
PARTNERSHIP, TRUST
OR OTHER ENTITY:
- ------------------
________________________________________________________________________________________________________
NAME OF CORPORATION, PARTNERSHIP, OR OTHER NAME(S) OF TRUSTEE(S)
________________________________________________________________________________________________________
TAXPAYER IDENTIFICATION NUMBER
+--------------+ ________________________________________________________________________________________________________
| 2 | STREET OR P.O. BOX AND/OR APARTMENT NUMBER
| Mailing |
| Address: | ________________________________________________________________________________________________________
+--------------+ CITY STATE ZIP CODE
________________________________________________________________________________________________________
DAY PHONE NUMBER EVENING PHONE NUMBER
+--------------+ Minimum initial investment of $2,500. Amount of investment $____________
| 3 |
| Investment | Make the check payable to Boston Partners Micro Cap Value Fund.
| Information: |
+--------------+ Shareholders may not purchase shares of this Fund with a check issued by a third party and endorsed over to
the Fund.
- ------------
DISTRIBUTION NOTE: Dividends and capital gains may be reinvested or paid by check. If no options are selected
OPTIONS: below, both dividends and capital gains will be reinvested in additional Fund shares.
- ------------
DIVIDENDS: Pay by check |_| Reinvest |_| CAPITAL GAINS: Pay by check |_| Reinvest |_|
+--------------+ To use this option, you must initial the appropriate line below.
| 4 | I authorize the Transfer Agent to accept instructions from any persons to redeem or exchange shares in
| Telephone | my account(s) by telephone in accordance with the procedures and conditions set forth in the Fund's
| Redemption: | current prospectus.
+--------------+
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Redeem shares, and send the proceeds to the
____________________________ ________________________________ address of record.
individual initial joint initial
____________________________ ________________________________ Exchange shares for shares of The Boston
individual initial joint initial Partners Large Cap Value Fund, Mid Cap
Value Fund, Bond Fund or Market Neutral Fund.
+--------------+ The Automatic Investment Plan which is available to shareholders of the Fund, makes possible regularly
| 5 | scheduled purchases of Fund shares to allow dollar-cost averaging. The Fund's Transfer Agent can
| Automatic | arrange for an amount of money selected by you to be deducted from your checking account and used to
| Investment | purchase shares of the Fund.
| Plan: |
+--------------+ Please debit $________ from my checking account (named below) on or about the 20th of the month. PLEASE ATTACH AN
UNSIGNED, VOIDED CHECK.
|_| Monthly |_| Every Alternate Month |_| Quarterly |_| Other
_______________ ________________________________________________________________________________________________________
BANK OF RECORD: BANK NAME STREET ADDRESS OR P.O. BOX
_______________
________________________________________________________________________________________________________
CITY STATE ZIP CODE
________________________________________________________________________________________________________
BANK ABA NUMBER BANK ACCOUNT NUMBER
+--------------+ The undersigned warrants that I (we) have full authority and, if a natural person, I (we) am (are) of
| 6 | legal age to purchase shares pursuant to this Account Application, and I (we) have received a current
| | prospectus for the Fund in which I (we) am (are) investing.
| Signatures: | Under the Interest and Dividend Tax Compliance Act of 1983, the Fund is required to have the following
+--------------+ certification:
Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number (or I am waiting for a
number to be issued to), and
(2) I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have
not been notified by the Internal Revenue Service that I am subject to 31% backup withholding as a result
of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
NOTE: YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY
SUBJECT TO BACKUP WITHHOLDING BECAUSE YOU HAVE FAILED TO REPORT ALL INTEREST AND DIVIDENDS ON YOUR TAX
RETURN. THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATION REQUIRED TO AUDIT BACKUP WITHHOLDING.
________________________________________________________________________________________________________
SIGNATURE OF APPLICANT DATE
________________________________________________________________________________________________________
PRINT NAME TITLE (IF APPLICABLE)
________________________________________________________________________________________________________
SIGNATURE OF JOINT OWNER DATE
________________________________________________________________________________________________________
PRINT NAME TITLE (IF APPLICABLE)
(If you are signing for a corporation, you must indicate corporate office or title. If you wish
additional signatories on the account, please include a corporate resolution. If signing as a fiduciary,
you must indicate capacity.)
For information on additional options, such as IRA Applications, rollover requests for qualified
retirement plans, or for wire instructions, please call us at 1-888-261-4073.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
MAIL COMPLETED ACCOUNT APPLICATION AND CHECK TO: THE BOSTON PARTNERS MICRO CAP VALUE FUND
C/O PFPC INC.
P.O. BOX 8852
WILMINGTON, DE 19899-8852
</TABLE>
<PAGE>
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<PAGE>
HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------
GENERAL
Shares representing interests in the Fund are offered continuously for sale
by the Distributor and may be purchased without imposition of a sales charge.
Shares may be purchased initially by completing the application included in this
Prospectus and forwarding the application to the Fund's transfer agent, PFPC.
Purchases of Shares may be effected by wire to an account to be specified by
PFPC or by mailing a check or Federal Reserve Draft, payable to the order of
"The Boston Partners Micro Cap Value Fund," c/o PFPC Inc., P.O. Box 8852,
Wilmington, Delaware 19899-8852. The name of the Fund, Boston Partners Micro Cap
Value Fund, must also appear on the check or Federal Reserve Draft. Shareholders
may not purchase shares of the Boston Partners Micro Cap Value Fund with a check
issued by a third party and endorsed over to the Fund. Federal Reserve Drafts
are available at national banks or any state bank which is a member of the
Federal Reserve System. Initial investments in the Fund must be at least $2,500
and subsequent investments must be at least $100. The Fund reserves the right to
suspend the offering of Shares for a period of time or to reject any purchase
order. As of the date of this Prospectus, the Fund intends to suspend the
offering of Shares upon the Fund's attaining $300 million in total assets.
Shares may be purchased on any Business Day. A "Business Day" is any day
that the New York Stock Exchange, Inc. (the "NYSE") is open for business.
Currently, the NYSE is closed on weekends and New Year's Day, Dr. Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day and on the preceding Friday or
subsequent Monday when one of these holidays falls on a Saturday or Sunday.
The price paid for Shares purchased initially or acquired through the
exercise of an exchange privilege is based on the net asset value next computed
after a purchase order is received by the Fund or its agents prior to the close
of the NYSE on such day (generally 4:00 p.m. Eastern Time). Orders received by
the Fund or its agents after the close of the NYSE are priced at the net asset
value next determined on the following Business Day. In those cases where an
investor pays for Shares by check, the purchase will be effected at the net
asset value next determined after the Fund or its agents receives the order and
the completed application.
Provided that the investment is at least $2,500, An investor may also
purchase Shares by having his bank or his broker wire Federal Funds to PFPC. An
investor's bank or broker may impose a charge for this service. The Fund does
not currently impose a service charge for effecting wire transfers but reserves
the right to do so in the future. In order to ensure prompt receipt of an
investor's Federal Funds wire for an initial investment, it is important that an
investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (888) 261-4073, and
provide PFPC with your name, address, telephone number, Social Security or Tax
Identification Number, the Fund selected, the amount being wired, and by which
bank. PFPC will then provide an investor with a Fund account number. Investors
with existing accounts should also notify PFPC prior to wiring funds.
11
<PAGE>
B. Instruct your bank or broker to wire the specified amount, together with
your assigned account number, to PFPC's account with PNC Bank:
PNC Bank, N.A. Philadelphia, PA 19103
ABA NUMBER: 0310-0005-3
CREDITING ACCOUNT NUMBER: 86-1108-2507
FROM: (name of investor)
ACCOUNT NUMBER: (Investor's account number with the Fund)
FOR PURCHASE OF: Boston Partners Micro Cap Value Fund
AMOUNT: (amount to be invested)
C. Fully complete and sign the application and mail it to the address shown
thereon. PFPC will not process purchases until it receives a fully completed and
signed application.
For subsequent investments, an investor should follow steps A and B above.
AUTOMATIC INVESTING
Additional investments in Shares may be made automatically by authorizing
the Fund's transfer agent to withdraw funds from your bank account. Investors
desiring to participate in the automatic Investing Program should call the
Fund's transfer agent, PFPC, at (888) 261-4073 to obtain the appropriate forms.
RETIREMENT PLANS
Shares may be purchased in conjunction with individual retirement accounts
("IRAs") and rollover IRAs where PFPC Trust Company acts as custodian. For
further information as to applications and annual fees, contact the Fund's
transfer agent, PFPC, at (888) 261-4073. To determine whether the benefits of an
IRA are available and/or appropriate, a shareholder should consult with a tax
adviser.
HOW TO REDEEM AND EXCHANGE SHARES
- --------------------------------------------------------------------------------
REDEMPTION BY MAIL
Shareholders may redeem for cash some or all of their Shares of the Fund at
any time. To do so, a written request in proper form must be sent directly to
Boston Partners Micro Cap Value Fund, c/o PFPC Inc., P.O. Box 8852, Wilmington,
Delaware 19899-8852. There is no charge for a redemption, unless the Shareholder
has held his or her Shares for less than one year, upon which a fee equal to 1%
of the net asset value of the Shares redeemed at the time of redemption will be
imposed.
A request for redemption must be signed by all persons in whose names the
Shares are registered. Signatures must conform exactly to the account
registration. If the proceeds of the redemption would exceed $10,000, or if the
proceeds are not to be paid to the record owner at the record address, or if the
shareholder is a corporation, partnership, trust or fiduciary, signature(s) must
be guaranteed according to the procedures described below under "Exchange
Privilege."
Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption. In some cases, however,
other documents may be necessary. In the case of shareholders holding share
certificates, the certificates for the shares being redeemed must accompany the
redemption request. Additional documentary evidence of authority is also
required by the Fund's transfer agent in the event redemption is requested by a
corporation, partnership, trust, fiduciary, executor or administrator.
12
<PAGE>
SYSTEMATIC WITHDRAWAL PLAN
If your account has a value of at least $10,000, you may establish a
Systematic Withdrawal Plan and receive regular periodic payments. A request to
establish a Systematic Withdrawal Plan must be submitted in writing to PFPC at
P.O. Box 8852, Wilmington, Delaware 19899-8852. Each withdrawal redemption will
be processed on or about the 25th of the month and mailed as soon as possible
thereafter. There are no service charges for maintenance; the minimum amount
that you may withdraw each period is $100. (This is merely the minimum amount
allowed and should not be mistaken for a recommended amount.) The holder of a
Systematic Withdrawal Plan will have any income dividends and any capital gains
distributions reinvested in full and fractional shares at net asset value. To
provide funds for payment, Shares will be redeemed in such amount as is
necessary at the redemption price, which is net asset value next determined
after the Fund's receipt of a redemption request. Redemption of Shares may
reduce or possibly exhaust the Shares in your account, particularly in the event
of a market decline. As with other redemptions, a redemption to make a
withdrawal payment is a sale for federal income tax purposes. Payments made
pursuant to a Systematic Withdrawal Plan cannot be considered as actual yield or
income since part of such payments may be a return of capital.
You will ordinarily not be allowed to make additional investments of less
than the aggregate annual withdrawals under the Systematic Withdrawal Plan
during the time you have the plan in effect and, while a Systematic Withdrawal
Plan is in effect, you may not make periodic investments under the Automatic
Investment Plan. You will receive a confirmation of each transaction showing the
sources of the payment and the Share and cash balance remaining in your plan.
The plan may be terminated on written notice by the shareholder or by the Fund
and will terminate automatically if all Shares are liquidated or withdrawn from
the account or upon the death or incapacity of the shareholder. You may change
the amount and schedule of withdrawal payments or suspend such payments by
giving written notice to the Fund's transfer agent at least seven Business Days
prior to the end of the month preceding a scheduled payment.
TRANSACTION FEE IMPOSED ON CERTAIN REDEMPTIONS
The Fund requires the payment of a transaction fee on redemptions of Shares
of the Fund held for less than one year equal to 1.00% of the net asset value of
such Shares redeemed at the time of redemption. This additional transaction fee
is paid to the Fund, not to the adviser, distributor or transfer agent. It is
not a sales charge or a contingent deferred sales charge. The purpose of the
additional transaction fee is to indirectly allocate transaction costs
associated with redemptions to those investors making redemptions after holding
their shares for a short period, thus protecting existing shareholders. These
costs include: (1) brokerage costs; (2) market impact costs -- i.e., the
decrease in market prices which may result when the Fund sells certain
securities in order to raise cash to meet the redemption request; (3) the
realization of capital gains by the other shareholders in the Fund; and (4) the
effect of the "bid-ask" spread in the over-the-counter market. The 1.00% amount
represents the Fund's estimate of the brokerage and other transaction costs
which may be incurred by the Fund in disposing of stocks in which the Fund may
invest. Without the additional transaction fee, the Fund would generally be
selling its shares at a price less than the cost to the Fund of acquiring the
portfolio securities necessary to maintain its investment characteristics,
resulting in reduced investment performance for all shareholders in the Fund.
With the additional transaction fee, the transaction costs of selling additional
stocks are not borne by all existing shareholders, but the source of funds for
these costs is the transaction fee paid by those investors making redemptions.
INVOLUNTARY REDEMPTION
The Fund reserves the right to redeem a shareholder's account at any time
the net asset value of the account falls below $500 as the result of a
redemption or an exchange request. Shareholders will be notified in writing that
the value of their account is less than $500 and will be allowed 30 days to make
additional investments before the redemption is processed.
13
<PAGE>
PAYMENT OF REDEMPTION PROCEEDS
With the exception of redemptions to which the 1.00% transaction fee
applies, the redemption price is the net asset value per share next determined
after the request for redemption is received in proper form by the Fund or its
agents. For redemptions to which the additional transaction fee applies, the
redemption price is the net asset value per share next determined after the
request for redemption is received in proper form by the Fund or its agents,
less an amount equal to 1.00% of the net asset value of such shares redeemed
that the shareholder has held for less than one year. Payment for Shares
redeemed is made by check mailed within seven days after acceptance by the Fund
or its agents of the request and any other necessary documents in proper order.
Such payment may be postponed or the right of redemption suspended as permitted
by the 1940 Act. If the Shares to be redeemed have been recently purchased by
check, the Fund's transfer agent may delay mailing a redemption check, which may
be a period of up to 15 days from the purchase date, pending a determination
that the check has cleared. The Fund has elected to be governed by Rule 18f-1
under the 1940 Act so that a portfolio is obligated to redeem its shares solely
in cash up to the lesser of $250,000 or 1% of its net asset value during any
90-day period for any one shareholder of a portfolio.
EXCHANGE PRIVILEGE
The exchange privilege is available to shareholders residing in any state
in which the Shares being acquired may be legally sold. A shareholder may
exchange Shares of the Fund for Investor Shares of any other Boston Partners
Fund of RBB, subject to the restrictions described under "Exchange Privilege
Limitations." Such exchange will be effected at the net asset value of the
exchanged Fund and the net asset value of the Fund being acquired next
determined after receipt of a request for an exchange by the Fund or its agents.
An exchange of Shares will be treated as a sale for federal income tax purposes.
See "Taxes." A shareholder wishing to make an exchange may do so by sending a
written request to PFPC.
If the exchanging shareholder does not currently own Investor Shares of the
Boston Partners Fund into which he would like to exchange, a new account will be
established with the same registration, dividend and capital gain options as the
account from which shares are exchanged, unless otherwise specified in writing
by the shareholder with all signatures guaranteed. A signature guarantee may be
obtained from a domestic bank or trust company, broker, dealer, clearing agency
or savings association who are participants in a medallion program recognized by
the Securities Transfer Association. The three recognized medallion programs are
Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion
Program (SEMP) and New York Stock Exchange, Inc. Medallion Signature Program
(MSP). Signature guarantees that are not part of these programs will not be
accepted. The exchange privilege may be modified or terminated at any time, or
from time to time, by RBB, upon 60 days' written notice to shareholders.
If an exchange is to a new account in the acquired Fund, the dollar value
of Investor Shares acquired must equal or exceed that Fund's minimum for a new
account; if to an existing account, the dollar value must equal or exceed that
Fund's minimum for subsequent investments. If any amount remains in the Fund
from which the exchange is being made, such amount must not drop below the
minimum account value required by the Fund.
EXCHANGE PRIVILEGE LIMITATIONS
The Fund's exchange privilege is not intended to afford shareholders a way
to speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Fund and increase transaction costs, the Fund has established
a policy of limiting excessive exchange activity.
Shareholders are entitled to six (6) exchange redemptions (at least 30 days
apart) from the Fund during any twelve-month period. Notwithstanding these
limitations, the Fund reserves the right to reject any purchase request
(including purchases by exchange) that is deemed to be disruptive to efficient
portfolio management.
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<PAGE>
TELEPHONE TRANSACTIONS
In order to request a telephone exchange or redemption, a shareholder must
have completed and returned an account application containing a telephone
election. To add a telephone option to an existing account that previously did
not provide for this option, a Telephone Authorization Form must be filed with
PFPC. This form is available from PFPC. Once this election has been made, the
shareholder may simply contact PFPC by telephone to request the exchange or
redemption by calling (888) 261-4073. Neither RBB, the Fund, the Distributor,
the Administrator nor any other Fund agent will be liable for any loss,
liability, cost or expense for following RBB's telephone transaction procedures
described below or for following instructions communicated by telephone that
they reasonably believe to be genuine.
RBB's telephone transaction procedures include the following measures: (1)
requiring the appropriate telephone transaction privilege forms; (2) requiring
the caller to provide the names of the account owners, the account social
security number and name of the Fund, all of which must match RBB's records; (3)
requiring RBB's service representative to complete a telephone transaction form,
listing all of the above caller identification information; (4) permitting
exchanges only if the two account registrations are identical; (5) requiring
that redemption proceeds be sent only by check to the account owners of record
at the address of record, or by wire only to the owners of record at the bank
account of record; (6) sending a written confirmation for each telephone
transaction to the owners of record at the address of record within five (5)
Business Days of the call; and (7) maintaining tapes of telephone transactions
for six months, if the Fund elects to record shareholder telephone transactions.
For accounts held of record by broker-dealers (other than the Distributor),
financial institutions, securities dealers, financial planners and other
industry professionals, additional documentation or information regarding the
scope of a caller's authority is required. Finally, for telephone transactions
in accounts held jointly, additional information regarding other account holders
is required. Telephone transactions will not be permitted in connection with IRA
or other retirement plan accounts or by an attorney-in-fact under a power of
attorney.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset values for each class of a fund are calculated by adding the
value of the proportionate interest of the class in a fund's cash, securities
and other assets, deducting actual and accrued liabilities of the class and
dividing the result by the number of outstanding shares of the class. The net
asset value of each class is calculated independently of each other class. The
net asset values are calculated as of the close of regular trading on the NYSE,
generally 4:00 p.m. Eastern Time on each Business Day.
Valuation of securities held by the Fund is as follows: securities traded
on a national securities exchange or on the NASDAQ National Market System are
valued at the last reported sale price that day; securities traded on a national
securities exchange or on the NASDAQ National Market System for which there were
no sales on that day and securities traded on other over-the-counter markets for
which market quotations are readily available are valued at the mean of the bid
and asked prices; and securities for which market quotations are not readily
available are valued at fair market value as determined in good faith by or
under the direction of RBB's Board of Directors. The amortized cost method of
valuation may also be used with respect to debt obligations with sixty days or
less remaining to maturity.
With the approval of RBB's Board of Directors, the Fund may use a pricing
service, bank or broker-dealer experienced in such matters to value the Fund's
securities. A more detailed discussion of net asset value and security valuation
is contained in the Statement of Additional Information.
15
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of the net investment income and
net realized capital gains, if any, of the Fund to the Fund's shareholders. All
distributions are reinvested in the form of additional full and fractional
Shares unless a shareholder elects otherwise.
The Fund will declare and pay dividends from net investment income annually
and will pay them in the calendar year in which they are declared, generally in
December. Net realized capital gains (including net short-term capital gains),
if any, will be distributed at least annually.
TAXES
- --------------------------------------------------------------------------------
The following discussion is only a brief summary of some of the important
tax considerations generally affecting the Fund and its shareholders and is not
intended as a substitute for careful tax planning. Accordingly, investors in the
Fund should consult their tax advisers with specific reference to their own tax
situation.
The Fund will elect to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended. So long as the
Fund qualifies for this tax treatment, it will be relieved of federal income tax
on amounts distributed to shareholders, but shareholders, unless otherwise
exempt, will pay income or capital gains taxes on amounts so distributed (except
distributions that are treated as a return of capital) regardless of whether
such distributions are paid in cash or reinvested in additional shares.
Distributions out of the "net capital gain" (the excess of net long-term
capital gain over net short-term capital loss), if any, of the Fund, will be
taxed to shareholders as long-term capital gain regardless of the length of time
a shareholder has held his Shares, whether such gain was reflected in the price
paid for the Shares, or whether such gain was attributable to bonds bearing
tax-exempt interest. All other distributions, to the extent they are taxable,
are taxed to shareholders as ordinary income.
RBB will send written notices to shareholders annually regarding the tax
status of distributions made by the Fund. Dividends declared in December of any
year payable to shareholders of record on a specified date in such a month will
be deemed to have been received by the shareholders on December 31, provided
such dividends are paid during January of the following year. The Fund intends
to make sufficient actual or deemed distributions prior to the end of each
calendar year to avoid liability for federal excise tax.
Investors should be careful to consider the tax implications of buying
shares just prior to a distribution. The price of shares purchased at that time
will reflect the amount of the forthcoming distribution. Those investors
purchasing shares just prior to a distribution will nevertheless be taxed on the
entire amount of the distribution received, although the distribution is, in
effect, a return of capital.
Shareholders who exchange shares representing interests in one Fund for
shares representing interests in another Fund will generally recognize capital
gain or loss for federal income tax purposes.
Shareholders who are nonresident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships may be subject to
different U.S. Federal income tax treatment and should consult their tax
advisers.
MULTI-CLASS STRUCTURE
- --------------------------------------------------------------------------------
The Fund offers one other class of shares, Institutional Shares, which is
offered directly to institutional investors pursuant to a separate prospectus.
Shares of each class represent equal pro rata interests in the Fund and accrue
dividends and calculate net asset value and performance quotations in the same
manner. The Fund will quote performance
16
<PAGE>
of the Institutional Shares separately from Investor Shares. Because of
different expenses paid by the Investor Shares, the total return on such shares
can be expected, at any time, to be different than the total return on
Institutional Shares. Information concerning other classes may be obtained by
calling the Fund at (888) 261-4073.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
RBB has authorized capital of thirty billion shares of Common Stock, $.001
par value per share, of which 18.326 billion shares are currently classified
into 97 different classes of Common Stock. See "Description of Shares" in the
Statement of Additional Information."
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO BOSTON PARTNERS MICRO CAP VALUE FUND AND DESCRIBE
ONLY THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS AND OTHER
MATTERS RELATING TO BOSTON PARTNERS MICRO CAP VALUE FUND.
Each share that represents an interest in the Fund has an equal
proportionate interest in the assets belonging to the Fund with each other share
that represents an interest in the Fund, even where a share has a different
class designation than another share representing an interest in the Fund.
Shares of the Fund do not have preemptive or conversion rights. When issued for
payment as described in this Prospectus, Shares will be fully paid and
non-assessable.
RBB currently does not intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. The law under
certain circumstances provides shareholders with the right to call for a meeting
of shareholders to consider the removal of one or more directors. To the extent
required by law, RBB will assist in shareholder communication in such matters.
Holders of Shares of the Fund will vote in the aggregate and not by class
on all matters, except where otherwise required by law. Further, shareholders of
all investment portfolios of RBB will vote in the aggregate and not by portfolio
except as otherwise required by law or when the Board of Directors determines
that the matter to be voted upon affects only the interests of the shareholders
of a particular investment portfolio. (See the Statement of Additional
Information under "Additional Information Concerning Fund Shares" for examples
when the 1940 Act requires voting by investment portfolio or by class.)
Shareholders of the Fund are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares
held. Voting rights are not cumulative and, accordingly, the holders of more
than 50% of the aggregate shares of Common Stock of the Fund may elect all of
the directors.
As of November 16, 1998, to the Fund's knowledge, no person held of record
or beneficially 25% or more of the outstanding shares of all classes of RBB.
OTHER INFORMATION
- --------------------------------------------------------------------------------
REPORTS AND INQUIRIES
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC Inc.,
the Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (888) 261-4073.
SHARE CERTIFICATES
In the interest of economy and convenience, physical certificates
representing Shares in the Fund are not normally issued.
17
<PAGE>
FUTURE PERFORMANCE INFORMATION
From time to time, the Fund may advertise its performance, including
comparisons to other mutual funds with similar investment objectives and to
stock or other relevant indices. All such advertisements will show the average
annual total return over one, five and ten year periods or, if such periods have
not yet elapsed, shorter periods corresponding to the life of the Fund. Such
total return quotations will be computed by finding the compounded average
annual total return for each time period that would equate the assumed initial
investment of $1,000 to the ending redeemable value, net of fees, according to a
required standardized calculation. The standard calculation is required by the
SEC to provide consistency and comparability in investment company advertising.
The Fund may also from time to time include in such advertising an aggregate
total return figure or a total return figure that is not calculated according to
the standardized formula in order to compare more accurately the Fund's
performance with other measures of investment return. For example, the Fund's
total return may be compared with data published by Lipper Analytical Services,
Inc., CDA Investment Technologies, Inc. or Weisenberger Investment Company
Service, or with the performance of the Russell 2000 Index. Performance
information may also include evaluation of the Fund by nationally recognized
ranking services and information as reported in financial publications such as
Business Week, Fortune, Institutional Investor, Money Magazine, Forbes,
Barron's, The Wall Street Journal, The New York Times, or other national,
regional or local publications. All advertisements containing performance data
will include a legend disclosing that such performance data represents past
performance and that the investment return and principal value of an investment
will fluctuate so that an investor's Shares, when redeemed, may be worth more or
less than their original cost.
18
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN RBB'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RBB OR ITS DISTRIBUTOR.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY RBB OR BY THE DISTRIBUTOR IN
ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
--------------------
TABLE OF CONTENTS
PAGE
----
FINANCIAL HIGHLIGHTS ................................................... 3
INTRODUCTION ........................................................... 5
INVESTMENT OBJECTIVES AND POLICIES ..................................... 5
INVESTMENT LIMITATIONS ................................................. 6
RISK FACTORS ........................................................... 7
YEAR 2000 .............................................................. 8
MANAGEMENT ............................................................. 8
DISTRIBUTION OF SHARES ................................................. 9
HOW TO PURCHASE SHARES ................................................. 11
HOW TO REDEEM AND EXCHANGE SHARES. ..................................... 12
NET ASSET VALUE. ....................................................... 15
DIVIDENDS AND DISTRIBUTIONS. ........................................... 16
TAXES .................................................................. 16
MULTI-CLASS STRUCTURE. ................................................. 16
DESCRIPTION OF SHARES. ................................................. 17
OTHER INFORMATION. ..................................................... 17
INVESTMENT ADVISER
Boston Partners Asset Management, L.P.
Boston, Massachusetts
CUSTODIAN
PFPC Trust Company
Wilmington, Delaware
TRANSFER AGENT AND ADMINISTRATOR
PFPC Inc.
Wilmington, Delaware
DISTRIBUTOR
Provident Distributors, Inc.
West Conshohocken, Pennsylvania
COUNSEL
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
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