<PAGE>
File Nos. 33-21677
811-5547
As filed with the Securities and Exchange Commission on August 5, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 12 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT /X/
COMPANY ACT OF 1940
Amendment No. 15 /X/
BARR ROSENBERG SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
237 Park Avenue, New York, N.Y. 10017
(Address of principal executive offices)
510-254-6464
(Registrant's telephone number, including area code)
Barr M. Rosenberg with a copy to:
Rosenberg Institutional J.B. Kittredge, Jr.
Equity Management Ropes & Gray
Four Orinda Way One International Place
Suite 300 E Boston, Massachusetts 02110-2624
Orinda, CA 94563
(Name and address of agent for service)
- --------------------------------------------------------------------------------
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant has previously registered an indefinite number or amount of its
shares of beneficial interest under the Securities Act of 1933. The Registrant
filed its 24f-2 Notice for its fiscal year ended March 31, 1996 on May 30, 1996.
It is proposed that this filing will become effective:
X Immediately upon filing pursuant to paragraph (b)
---
On - pursuant to paragraph (b)
---
60 days after filing pursuant to paragraph (a)(1)
---
On _______ pursuant to paragraph (a)(1)
---
75 days after filing pursuant to paragraph (a)(2)
---
On _______ pursuant to paragraph (a)(2), of Rule 485
---
If appropriate, check the following box:
--- This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
BARR ROSENBERG SERIES TRUST
CROSS REFERENCE SHEET
N-1 A Item No. Location
- -------------- --------
PART A
Item 1. Cover Page Cover Page
Item 2. Synopsis Schedule of Fees
Item 3. Condensed Financial Financial Highlights
Information
Item 4. General Description of Description of the Trust
Registrant and Ownership of Shares;
Investment Objective and
Policies; Cover Page
Item 5. Management of the Fund Management of the Trust;
Back Cover
Item 5A. Management's Discussion Investment Performance of
of Fund Performance the Fund
Item 6. Capital Stock and Other Description of the Trust
Securities and Ownership of Shares;
Distributions;
Back Cover
Item 7. Purchase of Securities Being Purchase of Shares;
Offered Determination of Net Asset
Value
Item 8. Redemption or Repurchase Redemption of Shares;
Determination of Net Asset
Value
Item 9. Legal Proceedings None
PART B
Item 10. Cover page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and Not Applicable
History
Item 13. Investment Objectives Investment Objective and
and Policies Policies; Investment
Restrictions
Item 14. Management of the Fund Management of the Trust
<PAGE>
Item 15. Control Persons and Principal Description of the Trust
Holders of Securities and Ownership of Shares;
Management of the Trust;
Part A, Description of the
Trust and Ownership of
Shares
Item 16. Investment Advisory and Other Investment Advisory and
Services Other Services
Item 17. Brokerage Allocation and Other Portfolio Transactions
Practices
Item 18. Capital Stock and Other Description of the Trust
Securities and Ownership of Shares
Item 19. Purchase, Redemption See in Part A, Purchase of
and Pricing of Securities Shares; Redemption of
Being Offered Shares; Determination of
Net Asset Value
Item 20. Tax Status Income Dividends,
Distributions and Tax
Status
Item 21. Underwriters Investment Advisory and
Other Services --
Distributor and Distribution
Plan
Item 22. Calculation of Yield Quotations Not Applicable
of Money Market Funds
Item 23. Financial Statements Financial Statements
Part C
Information to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this Registration Statement.
<PAGE>
BARR ROSENBERG SERIES TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
1-800-447-3332
AUGUST 5, 1996
The Barr Rosenberg Series Trust (the "Trust") is an open-end management
investment company offering the following three diversified portfolios with
different investment objectives and strategies: the U.S. Small Capitalization
Series, the International Small Capitalization Series and the Japan Series. The
Trust's portfolios are referred to individually as a "Series" or a "Fund," and
collectively as the "Series" or the "Funds." Each Fund's investment manager is
Rosenberg Institutional Equity Management (the "Manager").
DOMESTIC EQUITY PORTFOLIO
The U.S. SMALL CAPITALIZATION SERIES seeks a total return greater than that
of the Russell 2000 Index through investment primarily in equity securities of
smaller companies which are traded principally in the markets of the United
States. The Fund is designed for long-term investors willing to assume above-
average risk in return for above-average capital growth potential.
INTERNATIONAL EQUITY PORTFOLIOS
The INTERNATIONAL SMALL CAPITALIZATION SERIES seeks a total return greater
than that of the Cazenove Rosenberg Global Smaller Companies Index excluding
the United States ("CRIEXUS") through investment primarily in equity securities
of smaller companies which are traded principally in markets outside of the
United States. The Fund is designed for long-term investors willing to assume
above-average risk in return for above-average capital growth potential.
The JAPAN SERIES seeks a total return greater than that of the Tokyo Stock
Price Index of the Tokyo Stock Exchange ("TOPIX") through investment in Japanese
securities, primarily in common stocks of Japanese companies traded in Japanese
markets. The Fund is designed for long-term investors willing to assume above-
average risk in return for above-average capital growth potential.
Each Fund offers three classes of shares: Institutional Shares, Adviser
Shares and Select Shares. Whether an investor is eligible to purchase
Institutional, Adviser or Select Shares generally depends on the amount invested
in a particular Fund and on whether the investor makes the investment in the
Fund directly or through a financial adviser. The classes differ primarily
with respect to (i) the level of Shareholder Service Fee and (ii) the level of
Distribution Fee borne by each class.
This Prospectus concisely describes the information which investors ought
to know before investing. Please read this Prospectus carefully and keep it for
further reference.
A Statement of Additional Information dated August 5, 1996 is available
free of charge by writing to Barr Rosenberg Funds Distributor, Inc., the Funds'
distributor (the "Distributor"), at 230 Park Avenue, New York, New York 10169 or
by telephoning 1-800-447-3332. The Statement, which contains more detailed
information about the Trust, has been filed with the Securities and Exchange
Commission and is incorporated by reference in this Prospectus.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY,
AND INVOLVE RISK, 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 SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
Page
----
SHAREHOLDER TRANSACTION AND FUND EXPENSES. . . . . . . . . . . . . . . . . . 3
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . 7
GENERAL DESCRIPTION OF RISKS AND FUND INVESTMENTS. . . . . . . . . . . . . .10
INVESTMENT PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . .14
MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . .17
MULTIPLE CLASSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
RETIREMENT PLAN ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . .30
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
EXCHANGE OF FUND SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . .33
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . .35
DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES . . . . . . . . . . . . . .36
SHAREHOLDER INQUIRIES. . . . . . . . . . . . . . . . . . . . . . . . . . . .38
2
<PAGE>
SHAREHOLDER TRANSACTION AND FUND EXPENSES
The estimated annual expenses of each of the Funds are set forth in the
following tables, the forms of which are prescribed by federal securities laws
and regulations.
SHAREHOLDER TRANSACTION EXPENSES
All Classes
-----------
International
U.S. Small Small Cap Japan
Cap Series Series Series
Fund Reimbursement Fee - Purchase
(as a percentage of amount purchased)* . . . .25% .50% .50%
Fund Reimbursement Fee - Redemption
(as a percentage of amount redeemed)*. . . . .25% .50% .50%
* Applies only with respect to certain cash purchases and redemptions. See
"Purchase of Shares" and "Redemption of Shares." Also, investors are charged
Fund Reimbursement Fees in connection with exchanges of Fund Shares. See
"Exchange of Fund Shares." Each Fund Reimbursement Fee is retained by the Fund
purchased or redeemed to defray the costs and expenses associated with investing
the proceeds of the sale of the Fund's shares in the case of purchases, and the
sale of the Fund's portfolio securities in the case of redemptions.
ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
Total Fund
Other Operating
Management Shareholder Expenses Expenses
Fee (after Service Distribution (after reim- (after
waiver)a Fee Fee bursement) b waiver)
<S> <C> <C> <C> <C> <C>
Institutional Shares
U.S. Small Cap Series 0.80% None None 0.35% 1.15%
International Small Cap Series 0.00% None None 1.50% 1.50%
Japan Series 0.00% None None 1.50% 1.50%
Adviser Shares
U.S. Small Cap Series 0.80% 0.25% None 0.35% 1.40%
International Small Cap Series 0.00% 0.25% None 1.50% 1.75%
Japan Series 0.00% 0.25% None 1.50% 1.75%
Select Shares
U.S. Small Cap Series 0.80% 0.25% 0.25% 0.35% 1.65%
International Small Cap Series 0.00% 0.25% 0.25% 1.50% 2.00%
Japan Series 0.00% 0.25% 0.25% 1.50% 2.00%
</TABLE>
(a) The Manager has agreed to reduce its management fee and bear
certain expenses until further notice in order to limit the total annual
operating expenses (which do not include nonrecurring account fees and
extraordinary expenses) of each class to the percentage of a Fund's total
annual operating expenses attributable to that class listed under Total Fund
Operating Expenses above. Absent such agreement by the Manager to waive its
fee and bear such expenses, management fees would be 0.90% for the U.S. Small
Cap Series and Total Fund Operating Expenses for the U.S. Small Cap Series
would be 1.25% for Institutional Shares, 1.50% for Adviser Shares and 1.75%
for Select Shares and management fees would be 1.00% for the Japan Series and
Total Fund Operating Expenses for the Japan Series would be 7.26% for
Institutional Shares, 7.51% for Adviser Shares and 7.76% for Select Shares.
Absent such agreement by the Manager to waive its fee and bear such expenses,
management fees would be 1.00% for the International Small Cap Series.
Assuming average daily net assets of the International Small Cap Series for
the first year of operations are $10,000,000, it is estimated that "Total
Fund Operating Expenses" for the International Small Cap Series for such
fiscal year will be 3.73% for Institutional Shares, 3.98% for Adviser Shares
and 4.23% for Select Shares. See "Management of the Trust."
(b) For the U.S. Small Cap Series, Other Expenses are based on actual results
for Institutional Shares for the fiscal year ended March 31, 1996. Actual
Other Expenses for Institutional Shares of the Japan Series for the fiscal year
ended March 31, 1996 were 6.26% and the percentages listed for the Japan
Series under "Other Expenses" above reflect expenses borne by the Manager
during such fiscal year. Assuming average daily net assets of the
International Small Cap Series for the first year of operations are
$10,000,000, it is estimated that actual "Other Expenses" for the
International Small Cap Series for such fiscal year will be 2.73% and the
percentages listed under "Other Expenses" above reflect estimated expenses
that would be borne by the Manager for such fiscal year.
3
<PAGE>
<TABLE>
<CAPTION>
EXAMPLE: You would pay the following expenses on a You would pay the following expenses on a $1,000
$1,000 inve stment assuming (1) 5% annual investment assuming (1) 5% annual return and (2)
return and (2) no redemption: redemption at the end of each time period:
-------------------------------------------------------------------------------------------------
1 3 5 10 1 3 5 10
year years years years year years years years
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL SHARES
U.S. Small Cap Series 14 40 67 142 17 42 71 146
International Small Cap 20 53 -- -- 23 56 -- --
Series
Japan Series 20 53 86 183 23 56 93 190
ADVISER SHARES
U.S. Small Cap Series 17 48 82 170 19 50 85 174
International Small Cap 23 61 -- -- 26 64 -- --
Series
Japan Series 23 61 99 210 26 64 107 217
SELECT SHARES
U.S. Small Cap Series 19 56 92 197 22 59 95 201
International Small Cap 25 69 -- -- 28 72 -- --
Series
Japan Series 25 69 112 237 28 72 118 243
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The foregoing Examples assume the payment of a Fund Reimbursement Fee both
at the time of purchase and at the time of redemption even though such fees may
not be applicable (see "Purchase of Shares" and "Redemption of Shares").
THE PURPOSE OF THIS TABLE IS TO ASSIST IN UNDERSTANDING THE VARIOUS COSTS
AND EXPENSES OF THE FUNDS THAT ARE BORNE DIRECTLY OR INDIRECTLY BY HOLDERS OF
SHARES OF THE FUNDS. THE FIVE PERCENT ANNUAL RETURN AND THE EXPENSES USED IN
THE EXAMPLES ARE MANDATED BY THE SECURITIES AND EXCHANGE COMMISSION AND ARE NOT
REPRESENTATIONS OF PAST OR FUTURE PERFORMANCE OR EXPENSES; ACTUAL PERFORMANCE
AND/OR EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables present per share financial information for the
periods listed for each Fund which had commenced operations prior to the date of
this Prospectus. Each of the Financial Highlights has been audited by Price
Waterhouse LLP, independent accountants. These statements should be read in
conjunction with the other audited financial statements and related notes which
are included in the Statement of Additional Information.
U.S. SMALL CAPITALIZATION SERIES
FINANCIAL HIGHLIGHTS
(FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT
EACH PERIOD, DURING WHICH ONLY ONE CLASS OF SHARES WAS OFFERED)
<TABLE>
<CAPTION>
Year Ended March 31
-----------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989(a)
---- ---- ---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $6.97 $7.36 $12.33 $12.04 $10.74 $10.70 $10.34 $10.00
----- ----- ------ ------ ------ ------ ------ ------
Income from Investment
Operations
Net Investment Income(Section) 0.03 0.01 0.08 0.13 0.11 0.09 0.08 0.11
Net realized and un-
realized gain
on investments and
foreign currency 2.34 0.78 1.28 2.31 1.53 0.05 0.67 0.23
----- ----- ------ ------ ------ ------ ------ ------
Total investment
operations 2.37 0.79 1.36 2.44 1.64 0.14 0.75 0.34
----- ----- ------ ------ ------ ------ ------ ------
Distributions to shareholders
from:
Net investment income (0.01) (0.08) (0.14) (0.10) (0.08) (0.07) (0.15) -
Net realized gain on
investments (1.73) (1.10) (6.19) (2.05) (0.26) (0.03) (0.24) -
----- ----- ------ ------ ------ ------ ------ ------
Total distributions (1.74) (1.18) (6.33) (2.15) (0.34) (0.10) (0.39) -
----- ----- ------ ------ ------ ------ ------ ------
Net asset value at
end of period $7.60 $6.97 $ 7.36 $12.33 $12.04 $10.74 $10.70 $10.34
----- ----- ------ ------ ------ ------ ------ ------
----- ----- ------ ------ ------ ------ ------ ------
Total return(1) 35.69% 12.21% 12.83% 22.51% 15.79% 1.56% 7.37% 39.06% *
Net assets,
end of period (000) $60,046 $56,910 $52,500 $69,458 $119,343 $171,942 $113,222 $57,058
Ratio of net expenses
to average daily net
assets 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% **
Ratio of net expenses to
average daily net assets
before reimbursement 1.15% 1.17% 1.14% 1.03% 0.94% 1.04% 1.06% 1.86% **
Ratio of net investment
income to average
daily net assets 0.47% 0.60% 0.60% 0.59% 0.66% 1.22% 1.24% 10.10% **
Portfolio turnover rate 71.87% 57.27% 59.61% 32.61% 59.04% 64.97% 60.10% 0.04%
</TABLE>
(a) The Fund commenced operations on February 22, 1989.
(Section) Net of fees and expenses waived or borne by the Manager which amounted
to $.02, $.01, $.05, $.03, $.01, $.01, $.01 and $.01 per share.
(1) Total return would have been lower had certain fees and expenses not
been waived.
* Not Annualized.
** Annualized.
5
<PAGE>
JAPAN SERIES
FINANCIAL HIGHLIGHTS
(FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT
EACH PERIOD, DURING WHICH ONLY ONE CLASS OF SHARES WAS OFFERED)
<TABLE>
<CAPTION>
Year Ended March 31
-----------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989(a)
---- ---- ---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $ 8.96 $ 8.25 $ 6.94 $ 6.15 $ 7.87 $ 8.23 $ 9.88 $10.00
------ ------ ------ ------ ------ ------ ------ ------
Income (loss) from Investment
Operations
Net investment income (loss)(Section) 0.04 0.10 (0.01) 0.02 0.04 0.06 0.06 0.02
Net realized and un-
realized gain/(loss)
on investments and
foreign currency (0.15) 0.63 1.41 0.84 (1.69) 0.09 (1.67) (0.14)
------ ------ ------ ------ ------ ------ ------ ------
Total investment operations (0.11) 0.73 1.40 0.86 (1.65) 0.15 (1.61) (0.12)
------ ------ ------ ------ ------ ------ ------ ------
Distributions to shareholders
from:
Net investment income - - - (0.07) (0.07) (0.07) (0.04) -
In excess of net investment
income (0.08) (0.02) (0.09) - - - - -
Net realized gain on
investments - - - - - (0.44) - -
------ ------ ------ ------ ------ ------ ------ ------
Total distributions (0.08) (0.02) (0.09) (0.07) (0.07) (0.51) (0.04) -
------ ------ ------ ------ ------ ------ ------ ------
Net asset value at end
of period $ 8.77 $ 8.96 $ 8.25 $ 6.94 $ 6.15 $7.87 $8.23 $9.88
------ ------ ------ ------ ------ ------ ------ ------
Total return(1) (1.2%) 8.86% 20.35% 14.24% (21.09%) 1.94% (16.39%) (4.94%)*
Net assets, end of period (000) $1,378 $1,385 $1,258 $1,044 $ 915 $1,864 $1,829 $2,186
------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------
Ratio of net expenses
to average daily net
assets 1.00% 1.00% 1.00% 0.70% 0.59% 0.02% 0.00% 0.28% **
Ratio of net expenses to
average daily net assets
before reimbursement 7.16% 7.02% 7.63% 10.70% 8.56% 8.40% 7.35% 9.30% **
Ratio of net investment
income (loss) to average
daily net assets (0.22%) (0.20%) (0.26%) 0.37% 0.20% 0.76% 0.62% 0.88% **
Portfolio turnover rate 60.60% 57.10% 74.60% 162.10% 53.13% 78.61% 87.72% 0.00%
</TABLE>
(a) The Fund commenced operations on January 3, 1989.
(Section) Net of fees and expenses waived or borne by the Manager which amounted
to $.38, $.67, $.49, $.59, $1.64, $.71, $.74 and $.21 per share.
(1) Total return would have been lower had certain fees and expenses not
been waived.
* Not Annualized.
** Annualized.
6
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
U.S. SMALL CAPITALIZATION SERIES
The investment objective of the U.S. Small Capitalization Series is to seek
total return greater than that of the Russell 2000 Index through investment
primarily in equity securities of smaller companies which are traded principally
in the markets of the United States. Total return is a combination of capital
appreciation and current income (dividend or interest). In the case of the
Fund, total return will be measured by changes in value of an investment over a
given period, assuming that any dividends or capital gains distributions are
reinvested in the Fund rather than paid to the investor in cash. The Fund does
not seek to MAXIMIZE total return but, as indicated above, seeks a total return
greater than that of the common stocks referred to above. Because the companies
in which the Fund invests typically do not distribute significant amounts of
company earnings to shareholders, the Fund's objective will place relatively
greater emphasis on capital appreciation than on current income. The Fund's
investment objective is non-fundamental and thus may be changed by the Trustees
without shareholder approval.
It is currently expected that, under normal circumstances, most of the
Fund's assets will be invested in common stocks of companies with total market
capitalization of less than $750 million ("small capitalization securities").
This corresponds with the defining range of market capitalization of companies
in the Russell 2000 Index. Investments in issuers of small capitalization
securities may present greater opportunities for capital appreciation because of
high potential earnings growth, but may also involve greater risk. See "General
Description of Risks and Fund Investments -- Companies with Small Market
Capitalizations" below.
To meet redemptions or pending investments in common stocks, the Fund may
also temporarily hold a portion of its assets not invested in small
capitalization securities in full faith and credit obligations of the United
States government (e.g., U.S. Treasury Bills) and in short-term notes,
commercial paper or other money market instruments of high quality (i.e., rated
at least "A-2" or "AA" by Standard & Poor's ("S&P") or Prime 2 or "Aa" by
Moody's Investors Service, Inc. ("Moody's")) issued by companies having an
outstanding debt issue rated at least "AA" by S&P or at least "Aa" by Moody's,
or determined by the Manager to be of comparable quality to any of the
foregoing. See also "General Description of Risks and Fund Investments -- Stock
Index Futures" below.
Also, the Fund may invest without limit in common stocks of foreign issuers
which are listed on a United States securities exchange or traded in the United
States in the OTC market. Investments in common stocks of foreign issuers may
involve certain special risks due to foreign economic, political and legal
developments. See "General Description of Risks and Fund Investments -- Special
Consideration of Foreign Investments" below. The Fund will not invest in
securities which are principally traded outside of the United States.
FUNDAMENTAL POLICIES. The Fund will normally invest most of its assets in
small capitalization securities, and it is a fundamental policy of the Fund,
which may not be changed without shareholder approval, that at least 65% of the
Fund's total assets will be invested in small capitalization securities.
7
<PAGE>
INTERNATIONAL SMALL CAPITALIZATION SERIES
The investment objective of the International Small Capitalization
Series is to seek total return greater than the Cazenove Rosenberg Global
Smaller Companies Index excluding the United States ("CRIEXUS") through
investment primarily in equity securities (i) that are traded principally in
securities markets outside of the United States and (ii) that represent
interests in companies currently with market capitalization of between $15
million and $1 billion at the time of purchase by the Fund. Such companies
are referred to herein as "small capitalization companies." CRIEXUS is
comprised of stocks of small capitalization companies in mature markets.
Total return is a combination of capital appreciation and current income
(dividend or interest). In the case of the Fund, total return will be
measured by changes in value of an investment over a given period, assuming
that any dividends or capital gains distributions are reinvested in the Fund
rather than paid to the investor in cash. The Fund does not seek to MAXIMIZE
total return but, as indicated above, seeks a total return greater than that
of the common stocks referred to above. Because the companies in which the
Fund invests typically do not distribute significant amounts of company
earnings to shareholders, the Fund's objective will place relatively greater
emphasis on capital appreciation than on current income. The Fund's
investment objective is non-fundamental and thus may be changed by the
Trustees without shareholder approval.
There are no prescribed limits on geographic asset distribution and the
Fund has the authority to invest in securities traded in securities markets of
any country in the world. It is currently expected that the Fund will invest
in approximately twenty different countries across three regions -- Europe,
Pacific and North America (excluding the United States). Under certain adverse
investment conditions, the Fund may restrict the number of securities markets in
which its assets will be invested, although under normal market circumstances,
the Fund's investments will involve securities principally traded in at least
three different countries. See "General Description of Risks and Fund
Investments -- Special Considerations of Foreign Investments" and "General
Description of Risks and Fund Investments -- Foreign Exchange Transactions"
below.
Under normal circumstances, at least 90% of the Fund's total assets will
be invested in common stocks of small capitalization companies. It is the
non-fundamental policy of the Fund to invest at least 65% of the Fund's total
assets in common stocks of small capitalization companies. Investments in
such companies may present greater opportunities for capital appreciation
because of high potential earnings growth, but may also involve greater risk.
See "General Description of Risks and Fund Investments -- Companies with
Small Market Capitalizations" below.
The Fund will not normally invest in securities of United States issuers
traded on United States securities markets.
8
<PAGE>
JAPAN SERIES
The investment objective of the Japan Series is to seek a total return
greater than that of the Tokyo Stock Price Index ("TOPIX") of the Tokyo Stock
Exchange. TOPIX is a capitalization weighted index of all stocks in the First
Section of the Tokyo Stock Exchange. Total return is a combination of capital
appreciation and current income (dividend or interest). The Fund will seek to
meet this objective primarily through investment in Japanese equity securities,
primarily in common stocks of Japanese companies. The Fund expects that any
income it derives will be from dividend or interest payments on securities. The
Fund's investment objective is non-fundamental and thus may be changed by the
Trustees without shareholder approval.
It is currently expected that, under normal circumstances, the Fund will
invest at least 90% of its assets in "Japanese Securities," that is, securities
issued by entities ("Japanese Companies") that are organized under the laws of
Japan and that either have 50% or more of their assets in Japan or derive 50% or
more of their revenues from Japan. While the Fund will invest primarily in
common stocks of Japanese Companies, it may also invest in other Japanese
Securities, such as convertible preferred stock, warrants or rights, as well as
short-term government debt securities or other short-term prime obligations
(i.e., high quality debt obligations maturing not more than one year from the
date of issuance). See "General Description of Risks and Fund Investments --
Foreign Exchange Transactions" below. The Fund will not customarily purchase
warrants or rights, although it may receive warrants or rights through
distributions on other securities it owns. In those cases, the Fund expects to
sell such warrants and rights within a reasonable period of time following their
distribution to the Fund. The Fund does not currently expect to own warrants or
rights with an aggregate value of greater than 5% of the Fund's assets. Refer
to the Statement of Additional Information for further information with respect
to the Fund's investments in warrants or rights.
The Fund currently intends to make its investments in Japanese equity
securities principally in well-established Japanese Companies that have an
active market for their shares. Japanese Companies will be considered well-
established if they have been subject for at least two years to the financial
accounting rules for a company whose securities are traded on a Japanese
securities exchange. In the discretion of the Fund's management, the balance of
the Fund's investments may be in companies that do not meet all such
qualifications, although the nature of the market for the shares will always be
an important consideration in determining whether the Fund will invest in such
shares. The Fund anticipates that most Japanese equity securities in which it
will invest, either directly or indirectly (by means of convertible debentures),
will be listed on securities exchanges in Japan.
INDEX FUTURES. The Fund may also purchase futures contracts or options on
futures contracts on the Tokyo Stock Price Index ("TOPIX") or the NIKKEI 225
Index ("NIKKEI") for investment purposes. TOPIX futures are traded on the
Chicago Board of Trade and NIKKEI futures are traded on the Chicago Mercantile
Exchange. See "General Description of Risks and Fund Investments -- Stock Index
Futures" below.
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RISKS OF INVESTING IN JAPANESE SECURITIES. Unlike other mutual funds which
invest in the securities of many countries, the Fund will invest almost
exclusively in Japanese Securities. Generally, the Manager will not vary the
percentage of the Fund's assets which are invested in Japanese Securities based
on its assessment of Japanese economic, political or regulatory developments or
changes in currency exchange rates. However, the Manager reserves the right to
hedge against a possible decline in the Japanese Securities market by utilizing
futures and options on futures on Japanese stock indices as described above with
respect to 100% of the Fund's total assets.
Because a high percentage of the Fund asset's will be invested in Japanese
Securities, investment in the Fund will involve the general risks associated
with investing in foreign securities. See "General Description of Risks and
Fund Investments -- Special Considerations of Foreign Investments" below. In
addition, investors will be subject to the market risk associated with investing
almost exclusively in stocks of companies which are subject to Japanese economic
factors and conditions. Since the Japanese economy is dependent to a
significant extent on foreign trade, the relationships between Japan and its
trading partners and between the yen and other currencies are expected to have a
significant impact on particular Japanese companies and on the Japanese economy
generally. The Fund is designed for investors who are willing to accept the
risks associated with changes in such conditions and relationships.
FUNDAMENTAL POLICIES. The Fund will normally invest at least 90% of its
total assets in Japanese Securities, and it is a fundamental policy of the Fund,
which may not be changed without shareholder approval, that at least 65% of the
Fund's total assets will be invested in Japanese Securities.
GENERAL DESCRIPTION OF RISKS AND FUND INVESTMENTS
INVESTMENT RISKS. An investment in the Funds involves risks similar to
those of investing in common stocks directly. Just as with common stocks, the
value of Fund shares may increase or decrease depending on market, economic,
political, regulatory and other conditions affecting a Fund's portfolio. These
types of risks may be greater with respect to investments in securities of
foreign issuers. Investment in shares of the Funds is, like investment in
common stocks, more volatile and risky than some other forms of investment.
COMPANIES WITH SMALL MARKET CAPITALIZATIONS. As specified above, the U.S.
Small Capitalization Series and the International Small Capitalization Series
will invest a relatively high percentage of their assets in companies with
relatively small market capitalizations (generally, market capitalizations of
under $750 million for the U.S. Small Capitalization Series and under $1 billion
for the International Small Capitalization Series). Companies with small market
capitalizations may be dependent upon a single proprietary product or market
niche, may have limited product lines, markets or financial resources, or may
depend on a limited management group. Typically, such companies have fewer
securities outstanding, which may be less liquid than securities of larger
companies. Their common stock and other securities may trade less frequently
and in limited volume and are generally more sensitive to purchase and sale
transactions. Therefore, the prices of such securities tend to be more volatile
than the prices of securities of companies with larger market capitalizations.
As a result, the absolute values of changes in
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the price of securities of companies with small market capitalizations may be
greater than those of larger, more established companies.
SPECIAL CONSIDERATIONS OF FOREIGN INVESTMENTS. Investing in foreign
securities (i.e., those which are traded principally in markets outside of the
United States) involves certain risks not typically found in investing in U.S.
domestic securities. These include risks of adverse change in foreign economic,
political, regulatory and other conditions, and changes in currency exchange
rates, exchange control regulations (including currency blockage), expropriation
of assets or nationalization, imposition of withholding taxes on dividend or
interest payments, and possible difficulty in obtaining and enforcing judgments
against foreign entities. Furthermore, issuers of foreign securities are
subject to different, and often less comprehensive, accounting, reporting and
disclosure requirements than domestic issuers. In certain countries, legal
remedies available to investors may be more limited than those available with
respect to investments in the United States or other countries. The laws of
some foreign countries may limit a Fund's ability to invest in securities of
certain issuers located in those countries. The securities of some foreign
issuers and securities traded principally in foreign securities markets are less
liquid and at times more volatile than securities of comparable U.S. issuers and
securities traded principally in U.S. securities markets. Foreign brokerage
commissions and other fees are also generally higher than those charged in the
United States. There are also special tax considerations which apply to
securities of foreign issuers and securities traded principally in foreign
securities markets.
The risks of investing in foreign securities may be intensified in the case
of investments in emerging markets or countries with limited or developing
capital markets. Prices of securities of companies in emerging markets can be
significantly more volatile than prices of securities of companies in the more
developed nations of the world, reflecting the greater uncertainties of
investing in less developed markets and economies. In particular, countries
with emerging markets may have relatively unstable governments, present the risk
of nationalization of businesses, restrictions on foreign ownership, or
prohibitions of repatriation of assets, and may have less protection of property
rights than more developed countries. The economies of countries with emerging
markets may be predominantly based on only a few industries or dependent on
revenues from particular commodities or on international aid or development
assistance, may be highly vulnerable to changes in local or global trade
conditions, and may suffer from extreme and volatile debt burdens or inflation
rates. Local securities markets may trade a small number of securities and may
be unable to respond effectively to increases in trading volume, potentially
making prompt liquidation of substantial holdings difficult or impossible at
times. Consequently, securities of issuers located in countries with emerging
markets may have limited marketability and may be subject to more abrupt or
erratic price movements. Also, such local markets typically offer less
regulatory protections for investors.
FOREIGN EXCHANGE TRANSACTIONS. The International Equity Portfolios of the
Trust (i.e., the International Small Capitalization Series and the Japan Series)
do not currently intend to hedge the foreign currency risk associated with
investments in securities denominated in foreign currencies. However, in order
to hedge against possible variations in foreign exchange rates pending the
settlement of securities transactions, the International Equity Portfolios
reserve the right to buy or sell foreign currencies or to deal in forward
foreign currency contracts; that is, to agree to buy or sell a specified
currency at a specified price and future date. The International Equity
Portfolios also reserve the right to invest in currency futures contracts and
related options thereon for similar purposes. For example, if the Manager
anticipates that the value of the yen will rise relative to the dollar, a Fund
could purchase a
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currency futures contract or a call option thereon or sell (write) a put option
to protect against an increase in the price of yen-denominated securities such
Fund intends to purchase. If the Manager anticipates a fall in the value of the
yen relative to the dollar, a Fund could sell a currency futures contract or a
call option thereon or purchase a put option on such futures contract as a
hedge. If the International Equity Portfolios change their present intention
and decide to utilize hedging strategies, futures contracts and related options
will be used only as a hedge against anticipated currency rate changes (not for
investment purposes) and all options on currency futures written by a Fund will
be covered. These practices, if utilized, may present risks different from or
in addition to the risks associated with investments in foreign currencies.
STOCK INDEX FUTURES. A stock index futures contract (an "Index Future") is
a contract to buy an integral number of units of the relevant index at a
specified future date at a price agreed upon when the contract is made. A unit
is the value at a given time of the relevant index.
In connection with a Fund's investment in common stocks, a Fund may invest
in Index Futures while the Manager seeks favorable terms from brokers to effect
transactions in common stocks selected for purchase. A Fund may also invest in
Index Futures when the Manager believes that there are not enough attractive
common stocks available to maintain the standards of diversity and liquidity set
for the Fund pending investment in such stocks when they do become available.
Through the use of Index Futures, a Fund may maintain a portfolio with
diversified risk without incurring the substantial brokerage costs which may be
associated with investment in multiple issuers. This may permit a Fund to avoid
potential market and liquidity problems (e.g., driving up or forcing down the
price by quickly purchasing or selling shares of a portfolio security) which may
result from increases or decreases in positions already held by a Fund. Certain
provisions of the Internal Revenue Code may limit this use of Index Futures. A
Fund may also invest in Index Futures in order to hedge its equity positions.
In contrast to purchases of a common stock, no price is paid or received by
a Fund upon the purchase of a futures contract. Upon entering into a futures
contract, a Fund will be required to deposit with its custodian in a segregated
account in the name of the futures broker a specified amount of cash or
securities. This is known by participants in the market as "initial margin."
The type of instruments that may be deposited as initial margin, and the
required amount of initial margin, are determined by the futures exchange on
which the Index Futures are traded. The nature of initial margin in futures
transactions is different from that of margin in securities transactions in that
futures contract margin does not involve the borrowing of funds by the customer
to finance the transactions. Rather, the initial margin is in the nature of a
performance bond or good faith deposit on the contract which is returned to the
Fund upon termination of the futures contract, assuming all contractual
obligations have been satisfied. Subsequent payments, called "variation
margin," to and from the broker, will be made on a daily basis as the price of
the particular Index fluctuates, making the position in the futures contract
more or less valuable, a process known as "marking to the market."
A Fund may close out a futures contract purchase by entering into a futures
contract sale. This will operate to terminate the Fund's position in the
futures contract. Final determinations of variation margin are then made,
additional cash is required to be paid by or released to the Fund, and the Fund
realizes a loss or a gain.
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A Fund's investment in Index Futures involves risk. Positions in Index
Futures may be closed out by a Fund only on the futures exchanges on which the
Index Futures are then traded. There can be no assurance that a liquid market
will exist for any particular contract at any particular time. The liquidity of
the market in futures contracts could be adversely affected by "daily price
fluctuation limits" established by the relevant futures exchange which limit the
amount of fluctuation in the price of an Index Futures contract during a single
trading day. Once the daily limit has been reached in the contract, no trades
may be entered into at a price beyond the limit. In such events, it may not be
possible for a Fund to close its futures contract purchase, and, in the event of
adverse price movements, a Fund would continue to be required to make daily cash
payments of variation margin. When the Fund has purchased a futures contract,
its risk is, however, limited to the amount of the contract. The futures market
may also attract more speculators than does the securities market, because
deposit requirements in the futures market are less onerous than margin
requirements in the securities market. Increased participation by speculators
in the futures market may also cause price distortions.
A Fund will not purchase Index Futures if, as a result, the Fund's initial
margin deposits on transactions that do not constitute "bona fide hedging" under
relevant regulations of the Commodities Futures Trading Commission would be
greater than 5% of the Fund's total assets. In addition to margin deposits,
when a Fund purchases an Index Future, it is required to maintain, at all times
while an Index Future is held by the Fund, cash, U.S. Government securities or
other high grade liquid debt obligations in a segregated account with its
Custodian, in an amount which, together with the initial margin deposit on the
futures contract, is equal to the current value of the futures contract.
ILLIQUID SECURITIES. Each Fund may purchase "illiquid securities,"
defined as securities which cannot be sold or disposed of in the ordinary
course of business within seven days at approximately the value at which a
Fund has valued such securities, so long as no more than 15% of the Fund's
net assets would be invested in such illiquid securities after giving effect
to the purchase. Investment in illiquid securities involves the risk that,
because of the lack of consistent market demand for such securities, the
Fund may be forced to sell them at a discount from the last offer price.
PORTFOLIO TURNOVER. Portfolio turnover is not a limiting factor with
respect to investment decisions. Although the rate of portfolio turnover is
very difficult to predict, it is not anticipated that, under normal
circumstances, the annual portfolio turnover rate for each of the Funds will
exceed 100%. In any particular year, market conditions may well result in
greater portfolio turnover rates than are presently anticipated. The rate of a
Fund's portfolio turnover may vary significantly from time to time depending on
the volatility of economic and market conditions. High portfolio turnover
involves correspondingly greater brokerage commissions and other transaction
costs, which will be borne directly by a Fund, and could involve realization of
capital gains that would be taxable when distributed to shareholders of such
Fund. To the extent portfolio turnover results in the realization of net short-
term capital gains, such gains ordinarily are taxed to shareholders at ordinary
income tax rates.
LOANS OF PORTFOLIO SECURITIES. Each Fund may lend some or all of its
portfolio securities to broker-dealers. Securities loans are made to broker-
dealers pursuant to agreements requiring that loans be continuously secured by
collateral in cash or U.S. Government securities at least equal at all times to
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the market value of the securities lent. The borrower pays to the lending Fund
an amount equal to any dividends or interest received on the securities lent.
When the collateral is cash, the Fund may invest the cash collateral in
interest-bearing, short-term securities. When the collateral is U.S. Government
securities, the Fund usually receives a fee from the borrower. Although voting
rights or rights to consent with respect to the loaned securities pass to the
borrower, a Fund retains the right to call the loans at any time on reasonable
notice, and it will do so in order that the securities may be voted by the Fund
if the holders of such securities are asked to vote upon or consent to matters
materially affecting the investment. A Fund may also call such loans in order to
sell the securities involved. The risks in lending portfolio securities, as
with other extensions of credit, include possible delay in recovery of the
securities or possible loss of rights in the collateral should the borrower fail
financially. However, such loans will be made only to broker-dealers that are
believed by the Manager to be of relatively high credit standing.
INVESTMENT POLICIES. Except for investment policies which are explicitly
described as fundamental, the investment policies of each of the Funds may be
changed without shareholder approval. In addition to the policies described
in this Prospectus, please see the Statement of Additional Information for a
statement of fundamental and non-fundamental policies of the Funds.
INVESTMENT PERFORMANCE
MANAGER'S DISCUSSION OF U.S. SMALL CAPITALIZATION SERIES PERFORMANCE.
For the fiscal year ending March 31, 1996, the standardized total return
of the U.S. Small Capitalization Series was 35.69% after deduction of fees
and expenses, more than 6 1/2 percentage points above the total return of the
Russell 2000 Index. The Manager believes that the U.S. Small Capitalization
Series' total return was the result of an overall rise in the market combined
with the Manager's identification of undervalued U.S. small company stocks.
In the last fiscal year, the prices of the undervalued U.S. small company
stocks selected by the Manager generally rose towards the Manager's estimates
of their fair value.
The U.S. Small Capitalization Series has built a diversified portfolio that
closely tracks the risk factor and industry profile of the Russell 2000 Index
while emphasizing companies that are selling at prices below the Manager's
estimates of their fair value. The total return of the U.S. Small
Capitalization Series has exceeded the total return of the Russell 2000
Index since inception of the Fund as well as in the latest 3- and 5- year
fiscal periods of the Fund.
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U.S. Small Capitalization Series
(Based on the Performance of Institutional Shares only)1
[Graph depicting performance against the benchmark]
(1) Based on minimum initial investment of $1,000,000 for Institutional
Shares less applicable Fund Reimbursement Fees. Note that the minimum initial
investment for Adviser Shares is $100,000 and for Select Shares is $10,000.
(2) Fund returns are net of all fees while the Russell 2000 Index returns
are based solely on market returns without deduction of fees or transaction
costs for rebalancing.
Average Annual Total Return (for periods ended 3/31/96)
1 Year 3 Years 5 Years Since Inception (2/22/89)
------ ------- ------- -------------------------
U.S. Small Capitalization
Series 35.69% 19.45% 19.31% 15.28%
(Institutional Shares)
Russell 2000 Index 29.10% 14.77% 16.05% 13.34%
THE NUMBERS REPORTED IN BOTH THE GRAPH AND THE TABLE REPRESENT PAST PERFORMANCE
AND ARE NOT PREDICTIVE OF FUTURE PERFORMANCE.
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MANAGER'S DISCUSSION OF JAPAN SERIES PERFORMANCE.
During the last fiscal year, the standardized total return of the Japan
Series after deduction of fees and expenses was less than the total return
of its Tokyo Stock Price Index ("TOPIX") benchmark; however, the Series has
outperformed the TOPIX benchmark over the latest 3- and 5-year periods.
Since inception in January 1989, the Japan Series has outperformed the TOPIX
by an average of 1.66% per year while matching the risk factor, industry, and
capitalization characteristics of the benchmark. The Japan Series maintains
a diversified portfolio of moderately undervalued securities identified by
the Manager's proprietary stock selection models.
Under normal circumstances, the Japan Series' investments in securities
will be in yen-denominated securities, thus its value in U.S. dollars depends on
prevailing exchange rates. During the last fiscal year, the Yen depreciated by
more than 20%, offsetting the overall rise in the Japanese equity market. Since
the inception of the Japan Series, the yen has appreciated almost 15%.
Japan Series
(Based on the Performance of Institutional Shares only)1
[Graph depicting performance against the benchmark]
(1) Based on minimum initial investment of $1,000,000 for Institutional
Shares less applicable Fund Reimbursement Fees. Note that the minimum initial
investment for Adviser Shares is $100,000 and for Select Shares is $10,000.
(2) Fund returns are net of all fees while the TOPIX returns are based
solely on market returns without deduction of fees or transaction costs for
rebalancing.
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Average Annual Total Return (for periods ended 3/31/96)
Since Inception (1/3/89)
1 Year 3 Years 5 Years (See annual report)
------ ------- ------- -------------------------
Japan Series -1.20% 8.98% 3.14% -0.32%
(Institutional Shares)
TOPIX 2.98% 8.12% 2.69% -1.98%
THE NUMBERS REPORTED IN BOTH THE GRAPH AND THE TABLE REPRESENT PAST PERFORMANCE
AND ARE NOT PREDICTIVE OF FUTURE PERFORMANCE.
MANAGEMENT OF THE TRUST
Each Fund is advised and managed by Rosenberg Institutional Equity
Management (the "Manager") which provides investment advisory services to a
substantial number of institutional investors.
KEY PERSONNEL OF THE MANAGER
The biography of each of the General Partners of the Manager, each of whom
is also a Trustee of the Trust, is set forth below.
BARR ROSENBERG. Dr. Rosenberg is Managing General Partner and Chief
Investment Officer for the Manager. As such, he has ultimate responsibility for
the Manager's securities valuation and portfolio optimization systems used to
manage the Funds and for the implementation of the decisions developed therein.
His area of special concentration is the design of the Manager's proprietary
securities valuation model.
Dr. Rosenberg earned a B.A. degree from the University of California,
Berkeley, in 1963. He earned an M.Sc. from the London School of Economics in
1965, and a Ph.D. from Harvard University, Cambridge, Massachusetts, in 1968.
From 1968 until 1983, Dr. Rosenberg was a Professor of Finance, Econometrics,
and Economics at the School of Business Administration at the University of
California, Berkeley. Concurrently, from 1968 until 1974, Dr. Rosenberg worked
as a consultant in applied decision theory in finance, banking, and medicine.
In 1975, he founded Barr Rosenberg Associates, a financial consulting firm (now
know as BARRA) where he was a managing partner, and later chief scientist. Dr.
Rosenberg, the founder of the Berkeley Program in Finance, is acknowledged as an
expert in the modeling of complex processes with substantial elements of risk.
MARLIS S. FRITZ. Ms. Fritz is a General Partner for the Manager. She has
primary responsibility for the Manager's new business development and secondary
responsibility for client service.
Ms. Fritz earned a B.S. degree from the University of Michigan, Ann Arbor,
in 1971. After working in life insurance management and sales for seven years,
she entered the investment management
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business in 1978 as Marketing Associate with Forstmann-Leff Associates, New
York. From 1983 until 1985, she was Vice President, Marketing at Criterion
Investment Management Company, Houston, Texas.
KENNETH REID. Dr. Reid is a General Partner and Director of Research for
the Manager. His work is focused on the design and estimation of the Manager's
valuation models and he has primary responsibility for analyzing the empirical
evidence that validates and supports the day-to-day recommendations of the
Manager's portfolio valuation models. Patterns of short-term price behavior
discussed by Dr. Reid as part of his Ph.D. dissertation have been refined and
incorporated into the Manager's proprietary valuation and trading systems.
Dr. Reid earned both a B.A. degree (1973) and an M.D.S. (1975) from Georgia
State University, Atlanta. In 1982, he earned a Ph.D. from the University of
California, Berkeley, where he was awarded the American Bankers Association
Fellowship. From 1981 until June 1986, Dr. Reid worked as a consultant at BARRA
in Berkeley, California. His responsibilities included estimating multiple-
factor risk models, designing and evaluating active management strategies, and
serving as an internal consultant on econometric matters in finance.
There are 38 professional staff members of the Manager and the Manager's
affiliate, Barr Rosenberg Investment Management, Inc., located in Orinda,
California. Included among the Manager's professional staff are eight
individuals with Ph.D.s and twenty-three individuals with other graduate
degrees. Five members of the staff have been awarded C.F.A. certificates.
THE OUTSIDE TRUSTEES
William F. Sharpe and Nils H. Hakansson are Trustees of the Trust who are
not "interested persons" (as defined in the Investment Company Act of 1940) of
the Trust or the Manager.
Dr. Sharpe is the STANCO 25 Professor of Finance at Stanford University's
Graduate School of Business. He is best known as one of the developers of the
Capital Asset Pricing Model, including the beta and alpha concepts used in risk
analysis and performance measurement. He developed the widely-used binomial
method for the valuation of options and other contingent claims. He also
developed the computer algorithm used in many asset allocation procedures. Dr.
Sharpe has published articles in a number of professional journals. He has
also written six books, including PORTFOLIO THEORY AND CAPITAL MARKETS, (McGraw-
Hill, 1970), ASSET ALLOCATION TOOLS, (Scientific Press, 1987), FUNDAMENTALS OF
INVESTMENTS (with Gordon J. Alexander and Jeffery Bailey, Prentice-Hall, 1993)
and INVESTMENTS (with Gordon J. Alexander and Jeffery Bailey, Prentice-Hall,
1995). Dr. Sharpe is a past President of the American Finance Association. He
has also served as consultant to a number of corporations and investment
organizations. He is also a member of the Board of Trustees of Smith Breeden
Trust, an investment company, and a director at CATS Software and Stanford
Management Company. He received the Nobel Prize in Economic Sciences in 1990.
Professor Hakansson is the Sylvan C. Coleman Professor of Finance and
Accounting of the Haas School of Business, University of California, Berkeley.
He is a former member of the faculty at UCLA as well as at Yale University. At
Berkeley, he served as Director of the Berkeley Program in Finance (1988-1991)
and as Director of the Professional Accounting Program (1985-1988). Professor
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Hakansson is a Certified Public Accountant and spent three years with Arthur
Young & Company prior to receiving his Ph.D from UCLA in 1966. He has twice
been a Visiting Scholar at Bell Laboratories in New Jersey and was, in 1975, the
Hoover Fellow at the University of New South Wales in Sydney and, in 1982, the
Chevron Fellow at Simon Fraser University in British Columbia. In 1984,
Professor Hakansson was a Special Visiting Professor at the Stockholm School of
Economics, where he was also awarded an honorary doctorate in economics. He is
a past president of the Western Finance Association (1983-1984). Professor
Hakansson has published numerous articles in academia journals and in
professional volumes. Many of his papers address various aspects of asset
allocation procedures as well as topics in security innovation, information
economics, and financial reporting. He has served on the editorial boards of
several professional journals and been a consultant to the RAND Corporation and
a number of investment organizations. Professor Hakansson is a member of the
board of two foundations and a past board member of SuperShare Service
Corporation and of Theatrix Interactive, Inc. He is also a Fellow of the
Accounting Researchers International Association and a member of the Financial
Economists Roundtable.
THE MANAGER'S GENERAL INVESTMENT PHILOSOPHY AND STRATEGY
The Manager attempts to add value relative to the designated benchmark
through a quantitative stock selection process, and seeks to diversify
investment risk across the several hundred holdings in each Fund. In seeking to
outperform each Fund's designated benchmark, the Manager also attempts to
control risk in the Fund's portfolio relative to the securities constituting
that benchmark. So that each Fund is substantially invested in equities at all
times, the Manager does not earn the extraordinary return, or "alpha," by timing
the market. The Manager seeks to avoid constructing portfolios that
significantly differ from the relevant benchmark with respect to characteristics
such as market capitalization, historic volatility, or "beta," and industry
weightings. Each Fund seeks to have a similar exposure to these factors as the
designated benchmark.
INVESTMENT PHILOSOPHY. The Manager's investment strategy is based on the
belief that stock prices imperfectly reflect the present value of the expected
future earnings of companies, their "fundamental value." The Manager believes
that market prices will converge towards fundamental value over time, and that
therefore any investor who can accurately determine fundamental value, and who
applies a disciplined investment process to select those stocks that are
currently undervalued (i.e., the price is less than fundamental value), will
outperform the market over time.
The premise of the Manager's investment philosophy is that there is a link
between the price of a stock and the underlying financial and operational
characteristics of the company. In other words, the price reflects the market's
assessment of how well the company is positioned to generate future earnings
and/or future cash flow. The Manager identifies and purchases those stocks
which are undervalued (i.e., they are currently cheaper than similar stocks with
the same characteristics). The Manager believes that the market will recognize
the "better value" and that the mispricing will be corrected as the stocks in
the Funds' portfolios are purchased by other investors.
Determination of the relative valuation of a stock is based upon a
comparison of similar companies. In any group of similar companies, it is the
Manager's view that there are always some that are overvalued, some that are
undervalued, and some that are fairly-valued relative to the average
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<PAGE>
valuation for the group. These moderate valuation errors are believed to be
present in every sector of the market and can be identified through rigorous
quantitative analysis of fundamental data.
In determining whether or not a stock is attractive, the Manager considers
the company's current estimated fundamental value as determined by the Manager's
proprietary Appraisal Model, the company's future earnings, and investor
sentiment toward the stock. The Manager identifies and causes a Fund to
purchase an undervalued stock and to hold it in the relevant Fund's portfolio
until the market recognizes and corrects for the misvaluation. The Funds'
portfolios are composed of undervalued stocks from every sector represented in
the relevant Fund's benchmark, with a typical portfolio consisting of several
hundred stocks.
DECISION PROCESS. The Manager's decision process is a continuum. Its
research function develops Models which analyze the 12,000 securities in the
global universe, both fundamentally and technically, and determines the risk
characteristics of the relevant Fund's benchmark. The portfolio management
function optimizes each portfolio's composition, executes trades, and monitors
performance and trading costs.
The essence of the Manager's approach is rigorous attention to important
aspects of the investment process. Factors crucial to successful stock
selection include: (1) accurate and timely data on a large universe of
companies; (2) subtle quantitative descriptors of value and predictors of
changes in value; and (3) insightful definitions of similar businesses. The
Manager takes great care assimilating, checking and structuring the input data
on which its Models rely. The Manager believes that if the data is correct, the
recommendations made by the system will be sound.
STOCK SELECTION. Fundamental valuation of stocks is key to the Manager's
investment process, and the heart of the valuation process lies in the Manager's
proprietary Appraisal Model. Analysis of companies in the United States and
Canada is conducted in a single unified Model. The Appraisal Model
discriminates where the two markets are substantially different, while
simultaneously comparing companies in the two markets according to their degrees
of similarity. European companies and Asian companies (other than Japanese
companies) are analyzed in a nearly global Model, which includes the United
States and Canada as a further basis for comparative valuation, but which
excludes Japan. Japanese companies are analyzed in an independent national
Model. The Model incorporates the various accounting standards which apply in
different markets and makes adjustments to ensure meaningful comparisons.
An important feature of the Appraisal Model is the classification of
companies into one or more of 166 groups of "similar" businesses. Currently, in
the United States, 160 groups are applicable; in Japan, 122 groups are
applicable; and in Europe, 154 groups are applicable. Each company is broken
down into its individual business segments, and each segment is compared with
similar business operations of other companies doing business in the same
geographical market. In most cases, the comparison is extended to include
companies with similar business operations in different markets. Subject to the
availability of data in different markets, the Manager appraises the company's
assets, operating earnings and sales within each business segment, accepting the
market's valuation of that category of business as fair. The Manager then
integrates the segment appraisals into balance sheet, income statement, and
sales valuation models for the total company and sales, and simultaneously
adjusts the segment appraisals to include appraisals for variables which are
declared only for the total company,
20
<PAGE>
such as taxes, capital structure, and pension funding. The result is a single
valuation for each of the 12,000 companies followed.
The difference between the Manager's appraisal and the market price is
believed to represent an opportunity for profit. For each stock, the Manager
develops "appraisal alphas" (i.e., the expected rate of extraordinary return) by
adjusting for the rate at which the market has corrected for such misvaluations
in the past.
A second sphere of analysis is captured by the Manager's proprietary
Earnings Change Model, which analyzes more than 20 variables to predict
individual company earnings over a one year horizon. The variables are
fundamental and fall into three categories: measures of past profitability,
measures of company operations and consensus earnings forecasts. The Earnings
Change Model is independent of the Appraisal Model and projects the change in a
company's earnings in cents/current price. The value of the projected earnings
change is converted to an "earnings change alpha" by multiplying the projected
change by the market's historical response to changes of that magnitude.
Finally, the Manager's proprietary Investor Sentiment Model quantifies
investor sentiment about features of stocks which influence price but which are
not captured by the Appraisal Model or the Earnings Change Model. This Model
measures company quality by looking at past price patterns and by predicting the
probability of deficient earnings. The Investor Sentiment Model also captures
market enthusiasm towards individual stocks by looking at broker recommendations
and analyst estimates. Investor sentiment alphas are developed by multiplying
the Model's sentiment scores by the market's historical response to such scores.
Each company's earnings change alpha and investor sentiment alpha is added
to its appraisal alpha to arrive at a total company alpha. Stocks with large
positive total company alphas are candidates for purchase. Stocks held in a
portfolio with total company alphas that are only slightly positive, zero or
negative are candidates for sale.
Before trading, the Manager systematically analyzes the short-term price
behavior of individual stocks to determine the timing of trades. The Investor
Sentiment Model quantifies investor enthusiasm for each stock by analyzing its
short-term performance relative to similar stocks, changes in analyst and broker
opinions about the stock, and earnings surprises. The Manager develops a
"trading alpha" for each stock (i.e., the expected short-term extraordinary
return) which is designed to enable the Funds to purchase stocks from supply and
to sell stocks into demand, greatly reducing trading costs.
OPTIMIZATION. The Manager's portfolio optimization system seeks to
optimize the trade-off between risk and reward relative to each Fund's bench-
mark. It exploits the information developed by the Manager's stock selection
Models to maximize return relative to the benchmark, while avoiding a portfolio
with exposure to any other extraneous factors that would distinguish the Fund's
portfolio from the stocks constituting the relevant benchmark. Within the
geographic zone appropriate for each Fund, the optimizer recommends positions in
companies which in aggregate constitute the most efficient portfolio. The
optimizer simultaneously considers total company alphas, trading alphas, and
risk and quantifies the expected "net benefit" to the portfolio of each
recommended transaction. A stock is considered for sale when a higher alpha
stock with complementary risk characteristics has been identified. No
transaction will be executed unless the opportunity offered by the purchase
candidate
21
<PAGE>
sufficiently exceeds the potential of an existing holding to justify the
transaction costs. In most markets, portfolios are reoptimized continuously
throughout the day, allowing the Manager to respond immediately to investment
opportunities, subject to certain limitations on short-term trading applicable
by virtue of each Fund's intention to qualify as a regulated investment company
under the Internal Revenue Code.
TRADING. The Manager's trading system aggregates the recommended
transactions for each of the Funds and determines the feasibility of each
recommendation in light of the stock's liquidity, the expected transaction
costs, and general market conditions. It relays target price information to a
trader for each stock considered for purchase or sale. Trades are executed
through any one of four trading strategies: traditional brokerage, networks,
accommodation, and package or "basket" trades.
The network arrangements the Manager has developed with Instinet Matching
System (IMS), Portfolio System for Institutional Trading (POSIT), and the
Arizona Stock Exchange (AZX) facilitate large volume trading with little or no
price disturbance and low commission rates.
Accommodative trading (which we also refer to as the Manager's "match
system") allows institutional buyers and sellers of stock to electronically
present the Manager with their "interest" lists each morning. Any matches
between the inventory which the brokers have presented and the Manager's own
recommended trades are signaled to the Manager's traders. Since the broker is
doing agency business and has a client on the other side of the trade, the
Manager expects that the other side will be accommodative in the price. The
Manager's objective in using this match system is to execute most trades on the
Manager's side of the bid/ask spread so as to minimize market impact.
Package trades further allow the Manager to trade large lists of orders
simultaneously using state of the art tools such as the Instinet Real-Time
System, Instinet Order Matching System and Lattice Trading System. Those tools
provide order entry, negotiation and execution capabilities, either directly to
other institutions or electronically to the floor of the exchange. The
advantages of using such systems include speed of execution, low commissions,
anonymity and very low market impact.
The Manager continuously monitors trading costs to determine the impact of
commissions and price disturbance on the Funds' portfolios.
INDIVIDUALS RESPONSIBLE FOR EACH FUND
Each of the following General Partners of the Manager holds a greater than
5% interest in the Manager: Marlis S. Fritz and Kenneth Reid. Rosenberg Alpha
L.P., a California limited partnership, is a limited partner of the Manager and
holds a greater than 5% interest in the Manager. Barr M. Rosenberg, the
Managing General Partner of the Manager, and his wife, June Rosenberg, each
holds a greater than 5% general partnership interest in Rosenberg Alpha L.P.
Management of the portfolio of each Fund is overseen by the Manager's
General Partners who are responsible for design and maintenance of the Manager's
portfolio system, and by a portfolio manager
22
<PAGE>
who is responsible for research and monitoring each Fund's characteristic
performance against the relevant benchmark and for monitoring cash balances.
THE U.S. SMALL CAPITALIZATION SERIES. Dr. Rosenberg, Dr. Reid and Floyd
Coleman, the portfolio manager, are responsible for the day to day management of
the U.S. Small Capitalization Series' portfolio. Dr. Rosenberg and Dr. Reid both
have been employed by the Manager for the past eleven years. Mr. Coleman has
been a trader and portfolio manager for the Manager since 1988. He received a
B.S. from Northwestern University in 1982, a M.S. from Polytechnic Institute,
Brooklyn in 1984 and a M.B.A. from Harvard Business School in 1988.
JAPAN SERIES. Dr. Rosenberg, Dr. Reid, and Cheng S. Liao, the portfolio
manager, are responsible for the day to day management of the Japan Series'
portfolio. Mr. Liao has been a senior research associate, programmer and
portfolio manager, specializing in the Japanese market with the Manager since
1989. Mr. Liao has also been a trader for the Manager in Japanese securities
since 1994. He received a B.S. from Tohobu University, Japan, in 1984, a M.S.
from Stanford University in 1986, and a M.S. in Computer Science from
Polytechnic Institute, New York in 1988.
INTERNATIONAL SMALL CAPITALIZATION SERIES. Dr. Rosenberg, Dr. Reid and
Joseph Leung, the portfolio manager, are responsible for the day to day
management of the International Small Capitalization Series' portfolio. Mr.
Leung has been a senior research associate, programmer and portfolio manager
with the Manager since 1993. He received a B.S. and a B.A. from Queen's
University, Ontario, Canada in 1989 and a M.B.A. from the University of Chicago
in 1993.
MANAGEMENT CONTRACTS
Under separate Management Contracts with the Trust on behalf of each Fund,
the Manager selects and reviews each Fund's investments and provides executive
and other personnel for the management of the Trust. Pursuant to the Trust's
Agreement and Declaration of Trust, the Board of Trustees supervises the affairs
of the Trust as conducted by the Manager. In the event that the Manager ceases
to be the manager of a Fund, the right of the Trust to use the identifying name
"Barr Rosenberg" and/or "Rosenberg" may be withdrawn.
The organizational expenses of the U.S. Small Capitalization Series and the
Japan Series were borne by the Manager and such expenses of the International
Small Capitalization Series will be borne by the Manager. Each Fund will pay
all other expenses incurred in the operation of such Fund, including, but not
limited to, brokerage commissions and transfer taxes in connection with the
Fund's portfolio transactions, all applicable taxes and filing fees,
distribution fees, shareholder servicing fees, the fees and expenses for
registration or qualification of its shares under the federal or state
securities laws, the compensation of trustees who are not partners, officers or
employees of the Manager, interest charges, expenses of issue or redemption of
shares, charges of custodians, auditing and legal expenses, expenses of
determining net asset value of Fund shares, reports to shareholders, expenses of
meetings of shareholders, expenses of printing and mailing prospectuses, proxy
statements and proxies to existing shareholders, insurance premiums and
professional association dues or assessments.
In addition, each Fund has agreed to pay the Manager a quarterly management
fee at the annual percentage rate of the relevant Fund's average daily net
assets set forth below. The Manager has agreed
23
<PAGE>
to voluntarily waive some or all of its management fee and, if necessary, to
bear certain expenses of each Fund until further notice to the extent required
to limit the total annual operating expenses (which do not include nonrecurring
account fees and extraordinary expenses) of each class of shares to the
percentage of each Fund's average daily net assets attributable to that class
listed in the Expense Limitation column below. The Manager's fee for management
of each of the Funds is higher than that paid by most other mutual funds.
<TABLE>
<CAPTION>
Contractual
Management Fee Expense Limitation
(as a % of Average (as a % of Average
Daily Net Assets) (a) Daily Net Assets)
--------------------- ------------------
<S> <C> <C>
INSTITUTIONAL SHARES
U.S. Small Capitalization Series .90% 1.15%
Japan Series 1.00% 1.50%
International Small Capitalization Series 1.00% 1.50%
ADVISER SHARES
U.S. Small Capitalization Series .90% 1.40%
Japan Series 1.00% 1.75%
International Small Capitalization Series 1.00% 1.75%
SELECT SHARES
U.S. Small Capitalization Series .90% 1.65%
Japan Series 1.00% 2.00%
International Small Capitalization Series 1.00% 2.00%
</TABLE>
_______________
(a) During the fiscal year ended March 31, 1996, the Management Fee actually
paid was 0.55% of average daily net asset for the U.S. Small Capitalization
Series and 0.00% of average daily net assets for the Japan Series. The
International Small Capitalization Series had not yet commenced operations.
ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT
Furman Selz LLC ("Furman Selz" or the "Administrator"), a Delaware limited
liability company with its principal place of business at 230 Park Avenue, New
York, New York 10169, serves as the Trust's administrator and generally assists
the Trust in all aspects of its administration and operation. As compensation
for its administrative services, Furman Selz receives a monthly fee based upon
an annual percentage rate of 0.15% of the aggregate average daily net assets of
the Funds.
Furman Selz has also entered into an agreement with the Trust for the
provision of transfer agency services (and is referred to herein as the
"Transfer Agent" in such capacity) and dividend disbursing services for the
Funds. The principal business address of the Transfer Agent is 230 Park Avenue,
New York, New York 10169.
On June 28, 1996, Furman Selz and BISYS Group, Inc. ("BISYS") announced a
definitive agreement which provides for Furman Selz to transfer its mutual fund
clients to BISYS. This transaction
24
<PAGE>
is expected to close on or before September 30, 1996. BISYS, headquartered in
Little Falls, New Jersey, supports more than 5,000 financial institutions and
corporate clients through two strategic business units. BISYS Information
Services Group designs, administers and distributes over 30 families of
proprietary mutual funds consisting of more than 365 portfolios, and provides
401(k) marketing support, administration, and recordkeeping services in
partnership with 18 of the nation's leading bank and investment management
companies. It is expected that BISYS and its affiliates will serve in Furman
Selz' current capacity as Administrator and Transfer Agent for the Funds on and
after the closing of the transaction.
State Street Bank and Trust Company (the "Custodian") serves as custodian
of the assets of the Funds. The principal address of the Custodian is Mutual
Funds Division, Boston, Massachusetts 02102.
A further discussion of the terms of the Trust's administrative, custody
and transfer agency arrangements is contained in the Statement of Additional
Information.
DISTRIBUTOR
Adviser and Select Shares of each Fund are sold on a continuous basis by
the Company's distributor, Barr Rosenberg Funds Distributor, Inc. (the
"Distributor"), a wholly-owned subsidiary of Furman Selz. It is expected that
the Distributor will become a wholly-owned subsidiary of BISYS upon the closing
of the above-referenced transaction. The Distributor's principal offices are
located at 230 Park Avenue, New York, New York 10169. Institutional Shares are
purchased directly from the Funds.
Solely for the purpose of compensating the Distributor for services and
expenses primarily intended to result in the sale of Select Shares of the Funds,
such shares are subject to an annual Distribution Fee of up to 0.50% of the
average daily net assets attributable to such shares in accordance with a
Distribution Plan (the "Distribution Plan") adopted by the Trust pursuant to
Rule 12b-1 under the 1940 Act. Currently, each Fund pays the Distributor an
annual Distribution Fee of 0.25% of the Fund's average daily net assets
attributable to Select Shares. Activities for which the Distributor may be
reimbursed include (but are not limited to) the development and implementation
of direct mail promotions and advertising for the Funds, the preparation,
printing and distribution of prospectuses for the Funds to recipients other than
existing shareholders, and contracting with one or more wholesalers of the
Funds' shares. The Distribution Plan for Select Shares went into effect on
August 5, 1996. The Distribution Plan is of the type known as a "compensation"
plan. This means that, although the trustees of the Trust are expected to take
into account the expenses of the Distributor in their periodic review of the
Distribution Plan, the fees are payable to compensate the Distributor for
services rendered even if the amount paid exceeds the Distributor's expenses.
The Distributor may also provide (or arrange for another intermediary or
agent to provide) personal and/or account maintenance services to Adviser and
Select shareholders of the Funds (the Distributor or such entity is referred to
as a "Servicing Agent" in such capacity). A Servicing Agent will be paid some
or all of the Shareholder Servicing Fees charged with respect to Adviser and
Select Shares of the Funds pursuant to Servicing Plans for such shares.
25
<PAGE>
MULTIPLE CLASSES
As indicated previously, the Funds offer three classes of shares to
investors, with eligibility generally depending on the amount invested in the
particular Fund and whether the investor makes the investment directly or
through a financial adviser. The three classes of shares are Institutional
Shares, Adviser Shares and Select Shares. Each class of shares is generally
subject to a Fund Reimbursement Fee at the time of purchase and at the time of
redemption, although certain exceptions apply. The following table sets forth
basic investment and fee information for each class.
<TABLE>
<CAPTION>
Minimum Method Annual Annual
Fund Subsequent of Shareholder Distribution
Name of Class Investment* Investments* Investment* Service Fee Fee
------------- ----------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Institutional $1 million $10,000 Direct None None
Adviser $100,000 $1,000 Financial Adviser .25% None
Select $10,000 $500 Direct .25% .25%
</TABLE>
*Certain exceptions apply. See "Institutional Shares", "Adviser Shares" and
"Select Shares" below."
The offering price is based on the net asset value per share next determined
after an order is received. Generally, a separate Fund Reimbursement Fee
applies to both purchases and redemptions of all classes, although certain
exceptions apply. See "Purchase of Shares" and "Redemption of Shares."
INSTITUTIONAL SHARES
Institutional Shares may be purchased by endowments, foundations and plan
sponsors of 401(a), 401(k), 451 and 403(b) plans and by individuals. In order
to be eligible to purchase Institutional Shares, an institution, plan or
individual must make an initial investment of at least $1 million in the
particular Fund. In its sole discretion, the Manager may waive this minimum
investment requirement and the Manager intends to do so for employees of the
Manager, for the spouse, parents, children, siblings, grandparents or grandchil-
dren of such employees and for employees of the Administrator. Institutional
Shares are sold without any initial or deferred sales charges and are not
subject to any ongoing distribution expenses or shareholder servicing fees.
ADVISER SHARES
Adviser shares may be purchased solely through accounts established under a
fee-based program which is sponsored and maintained by a registered broker-
dealer or other financial adviser approved by the Trust's Distributor and under
which each investor pays a fee to the broker-dealer or other financial adviser,
or its affiliate or agent, for investment advisory or administrative services.
In order to be eligible to purchase Adviser Shares, a broker-dealer or other
financial adviser must make an initial investment of at least $100,000 of its
client's assets in the particular Fund. In its sole discretion, the Manager may
waive this minimum asset investment requirement. Adviser Shares are sold
without any initial or deferred sales charges and are not subject to ongoing
distribution expenses, but are subject to a Shareholder Service Fee at an annual
rate with respect to each Fund equal to 0.25% of the Fund's average daily net
assets attributable to Adviser Shares.
26
<PAGE>
SELECT SHARES
Select Shares may be purchased by intermediary financial institutions and
certain individual retirement accounts and individuals. In order to be eligible
to purchase Select Shares, an eligible investor must make an initial investment
of at least $10,000 in the particular Fund. In its sole discretion, the Manager
may waive this minimum investment requirement. Select Shares are subject to an
annual Shareholder Service Fee equal to 0.25% of the average daily net assets
attributable to Select Shares and an annual Distribution Fee equal to 0.25% of
the average daily net assets attributable to Select Shares. As described above,
the Distribution Plan for Select Shares permits payments of up to 0.50% of the
Funds' average daily net assets attributable to Select Shares.
GENERAL
The Shareholder Service Fee charged with respect to Adviser Shares and
Select Shares is intended to be compensation for personal services rendered and
for account maintenance with respect to such shares. The Distribution Fee
charged with respect to Select Shares is intended to compensate the Distributor
for services and expenses primarily intended to result in the sale of Select
Shares.
As described above, shares of the Funds may be sold to corporations or
other institutions such as trusts, foundations or broker-dealers purchasing for
the accounts of others ("Shareholder Organizations"). Investors purchasing and
redeeming shares of the Funds through a Shareholder Organization or through
financial advisers may be charged a transaction-based fee or other fee for the
services provided by the Shareholder Organization or financial adviser. Each
such Shareholder Organization and financial adviser is responsible for transmit-
ting to its customers a schedule of any such fees and information regarding any
additional or different conditions regarding purchases and redemptions of Fund
shares. Customers of Shareholder Organizations and financial advisers should
read this Prospectus in light of the terms governing accounts with their
particular organization.
27
<PAGE>
PURCHASE OF SHARES
The offering price for shares of each Fund is the net asset value per share
next determined after receipt of a purchase order plus the applicable Fund
Reimbursement Fee. See "Net Asset Value." The payment of a Fund Reimbursement
Fee by each cash investor, which is used to defray the significant costs
associated with investing the proceeds of the sale of the shares to such
investors, is designed to eliminate the diluting effect such costs would
otherwise have on the net asset value of shares held by pre-existing sharehold-
ers. The amount of the Fund Reimbursement Fee represents the Manager's estimate
of the costs reasonably anticipated to be associated with the purchase of
portfolio securities by the Funds and is paid to and retained by the Funds and
used by the Funds to defray such costs. No portion of the Fund Reimbursement
Fee is paid to or retained by the Distributor or the Manager. The Fund Reim-
bursement Fee for each Fund, expressed as a percentage of the net asset value of
the shares of each Fund, is as follows: U.S. Small Capitalization Series --
0.25%; International Small Capitalization Series -- 0.50%; Japan Series --
0.50%. Reinvestments of dividends and capital gains distributions paid by the
Funds, in-kind investments, investments made through the Barr Rosenberg Automat-
ic Investment Program and additional investments of 401(k) participants are not
subject to a Fund Reimbursement Fee. Also, investors may be charged an addi-
tional fee if they effect transactions through their particular broker or agent.
As described below, the net asset value of the Japan Series shares is
determined as of 3:00 p.m., Tokyo time. See "Net Asset Value." Due to the 14
hour difference between Tokyo time and New York time, investors who call in
purchase orders after 1:00 a.m. New York time (with adjustment for daylight
savings time) will get the price of Japan Series shares as determined on the
next business day in Tokyo. In such circumstances, investors should expect to
receive the price published on the FOLLOWING day (i.e., not the price published
on the morning of the day the order was placed).
INITIAL CASH INVESTMENTS BY WIRE
Subject to acceptance by the Trust, shares of each Fund may be purchased by
wiring federal funds to Investors Fiduciary Trust Company (see instructions
below). A completed Account Application should be forwarded to the Trust at the
address noted below under "Initial Investments by Mail" in advance of the wire.
Notification must be given at 1-800-447-3332 prior to 4:15 p.m., New York time,
of the wire date. (Prior notification must also be received from investors with
existing accounts.) Funds should be wired through the Federal Reserve Bank to:
Investors Fiduciary Trust Company
ABA # 101003621
Acct. # 7513003
F/B/O Barr Rosenberg Series Trust
Ref. (Fund name)
28
<PAGE>
Federal funds purchases will be accepted only on a day on which the Trust,
the Distributor and the custodian bank are all open for business.
INITIAL CASH INVESTMENTS BY MAIL
Subject to acceptance by the Trust, an account may be opened by completing
and signing an Account Application and mailing it to the Trust at the address
noted below, together with a check (for the applicable minimum) payable to Barr
Rosenberg Series Trust:
Barr Rosenberg Series Trust
P.O. Box 1694
Scottsdale, Arizona 85252-1694
The Fund(s) to be purchased should be specified on the Account Application.
Purchases are accepted subject to collection of checks at full value and
conversion into federal funds. In all cases, subject to acceptance by the
Trust, payment for the purchase of shares received by mail will be credited to a
shareholder's account at the net asset value per share of the Fund next deter-
mined after receipt with deduction of any Fund Reimbursement Fee, even though
the check may not yet have been converted into federal funds.
ADDITIONAL CASH INVESTMENTS
Additional cash investments may be made at any time by mailing a check to
the Trust at the address noted under "Initial Cash Investments by Mail" (payable
to Barr Rosenberg Series Trust) or by wiring monies to Investors Fiduciary Trust
Company as outlined above. Notification must be given at 1-800-447-3332 prior
to 4:15 p.m., New York time, of the wire date. The minimum amounts for addi-
tional cash investments are $10,000 for Institutional Shares, $1,000 for Adviser
Shares and $500 for Select Shares.
INVESTMENTS IN-KIND (INSTITUTIONAL SHARES)
Institutional Shares may be purchased in exchange for common stocks on
deposit at The Depository Trust Company ("DTC") or by a combination of such
common stocks and cash. Purchase of Institutional Shares of a Fund in exchange
for stocks is subject in each case to the determination by the Manager that the
stocks to be exchanged are acceptable. Securities accepted by the Manager in
exchange for Fund shares will be valued as set forth under "Determination of Net
Asset Value" (generally the last quoted sale price) as of the time of the next
determination of net asset value after such acceptance. All dividends,
subscription or other rights which are reflected in the market price of accepted
securities at the time of valuation become the property of the Fund and must be
delivered to the Fund upon receipt by the investor from the issuer. A gain or
loss for federal income tax purposes would be realized by investors subject to
federal income taxation upon the exchange, depending upon the investor's basis
in the securities tendered.
The Manager will not approve the acceptance of securities in exchange for
Fund shares unless (1) the Manager, in its sole discretion, believes the
securities are appropriate investments for the Fund; (2) the investor represents
and agrees that all securities offered to the Fund are not
29
<PAGE>
subject to any restrictions upon their sale by the Fund under the Securities Act
of 1933, or otherwise; and (3) the securities may be acquired under the Fund's
investment restrictions. In addition, portfolio securities acquired in exchange
for Fund shares will (1) be acquired for investment and not for resale; (2) be
liquid securities; and (3) have a readily ascertainable value.
OTHER PURCHASE INFORMATION
An eligible shareholder may also participate in the Barr Rosenberg
Automat-ic Investment Program, an investment plan that automatically debits
money from the shareholder's bank account and invests it in Select Shares of
one or more of the Funds through the use of electronic funds transfers.
Investors may commence their participation in this program with a minimum
initial investment of $10,000 and may elect to make subsequent invest-ments
by transfers of a minimum of $50 into their established Fund account . You
may contact the Trust for more information about the Barr Rosenberg Automatic
Investment Program.
For purposes of calculating the purchase price of Fund shares, a purchase
order is received by the Trust on the day that it is in "good order" unless it
is rejected by the Distributor. For a purchase order to be in "good order" on a
particular day a check or money wire must be received on or before 4:15 p.m. New
York time (in the case of Adviser Shares or Select Shares) of that day or, in
the case of Institutional Shares, the investor's securities must be placed on
deposit at DTC prior to 10:00 a.m. New York time or, in the case of cash
investments, the Trust must have received adequate assurances that federal funds
will be wired to the Fund prior to 4:15 p.m. New York time, on the following
business day. If the consideration is received by the Trust after the deadline,
the purchase order will not be accepted on that day and will have to be resub-
mitted to the Trust on a subsequent business day.
The Trust reserves the right, in its sole discretion, to suspend the
offering of shares of its Funds or to reject purchase orders when, in the
judgment of the Manager, such suspension or rejection would be in the best
interests of the Trust.
Purchases of a Fund's shares may be made in full or in fractional shares of
the Fund calculated to three decimal places. In the interest of economy and
convenience, certificates for shares will not be issued.
RETIREMENT PLAN ACCOUNTS
Shares of all Funds may be used as a funding medium for IRAs and other
qualified retirement plans ("Plans"). The minimum initial investment for an IRA
or a Plan is $10,000. An IRA may be established through a custodial account
with Investors Fiduciary Trust Company. A special application must be completed
in order to create such an account. A $5.00 establishment fee and an annual
$12.00 maintenance and custody fee is payable with respect to each IRA. In
addition, a $10.00 termination fee will be charged when the account is closed.
Shares may also be purchased for IRAs and Plans established with other autho-
rized custodians. Contributions to IRAs are subject to prevailing amount limits
set by the Internal Revenue Service. For more information about IRAs and other
Plan accounts, call the Trust at 1-800-447-3332.
30
<PAGE>
REDEMPTION OF SHARES
Shares of each Fund may be redeemed by mail, or, if authorized, by tele-
phone. A Fund Reimbursement Fee is charged at the time of redemption on all
redemptions except in-kind redemptions of Institutional Shares and redemptions
made under the Systematic Withdrawal Plan. The Fund Reimbursement Fee paid on
such redemptions is used to defray the significant costs to existing sharehold-
ers associated with the sale of Fund portfolio securities to satisfy the
redemption requests and to eliminate the diluting effect such costs would
otherwise have on the net asset value of shares held by existing shareholders.
The amount of the Fund Reimbursement Fee represents the Manager's estimate of
the costs reasonably anticipated to be associated with redemptions and is
retained by the Funds to defray such costs. No portion of the Fund Reimburse-
ment Fee is paid to or retained by the Distributor or the Manager. The Fund
Reimbursement Fee for each Fund, expressed as a percentage of the net asset
value of the shares redeemed of such Fund, is as follows: U.S. Small Capitaliza-
tion Series -- 0.25%; International Small Capitalization Series -- 0.50%; Japan
Series -- 0.50%. The value of shares redeemed may be more or less than the
purchase price, depending on the market value of the investment securities held
by the particular Fund.
BY MAIL
The Trust will redeem its shares at the net asset value next determined
after the request is received in "good order" and will deduct from the proceeds
the applicable Fund Reimbursement Fee. The net asset values per share of the
Funds are determined as of 4:15 p.m., New York time, on each day that the New
York Stock Exchange, Inc., the Trust and the Distributor are open for business.
Requests should be addressed to Barr Rosenberg Series Trust, 237 Park Avenue,
New York, New York 10017.
Requests in "good order" must include the following documentation:
(a) a letter of instruction, if required, or a stock assignment specifying
the number of shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are registered;
(b) any required signature guarantees (see "Signature Guarantees" below);
and
(c) other supporting legal documents, if required, in the case of estates,
trusts, guardianships, custodianships, corporations, pension and profit sharing
plans and other organizations.
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SIGNATURE GUARANTEES
To protect shareholder accounts, the Trust and its transfer agent from
fraud, signature guarantees are required to enable the Trust to verify the
identity of the person who has authorized a redemption from an account.
Signature guarantees are required for (1) redemptions where the proceeds are to
be sent to someone other than the registered shareholder(s) at the registered
address, (2) redemptions of $25,000 or more, and (3) share transfer requests.
Signature guarantees may be obtained from certain eligible financial
institutions, including but not limited to, the following: banks, trust
companies, credit unions, securities brokers and dealers, savings and loan
associations and participants in the Securities and Transfer Association
Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP") or
the New York Stock Exchange Medallion Signature Program ("MSP"). Shareholders
may contact the Trust at 1-800-447-3332 for further details.
BY TELEPHONE
Provided the Telephone Redemption Option has been authorized by an investor
in an account application, a redemption of shares may be requested by calling
the Transfer Agent at 1-800-447-3332 and requesting that the redemption proceeds
be mailed to the primary registration address or wired per the authorized
instructions. If the Telephone Redemption Option or the Telephone Exchange
Option (as described below) is authorized, the Transfer Agenct may act on
telephone instruction from any person representing himself or herself to be a
shareholder and believed by the Transfer Agenct to be genuine. The Transfer
Agent's records of such instructions are binding and the shareholder, and not
the Trust or the Transfer Agent, bears the risk of loss in the event of
unauthorized instructions reasonably believed by the Transfer Agent to be
genuine. The Transfer Agent will employ reasonable procedures to confirm that
instructions communicated are genuine and, if it does not, it may be liable for
any losses due to unauthorized or fraudulent instructions. The procedures
employed in connection with transactions initiated by telephone include tape
recording of telephone instructions and requiring some form of personal
identification prior to acting upon instructions received by telephone.
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SYSTEMATIC WITHDRAWAL PLAN
An owner of $12,000 or more of shares of a Fund may elect to have periodic
redemptions made from the investor's account to be paid on a monthly, quarterly,
semiannual or annual basis. The maximum payment per year is 12% of the account
value at the time of the election. The shareholder will normally redeem a
sufficient number of shares to make the scheduled redemption payments on a date
selected by the shareholder. Depending on the size of the payment requested and
fluctuation in the net asset value, if any, of the shares redeemed, redemptions
for the purpose of making such payments may reduce or even exhaust the account.
A shareholder may request that these payments be sent to a predesignated bank or
other designated party. Capital gains and dividend distributions paid to the
account will automatically be reinvested at net asset value on the distribution
payment date.
FURTHER REDEMPTION INFORMATION
Redemption proceeds for shares of the Trust recently purchased by check may
not be distributed until payment for the purchase has been collected, which may
take up to fifteen business days from the purchase date. Shareholders can avoid
this delay by utilizing the wire purchase option.
If the Manager determines, in its sole discretion, that it would not be in
the best interests of the remaining shareholders of a Fund to make redemption
payment wholly or partly in cash, the Fund may pay the redemption price of
Institutional Shares in whole or in part by a distribution in kind of readily
marketable securities held by the relevant Fund in lieu of cash. There will be
no Fund Reimbursement Fee on redemptions in kind of Institutional Shares.
Securities used to redeem Fund shares in kind will be valued in accordance with
the Fund's procedures for valuation described under "Determination of Net Asset
Value." Securities distributed by the Fund in kind will be selected by the
Manager in light of the Fund's objective and will not generally represent a pro
rata distribution of each security held in the Fund's portfolio. Investors may
incur brokerage charges on the sale of any such securities so received in
payment of redemptions.
The Trust may suspend the right of redemption and may postpone payment for
more than seven days when the New York Stock Exchange is closed for other than
weekends or holidays, or if permitted by the rules of the Securities and
Exchange Commission, during periods when trading on the Exchange is restricted
or during an emergency which makes it impracticable for the Funds to dispose of
their securities or to fairly determine the value of their net assets, or during
any other period permitted by the Securities and Exchange Commission for the
protection of investors.
EXCHANGE OF FUND SHARES
The Funds offer two convenient ways to exchange shares in one Fund for
shares of another Fund in the Trust. Shares of a particular class of a Fund may
be exchanged only for shares of the same class in another Fund. There is no
sales charge on exchanges, but both the Fund from which the exchange is made and
the Fund into which the exchange is made will charge any applicable Fund
Reimbursement Fee. Before engaging in an exchange transaction, a shareholder
should read carefully the information in the Prospectus describing the Fund into
which the exchange will occur.
33
<PAGE>
A shareholder may not exchange shares of a class of one Fund for shares of the
same class of another Fund that is not qualified for sale in the state of the
shareholder's residence. Although the Trust has no current intention of
terminating or modifying the exchange privilege, it reserves the right to do so
at any time. Except as otherwise permitted by regulations of the Securities and
Exchange Commission, the Trust will give 60 days' advance notice to shareholders
of any termination or material modification of the exchange privilege.
An exchange is taxable as a sale of a security on which a gain or loss may
be recognized. Shareholders should receive written confirmation of the exchange
within a few days of the completion of the transaction.
A new account opened by exchange must be established with the same name(s),
address and social security number as the existing account. All exchanges will
be made based on the respective net asset values next determined following
receipt of the request by the Funds containing the information indicated below.
EXCHANGE BY MAIL
To exchange Fund shares by mail, shareholders should simply send a letter
of instruction to the Trust. The letter of instruction must include: (a) the
investor's account number; (b) the class of shares to be exchanged; (c) the Fund
from and the Fund into which the exchange is to be made; (d) the dollar or share
amount to be exchanged; and (e) the signatures of all registered owners or
authorized parties. All signatures must be guaranteed by an eligible guarantor
institution including members of national securities exchanges, commercial banks
or trust companies, broker-dealers, credit unions and savings associations.
EXCHANGE BY TELEPHONE
To exchange Fund shares by telephone or to ask questions about the exchange
privilege, shareholders may call the Trust at 1-800-447-3332. If you wish to
exchange shares, please be prepared to give the telephone representative the
following information: (a) the account number, social security number and
account registration; (b) the class of shares to be exchanged; (c) the name of
the Fund from which and the Fund into which the exchange is to be made; and (d)
the dollar or share amount to be exchanged. Telephone exchanges are available
only if the shareholder so indicates by checking the "yes" box on the Account
Application. The Trust employs procedures, including recording telephone calls,
testing a caller's identity, and sending written confirmation of telephone
transactions, designed to give reasonable assurance that instructions communi-
cated by telephone are genuine, and to discourage fraud. To the extent that a
Fund does not follow such procedures, it may be liable for losses due to
unauthorized or fraudulent telephone instructions. A Fund will not be liable
for acting upon instructions communicated by telephone that it reasonably
believes to be genuine. The Trust reserves the right to suspend or terminate
the privilege of exchanging by mail or by telephone at any time.
34
<PAGE>
DETERMINATION OF NET ASSET VALUE
With the exception of the Japan Series, the net asset value of each class
of shares of each Fund will be determined once on each day on which the New York
Stock Exchange is open as of 4:15 p.m., New York time. In the case of the Japan
Series, the net asset value of each class of shares of that Fund will be
determined once on each day on which the Tokyo Stock Exchange is open as of 3:00
p.m., Tokyo time. Due to the 14 hour time difference, 3:00 p.m. Tokyo time
corresponds to 1:00 a.m. New York time (with adjustments for daylight savings
time). Accordingly, purchase orders received for the Japan Series after 1:00
a.m., New York time (with adjustments for daylight savings time) will receive
the offering price determined on the next business day in Japan. See "Purchase
of Shares" above.
The net asset value per share of each class of a Fund is determined by
dividing the particular class's proportionate interest in the total market value
of the Fund's portfolio investments and other assets, less any applicable
liabilities, by the total outstanding shares of that class of the Fund. Specifi-
cally, each Fund's liabilities are allocated among its classes. The total of
such liabilities allocated to a particular class plus that class's shareholder
servicing and/or distribution expenses, if any, and any other expenses specially
allocated to that class are then deducted from the class's proportionate
interest in the Fund's assets. The resulting amount for each class is divided
by the number of shares of that class outstanding to produce the "net asset
value" per share.
Portfolio securities listed on a securities exchange for which market
quotations are available are valued at the last quoted sale price on each
business day, or, if there is no such reported sale, at the most recent quoted
bid price. Price information on listed securities is generally taken from the
closing price on the exchange where the security is primarily traded. Unlisted
securities for which market quotations are readily available are valued at the
most recent quoted bid price, except that debt obligations with sixty days or
less remaining until maturity may be valued at their amortized cost. Exchange-
traded options, futures and options on futures are valued at the settlement
price as determined by the appropriate clearing corporation. Other assets and
securities for which no quotations are readily available are valued at fair
value as determined in good faith by the trustees of the Trust or by persons
acting at their direction.
DISTRIBUTIONS
Each Fund intends to pay out as dividends substantially all of its net
investment income (which comes from dividends and any interest it receives from
its investments and net realized short-term capital gains). Each Fund also
intends to distribute substantially all of its net realized long-term capital
gains, if any, after giving effect to any available capital loss carryover.
Each Fund's policy is to declare and pay distributions of its dividends and
interest annually although it may do so more frequently as determined by the
Trustees of the Trust. The Funds' policy is to distribute net realized short-
term capital gains and net realized long-term gains annually, although it may do
so more frequently as determined by the Trustees of the Trust to the extent
permitted by applicable regulations.
All dividends and/or distributions will be paid out in the form of addi-
tional shares of the Fund to which the dividends and/or distributions relate at
net asset value unless the shareholder elects to receive cash. Shareholders may
make this election by marking the appropriate box on the Account Application or
by writing to the Administrator. There is no Fund Reimbursement Fee charged on
reinvested dividends or distributions.
35
<PAGE>
TAXES
Each Fund intends to qualify each year as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended. So long as
a Fund distributes substantially all of its dividend, interest and certain other
income, its net realized short-term capital gains and its net realized long-term
capital gains to its shareholders and otherwise qualifies for the special rules
governing the taxation of regulated investment companies, the Fund itself will
not pay federal income tax on the amount distributed. Dividend distributions
(I.E., distributions derived from interest, dividends and certain other income,
including, in general, short-term capital gains) will be taxable to shareholders
subject to income tax as ordinary income. Distributions of any long-term
capital gains are taxable as such to shareholders subject to income tax,
regardless of how long a shareholder may have owned shares in such Fund. A
distribution paid to shareholders by a Fund in January of a year is generally
deemed to have been received by shareholders on December 31 of the preceding
year, if the distribution was declared and payable to shareholders of record on
a date in October, November or December of that preceding year. Each Fund will
provide federal tax information annually, including information about dividends
and distributions paid during the preceding year.
If more than 50% of a Fund's assets at fiscal year-end is represented by
debt and equity securities of foreign corporations, the Fund may (and the Japan
Series and the International Small Capitalization Series intend to) elect to
permit shareholders who are U.S. citizens or U.S. corporations to claim a
foreign tax credit or deduction (but not both) on their U.S. income tax returns
for their pro rata portion of qualified taxes paid by the Fund to foreign
countries. As a result, the amounts of foreign income taxes paid by such Fund
would be treated as additional income to shareholders of such Fund for purposes
of the foreign tax credit. Each such shareholder would include in gross income
from foreign sources its pro rata share of such taxes. Certain limitations
imposed by the Internal Revenue Code may prevent shareholders from receiving a
full foreign tax credit or deduction for their allocable amount of such taxes.
The foregoing is a general summary of the federal income tax consequences
of investing in a Fund to shareholders who are U.S. citizens or U.S. corpora-
tions. Shareholders should consult their own tax advisers about the tax
consequences of an investment in the Funds in light of each shareholder's
particular tax situation. Shareholders should also consult their own tax
advisers about consequences under foreign, state, local or other applicable tax
laws.
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES
The Trust is a diversified open-end series investment company organized as
a Massachusetts business trust under the laws of The Commonwealth of Massachu-
setts by an Agreement and Declaration of Trust (the "Declaration of Trust")
dated April 1, 1988, as amended from time to time. The U.S. Small Capitaliza-
tion Series commenced operations on or about September 13, 1988. The Japan
Series commenced operations on or about January 3, 1989. The International
Small Capitalization Series expects to commence operations on or about the date
of this Prospectus.
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest which are presently divided
into three series. Interests in each of the Funds described in this Prospectus
are represented by shares of such Fund. The Declaration of Trust also permits
the Trustees, without shareholder approval, to subdivide any series of shares
into various sub-series of shares with such
36
<PAGE>
dividend preferences and other rights as the Trustees may designate. While the
Trustees have no current intention to exercise this power, it is intended to
allow them to provide for an equitable allocation of the impact of any future
regulatory requirements which might affect various classes of shareholders
differently. The Trustees may also, without shareholder approval, establish one
or more additional separate portfolios for investments in the Trust or merge two
or more existing portfolios. Shareholders' investments in such a portfolio
would be evidenced by a separate series of shares.
Each Fund is further divided into three classes of shares designated as
Institutional Shares, Adviser Shares and Select Shares. Each class of shares of
each Fund represents interests in the assets of that Fund and has identical
dividend, liquidation and other rights and the same terms and conditions except
that expenses, if any, related to the distribution and shareholder servicing of
a particular class are borne solely by such class and each class may, at the
Trustees' discretion, also pay a different share of other expenses, not includ-
ing advisory or custodial fees or other expenses related to the management of
the Trust's assets, if these expenses are actually incurred in a different
amount by that class, or if the class receives services of a different kind or
to a different degree than the other classes. All other expenses are allocated
to each class on the basis of the net asset value of that class in relation to
the net asset value of the particular Fund.
Each class of shares of each Fund has identical voting rights except that
each class has exclusive voting rights on any matter submitted to shareholders
that relates solely to that class, and has separate voting rights on any matter
submitted to shareholders in which the interests of one class differ from the
interests of any other class. Each class of shares has exclusive voting rights
with respect to matters pertaining to any distribution or servicing plan
applicable to that class. Matters submitted to shareholder vote must be
approved by each Fund separately except (i) when required by the Investment
Company Act of 1940, all shares shall be voted together and (ii) when the
Trustees have determined that the matter does not affect all Funds, then only
shareholders of the Fund or Funds affected shall be entitled to vote on the
matter. All three classes of shares of a Fund will vote together, except with
respect to any distribution or servicing plan applicable to a class or when a
class vote is required as specified above or otherwise by the Investment Company
Act of 1940. Shares are freely transferable, are entitled to dividends as
declared by the Trustees and, in liquidation of a Fund portfolio, are entitled
to receive the net assets of that portfolio, but not of the other Funds. The
Trust does not generally hold annual meetings of shareholders and will do so
only when required by law. Shareholders holding a majority of the outstanding
shares may remove trustees from office by votes cast in person or by proxy at a
meeting of shareholders or by written consent.
The Declaration of Trust provides for the perpetual existence of the Trust.
The Trust, may, however, be terminated at any time by vote of at least two-
thirds of the outstanding shares of the Trust.
Shareholders could, under certain circumstances, be held personally liable
for the obligations of the Trust. However, the risk of a shareholder incurring
financial loss on account of that liability is considered remote since it may
arise only in very limited circumstances.
37
<PAGE>
SHAREHOLDER INQUIRIES
Shareholders may direct inquiries to the Trust at Barr Rosenberg Series
Trust, P.O. Box 1694, Scottsdale, Arizona 85252-1694.
38
<PAGE>
BARR ROSENBERG SERIES TRUST
237 Park Avenue, Suite 910
New York, New York 10017
MANAGER
Rosenberg Institutional Equity Management
Four Orinda Way, Suite 300E
Orinda, CA 94563
ADMINISTRATOR, TRANSFER AND DIVIDEND PAYING AGENT
Furman Selz LLC
230 Park Avenue
New York, NY 10169
DISTRIBUTOR
Barr Rosenberg Funds Distributor, Inc.
230 Park Avenue
New York, New York 10169
CUSTODIAN OF ASSETS
State Street Bank and Trust Company
Mutual Funds Division
Boston, MA 02102
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA 02110-2624
PROSPECTUS
August 5, 1996
39
<PAGE>
BARR ROSENBERG SERIES TRUST
SHAREHOLDER SERVICES
Account Inquiries, Balances
and Transaction Information
FOR ROSENBERG INSTITUTIONAL
EQUITY MANAGEMENT CUSTOMERS
1-800-447-3332
FOR ALL SHAREHOLDERS
1-800-447-3332
Additional Information May Be
Found on the WorldWide Web at
http://riem.com
40
<PAGE>
BARR ROSENBERG SERIES TRUST
U.S. SMALL CAPITALIZATION SERIES
INTERNATIONAL SMALL CAPITALIZATION SERIES
JAPAN SERIES
STATEMENT OF ADDITIONAL INFORMATION
AUGUST 5, 1996
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. THIS
STATEMENT OF ADDITIONAL INFORMATION RELATES TO THE PROSPECTUS DATED AUGUST 5,
1996 AND SHOULD BE READ IN CONJUNCTION THEREWITH. A COPY OF THE PROSPECTUS MAY
BE OBTAINED FROM BARR ROSENBERG SERIES TRUST, 237 PARK AVENUE, SUITE 910, NEW
YORK, NEW YORK 10017.
<PAGE>
TABLE OF CONTENTS
Page
----
INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . 1
MISCELLANEOUS INVESTMENT PRACTICES . . . . . . . . . . . . . . . . . . 5
INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . 6
INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS . . . . . . . . . . . . 7
MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . 9
INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . . . . . 11
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . 15
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES . . . . . . . . . . . 17
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . 20
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SPECIMEN PRICE-MAKE-UP SHEET . . . . . . . . . . . . . . . . . . . . . A-1
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . F-1
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of each of the U.S. Small
Capitalization Series, the International Small Capitalization Series and the
Japan Series (each a "Fund" and collectively, the "Funds") of Barr Rosenberg
Series Trust (the "Trust") are summarized on the front page of the Prospectus
and in the text of the Prospectus under the headings "Investment Objectives and
Policies" and "General Description of Risks and Fund Investments."
In addition, the following investment objectives and policies apply to the
Fund or Funds indicated.
INDEX FUTURES (ALL FUNDS). An index futures contract (an "Index Future")
is a contract to buy or sell an integral number of units of an Index at a
specified future date at a price agreed upon when the contract is made. A unit
is the value of the relevant Index from time to time. Entering into a contract
to buy units is commonly referred to as buying or purchasing a contract or
holding a long position in an Index.
Index Futures contracts can be traded through all major commodity brokers.
Currently, contracts are expected to expire on the tenth day of March, June,
September and December. A Fund will be able to close open positions on the
United States futures exchange on which Index Futures are then traded at any
time up to and including the expiration day.
As noted in the Prospectus, upon entering into a futures contract, a Fund
will be required to deposit initial margin with its Custodian in a segregated
account in the name of the futures broker. Variation margin will be paid to and
received from the broker on a daily basis as the contracts are marked to market.
For example, when a Fund has purchased an Index Future and the price of the
relevant Index has risen, that position will have increased in value and the
Fund will receive from the broker a variation margin payment equal to that
increase in value. Conversely, when a Fund has purchased an Index Future and
the price of the relevant Index has declined, the position would be less
valuable and the Fund would be required to make a variation margin payment to
the broker.
The price of Index Futures may not correlate perfectly with movement in the
underlying Index due to certain market distortions. First, all participants in
the futures market are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements, investors may close
futures contracts through offsetting transactions which could distort the normal
relationship between the Index and futures markets. Secondly, the deposit
requirements in the futures market are less onerous than margin requirements in
the securities market, and as a result the futures market may attract more
speculators than does the securities market. Increased participation by
speculators in the futures market may also cause temporary price distortions.
In addition, with respect to the Japan Series, trading hours for Index Futures
may not correspond perfectly to hours of trading on the Tokyo Stock Exchange.
This may result in a disparity between the price of Index Futures and the value
of the underlying Index due to the lack of continuous arbitrage between the
Index Futures price and the value of the underlying Index.
FOREIGN CURRENCY TRANSACTIONS (INTERNATIONAL SMALL CAPITALIZATION SERIES
AND JAPAN SERIES). As is disclosed in the Prospectus following the heading
"General Description of Risks and Fund Investments," the Funds do not currently
intend to hedge the foreign currency risk associated with investments in
securities denominated in foreign currencies. However, the Funds reserve the
right to buy or sell foreign currencies or to deal in forward foreign currency
contracts to hedge against possible variations in foreign
<PAGE>
exchange rates pending the settlement of securities transactions. The Funds
also reserve the right to invest in currency futures contracts and related
options thereon for similar purposes. By entering into a futures or forward
contract for the purchase or sale, for a fixed amount of dollars, of the amount
of foreign currency involved in the underlying security transactions, a Fund
will be able to protect itself against a possible loss resulting from an adverse
change in the relationship between the U.S. dollar and the subject foreign
currency during the period between the date on which the security is purchased
or sold and the date on which payment is made or received. A Fund's dealing in
forward contracts will be limited to this type of transaction. A Fund will not
engage in currency futures transactions for leveraging purposes. A put option
on a futures contract gives a Fund the right to assume a short position in the
futures contract until the expiration of the option. A call option on a futures
contract gives a Fund the right to assume a long position in the futures
contract until the expiration of the option.
CURRENCY FORWARD CONTRACTS (INTERNATIONAL SMALL CAPITALIZATION SERIES AND
JAPAN SERIES). A forward foreign currency exchange contract involves an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract as agreed by the
parties, at a price set at the time of the contract. In the case of a
cancelable forward contract, the holder has the unilateral right to cancel the
contract at maturity by paying a specified fee. The contracts traded in the
interbank market are negotiated directly between currency traders (usually large
commercial banks) and their customers. A forward contract generally has no
deposit requirement, and no commissions are charged at any stage for trades.
CURRENCY FUTURES TRANSACTIONS (INTERNATIONAL SMALL CAPITALIZATION SERIES
AND JAPAN SERIES). A currency futures contract sale creates an obligation by
the seller to deliver the amount of currency called for in the contract in a
specified delivery month for a stated price. A currency futures contract
purchase creates an obligation by the purchaser to take delivery of the
underlying amount of currency in a specified delivery month at a stated price.
Futures contracts are traded only on commodity exchanges -- known as "contract
markets" -- approved for such trading by the Commodity Futures Trading
Commission ("CFTC"), and must be executed through a futures commission merchant,
or brokerage firm, which is a member of the relevant contract market.
Although futures contracts by their terms call for actual delivery or
acceptance, in most cases the contracts are closed out before the settlement
date without the making or taking of delivery. Closing out a futures contract
sale is effected by purchasing a futures contract for the same aggregate amount
of the specific type of financial instrument or commodity and the same delivery
date. If the price of the initial sale of the futures contract exceeds the
price of the offsetting purchase, the seller is paid the difference and realizes
a gain. Conversely, if the price of the offsetting purchase exceeds the price
of the initial sale, the seller realizes a loss. Similarly, the closing out of
a futures contract purchase is effected by the purchaser entering into a futures
contract sale. If the offsetting sale price exceeds the purchase price, the
purchaser realizes a gain, and if the purchase price exceeds the offsetting sale
price, he realizes a loss.
The purchase or sale of a futures contract differs from the purchase or
sale of a security, in that no price or premium is paid or received. Instead,
an amount of cash or U.S. Treasury bills generally not exceeding 5% of the
contract amount must be deposited with the broker. This amount is known as
initial margin. Subsequent payments to and from the broker, known as variation
margin, are made on a daily basis as the price of the underlying futures
contract fluctuates making the long and short positions in the futures contract
more or less valuable, a process known as "marking to the market." At any time
prior to
-2-
<PAGE>
the settlement date of the futures contract, the position may be closed out by
taking an opposite position which will operate to terminate the position in the
futures contract. A final determination of variation margin is then made,
additional cash is required to be paid to or released by the broker, and the
purchaser realizes a loss or gain. In addition, a commission is paid on each
completed purchase and sale transaction.
Unlike a currency futures contract, which requires the parties to buy and
sell currency on a set date, an option on a futures contract entitles its holder
to decide on or before a future date whether to enter into such a contract. If
the holder decides not to enter into the contract, the premium paid for the
option is lost. Since the value of the option is fixed at the point of sale,
there are no daily payments of cash in the nature of "variation" or
"maintenance" margin payments to reflect the change in the value of the
underlying contract as there are by a purchaser or seller of a currency futures
contract.
The ability to establish and close out positions on options on futures will
be subject to the development and maintenance of a liquid secondary market. It
is not certain that this market will develop or be maintained.
The Funds will write (sell) only covered put and call options on currency
futures. This means that a Fund will provide for its obligations upon exercise
of the option by segregating sufficient cash or short-term obligations or by
holding an offsetting position in the option or underlying currency future, or a
combination of the foregoing. Set forth below is a description of methods of
providing cover that the Funds currently expect to employ, subject to applicable
exchange and regulatory requirements. If other methods of providing appropriate
cover are developed, a Fund reserves the right to employ them to the extent
consistent with applicable regulatory and exchange requirements.
A Fund will, so long as it is obligated as the writer of a call option on
currency futures, own on a contract-for-contract basis an equal long position in
currency futures with the same delivery date or a call option on stock index
futures with the difference, if any, between the market value of the call
written and the market value of the call or long currency futures purchased
maintained by the Fund in cash, U.S. Government securities, or other high-grade
liquid debt obligations in a segregated account with its custodian. If at the
close of business on any day the market value of the call purchased by a Fund
falls below 100% of the market value of the call written by the Fund, the Fund
will so segregate an amount of cash, U.S. Government securities, or other high-
grade liquid debt obligations equal in value to the difference. Alternatively,
a Fund may cover the call option through segregating with its custodian an
amount of the particular foreign currency equal to the amount of foreign
currency per futures contract option times the number of options written by the
Fund.
In the case of put options on currency futures written by a Fund, the Fund
will hold the aggregate exercise price in cash, U.S. Government securities, or
other high-grade liquid debt obligations in a segregated account with its
custodian, or own put options on currency futures or short currency futures,
with the difference, if any, between the market value of the put written and the
market value of the puts purchased or the currency futures sold maintained by
the Fund in cash, U.S. Government securities, or other high-grade liquid debt
obligations in a segregated account with its custodian. If at the close of
business on any day the market value of the put options purchased or the
currency futures sold by a Fund falls below 100% of the market value of the put
options written by the Fund, the Fund will so segregate an amount of cash, U.S.
Government securities, or other high-grade liquid debt obligations equal in
value to the difference.
-3-
<PAGE>
The Fund may not enter into currency futures contracts or related options
thereon if immediately thereafter the amount committed to margin plus the amount
paid for premiums for unexpired options on currency futures contracts exceeds 5%
of the market value of the Fund's total assets.
LIMITATIONS ON THE USE OF CURRENCY FUTURES CONTRACTS (INTERNATIONAL SMALL
CAPITALIZATION SERIES AND JAPAN SERIES). A Fund's ability to engage in the
currency futures transactions described above will depend on the availability of
liquid markets in such instruments. Markets in currency futures are relatively
new and still developing. It is impossible to predict the amount of trading
interest that may exist in various types of currency futures. Therefore no
assurance can be given that a Fund will be able to utilize these instruments
effectively for the purposes set forth above. Furthermore, a Fund's ability to
engage in such transactions may be limited by tax considerations.
RISK FACTORS IN CURRENCY FUTURES TRANSACTIONS (INTERNATIONAL SMALL
CAPITALIZATION SERIES AND JAPAN SERIES). Investment in currency futures
contracts involves risk. Some of that risk may be caused by an imperfect
correlation between movements in the price of the futures contract and the price
of the currency being hedged. The hedge will not be fully effective where there
is such imperfect correlation. To compensate for imperfect correlations, a Fund
may purchase or sell futures contracts in a greater amount than the hedged
currency if the volatility of the hedged currency is historically greater than
the volatility of the futures contracts. Conversely, a Fund may purchase or
sell fewer contracts if the volatility of the price of the hedged currency is
historically less than that of the futures contracts. The risk of imperfect
correlation generally tends to diminish as the maturity date of the futures
contract approaches.
The successful use of transactions in futures and related options also
depends on the ability of the Manager to forecast correctly the direction and
extent of exchange rate and stock price movements within a given time frame. It
is impossible to forecast precisely what the market value of securities a Fund
anticipates buying will be at the expiration or maturity of a currency forward
or futures contract. Accordingly, in cases where a Fund seeks to protect
against an increase in value of the currency in which the securities are
denominated through a foreign currency transaction, it may be necessary for the
Fund to purchase additional foreign currency on the spot market (and bear the
expense of such currency purchase) if the market value of the securities to be
purchased is less than the amount of foreign currency the Fund contracted to
purchase. Conversely, it may be necessary to sell on the spot market some of
the foreign currency received upon the sale of the portfolio security or
securities if the market value of such security or securities exceeds the value
of the securities purchased. When a Fund purchases forward or futures contracts
(or options thereon) to hedge against a possible increase in the price of
currency in which is denominated the securities the Fund anticipates purchasing,
it is possible that the market may instead decline. If a Fund does not then
invest in such securities because of concern as to possible further market
decline or for other reasons, the Fund may realize a loss on the forward or
futures contract that is not offset by a reduction in the price of the
securities purchased. As a result, a Fund's total return for such period may be
less than if it had not engaged in the forward or futures transaction.
Foreign currency transactions that are intended to hedge the value of
securities a Fund contemplates purchasing do not eliminate fluctuations in the
underlying prices of those securities. Rather, such currency transactions
simply establish a rate of exchange which can be used at some future point in
time. Additionally, although these techniques tend to minimize the risk of loss
due to a change in the value of
-4-
<PAGE>
the currency involved, they tend to limit any potential gain that might result
from the increase in the value of such currency.
The amount of risk a Fund assumes when it purchases an option on a currency
futures contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the purchase of an
option also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the option purchased.
The liquidity of a secondary market in a currency futures contract may be
adversely affected by "daily price fluctuation limits" established by commodity
exchanges which limit the amount of fluctuation in a futures contract price
during a single trading day. Once the daily limit has been reached in the
contract, no trades may be entered into at a price beyond the limit, thus
preventing the liquidation of open futures positions. Prices have in the past
exceeded the daily limit on a number of consecutive trading days.
A Fund's ability to engage in currency forward and futures transactions may
be limited by tax considerations.
WARRANTS (JAPAN SERIES). The Japan Series may from time to time purchase
warrants; however, not more than 5% of its net assets (at the time of purchase)
will be invested in warrants other than warrants acquired in units or attached
to other securities. Of such 5%, not more than 2% of such net assets at the
time of purchase may be invested in warrants that are not listed on the New York
Stock Exchange or American Stock Exchange. Warrants have no voting rights, pay
no dividends and have no rights with respect to the assets of the corporation
issuing them. Warrants represent options to purchase equity securities of an
issuer at a specific price for a specific period of time. They do not represent
ownership of such securities, but only the right to buy them.
MISCELLANEOUS INVESTMENT PRACTICES
PORTFOLIO TURNOVER. A change in securities held by a Fund is known as
"portfolio turnover" and almost always involves the payment by the Fund of
brokerage commissions or dealer markup and other transaction costs on the
sale of securities as well as on the reinvestment of the proceeds in other
securities. Portfolio turnover is not a limiting factor with respect to
investment decisions. Although the rate of portfolio turnover is difficult
to predict, it is not anticipated that under normal circumstances the annual
portfolio turnover rate for each of the Funds will exceed 100%. It is,
however, impossible to predict portfolio turnover in future years. The
portfolio turnover rate for the U.S. Small Capitalization Series for the
fiscal years ended March 31, 1995 and 1996 was 57.27% and 71.87%,
respectively. The portfolio turnover rate for the Japan Series for the
fiscal years ended March 31, 1995 and 1996 was 57.10% and 60.60%,
respectively. As disclosed in the Prospectus, high portfolio turnover
involves correspondingly greater brokerage commissions and other transaction
costs, which will be borne directly by the Fund, and could involve
realization of capital gains that would be taxable when distributed to
shareholders of a Fund. To the extent that portfolio turnover results in the
realization of net short-term capital gains, such gains are ordinarily taxed
to shareholders at ordinary income tax rates.
NOTICE ON SHAREHOLDER APPROVAL
Unless otherwise indicated in the Prospectus or this Statement of
Additional Information, the investment objective and policies of each of the
Funds may be changed without shareholder approval.
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<PAGE>
INVESTMENT RESTRICTIONS
Without a vote of the majority of the outstanding voting securities of a
Fund, the Trust will not take any of the following actions with respect to such
Fund:
(1) Borrow money in excess of 10% of the value (taken at the lower of
cost or current value) of the Fund's total assets (not including the amount
borrowed) at the time the borrowing is made, and then only from banks as a
temporary measure to facilitate the meeting of redemption requests (not for
leverage) which might otherwise require the untimely disposition of portfolio
investments or for extraordinary or emergency purposes. Such borrowings will be
repaid before any additional investments are purchased.
(2) Pledge, hypothecate, mortgage or otherwise encumber its assets in
excess of 10% of the Fund's total assets (taken at cost) and then only to secure
borrowings permitted by Restriction 1 above. (For the purposes of this
restriction, collateral arrangements with respect to options, stock index,
interest rate, currency or other futures, options on futures contracts and
collateral arrangements with respect to initial and variation margin are not
deemed to be a pledge or other encumbrance of assets. With respect to the
International Small Capitalization Series and the Japan Series, collateral
arrangements with respect to swaps and other derivatives are also not deemed to
be a pledge or other encumbrance of assets.
(3) Purchase securities on margin, except such short-term credits as
may be necessary for the clearance of purchases and sales of securities. (For
this purpose, the deposit or payment of initial or variation margin in
connection with futures contracts or related options transactions is not
considered the purchase of a security on margin.)
(4) Make short sales of securities or maintain a short position for
the Fund's account unless at all times when a short position is open the Fund
owns an equal amount of such securities or owns securities which, without
payment of any further consideration, are convertible into or exchangeable for
securities of the same issue as, and equal in amount to, the securities sold
short.
(5) Underwrite securities issued by other persons except to the
extent that, in connection with the disposition of its portfolio investments, it
may be deemed to be an underwriter under federal securities laws.
(6) Purchase or sell real estate, although it may purchase securities
of issuers which deal in real estate, including securities of real estate
investment trusts, and may purchase securities which are secured by interests in
real estate.
(7) Concentrate more than 25% of the value of its total assets in any
one industry.
(8) Invest in securities of other investment companies, except to the
extent permitted by the Investment Company Act of 1940, as amended (the "1940
Act"). Under the 1940 Act, no registered investment company may generally (a)
invest more than 10% of its total assets (taken at current value) in securities
of other investment companies, (b) own securities of any one investment company
having a value in excess of 5% of its total assets (taken at current value), or
(c) own more than 3% of the outstanding voting stock of any one investment
company.)
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<PAGE>
(9) Purchase or sell commodities or commodity contracts except that
each of the Funds may purchase and sell foreign currency, currency futures
contracts and options thereon, stock index and other financial futures contracts
and options thereon.
(10) Make loans, except by purchase of debt obligations or by
entering into repurchase agreements or through the lending of the Fund's
portfolio securities.
(11) Issue senior securities. (For the purpose of this restriction
none of the following is deemed to be a senior security: any pledge or other
encumbrance of assets permitted by restriction (2) above; any borrowing
permitted by restriction (1) above; any collateral arrangements with respect to
options, future contracts and options in future contracts and with respect to
initial and variation margin; and the purchase or sale of options, forward
contracts, future contracts or options on future contracts.)
Notwithstanding the latitude permitted by Restrictions 1, 2, 3, 4, 9 and 10
above, the Funds have no current intention of (a) borrowing money, (b)
purchasing interest rate futures, (c) entering into short sales or (d) investing
in repurchase agreements.
It is contrary to the present policy of each Fund, which may be changed by
the trustees without shareholder approval, to:
(a) With the exception of the Japan Series, invest in warrants or
rights (other than warrants or rights acquired by the Fund as a part of a unit
or attached to securities at the time of purchase).
(b) Write, purchase or sell options on particular securities (as
opposed to market indices or currencies).
(c) Buy or sell oil, gas or other mineral leases, rights or royalty
contracts.
(d) Make investments for the purpose of exercising control of a
company's management.
(e) Invest in (a) securities which at the time of investment are
not readily marketable, (b) securities the disposition of which is restricted
under the federal securities laws, and (c) repurchase agreements maturing in
more than seven days if, as a result, more than 15% of the Fund's net assets
(taken at current value) would then be invested in securities described in
(a), (b) and (c) above.
(f) With respect to 75% of its total assets, invest in a security
if, as a result of such investment, it would hold more than 10% (taken at the
time of such investment) of the outstanding voting securities of any one
issuer, except that this restriction does not apply to securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities.
Except as indicated above in Restriction No. 1, all percentage limitations
on investments set forth herein and in the Prospectus will apply at the time of
the making of an investment and shall not be considered violated unless an
excess or deficiency occurs or exists immediately after and as a result of such
investment.
The phrase "shareholder approval," as used in the Prospectus, and the
phrase "vote of a majority of the outstanding voting securities," as used
herein, means the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of a Fund or the Trust, as the case may be, or (2) 67% or
more of the shares of a Fund, or the Trust, as the case may be, present at a
meeting if more than 50% of the outstanding shares are represented at the
meeting in person or by proxy.
INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
The tax status of the Funds and the distributions which they may make are
summarized in the Prospectus under the heading "Taxes." The Funds intend to
qualify each year as a regulated investment company under the Internal Revenue
Code. In order to qualify as a "regulated investment company," each
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<PAGE>
Fund must, among other things, (a) derive at least 90% of its gross income from
dividends, interest, payments with respect to certain securities loans, gains
from the sale or other disposition of securities or foreign currencies or other
income (including but not limited to gains from options, futures or forward
contracts) derived with respect to its business of investing in such securities
or currencies; (b) derive less than 30% of its gross income from the sale or the
other disposition of securities and certain other assets held less than three
months; (c) diversify its holdings so that, at the close of each quarter of its
taxable year, (i) at least 50% of the value of its total assets consists of
cash, cash items, U.S. Government securities, securities of other regulated
investment companies, and other securities limited generally with respect to any
one issuer to not more than 5% of the total assets of such Fund and not more
than 10% of the outstanding voting securities of such issuer, and (ii) not more
than 25% of the value of its assets is invested in the securities of any issuer
(other than U.S. Government securities or securities of other regulated
investment companies); and (d) distribute annually at least 90% of its dividend,
interest and certain other income (including, in general, short-term capital
gains). To the extent a Fund qualifies for treatment as a regulated investment
company, the Fund will not be subject to federal income tax on income paid to
its shareholders in the form of dividends or capital gain distributions.
The Japan Series and the International Small Capitalization Series may be
subject to foreign withholding taxes on income and gains derived from foreign
investments. Such taxes would reduce the yield on such Funds' investments, but,
as discussed in the Prospectus, may be taken as either a deduction or a credit
by U.S. citizens and corporations.
Investment by either Fund in certain "passive foreign investment companies"
could subject the Fund to a U.S. federal income tax or other charge on
distributions received from, or on the sale of its investment in, such a
company. Such a tax cannot be eliminated by making distributions to Fund
shareholders. If such Fund elects to treat a passive foreign investment company
as a "qualified electing fund," different rules will apply, although the Fund
does not expect to be in the position to make such elections.
As described in the Prospectus under the heading "Distributions," each Fund
intends to pay out substantially all of its ordinary income and net realized
short-term capital gains, and to distribute substantially all of its net
realized capital gains, if any, after giving effect to any available capital
loss carryover. Net realized capital gain is the excess of net realized long-
term capital gain over net realized short-term capital loss. Under the Tax
Reform Act of 1986, in order to avoid an excise tax imposed on certain
undistributed income, a Fund must distribute prior to each calendar year end
without regard to the Fund's fiscal year end (i) 98% of the Fund's ordinary
income, and (ii) 98% of the Fund's capital gain net income, if any, realized in
the one-year period ending on October 31.
In general, all dividend distributions derived from ordinary income and
short-term capital gain are taxable to investors as ordinary income (eligible in
part for the dividends-received deduction in the case of corporations) and long-
term capital gain distributions are taxable to investors as long-term capital
gains, whether such dividends or distributions are received in shares or cash.
The dividends-received deduction for corporations will generally apply to a
Fund's dividends from investment income to the extent derived from dividends
received by the Fund from domestic corporations.
Certain tax exempt organizations or entities may not be subject to federal
income tax on dividends or distributions from a Fund. Each organization or
entity should review its own circumstances and the federal tax treatment of its
income.
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<PAGE>
Each Fund is generally required to withhold and remit to the U.S. Treasury
20% of all dividends from net investment income and capital gain distributions,
whether distributed in cash or reinvested in shares of the Fund, paid or
credited to any shareholder account for which an incorrect or no taxpayer
identification number has been provided or where the Fund is notified that the
shareholder has underreported income in the past (or the shareholder fails to
certify that he is not subject to such withholding). In addition, the Fund will
generally be required to withhold and remit to the U.S. Treasury 20% of the
amount of the proceeds of any redemption of Fund shares from a shareholder
account for which an incorrect or no taxpayer identification number has been
provided. However, the general back-up withholding rules set forth above will
not apply to tax exempt entities so long as each such entity furnishes the Fund
with an appropriate certificate.
To the extent such investments are permissible for a particular Fund, the
Fund's transactions in options, futures contracts, hedging transactions, forward
contracts, straddles and foreign currencies will be subject to special tax rules
(including mark-to-market, straddle, wash sale and short sale rules), the effect
of which may be to accelerate income to the Fund, defer losses to the Fund,
cause adjustments in the holding periods of the Fund's securities and convert
short-term capital losses into long-term capital losses. These rules could
therefore affect the amount, timing and character of distributions to
shareholders.
MANAGEMENT OF THE TRUST
The trustees and officers of the Trust and their principal occupations
during the past five years are as follows:
Kenneth Reid* (46) General Partner and Director
President, Trustee of Research, Rosenberg Institutional Equity
Management, June, 1986 to present.
Marlis S. Fritz* (46) General Partner and Director of
Vice President, Trustee Marketing, Rosenberg Institutional Equity
Management, April, 1985 to present.
Nils H. Hakansson (59) Sylvan C. Coleman Professor of
Trustee Finance and Accounting, Haas School of
Business, University of California, Berkeley,
June, 1969 to present. Director, Supershare
Services Corporation, November, 1989 to
present.
Barr M. Rosenberg* (53) Managing General Partner, Trustee and
Trustee Chief Investment Officer, Rosenberg
Institutional Equity Management, January,
1985 to present.
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<PAGE>
William F. Sharpe (62) Timken Professor of Finance,
Trustee Stanford University, September, 1970 to
September, 1989. Timken Professor Emeritus
of Finance, Stanford University, October,
1989 to present. Chairman, William F. Sharpe
Associates, Los Altos, California (research
and financial consulting), March, 1986 to
present.
Po-Len Hew (30) Accounting Manager, Rosenberg
Treasurer Institutional Equity Management, October,
1989 to present.
Carolyn Demler (52) Administrative Coordinator, Rosenberg
Clerk Institutional Equity Management, December,
1988 to present.
John J. Pileggi (37) Director, Furman Selz LLC 1993 to present.
Assistant Treasurer Managing Director, Furman Selz LLC, 1984 to
1993.
Gordon Forrester (35) Managing Director, Furman Selz LLC, 1987 to
Assistant Treasurer present.
Joan V. Fiore (40) Managing Director and Counsel, Furman Selz
Assistant Clerk LLC, 1991 to present. Staff Attorney,
Securities and Exchange Commission, 1986 to
1991.
Carrie Zuckerman (29) Associate Director, Furman Selz LLC, 1993 to
Assistant Clerk present. Alliance Capital Management, L.P.,
1991 to 1993.
Eric Rubin (30) Managing Director, Furman Selz LLC, June,
Assistant Clerk 1995 to present; Vice President and Managing
Director, Bank One Investment Advisers,
November, 1993 to June, 1995. Associate
Director, Furman Selz LLC, 1989 to1993.
* Trustees who are "interested persons" (as defined in the 1940 Act) of the
Trust or the Manager.
The mailing address of each of the officers and trustees is c/o Barr
Rosenberg Series Trust, 237 Park Avenue, Suite 910, New York, NY 10017.
The principal occupations of the officers and trustees for the last five
years have been with the employers as shown above, although in some cases they
have held different positions with such employers.
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<PAGE>
For the fiscal year beginning April 1, 1996, the Trust will pay the
trustees other than those who are interested persons of the Manager an annual
fee of $36,000 (including a base fee and a fee per Fund for each meeting). The
Trust does not pay any pension or retirement benefits for its trustees. As
noted below under the heading "Investment Advisory and other Services --
Management Contract," the Trust does not pay any compensation to officers or
trustees of the Trust other than those trustees who are not interested persons
of the Trust. The following table sets forth information concerning the total
compensation paid to each of the trustees who are not interested persons of the
Trust in the fiscal year ended March 31, 1996.
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Total
Pension or Compensation
Retirement from Registrant
Aggregate Benefits Accrued Estimated Annual and Fund
Name of Person Compensation as Part of Fund Benefits Upon Complex Paid
Position from Registrant Expenses Retirement to Directors
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nils H. Hakansson $22,063 $0 $0 $22,063
Trustee
William F. Sharpe $22,063 $0 $0 $22,063
Trustee
</TABLE>
Messrs. Rosenberg and Reid, and Ms. Fritz, Demler and Hew, each being a
general partner, officer or employee of the Manager, will each benefit from
the management fees paid by the Trust to the Manager, but receive no direct
compensation for the Trust.
INVESTMENT ADVISORY AND OTHER SERVICES
MANAGEMENT CONTRACTS
As disclosed in the Prospectus under the heading "Management of the Trust,"
under management contracts (each a "Management Contract") between the Trust, on
behalf of each Fund, and Rosenberg Institutional Equity Management (the
"Manager"), subject to the control of the trustees of the Trust and such
policies as the trustees may determine, the Manager will furnish continuously an
investment program for each Fund and will make investment decisions on behalf of
each Fund and place all orders for the purchase and sale of portfolio
securities. Subject to the control of the trustees, the Manager furnishes
office space and equipment, provides bookkeeping and certain clerical services
and pays all salaries, fees and expenses of officers and trustees of the Trust
who are affiliated with the Manager. As indicated under "Portfolio Transactions
- -- Brokerage and Research Services," the Trust's portfolio transactions may be
placed with broker-dealers which furnish the Manager, at no cost, certain
research, statistical and quotation services of value to the Manager in advising
the Trust or its other clients.
As is disclosed in the Prospectus, each of the Funds has agreed to pay the
Manager a quarterly management fee at the annual percentage rate of the relevant
Fund's average daily net assets set forth in the Prospectus. The Manager has
informed the Trust that it will voluntarily waive some or all of its management
fees under the Management Contracts and, if necessary, will bear certain
expenses of each Fund until
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<PAGE>
further notice to the extent that such Fund's total annual operating expenses
(including the management fee but not including nonrecurring account fees and
extraordinary expenses) applicable to each class will not exceed the percentage
of such Fund's average daily net assets attributable to that class as set forth
in the Prospectus. In addition, the Manager's compensation under each
Management Contract is subject to reduction to the extent that in any year the
expenses of a Fund (including investment advisory fees but excluding taxes,
portfolio brokerage commissions and any distribution expenses paid by a class of
shares of a Fund pursuant to a distribution plan or otherwise) exceed the limits
on investment company expenses imposed by any statute or regulatory authority of
any jurisdiction in which shares of the Fund are qualified for offer and sale.
The most restrictive of such limitations as of the date of this Statement of
Additional Information is believed to be 2 1/2% of the first $30 million of
average net assets, 2% of the next $70 million of average net assets and 1 1/2%
of any excess over $100 million.
Each Management Contract provides that the Manager shall not be subject to
any liability to the Trust or to any shareholder of the Trust in connection with
the performance of its services thereunder in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties thereunder.
Each Management Contract was approved by the trustees of the Trust
(including all of the trustees who are not "interested persons" of the Manager)
and by the shareholders of each Fund in connection with the organization and
establishment of each of the Funds. Each Management Contract will continue in
effect for a period no more than two years from the date of its execution only
so long as its continuance is approved at least annually by (i) vote, cast in
person at a meeting called for that purpose, of a majority of those trustees who
are not "interested persons" of the Manager or the Trust, and by (ii) the
majority vote of either the full Board of Trustees or the vote of a majority of
the outstanding shares of the relevant Fund. Each Management Contract
automatically terminates on assignment, and is terminable on not more than 60
days' notice by the Trust to the Manager. In addition, each Management Contract
may be terminated on not more than 60 days' written notice by the Manager to the
Trust.
As disclosed in the Prospectus, the general partners of the Manager are
Barr M. Rosenberg, Marlis S. Fritz and Kenneth Reid. Each of these persons may
be deemed a controlling person of the Manager.
As discussed in this Statement of Additional Information under the heading
"Management of the Trust," Barr M. Rosenberg is a trustee of the Trust as well
as Managing General Partner and Chief Investment Officer of the Manager; Marlis
S. Fritz is a trustee and Vice President of the Trust as well as general partner
and Director of Marketing of the Manager; and Kenneth Reid is a trustee and
President of the Trust as well as general partner and Director of Research of
the Manager.
During the last three fiscal years, the U.S. Small Capitalization Series
has paid the following amounts as management fees to the Manager pursuant to its
Management Contract:
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<PAGE>
Gross Reduction Net
----- --------- ---
4/1/93 - 3/31/94 $469,472 $140,112 $329,360
4/1/94 - 3/31/95 $427,746 $148,971 $278,775
4/1/95 - 3/31/96 $514,386 $157,913 $356,473
During the last three fiscal years, the Japan Series has paid the following
amounts as management fees to the Manager pursuant to its Management Contract:
Gross Reduction Net
----- --------- ---
4/1/93 - 3/31/94 $ 10,945 $ 10,945 -0-
4/1/94 - 3/31/95 $ 12,148 $ 12,148 -0-
4/1/95 - 3/31/96 $ 12.093 $ 12,093 -0-
As of March 31, 1996, the International Small Capitalization Series had not
yet commenced operations.
ADMINISTRATIVE SERVICES
The Trust has entered into a Fund Administration Agreement with Furman
Selz LLC ("Furman Selz") pursuant to which Furman Selz provides certain
management, accounting and administrative services necessary for the Funds'
operations including: (i) general supervision of the operation of the Funds
including coordination of the services performed by the Funds' investment
advisor, transfer agent, custodian, independent accountants and legal
counsel, regulatory compliance, including the compilation of information for
documents such as reports to, and filings with, the SEC and state securities
commissions, and preparation of proxy statements and shareholder reports for
the Funds; (ii) general supervision relative to the compilation of data
required for the preparation of periodic reports distributed to the Funds'
officers and Board of Trustees; and (iii) furnishing office space and certain
facilities required for conducting the business of the Funds. The Trust's
principal underwriter is an affiliate of Furman Selz. For these services,
Furman Selz is entitled to receive a fee, payable monthly, at the annual rate
of 0.15% of the average daily net assets of the Funds plus an annual fee of
$30,000 for each Fund. The Trust did not pay any such fees to Furman Selz
through the fiscal year ended March 31, 1996.
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<PAGE>
On June 28, 1996, Furman Selz and BISYS Group, Inc. ("BISYS") announced
a definitive agreement which provides for Furman Selz to transfer its mutual
fund clients to BISYS. This transaction is expected to close on or before
September 30, 1996. BISYS, headquartered in Little Falls, New Jersey,
supports more than 5,000 financial institutions and corporate clients through
two strategic business units. BISYS Information Services Group designs,
administers and distributes over 30 families of proprietary mutual funds
consisting of more than 365 portfolios, and provides 401(k) marketing
support, administration, and recordkeeping services in partnership with 18 of
the nation's leading bank and investment management companies. It is
expected that BISYS and its affiliates will serve in Furman Selz' current
capacity as Administrator and Transfer Agent for the Funds on and after the
closing of the transaction.
DISTRIBUTOR AND DISTRIBUTION PLAN
As stated in the text of the Prospectus under the heading "Management of
the Trust-Distributor," Adviser and Select Shares of each Fund are sold on a
continuous basis by the Trust's distributor, Barr Rosenberg Funds
Distributor, Inc. (the "Distributor"). The Distributor is an affiliate of
Furman Selz. It is expected that the Distributor will become a wholly-owned
subsidiary of BISYS upon the closing of the above-referenced transaction.
Under the Distributor's Contract between the Trust and the Distributor (the
"Distributor's Contract"), the Distributor is not obligated to sell any
specific amount of shares of the Trust and will purchase shares for resale
only against orders for shares.
Pursuant to the Distribution Plan (the "Plan") described in the Prospectus,
in connection with the distribution of Select Shares of the Trust, the
Distributor receives certain distribution fees from the Trust. Subject to the
percentage limitation on the distribution fee set forth in the Prospectus, the
distribution fee may be paid in respect of services rendered and expenses borne
in the past with respect to each such class as to which no distribution fee was
paid on account of such limitation. The Distributor may pay all or a portion of
the distribution fees it receives from the Trust to participating and
introducing brokers.
The Plan may be terminated with respect to the class of shares of any Fund
to which the Plan relates by vote of a majority of the trustees of the Trust who
are not interested persons of the Trust (as defined in the 1940 Act) and who
have no direct or indirect financial interest in the operation of the Plan or
the Distributor's Contract (the "Independent Trustees"), or by vote of a
majority of the outstanding voting securities of that class. Any change in the
Plan that would materially increase the cost to the class of shares of any Fund
to which the Plan relates requires approval by the affected class of
shareholders of that Fund. The trustees of the Trust review quarterly a written
report of such costs and the purposes for which such costs have been incurred.
Except as described above, the Plan may be amended by vote of the trustees of
the Trust, including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose. For so long as the Plan is in effect, selection
and nomination of those trustees of the Trust who are not interested persons of
the Trust shall be committed to the discretion of such disinterested persons.
The Distributor's Contract may be terminated with respect to any Fund or
class of shares thereof at any time by not more than 60 days' nor less than 30
days' written notice without payment of any penalty either by the Distributor or
by such Fund or class and will terminate automatically, without the payment of
any penalty, in the event of its assignment.
The Distributor's Contract and the Plan will continue in effect with
respect to each class of shares to which they relate for successive one-year
periods, provided that each such continuance is specifically approved (i) by the
vote of a majority of the Independent Trustees and (ii) by the vote of a
majority of the
-14-
<PAGE>
entire Board of Trustees (or by vote of a majority of the outstanding shares of
a class, in the case of the Distributor's Contract) cast in person at a meeting
called for that purpose.
If the Distributor's Contract or the Plan are terminated (or not renewed)
with respect to one or more classes, they may continue in effect with respect to
any class of any Fund as to which they have not been terminated (or have been
renewed).
The trustees of the Trust believe that the Plan will provide benefits to
the Trust. The trustees of the Trust believe that the Plan will result in
greater sales and/or fewer redemptions of Select Shares, although it is
impossible to know for certain the level of sales and redemptions of Select
Shares that would occur in the absence of the Plan or under alternative
distribution schemes. The trustees of the Trust believe that the effect on
sales and/or redemptions benefit the Trust by reducing Fund expense ratios
and/or by affording greater flexibility to Fund managers.
CUSTODIAL ARRANGEMENTS. State Street Bank and Trust Company ("State Street
Bank"), Boston, Massachusetts 02102, is the Trust's custodian. As such, State
Street Bank holds in safekeeping certificated securities and cash belonging to
the Trust and, in such capacity, is the registered owner of securities in book-
entry form belonging to a Fund. Upon instruction, State Street Bank receives
and delivers cash and securities of a Fund in connection with Fund transactions
and collects all dividends and other distributions made with respect to Fund
portfolio securities. State Street Bank also maintains certain accounts and
records of the Trust and calculates the total net asset value, total net income
and net asset value per share of a Fund on a daily basis. State Street Bank has
also contracted with certain foreign banks and depositories to hold portfolio
securities outside of the United States on behalf of the Trust.
INDEPENDENT ACCOUNTANTS. The Trust's independent accountants are Price
Waterhouse LLP, 160 Federal Street, Boston, Massachusetts 02110. Price
Waterhouse LLP conducts an annual audit of the Trust's financial statements,
assists in the preparation of the Trust's federal and state income tax returns
and the Trust's filings with the Securities and Exchange Commission, and
consults with the Trust as to matters of accounting and federal and state income
taxation.
PORTFOLIO TRANSACTIONS
INVESTMENT DECISIONS. The purchase and sale of portfolio securities for
the Funds and for the other investment advisory clients of the Manager are made
by the Manager with a view to achieving each client's investment objective. For
example, a particular security may be purchased or sold on behalf of certain
clients of the Manager even though it could also have been purchased or sold for
other clients at the same time. Likewise, a particular security may be
purchased on behalf of one or more clients when the Manager is selling the same
security on behalf of one or more other clients. In some instances, therefore,
the Manager, acting for one client may sell indirectly a particular security to
another client. It also happens that two or more clients may simultaneously buy
or sell the same security, in which event purchases or sales are effected pro
rata on the basis of cash available or other equitable basis so as to avoid any
one account's being preferred over any other account.
BROKERAGE AND RESEARCH SERVICES. Transactions on stock exchanges and other
agency transactions involve the payment of negotiated brokerage commissions.
Such commissions vary among different brokers. There is generally no stated
commission in the case of securities traded in the over-the-counter
-15-
<PAGE>
markets, but the price paid for such securities usually includes an undisclosed
dealer commission or mark up. In placing orders for the portfolio transactions
of a Fund, the Manager will seek the best price and execution available, except
to the extent it may be permitted to pay higher brokerage commissions for
brokerage and research services as described below. The determination of what
may constitute best price and execution by a broker-dealer in effecting a
securities transaction involves a number of considerations, including, without
limitation, the overall net economic result to the Fund (involving price paid or
received and any commissions and other costs paid), the efficiency with which
the transaction is effected, the ability to effect the transaction at all where
a large block is involved, availability of the broker to stand ready to execute
possibly difficult transactions in the future and the financial strength and
stability of the broker. Because of such factors, a broker-dealer effecting a
transaction may be paid a commission higher than that charged by another broker-
dealer. Most of the foregoing are judgmental considerations.
Over-the-counter transactions often involve dealers acting for their own
account. It is the Manager's policy to place over-the-counter market orders for
a Fund with primary market makers unless better prices or executions are
available elsewhere.
Although the Manager does not consider the receipt of research services as
a factor in selecting brokers to effect portfolio transactions for a Fund, the
Manager will receive such services from brokers who are expected to handle a
substantial amount of such Fund's portfolio transactions. Research services may
include a wide variety of analyses, reviews and reports on such matters as
economic and political developments, industries, companies, securities and
portfolio strategy. The Manager uses such research in servicing other clients
as well as the Trust.
As permitted by Section 28(e) of the Securities Exchange Act of 1934, as
amended, and subject to such policies as the trustees of the Trust may
determine, the Manager may pay an unaffiliated broker or dealer that provides
"brokerage and research services" (as defined in the Act) to the Manager an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction.
The U.S. Small Capitalization Series paid brokerage commissions in the
amounts of $197,327.08 for the fiscal year ended March 31, 1994, $137,979 for
the fiscal year ended March 31, 1995 and $220,065.63 for the fiscal year ended
March 31, 1996.
The Japan Series paid brokerage commissions in the amounts of $13,939 for
the fiscal year ended March 31, 1994, $10,763 for the fiscal year ended
March 31, 1995 and $6,509.21 for the fiscal year ended March 31, 1996.
The Japan Series may pay brokerage commissions to Nomura Securities
Company, Inc., which may be deemed to be an "affiliate of an affiliate" of the
Trust, for acting as the Fund's agent on purchases and sales of securities for
the portfolio of the Fund. Securities and Exchange Commission rules require
that commissions paid to an affiliate of an affiliate by the Fund for portfolio
transactions not exceed "usual and customary" brokerage commissions. The rules
define "usual and customary" commissions to include amounts which are
"reasonable and fair compared to the commission, fee or other remuneration
received or to be received by other brokers in connection with comparable
transactions involving similar securities being purchased or sold on a
securities exchange during a comparable period of time." The trustees,
including those who are not "interested persons" of the Trust, have adopted
procedures for evaluating the
-16-
<PAGE>
reasonableness of commissions paid to Nomura Securities and will review these
procedures periodically. In the fiscal years ended March 31, 1994 and 1995, the
Fund paid an aggregate of $9,782 and $2,967 in brokerage commissions to Nomura
Securities. The Fund did not pay any brokerage commissions to Nomura Securities
during its fiscal year ended March 31, 1996.
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES
As more fully described in the Prospectus, the Trust is a diversified open-
end series investment company organized as a Massachusetts business trust. A
copy of the Agreement and Declaration of Trust of the Trust (the "Declaration of
Trust") is on file with the Secretary of The Commonwealth of Massachusetts. The
fiscal year of the Trust ends on March 31. The Trust changed its name to "Barr
Rosenberg Series Trust" from "Rosenberg Series Trust" on August 5, 1996.
Interests in the Trust portfolios are currently represented by shares of
three series, the U.S. Small Capitalization Series, the International Small
Capitalization Series and the Japan Series, issued pursuant to the Declaration
of Trust. The rights of shareholders and powers of the trustees of the Trust
with respect to such shares are described in the Prospectus.
As described in the Prospectus, each Fund is further divided into three
classes of shares designated as Institutional Shares, Adviser Shares and Select
Shares. Each class of shares of each Fund represents interests in the assets of
the Fund and has identical dividend, liquidation and other rights and the same
terms and conditions except that expenses, if any, related to the distribution
and shareholder servicing of a particular class are borne solely by such class
and each class may, at the discretion of the trustees of the Trust, also pay a
different share of other expenses, not including advisory or custodial fees or
other expenses related to the management of the Trust's assets, if these
expenses are actually incurred in a different amount by that class, or if the
class receives services of a different kind or to a different degree than the
other classes. All other expenses are allocated to each class on the basis of
the net asset value of that class in relation to the net asset value of the
particular Fund.
The Declaration of Trust provides for the perpetual existence of the Trust.
The Trust may, however, be terminated at any time by vote of at least two-thirds
of the outstanding shares of the Trust.
VOTING RIGHTS
Shareholders are entitled to one vote for each full share held (with
fractional votes for fractional shares held) and will vote (to the extent
provided herein) in the election of trustees and the termination of the Trust
and on other matters submitted to the vote of shareholders. Shareholders will
vote by individual Fund on all matters except (i) when required by the 1940 Act,
shares shall be voted in the aggregate and not by individual Fund, and (ii) when
the trustees have determined that the matter affects only the interests of one
or more Funds, then only shareholders of such Funds shall be entitled to vote
thereon. Shareholders of one Fund shall not be entitled to vote on matters
exclusively affecting another Fund, such matters including, without limitation,
the adoption of or change in any fundamental policies or restrictions of the
other Fund and the approval of the investment advisory contracts of the other
Fund.
Each class of shares of each Fund has identical voting rights except that
each class has exclusive voting rights on any matter submitted to shareholders
that relates solely to that class, and has separate voting
-17-
<PAGE>
rights on any matter submitted to shareholders in which the interests of one
class differ from the interests of any other class. Each class of shares has
exclusive voting rights with respect to matters pertaining to any distribution
or servicing plan applicable to that class. All three classes of shares of a
Fund will vote together, except with respect to any distribution or servicing
plan applicable to a class or when a class vote is required as specified above
or otherwise by the 1940 Act.
There will normally be no meetings of shareholders for the purpose of
electing trustees, except that in accordance with the 1940 Act (i) the Trust
will hold a shareholders' meeting for the election of trustees at such time as
less than a majority of the trustees holding office have been elected by
shareholders, and (ii) if, as a result of a vacancy in the Board of Trustees,
less than two-thirds of the trustees holding office have been elected by the
shareholders, that vacancy may only be filled by a vote of the shareholders. In
addition, trustees may be removed from office by a written consent signed by the
holders of two-thirds of the outstanding shares and filed with the Trust's
custodian or by a vote of the holders of two-thirds of the outstanding shares at
a meeting duly called for the purpose, which meeting shall be held upon the
written request of the holders of not less than 10% of the outstanding shares.
Upon written request by the holders of at least 1% of the outstanding shares
stating that such shareholders wish to communicate with the other shareholders
for the purpose of obtaining the signatures necessary to demand a meeting to
consider removal of a trustee, the Trust has undertaken to provide a list of
shareholders or to disseminate appropriate materials (at the expense of the
requesting shareholders). Except as set forth above, the trustees shall
continue to hold office and may appoint successor trustees. Voting rights are
not cumulative.
No amendment may be made to the Declaration of Trust without the
affirmative vote of a majority of the outstanding shares of the Trust except
(i) to change the Trust's name or to cure technical problems in the
Declaration of Trust and (ii) to establish, designate or modify new and
existing series, sub-series or classes of shares of any series of Trust
shares or other provisions relating to Trust shares in response to applicable
laws or regulations.
SHAREHOLDER AND TRUSTEE LIABILITY
Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Trust. However, the
Declaration of Trust disclaims shareholder liability for acts or obligations of
the Trust and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by the Trust or
the trustees. The Declaration of Trust provides for indemnification out of all
the property of the relevant Fund for all loss and expense of any shareholder of
that Fund held personally liable for the obligations of the Trust. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is considered remote since it is limited to circumstances in which the
disclaimer is inoperative and the Fund of which he is or was a shareholder would
be unable to meet its obligations.
The Declaration of Trust further provides that the trustees will not be
liable for errors of judgment or mistakes of fact or law. However, nothing in
the Declaration of Trust protects a trustee against any liability to which the
trustee would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office. The Declaration of Trust also provides for indemnification by the
Trust of the trustees and the officers of the Trust against liabilities and
expenses reasonably incurred in connection with litigation in which they may be
involved because of their offices with the Trust, except if it is determined in
the manner specified in the Declaration
-18-
<PAGE>
of Trust that such trustees are liable to the Trust or its shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of his or her duties. In addition, the Manager has agreed to indemnify each
trustee who is not "an interested person" of the Trust to the maximum extent
permitted by the 1940 Act against any liabilities arising by reason of such
trustee's status as a trustee of the Trust.
OWNERS OF 5% OR MORE OF A FUND'S SHARES
As of the date of this Prospectus, no shares of the International Small
Capitalization Series were issued and outstanding.
The following chart sets forth the names, addresses and percentage
ownership of those shareholders owning beneficially and of record 5% or more of
the outstanding shares of the U.S. Small Capitalization Series as of
July 12, 1996:
<TABLE>
<CAPTION>
Name and Address Number of Shares Percentage Ownership
of Owner Owned of the Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
The Common Fund 736,433.6800 9.94%
450 Poast Road East
Westport, CT 06881-0909
The Nathan Cummings Foundation 762,295.9550 10.29%
1926 Broadway, Suite 600
New York, NY 10023
Board of Pensions
Re: Luther Account 2,005,936.7300 27.08%
Re: Martin Account 226,237.5150 3.05%
Evangelical Lutheran Church in America
800 Marquette Avenue, Suite 1050
Minneapolis, MN 55402-2885
Rosenberg Institutional Equity 983,666.5990 13.28%
Management, Money Purchase Plan
Four Orinda Way, Suite 300E
Orinda, CA 94563
University of Washington 1,296,155.0460 17.50%
Financial Management
Box 351248
Seattle, WA 98195-1248
-19-
<PAGE>
Leland Stanford Junior University 1,396,379.5470 18.85%
c/o Stanford Mangement Company
2770 Sand Hill Road
Menlo Park, CA 94025
</TABLE>
As of July 12, 1996, the Board of Pensions of the Evanglical Lutheran
Church in America may be deemed to control the U.S. Small Capitalization
Series because it possessed beneficial ownership, either directly or
indirectly, of more than 25% of the U.S. Small Capitalization Series' shares.
The following chart sets forth the names, addresses and percentage
ownership of those shareholders owning beneficially and of record 5% or more
of the outstanding shares of the Japan Series as of July 12, 1996:
Name Address % Ownership
- ---- ------- -----------
Rosenberg Institutional 4 Orinda Way 100%
Equity Management Suite 300E
Orinda, CA 94563
As of the date of this Statement of Additional Information, the Manager
owned 100% of the shares of the Japan Series. Therefore, officers and
trustees of the Trust who are partners of the Manager may be deemed to own
beneficially 100% of the shares of such Fund. As of the date of this
Statement of Additional Information, the shares of the Japan Series
represented 2.09% of the total number of shares of the Trust outstanding.
The Manager will be entitled to vote such shares on any matter submitted to
the shareholders of the Trust and on which shareholders of the Japan Series
are entitled to vote.
The officers and trustees of the Trust as a group own less than 1% of
any class of outstanding shares of the Trust, except for shares of the Japan
Series.
DETERMINATION OF NET ASSET VALUE
As indicated in the Prospectus, the net asset value of each Fund share,
with the exception of shares of the Japan Series, is determined on each day on
which the New York Stock Exchange is open for trading. The Trust expects that
the days, other than weekend days, that the New York Stock Exchange will not be
open are Independence Day, Labor Day, Election Day, Thanksgiving Day, Christmas
Day, New Year's Day, President's Day, Good Friday and Memorial Day.
As indicated in the Prospectus, the net asset value of each share of the
Japan Series is determined on each day on which the Tokyo Stock Exchange is open
for trading. The Tokyo Stock Exchange is closed on Saturdays and Sundays. The
holidays for the Tokyo Stock Exchange for the remainder of 1996 are September
15, October 10, November 3 and November 23. If a holiday falls on a Saturday or
Sunday, there is not a holiday substitution. The Exchange is also expected not
to be open on the spring and fall equinox.
Portfolio securities listed on a securities exchange for which market
quotations are available are valued at the last quoted sale price on each
business day, or, if there is no such reported sale, at the most recent quoted
bid price. Price information on listed securities is generally taken from the
closing price on the exchange where the security is primarily traded. Unlisted
securities for which market quotations are readily available are valued at the
most recent quoted bid price, except that debt obligations with sixty days or
less remaining until maturity may be valued at their amortized cost. Exchange-
traded options, futures and options on futures are valued at the settlement
price as determined by the appropriate clearing corporation. Other assets and
securities for which no quotations are readily available are valued at fair
value as determined in good faith by the trustees of the Trust or by persons
acting at their direction.
The procedures for purchasing shares of each of the Funds and for
determining the offering price of such shares are described in the Prospectus.
-20-
<PAGE>
EXPERTS
The financial statements included in this Statement of Additional
Information (see "Financial Statements" below) have been included in reliance on
the report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
-21-
<PAGE>
BARR ROSENBERG SERIES TRUST
SPECIMEN PRICE-MAKE-UP SHEET
The following are computations of the total offering price per share for
each Series of the Trust based on its net asset value and shares of beneficial
interest outstanding at the close of business on March 31, 1996.
U.S. Small Capitalization Series
Net Assets at Value (Equivalent to 7.60 per share
based on 7,902,208 shares of beneficial interest outstanding) $60,045,522
Offering Price (7.60 x 100/99.75)* = 7.62
Japan Series
Net Assets at Value (Equivalent to 8.77 per share
based on 157,228 shares of beneficial interest outstanding) $1,378,372
Offering Price (8.77 x 100/99.75)* = 8.79
__________________________________
* Represents maximum offering price charged on certain cash purchases. See
"Shareholder Transaction and Fund Expenses" and "Purchase of Shares" in the
Prospectus
A-1
<PAGE>
[LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
May 20, 1996
To the Trustees of Rosenberg Series Trust
and the Shareholders of Small Capitalization
Series and Japan Series
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Small Capitalization Series and
Japan Series, each a series of Rosenberg Series Trust (the "Trust") at March 31,
1996, the results of each of their operations for the year then ended, the
changes in each of their net assets for each of the two years in the period then
ended and the financial highlights for each of the five years in the period then
ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at March
31, 1996 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
F-1
<PAGE>
ROSENBERG SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1996
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL
CAPITALIZATION
SERIES JAPAN SERIES
<S> <C> <C>
ASSETS
Investment in securities, at value (cost $46,600,495 and
$1,259,929, respectively) $ 59,537,973 $ 1,350,296
Short-term obligations 790,000 10,875
Foreign currency, at value (cost $10,203) -- 10,052
Cash 527,251 --
Receivable for investments sold 224,941 16,507
Receivable from manager -- 4,752
Dividends and interest receivable 44,097 6,847
Collateral for securities loaned, at value 5,656,375 --
--------------- ---------------
Total assets 66,780,637 1,399,329
--------------- ---------------
LIABILITIES
Payable for investments purchased 925,215 --
Due to custodian bank -- 1,384
Withholding tax payable -- 1,027
Payable for variation margin on open futures contracts -- 1,850
Accrued:
Advisor fee 76,734 --
Audit/tax fee 31,119 15,186
Custodian fee 21,634 1,510
Legal fees 19,324 --
Trustees' fee 4,714 --
Collateral on securities loaned, at value 5,656,375 --
--------------- ---------------
Total liabilities 6,735,115 20,957
--------------- ---------------
NET ASSETS $ 60,045,522 $ 1,378,372
--------------- ---------------
--------------- ---------------
Shares of beneficial interest outstanding
(unlimited number authorized) 7,902,208 157,228
--------------- ---------------
--------------- ---------------
NET ASSET VALUE PER SHARE $ 7.60 $ 8.77
--------------- ---------------
--------------- ---------------
COMPOSITION OF NET ASSETS:
Paid-in capital $ 42,842,480 $ 1,659,315
Undistributed net investment income (distributions
in excess of net investment income) 299,665 6,565
Accumulated net realized gains (losses) on investments,
futures and foreign currency transactions 3,965,899 (363,223)
Net unrealized appreciation on investments and futures
contracts 12,937,478 75,866
Net unrealized depreciation on foreign currency -- (151)
--------------- ---------------
NET ASSETS $ 60,045,522 $ 1,378,372
--------------- ---------------
--------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
ROSENBERG SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL
CAPITALIZATION
SERIES JAPAN SERIES
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign taxes of $467 and $1,780,
respectively) $ 838,009 $ 10,338
Interest 22,853 133
Security lending fee income, net of related expenses 17,196 --
--------------- ---------------
Total income 878,058 10,471
--------------- ---------------
EXPENSES
Advisory fee 514,386 12,093
Audit/tax fees 44,378 24,416
Custodian fees 133,342 57,360
Registration fees 535 126
Legal fees 19,052 386
Trustees' fee 20,693 1,370
Transfer agent fee 3,920 378
--------------- ---------------
Total expenses 736,306 96,129
Less expenses waived or borne by the Manager (157,913) (82,698)
--------------- ---------------
Net expenses 578,393 13,431
--------------- ---------------
Net investment income (loss) 299,665 (2,960)
--------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FUTURES AND FOREIGN CURRENCY
Net realized gain (loss) on:
Investments 16,565,303 (17,837)
Closed futures contracts -- 2,860
Foreign currency transactions -- (2,537)
Net change in unrealized
appreciation (depreciation) on:
Investments 2,415,710 17,606
Open futures contracts -- (14,501)
Foreign currency -- (961)
--------------- ---------------
Net realized and unrealized gain (loss) on investments,
futures and foreign currency 18,981,013 (15,370)
--------------- ---------------
Net increase (decrease) in net assets resulting
from operations $ 19,280,678 $ (18,330)
--------------- ---------------
--------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
ROSENBERG SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
MARCH 31, 1996
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAPITALIZATION SERIES JAPAN SERIES
YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss) $ 299,665 $ 324,509 $ (2,960) $ (3,232)
Net realized gain (loss) on investments
and closed futures contracts 16,565,303 4,831,958 (14,977) 66,766
Net realized gain (loss)
on foreign currency transactions -- -- (2,537) 3,355
Net change in unrealized appreciation on
investments and open futures contracts 2,415,710 1,170,368 3,105 45,132
Net change in unrealized depreciation on
foreign currency -- -- (961) (270)
------------ ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 19,280,678 6,326,835 (18,330) 111,751
------------ ----------- ----------- -----------
Distributions to shareholders from:
Net investment income (68,162) (575,600) -- --
In excess of net investment income -- -- (12,014) (2,850)
Net realized gain on investments (13,123,399) (7,601,631) -- --
------------ ----------- ----------- -----------
Net decrease in net assets resulting
from distributions (13,191,561) (8,177,231) (12,014) (2,850)
------------ ----------- ----------- -----------
Share transactions:
Proceeds from shares sold 866,628 2,439,880 -- --
Capital contribution -- -- 12,065 15,114
Issued on reinvestment of distributions 12,388,255 7,180,752 12,014 2,850
Cost of shares redeemed (16,207,993) (3,360,851) -- --
------------ ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from share transactions (2,953,110) 6,259,781 24,079 17,964
------------ ----------- ----------- -----------
Total increase (decrease) in net assets 3,136,007 4,409,385 (6,265) 126,865
NET ASSETS:
Beginning of period 56,909,515 52,500,130 1,384,637 1,257,772
------------ ----------- ----------- -----------
End of period (including undistributed
net investment income (distributions in
excess of net investment income) of
$299,665, $99,620, $6,565 and $12,012,
respectively) $60,045,522 $56,909,515 $1,378,372 $1,384,637
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
OTHER INFORMATION:
Share transactions:
Sold 117,734 342,062 -- --
Capital contribution -- -- 1,341 1,741
Issued upon reinvestment of
distributions 1,744,825 1,129,049 1,405 331
Redeemed (2,124,487) (437,819) -- --
------------ ----------- ----------- -----------
Net increase (decrease) in
shares outstanding (261,928) 1,033,292 2,746 2,072
Fund shares:
Beginning of period 8,164,136 7,130,844 154,482 152,410
------------ ----------- ----------- -----------
End of period 7,902,208 8,164,136 157,228 154,482
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
ROSENBERG SERIES TRUST
FINANCIAL STATEMENTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAPITALIZATION SERIES
-----------------------------------------------
YEAR ENDED MARCH 31,
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $6.97 $7.36 $12.33 $12.04 $10.74
------- ------ ------- ------- --------
Income (loss) from investment operations
Net investment income (loss) Section .03 .01 .08 .13 .11
Net realized and unrealized gain (loss) on
investments and foreign currency 2.34 .78 1.28 2.31 1.53
------- ------ ------- ------- --------
Total investment operations 2.37 .79 1.36 2.44 1.64
------- ------ ------- ------- --------
Distributions to shareholders from:
Net investment income (.01) (.08) (.14) (.10) (.08)
In excess of net investment income -- -- -- -- --
Net realized gain on investments (1.73) (1.10) (6.19) (2.05) (.26)
------- ------ ------- ------- --------
$(1.74) (1.18) (6.33) (2.15) (.34)
------- ------ ------- ------- --------
Net asset value at end of period $7.60 $6.97 $7.36 $12.33 $12.04
------- ------ ------- ------- --------
------- ------ ------- ------- --------
Total return(1) 35.69% 12.21% 12.83% 22.51% 15.79%
Net assets, end of period (000) $60,046 $56,910 $52,500 $69,458 $119,343
Ratio of net expenses to average daily net assets .90% .90% .90% .90% .90%
Ratio of net expenses to average daily net assets
before reimbursement 1.15% 1.17% 1.14% 1.03% .94%
Ratio of net investment income (loss) to average
daily net assets .47% .60% .60% .59% .66%
Portfolio turnover rate 71.87% 57.27% 59.61% 32.61% 59.04%
</TABLE>
<TABLE>
<CAPTION>
JAPAN SERIES
------------------------------------
YEAR ENDED MARCH 31,
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $8.96 $8.25 $6.94 $6.15 $ 7.87
------ ------ ------ ------ ------
Income (loss) from investment operations
Net investment income (loss) Section .04 .10 (.01) .02 .04
Net realized and unrealized gain (loss) on
investments and foreign currency (.15) .63 1.41 .84 (1.69)
------ ------ ------ ------ ------
Total investment operations (.11) 0.73 1.40 .86 (1.65)
------ ------ ------ ------ ------
Distributions to shareholders from:
Net investment income -- -- -- (.07) (.07)
In excess of net investment income (.08) (.02) (.09) -- --
Net realized gain on investments -- -- -- -- --
------ ------ ------ ------ ------
(.08) (.02) (.09) (.07) (.07)
------ ------ ------ ------ ------
Net asset value at end of period $8.77 $8.96 $8.25 $6.94 $6.15
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total return(1) (1.2%) 8.86% 20.35% 14.24% (21.09%)
Net assets, end of period (000) $1,378 $1,385 $1,258 $1,044 $ 915
Ratio of net expenses to average daily net assets 1.00% 1.00% 1.00% .70% .59%
Ratio of net expenses to average daily net assets
before reimbursement 7.16% 7.02% 7.63% 10.70% 8.56%
Ratio of net investment income (loss) to average
daily net assets (.22%) (.20)% (.26%) .37% .20%
Portfolio turnover rate 60.60% 57.10% 74.60% 162.10% 53.13%
</TABLE>
Section Net of fees and expenses waived or borne by the Manager which amounted
to $.02, $.01, $.05, $.03, and $.01 per share, respectively, for Small
Capitalization Series and $.38, $.67, $.49, $.59 and $1.64 per share,
respectively, for Japan Series.
(1) Total return would have been lower had certain fees and expenses not
been waived.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
<PAGE>
ROSENBERG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Rosenberg Series Trust (the "Trust") is an open-end diversified management
investment company offering two portfolios, Small Capitalization Series and
Japan Series, (the "Funds") or individually (the "Fund") with differing
objectives and strategies. The Trust was established as a Massachusetts
business trust under the laws of Massachusetts on April 1, 1988.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual amounts could differ from those estimates.
Following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
SECURITY VALUATION
Portfolio securities listed on a national exchange or exchanges for which
market quotations are available are valued at their last quoted sale price
on each business day. If there is no such reported sale, the most recently
quoted bid price is used. Debt obligations with sixty days or less
remaining until maturity are valued at their amortized cost. Unlisted
securities for which market quotations are readily available are valued at
the most recent quoted bid price. Securities quoted in foreign currencies
are translated into U.S. dollars based upon the prevailing exchange rate at
the close of each business day. Other assets and securities for which no
quotation is readily available are valued at fair value as determined in
good faith by the Trustees.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (the date the
order to buy or sell is executed). Corporate actions (including cash
dividends) are recorded on the ex-date or as soon after the ex-date as the
fund becomes aware of such action, net of any non-refundable tax
withholdings. Interest income is recorded on the accrual basis and is
adjusted for the accretion of discounts. In determining the net gain or
loss on securities sold, the cost of securities is determined on the
identified cost basis.
FOREIGN CURRENCY TRANSACTIONS
All monetary items denominated in foreign currencies are translated to U.S.
dollars based upon the prevailing exchange rate at the close of each
business day. Net realized gains and losses on foreign currency
transactions represent net gains and losses from currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. Further, the effects of changes
in foreign currency exchange rates on investments in securities are not
segregated in the Statement of Operations from the effects of changes in
market prices of those securities, but are included with the net realized
and unrealized gain or loss on investments.
EXPENSES
Expenses specific to an individual Fund are charged to that Fund. Common
expenses are allocated to each Fund based on their comparative net asset
values.
<PAGE>
ROSENBERG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
DISTRIBUTIONS
Distributions to shareholders are recorded on the ex-dividend date.
Distributions are made on a tax basis which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for foreign currency transactions and wash sales for
book and tax purposes. Permanent book and tax basis differences will
result in reclassifications to capital accounts.
OTHER
Japan Series pursues its objectives by investing in Japanese securities.
There are certain additional risks involved when investing in foreign
securities that are not inherent with investments in domestic securities.
These risks may involve adverse political and economic developments and the
possible imposition of currency exchange blockages or other foreign
governmental laws or restrictions.
The Japan Series may purchase futures contracts on the Tokyo Stock Price
Index ("TOPIX") or the NIKKEI 225 Index ("NIKKEI") to manage its exposure
to the Tokyo Stock Exchange. Buying futures tends to increase the Fund's
exposure to the underlying instrument. The use of futures contracts
involves certain risks, which include (1) the imperfect correlation between
the price movement of the contracts and the underlying securities, or (2)
the inability to close out positions due to different trading hours, or the
temporary absence of a liquid market, for either the contract or the
underlying securities. Futures contracts (secured by securities deposited
with brokers as "initial margin") are valued at the settlement price
established each day by the board of trade or exchange on which they are
traded. Changes in initial settlement value (represented by cash paid to
or received from brokers as "variation margin") are accounted for as
unrealized appreciation (depreciation). When futures contracts are closed,
the difference between the opening value at the date of purchase and the
value at closing is recorded as realized gains and losses in the Statement
of Operations. See Note 9 for all open future contracts held as of March
31, 1996.
2. MANAGEMENT FEE
Rosenberg Institutional Equity Management (the "Manager") provides advisory
and management services to the Funds under separate management contracts.
Compensation of the Manager for Small Capitalization Series is payable
quarterly at the annual rate of .80% of the Fund's average daily net
assets. The Manager has agreed with Small Capitalization Series to reduce
its fee until further notice to the extent necessary to limit the Fund's
annual expenses (including the management fee but excluding brokerage
commissions and transfer taxes) to .90% of the Fund's average daily net
assets.
Compensation of the Manager for Japan Series is payable quarterly at the
annual rate of 0.90% of the Fund's average daily net assets. The Manager
has agreed with the Japan Series to reduce its fee until further notice to
the extent necessary to limit the Fund's annual expenses (including the
management fee but excluding brokerage commissions and transfer taxes) to
1.00% of the Fund's average daily net assets.
2
<PAGE>
ROSENBERG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
During the fiscal year, the Manager, who is also the sole shareholder in
the Japan Series, made a capital contribution of $12,065 in return for
1,341 shares of the fund. This contribution represented the forgiveness of
the reimbursements owed by the fund to the Manager at March 31, 1995. The
Manager also made a capital contribution of $15,114 in return for 1,741
shares of the Fund during the fiscal year ended March 31, 1995. This
contribution represented the forgiveness of the cumulative reimbursements
owed by the fund to the Manager at March 31, 1994.
3. FEDERAL TAXATION
It is each Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income, including any net realized gain on investments,
to its shareholders. Therefore, no provision is made for federal income
taxes. As of March 31, 1996, Japan Series had a capital loss carryover of
approximately $368,407 available to offset future realized capital gains,
of which $262,527, $69,379, $15,997 and $20,504 will expire on March 31,
2000, March 31, 2001, March 31, 2002, and March 31, 2004, respectively. In
order to meet certain excise tax distribution requirements, each Fund is
required to measure and distribute annually, net capital gains and net
foreign currency gains realized during a twelve-month period ending
October 31. In connection with this, each Fund is permitted for tax
purposes to defer into its next fiscal year any net capital losses or net
foreign currency losses incurred between November 1, 1995 and the end of
its fiscal year. The Japan Series has elected to defer to its fiscal year
ending March 31, 1997 approximately $9,032 of losses occurring during the
period November 1, 1995 to March 31, 1996.
For federal tax purposes at March 31, 1996 the amounts of unrealized
appreciation/ depreciation and the cost of portfolio securities were as
follows:
UNREALIZED UNREALIZED NET UNREALIZED COST OF
APPRECIATION DEPRECIATION APPRECIATION SECURITIES
Small
Capitalization
Series $15,281,998 $2,375,056 $12,906,942 $47,421,031
Japan Series $129,080 $38,713 $90,367 $1,270,804
4. IN-KIND TRANSACTIONS
For the year ended March 31, 1996, the Small Capitalization Series realized
gains from in-kind redemptions of $717,144.
3
<PAGE>
ROSENBERG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
5. SECURITY PURCHASES AND SALES
For the period ended March 31, 1996 (excluding short term securities and
foreign currency):
PURCHASES OF SALES OF
PORTFOLIO SECURITIES PORTFOLIO SECURITIES
Small Capitalization Series $ 46,439,623 $ 61,744,837
Japan Series $ 805,419 $ 824,191
6. PRINCIPAL SHAREHOLDERS
Fund shareholders who each held in excess of 10% of the relevant Fund's
shares outstanding at March 31, 1996 held the following aggregate
percentages of the respective Fund's shares:
FUND % OF FUND'S SHARES
Small Capitalization 72
Japan 100
7. TRUSTEE FEES
The unaffiliated Trustees each receive an annual Trustee's fee of $9,000
plus a $500 meeting fee for each Trustee meeting attended for each Fund in
the series, allocated 98.00% to the Small Capitalization Fund and 2.00% to
the Japan Fund.
8. SALES AND REDEMPTIONS OF SHARES
Small Capitalization Series and Japan Series charge a purchase premium
equal to .25% and .50%, respectively, of the net asset value of the shares
purchased. The premium on redemptions is .25% for Small Capitalization
Series and .50% for Japan Series. All purchase and redemption premiums are
paid to and retained by the relevant Fund. For the years ended March 31,
1995, and March 31, 1996, total purchase premiums retained by Small
Capitalization Series were approximately $4,978 and $2,161, respectively.
For the years ended March 31, 1995 and March 31, 1996, total redemption
premiums retained by Small Capitalization Series were approximately $8,423
and $35,008, respectively. Purchase premiums are added to proceeds from
shares sold and redemption premiums netted against cost of shares redeemed
for financial statement presentation purposes. Purchase and redemption
premiums are not charged on in-kind transactions and reinvested
distributions or dividends.
4
<PAGE>
ROSENBERG SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
9. FUTURES CONTACTS
A summary of outstanding short futures contracts at March 31, 1996 for the
Japan Series is as follows:
NET UNREALIZED
NUMBER OF APPRECIATION
CONTRACTS TYPE EXPIRATION DATE CONTRACT VALUE (DEPRECIATION)
--------- ----- --------------- ------------- --------------
2 NIKKEI 225 June 1996 $ 215,450 $(14,501)
10. SECURITY LENDING PROGRAM
Under the Security Lending Program for the year ended March 31, 1996,
securities held by the Small Capitalization Series were loaned by State
Street Bank, as agent, to certain brokers (the "Borrowers"). The Borrowers
provided cash as collateral against loans in an amount at least equal to
100% of the market value of the loaned securities.
At March 31, 1996, the value of securities loaned amounted to $5,227,296
against which cash collateral of $5,656,375 was held. Cash provided is
invested in short-term investments. A portion of the income generated upon
investment of the collateral is remitted to the Borrowers, and the
remainder is allocated between the Small Capitalization Series and State
Street Bank in its capacity as lending agent. The Small Capitalization
Series bears the risk of loss with respect to the investment of the cash
collateral.
11. LINE OF CREDIT
A line of credit in the amount of $250,000 has been established by the
custodian for the purposes of foreign exchange contracts on behalf of Japan
Series. The maximum daily settlement amount under the line of credit is
$125,000.
5
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - 98.7% VALUE
AEROSPACE - 0.8%
6,700 Analysis & Technology Inc. $ 85,006
19,900 Banner Aerospace Inc.* 116,913
3,700 Curtiss Wright Corp. 192,400
1,700 Tech Sym Corp.* 60,563
------------
454,882
------------
AIR TRAVEL - 0.7%
5,000 Hudson General Corp. 216,875
9,900 Petroleum Helicopters Inc. 138,600
2,300 PS Group Inc.* 25,588
3,100 Tower Air Inc. 17,438
------------
398,501
------------
ALUMINUM - 0.1%
1,200 International Aluminum Corp. 32,100
------------
APPAREL & TEXTILES - 1.8%
16,700 CML Group Inc. 52,188
5,100 Dyersburg Corp. 22,313
7,900 Fabri-Centers of America - Class A* 90,850
7,900 Fabri-Centers of America - Class B* 91,838
5,500 Goodys Family Clothing Inc.* 48,813
10,900 Guilford Mills Inc. 267,050
5,000 Hampshire Group Ltd.* 53,750
7,900 Hyde Athletic Industries Inc.* 28,638
4,100 K-Swiss Inc. 34,338
9,700 Kellwood Co. 150,350
6,500 Morningstar Group Inc.* 63,477
1,570 Nitches Inc.* 8,243
9,400 Oneida Ltd. 160,975
8,100 Oshkosh B Gosh Inc. 123,525
------------
1,196,348
------------
1
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
AUTO PARTS - 0.5%
1,700 Douglas Lomason Co. $ 19,125
7,400 Excel Industries Inc. 84,175
1,000 Federal Screw Works 23,250
1,000 Republic Automotive Parts Inc.* 15,250
4,800 Stant Corp. 57,600
5,400 Trak Auto Corp.* 109,350
------------
308,750
------------
AUTOMOBILES - 0.3%
13,600 Oshkosh Truck Corp. 205,700
------------
BANKS - 4.1%
1,800 American Bancorp Ohio 41,850
5,500 Bank New Hampshire Corp. 235,125
3,100 Broad National Bancorp* 33,713
3,900 California State Bank Covina 54,600
2,700 Capitol Bancorp Ltd. 28,013
5,500 Commercial Bank of New York 56,375
4,200 CPB Inc. 142,800
4,840 CVB Financial Corp. 64,735
3,500 Evergreen Bancorp Inc. 75,250
4,200 GBC Bancorp 92,400
5,600 Hancock Holding Co. 200,200
1,836 Imperial Bancorp* 44,064
1,000 Iroquois Bancorp Inc. 14,500
10,000 Magna Bancorp Inc. 310,000
7,000 NS Bancorp Inc. 276,500
9,300 New York Bancorp Inc. 218,550
5,900 Newmil Bancorp Inc. 39,825
5,500 North Side Savings Bank 191,125
1,050 Northrim Bank Alaska 10,500
1,000 Peoples Savings Financial Corp. 20,250
6,100 Poncebank 87,688
1,000 Progressive Bank Inc.* 27,000
4,000 River Forest Bancorp 116,000
2,100 Sandwich Co. Operative Bank 43,575
2
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
BANKS (CONTINUED)
2,300 Sterling Bancorp $ 29,613
40 Union Planters Corp. 1,210
3,900 Warren Bancorp Inc. 40,950
------------
2,496,411
------------
BROADCASTING - 1.0%
11,100 Atlantic Tele Network Inc.* 249,750
6,100 Bet Holdings Inc. - Class A* 170,038
4,900 Datron Systems Inc. California* 58,188
9,000 Todd Ao Corp - Class A 123,750
------------
601,726
------------
BUILDING CONSTRUCTION - 0.9%
12,900 Apogee Enterprises Inc. 280,575
6,900 Apogee Inc.* 48,300
4,900 Green A P Industries Inc. 85,750
4,699 Myr Group Inc. 49,927
200 NCI Building Systems Inc.* 6,850
4,200 Nortek Inc.* 50,925
------------
522,327
------------
BUSINESS SERVICES - 5.6%
9,000 ABM Industries Inc.* 298,125
6,600 Advanced Marketing Services Inc. 77,550
18,700 Advo Inc. 182,325
1,000 Barra Inc.* 18,875
4,100 Berlitz International Inc.* 66,625
10,400 Bowne & Co Inc. 189,800
1,300 Business Records Corp Holding Co.* 48,100
5,900 Computer Language Research Inc. 95,875
13,800 Computer Task Group Inc. 281,175
5,550 Comshare Inc.* 127,650
12,412 Electro Rent* 294,785
9,000 Failure Group Inc.* 49,500
4,900 FDP Corp.* 46,550
3
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
BUSINESS SERVICES (CONTINUED)
4,600 Gilbert Association Inc. $ 51,750
7,800 GZA Geoenvironmental* 26,325
8,100 Hospital Staffing Services Inc.* 24,300
4,900 Kinder Care Learning Centers Inc.* 61,250
5,850 Kronos Inc.* 149,175
2,200 LCS Industries Inc. 51,150
15,200 Logicon Inc. 484,500
400 Market Facts Inc. 5,100
5,300 Paris Business Forms Inc.* 28,488
7,900 PCA International Inc. 99,244
5,900 Pinkertons Inc. New* 128,325
1,900 Roto Rooter Inc. 58,425
5,700 SEI Corp. 128,250
3,800 Serv Tech Inc.* 22,325
900 Supercuts Inc.* 4,725
4,400 Tro Learning Inc.* 59,950
5,300 Union Corp.* 93,413
5,500 URS Corp New* 37,125
17,500 Weston (Roy F) Inc. New* 87,500
------------
3,378,255
------------
CHEMICALS - 2.0%
4,653 Aceto Corp. 73,285
4,300 AEP Industries Inc.* 104,275
2,530 American Vanguard Corp. 32,890
9,100 Bio Rad Laboratories Inc.* 382,200
3,700 Cambrex Corp. 170,663
4,600 NCH Corp. 260,475
15,200 Univar Corp. 171,000
------------
1,194,788
------------
COMPUTERS & BUSINESS EQUIPMENT - 3.7%
8,000 Adage Inc. (NWE) 32,500
11,000 Advanced Logic Research Inc. 72,875
800 Applied Magnetics Corp.* 12,500
9,014 Bell Industries* 192,674
10,200 Control Data Systems Inc.* 202,088
6,150 DH Technology Inc.* 147,600
8,400 Digital Systems International Inc.* 128,625
4
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
COMPUTERS & BUSINESS EQUIPMENT (CONTINUED)
9,596 Dynamics Research Corp.* $ 67,172
6,000 Franklin Electronic Publishers Inc.* 147,750
8,900 General Binding Corp. 193,575
10,500 Gerber Scientific Inc. 157,500
12,200 Gradco Systems* 41,175
7,000 Macneal Schwendler Corp. 99,750
10,500 National Computer Systems Inc. 212,625
2,800 Nu Kote Holding Inc.* 49,350
15,000 Par Technology* 219,375
9,300 Volt Information Sciences Inc.* 223,200
------------
2,200,334
------------
CONSTRUCTION & MINING EQUIPMENT - 1.2%
4,300 Eastern Co. 51,600
1,300 Gencor Industries Inc. 10,725
6,400 JLG Industries Inc. 292,800
20,500 Kaman Corp. 222,938
5,500 Valmont Industries Inc. 165,000
------------
743,063
------------
CONSTRUCTION MATERIALS - 1.1%
2,800 Ameron Inc.* 104,650
5,500 Butler Manufacturing Co. 181,500
4,400 Lone Star Industries Inc. 132,000
7,000 Noland Co. 126,000
200 Patrick Industries Inc. 2,550
1,300 Research Inc. 9,425
7,400 Strober Organization Inc.* 32,375
9,000 Wolohan Lumber Co. 87,750
------------
676,250
------------
CONTAINERS & GLASS - 0.1%
2,400 Continental Can Inc.* 36,300
------------
5
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
COSMETICS & TOILETRIES - 0.2%
39,200 Cascade International Inc. (a) $ 0
5,300 Nutramax Products Inc.* 53,663
8,600 Tranzonic Companies 91,375
------------
145,038
------------
DOMESTIC OIL - 0.6%
7,600 American Oilfield Divers Inc.* 61,750
4,500 Energy Ventures Inc.* 119,813
4,200 Howell Corp. 57,225
4,500 Matrix Service Co.* 27,563
12,200 Maynard Oil Co.* 86,925
2,300 McFarland Energy Inc.* 19,550
------------
372,826
------------
DRUGS & HEALTHCARE - 6.0%
3,000 Alpharma Inc. - Class A 69,750
22,200 Applied Bioscience International Inc.* 202,575
4,500 Barr Labs Inc.* 110,813
5,600 Candela Corp.* 39,900
3,800 Chemed Corp.* 141,075
9,700 Collagen Corp.* 215,825
3,900 Comnet Corp.* 39,000
4,866 Del Labs Inc. 138,681
2,500 EZ Em Inc.* 28,125
6,517 EZ Em Inc. - Class B* 68,429
5,100 Fischer Imaging Corp.* 73,950
15,900 Gamma Biologicals Inc. 67,575
32,525 Geriatric & Medical Cos. Inc.* 67,083
15,800 Health Images Inc. 116,525
15,500 Ibah Inc.* 108,500
8,900 Life Technologies Inc. 249,200
6,900 Maxxim Medical Inc.* 130,238
2,400 MDT Corp.* 10,950
5,600 Medex Inc. 66,500
5,100 National Home Health Care Co.* 31,238
13,800 Option Care Inc.* 60,375
6,700 PCI Services Inc.* 107,200
6,900 Quest Med Inc.* 83,663
11,300 Regency Health Services* 127,125
6
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
DRUGS & HEALTHCARE (CONTINUED)
2,900 RLI Corp. $ 71,775
7,700 Spacelabs Inc.* 179,025
3,000 Spanish American Medical Sysems Inc. 19,125
6,200 Staff Builders Inc. Class A* 18,406
2,100 Sunrise Med Inc.* 29,400
2,600 Syncor International Corp. 17,388
8,400 U S Homecare Corp.* 16,800
13,000 Universal Health Services Inc.* 690,625
8,900 Universal Standard Medical Labs. 30,038
7,800 Vital Signs Inc. 191,100
------------
3,617,977
------------
ELECTRIC UTILITIES - 0.4%
10,600 TNP Enterprises Inc. 245,125
------------
ELECTRICAL EQUIPMENT - 4.6%
3,600 Amistar Corp.* 16,931
9,000 Bel Fuse Inc.* 165,375
4,700 Charter Power Systems Inc. 126,900
6,300 Cohu Inc. 157,500
8,600 Core Industries Inc. 126,850
15,900 Esco Electronics Corp.* 214,650
7,700 Fluke Corp. 293,563
7,700 Genlyte Group Inc.* 61,600
14,200 Hathaway Instruments Inc. 26,625
4,600 Hughes Supply Inc. 131,675
15,100 Jabil Circuit Inc.* 133,069
10,400 Keithley Instruments Inc. 145,600
12,100 Kuhlman Corp. 181,500
1,600 Lamson & Sessions Co.* 14,800
4,800 Milgray Electronics Inc.* 46,500
9,300 Napco Security Systems Inc.* 32,550
6,400 Park Electrochemical Corp. 190,400
10,000 Programming & Systems Inc. (a) 0
3,100 PSC Inc.* 23,638
11,800 Rexel Inc.* 144,550
10,300 Richardson Electronics Ltd. 117,163
7
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
ELECTRICAL EQUIPMENT (CONTINUED)
3,300 Robbins & Myers Inc. $ 113,025
6,500 Scotsman Industries Inc. 116,188
10,300 Thomas Industries Inc. 216,300
------------
2,796,952
------------
ELECTRONICS - 5.5%
10,600 Bairnco Corp. 71,550
32,900 Baldwin Technology Inc.* 137,769
6,900 BEI Electronics Inc. 62,100
5,400 Brite Voice Systems Inc.* 99,900
900 Brooktree Corp.* 8,100
9,600 Cherry Corp.* 86,400
4,900 Circuit Systems Inc.* 24,500
18,600 Computer Products Inc.* 251,100
4,400 CTS Corp. 168,850
5,500 Cubic Corp. 147,813
9,200 Dynatech Corp.* 216,200
1,500 Elxsi Corp.* 9,750
7,600 Exar Corp.* 112,100
5,800 Galileo Electro Optics Corp.* 92,075
14,500 Genicom Corp.* 88,813
10,700 Hadco Corp.* 326,350
3,100 Herley Industries Inc.* 26,350
6,400 Hologic Inc.* 145,600
7,400 IEC Electronics* 62,900
600 Integrated Circuit Systems Inc.* 5,850
7,700 Inter Tel Inc.* 139,563
7,700 Ipc Information Systems Inc.* 180,950
6,700 Kulicke & Soffa Industries Inc.* 105,525
8,400 Marquette Electronics - C1ass A* 162,750
14,100 Moog Inc.* 253,800
4,000 New Brunswick Scientific Inc. 26,500
4,800 Newport Corp. 43,800
1,000 Reliability Inc.* 7,125
5,800 Robinson Nugent Inc. 29,725
7,300 Sound Advice Inc.* 11,863
3,300 TCI International Inc.* 23,100
8
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
ELECTRONICS (CONTINUED)
3,600 Video Display Corp.* $ 18,900
4,300 Wyle Electronics 148,888
------------
3,296,559
------------
ENVIRONMENTAL - 0.1%
6,900 Harding Lawson Associates Group* 41,400
5,700 MFRI Inc.* 36,338
------------
77,738
------------
FINANCIAL SERVICES - 5.3%
6,840 Albank Financial Corp. 197,505
300 Amresco Inc. 4,388
7,700 Atlanta Sosnoff Cap Corp. 77,000
11,100 Capital Re Corp. 399,600
7,600 Capitol American Finanacial Corp. 189,050
1,000 CB Bancshares Inc.* 30,750
5,300 Charles JW Financial Services Inc.* 24,513
5,500 Dime Financial Corporation 73,563
16,900 Enhance Financial Services Group Inc. 466,863
1,500 Financial Security Corp.* 39,000
7,000 First Financial Caribbean Corp. 138,250
2,000 First Mortgage Corp.* 12,500
3,630 Foothill Independent Bancorp* 32,670
2,300 Granite State Bankshares Inc. 40,538
2,100 Haverfield Corp. 31,500
400 Hawthorne Financial Corp.* 1,950
8,000 Hoenig Group Inc.* 26,000
1 Investors Financial Services Corp.* 14
5,800 Jefferies Group Inc. 390,775
9,100 JSB Financial Inc. 305,988
8,400 Mainstreet Bankgroup Inc. 134,400
6,200 Nab Asset Corp.* 32,938
2,000 Premier Financial Services Inc. 19,000
4,850 Right Management Consultants Inc.* 143,075
4,200 Simmons First National Corp. - Class A 139,650
8,900 Southwest Securities Group Inc. 106,800
4,800 Vermont Financial Services Corp. 157,200
------------
3,215,480
------------
9
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
FOOD & BEVERAGES - 1.8%
3,300 Alico Inc. $ 74,250
7,100 Alpine Lace Brands Inc.* 46,150
3,100 Buttrey Food & Drug Stores* 24,025
14,100 Carr Gottstein Foods Co.* 72,263
800 Farmer Bros Co.* 106,400
10,500 FoodBrands America Inc.* 168,000
14,000 Golden Poultry Inc. 138,250
6,900 J & J Snack Foods Corp.* 81,938
8,000 Orange Co. Inc. New 73,000
700 Seaboard Corp. 166,600
7,400 Tasty Baking Corp. 82,325
6,000 Western Beef Inc.* 44,250
------------
1,077,451
------------
GAS & PIPELINE UTILITIES - 0.5%
5,400 Connecticut Energy Corp. 103,275
4,000 Energynorth Inc. 77,000
6,000 Philadelphia Suburban 138,750
------------
319,025
------------
GAS EXPLORATION - 1.6%
7,300 Alamco Inc. 68,438
14,800 Cabot Oil & Gas Corp.* 210,900
18,100 Coho Energy Inc.* 113,125
11,700 Comstock Resources Inc.* 59,963
2,800 Global Industries Inc.* 58,800
1,900 Hallwood Energy Corp. 15,200
14,500 Key Production Inc.* 79,750
100 Phoenix Resource Companies Inc. 2,388
9,100 Southern Union Company New* 186,550
10,780 Swift Energy Co.* 141,488
3,000 USX Delhi Group* 36,375
------------
972,977
------------
10
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
GOLD - .1%
18,100 Atlas Corp.* $ 24,888
------------
HOMEBUILDERS - 1.2%
6,500 Beazer Homes USA Inc.* 113,750
800 Champion Enterprises Inc.* 22,900
6,200 Continental Homes Holding Corp. 142,600
3,000 Major Realty Corp.* 5,625
14,700 Mego Financial Corp.* 132,300
12,800 Redman Industries New* 259,200
6,400 Starrett Corporation 68,800
------------
745,175
------------
HOTELS & RESTAURANTS - 4.4%
4,600 Back Bay Restaurant Group* 16,675
13,000 Chart House Enterprises Inc.* 79,625
13,000 CKE Restaurants Inc. 217,750
26,556 Consolidated Products Inc.* 438,174
5,700 El Chico Restaurants Inc.* 50,588
2,000 Foodmaker Inc.* 14,000
7,354 Frischs Restaurants Inc. 63,428
5,100 Harveys Casino Resorts* 87,338
8,100 Krystal Co.* 36,450
4,700 Lubys Cafeterias Inc. 108,688
18,300 Marcus Corp. 482,663
23,800 NPC International Inc. 214,200
6,500 O'Charleys Inc.* 89,375
14,500 Piccadilly Cafeterias Inc. 135,938
31,000 Ryans Family Steak Houses Inc.* 279,000
11,500 Sands Regent 41,688
4,100 Sbarro Inc. 103,525
2,000 Showbiz Pizza Time Inc.* 38,500
16,500 Sizzler International Inc. 51,563
2,200 Sonesta International Hotels Corp. 17,050
8,100 Spaghetti Warehouse Inc.* 40,500
3,000 TCBY Enterprises Inc. 14,625
3,800 WSMP Inc.* 18,525
------------
2,639,868
------------
11
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
HOUSEHOLD APPLIANCES FURNISHING - 1.1%
7,200 Aaron Rents Inc. $ 156,600
1,200 American Biltrite Inc. 22,650
7,700 Campo Electronics Appliances* 22,258
8,500 Chromcraft Revington Inc.* 205,063
6,600 Fedders USA Inc. 42,900
7,200 International Jensen Inc.* 61,200
2,000 Shelby Williams Industries Inc 21,500
7,800 Southern Electronics Corp.* 42,413
8,000 Tops Appliance City Inc.* 20,125
7,520 Virco Manufacturing Co. 69,560
------------
664,269
------------
HOUSEHOLD PRODUCTS - 0.7%
2,000 Ekco Group Inc.* 11,750
13,900 Mikasa Inc.* 165,063
4,900 Starrett (L.S.) Co. - Class A 122,500
7,100 Stepan Chemical Co. 137,563
------------
436,876
------------
INDUSTRIAL MACHINERY - 4.5%
8,900 Ampco Pittsburgh Corp. 115,700
1,200 Applied Power Inc. 39,150
1,300 Badger Meter Inc. 35,100
2,800 Barnes Group Inc. 125,650
11,300 Bearings Inc. 320,638
8,000 Brown & Sharpe Manufacturing Co.* 80,000
7,800 Central Tractor Farm & Country Inc.* 126,750
9,900 Daniel Industries Inc. 133,650
11,500 Esterline Technologies Corp.* 257,313
11,300 Gehl Co.* 88,988
2,100 GNI Inc.* 10,500
12,800 Graco Inc. 249,600
5,500 Hurco Company Inc.* 18,563
10,600 Manitowoc Inc. 333,900
7,900 Measurex Corp. 229,100
6,600 Mestek Inc.* 89,925
2,100 Moore Products Co.* 34,125
2,100 Oilgear Co. 32,550
11,700 Standex International Corp. 352,463
12
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
INDUSTRIAL MACHINERY (CONTINUED)
1,500 TSI Inc. Minn. $ 26,625
6,000 Worldtex Inc.* 29,250
------------
2,729,540
------------
INSURANCE - 3.2%
4,400 Central Reserve Life Corp. 39,600
4,900 Citation Insurance Group* 22,050
6,100 First American Financial Corp. 175,375
4,700 Harleysville Group Inc. 125,725
14,800 Home Ben Corp. 370,000
4,600 Kansas City Life Insurance Co. 243,800
11,100 Lawyers Title Corp. 208,125
8,200 Meridian Insurance Group Inc. 120,950
1,000 Midland Co. 48,875
2,000 National Western Life Insurance - Class A* 126,000
8,000 Stewart Information Services 158,000
11,000 Washington National Corp. 294,250
100 Zenith National Insurance Corp.* 2,388
------------
1,935,138
------------
INTERNATIONAL OIL - 0.6%
18,400 Global Natural Resources Inc.* 243,800
200 Plexus Corp.* 2,600
6,450 World Fuel Services Corp. 109,650
------------
356,050
------------
INVESTMENT COMPANIES - 2.4%
3,100 Advest Group Inc. 29,838
2,200 Allied Capital Commercial Corp. 41,525
7,800 Eaton Vance Corp. 253,500
2,205 First Albany Companies Inc. 22,877
1,900 ICC Industries Inc.* 64,600
9,700 Inter-Regional Finance Group Inc. 217,038
5,500 Interstate/Johnson Lane Inc.* 62,563
13
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
INVESTMENT COMPANIES (CONTINUED)
9,200 Mcdonald & Co. Investments Inc. $ 177,100
16,875 Morgan Keegan Inc. 208,828
15,100 Raymond James Financial Inc. 339,750
------------
1,417,619
------------
LEISURE TIME - 2.1%
4,000 American Casino Enterprises* 9,250
19,900 Aztar Corp.* 169,150
4,800 Baldwin Piano & Organ Co.* 64,800
8,400 Carmike Cinemas Inc.* 191,100
17,900 Dick Clark Productions Inc.* 219,275
7,300 Donnely Corp. 100,375
5,700 Escalade Inc.* 27,075
1,900 GC Cos Inc.* 72,200
11,900 Jackpot Enterprises Inc. 133,875
5,000 Johnson Worldwide Association Inc.* 87,500
4,200 Medalist Industries Inc.* 60,375
4,100 Sportmart Inc.* 21,013
10,600 Trans World Entertainment Corp.* 34,450
2,000 TSR Inc.* 11,250
7,600 Video Lottery Technologies Inc.* 50,350
------------
1,252,038
------------
MANUFACTURING - 0.9%
32,500 Griffon Corp.* 304,688
5,800 Plantronics Inc New* 218,950
------------
523,638
------------
MINING - 0.6%
16,100 Dravo Corp.* 211,313
5,200 Penn Virginia Corp. 176,800
------------
388,113
------------
14
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
MOBILE HOMES - 1.5%
12,750 Cavalier Homes Inc. $ 197,625
8,700 Coachmen Industries Inc. 228,375
4,900 Liberty Homes Inc. 53,900
1,300 Rexhall Industries Inc.* 8,613
12,200 Skyline Corp. 300,425
5,500 Thor Industries Inc. 103,125
------------
892,063
------------
NON-FERROUS METALS - 0.8%
400 Chase Brass Industries Inc.* 5,400
13,566 Commercial Metals Co. 390,023
6,900 Lindberg Corp. 69,000
------------
464,423
------------
OFFICE FURNISHINGS & SUPPLIES - 0.7%
9,000 American Business Products Inc. 203,625
5,800 Hunt Manufacturing Co. 88,450
6,400 Nashua Corp.* 82,400
1,294 United Stationers Inc.* 29,115
------------
403,590
------------
PAPER - 0.3%
6,700 Mosinee Paper Corp. 211,050
------------
PETROLEUM SERVICES - 3.3%
9,600 Atwood Oceanics Inc.* 345,600
3,000 ICO Inc.* 15,375
8,200 Lufkin Industries Inc. 149,650
36,200 Parker Drilling Co.* 253,400
18,500 Pool Energy Services Co.* 205,813
32,200 Pride Pete Services Inc.* 454,825
13,000 RPC Energy Services Inc.* 134,875
15
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
PETROLEUM SERVICES (CONTINUED)
46,400 Unit Corp.* $ 266,800
12,700 Varco International Inc.* 153,986
------------
1,980,324
------------
PHOTOGRAPHY - 0.6%
13,400 CPI Corp. 214,400
9,600 Optical Coating Lab Inc. 136,800
------------
351,200
------------
PLASTICS - 0.7%
17,450 Tredegar Industries Inc. 403,531
------------
POLLUTION CONTROL - 1.6%
11,800 Emcon* 50,150
4,100 Farr Company* 38,950
7,800 Groundwater Technology Inc.* 103,350
31,800 International Technology Corp.* 75,525
17,500 Mid American Waste Systems Inc.* 30,625
14,500 NSC Corp. 21,750
2,100 Sevenson Environmental Services 33,075
5,400 Smith Environmental Technology* 19,575
16,000 Western Waste Industries* 610,000
------------
983,000
------------
PUBLISHING - 1.7%
3,900 Courier Corp. 91,650
5,100 Crown Books Corp.* 40,800
8,100 Devon Group Inc. New* 230,850
13,200 Interleaf Inc.* 117,150
19,300 National Ed Corp.* 226,775
6,000 Playboy Enterprises Inc.* 60,750
7,400 Plenum Publishing Corp. 271,950
------------
1,039,925
------------
16
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
REAL ESTATE - 0.3%
9,600 FM PPTYS Inc.* $ 24,000
200 Metropolitan Realty Corp. 1,750
3,500 Reading Co.* 37,625
12,600 Taubman Centers Inc.* 124,425
------------
187,800
------------
RETAIL GROCERY - 2.5%
6,800 Dairy Mart Convenience Stores* 44,200
4,600 Delchamps Inc. 97,750
10,600 Marsh Supermarkets Inc. 128,525
2,000 Michaels Foods 21,000
17,400 Nash Finch Co. 291,450
21,800 Riser Foods Inc. 414,200
4,200 Schultz Sav O Stores Inc. 64,050
4,200 Seaway Food Town Inc. 68,250
18,200 Super Food Services Inc. 204,750
19,700 Uni Marts Inc. 164,988
2,300 Village Super Market Inc.* 17,250
------------
1,516,413
------------
RETAIL TRADE - 2.7%
4,100 Barrys Jewelers Inc. New* 15,375
9,300 Cash America International Inc. 49,988
15,600 Eagle Hardware and Groden* 159,900
7,400 Evans Inc.* 9,250
13,579 Genovese Drug Stores Inc. 134,093
13,200 Haverty Furniture Cos Inc. 179,850
3,400 K Tel International Inc.* 11,050
2,300 Mays J W Inc.* 16,675
6,900 Oshmans Sporting Goods Inc.* 69,000
3,700 Pubco Corp.* 23,125
6,600 Rag Shops Inc.* 14,438
5,874 Reeds Jewelers Inc.* 50,663
9,500 Rex Stores Corp.* 131,813
9,400 Sharper Image Corp.* 39,363
11,300 Shoe Carnival Inc.* 48,025
7,200 Sport Chalet Inc.* 16,200
7,400 Sun Television & Appliances 30,525
17
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
RETAIL TRADE (CONTINUED)
5,200 Syms Corp.* $ 42,900
16,800 The Good Guys Inc.* 147,000
7,500 Unifirst Corp. 141,563
6,000 Value City Department Stores Inc.* 58,500
11,300 Wet Seal Inc.* 144,075
------------
1,533,371
------------
ROYALTY TRUSTS - 0.5%
13,400 Inacom Corp.* 229,475
5,200 Burlington Resources Coal Seam Gas 57,200
------------
286,675
------------
SAVINGS & LOAN - 1.0%
1,400 Center Banks Inc. 19,250
1,300 First Franklin Corp. 17,550
1,680 First Mutual Savings Bank Bellevue 26,040
3,000 Home Fed Bancorp 75,375
4,700 Lawrence Savings Bank* 28,200
6,500 Medford Savings Bank 144,625
10,500 Peoples Heritage Financial Group 228,375
4,700 Sunrise Bancorp California* 14,100
4,000 Walden Bancorp Inc. 79,000
------------
632,515
------------
SHIP BUILDING - 0.3%
8,800 Avondale Industrial Inc.* 152,900
2,500 Todd Shipyards Corp.* 18,438
------------
171,338
------------
STEEL - 3.2%
11,700 Amcast Industrial Corp. 207,675
7,300 Castle AM Co. 215,350
6,200 Chaparral Steel Co. 92,225
18,500 Mueller Industries Inc.* 654,438
600 Mueller Paul Co. 18,000
18
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
STEEL (CONTINUED)
2,400 Pitt Desmoines Inc.* $ 108,000
11,400 Quanex Corp. 249,375
8,100 Roanoke Electric Steel Corp. 117,450
11,000 Shiloh Industries Inc.* 136,125
5,500 Varlen Corp. 126,500
------------
1,925,138
------------
TECHNOLOGY - 1.5%
18,000 American Software Inc.* 69,750
11,800 ASA International Ltd.* 25,075
15,525 Boole & Babbage Inc.* 397,828
7,800 Computer Data Systems Inc. 121,388
1,575 Continuum Inc.* 65,559
2,500 Group 1 Software Inc.* 20,000
2,900 Rational Software Corp.* 114,550
5,400 Software Spectrum Inc.* 109,350
------------
923,500
------------
TELECOMMUNICATION SERVICES - 0.6%
6,900 Aydin Corp.* 101,775
8,800 Norstan Inc.* 235,950
1,000 Stanford Telecommunications* 30,000
------------
367,725
------------
TELEPHONE - 0.7%
7,100 ACC Corp.* 210,338
16,750 Pricellular Corp.* 224,031
------------
434,369
------------
TIRES & RUBBER - 0.1%
5,000 O'Sullivan Corp. 55,000
------------
19
SEE NOTES TO PORTFOLIO OF INVESTMENTS.
<PAGE>
SMALL CAPITALIZATION SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- -------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
TRANSPORTATION - 0.3%
9,700 Amtran Inc.* $ 113,975
8,000 Defiance Inc. 45,000
------------
158,975
------------
TRUCKING & FREIGHT FORWARDING - 1.2%
3,300 Gulfmark International Inc.* 99,825
17,175 International Shipholding Co. 328,472
8,300 Kysor Industrial Corp. 218,913
2,000 Oglebay Norton Co. 79,250
------------
726,460
------------
UTILITIES - 0.3%
3,000 Consumers Water Co. 53,250
1,000 Dominguez Services Corp. 19,000
3,100 SJW Corp. 121,243
------------
193,493
------------
Total Common Stock (Cost $46,600,495) $ 59,537,973
------------
------------
PAR SHORT TERM OBLIGATIONS - 1.3%
$ 790,000 Repurchase agreement with State Street Bank
dated 3/29/96, due 4/1/96 at 2.0%, collateralized
by U.S. Treasury Bond at 10.75% due 8/15/05,
market value $808,335 (repurchase proceeds
$790,132) 790,000
------------
Total Investments (Cost $47,390,495) $ 60,327,973
------------
------------
Notes to Portfolio of Investments:
(a) Bankrupt security - valued by management (Note 1).
* Non-income producing security.
<PAGE>
ROSENBERG JAPAN SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
SHARES COMMON STOCK - 99.2% VALUE
AUTOMOBILES - 4.7%
3,000 Mitsubishi Motors Corp. $ 25,632
5,000 Nissan Motor Co. 38,701
----------------
64,333
----------------
AUTOPARTS - 2.0%
3,000 Fuji Heavy Industries* 13,405
2,000 Kanto Auto Works 13,480
----------------
26,885
----------------
BANKS - 17.6%
5,000 Asahi Bank 59,827
4,000 Long-Term Credit Bank of Japan 33,428
1,050 Mitsubishi Bank 22,183
3,000 Sakura Bank 34,214
2,000 Sumitomo Bank 40,383
4,000 Tokai Bank 49,731
----------------
239,766
----------------
BUILDING CONSTRUCTION - 1.5%
2,000 Ishihara Construction* 5,852
2,000 Zenitaka Corp. 14,770
----------------
20,622
----------------
CHEMICALS - 1.2%
2,000 Mitsui Petrochem 16,471
----------------
COMPUTERS & BUSNESS EQUIPMENT - 0.8%
1,000 Nihon Unisys 10,750
----------------
SEE NOTES TO PORFOLIO OF INVESTMENTS
1
<PAGE>
ROSENBERG JAPAN SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
CONGLOMERATES - 0.9%
3,000 Kanematsu Corp. $ 12,928
----------------
CONSTRUCTION & MINING EQUIPMENT - 2.6%
2,000 Daito Trust Construction 24,118
2,000 Nittan Valve Co. 10,806
----------------
34,924
----------------
CONSTRUCTION MATERIALS - 0.6%
2,000 Kumagai Gumi Co. 8,264
----------------
CONTAINERS & GLASS - 0.6%
2,000 Central Glass Co.* 8,077
----------------
DRUGS & HEALTH CARE - 1.8%
1,000 Daiichi Pharmaceutical Co. 15,705
1,000 Shionogi & Co. 8,609
----------------
24,314
----------------
ELECTRIC UTILITIES - 3.3%
1,000 Hokkaido Electric Power 22,716
1,000 Kyushu Electric Power 22,716
----------------
45,432
----------------
ELECTRICAL EQUIPMENT - 8.1%
3,000 Fuji Electric Co. 16,322
5,000 Hitachi 48,609
6,000 Mitsubishi Electric Corp. 44,646
----------------
109,577
----------------
SEE NOTES TO PORFOLIO OF INVESTMENTS
2
<PAGE>
ROSENBERG JAPAN SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
ELECTRONICS - 0.7%
1,000 Dainippon Screen $ 9,441
----------------
FINANCIAL SERVICES - 2.2%
2,000 Daiwa Securities 30,474
----------------
FOOD & BEVERAGE - 4.2%
2,000 Izumi Industries 14,396
3,000 Maruha Corp.* 10,657
2,000 Tokuyama Corp. 12,919
2,000 Tokyo Kozosushi Co. 18,696
----------------
56,668
----------------
HOMEBUILDERS - 2.5%
1,000 Hazama Corp. 4,272
1,000 Maeda Corp. 9,909
1,000 Recruit Cosmos Co. 9,815
2,000 Ueki Corp. 9,984
----------------
33,980
----------------
HOUSEHOLD APPLIANCES FURNISHING - 9.6%
5,000 Matsushita Electric Industrial Co. 81,327
4,000 Sanyo Electric Co. 23,931
2,000 Victor Company of Japan 25,427
----------------
130,685
----------------
HOUSEHOLD PRODUCTS - 1.0%
2,000 Sekido Co. 14,302
----------------
SEE NOTES TO PORFOLIO OF INVESTMENTS
3
<PAGE>
ROSENBERG JAPAN SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
INDUSTRIAL MACHINERY - 8.5%
2,000 Aichi Machine Industries $ 11,965
3,000 Ishikawajima - Harima Heavy Industries 14,022
7,000 Mitsubishi Heavy Industries 60,463
1,000 Okura Industrial Company Ltd. 6,871
3,000 Toshiba Corp. 22,772
----------------
116,093
----------------
INSURANCE - 1.7%
2,000 Dowa Fire & Marine 11,031
1,000 Koa Fire & Marine 6,216
----------------
23,435
----------------
INTERNATIONAL OIL - 2.7%
3,000 Cosmo Oil Co. 17,920
3,000 Nippon Oil Co. 19,154
----------------
37,074
----------------
INVESTMENT COMPANIES - 1.6%
4,000 Marubeni Corp. 22,398
----------------
LEISURE TIME - 1.0%
2,000 Toei Co. 13,555
----------------
NON-FERROUS METALS - 1.5%
4,000 Nissho Iwai Corp. 20,416
----------------
SEE NOTES TO PORFOLIO OF INVESTMENTS
4
<PAGE>
ROSENBERG JAPAN SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
PAPER - 2.8%
2,300 Daio Paper Corp. $ 30,315
2,000 Settsu Corp.* 6,861
----------------
37,176
----------------
PETROLEUM SERVICES - 0.9%
1,000 Kamei Corp. 12,152
----------------
PHOTOGRAPHY - 2.1%
1,000 Fuji Photo Film Co. 28,605
----------------
REAL ESTATE - 1.1%
2,000 Sumitomo Realty and Development 15,349
----------------
RETAIL TRADE - 1.4%
2,000 Asanuma Corp. 11,442
1,000 Tokyu Store Chain 7,936
----------------
19,378
----------------
STEEL - 4.9%
2,000 Chubu Steel Plate 10,993
2,000 Noritz Corp. 33,279
7,000 Sumitomo Metal Industries 21,921
----------------
66,193
----------------
TELEPHONE - 1.1%
2 Nippon Telegraph & Telephone Corp. 14,620
----------------
TIRES & RUBBER - 0.7%
2,000 Toyo Tire & Rubber 8,881
----------------
SEE NOTES TO PORFOLIO OF INVESTMENTS
5
<PAGE>
ROSENBERG JAPAN SERIES
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
SHARES COMMON STOCK - CONTINUED VALUE
TRUCKING & FREIGHT - 1.3%
3,000 Nippon Yusen Kabushiki Kaish $ 17,078
----------------
Total Common Stock (Cost $1,259,929) $ 1,350,296
----------------
----------------
PAR SHORT-TERM OBLIGATIONS - 0.8%
U.S. GOVERNMENT - 0.8%
$ 11,000 U.S. Treasury Bills, 4.95% 6/27/96
(Cost $10,875) (a) $ 10,875
----------------
Total Investments (Cost $1,270,804) $ 1,361,171
----------------
----------------
Notes to portfolio of investments:
(a) This security is held as collateral for open
futurescontracts.
* Non-income producing security.
6
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
See "Financial Highlights" in the Prospectus.
See "Financial Statements" in the Statement of Additional Information
(b) Exhibits:
1. Agreement and Declaration of Trust of the Registrant,
dated April 1, 1988, incorporated by reference to the
Trust's original Registration Statement on Form N-1A (the
"Registration Statement") filed on May 5, 1988;
1.1 Amendment No. 1 to Agreement and Declaration of Trust,
dated April 28, 1988, incorporated by reference to the
Trust's original Registration Statement filed on May 5,
1988;
1.2 Amendment No. 2 to Agreement and Declaration of Trust,
dated October 27, 1988, incorporated by reference to
Post-Effective Amendment No. 1 to the Registration
Statement filed on October 28, 1988;
1.3 Amendment No. 3 to Agreement and Declaration of Trust
filed in Post-Effective Amendment No. 6 to the
Registration Statement filed on December 11, 1991;
1.4 Form of First Amended and Restated Agreement and
Declaration of Trust of the Registrant, dated as of
August __, 1996, filed herewith.
2. By-Laws of the Registrant incorporated by reference to the
Trust's original Registration Statement (the "Registration
Statement") filed on May 5, 1988;
3. None;
4. Specimen Share Certificates for Institutional shares,
Adviser shares and Select shares of the U.S. Small
Capitalization Series, the International Small
Capitalization Series and the Japan Series filed herewith;
5.1. Form of Contract between the Registrant on behalf of
its U.S. Small Capitalization Series and Rosenberg
Institutional Equity Management incorporated by
reference to Post-Effective Ammendment No. 11 to the
Registration Statement filed on May 22, 1996;
5.2. Form of Management Contract between the Registrant on
behalf of its Japan Series and Rosenberg Institutional
Equity Management incorporated by reference to Post-
Effective Amendment No. 11 to the Registration
Statement filed on May 22, 1996;
5.3. Form of Management Contract between the Registrant on
behalf of its International Small Capitalization Series
and Rosenberg Institutional Equity Management incorporated
by reference to Post-Effective Amendment No. 11 to the
Registration Statement filed on May 22, 1996;
5.4. Form of Management Contract between the Registrant on
behalf of its United States Equity Series and Rosenberg
Institutional Equity Management incorporated by reference
to Post-Effective Amendment No. 6 to the Registration
Statement filed on December 11, 1991;
6. Form of Distributor's Contract between the Registrant and
Barr Rosenberg Funds Distributor, Inc. relating to the
Registrant's Select shares and Adviser shares incorporated
by reference to Post-Effective Amendment No. 11 to the
Registration Statement filed on May 22, 1996;
7. None;
8.1. Form of Custody Agreement between the Registrant on behalf
of its Small Capitalization Series (renamed U.S. Small
Capitalization Series) and State Street Bank and Trust
Company incorporated by reference to Pre-Effective
Amendment No. 2 to the Registration Statement filed on
August 18, 1988;
-1-
<PAGE>
8.2. Form of Custody Agreement between the Registrant on behalf
of its Japan Series and State Street Bank and Trust
Company incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement filed on
January 4, 1989;
9. (a) Form of Transfer Agency Agreement between the
Registrant and State Street Bank and Trust Company
incorporated by reference to Pre-Effective
Amendment No. 2 to the Registration Statement
filed on August 18, 1988;
(b) Letter Agreement amending Transfer Agency
Agreement with respect to the Registrant's Japan
Series incorporated by reference to Post-Effective
Amendment No. 1 to the Registration Statement
filed on October 28, 1988;
(c) Letter Agreement adding United States Equity
Series to Custody Agreement and Transfer Agency
Agreement filed in Post-Effective Amendment No. 6
to the Registration Statement filed on
December 11, 1991;
(d) Form of Letter Agreement adding International
Small Capitalization Series to Custody Agreement
incorporated by reference to Post-Effective
Amendment No. 11 to the Registration Statement
filed on May 22, 1996;
(e) Form of Notification of Expense Limitation by
Rosenberg Institutional Equity Management to the
Japan Series, U.S. Small Capitalization Series
and International Small Capitalization Series
filed herewith;
(f) Form of Fund Administration Agreement between
Registrant and Furman Selz LLC filed herewith;
(g) Form of Transfer Agency Agreement between
Registrant and Furman Selz LLC on behalf of each
Fund filed herewith;
10. Opinion of Ropes & Gray (filed with the Trust's Rule 24f-2
Notice on May 30, 1996 filed herewith);
11. Consent of Price Waterhouse LLP filed herewith;
12. None;
13. Investment letter regarding initial capital incorporated
by reference to Pre-Effective Amendment No. 3 to the
Registration Statement filed on September 12, 1988;
14. None;
15. Form of Distribution Plan for Select shares incorporated
by reference to Post-Effective Amendment No. 11 to the
Registration Statement filed on May 22, 1996;
16. Schedule for Computation of Performance Quotations filed
herewith;
17. Financial Data Schedule for Registrant's fiscal year ended
March 31, 1996 filed herewith;
18. Form of Multi-Class Plan to be entered into by Registrant
pursuant to Rule 18f-3 under the Investment Company Act of
1940 incorporated by
-2-
<PAGE>
reference to Post-Effective Amendment No. 11 to the
Registration Statement filed on May 22, 1996;
19. Powers of Attorney incorporated by reference to Post-
Effective Amendment No. 3 to the Registration Statement
filed on July 28, 1989 and Post-Effective Amendment No. 4
to the Registration Statement filed on July 31, 1990.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
Item 26. NUMBER OF HOLDERS OF SECURITIES.
The following table sets forth the number of holders of each class of
securities of the Trust as of July 12, 1996 (only the class to be
designated as Institutional Shares was outstanding as of this date):
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Shares of Beneficial Interest 7
U.S. Small Capitalization Series
Shares of Beneficial Interest
Japan Series 1
Shares of Beneficial Interest 0
United States Equity Series
Shares of Beneficial Interest Not Applicable
International Small Capitalization Series
-3-
<PAGE>
Item 27. INDEMNIFICATION.
Article VIII of the Registrant's Agreement and Declaration of Trust
reads as follows (referring to the Registrant as the "Trust"):
ARTICLE VIII
Indemnification
SECTION 1. TRUSTEES, OFFICERS, ETC. The Trust shall indemnify each
of its Trustees and officers (including persons who serve at the Trust's request
as directors, officers or trustees of another organization in which the Trust
has any interest as a shareholder, creditor or otherwise) (hereinafter referred
to as a "Covered Person") against all liabilities and expenses, including but
not limited to amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and counsel fees reasonably incurred by any Covered Person
in connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such Covered Person may be or may have
been threatened, while in office or thereafter, by reason of being or having
been such a Covered Person except with respect to any matter as to which such
Covered person shall have been finally adjudicated in any such action, suit or
other proceeding to be liable to the Trust or its Shareholders by reason of
wilful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office. Expenses,
including counsel fees so incurred by any such Covered Person (but excluding
amounts paid in satisfaction of judgments, in compromise or as fines or
penalties), shall be paid from time to time by the Trust in advance of the final
disposition of any such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Covered Person to repay amounts so paid to
the Trust if it is ultimately determined that indemnification of such expenses
is not authorized under this Article, provided, however, that either (a) such
Covered Person shall have provided appropriate security for such undertaking,
(b) the Trust shall be insured against losses arising from any such advance
payments or (c) either a majority of the disinterested Trustees acting on the
matter (provided that a majority of the disinterested Trustees then in office
act on the matter), or independent legal counsel in a written opinion, shall
have determined, based upon a review of readily available facts (as opposed to a
full trial type inquiry) that there is reason to believe that such Covered
Person will be found entitled to indemnification under this Article.
SECTION 2. COMPROMISE PAYMENT. As to any matter disposed of (whether
by a compromise payment, pursuant to a consent decree or otherwise) without an
adjudication by a court, or by any other body before which the proceeding was
brought, that such Covered Person is liable to the Trust or its Shareholders by
reason of wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office, indemnification
shall be provided if (a) approved, after notice that it involves such
indemnification, by at least a majority of the disinterested Trustees acting on
the matter (provided that a majority of the disinterested Trustees then in
office act on the matter) upon a determination, based upon a review of readily
available fact (as opposed to a full trial type inquiry) that such Covered
Person is not liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office, or (b) there has been obtained an
opinion in writing of independent legal counsel, based upon a review of readily
available facts (as opposed to a full trial type inquiry) to the effect that
such indemnification would not protect such Person against any liability to the
Trust to which he would otherwise be subject by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office. Any approval pursuant to this Section shall not prevent
the recovery from any Covered Person of any amount paid to such Covered Person
in accordance with this Section as indemnification if such Covered Person is
subsequently adjudicated by a court of competent
-4-
<PAGE>
jurisdiction to have been liable to the Trust or its Shareholders by reason of
wilful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
SECTION 3. INDEMNIFICATION NOT EXCLUSIVE. The right of
indemnification hereby provided shall not be exclusive of or affect any other
rights to which such Covered Person may be entitled. As used in this Article
VIII, the term "Covered Person" shall include such person's heirs, executors and
administrators and a "disinterested Trustee" is a Trustee who is not an
"interested person" of the Trust as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended, (or who has been exempted from being
an "interested person" by any rule, regulation or order of the Commission) and
against whom none of such actions, suits or other proceedings or another action,
suit or other proceeding on the same or similar grounds is then or has been
pending. Nothing contained in this Article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees or
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person; provided, however, that the Trust shall not purchase
or maintain any such liability insurance in contravention of applicable law,
including without limitation the 1940 Act.
SECTION 4. SHAREHOLDERS. In case any Shareholder or former
Shareholder shall be held to be personally liable solely by reason of his or her
being or having been a Shareholder and not because of his or her acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his or her heirs, executors, administrators or other legal representatives or in
the case of a corporation or other entity, its corporate or other general
successor) shall be entitled to be held harmless from and indemnified against
all loss and expense arising from such liability, but only out of the assets of
the particular series of Shares of which he or she is or was a Shareholder."
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Rosenberg Institutional Equity Management (the "Manager") was
organized as a limited partnership under the laws of the State of California in
1985, and is registered as an investment adviser under the Investment Advisers
Act of 1940.
Set forth below are the substantial business engagements during at
least the past two fiscal years of each director, officer or partner of the
Manager:
Name and Position Business and
with Manager other connections
- ------------------ -----------------
Barr M. Rosenberg General Partner, Rosenberg Alpha L.P.
Managing General Partner (formerly (RBR Partners (limited partner of
and Chief Investment Officer Manager)), 12 El Sueno, Orinda, California,
December, 1984 to present; Chairman of the
Board, Rosenberg Management Company S.A.,
April 1989 to present; Chairman of the Board,
Rosenberg U.S. Japan Management Company S.A.,
July, 1989 to present. Chairman of the
Board, Rosenberg Global Management Company,
S.A., April 1990 to present; Director and
Chairman of the Board, Rosenberg Asset
Management Company, Ltd., Dai-Ichi Edobashi
Bldg., 1-11-1 Nihonbashi Chuo-Ku, Tokyo 103,
Japan; Chairman of the Board and Director of
Barr Rosenberg Investment Management, Inc.,
February 1990 to present. Chairman, Barr
Rosenberg European Management, Ltd., March
1990 to present; Chairman and Director,
Nomura Rosenberg Investment Technology
Institute, June 1990 to present.
-5-
<PAGE>
Marlis S. Fritz Director, Barr Rosenberg European Management
General Partner and Director of Ltd., May 1990 to present.
Marketing
Kenneth Reid Consultant, BARRA (financial consulting),
General Partner 2001 Addison Street, Berkeley, California,
and Director of Research June, 1982 to June, 1986. Director, Nomura
Rosenberg Investment Technology Institute,
January 1991 to present.
Po-Len Hew Controller, Rosenberg Institutional Equity
Controller Management, October 1989 to present,
Treasurer, Barr Rosenberg Investment
Management, May 1994 to present.
Item 29. PRINCIPAL UNDERWRITERS:
(a) Barr Rosenberg Funds Distributor, Inc. (the "Distributor") is the
principal underwriter of the Funds' Adviser and Select shares.
The Distributor does not act as principal underwriter, depositor
or investment adviser for any other investment company.
(b) Information with respect to the Distributor's directors and
officers is as follows:
Name and Principal Positions and Positions and
Offices Offices with with
Business Address Underwriter Registrant
------------------ ------------- -------------
Robert Hering President None
Michael C. Petrycki Vice President and None
Director
Gordon Forrester Vice President Assistant Treasurer
Steven D. Blecher Vice President, None
Secretary and
Treasurer
Lawrence Wagner Vice President, Chief None
Financial Officer
Elizabeth Q. Solazzo Assistant Secretary None
Thalia M. Cody Assistant Secretary None
The business address of all directors and officers of the Distributor is 230
Park Avenue, New York, New York 10169.
(c) None.
Item 30. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940, as amended, and the rules
thereunder will be maintained at the offices of:
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<PAGE>
1) Barr Rosenberg Series Trust
237 Park Avenue
Suite 910
New York, NY 10017
Rule 31a-1 (b)(1),(2),(3), (4), (5), (6), (7), (8), (9), (10), (11)
Rule 31a-2 (a)
2) Rosenberg Institutional Equity Management
Four Orinda Way
Suite 300E
Orinda, CA 94563
Rule 31a-1 (f)
Rule 31a-2 (e)
3) Barr Rosenberg Funds Distributor, Inc.
230 Park Avenue
New York, NY 10169
Rule 31a-1 (d)
Rule 31a-2 (c)
Item 31. MANAGEMENT SERVICES.
None.
Item 32. UNDERTAKINGS.
(i) The Registrant undertakes to comply with the last three
paragraphs of Section 16(c) of the Investment Company Act of 1940 as though such
provisions of the Act were applicable to the Trust.
(ii) The Registrant undertakes to file a post-effective amendment to
the Registration Statement within four to six months from the later of (i) the
effective date of this post-effective amendment or (ii) the commencement of
operations of the International Small Capitalization Series which includes
financial statements (which need not be audited) for the International Small
Capitalization Series reflecting an initial period of operations.
-7-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has met all of
the requirements for effectiveness of this Amendment to its Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 12 to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Orinda, and the State of California, on the 31st day of July, 1996.
BARR ROSENBERG SERIES TRUST
By /s/Marlis S. Fritz
_____________________
Marlis S. Fritz
Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following persons in
the capacities and on the 31 day of July, 1996.
SIGNATURE TITLE DATE
/s/Marlis S. Fritz Vice President, July 31, 1996
____________________
Marlis S. Fritz Trustee
Kenneth Reid* President July 31, 1996
Kenneth Reid Principal Executive Officer,
Trustee
Po-Len Hew* Treasurer, July 31, 1996
____________________
Po-Len Hew Principal Financial Officer
Trustee
Nils H. Hakansson* Trustee July 31, 1996
____________________
Nils H. Hakansson
Barr M. Rosenberg* Trustee July 31, 1996
____________________
Barr M. Rosenberg
William F. Sharpe* Trustee July 31, 1996
____________________
William F. Sharpe
*By: /s/Marlis S. Fritz
__________________
Marlis S. Fritz
Attorney-in-Fact
Date: July 31, 1996
<PAGE>
BARR ROSENBERG SERIES TRUST
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
1.4 Form of First Amended and Restated Agreement and
Declaration of Trust
4 Specimen Share Certificates
9(e) Form of Notification of Expense Limitation
9(f) Form of Fund Administration Agreement
9(g) Form of Transfer Agency Agreement
10. Opinion of Ropes & Gray - Rule 24f-2
11 Consent of Price Waterhouse LLP
16 Schedule for Computation of Performance Information
27 Financial Data Schedules
<PAGE>
BARR ROSENBERG SERIES TRUST
FIRST AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
THIS FIRST AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST made
this ___ of August, 1996 by the Trustees hereunder and the holders of shares of
beneficial interest issued hereunder and to be issued hereunder as hereinafter
provided:
WITNESSETH that
WHEREAS the Trustees desire to restate all prior Amendments to the original
Agreement and Declaration of Trust made to date and additionally desire to amend
and restate the original Agreement and Declaration of Trust to change the name
of the Trust from "Rosenberg Series Trust" to "Barr Rosenberg Series Trust," to
change the name of the "Small Capitalization Series" to the "U.S. Small
Capitalization Series," to add the International Small Capitalization Series to
the Trust and to provide for the establishment and designation of multiple
classes of shares within each series of the Trust pursuant to the power of the
Trustees set forth in Article III, Section 5 of the original Agreement and
Declaration of Trust.
WHEREAS the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby direct that this First Amended and
Restated Agreement and Declaration of Trust be filed with the Secretary of The
Commonwealth of Massachusetts and with the Clerk of every city or town where
such association or trust has a usual place of business, and do hereby declare
that they will hold all cash, securities and other assets, which they may from
time to time acquire in any manner as Trustees hereunder IN TRUST to manage and
dispose of the same upon the following terms and conditions for the pro rata
benefit of the holders from time to time of Shares in this Trust as hereinafter
set forth.
ARTICLE I
Name and Definitions
SECTION 1. This Trust shall be known as Barr Rosenberg Series Trust and the
Trustees shall conduct the business of the Trust under that name or any other
name as they may from time to time determine.
<PAGE>
SECTION 2. DEFINITIONS. Whenever used herein, unless otherwise required by
the context or specifically provided
(a) "Trust" refers to the Massachusetts business trust established by
the Trust's original Agreement and Declaration of Trust, dated April 1, 1988, as
amended and restated by this instrument and further amended from time to time;
(b) "Trustees" refers to the Trustees of the Trust named in Article IV
hereof or elected in accordance with such Article;
(c) "Shares" means the equal proportionate units of interest into
which the beneficial interest in the Trust or in the Trust property belonging to
any Series of the Trust (or in the property belonging to any Series allocable to
any Class of that Series) (as the context may require) shall be divided from
time to time;
(d) "Shareholder" means a record owner of Shares;
(e) "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Commission" and "principal underwriter" shall have the
meanings given them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust, as amended or restated from time to time;
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from time
to time;
(i) "Series Company" refers to the form of registered open-end
investment company described in Section 18(f)(2) of the 1940 Act or in any
successor statutory provision;
(j) "Series" refers to Series of Shares established and designated
under or in accordance with the provisions of Article III; and
(k) "Class" refers to any Class of Shares established and designated
under or in accordance with the provisions of Article III. The Shares of any
Class shall represent a subset of Shares of a Series, and together with all
other Classes of the same Series, shall constitute all Shares of that Series.
-2-
<PAGE>
ARTICLE II
Purpose of Trust
The purpose of the Trust is to provide investors a managed investment
primarily in securities (including options), debt instruments, money market
instruments, commodities, commodity contracts and options thereon.
ARTICLE III
Shares
SECTION 1. DIVISION OF BENEFICIAL INTEREST. The beneficial interest in the
Trust shall at all times be divided into an unlimited number of Shares, without
par value. Subject to the provisions of Section 6 of this Article III, each
Share shall have voting rights as provided in Article V hereof, and holders of
the Shares of any Series or Class shall be entitled to receive dividends, when
and as declared with respect thereto in the manner provided in Article VI,
Section 1 hereof. No Share shall have any priority or preference over any other
Share of the same Series and Class with respect to dividends or distributions
upon termination of the Trust or of such Series or Class made pursuant to
Article IX, Section 4 hereof. All dividends and distributions shall be made
ratably among all Shareholders of a particular Series or Class from the assets
belonging to such Series (or, in the case of a Class, allocable to such Class)
according to the number of Shares of such Series or Class held of record by such
Shareholders on the record date for any dividend or on the date of termination,
as the case may be. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust. The
Trustees may from time to time divide or combine the Shares of any particular
Series or Class into a greater or lesser number of Shares of that Series or
Class without thereby changing the proportionate beneficial interest of the
Shares of that Series or Class in the assets belonging to that Series (or, in
the case of a Class, allocable to such Class) or in any way affecting the rights
of Shares of any other Series or Class.
SECTION 2. OWNERSHIP OF SHARES. The ownership of Shares shall be recorded
on the books of the trust or a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Series and Class.
No certificates certifying the ownership of Shares shall be issued except as the
Trustees may otherwise determine from time to time. The Trustees may make such
rules as they consider appropriate for the transfer of Shares of each Series and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive as to who are
the Shareholders of each Series and Class and as to the number of Shares of each
Series and Class held from time to time by each.
SECTION 3. INVESTMENT IN THE TRUST. The Trustees shall accept investments
in the Trust from such persons and on such terms and for such consideration as
they from time to time authorize.
-3-
<PAGE>
SECTION 4. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY. Shares
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the continuance of the
Trust shall not operate to terminate the same nor entitle the representative of
any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but entitles such representative
only to the rights of said deceased Shareholder under this Trust. Ownership of
Shares shall not entitle the Shareholder to any title in or to the whole or any
part of the Trust property or right to call for a partition or division of the
same or for an accounting, nor shall the ownership of Shares constitute the
Shareholders partners. Neither the Trust nor the Trustees, nor any officer,
employee or agent of the Trust shall have any power to bind personally any
Shareholders, nor except as specifically provided herein to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever other
than such as the Shareholder may at any time personally agree to pay.
SECTION 5. POWER OF TRUSTEES TO CHANGE PROVISIONS RELATING TO SHARES.
Notwithstanding any other provisions of this Declaration of Trust and without
limiting the power of the Trustees to amend the Declaration of Trust as provided
elsewhere herein, the Trustees shall have the power to amend this Declaration of
Trust, at any time and from time to time, in such manner as the Trustees may
determine in their sole discretion, without the need for Shareholder action, so
as to add to, delete, replace or otherwise modify any provisions relating to the
Shares contained in this Declaration of Trust for the purpose of (i) responding
to or complying with any regulations, orders, rulings or interpretations of any
governmental agency or any laws, now or hereafter applicable to the Trust, or
(ii) designating and establishing Series and Classes in addition to the Series
and Classes established in Section 6 of this Article III; provided that before
adopting any such amendment without Shareholder approval the Trustees shall
determine that it is consistent with the fair and equitable treatment of all
Shareholders. The establishment and designation of any Series or Class of
Shares in addition to the Series and Classes established and designated in
Section 6 of this Article III shall be effective upon the execution by a
majority of the then Trustees of an amendment to this Declaration of Trust,
taking the form of a complete restatement or otherwise, setting forth such
establishment and designation and the relative rights and preferences of such
Series or Class, as the case may be, or as otherwise provided in such
instrument.
Without limiting the generality of the foregoing, the Trustees may, for the
above-stated purposes, amend the Declaration of Trust to:
(a) create one or more Series or Classes of Shares (in addition to any
Series or Classes already existing or otherwise) with such rights and
preferences and such eligibility requirements for investment therein as the
Trustees shall determine and reclassify any or all outstanding Shares as shares
of particular Series or Classes in accordance with such eligibility
requirements;
-4-
<PAGE>
(b) amend any of the provisions set forth in paragraphs (a) through
(j) of Section 6 of this Article III;
(c) combine one or more Series or Classes of Shares into a single
Series or Class on such terms and conditions as the Trustees shall determine;
(d) change or eliminate any eligibility requirements for investment in
Shares of any Series or Class, including without limitation the power to provide
for the issue of Shares of any Series or Class in connection with any merger or
consolidation of the Trust with another trust or company or any acquisition by
the Trust of part or all of the assets of another trust or company;
(e) change the designation of any Series or Class of Shares;
(f) change the method of allocating dividends among the various Series
and Classes of Shares;
(g) allocate any specific assets or liabilities of the Trust or any
specific items of income or expense of the Trust to one or more Series or
Classes of Shares;
(h) specifically allocate assets to any or all Series or Classes of
Shares or create one or more additional Series or Classes of Shares which are
preferred over all other Series or Classes of Shares in respect of assets
specifically allocated thereto or any dividends paid by the Trust with respect
to any net income, however determined, earned from the investment and
reinvestment of any assets so allocated or otherwise and provide for any special
voting or other rights with respect to such Series or Classes.
SECTION 6. ESTABLISHMENT AND DESIGNATION OF SERIES AND CLASSES. Without
limiting the authority of the Trustees set forth in Section 5, INTER ALIA, to
establish and designate any further Series or Classes of Shares or to modify
the rights and preferences of any Series or Class, the "Japan Series", the
"U.S. Small Capitalization Series" (formerly the Small Capitalization Series),
the "United States Equity Series", and the "International Small Capitalization
Series" shall be, and are hereby, established and designated; and with
respect to each Series, the Institutional Shares Class, Adviser Shares Class
and Select Shares Class, which may be issued by each Series from time to
time, shall be, and are hereby, established and designated, which Classes
shall have the respective rights and preferences as are set forth in the Plan
attached as Exhibit 3.6 hereto as such Plan may be amended from
time to time by The Board of Trustees.
Shares of each Series (or Class, as the case may be) established in this
Section 6 shall have the following relative rights and preferences:
(a) ASSETS BELONGING TO SERIES. All consideration received by the
Trust for the issue or sale of Shares of a particular Series, together with all
assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof from whatever source derived, including,
without limitation, any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably belong to that
Series for all purposes, subject only to the rights of creditors, and shall be
so recorded
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upon the books of account of the Trust. Such consideration, assets, income,
earnings, profits and proceeds thereof, from whatever source derived, including,
without limitation, any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as "assets
belonging to" that Series. In the event that there are any assets, income,
earnings, profits and proceeds thereof, funds or payments which are not readily
identifiable as belonging to any particular Series (collectively "General
Assets"), the Trustees shall allocate such General Assets to, between or among
any one or more of the Series established and designated from time to time in
such manner and on such basis as they, in their sole discretion, deem fair and
equitable, and any General Asset so allocated to a particular Series shall
belong to that Series. Each such allocation by the Trustees shall be conclusive
and binding upon the Shareholders of all Series for all purposes.
(b) LIABILITIES BELONGING TO SERIES. The assets belonging to each
particular series shall be charged solely with the liabilities of the Trust in
respect to that Series, expenses, costs, charges and reserves attributable to
that Series, and any general liabilities of the Trust which are not readily
identifiable as belonging to any particular Series but which are allocated and
charged by the Trustees to and among any one or more of the Series established
and designated from time to time in a manner and on such basis as the Trustees
in their sole discretion deem fair and equitable. The liabilities, expenses,
costs, charges, and reserves so charged to a Series are herein referred to as
"liabilities belonging to" that Series. Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees shall be conclusive and
binding upon the holders of all Series for all purposes.
(c) DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS, AND REPURCHASES.
Notwithstanding any other provisions of this Declaration of Trust, including,
without limitation, Article VI, no dividend or distribution (including, without
limitation, any distribution paid upon termination of the Trust or of any Series
or Class) with respect to, nor any redemption or repurchase of, the Shares of
any Series shall be effected by the Trust other than from the assets belonging
to such Series, nor shall any Shareholder of any particular Series otherwise
have any right or claim against the assets belonging to any other Series except
to the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series.
(d) VOTING. Notwithstanding any of the other provisions of this
Declaration of Trust, including, without limitation, Section 1 of Article V, the
Shareholders of any particular Series or Class shall not be entitled to vote on
any matters as to which such Series or Class is not affected except as otherwise
required by the 1940 Act or other applicable law. On any matter submitted to a
vote of Shareholders, all Shares of the Trust then entitled to vote shall be
voted by individual Series, unless otherwise required by the 1940 Act or other
applicable law.
(e) EQUALITY. All the Shares of each particular Class of a Series
shall represent an equal proportionate interest in the assets allocable to that
Class, and each Share of any particular Series shall be equal to each other
Share of that Series (subject to the liabilities allocated to each Class of that
Series).
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(f) FRACTIONS. Any fractional Share of a Series or Class shall carry
proportionately all the rights and obligations of a whole share of that Series
or Class, including rights with respect to voting, receipt of dividends and
distributions, redemption of Shares and termination of the Trust.
(g) EXCHANGE PRIVILEGE. The Trustees shall have the authority to
provide that the holders of Shares of any Series or Class shall have the right
to exchange said Shares for Shares of one or more other Series or Classes of
Shares in accordance with such requirements and procedures as may be established
by the Trustees.
(h) COMBINATION OF SERIES OR CLASSES. The Trustees shall have the
authority, without the approval of the Shareholders of any Series or Class
unless otherwise required by applicable law, to combine the assets and
liabilities belonging to any two or more Series (or the assets allocable to any
two or more Classes) into assets and liabilities belonging (or allocable) to a
single Series (or Class).
(i) ELIMINATION OF SERIES OR CLASSES. If at any time that there are
no Shares outstanding of any particular Series or Class previously established
and designated, the Trustees may amend this Declaration of Trust to abolish that
Series or Class and to rescind the establishment and designation thereof, such
amendment to be effected in the manner provided in Section 5 of this Article
III.
(j) ASSETS AND LIABILITIES ALLOCABLE TO A CLASS. The assets and
liabilities belonging to a Series shall be proportionately allocated among all
the Classes of that Series according to the percentage of net assets allocated
to each particular Class. For purposes of determining the assets and
liabilities belonging to a Series that are allocable to a Class of that Series,
expenses shall be accrued as described in the Plan attached as Exhibit 3.6
hereto subject to the provisions of paragraph (g) of Section 5 of this Article
III.
SECTION 7. INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former Shareholder shall be held to be personally liable solely by reason of his
or her being or having been a Shareholder of the trust or of a particular Series
and not because of his or her acts or omissions or for some other reason, the
Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled out of
the assets of the Series of which he is a Shareholder or former Shareholder to
be held harmless from and indemnified against all loss and expense arising from
such liability.
SECTION 8. NO PREEMPTIVE RIGHTS. Shareholders shall have no preemptive or
other right to subscribe to any additional Shares or other securities issued by
the Trust.
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ARTICLE IV
The Trustees
SECTION 1. ELECTION AND TENURE. The Trustees may fix the number of
Trustees, fill vacancies in the Trustees, including vacancies arising from an
increase in the number of Trustees, or remove Trustees with or without cause.
Each Trustee shall serve during the continued lifetime of the Trust until he
dies, resigns or is removed, or, if sooner, until the next meeting of
Shareholders called for the purpose of electing Trustees and until the election
and qualification of his successor. Any Trustee may resign at any time by
written instrument signed by him and delivered to any officer of the Trust or to
a meeting of the trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee resigning
and no Trustee removed shall have any right to any compensation for any period
following his resignation or removal, or any right to damages on account of such
removal. The Shareholders may fix the number of Trustees and elect Trustees at
any meeting of Shareholders called by the Trustees for that purpose.
SECTION 2. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. The death,
declination, resignation, retirement, removal, or incapacity of the Trustees, or
any of them, shall not operate to annul the Trust or to revoke any existing
agency created pursuant to the terms of this Declaration of Trust.
SECTION 3. POWERS. Subject to the provisions of this Declaration of Trust,
the business of the Trust shall be managed by the Trustees, and they shall have
all powers necessary or convenient to carry out that responsibility including
the power to engage in securities transactions of all kinds on behalf of the
Trust. Without limiting the foregoing, the Trustees may adopt By-Laws not
inconsistent with this Declaration of Trust providing for the regulation and
management of the affairs of the Trust and may amend and repeal them to the
extent that such By-Laws do not reserve that right to the Shareholders; they may
fill vacancies in or remove from their number (including any vacancies created
by an increase in the number of Trustees); they may remove from their number
with or without cause; they may elect and remove such officers and appoint and
terminate such agents as they consider appropriate; they may appoint from their
own number and terminate one or more committees consisting of two or more
Trustees which may exercise the powers and authority of the Trustees to the
extent that the Trustees determine; they may employ one or more custodians of
the assets of the Trust and may authorize such custodians to employ
subcustodians and to deposit all or any part of such assets in a system or
systems for the central handling of securities or with a Federal Reserve Bank,
retain a transfer agent or a shareholder servicing agent, or both, provide for
the distribution of Shares by the Trust, through one or more principal
underwriters or otherwise, set record dates for the determination of
Shareholders with respect to various matters, and in general delegate such
authority as they consider desirable to any officer of the Trust, to any
committee of the Trustees and to any agent or employee of the Trust or to any
such custodian or underwriter.
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Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or
write options with respect to or otherwise deal in any property rights relating
to any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to executive and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;
(d) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in its own
name or in the name of a custodian or subcustodian or a nominee or nominees or
otherwise;
(f) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held in the Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;
(g) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper;
(h) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(i) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(j) To borrow funds or other property;
(k) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof;
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(l) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers, principal underwriters, or
independent contractors of the Trust individually against all claims and
liabilities of every nature arising by reason of holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such person as Trustee, officer, employee, agent,
investment adviser, principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such person against
liability; and
(m) To pay pensions as deemed appropriate by the Trustees and to
adopt, establish and carry out pension, profit-sharing, share bonus, share
purchase, savings, thrift and other retirement, incentive and benefit plans,
trusts and provisions, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust.
The Trustees shall not in any way be bound or limited by any present
or future law or custom in regard to investments by Trustees. The Trustees
shall not be required to obtain any court order to deal with any assets of the
Trust or take any other action hereunder.
SECTION 4. PAYMENT OF EXPENSE BY THE TRUST. The Trustees are authorized to
pay or cause to be paid out of the principal or income of the Trust, or partly
out of principal and partly out of income, as they deem fair, all expenses,
fees, charges, taxes and liabilities incurred or arising in connection with the
Trust, or in connection with the management thereof, including but not limited
to, the Trustees' compensation and such expenses and charges for the services of
the Trust's officers, employees, investment adviser or manager, principal
underwriter, auditor, counsel, custodian, transfer agent, shareholder servicing
agent, and such other agents or independent contractors and such other expenses
and charges as the Trustees may deem necessary or power to incur.
SECTION 5. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder, or
each Shareholder of any particular Series or Class, to pay directly, in advance
or arrears, for charges of the Trust's custodian or transfer, shareholder
servicing or similar agent, an amount fixed from time to time by the Trustees,
by setting off such charges due from such Shareholder from declared but unpaid
dividends owed such Shareholder and/or by reducing the number of Shares in the
account of such Shareholder by that number of full and/or fractional Shares
which represents the outstanding amount of such charges due from such
Shareholder.
SECTION 6. OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the assets of
the Trust shall at all times be considered as vested in the Trustees.
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SECTION 7. ADVISORY, MANAGEMENT AND DISTRIBUTION CONTRACTS. Subject to
such requirements and restrictions as may be set forth in the By-Laws, the
Trustees may, at any time and from time to time, contract for exclusive or
nonexclusive advisory and/or management services for the Trust or for any Series
with Rosenberg Institutional Equity Management or any other partnership,
corporation, trust, association or other organization (the "Manager"); and any
such contract may contain such other terms as the Trustees may determine,
including without limitation, authority for a Manager to determine from time to
time without prior consultation with the Trustees what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets of
the Trust shall be held uninvested and to make changes in the Trust's
investments. The Trustees may also, at any time and from time to time, contract
with the Manager or any other partnership, corporation, trust, association or
other organization, appointing it exclusive or nonexclusive distributor or
principal underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager, adviser,
principal underwriter, distributor or affiliate or agent of or for any
partnership, corporation, trust, association, or other organization, or of or
for any parent or affiliate of any organization, with which an advisory or
management contract, or principal underwriter's or distributor's contract, or
transfer, shareholder servicing or other agency contract may have been or may
hereafter be made, or that any such organization, or any parent or affiliate
thereof, is Shareholder or has an interest in the Trust, or that
(ii) any corporation, trust, association or other organization with
which an advisory or management contract or principal underwriter's or
distributor's contract, or transfer, shareholder servicing or other agency
contract may have been or may hereafter be made also has an advisory or
management contract, or principal underwriter's or distributor's contract, or
transfer, shareholder servicing or other agency contract with one or more other
corporations, trusts, associations, or other organizations, or has other
business or interests, shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust from voting upon or
executing the same or create any liability or accountability to the Trust or its
Shareholders.
ARTICLE V
Shareholders' Voting Powers and Meetings
SECTION 1. VOTING POWERS. The Shareholders shall have power to vote only
(i) for the election of Trustees as provided in Article IV, Section 1, (ii) with
respect to any amendment of this Declaration of Trust to the extent and as
provided in Article IX, Section 8, (iii) to the same extent as the stockholders
of a Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
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or as a class action on behalf of the Trust or the Shareholders, (iv) with
respect to the termination of the Trust or any Series or Class to the extent and
as provided in Article IX, Section 4, and (v) with respect to such additional
matters relating to the Trust as may be required by this Declaration of Trust,
the By-Laws or any registration of the Trust with the Commission (or any
successor agency) or any state, or as the Trustees may consider necessary or
desirable. Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. A proxy with
respect to Shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them.
A proxy purporting to be executed by or on behalf of a Shareholder shall be
deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger. At any time when no Shares of
a Series or Class are outstanding, the Trustees may exercise all rights of
Shareholders of that Series or Class with respect to matters affecting that
Series or Class and may with respect to that Series or Class take any action
required by law, this Declaration of Trust or the By-Laws to be taken by the
Shareholders.
SECTION 2. VOTING POWER AND MEETINGS. Meetings of the Shareholders may be
called by the Trustees for the purpose of electing Trustees as provided in
Article IV, Section 1 and for such other purposes as may be prescribed by law,
by this Declaration of Trust or by the By-Laws. Meetings of the Shareholders
may also be called by the Trustees from time to time for the purpose of taking
action upon any other matter deemed by the Trustees to be necessary or
desirable. A meeting of Shareholders may be held at any place designated by the
Trustees. Written notice of any meeting of Shareholders shall be given or
caused to be given by the Trustees by mailing such notice at least seven days
before such meeting, postage prepaid, stating the time and place of the meeting,
to each Shareholder at the Shareholder's address as it appears on the records of
the Trust. Whenever notice of a meeting is required to be given to a
Shareholder under this Declaration of Trust or the By-Laws, a written waiver
thereof, executed before or after the meeting by such Shareholder or his
attorney thereunto authorized and filed with the records of the meeting, shall
be deemed equivalent to such notice.
SECTION 3. QUORUM AND REQUIRED VOTE. Except when a larger quorum is
required by law, by the By-Laws or by this Declaration of Trust, 40% of the
Shares entitled to vote shall constitute a quorum at a Shareholders' meeting.
When any one Series or Class is to vote separately from any other Shares
which are to vote on the same matters as a separate Series or Class, 40% of
the Shares of each such Series or Class entitled to vote shall constitute a
quorum at a Shareholder's meeting of that Series or Class. Any meeting of
Shareholders may be adjourned from time to time by a majority of the votes
properly cast upon the question, whether or not a quorum is present, and the
meeting may be held as adjourned within a reasonable time after the date set
for the original meeting without further notice. When a quorum is present at
any meeting, a majority of the Shares voted shall decide any questions and a
plurality shall elect a Trustee, except when a larger vote is required by any
provision of this Declaration of Trust or the By-Laws or by law. If any
question on which the Shareholders are entitled to vote would adversely
affect the rights of any Series or Class, the
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vote of a majority (or such larger vote as is required as aforesaid) of the
Shares of such Series or Class which are entitled to vote, voting separately,
shall also be required to decide such question.
SECTION 4. ACTION BY WRITTEN CONSENT. Any action taken by Shareholders may
be taken without a meeting if Shareholders holding a majority of the Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration of Trust or by the By-
Laws) and holding a majority (or such larger proportion as aforesaid) of the
Shares of any Series or Class entitled to vote separately on the matter consent
to the action in writing and such written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
SECTION 5. RECORD DATES. For the purpose of determining the Shareholders
of any Series or Class who are entitled to vote or act at any meeting or any
adjournment thereof, the Trustees may from time to time fix a time, which shall
be not more than 60 days before the date of any meeting of Shareholders, as the
record date for determining the Shareholders of such Series or Class having the
right to notice of and to vote at such meeting and any adjournment thereof, and
in such case only Shareholders of record on such record date shall have such
right, notwithstanding any transfer of shares on the books of the Trust after
the record date. For the purpose of determining the Shareholders of any Series
or Class who are entitled to receive payment of any dividend or of any other
distribution, the Trustees may from time to time fix a date, which shall be
before the date for the payment of such dividend or such other payment, as the
record date for determining the Shareholders of such Series or Class having the
right to receive such dividend or distribution. Without fixing a record date
the Trustees may for voting and/or distribution purposes close the register or
transfer books for one or more Series or Classes for all or any part of the
period between a record date and a meeting of shareholders or the payment of a
distribution. Nothing in this section shall be construed as precluding the
Trustees from setting different record dates for different Series or Classes.
SECTION 6. ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VI
Net Income, Distributions, and Redemptions and Repurchases
SECTION 1. DISTRIBUTIONS OF NET INCOME. The Trustees shall each year, or
more frequently if they so determine in their sole discretion, distribute to the
Shareholders of each Series or Class, in shares of that Series or Class, cash or
otherwise, an amount approximately equal to the net income attributable to the
assets belonging to such Series (or the assets allocable to such Class) and may
from time to time distribute to the Shareholders of each Series or Class, in
shares of that Series, cash or otherwise, such additional amounts, but only from
the assets belonging to such Series (or allocable to such Class), as they may
authorize. All dividends and distributions on Shares of a particular Series or
Class shall be distributed
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pro rata to the holders of that Series or Class in proportion to the number of
Shares of that Series or Class held by such holders and recorded on the books of
the Trust at the date and time of record established for that payment of such
dividend of distributions.
The manner of determining net income, income, asset values, capital gains,
expenses, liabilities and reserves of any Series or Class may from time to time
be altered as necessary or desirable in the judgement of the Trustees to conform
such manner of determination to any other method prescribed or permitted by
applicable law. Net income shall be determined by the Trustees or by such
person as they may authorize at the times and in the manner provided in the By-
Laws. Determinations of net income of any Series or Class and determination of
income, asset value, capital gains, expenses, and liabilities made by the
Trustees, or by such person as they may authorize, in good faith, shall be
binding on all parties concerned. The foregoing sentence shall not be construed
to protect any Trustee, officer or agent of the Trust against any liability to
the Trust or its security holders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office.
If, for any reason, the net income of any Series or Class determined at any
time is a negative amount, the pro rata share of such negative amount allocable
to each Shareholder of such Series or Class shall constitute a liability of such
Shareholder to that Series or Class which shall be paid out of such
Shareholder's account at such times and in such manner as the Trustees may from
time to time determine (x) out of the accrued dividend account of such
Shareholder, (y) by reducing the number of Shares of that Series or Class in the
account of such Shareholder, or (z) otherwise.
SECTION 2. REDEMPTIONS AND REPURCHASES. The Trust shall purchase such
Shares as are offered by any Shareholder for redemption, upon the presentation
of a proper instrument of transfer together with a request directed to the Trust
or a person designated by the Trust that the Trust purchase such Shares or in
accordance with such other procedures for redemption as the Trustees may from
time to time authorize; and the Trust will pay therefor the net asset value
thereof, as determined in accordance with the By-Laws, the 1940 Act and the
rules of the Commission. Payment for said Shares shall be made by the Trust to
the Shareholders within seven days after the date on which the request is made
or in accordance with such other procedures, consistent with the 1940 Act and
the rules of the Commission, as the Trustees may from to time authorize. The
obligation set forth in this Section 2 is subject to the provision that in the
event that any time the New York Stock Exchange is closed for other than
weekends or holidays, or if permitted by the rules of the Commission during
periods when trading on the Exchange is restricted or during any emergency which
makes it impracticable for the Trust to dispose of the investments of the
applicable Series or to determine fairly the value of the net assets belonging
to such Series (or net assets allocable to such Class) or during any other
period permitted by order of the Commission for the protection of investors,
such obligations may be suspended or postponed by the Trustees. The Trust may
also purchase or repurchase Shares at a price not exceeding the net asset value
of such Shares in effect when the purchase or repurchase or any contract to
purchase or repurchase is made.
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The redemption price may in any case or cases be paid wholly or partly in
kind if the Trustees determine that such payment is advisable in the interest of
the remaining Shareholders of the Series or Class the Shares of which are being
redeemed. In making any such payment wholly or partly in kind, the Trust shall,
so far as may be practicable, deliver assets which approximate the
diversification of all of the assets belonging at the time to the Series (or
allocable to the Class) the Shares of which are being redeemed. Subject to the
foregoing, the fair value, selection and quantity of securities or other
property so paid or delivered as all or part of the redemption price may be
determined by or under authority of the Trustees. In no case shall the Trust be
liable for any delay of any corporation or other person in transferring
securities selected for delivery as all or part of any payment in kind.
SECTION 3. REDEMPTIONS AT THE OPTION OF THE TRUST. The Trust shall have
the right at its option and at any time to redeem Shares of any Shareholder at
the net asset value thereof as described in Section 1 of this Article VI: (i)
if at such time such Shareholder owns Shares of any Series or Class having an
aggregate net asset value of less than an amount determined from time to time by
the Trustees; or (ii) to the extent that such Shareholder owns Shares equal to
or in excess of a percentage determined from time to time by the Trustees of the
outstanding Shares of the Trust or of any Series or Class.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
SECTION 1. COMPENSATION. The Trustees as such shall be entitled to
reasonable compensation from the Trust; they may fix the amount of their
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
SECTION 2. LIMITATION OF LIABILITY. The Trustees shall not be responsible
or liable in any event for any neglect or wrong-doing of any officer, agent,
employee, manager or principal underwriter of the Trust, nor shall any Trustee
be responsible for the act or omission of any other Trustee, but nothing herein
contained shall protect any Trustee against any liability to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever issued, executed or done by or on behalf of
the Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been issued, executed or done only in or with
respect to their or his capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
ARTICLE VIII
Indemnification
SECTION 1. TRUSTEES, OFFICERS, ETC. The Trust shall indemnify each of its
Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of
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another organization in which the Trust has any interest as a shareholder,
creditor or otherwise) (hereinafter referred to as a "Covered Person") against
all liabilities and expenses, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and counsel
fees reasonably incurred by any Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which such Covered
Person may be or may have been involved as a party or otherwise or with which
such Covered Person may be or may have been threatened, while in office or
thereafter, by reason of being or having been such a Covered Person except with
respect to any matter as to which such Covered Person shall have been finally
adjudicated in any such action, suit or other proceeding to be liable to the
Trust or its Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office. Expenses, including counsel fees so incurred by any
such Covered Person (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), shall be paid from time to time by the
Trust in advance of the final disposition of any such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Covered Person to repay
amounts so paid to the Trust if it is ultimately determined that indemnification
of such expenses is not authorized under this Article, provided, however, that
either (a) such Covered Person shall have provided appropriate security for such
undertaking, (b) the Trust shall be insured against losses arising from any such
advance payments or (c) either a majority of the disinterested Trustees acting
on the matter (provided that a majority of the disinterested Trustees then in
office act on the matter), or independent legal counsel in a written opinion,
shall have determined, based upon a review of readily available facts (as
opposed to a full trial type inquiry) that there is reason to believe that such
Covered Person will be found entitled to indemnification under this Article.
SECTION 2. COMPROMISE PAYMENT. As to any matter disposed of (whether by a
compromise payment, pursuant to a consent decree or otherwise) without an
adjudication by a court, or by any other body before which the proceeding was
brought, that such Covered Person is liable to the Trust or its Shareholders by
reason of wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office, indemnification
shall be provided if (a) approved, after notice that it involves such
indemnification, by at least a majority of the disinterested Trustees acting on
the matter (provided that a majority of the disinterested Trustees then in
office act on the matter) upon a determination, based upon a review of readily
available facts (as opposed to a full trial type inquiry) that such Covered
Person is not liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office, or (b) there has been obtained an
opinion in writing of independent legal counsel, based upon a review of readily
available facts (as opposed to a full trial type inquiry) to the effect that
such indemnification would not protect such Person against any liability to the
Trust to which he would otherwise be subject by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office. Any approval pursuant to this Section shall not prevent
the recovery from any Covered Person of any amount paid to such Covered Person
in accordance with this Section as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction to have been
liable to the Trust or its Shareholders by reason of wilful
-16-
<PAGE>
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office.
SECTION 3. INDEMNIFICATION NOT EXCLUSIVE. The right of indemnification
hereby provided shall not be exclusive of or affect any other rights to which
such Covered Person may be entitled. As used in this Article VIII, the term
"Covered Person" shall include such person's heirs, executors and administrators
and a "disinterested Trustee" is a Trustee who is not an "interested person" of
the Trust as defined in Section 2(a)(19) of the Investment Company Act of 1940,
as amended, (or who has been exempted from being an "interested person" by any
rule, regulation or order of the Commission) and against whom none of such
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or has been pending. Nothing contained
in this Article shall affect any rights to indemnification to which personnel of
the Trust, other than Trustees or officers, and other persons may be entitled by
contract or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of any such person; provided, however,
that the Trust shall not purchase or maintain any such liability insurance in
contravention of applicable law, including without limitation the 1940 Act.
SECTION 4. SHAREHOLDERS. In case any Shareholder or former Shareholder
shall be held to be personally liable solely by reason of his or her being or
having been a Shareholder and not because of his or her acts or omissions or for
some other reason, the Shareholder or former Shareholder (or his or her heirs,
executors, administrators or other legal representatives, or in the case of a
corporation or other entity, its corporate or other general successor) shall be
entitled to be held harmless from and indemnified against all loss and expense
arising from such liability, but only out of the assets of the particular series
of Shares of which he or she is or was a Shareholder."
ARTICLE IX
Miscellaneous
SECTION 1. TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE. All
persons extending credit to, contracting with or having any claim against the
Trust or any Series or Class shall look only to the assets of the Trust, or, to
the extent that the liability of the Trust may have been expressly limited by
contract to the assets of a particular Series (or the assets allocable to a
particular Class), only to the assets belonging to the relevant Series (or
allocable to the relevant Class), for payment under such credit, contract or
claim; and neither the Shareholders nor the Trustees, nor any of the Trust's
officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Nothing in this Declaration of Trust shall protect
any Trustee against any liability to which such Trustee would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee.
Every note, bond, contract, instrument, certificate or undertaking made or
issued on behalf of the Trust by the Trustees, by any officers or officer or
otherwise shall give notice that this Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts and shall recite that the same
was executed or made by or on behalf of the Trust
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<PAGE>
or by them as Trustee or Trustees or as officers or officer or otherwise and not
individually and that the obligations of such instrument are not binding upon
any of them or the shareholders individually but are binding only upon the
assets and property of the Trust or upon the assets belonging to the Series (or
allocable to the Class) for the benefit of which the Trustees have caused the
note, bond, contract, instrument, certificate or undertaking to be made or
issued, and may contain such further recital as he or they may deem appropriate,
but the omission of any such recital shall not operate to bind any Trustee or
Trustees or officers or officer or Shareholders or any other person
individually.
SECTION 2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY.
The exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. A Trustee shall be liable for his own willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration of Trust, and shall be under no liability for
any act or omission in accordance with such advice or for failing to follow such
advice. The Trustees shall not be required to give any bond as such, nor any
surety if a bond is required.
SECTION 3. LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
SECTION 4. TERMINATION OF TRUST OR SERIES OR CLASS. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The
Trust may be terminated at any time by vote of at least 66-2/3% of the Shares
of each Series entitled to vote and voting separately by Series or by the
Trustees by written notice to the Shareholders. Any Series may be terminated
at any time by vote of at least 66-2/3% of the Shares of that Series or by
the Trustees by written notice to the Shareholders of that Series. Any Class
may be seperately terminated at any time by vote of a majority of the Shares
of that Class present and voting on the question (a quorum being present) or
by the Trustees by written notice to the Shareholders of that Class.
Upon termination of the Trust (or any Series or Class, as the case may be),
after paying or otherwise providing for all charges, taxes, expenses and
liabilities belonging, severally, to each Series or allocable to each Class (or
the applicable Series or Classes, as the case may be), whether due or accrued or
anticipated as may be determined by the Trustees, the Trust shall in accordance
with such procedures as the Trustees consider appropriate reduce the remaining
assets belonging, severally, to each Series or allocable to each Class (or the
applicable Series or Classes, as the case may be), to distributable form in cash
or shares or other securities, or any combination thereof, and distribute the
proceeds belonging to each Series or allocable to each Class (or the applicable
Series or Classes, as the case may be), to the Shareholders of that Series or
Class, as a Series or Class, ratably according to the number of Shares of that
Series or Class held by the several Shareholders on the date of termination.
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<PAGE>
SECTION 5. MERGER AND CONSOLIDATION. The Trustees may cause the Trust to
be merged into or consolidated with another trust or company or its shares
exchanged under or pursuant to any state or federal statute, if any, or
otherwise to the extent permitted by law, if such merger or consolidation or
share exchange has been authorized by vote of a majority of the outstanding
Shares; provided that in all respects not governed by statute or applicable law,
the Trustees shall have power to prescribe the procedure necessary or
appropriate to accomplish a sale of assets, merger or consolidation.
SECTION 6. FILING OF COPIES, REFERENCES, HEADINGS. The original or a copy
of this instrument and of each amendment hereto shall be kept at the office of
the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust with the
Secretary of the Commonwealth of Massachusetts and with any other governmental
office where such filing may from time to time be required. Anyone dealing with
the Trust may rely on a certificate by an officer of the Trust as to whether or
not any such amendments have been made and as to any matters in connection with
the Trust hereunder; and, with the same effect as if it were the original, may
rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like "herein,"
"hereof" and "hereunder" shall be deemed to refer to this instrument as amended
or affected by any such amendments. Headings are placed herein for convenience
of reference only and shall not be taken as a part hereof or control or affect
the meaning, construction or effect of this instrument. This instrument may be
executed in any number of counterparts each of which shall be deemed an
original.
SECTION 7. APPLICABLE LAW. This Declaration of Trust is made in the
Commonwealth of Massachusetts, and it is created under and is to be governed by
and construed and administered according to the laws of said Commonwealth. The
Trust shall be of the type commonly called a Massachusetts business trust, and
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a trust.
SECTION 8. AMENDMENTS. This Declaration of Trust may be amended at any
time by an instrument in writing signed by a majority of the then Trustees when
authorized so to do by vote of a majority of the Shares entitled to vote, except
that amendments described in Article III, Section 5 hereof or having the purpose
of changing the name of the Trust or of supplying any omission, curing any
ambiguity or curing, correcting or supplementing any defective or inconsistent
provision contained herein shall not require authorization by Shareholder vote.
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<PAGE>
IN WITNESS WHEREOF, each of the undersigned Trustees as aforesaid do hereto
set their hands this ___ day of August, 1996.
--------------------------------------------
Marlis S. Fritz
--------------------------------------------
Kenneth Reid
--------------------------------------------
Nils H. Hakansson
--------------------------------------------
Barr M. Rosenberg
--------------------------------------------
William F. Sharpe
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<PAGE>
EXHIBIT 3.6
BARR ROSENBERG SERIES TRUST
PLAN PURSUANT TO RULE 18F-3(D) UNDER THE INVESTMENT COMPANY ACT OF 1940
Effective _______, 1996
WHEREAS, the Board of Trustees of the Barr Rosenberg Series Trust (the
"TRUST") has considered the following multi-class plan (the "PLAN") under which
the Trust may offer multiple classes of shares of its now existing and hereafter
created series pursuant to Rule 18f-3 (the "RULE") under the Investment Company
Act of 1940 (the "1940 ACT"); and
WHEREAS, a majority of the Trustees of the Trust and a majority of the
Trustees who are not interested persons of the Trust have found the Plan, as
proposed, to be in the best interests of each class of shares of each series of
the Trust individually and the Trust as a whole.
NOW, THEREFORE, the Trust hereby approves and adopts the following Plan
pursuant to the Rule.
THE PLAN
Each now existing and hereafter created series ("FUND")(1) of the Trust may
from time to time issue one or more of the following classes of shares:
Institutional shares, Adviser shares and Select shares. Each class is subject
to such investment minimums and other conditions of eligibility as are set forth
in the Trust's prospectus as from time to time in effect (the "PROSPECTUS").
The differences in expenses among these classes of shares, and the conversion
and exchange features of each class of shares, are set forth below in this Plan,
which is subject to change, to the extent permitted by law and by the Agreement
and Declaration of Trust and By-laws of the Trust, as amended from time to time,
by action of the Board of Trustees of the Trust.
CLASS CHARACTERISTICS
Institutional, Adviser and Select shares of each Fund represents interests
in the assets of such Fund and have identical dividend and liquidation rights.
The classes differ materially only with respect to (i) the level of shareholder
service fee ("SERVICE FEE"), if any, borne by each class, and (ii) the level of
distribution fee ("DISTRIBUTION FEE"), if any, borne by each
- --------------------
(1) The current operational Funds of the Trust are the U.S. Small
Capitalization Series, the International Small Capitalization Series and the
Japan Series.
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<PAGE>
class. Service Fees are paid for services rendered and expenses borne in
connection with personal services rendered to shareholders of a class and the
maintenance of shareholder accounts. Servicing Fees are paid pursuant to
Servicing Agreement(s) between the Trust and appropriate shareholder servicing
agent(s) and under related plans (each a "SERVICE PLAN") for applicable
classes. Distribution Fees are paid in connection with services and expenses
primarily intended to result in the sale of shares pursuant to a Distributor's
Contract between the Trust and Barr Rosenberg Funds Distributor, Inc., the
Funds' distributor (the "DISTRIBUTOR"), and under a separate plan (each a
"DISTRIBUTION PLAN") for each applicable class adopted by the Trust pursuant to
Rule 12b-1 under the 1940 Act.
(1) INSTITUTIONAL SHARES are sold without any initial or deferred sales
charges and are not subject to any ongoing Distribution Fees or Service Fees.
(2) ADVISER SHARES are sold without any initial or deferred sales charges
and are not subject to any ongoing Distribution Fees, but are subject to a
Service Fee at an annual rate with respect to each Fund equal to 0.25% of the
Fund's average daily net assets attributable to Adviser shares.
(3) SELECT SHARES are sold without any initial or deferred sales charges,
but are subject to a Service Fee at an annual rate with respect to each Fund
equal to 0.25% of the average daily net assets attributable to Select shares.
Select shares are also subject to a Distribution Fee. The Distribution
Plan for Select shares permits each Fund to pay the Distributor up to 0.50% per
annum of the Fund's average daily net assets attributable to Select shares.
However, the Distributor's contract currently provides that the Distributor will
be paid 0.25% per annum of each Fund's average daily net assets attributable to
Select shares.
FUND REIMBURSEMENT FEES
Investors in each class of shares of the Funds pay a separate fee (a "FUND
REIMBURSEMENT FEE")(2) upon both the purchase and redemption of Fund shares,
with the exception of certain categories of purchases and redemptions as
described in the Prospectus. Fund Reimbursement Fees do not constitute "sales
charges" because they are retained by the particular Fund and no portion thereof
is paid to or retained by the Distributor, the Manager or Furman Selz LLC, the
Funds' Administrator. Each class of shares of a Fund pays the same Fund
Reimbursement Fee on purchases and redemptions of shares of that Fund, expressed
as a percentage of the net asset value of the Fund, as follows: U.S. Small
Capitalization Series -- 0.25%; International Small Capitalization Series --
0.50%; Japan Series -- 0.50%.
- --------------------
(2) Fund Reimbursement Fees are used to defray the costs and expenses
associated with investing the proceeds of the sale of Fund shares in the case of
purchases, and the sale of Fund portfolio securities in the case of redemptions,
and are designed to eliminate the diluting effect such costs and expenses would
otherwise have on the net asset value of shares held by existing shareholders.
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<PAGE>
EXPENSE ALLOCATIONS
Institutional, Adviser and Select shares pay the expenses associated with
their different distribution and/or shareholder servicing arrangements. Each
class may, at the Trustees' discretion, also pay a different share of other
expenses, not including advisory or custodial fees or other expenses related to
the management of the Trust's assets, if these expenses are actually incurred in
a different amount by that class, or if the class receives services of a
different kind or to a different degree than the other classes ("CLASS
EXPENSES"). All other expenses will be allocated to each class on the basis of
the net asset value of that class in relation to the net asset value of a
particular Fund attributable to that class.
EXCHANGE FEATURES / CONVERSIONS
Shares of any particular class of a Fund may be exchanged only for shares
of the same class of another Fund. There is no sales charge on exchanges, but
both the Fund from which the exchange is made and the Fund into which the
exchange is made will charge a Fund Reimbursement Fee, unless an exception
applies. A shareholder may not exchange shares of a class of one Fund for
shares of the same class of another Fund that is not qualified for sale in the
state of the shareholder's residence. Although the Trust has no current
intention of terminating or modifying the exchange privilege, it reserves the
right to do so at any time. Except as otherwise permitted by regulations of the
Securities and Exchange Commission, the Trust will give 60 days' advance notice
to shareholders of any termination or material modification of the exchange
privilege. All exchanges will be made based on the respective net asset values
next determined following receipt of the request by the Funds.
The Trust does not currently offer any automatic conversion feature among
the classes.
DIVIDENDS/DISTRIBUTIONS
Each Fund intends to pay out as dividends substantially all of its net
investment income (which comes from dividends and any interest it receives from
its investments and net realized short-term capital gains). Each Fund also
intends to distribute substantially all of its net realized long-term capital
gains, if any, after giving effect to any available capital loss carryover.
Dividends paid by the Funds with respect to Institutional, Adviser and Select
shares, to the extent any dividends are paid, will be calculated in the same
manner, at the same time, and will be in the same amount, except that any
Service Fee or Distribution Fee charged to a particular class will be borne
solely by such class and, if applicable, at the Trustees discretion, Class
Expenses relating to a particular class may be borne exclusively by that class.
VOTING RIGHTS
Each class of shares of each Fund has identical voting rights except that
each class has exclusive voting rights on any matter submitted to shareholders
that relates solely to that class, and has separate voting rights on any matter
submitted to shareholders in which the interests of one class differ from the
interests of any other class. Each class of shares has exclusive voting rights
with respect to matters pertaining to any Distribution Plan or Service Plan
applicable to
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<PAGE>
that class. All three classes of shares of a Fund will vote together, except
with respect to any Distribution Plan or Service Plan applicable to a class or
when a class vote is required by the 1940 Act.
RESPONSIBILITIES OF THE TRUSTEES
On an ongoing basis, the Trustees will monitor the Trust for the existence
of any material conflicts among the interests of the three classes of shares.
The Trustees shall further monitor on an ongoing basis the use of waivers or
reimbursement of expenses by the Manager to guard against cross-subsidization
between classes. The Trustees, including a majority of the independent
Trustees, shall take such action as is reasonably necessary to eliminate any
such conflict that may develop.
REPORTS TO THE TRUSTEES
The Manager and/or the Administrator will be responsible for reporting any
potential or existing conflicts among the three classes of shares to the
Trustees.
AMENDMENTS
The Plan may be amended from time to time in accordance with the provisions
and requirements of the Rule.
BARR ROSENBERG SERIES TRUST
---------------------------------------
By:
Title:
Date:
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<PAGE>
NUMBER SHARES
BARR ROSENBERG SERIES TRUST
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
JAPAN SERIES
CUSIP.
ACCOUNT No. ALPHA CODE
SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
THIS IS TO CERTIFY that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF JAPAN
------
SERIES (INSTITUTIONAL SHARES)
- --------------------------------------------------------------------------------
transferable on the books of the Trust by the holder hereof, in person or by
duly authorized attorney, upon the surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all provisions of the Declaration of Trust and By-Laws
of the Trust and all amendments thereto, copies of which are on file with the
Transfer Agent. Under provisions of the Declaration of Trust of the Trust,
shares of beneficial interest of the Trust under certain circumstances may be
called for redemption by the Trust at any time and from time to time and
redeemed on the date fixed for redemption at the applicable redemption price
determined in accordance with such provisions, a copy of which will befurnished
to the holder hereof upon written request and without charge.
This certificate is not valid until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Trust and the facsimile signatures
of its duly authorized officers.
Dated:
______________ __________________________________
Clerk Chairman of the Board & President
<PAGE>
EXPLANATION OF ABBREVIATIONS
The following abbreviations, when used in the form of ownership on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Abbreviations in addition to those
appearing below may be used.
Abbreviation Equivalent Abbreviation Equivalent
- ------------ ---------- ------------ ----------
JT TEN As joint tenants TEN IN COM As tenants n common
with right of TEN BY ENT As tenants by the
survivorship and entireties
not as tenants UNIF GIFT MIN ACT Uniform Gifts to
in common Minors
Abbre- Equivalent Abbre- Equivalent
viation ---------- viation ----------
------- -------
ADM Administrator(s) FDN Foundation
Administratrix PL Public Laws
AGMT Agreement TR (As) trustee (s), for, of
CUST Custodian for UA Under agreement
EST Estate. UW Under will of. Of will of.
Of estate of Under last will & Testament
EX Executor(s),
Executrix
FBO For the benefit of
- --------------------------------------------------------------------------------
TRANSFER FORM
PLEASE INSERT SOCIAL SECURITY FOR VALUE RECEIVED ___________________ hereby
OR OTHER IDENTIFYING NUMBER (I / we)
OF ASSIGNEE sell, assign and transfer unto
Please print or typewrite name and
address including postal zip code of
assignee
of beneficial interest represented by this Certificate Shares
and do hereby irrevocably constitute and appoint
to transfer the said shares on the books of the Trust Attorney
with full power of substitution in the premises
Dated:
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this assignment must
correspond with the name as written upon
the face of this Certificate in every
particular, without alteration or
enlargement or any change whatsoever.
If more than one owner, all must sign.)
(Signature must be guaranteed by a
commercial bank or trustcompany or
member firm of any national stock
exchange.)
IMPORTANT NOTICE:
When you sign your name to this Transfer Form without filling in the name
of your Assignee this share certificate becomes fully negotiable similar to a
check endorsed in blank. Therefore, to safeguard a signed certificate, it is
recommended that you fill in the name of the new owner in the Assignee space.
Alternatively, instead of using this Transfer Form, you may sign a separate
"stock power" form and then mail the Certificate and the signed "stock power" in
separate envelopes. For added protection, use registered mail for Certificate.
- --------------------------------------------------------------------------------
REDEMPTION FORM
The undersigned hereby tenders to the Trust this Certificate properly endorsed
with any requisite guarantee of signature and supporting papers and requests the
redemption of __________ Shares (indicate the number of shares to be redeemed.
A new certificate will be issued for any unredeemed balance) of beneficial
interest represented by this Certificate in accordance with the terms of the
Declaration of Trust dated April 1, 1988, and all amendments thereto.
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this request for
redemption must correspond with the name
as written upon the face of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever. If more than one owner, all
must sign.)
(Signature must be guaranteed by
a commercial bank or trust company
or member firm of any national
stock exchange.)
________________________________________
Address
<PAGE>
NUMBER SHARES
BARR ROSENBERG SERIES TRUST
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
JAPAN SERIES
ACCOUNT No. ALPHA CODE CUSIP.
SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
THIS IS TO CERTIFY that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF JAPAN
------
SERIES (ADVISER SHARES)
- --------------------------------------------------------------------------------
transferable on the books of the Trust by the holder hereof, in person or by
duly authorized attorney, upon the surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all provisions of the Declaration of Trust and By-Laws
of the Trust and all amendments thereto, copies of which are on file with the
Transfer Agent. Under provisions of the Declaration of Trust of the Trust,
shares of beneficial interest of the Trust under certain circumstances may be
called for redemption by the Trust at any time and from time to time and
redeemed on the date fixed for redemption at the applicable redemption price
determined in accordance with such provisions, a copy of which will be furnished
to the holder hereof upon written request and without charge.
This certificate is not valid until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Trust and the facsimile signatures
of its duly authorized officers.
Dated:
_____________ _________________________________
Clerk Chairman of the Board & President
<PAGE>
EXPLANATION OF ABBREVIATIONS
The following abbreviations, when used in the form of ownership on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Abbreviations in addition to those
appearing below may be used.
Abbreviation Equivalent Abbreviation Equivalent
- ------------ ---------- ------------ ----------
JT TEN As joint tenants, TEN IN COM As tenants n common
with right of TEN BY ENT As tenants by the
survivorship and entireties
not as tenants UNIF GIFT MIN ACT Uniform Gifts to
in common Minors
Abbre- Equivalent Abbre- Equivalent
viation ---------- viation ----------
------- -------
ADM Administrator(s) FDN Foundation
Administratrix PL Public Laws
AGMT Agreement TR (As) trustee (s), for, of
CUST Custodian for UA Under agreement
EST Estate. UW Under will of. Of will of.
Of estate of Under last will & Testament
EX Executor(s),
Executrix
FBO For the benefit of
- --------------------------------------------------------------------------------
TRANSFER FORM
PLEASE INSERT SOCIAL SECURITY OR FOR VALUE RECEIVED __________________ hereby
OTHER IDENTIFYING NUMBER (I / we)
OF ASSIGNEE sell, assign and transfer unto
Please print or typewrite name and
address including postal zip code of
assignee
of beneficial interest represented by this Shares
Certificate and do hereby irrevocably
constitute and appoint
to transfer the said shares on the books Attorney
of the Trust with full power of substitution
in the premises
Dated:
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this assignment must
correspond with the name as written upon
the face of this Certificate in every
particular, without alteration or
enlargement or any change whatsoever.
If more than one owner, all must sign.)
(Signature must be guaranteed by
a commercial bank or trust company
or member firm of any national stock
exchange.)
IMPORTANT NOTICE:
When you sign your name to this Transfer Form without filling in the name
of your Assignee this share certificate becomes fully negotiable similar to a
check endorsed in blank. Therefore, to safeguard a signed certificate, it is
recommended that you fill in the name of the new owner in the Assignee space.
Alternatively, instead of using this Transfer Form, you may sign a separate
"stock power" form and then mail the Certificate and the signed "stock power" in
separate envelopes. For added protection, use registered mail for Certificate.
- --------------------------------------------------------------------------------
REDEMPTION FORM
The undersigned hereby tenders to the Trust this Certificate properly endorsed
with any requisite guarantee of signature and supporting papers and requests the
redemption of __________ Shares (indicate the number of shares to be redeemed.
A new certificate will be issued for any unredeemed balance) of beneficial
interest represented by this Certificate in accordance with the terms of the
Declaration of Trust dated April 1, 1988, and all amendments thereto.
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this request for
redemption must correspond with the name
as written upon the face of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever. If more than one owner, all
must sign.)
(Signature must be guaranteed by a
commercial bank or trust company or
member firm of any national stock
exchange.)
________________________________________
Address
<PAGE>
NUMBER SHARES
BARR ROSENBERG SERIES TRUST
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
JAPAN SERIES
ACCOUNT No. ALPHA CODE CUSIP.
SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
THIS IS TO CERTIFY that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF JAPAN
------
SERIES (SELECT SHARES)
- --------------------------------------------------------------------------------
transferable on the books of the Trust by the holder hereof, in person or by
duly authorized attorney, upon the surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued
and shall be held subject to all provisions of the Declaration of Trust
and By-Laws of the Trust and all amendments thereto, copies of which are on
file with the Transfer Agent. Under provisions of the Declaration of Trust
of the Trust, shares of beneficial interest of the Trust under certain
circumstances may be called for redemption by the Trust at any time and from
time to time and redeemed on the date fixed for redemption at the applicable
redemption price determined in accordance with such provisions, a copy of which
will be furnished to the holder hereof upon written request and without charge.
This certificate is not valid until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Trust and the facsimile signatures
of its duly authorized officers.
Dated:
_____________ __________________________________
Clerk Chairman of the Board & President
<PAGE>
EXPLANATION OF ABBREVIATIONS
The following abbreviations, when used in the form of ownership on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Abbreviations in addition to those
appearing below may be used.
Abbreviation Equivalent Abbreviation Equivalent
- ------------ ---------- ------------ ----------
JT TEN As joint tenants, TEN IN COM As tenants n common
with right of TEN BY ENT As tenants by the
survivorship and entireties
not as tenants UNIF GIFT MIN ACT Uniform Gifts to
in common Minors
Abbre- Equivalent Abbre- Equivalent
viation ---------- viation ----------
------- -------
ADM Administrator(s) FDN Foundation
Administratrix PL Public Laws
AGMT Agreement TR (As) trustee (s), for, of
CUST Custodian for UA Under agreement
EST Estate. UW Under will of. Of will of.
Of estate of Under last will & Testament
EX Executor(s),
Executrix
FBO For the benefit of
- --------------------------------------------------------------------------------
TRANSFER FORM
PLEASE INSERT SOCIAL SECURITY FOR VALUE RECEIVED ____________________ hereby
OR OTHER IDENTIFYING NUMBER (I / we)
OF ASSIGNEE sell, assign and transfer unto
Please print or typewrite name and address
including postal zip code of assignee
of beneficial interest represented Shares
by this Certificate and do hereby
irrevocably constitute and appoint
to transfer the said shares on the Attorney
books of the Trust with full power
of substitution in the premises
Dated:
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this assignment must
correspond with the name as written upon
the face of this Certificate in every
particular, without alteration or
enlargement or any change whatsoever.
If more than one owner, all must sign.)
(Signature must be guaranteed by a
commercial bank or trust company or
member firm of any national stock
exchange.)
IMPORTANT NOTICE:
When you sign your name to this Transfer Form without filling in the name
of your Assignee this share certificate becomes fully negotiable similar to a
check endorsed in blank. Therefore, to safeguard a signed certificate, it is
recommended that you fill in the name of the new owner in the Assignee space.
Alternatively, instead of using this Transfer Form, you may sign a separate
"stock power" form and then mail the Certificate and the signed "stock power" in
separate envelopes. For added protection, use registered mail for Certificate.
- --------------------------------------------------------------------------------
REDEMPTION FORM
The undersigned hereby tenders to the Trust this Certificate properly endorsed
with any requisite guarantee of signature and supporting papers and requests the
redemption of __________ Shares (indicate the number of shares to be redeemed.
A new certificate will be issued for any unredeemed balance) of beneficial
interest represented by this Certificate in accordance with the terms of the
Declaration of Trust dated April 1, 1988, and all amendments thereto.
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this request for
redemption must correspond with the name
as written upon the face of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever. If more than one owner, all
must sign.)
(Signature must be guaranteed by
a commercial bank or trust company
or member firm of any national
stock exchange.)
________________________________________
Address
<PAGE>
NUMBER SHARES
BARR ROSENBERG SERIES TRUST
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
U.S. SMALL CAPITALIZATION SERIES
ACCOUNT No. ALPHA CODE CUSIP.
SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
THIS IS TO CERTIFY that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF
U.S. SMALL CAPITALIZATION SERIES (SELECT SHARES)
- --------------------------------------------------------------------------------
transferable on the books of the Trust by the holder hereof, in person or by
duly authorized attorney, upon the surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all provisions of the Declaration of Trust and By-Laws
of the Trust and all amendments thereto, copies of which are on file with the
Transfer Agent. Under provisions of the Declaration of Trust of the Trust,
shares of beneficial interest of the Trust under certain circumstances may be
called for redemption by the Trust at any time and from time to time and
redeemed on the date fixed for redemption at the applicable redemption price
determined in accordance with such provisions, a copy of which will be furnished
to the holder hereof upon written request and without charge.
This certificate is not valid until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Trust and the facsimile signatures
of its duly authorized officers.
Dated:
_____________ __________________________________
Clerk Chairman of the Board & President
<PAGE>
EXPLANATION OF ABBREVIATIONS
The following abbreviations, when used in the form of ownership on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Abbreviations in addition to those
appearing below may be used.
Abbreviation Equivalent Abbreviation Equivalent
- ------------ ---------- ------------ ----------
JT TEN As joint tenants, TEN IN COM As tenants n common
with right of TEN BY ENT As tenants by the
survivorship and entireties
not as tenants UNIF GIFT MIN ACT Uniform Gifts to
in common Minors
Abbre- Equivalent Abbre- Equivalent
viation ---------- viation ----------
------- -------
ADM Administrator(s) FDN Foundation
Administratrix PL Public Laws
AGMT Agreement TR (As) trustee (s), for, of
CUST Custodian for UA Under agreement
EST Estate. UW Under will of. Of will of.
Of estate of Under last will & Testament
EX Executor(s),
Executrix
FBO For the benefit of
- --------------------------------------------------------------------------------
TRANSFER FORM
PLEASE INSERT SOCIAL SECURITY FOR VALUE RECEIVED ____________________ hereby
OR OTHER IDENTIFYING NUMBER (I / we)
OF ASSIGNEE sell, assign and transfer unto
Please print or typewrite name and address
including postal zip code of assignee
of beneficial interest represented Shares
by this Certificate and do hereby
irrevocably constitute and appoint
to transfer the said shares on the Attorney
books of the Trust with full power
of substitution in the premises
Dated:
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this assignment must
correspond with the name as written upon
the face of this Certificate in every
particular, without alteration or
enlargement or any change whatsoever.
If more than one owner, all must sign.)
(Signature must be guaranteed
by a commercial bank or trust
company or member firm of any
national stock exchange.)
IMPORTANT NOTICE:
When you sign your name to this Transfer Form without filling in the name
of your Assignee this share certificate becomes fully negotiable similar to a
check endorsed in blank. Therefore, to safeguard a signed certificate, it is
recommended that you fill in the name of the new owner in the Assignee space.
Alternatively, instead of using this Transfer Form, you may sign a separate
"stock power" form and then mail the Certificate and the signed "stock power" in
separate envelopes. For added protection, use registered mail for Certificate.
- --------------------------------------------------------------------------------
REDEMPTION FORM
The undersigned hereby tenders to the Trust this Certificate properly endorsed
with any requisite guarantee of signature and supporting papers and requests the
redemption of __________ Shares (indicate the number of shares to be redeemed.
A new certificate will be issued for any unredeemed balance) of beneficial
interest represented by this Certificate in accordance with the terms of the
Declaration of Trust dated April 1, 1988, and all amendments thereto.
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this request for
redemption must correspond with the name
as written upon the face of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever. If more than one owner, all
must sign.)
(Signature must be guaranteed
by a commercial bank or trust
company or member firm of any
national stock exchange.)
________________________________________
Address
<PAGE>
NUMBER SHARES
BARR ROSENBERG SERIES TRUST
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
U.S. SMALL CAPITALIZATION SERIES
ACCOUNT No. ALPHA CODE CUSIP.
SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
THIS IS TO CERTIFY that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF
U.S. SMALL CAPITALIZATION SERIES (ADVISER SHARES)
- --------------------------------------------------------------------------------
transferable on the books of the Trust by the holder hereof, in person or by
duly authorized attorney, upon the surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all provisions of the Declaration of Trust and By-Laws
of the Trust and all amendments thereto, copies of which are on file with the
Transfer Agent. Under provisions of the Declaration of Trust of the Trust,
shares of beneficial interest of the Trust under certain circumstances may be
called for redemption by the Trust at any time and from time to time and
redeemed on the date fixed for redemption at the applicable redemption price
determined in accordance with such provisions, a copy of which will be furnished
to the holder hereof upon written request and without charge.
This certificate is not valid until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Trust and the facsimile signatures
of its duly authorized officers.
Dated:
_____________ ________________________________________
Clerk Chairman of the Board & President
<PAGE>
EXPLANATION OF ABBREVIATIONS
The following abbreviations, when used in the form of ownership on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Abbreviations in addition to those
appearing below may be used.
Abbreviation Equivalent Abbreviation Equivalent
- ------------ ---------- ------------ ----------
JT TEN As joint tenants, TEN IN COM As tenants n common
with right of TEN BY ENT As tenants by the
survivorship and entireties
not as tenants UNIF GIFT MIN ACT Uniform Gifts to
in common Minors
Abbre- Equivalent Abbre- Equivalent
viation ---------- viation ----------
------- -------
ADM Administrator(s) FDN Foundation
Administratrix PL Public Laws
AGMT Agreement TR (As) trustee (s), for, of
CUST Custodian fo UA Under agreement
EST Estate. UW Under will of. Of will of.
Of estate of Under last will & Testament
EX Executor(s),
Executrix
FBO For the benefit of
- --------------------------------------------------------------------------------
TRANSFER FORM
PLEASE INSERT SOCIAL SECURITY FOR VALUE RECEIVED ____________________ hereby
OR OTHER IDENTIFYING NUMBER (I / we)
OF ASSIGNEE sell, assign and transfer unto
Please print or typewrite name and address
including postal zip code of assignee
of beneficial interest represented by Shares
this Certificate and do hereby irrevocably
constitute and appoint
to transfer the said shares on the books Attorney
of the Trust with full power of substitution
in the premises
Dated:
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this assignment must
correspond with the name as written upon
the face of this Certificate in every
particular, without alteration or
enlargement or any change whatsoever.
If more than one owner, all must sign.)
(Signature must be guaranteed by a
commercial bank or trust company or
member firm of any national stock
exchange.)
IMPORTANT NOTICE:
When you sign your name to this Transfer Form without filling in the name of
your Assignee this share certificate becomes fully negotiable similar to a check
endorsed in blank. Therefore, to safeguard a signed certificate, it is
recommended that you fill in the name of the new owner in the Assignee space.
Alternatively, instead of using this Transfer Form, you may sign a separate
"stock power" form and then mail the Certificate and the signed "stock power" in
separate envelopes. For added protection, use registered mail for Certificate.
- --------------------------------------------------------------------------------
REDEMPTION FORM
The undersigned hereby tenders to the Trust this Certificate properly endorsed
with any requisite guarantee of signature and supporting papers and requests the
redemption of __________ Shares (indicate the number of shares to be redeemed.
A new certificate will be issued for any unredeemed balance) of beneficial
interest represented by this Certificate in accordance with the terms of the
Declaration of Trust dated April 1, 1988, and all amendments thereto.
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this request for
redemption must correspond with the name
as written upon the face of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever. If more than one owner, all
must sign.)
(Signature must be guaranteed by a
commercial bank or trust company or
member firm of any national stock
exchange.)
________________________________________
Address
<PAGE>
NUMBER SHARES
BARR ROSENBERG SERIES TRUST
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
U.S. SMALL CAPITALIZATION SERIES
ACCOUNT No. ALPHA CODE CUSIP.
SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
THIS IS TO CERTIFY that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF U.S.
-------
SMALL CAPITALIZATION SERIES (INSTITUTIONAL SHARES)
- --------------------------------------------------------------------------------
transferable on the books of the Trust by the holder hereof, in person or by
duly authorized attorney, upon the surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all provisions of the Declaration of Trust and By-Laws
of the Trust and all amendments thereto, copies of which are on file with the
Transfer Agent. Under provisions of the Declaration of Trust of the Trust,
shares of beneficial interest of the Trust under certain circumstances may be
called for redemption by the Trust at any time and from time to time and
redeemed on the date fixed for redemption at the applicable redemption price
determined in accordance with such provisions, a copy of which will be furnished
to the holder hereof upon written request and without charge.
This certificate is not valid until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Trust and the facsimile signatures
of its duly authorized officers.
Dated:
_____________ __________________________________
Clerk Chairman of the Board & President
<PAGE>
EXPLANATION OF ABBREVIATIONS
The following abbreviations, when used in the form of ownership on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Abbreviations in addition to those
appearing below may be used.
Abbreviation Equivalent Abbreviation Equivalent
- ------------ ---------- ------------ ----------
JT TEN As joint tenants, TEN IN COM As tenants n common
with right of TEN BY ENT A As tenants by the
survivorship and entireties
not as tenants UNIF GIFT MIN ACT Uniform Gifts to
in common Minors
Abbre- Equivalent Abbre- Equivalent
viation ---------- viation ----------
------- -------
ADM Administrator(s) FDN Foundation
Administratrix PL Public Laws
AGMT Agreement TR (As) trustee (s), for, of
CUST Custodian for UA Under agreement
EST Estate. UW Under will of. Of will of.
Of estate of Under last will & Testament
EX Executor(s),
Executrix
FBO For the benefit of
- --------------------------------------------------------------------------------
TRANSFER FORM
PLEASE INSERT SOCIAL SECURITY FOR VALUE RECEIVED ____________________ hereby
OR OTHER IDENTIFYING NUMBER OF (I / we)
ASSIGNEE sell, assign and transfer unto
Please print or typewrite name and address
including postal zip code of assignee
of beneficial interest represented Shares
by this Certificate and do hereby
irrevocably constitute and appoint
to transfer the said shares on the Attorney
books of the Trust with full power
of substitution in the premises
Dated:
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this assignment must
correspond with the name as written upon
the face of this Certificate in every
particular, without alteration or
enlargement or any change whatsoever.
If more than one owner, all must sign.)
(Signature must be guaranteed by
a commercial bank or trust company
or member firm of any national
stock exchange.)
IMPORTANT NOTICE:
When you sign your name to this Transfer Form without filling in the name
of your Assignee this share certificate becomes fully negotiable similar to a
check endorsed in blank. Therefore, to safeguard a signed certificate, it is
recommended that you fill in the name of the new owner in the Assignee space.
Alternatively, instead of using this Transfer Form, you may sign a separate
"stock power" form and then mail the Certificate and the signed "stock power" in
separate envelopes. For added protection, use registered mail for Certificate.
- --------------------------------------------------------------------------------
REDEMPTION FORM
The undersigned hereby tenders to the Trust this Certificate properly endorsed
with any requisite guarantee of signature and supporting papers and requests the
redemption of __________ Shares (indicate the number of shares to be redeemed.
A new certificate will be issued for any unredeemed balance) of beneficial
interest represented by this Certificate in accordance with the terms of the
Declaration of Trust dated April 1, 1988, and all amendments thereto.
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this request for
redemption must correspond with the name
as written upon the face of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever. If more than one owner, all
must sign.)
(Signature must be guaranteed by
a commercial bank or trust company
or member firm of any national stock
exchange.)
________________________________________
Address
<PAGE>
NUMBER SHARES
BARR ROSENBERG SERIES TRUST
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
INTERNATIONAL SMALL CAPITALIZATION SERIES
ACCOUNT No. ALPHA CODE CUSIP.
SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
THIS IS TO CERTIFY that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF
INTERNATIONAL SMALL CAPITALIZATION SERIES (INSTITUTIONAL SHARES)
- --------------------------------------------------------------------------------
transferable on the books of the Trust by the holder hereof, in person or by
duly authorized attorney, upon the surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all provisions of the Declaration of Trust and By-Laws
of the Trust and all amendments thereto, copies of which are on file with the
Transfer Agent. Under provisions of the Declaration of Trust of the Trust,
shares of beneficial interest of the Trust under certain circumstances may be
called for redemption by the Trust at any time and from time to time and
redeemed on the date fixed for redemption at the applicable redemption price
determined in accordance with such provisions, a copy of which will be furnished
to the holder hereof upon written request and without charge.
This certificate is not valid until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Trust and the facsimile signatures
of its duly authorized officers.
Dated:
_____________ _______________________________________
Clerk Chairman of the Board & President
<PAGE>
EXPLANATION OF ABBREVIATIONS
The following abbreviations, when used in the form of ownership on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Abbreviations in addition to those
appearing below may be used.
Abbreviation Equivalent Abbreviation Equivalent
- ------------ ---------- ------------ ----------
JT TEN As joint tenants, TEN IN COM As tenants n common
with right of TEN BY ENT As tenants by the
survivorship and entireties
not as tenants UNIF GIFT MIN ACT Uniform Gifts to
in common Minors
Abbre- Equivalent Abbre- Equivalent
viation ---------- viation ----------
------- -------
ADM Administrator(s) FDN Foundation
Administratrix PL Public Laws
AGMT Agreement TR (As) trustee (s), for, of
CUST Custodian for UA Under agreement
EST Estate. UW Under will of. Of will of.
Of estate of Under last will & Testament
EX Executor(s),
Executrix
FBO For the benefit of
- --------------------------------------------------------------------------------
TRANSFER FORM
PLEASE INSERT SOCIAL SECURITY FOR VALUE RECEIVED ____________________ hereby
OR OTHER IDENTIFYING NUMBER (I / we)
OF ASSIGNE sell, assign and transfer unto
Please print or typewrite name and address
including postal zip code of assignee
of beneficial interest represented Shares
by this Certificate and do hereby
irrevocably constitute and appoint
to transfer the said shares on the Attorney
books of the Trust with full power
of substitution in the premises
Dated:
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this assignment must
correspond with the name as written upon
the face of this Certificate in every
particular, without alteration or
enlargement or any change whatsoever.
If more than one owner, all must sign.)
(Signature must be guaranteed by
a commercial bank or trust company
or member firm of any national stock
exchange.)
IMPORTANT NOTICE:
When you sign your name to this Transfer Form without filling in the name
of your Assignee this share certificate becomes fully negotiable similar to a
check endorsed in blank. Therefore, to safeguard a signed certificate, it is
recommended that you fill in the name of the new owner in the Assignee space.
Alternatively, instead of using this Transfer Form, you may sign a separate
"stock power" form and then mail the Certificate and the signed "stock power" in
separate envelopes. For added protection, use registered mail for Certificate.
- --------------------------------------------------------------------------------
REDEMPTION FORM
The undersigned hereby tenders to the Trust this Certificate properly endorsed
with any requisite guarantee of signature and supporting papers and requests the
redemption of __________ Shares (indicate the number of shares to be redeemed.
A new certificate will be issued for any unredeemed balance) of beneficial
interest represented by this Certificate in accordance with the terms of the
Declaration of Trust dated April 1, 1988, and all amendments thereto.
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this request for
redemption must correspond with the name
as written upon the face of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever. If more than one owner, all
must sign.)
(Signature must be guaranteed by a
commercial bank or trust company or
member firm of any national stock
exchange.)
________________________________________
Address
<PAGE>
NUMBER SHARES
BARR ROSENBERG SERIES TRUST
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
INTERNATIONAL SMALL CAPITALIZATION SERIES
ACCOUNT No. ALPHA CODE CUSIP.
SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
THIS IS TO CERTIFY that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF
INTERNATIONAL SMALL CAPITALIZATION SERIES (ADVISER SHARES)
- --------------------------------------------------------------------------------
transferable on the books of the Trust by the holder hereof, in person or by
duly authorized attorney, upon the surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all provisions of the Declaration of Trust and By-Laws
of the Trust and all amendments thereto, copies of which are on file with the
Transfer Agent. Under provisions of the Declaration of Trust of the Trust,
shares of beneficial interest of the Trust under certain circumstances may be
called for redemption by the Trust at any time and from time to time and
redeemed on the date fixed for redemption at the applicable redemption price
determined in accordance with such provisions, a copy of which will be furnished
to the holder hereof upon written request and without charge.
This certificate is not valid until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Trust and the facsimile signatures
of its duly authorized officers.
Dated:
_____________ ______________________________________
Clerk Chairman of the Board & President
<PAGE>
EXPLANATION OF ABBREVIATIONS
The following abbreviations, when used in the form of ownership on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Abbreviations in addition to those
appearing below may be used.
Abbreviation Equivalent Abbreviation Equivalent
- ------------ ---------- ------------ ----------
JT TEN As joint tenants, TEN IN COM As tenants n common
with right of TEN BY ENT As tenants by the
survivorship and entireties
not as tenants UNIF GIFT MIN ACT Uniform Gifts to
in common Minors
Abbre- Equivalent Abbre- Equivalent
viation ---------- viation ----------
------- -------
ADM Administrator(s) FDN Foundation
Administratrix PL Public Laws
AGMT Agreement TR (As) trustee (s), for, of
CUST Custodian for UA Under agreement
EST Estate. UW Under will of. Of will of.
Of estate of Under last will & Testament
EX Executor(s),
Executrix
FBO For the benefit of
- --------------------------------------------------------------------------------
TRANSFER FORM
PLEASE INSERT SOCIAL SECURITY FOR VALUE RECEIVED ____________________ hereby
OR OTHER IDENTIFYING NUMBER (I / we)
OF ASSIGNEE sell, assign and transfer unto
Please print or typewrite name and address
including postal zip code of assignee
of beneficial interest represented Shares
by this Certificate and do hereby
irrevocably constitute and appoint
to transfer the said shares on the Attorney
books of the Trust with full power
of substitution in the premises
Dated:
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this assignment must
correspond with the name as written upon
the face of this Certificate in every
particular, without alteration or
enlargement or any change whatsoever.
If more than one owner, all must sign.)
(Signature must be guaranteed by
a commercial bank or trust company
or member firm of any national stock
exchange.)
IMPORTANT NOTICE:
When you sign your name to this Transfer Form without filling in the name
of your Assignee this share certificate becomes fully negotiable similar to a
check endorsed in blank. Therefore, to safeguard a signed certificate, it is
recommended that you fill in the name of the new owner in the Assignee space.
Alternatively, instead of using this Transfer Form, you may sign a separate
"stock power" form and then mail the Certificate and the signed "stock power" in
separate envelopes. For added protection, use registered mail for Certificate.
- --------------------------------------------------------------------------------
REDEMPTION FORM
The undersigned hereby tenders to the Trust this Certificate properly endorsed
with any requisite guarantee of signature and supporting papers and requests the
redemption of __________ Shares (indicate the number of shares to be redeemed.
A new certificate will be issued for any unredeemed balance) of beneficial
interest represented by this Certificate in accordance with the terms of the
Declaration of Trust dated April 1, 1988, and all amendments thereto.
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this request for
redemption must correspond with the name
as written upon the face of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever. If more than one owner, all
must sign.)
(Signature must be guaranteed
by a commercial bank or trust
company or member firm of any
national stock exchange.)
________________________________________
Address
<PAGE>
NUMBER SHARES
BARR ROSENBERG SERIES TRUST
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
INTERNATIONAL SMALL CAPITALIZATION SERIES
ACCOUNT No. ALPHA CODE CUSIP.
SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
THIS IS TO CERTIFY that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF
INTERNATIONAL SMALL CAPITALIZATION SERIES (SELECT SHARES)
- --------------------------------------------------------------------------------
transferable on the books of the Trust by the holder hereof, in person or by
duly authorized attorney, upon the surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all provisions of the Declaration of Trust and By-Laws
of the Trust and all amendments thereto, copies of which are on file with the
Transfer Agent. Under provisions of the Declaration of Trust of the Trust,
shares of beneficial interest of the Trust under certain circumstances may be
called for redemption by the Trust at any time and from time to time and
redeemed on the date fixed for redemption at the applicable redemption price
determined in accordance with such provisions, a copy of which will be furnished
to the holder hereof upon written request and without charge.
This certificate is not valid until countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Trust and the facsimile signatures
of its duly authorized officers.
Dated:
______________ ______________________________________
Clerk Chairman of the Board & President
<PAGE>
EXPLANATION OF ABBREVIATIONS
The following abbreviations, when used in the form of ownership on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Abbreviations in addition to those
appearing below may be used.
Abbreviation Equivalent Abbreviation Equivalent
- ------------ ---------- ------------ ----------
JT TEN As joint tenants, TEN IN COM As tenants n common
with right of TEN BY ENT As tenants by the
survivorship and entireties
not as tenants UNIF GIFT MIN ACT Uniform Gifts to
in common Minors
Abbre- Equivalent Abbre- Equivalent
viation ---------- viation ----------
------- -------
ADM Administrator(s) FDN Foundation
Administratrix PL Public Laws
AGMT Agreement TR (As) trustee (s), for, of
CUST Custodian for UA Under agreement
EST Estate. UW Under will of. Of will of.
Of estate of Under last will & Testament
EX Executor(s),
Executrix
FBO For the benefit of
- --------------------------------------------------------------------------------
TRANSFER FORM
PLEASE INSERT SOCIAL SECURITY FOR VALUE RECEIVED ____________________ hereby
OR OTHER IDENTIFYING NUMBER (I / we)
OF ASSIGNEE sell, assign and transfer unto
Please print or typewrite name and address
including postal zip code of assignee
of beneficial interest represented Shares
by this Certificate and do hereby
irrevocably constitute and appoint
to transfer the said shares on the Attorney
books of the Trust with full power
of substitution in the premises
Dated:
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this assignment must
correspond with the name as written upon
the face of this Certificate in every
particular, without alteration or
enlargement or any change whatsoever.
If more than one owner, all must sign.)
(Signature must be guaranteed by
a commercial bank or trust company
or member firm of any national
stock exchange.)
IMPORTANT NOTICE:
When you sign your name to this Transfer Form without filling in the name
of your Assignee this share certificate becomes fully negotiable similar to a
check endorsed in blank. Therefore, to safeguard a signed certificate, it is
recommended that you fill in the name of the new owner in the Assignee space.
Alternatively, instead of using this Transfer Form, you may sign a separate
"stock power" form and then mail the Certificate and the signed "stock power" in
separate envelopes. For added protection, use registered mail for Certificate.
- --------------------------------------------------------------------------------
REDEMPTION FORM
The undersigned hereby tenders to the Trust this Certificate properly endorsed
with any requisite guarantee of signature and supporting papers and requests the
redemption of __________ Shares (indicate the number of shares to be redeemed.
A new certificate will be issued for any unredeemed balance) of beneficial
interest represented by this Certificate in accordance with the terms of the
Declaration of Trust dated April 1, 1988, and all amendments thereto.
SIGNATURE Signatures(s)
GUARANTEED BY (The signature to this request for
redemption must correspond with the name
as written upon the face of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever. If more than one owner, all
must sign.)
(Signature must be guaranteed by
a commercial bank or trust company
or member firm of any national
stock exchange.)
________________________________________
Address
<PAGE>
NOTIFICATION OF
EXPENSE LIMITATION
NOTIFICATION made this __________ day of _____________, 199__ by Rosenberg
Institutional Equity Management, a California limited partnership (the
"Adviser"), to Barr Rosenberg Series Trust, a Massachusetts business trust (the
"Trust") and its Japan Series, U.S. Small Capitalization Series and
International Small Capitalization Series (each a Fund, and together, the
"Funds").
WITNESSETH:
WHEREAS, The Adviser serves as investment adviser for each Fund of the
Trust; and
WHEREAS, on or about August 5, 1996, each Fund will offer three separate
classes of shares, designed as "Institutional Shares," "Adviser Shares," and
"Select Shares," which will be subject to different shareholder service,
distribution and other fees and expenses; and
WHEREAS, the Adviser believes it would benefit from a high sales volume of
shares of the Funds in that such a volume would maximize the Adviser's fee as
investment adviser to the Funds; and
WHEREAS, the Adviser has agreed to furnish certain services and, as
necessary, to voluntarily bear a portion of the costs thereof so as to enable
the Funds to offer competitive returns with respect to investments in each class
of shares of the Funds.
NOW THEREFORE, pursuant to Section 3 of each Management Contract (each a
"Management Contract") between the Adviser and the Trust on behalf of each Fund,
the Adviser hereby notifies the Trust that the Adviser shall, until further
notice, voluntarily reduce its compensation due under the particular Management
Contract, and, if necessary, bear certain expenses of each Fund to the extent
required to limit the expenses of each class of shares of such Fund to the
following annual percentages of such Fund's average daily net asset value
attributable to such class:
Total Fund Operating
Expenses applicable to
each class after waiver
-----------------------
Series/Class
- ------------
JAPAN SERIES
Institutional Shares 1.50%
Adviser Shares 1.75%
Select Shares 2.00%
<PAGE>
U.S. SMALL CAPITALIZATION SERIES
Institutional Shares 1.15%
Adviser Shares 1.40%
Select Shares 1.65%
INTERNATIONAL SMALL CAPITALIZATION SERIES
Institutional Shares 1.50%
Adviser Shares 1.75%
Select Shares 2.00%
IN WITNESS WHEREOF, the Adviser has executed this Notification of Expense
Limitation on the day and year first above written.
ROSENBERG INSTITUTIONAL EQUITY
MANAGEMENT
By:
----------------------------
Title:
The foregoing is hereby accepted:
BARR ROSENBERG SERIES TRUST,
on behalf of its Japan Series, U.S. Small Capitalization Series
and International Small capitalization Series
By:
---------------------------------------------
Title:
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<PAGE>
FUND ADMINISTRATION AGREEMENT
-----------------------------
THIS AGREEMENT is made as of the ______ day of _______________, 1996 by and
between BARR ROSENBERG SERIES TRUST, a Massachusetts business trust (the
"Company"), and FURMAN SELZ LLC, a Delaware limited liability company ("Furman
Selz").
W I T N E S S E T H :
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company wishes to retain Furman Selz to provide certain
administration and accounting services with respect to shares of the Company's
three investment portfolios, the Japan Series, the U.S. Small Capitalization
Series and the International Small Capitalization Series (collectively, the
"Funds"), and Furman Selz is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Company hereby appoints Furman Selz and Furman Selz
hereby agrees to provide certain administration and accounting services to the
Company for the period and on the terms set forth in this Agreement. Furman
Selz agrees to comply with all relevant provisions of the 1940 Act and
applicable rules and regulations thereunder. In the event that the Company
establishes one or more portfolios other than the Funds with respect to which
the Company decides to retain Furman Selz to act as administrator and accounting
services provider, the Company shall so notify Furman Selz in writing. If
Furman Selz is willing to render such services, Furman Selz shall promptly
notify the Company in writing whereupon such portfolio shall be deemed to be a
Fund hereunder.
2. DELIVERY OF DOCUMENTS. The Company has furnished Furman Selz with
copies properly certified or authenticated of each of the following:
(a) Resolutions of the Company's Board of Trustees authorizing the
appointment of Furman Selz to provide certain administration and accounting
services to the Company and approving this Agreement;
<PAGE>
(b) Appendix A identifying and containing the signatures of the
Company's officers and other persons authorized to issue Oral Instructions and
to sign Written Instructions, as hereinafter defined, on behalf of the Company;
(c) The Company's Agreement and Declaration of Trust dated as of
April 1, 1988 and filed with The Commonwealth of Massachusetts on April 22, 1988
and all amendments thereto (the "Articles");
(d) The Company's By-Laws and all amendments thereto (the "By-Laws");
(e) The Management Contracts between Rosenberg Institutional Equity
Management and the Company with respect to the Funds;
(f) The Distributor's Contract between Barr Rosenberg Funds
Distributor, Inc. and the Company dated as of July ____ , 1996;
(g) The Custodian Agreement between State Street Bank and Trust
Company and the Company dated as of August 10, 1988;
(h) The Transfer Agency Agreement between Furman Selz (in its
capacity as transfer agent, the "Transfer Agent") and the Company dated as of
July _____, 1996;
(i) The Company's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act"), and under the 1940 Act
(File Nos. 33-21677 and 811-5547), as filed with the Securities and Exchange
Commission ("SEC") relating to shares of beneficial interest in the Company
("the Shares"), and all amendments thereto;
(j) The Company's most recent prospectus and statement of additional
information and all amendments and supplements thereto (the "Prospectus"); and
(k) Before the Company engages in any transaction regulated by the
Commodity Futures Trading Commission ("CFTC"), a copy of either (i) a filed
notice of eligibility to claim the exclusion from the definition of "commodity
pool operator" contained in Section 2(a)(1)(A) of the Commodity Exchange Act
("CEA") that is provided in Rule 4.5 under the CEA, together with all
supplements as are required by the CFTC, or (ii) a letter which has been granted
the Company by the CFTC which states that the Company will not be treated as a
"pool" as defined in Section 4.10(d) of the CFTC's General Regulations, or (iii)
a letter which has
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<PAGE>
been granted the Company by the CFTC which states that the CFTC will not take
any enforcement action if the Company does not register as a "commodity pool
operator."
The Company will furnish Furman Selz from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
3. DEFINITIONS.
(a) "AUTHORIZED PERSON". As used in this Agreement, the term
"Authorized Person" means any officer of the Company and any other person,
whether or not any such person is an officer or employee of the Company, duly
authorized by the Board of Trustees of the Company to give Oral and Written
Instructions on behalf of the Company and listed on Appendix A attached hereto
or any amendment thereto as may be received by Furman Selz from time to time.
(b) "ORAL INSTRUCTIONS". As used in this Agreement, the term "Oral
Instructions" means oral instructions received by Furman Selz from an Authorized
Person or from a person reasonably believed by Furman Selz to be an Authorized
Person. The Company agrees to deliver to Furman Selz, at the time and in the
manner specified in Paragraph 4(b) of this Agreement, Written Instructions
confirming Oral Instructions given by an Authorized Person.
(c) "WRITTEN INSTRUCTIONS". As used in this Agreement, the term
"Written Instructions" means written instructions delivered by hand, mail,
tested telegram, cable, telex or facsimile sending device, including buy or sell
tickets and computer transmissions, and received by Furman Selz, signed by two
Authorized Persons.
4. INSTRUCTIONS CONSISTENT WITH ARTICLES, ETC.
(a) Unless otherwise provided in this Agreement, Furman Selz shall
act only upon Oral and Written Instructions. Although Furman Selz may know of
the provisions of the Articles and By-Laws of the Company, Furman Selz may
assume that any Oral or Written Instructions received hereunder are not in any
way inconsistent with any provisions of such Articles or By-Laws or any vote,
resolution or proceeding of the Shareholders, or of the Board of Trustees, or of
any committee thereof.
-3-
<PAGE>
(b) Furman Selz shall be entitled to rely upon any Oral Instructions
and any Written Instructions received by Furman Selz pursuant to this Agreement.
The Company agrees to forward to Furman Selz Written Instructions confirming
Oral Instructions given by an Authorized Person in such manner that the Written
Instructions are received by Furman Selz, whether by hand delivery, telex,
facsimile sending device or otherwise, within 24 hours from the time that such
Oral Instructions are given to Furman Selz. The Company agrees that the fact
that such confirming Written Instructions are not received by Furman Selz shall
in no way affect the validity of the transactions or enforceability of the
transactions authorized by the Company by giving Oral Instructions. Subject to
Paragraph 14 hereof, the Company agrees that Furman Selz shall incur no
liability to the Company in acting upon Oral Instructions given to Furman Selz
hereunder concerning such transactions, provided such instructions reasonably
appear to have been received from an Authorized Person.
5. SERVICES ON A CONTINUING BASIS.
(a) Subject to the supervision and control of the Company's Board of
Trustees, Furman Selz, as administrator, will assist in supervising various
aspects of the Company's administrative operations, and undertakes to do the
following specific services:
(1) Maintaining office facilities (which may be in the offices
of Furman Selz or a corporate affiliate, but shall be in such location as the
Company shall reasonably determine);
(2) Furnishing statistical and research data, clerical services,
and stationery and office supplies.
(3) Preparing and filing with the SEC Post-Effective Amendments
to the Company's Registration Statement, Notices of Annual or Special Meetings
of Shareholders and Proxy materials relating to such meetings; accumulating
information for and, subject to the approval of the Company's Treasurer,
preparing reports to the Company's shareholders of record and the SEC including,
but not necessarily limited to: Semi-Annual Reports on Form N-SAR and the
preparation and filing of Notices pursuant to Rule 24f-2 under the 1940 Act;
-4-
<PAGE>
(4) Preparing and filing various reports or other documents
required by federal, state and other applicable laws and regulations other than
those required to be filed by Furman Selz as the Company's accounting services
provider, or by the Company's Custodian or Transfer Agent;
(5) Reviewing and providing advice and counsel on all sales
literature (E.G., advertisements, brochures and shareholder communications) with
respect to each of the Funds;
(6) Performing corporate secretarial duties which will include,
among other things, maintaining the necessary corporate records and the good
standing status of the Company in all states in which it is qualified to do
business, preparation of all agendas, notices and minutes for meetings of the
Company's Board of Trustees and shareholders, preparation of all resolutions to
be voted upon by the Board of Trustees, and preparation and/or consideration of
supporting information for such meetings;
(7) Assisting in developing and monitoring compliance procedures
for each Fund which will include, among other matters, procedures to monitor
compliance with each Fund's investment objective, policies, restrictions, tax
matters and applicable laws and regulations;
(8) Monitoring the Company's arrangements with respect to
services provided by financial institutions which are, or wish to become,
shareholder servicing agents for the Company ("Shareholder Servicing Agents").
With respect to Shareholder Servicing Agents, Furman Selz shall specifically
monitor and review the services rendered by the Shareholder Servicing Agents to
the beneficial owners of Shares of the Company, pursuant to agreements between
the Company and such Shareholder Servicing Agents ("Shareholder Servicing
Agreements"), including, among other things, reviewing the qualifications of
financial institutions wishing to be Shareholder Servicing Agents, assisting in
the execution and delivery of Shareholder Servicing Agreements, reporting to the
Board of Trustees with respect to the amounts paid or payable by the Company
from time to time under the Shareholder Servicing Agreements and the nature of
the services provided by Shareholder Servicing Agents, and maintaining
appropriate records in connection with its monitoring duties;
(9) Determining the jurisdictions in which the Shares shall be
registered or qualified for sale and, in connection therewith, maintaining the
registration or qualification of Shares for sale
-5-
<PAGE>
under the securities laws of any state. Payment of share registration fees and
any fees for qualifying or continuing the qualification of any Fund as a dealer
or broker shall be made by that Fund;
(10) Providing the services of certain persons who may be
appointed as officers of the Company by the Company's Board of Trustees;
(11) Preserving for the periods prescribed by Rule 31a-2 under
the 1940 Act the records required to be maintained by Rule 31a-1 under said Act.
Furman Selz further agrees that all such records which it maintains for the
Company are the property of the Company and further agrees to surrender promptly
to the Company any of such records upon the Company's request; and
(12) Providing for the furnishing of legal advice and counsel to
the Company with respect to regulatory matters including: monitoring regulatory
and legislative developments which may affect the Company and assisting in the
strategic response to such developments, counseling and assisting the Company in
routine regulatory examinations or investigations of the Company, and working
closely with outside counsel to the Company in response to any litigation or
non-routine regulatory matters.
In performing its duties as administrator of the Company, Furman Selz
(a) will act in accordance with the Articles, By-Laws, Prospectus and with the
instructions and directions of the Board of Trustees of the Company and will
conform to and comply with the requirements of the 1940 Act and all other
applicable federal or state laws and regulations and (b) will consult with legal
counsel to the Company, as necessary and appropriate.
(b) As of the date of this Agreement, Furman Selz will perform the
following accounting functions on an ongoing basis:
(1) Journalize the Company's investment, capital share, income
and expense activities;
(2) Verify investment buy/sell trade tickets when received from
Rosenberg Institutional Equity Management and transmit trades to the Company's
Custodian for proper settlement;
(3) Maintain individual ledgers for investment securities;
(4) Maintain historical tax lots for each security;
-6-
<PAGE>
(5) Maintain financial records in accordance
with the 1940 Act and the rules and regulations thereunder;
(6) Reconcile, on a daily basis, cash and investment balances of
the Company with the Custodian, and provide Rosenberg Institutional Equity
Management with the beginning cash balance available each day for investment
purposes;
(7) Update the cash availability throughout the day as required
by Rosenberg Institutional Equity Management;
(8) Post to and prepare the Company's Statement of Assets and
Liabilities and the Statement of Operations;
(9) Calculate various contractual expenses (E.G., advisory and
custody fees);
(10) Monitor the expense accruals and notify Company management
of any proposed adjustments;
(11) Control all disbursements from the Company and authorize
such disbursements upon Written Instructions;
(12) Calculate capital gains and losses, if applicable;
(13) Determine the Company's net income;
(14) Obtain security market quotes from services approved by
Rosenberg Institutional Equity Management, or if such quotes are unavailable,
then obtain such prices from Rosenberg Institutional Equity Management, and in
either case calculate the market value of the Company's investments;
(15) Transmit or mail a copy of the daily portfolio valuation to
Rosenberg Institutional Equity Management;
(16) Compute the net asset value of the Company;
(17) Compute the Company's yields and portfolio average
dollar-weighted maturity daily, and as needed, total return, expense ratios and
portfolio turnover rate;
(18) Mark securities to market based upon quotes furnished by
Rosenberg Institutional Equity Management or an independent pricing agent;
-7-
<PAGE>
(19) Assist in monitoring compliance and developing compliance
procedures for each Fund which will include, among other matters, monitoring
compliance with each Fund's investment objective, policies, restrictions, tax
matters and applicable laws and regulations; and
(20) As appropriate, transmit to the Custodian Written or Oral
Instructions received from Rosenberg Institutional Equity Management.
(c) In addition to the accounting services described in the foregoing
Paragraph 5(b), Furman Selz will, commencing on the date of this Agreement:
(1) Prepare monthly financial statements which will include, but will not
be limited to, the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses;
(2) Prepare monthly broker securities transactions summaries;
(3) Prepare monthly securities transaction listings;
(4) Supply various Company statistical data as requested on an ongoing
basis;
(5) Assist in the preparation of support schedules necessary for
completion of federal, state and excise tax returns;
(6) Assist in the preparation of the Company's Semi-Annual Reports on Form
N-SAR;
(7) Assist in the preparation of the Company's annual, semi-annual, and
quarterly shareholder reports;
(8) Assist with the preparation of registration statements on Form N-1A
and amendments thereto and other filings relating to the registration
of Shares; and
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<PAGE>
(9) Assist in monitoring the Company's status as a regulated investment
company under sub-chapter M of the Internal Revenue Code of 1986, as amended.
6. RECORDS. Commencing with the date of this Agreement, Furman Selz
shall keep the following records:
(a) all books and records with respect to the Company's books of
account; and
(b) records of the Company's securities transactions, portfolio
valuations and securities positions.
The books and records pertaining to the Company which are in the possession
of Furman Selz shall be the property of the Company. If this Agreement is
terminated pursuant to paragraph 15 hereunder, Furman Selz shall deliver all
such books and records to the Company, or such party as the Company may
designate. Such books and records shall be prepared and maintained as required
by the 1940 Act and other applicable securities laws and rules and regulations.
The Company, or the Company's authorized representatives, shall have access to
such books and records at all times during Furman Selz's normal business hours.
Upon the reasonable request of the Company, copies of any such books and records
shall be provided by Furman Selz to the Company or the Company's authorized
representative at the Company's expense.
7. LIAISON WITH ACCOUNTANTS. Commencing with the date of this Agreement,
Furman Selz shall act as liaison with the Company's independent public
accountants and shall provide account analyses, fiscal year summaries and other
audit related schedules. Furman Selz shall take all reasonable action in the
performance of its obligations under this Agreement to ensure that the necessary
information is made available to such accountants for the expression of their
opinion, as such may be required by the Company from time to time.
8. CONFIDENTIALITY. Furman Selz agrees on behalf of itself and its
employees to treat confidentially all records and other information relating to
the Company and its prior, present or potential Shareholders and relating to
Rosenberg Institutional Equity Management and its prior, present or potential
customers, except, after prior notification to and approval in writing by the
Company or Rosenberg Institutional Equity Management, as the case may be, which
approval shall not be unreasonably withheld and may not be withheld where Furman
Selz may be exposed to civil or criminal contempt proceedings for failure to
comply, where Furman Selz is requested
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<PAGE>
to divulge such information by duly constituted authorities, or when so
requested by the Company or Rosenberg Institutional Equity Management, as the
case may be.
9. EQUIPMENT FAILURES. In the event of equipment failures beyond Furman
Selz's control, Furman Selz shall, at no additional expense to the Company, take
reasonable steps to minimize service interruptions but shall have no liability
with respect thereto. Furman Selz shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable provision for
emergency use of electronic data processing equipment to the extent appropriate
equipment is available.
10. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF COMPANY. If Furman Selz shall be in doubt as to any
action to be taken or omitted by it, it may request, and shall receive, from the
Company directions or advice, including Oral or Written Instructions where
appropriate.
(b) ADVICE OF COUNSEL. If Furman Selz shall be in doubt as to any
question of law involved in any action to be taken or omitted by Furman Selz, it
may request advice at its own cost from counsel, which counsel shall be subject
to the reasonable approval of the Company.
(c) CONFLICTING ADVICE. In case of conflict between directions,
advice or Oral or Written Instructions received by Furman Selz pursuant to
subsection (a) of this paragraph and advice received by Furman Selz pursuant to
subsection (b) of this paragraph, Furman Selz shall be entitled to rely on and
follow the advice received pursuant to the latter provision alone.
(d) PROTECTION OF FURMAN SELZ. Furman Selz shall be protected in any
action or inaction which it takes in reliance on any directions, advice or Oral
or Written Instructions received pursuant to subsections (a) or (b) of this
paragraph which Furman Selz, after receipt of any such directions, advice or
Oral or Written Instructions, in good faith and reasonably believes to be
consistent with such directions, advice or Oral or Written Instructions, as the
case may be. However, nothing in this paragraph shall be construed as imposing
upon Furman Selz any obligation (i) to seek such directions, advice or Oral or
Written Instructions, or (ii) to act in accordance with such directions, advice
or Oral or Written Instructions when received, unless, under the terms of
another provision of this Agreement, the same is a condition to Furman Selz's
properly taking or omitting to take
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<PAGE>
such action. Nothing in this subsection shall excuse Furman Selz when an action
or omission on the part of Furman Selz constitutes willful misfeasance, bad
faith, negligence or reckless disregard by Furman Selz of its duties under this
Agreement.
11. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. Furman Selz
undertakes to comply with all applicable requirements of the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, the
CEA, and any laws, rules and regulations of governmental authorities having
jurisdiction.
12. COMPENSATION. For the services provided and the expenses assumed by
Furman Selz under this Agreement, the Company will pay to Furman Selz a monthly
fee at an annual rate of 0.15% of the average daily net assets of the Funds,
plus an annual fee of $30,000 for each Fund.
13. INDEMNIFICATION. The Company agrees to indemnify and hold Furman Selz
and its nominees harmless from all taxes, charges, assessments, claims
liabilities (including, without limitation, liabilities arising under the 1933
Act, the 1934 Act, the 1940 Act, the CEA, and any state and foreign securities
and blue sky laws, all as or to be amended from time to time) and expenses,
including reasonable attorneys' fees and disbursements (as long as such legal
counsel has been retained with the consent of the Company, which consent shall
not be unreasonably withheld), arising directly or indirectly from any action or
thing which Furman Selz takes or does or omits to take or do (i) at the request
or on the direction of or in reliance on the advice of the Company or (ii) upon
Oral or Written Instructions, PROVIDED, that neither Furman Selz nor any of its
nominees shall be indemnified against any liability to the Company or to its
Shareholders (or any expenses incident to such liability) arising out of Furman
Selz's willful misfeasance, bad faith, negligence or reckless disregard of its
duties and obligations under this Agreement. In order that the indemnification
provision contained in this Paragraph 13 shall apply, it is understood that if
in any case the Company may be asked to indemnify or hold Furman Selz harmless,
the Company shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood that Furman
Selz will use all reasonable care and effort to identify and notify the Company
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the Company. The
Company shall have the option to defend Furman Selz against any claim which may
be the subject of this indemnification and, in the event that the Company so
elects, it will so
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<PAGE>
notify Furman Selz and thereupon the Company shall take over complete defense
for the claim, and Furman Selz shall in such situation incur no further legal or
other expenses for which it shall seek indemnification under this Paragraph 13.
Furman Selz shall in no case confess any claim or make any compromise or
settlement in any case in which the Company will be asked to indemnify Furman
Selz, except with the Company's prior written consent (which consent shall not
be unreasonably withheld).
14. RESPONSIBILITY OF FURMAN SELZ. Furman Selz shall be under no duty to
take any action on behalf of the Company except as specifically set forth herein
or as may be specifically agreed to by Furman Selz in writing. In the
performance of its duties hereunder, Furman Selz shall be obligated to exercise
care and diligence and to act in good faith and to use its best efforts within
reasonable limits in performing services provided for under this Agreement but
Furman Selz shall not be liable for any act or omission which does not
constitute willful misfeasance, bad faith or negligence on the part of Furman
Selz or reckless disregard by Furman Selz of its duties under this Agreement.
Furman Selz shall be responsible for and shall hold the Company harmless from
all loss, cost, damage, liability and expense, including reasonable attorneys'
fees (as long as such legal counsel has been retained with the consent of Furman
Selz, which consent shall not be unreasonably withheld), incurred by the Company
arising directly or indirectly from Furman Selz's willful misfeasance, bad
faith, negligence or reckless disregard of its duties and obligations under this
Agreement. In order that the indemnification provision contained in this
Paragraph 14 shall apply, it is understood that if in any case Furman Selz may
be asked to indemnify or hold the Company harmless, Furman Selz shall be fully
and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the Company will use all reasonable
care and effort to identify and notify Furman Selz promptly concerning any
situation which presents or appears likely to present the probability of such a
claim for indemnification against Furman Selz. Furman Selz shall have the
option to defend the Company against any claim which may be the subject of this
indemnification and, in the event that Furman Selz so elects, it will so notify
the Company and thereupon Furman Selz shall take over complete defense for the
claim, and the Company shall in such situation incur no further legal or other
expenses for which it shall seek indemnification under this Paragraph 14. The
Company shall in no case confess any claim or make any
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<PAGE>
compromise or settlement in any case in which Furman Selz will be asked to
indemnify the Company, except with Furman Selz's prior written consent (which
consent shall not be unreasonable withheld).
Without limiting the generality of the foregoing or of any other provision
of this Agreement, Furman Selz in connection with its duties under this
Agreement shall not be under any duty or obligation to inquire into and shall
not be liable for or in respect of (a) the validity or invalidity or authority
or lack thereof of any Oral or Written Instruction, notice or other instrument
which conforms to the applicable requirements of this Agreement, and which
Furman Selz reasonably believes to be genuine; or (b) delays or errors or loss
of data occurring by reason of circumstances beyond Furman Selz's control,
including acts of civil or military authorities, national emergencies, labor
difficulties, fire, mechanical breakdown (except as provided in Paragraph 9),
flood or catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply. Notwithstanding the
foregoing, Furman Selz shall use its best efforts to mitigate the effects of the
events in clause (b) above, although such efforts shall not impute any liability
thereto. Furman Selz and the Company expressly disclaim all responsibility for
consequential damages, including but not limited to any that may result from
performance or non-performance of any duty or obligation whether express or
implied in this Agreement, and Furman Selz also expressly disclaims any express
or implied warranty of products or services provided in connection with this
Agreement.
Any person, even though also a member, manager, employee or agent of Furman
Selz, shall be deemed, when rendering services to the Company or acting on any
business of the Company (other than services or business in connection with
Furman Selz's duties as administrator or accounting services provider
hereunder), to be acting solely for the Company and not as a member, manager,
employee or agent or one under the control or discretion of Furman Selz even
though paid by it.
15. DURATION AND TERMINATION. This Agreement shall continue in effect
until two years from the date hereof and thereafter for successive annual
periods, provided that such continuance is specifically approved at least
annually (a) by the Company's Board of Trustees and (b) by the vote, cast in
person at a meeting called for the purpose, of a majority of the Company's
Trustees who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any such party. This Agreement may be terminated at
any time, without
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the payment of any penalty, by a vote of a majority of the Company's outstanding
voting securities (as defined in the 1940 Act) or by a vote of a majority of the
Company's Board of Trustees on 60 days' written notice to Furman Selz or by
Furman Selz on 60 days' written notice to the Company.
16. NOTICES. All notices and other communications, including Written
Instructions (collectively referred to as a "Notice" or "Notices" in this
Paragraph), hereunder shall be in writing and sent by mail, hand delivery,
confirming telegram, cable, telex or facsimile sending device. Notices shall be
addressed (a) if to Furman Selz, at Furman Selz's address, 230 Park Avenue, New
York, New York 10169, attention John J. Pileggi; (b) if to the Company, at the
address of the Company; or (c) if to neither of the foregoing, at such other
address as shall have been notified to the sender of any such Notice or other
communication. A Notice may be mailed, in which case it shall be deemed to have
been given three days after it is sent, or if sent by facsimile sending device,
it shall be deemed to have been given immediately, or if sent by messenger, it
shall be deemed to have been given on the day it is delivered, or if sent by
confirming telegram, cable, telex and facsimile sending device it shall be
deemed to have been given immediately. All postage, messenger, cable, telex, or
facsimile sending device charges arising from the sending of a Notice hereunder
shall be paid by the sender.
17. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
18. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties thereto, and supersedes all prior agreements
and understandings, relating to the subject matter hereof, provided that the
parties hereto may embody in one or more separate documents their agreement, if
any, with respect to delegated and/or Oral Instructions. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or
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otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding and shall inure to the benefit of the parties hereto
and their respective successors.
21. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York (not including the conflict of laws principles thereof).
22. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS. A copy of
the Articles is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
trustees of the Company as trustees and not individually and that the
obligations of this instrument are not binding upon any of the trustees or
shareholders individually but are binding only upon the assets and property of
the Funds.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below on the day and year first above
written.
BARR ROSENBERG SERIES TRUST
Attest:_____________________ By:________________________
Title:
FURMAN SELZ LLC
Attest:_____________________ By:________________________
Title:
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APPENDIX A
----------
NAME OFFICE SIGNATURE
- ---- ------ ---------
Kenneth Reid President ____________________
Marlis S. Fritz Vice President ____________________
Po-Len Hew Treasurer ____________________
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TRANSFER AGENCY AGREEMENT
-------------------------
THIS AGREEMENT is made as of the ___ day of July, 1996 between Barr
Rosenberg Series Trust, a Massachusetts business trust (the "Company"), and
FURMAN SELZ LLC, a Delaware limited liability company (the "Transfer Agent").
R E C I T A L S
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company desires to retain the Transfer Agent to serve as the
Company's transfer agent, registrar and dividend disbursing agent, and the
Transfer Agent is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Company hereby appoints the Transfer Agent and the
Transfer Agent hereby agrees to serve as transfer agent, registrar and dividend
disbursing agent for the Company with respect to the shares of the Company's
three existing investment portfolios, the Japan Series, the U.S. Small
Capitalization Series and the International Small Capitalization Series
(collectively, the "Funds"), for the period and on the terms set forth in this
Agreement. In the event that the Company establishes one or more portfolios
other than the Funds with respect to which the Company decides to retain the
Transfer Agent to act as transfer agent, registrar and dividend disbursing
agent, the Company shall so notify the Transfer Agent in writing. If the
Transfer Agent is willing to render such services, the Transfer Agent shall
promptly notify the Company in writing whereupon such portfolio shall be deemed
to be a Fund hereunder.
2. DELIVERY OF DOCUMENTS. The Company has furnished the Transfer Agent
with copies properly certified or authenticated of each of the following:
<PAGE>
(a) Resolutions of the Company's Board of Trustees authorizing the
appointment of the Transfer Agent as transfer agent, registrar and dividend
disbursing agent for the Company and approving this Agreement;
(b) Appendix A identifying and containing the signatures of the
Company's officers and other persons authorized to issue Oral Instructions and
to sign Written Instructions, as hereinafter defined, on behalf of the Company
and to execute stock certificates representing Shares (as hereinafter defined);
(c) the Company's Agreement and Declaration of Trust dated as of
April 1, 1988 and filed with The Commonwealth of Massachusetts on April 22, 1988
and all amendments thereto (the "Articles");
(d) The Company's By-Laws and all amendments thereto (the "By-Laws");
(e) The Management Contracts between Rosenberg Institutional Equity
Management and the Company with respect to the Funds;
(f) The Custodian Agreement between State Street Bank and Trust
Company (referred to herein as the "Custodian" for the period during which the
agreement between the Company and such entity is in effect) and the Company
dated as of August 10, 1988;
(g) The Fund Administration Agreement between Furman Selz LLC (the
"Administrator") and the Company dated as of _______________________________ ,
1996;
(h) The Distributor's Contract between Barr Rosenberg Funds
Distributor, Inc. (the "Distributor") and the Company dated as of July ___,
1996;
(i) The Company's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act"), and under the 1940 Act
(File Nos. 33-21677 and 811-5547) as filed with the Securities and Exchange
Commission ("SEC") relating to shares of beneficial interest in the Company (the
"Shares"), and all amendments thereto;
(j) The Company's most recent prospectus and statement of additional
information and all amendments and supplements thereto (the "Prospectus"); and
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(k) Before the Company engages in any transaction regulated by the
Commodity Futures Trading Commission ("CFTC"), a copy of either (i) a filed
notice of eligibility to claim the exclusion from the definition of "commodity
pool operator" contained in Section 2(a)(1)(A) of the Commodity Exchange Act
("CEA") that is provided in Rule 4.5 under the CEA, together with all
supplements as are required by the CFTC, or (ii) a letter which has been granted
the Company by the CFTC which states that the Company will not be treated as a
"pool" as defined in Section 4.10(d) of the CFTC's General Regulations, or (iii)
a letter which has been granted the Company by the CFTC which states that the
CFTC will not take any enforcement action if the Company does not register as a
"commodity pool operator".
The Company will furnish the Transfer Agent from time to time with
copies, properly certified or authenticated, of all amendments of or supplements
to the foregoing, if any.
3. DEFINITIONS.
(a) "AUTHORIZED PERSON". As used in this Agreement, the term
"Authorized Person" means any officer of the Company and any other person,
whether or not any such person is an officer or employee of the Company, duly
authorized by the Board of Trustees of the Company to give Oral and Written
Instructions on behalf of the Company and listed on Appendix A attached hereto
or any amendment thereto as may be received by the Transfer Agent from time to
time.
(b) "ORAL INSTRUCTIONS". As used in this Agreement, the term "Oral
Instructions" means oral instructions received by the Transfer Agent from an
Authorized Person or from a person reasonably believed by the Transfer Agent to
be an Authorized Person. The Company agrees to deliver to the Transfer Agent,
at the time and in the manner specified in Paragraph 4(b) of this Agreement,
Written Instructions confirming Oral Instructions given by an Authorized Person.
(c) "WRITTEN INSTRUCTIONS". As used in this Agreement, the term
"Written Instructions" means written instructions delivered by hand, mail,
tested telegram, cable, telex or facsimile sending device, including buy or sell
tickets and computer transmissions, and received by the Transfer Agent and
signed by an Authorized Person.
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<PAGE>
4. INSTRUCTIONS CONSISTENT WITH ARTICLES, ETC.
(a) Unless otherwise provided in this Agreement, the Transfer Agent
shall act only upon Oral or Written Instructions. Although the Transfer Agent
may know of the provisions of the Articles and By-Laws of the Company, the
Transfer Agent may assume that any Oral or Written Instructions received
hereunder are not in any way inconsistent with any provisions of such Articles
or By-Laws or any vote, resolution or proceeding of the Shareholders, or of the
Board of Trustees, or of any committee thereof.
(b) The Transfer Agent shall be entitled to rely upon any Oral
Instructions and any Written Instructions received by the Transfer Agent
pursuant to this Agreement. The Company agrees to forward to the Transfer Agent
Written Instructions confirming Oral Instructions given by an Authorized Person
in such manner that the Written Instructions are received by the Transfer Agent
within 24 hours of the time that such Oral Instructions are given to the
Transfer Agent by an Authorized Person. The Company agrees that the fact that
such confirming Written Instructions are not received by the Transfer Agent
shall in no way affect the validity of the transactions or enforceability of the
transactions authorized by the Company by giving Oral Instructions. Subject to
the provisions of Paragraph 18 hereof, the Company agrees that the Transfer
Agent shall incur no liability to the Company in acting upon Oral Instructions
given to the Transfer Agent hereunder concerning such transactions, provided
such Oral Instructions reasonably appear to have been received from an
Authorized Person.
5. TRANSACTIONS NOT REQUIRING INSTRUCTIONS. In the absence of contrary
Written Instructions, the Transfer Agent is authorized to take the following
actions:
(a) ISSUANCE OF SHARES. Upon receipt of a purchase order from the
Distributor for the purchase of Shares and sufficient information to enable the
Transfer Agent to establish a Shareholder account, and after confirmation of
receipt or crediting of Federal funds for such order from the Custodian, the
Transfer Agent shall issue and credit the account of the investor or other
record holder with Shares in the manner described in the Prospectus.
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<PAGE>
(b) TRANSFER OF SHARES; UNCERTIFICATED SECURITIES. Where a
Shareholder does not hold a certificate representing the number of Shares in his
account and provides the Transfer Agent with instructions for the transfer of
such Shares which include appropriate documentation to permit a transfer, then
the Transfer Agent shall register such Shares and shall deliver them pursuant to
instructions received from the transferor, and subject to the rules and
regulations of the SEC and the law of The Commonwealth of Massachusetts relating
to the transfer of shares of beneficial interest.
(c) SHARE CERTIFICATES. If at any time the Company issues share
certificates representing Shares, the following provisions will apply:
(i) The Company will supply the Transfer Agent with a sufficient
supply of share certificates representing Shares, in the form approved from time
to time by the Board of Trustees of the Company, and, from time to time, shall
replenish such supply upon request of the Transfer Agent. Such share
certificates shall be properly signed, manually or by facsimile signature, by
the duly authorized officers of the Company, whose names and positions shall be
set forth on Appendix A attached hereto, and shall bear the trust seal or
facsimile thereof of the Company, and notwithstanding the death, resignation or
removal of any officer of the Company, such executed certificates bearing the
manual or facsimile signature of any such officer shall remain valid and may be
issued to Shareholders until the Transfer Agent is otherwise directed by Written
Instructions.
(ii) In the case of the loss or destruction of any certificate
representing Shares, no new certificate shall be issued in lieu thereof, unless
there shall first have been furnished an appropriate bond of indemnity issued by
the surety company approved by the Transfer Agent.
(iii) Upon receipt of signed share certificates, which shall be in
proper form for transfer, and upon cancellation or destruction thereof, the
Transfer Agent shall countersign, register and issue new certificates for the
same number of Shares and shall deliver them pursuant to instructions received
from the transferor, and subject to the rules and regulations of the SEC and the
law of The Commonwealth of Massachusetts relating to the transfer of shares of
beneficial interest.
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<PAGE>
(iv) Upon receipt of the share certificates, which shall be in proper
form for transfer, together with the Shareholder's instructions to hold such
share certificates for safekeeping, the Transfer Agent shall reduce such Shares
to uncertificated status, while retaining the appropriate registration in the
name of the Shareholder upon the transfer books.
(v) Upon receipt of written instructions from a Shareholder of
uncertificated securities for a certificate in the number of shares in his
account, the Transfer Agent will issue such share certificates and deliver them
to the Shareholder.
(d) REDEMPTION OF SHARES. Upon receipt of a redemption order from
the Distributor or other authorized agent, the Transfer Agent shall redeem the
number of Shares indicated thereon from the redeeming Shareholder's account and
receive from the Custodian and disburse to the redeeming Shareholder the
redemption proceeds therefor, or arrange for direct payment of redemption
proceeds to such Shareholders by the Custodian, in accordance with such
procedures and controls as are mutually agreed upon from time to time by and
among the Company, the Transfer Agent and the Custodian. Authority to perform
the above shall be suspended when the Company suspends the Shareholders' right
of redemption, provided that the Company delivers notice of such suspension to
the Transfer Agent.
6. AUTHORIZED SHARES.
The Transfer Agent shall record issues of all Shares and shall notify the
Company in case any proposed issue of Shares by the Company for a particular
Fund shall result in an over-issue for that Fund. In case any such issue of
Shares would result in such an over-issue, the Transfer Agent shall refuse to
issue said Shares and shall not countersign and issue certificates for such
Shares. The Company agrees to notify the Transfer Agent promptly of any change
in the number of authorized Shares or their classification and of any change in
the number of Shares registered under the 1933 Act.
7. DIVIDENDS AND DISTRIBUTIONS.
(a) The Company shall furnish the Transfer Agent with appropriate
evidence of action by the Company's Board of Trustees authorizing the
declaration and payment of dividends and
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<PAGE>
distributions as described in the Prospectus. After deducting any amount
required to be withheld by any applicable tax laws, rules and regulations or
other applicable laws, rules and regulations, the Transfer Agent shall in
accordance with instructions in proper form from a Shareholder and the
provisions of the Company's Articles and the Prospectus, issue and credit the
account of the Shareholder with Shares, or, if the Shareholder so elects, pay
such dividends to the Shareholder in the manner described in the Prospectus. In
lieu of receiving from the Custodian and paying to Shareholders cash dividends
or distributions, the Transfer Agent may arrange for the direct payment of cash
dividends and distributions to Shareholders by the Custodian, in accordance with
such procedures and controls as are mutually agreed upon from time to time by
and among the Company, the Transfer Agent and the Custodian.
(b) The Transfer Agent shall prepare, file with the Internal Revenue
Service and other appropriate taxing authorities, and address and mail to
Shareholders such returns and information relating to dividends and
distributions paid by the Company as are required to be so prepared, filed and
mailed by applicable laws, rules and regulations, or such substitute form of
notice as may from time to time be permitted or required by the Internal Revenue
Service. On behalf of the Company, the Transfer Agent shall mail certain
requests for Shareholders' certifications under penalties of perjury and pay on
a timely basis to the appropriate Federal authorities any taxes to be withheld
on dividends and distributions paid by the Company, all as required by
applicable Federal tax laws and regulations.
In accordance with the Prospectus and such procedures and controls as
are mutually agreed upon from time to time by and among the Company, the
Transfer Agent and the Custodian, the Transfer Agent shall (a) arrange for
issuance of Shares obtained through (1) transfers of funds from Shareholders'
accounts at financial institutions, (2) a pre-authorized check plan, if any, and
(3) a right of accumulation, if any; (b) arrange for the exchange of Shares for
shares of such other funds designated by the Company from time to time; and (c)
arrange for systematic withdrawals from the account of a Shareholder
participating in a systematic withdrawal plan, if any.
8.COMMUNICATIONS WITH SHAREHOLDERS.
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<PAGE>
(a) COMMUNICATIONS TO SHAREHOLDERS. The Transfer Agent will address
and mail all communications by the Company to its Shareholders, including
reports to Shareholders, confirmations of purchases and sales of Company Shares,
monthly statements, dividend and distribution notices and proxy materials for
any meetings of Shareholders. The Transfer Agent will receive and tabulate the
proxy cards for any meetings of the Company's Shareholders.
(b) CORRESPONDENCE. The Transfer Agent will answer such
correspondence from Shareholders, securities brokers and others relating to its
duties hereunder and such other correspondence as may from time to time be
mutually agreed upon between the Transfer Agent and the Company.
9. RECORDS. The Transfer Agent shall maintain records of the accounts
for each Shareholder showing the following information:
(a) name, address and United States Tax Identification or Social
Security number;
(b) number and class of Shares held with respect to each Fund and
number and class of Shares with respect to each Fund for which certificates, if
any, have been issued, including certificate numbers and denominations;
(c) historical information regarding the account of each Shareholder,
including dividends and distributions paid and the dates and prices for all
transactions on a Shareholder's account;
(d) any stop or restraining order placed against a Shareholder's
account;
(e) any correspondence relating to the current maintenance of a
Shareholder's account;
(f) information with respect to withholdings; and
(g) any information required in order for the Transfer Agent to
perform any calculations contemplated or required by this Agreement.
The books and records pertaining to the Company which are in the
possession of the Transfer Agent shall be the property of the Company. Such
books and records shall be prepared and maintained as required by the 1940 Act
and other applicable securities laws and rules and regulations. The Company, or
the Company's authorized representatives, shall have access to such books and
records
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<PAGE>
at all times during the Transfer Agent's normal business hours. Upon the
reasonable request of the Company, copies of any such books and records shall be
provided by the Transfer Agent to the Company or the Company's authorized
representative at the Company's expense.
10. ONGOING FUNCTIONS. The Transfer Agent will perform the following
functions on an ongoing basis:
(a) furnish state-by-state registration and sales reports to the
Administrator;
(b) calculate Account Executive load or compensation payment and
provide such information to the Company, if any;
(c) calculate dealer commissions for the Company, if any;
(d) provide toll-free lines for direct Shareholder use, plus customer
liaison staff with on-line inquiry capacity;
(e) mail duplicate confirmations to dealers of their clients'
activity, whether executed through the dealer or directly with the Transfer
Agent, if any;
(f) provide details for underwriter or broker confirmations and other
participating dealer Shareholder accounting, in accordance with such procedures
as may be agreed upon between the Company and the Transfer Agent, if any;
(g) provide Shareholder lists and statistical information concerning
accounts to the Company; and
(h) provide timely notification of Company activity and such other
information as may be agreed upon from time to time between the Transfer Agent
and the Custodian, to the Company or the Custodian.
11. COOPERATION WITH ACCOUNTANTS. The Transfer Agent shall cooperate with
the Company's independent public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement to ensure that
the necessary information is made available to such accountants for the
expression of their opinion as such may be required by the Company from time to
time.
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12. CONFIDENTIALITY. The Transfer Agent agrees on behalf of itself and
its employees to treat confidentially all records and other information relating
to the Company and its prior, present or potential Shareholders and relating to
Rosenberg Institutional Equity Management and its prior, present or potential
customers, except, after prior notification to and approval in writing by the
Company or Rosenberg Institutional Equity Management, as the case may be, which
approval shall not be unreasonably withheld and may not be withheld where the
Transfer Agent may be exposed to civil or criminal contempt proceedings for
failure to divulge such information, when the Transfer Agent is requested to
divulge such information by duly constituted authorities, or when so requested
by the Company or Rosenberg Institutional Equity Management, as the case may be.
13. EQUIPMENT FAILURES. In the event of equipment failures beyond the
Transfer Agent's control, the Transfer Agent shall, at no additional expense to
the Company, take reasonable steps to minimize service interruptions but shall
have no liability with respect thereto. The foregoing obligation shall not
extend to computer terminals located outside of premises maintained by the
Transfer Agent. The Transfer Agent shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provision for emergency use of electronic data processing equipment to the
extent appropriate equipment is available.
14. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF COMPANY. If the Transfer Agent shall be in doubt as to
any action to be taken or omitted by it, it may request, and shall receive, from
the Company directions or advice, including Oral or Written Instructions where
appropriate.
(b) ADVICE OF COUNSEL. If the Transfer Agent shall be in doubt as to
any question of law involved in any action to be taken or omitted by the
Transfer Agent, it may request advice at its own cost from counsel, which
counsel shall be subject to the reasonable approval of the Company.
(c) CONFLICTING ADVICE. In case of conflict between directions,
advice or Oral or Written Instructions received by the Transfer Agent pursuant
to subparagraph (a) of this Paragraph and
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advice received by the Transfer Agent pursuant to subparagraph (b) of this
Paragraph, the Transfer Agent shall be entitled to rely on and follow the advice
received pursuant to the latter provision alone.
(d) PROTECTION OF THE TRANSFER AGENT. The Transfer Agent shall be
protected in any action or inaction which it takes in reliance on any
directions, advice or Oral or Written Instructions received pursuant to
subparagraphs (a) or (b) of this Paragraph which the Transfer Agent, after
receipt of any such directions, advice or Oral or Written Instructions, in good
faith and reasonably believes to be consistent with such directions, advice or
Oral or Written Instructions, as the case may be. However, nothing in this
Paragraph shall be construed as imposing upon the Transfer Agent any obligation
(i) to seek such directions, advice or Oral or Written Instructions, or (ii) to
act in accordance with such directions, advice or Oral or Written Instructions
when received, unless, under the terms of another provision of this Agreement,
the same is a condition to the Transfer Agent's properly taking or omitting to
take such action. Nothing in this subparagraph shall excuse the Transfer Agent
when an action or omission on the part of the Transfer Agent constitutes willful
misfeasance, bad faith, negligence or reckless disregard by the Transfer Agent
of its duties and obligations under this Agreement.
15. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. The Transfer
Agent undertakes to comply with all applicable requirements of the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, the
CEA, and any laws, rules and regulations of governmental authorities having
jurisdiction.
16. COMPENSATION. As compensation for the services rendered by the
Transfer Agent during the term of this Agreement, the Company will pay to the
Transfer Agent monthly fees plus certain of the Transfer Agent's expenses
relating to such services, as shall be agreed to from time to time by the
Company and the Transfer Agent. The Company and the Transfer Agent have
initially agreed to the compensation set forth on Exhibit A attached hereto.
17. INDEMNIFICATION. The Company agrees to indemnify and hold harmless
the Transfer Agent and its nominees and sub-contractors from all taxes, charges,
assessments, claims and liabilities (including, without limitation, liabilities
arising under the 1933 Act, the 1934 Act, the 1940 Act, the
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CEA, and any state and foreign securities and blue sky laws, all as or to be
amended from time to time) and expenses, including reasonable attorneys' fees
and disbursements (as long as such legal counsel) has been retained with the
consent of the Company, which consent shall not be unreasonably withheld),
arising directly or indirectly from any action or thing which the Transfer Agent
takes or does or omits to take or do (i) at the request or on the direction of
or in reliance on the advice of the Company or (ii) upon Oral or Written
Instructions, PROVIDED, that neither the Transfer Agent nor any of its nominees
or sub-contractors shall be indemnified against any liability to the Company or
to its Shareholders (or any expenses incident to any such liability) arising out
of the Transfer Agent's or such nominee's or such sub-contractor's willful
misfeasance, bad faith, negligence or reckless disregard of its duties in
connection with the performance of its duties and obligations specifically
described in this Agreement. In order that the indemnification provision
contained in this Paragraph 17 shall apply, it is understood that if in any case
the Company may be asked to indemnify or hold the Transfer Agent harmless, the
Company shall be fully and promptly advised of all pertinent facts concerning
the situation in question, and it is further understood that the Transfer Agent
will use all reasonable care and effort to identify and notify the Company
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the Company. The
Company shall have the option to defend the Transfer Agent against any claim
which may be the subject of this indemnification and, in the event that the
Company so elects, it will so notify the Transfer Agent and thereupon the
Company shall take over complete defense for the claim, and the Transfer Agent
shall in such situation incur no further legal or other expenses for which it
shall seek indemnification under this Paragraph 17. The Transfer Agent shall in
no case confess any claim or make any compromise or settlement in any case in
which the Company will be asked to indemnify the Transfer Agent, except with the
Company's prior written consent (which consent shall not be unreasonably
withheld).
18. RESPONSIBILITY OF THE TRANSFER AGENT. The Transfer Agent shall be
under no duty to take any action on behalf of the Company except as specifically
set forth herein or as may be specifically agreed to by the Transfer Agent in
writing. In the performance of its duties hereunder, the Transfer
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Agent shall be obligated to exercise care and diligence and to act in good faith
and to use its best efforts within reasonable limits to ensure the accuracy and
completeness of all services performed under this Agreement. The Transfer Agent
shall be responsible for and shall hold the Company harmless from all loss,
cost, damage, liability and expense, including reasonable attorneys' fees (as
long as such legal counsel has been retained with the consent of the Transfer
Agent, which consent shall not be unreasonably withheld), incurred by the
Company arising directly or indirectly out of the Transfer Agent's willful,
reckless or negligent failure to perform its duties under this Agreement. In
order that the indemnification provision contained in this Paragraph 18 shall
apply, it is understood that if in any case the Transfer Agent may be asked to
indemnify or hold the Company harmless, the Transfer Agent shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the Company will use all reasonable care and
effort to indemnify and notify the Transfer Agent promptly concerning any
situation which presents or appears likely to present the probability of such a
claim for indemnification against the Transfer Agent. The Transfer Agent shall
have the option to defend the Company against any claim which may be subject to
this indemnification and, in the event that the Transfer Agent so elects, it
will so notify the Company and thereupon the Transfer Agent shall take over
complete defense for the claim, and the Company shall in such situation incur no
further legal or other expenses for which it shall seek indemnification under
this Paragraph 17. The Company shall in no case confess any claim or make any
compromise or settlement in any case in which the Transfer Agent will be asked
to indemnify the Company except with the Transfer Agent's prior written consent
(which consent shall not be unreasonably withheld).
To the extent that duties, obligations and responsibilities are not
expressly set forth in this Agreement, however, the Transfer Agent shall not be
liable for any act or omission which does not constitute willful misfeasance,
bad faith or negligence on the part of the Transfer Agent or reckless disregard
of such duties, obligations and responsibilities. Without limiting the
generality of the foregoing or of any other provision of this Agreement, the
Transfer Agent in connection with its duties under this Agreement shall not be
under any duty or obligation to inquire into and shall not be liable for or in
-13-
<PAGE>
respect of (a) the validity or invalidity or authority or lack thereof of any
Oral or Written Instruction, notice or other instrument which conforms to the
applicable requirements of this Agreement, if any, and which the Transfer Agent
reasonably believes to be genuine, or (b) delays or errors or loss of data
occurring by reason of circumstances beyond the Transfer Agent's control,
including acts of civil or military authorities, national emergencies, labor
difficulties, fire, mechanical breakdown (except as provided in Paragraph 13),
flood or catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply. Notwithstanding the
foregoing, the Transfer Agent shall use its best efforts to mitigate the effects
of the events set forth in clause (b) above, although such efforts shall not
impute any liability thereto. The Transfer Agent and the Company expressly
disclaim all responsibility for consequential damages, including but not limited
to any that may result from performance or non-performance of any duty or
obligation whether express or implied in this Agreement, and the Transfer Agent
also expressly disclaims any express or implied warranty of products or services
provided in connection with this Agreement.
19. DURATION AND TERMINATION. This Agreement shall continue in effect
until two years from the date thereof and thereafter for successive annual
periods, provided that such continuance is specifically approved at least
annually (a) by the company's Board of Trustees and (b) by the vote, cast in
person at a meeting called for the purpose, of a majority of the Company's
Trustees who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any such party. This Agreement may be terminated at
any time, without the payment of any penalty, by a vote of a majority of the
Company's outstanding voting securities (as defined in the 1940 Act) or by a
vote of a majority of the Company's Board of Trustees on 60 days' written notice
to the Transfer Agent or by the Transfer Agent on 60 days' written notice to the
Company.
20. REGISTRATION AS A TRANSFER AGENT. The Transfer Agent represents that
it is currently registered with the appropriate federal agency for the
registration of transfer agents, and that it will remain so registered for the
duration of this Agreement. The Transfer Agent agrees that it will promptly
notify the Company in the event of any change in its status as a registered
transfer agent. Should the
-14-
<PAGE>
Transfer Agent fail to be registered with the appropriate federal agency as a
transfer agent at any time during this Agreement, the Company may, on written
notice to the Transfer Agent, immediately terminate this Agreement and all
expenses arising from such termination shall be paid by the Transfer Agent.
21. NOTICES. All notices and other communications, including Written
Instructions (collectively referred to as a "Notice" or "Notices" in this
Paragraph), hereunder shall be in writing and sent by mail, hand delivery,
confirming telegram, cable, telex or facsimile sending device. Notices shall be
addressed (a) if to the Transfer Agent, at Furman Selz LLC, 230 Park Avenue, New
York, New York 10169, attention: John J. Pileggi; (b) if to the Company, at the
address of the Company; or (c) if to neither of the foregoing, at such other
address as shall have been notified to the sender of any such Notice or other
communication. A Notice may be sent by first-class mail, in which case it shall
be deemed to have been given three days after it is sent, or if sent by
messenger, it shall be deemed to have been given on the day it is delivered, or
if sent by confirming telegram, cable, telex or facsimile sending device, it
shall be deemed to have been given immediately. All postage, messenger, cable,
telegram, telex and facsimile sending device charges arising from the sending of
a Notice hereunder shall be paid by the sender.
22. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
23. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
24. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
25. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof, PROVIDED that the
parties hereto may embody in one or more separate documents their
-15-
<PAGE>
agreement, if any, with respect to Oral Instructions. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding and shall inure
to the benefit of the parties hereto and their respective successors.
26. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York (not including the conflict of laws principles thereof).
27. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS. A copy of
the Articles is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
trustees of the Company as trustees and not individually and that the
obligations of this instrument are not binding upon any of the trustees or
shareholders individually but are binding only upon the assets and property of
the Funds.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
BARR ROSENBERG SERIES TRUST
Attest: _____________________ By: ________________________
Title:
FURMAN SELZ LLC
Attest: _____________________ By: ________________________
Title:
-16-
<PAGE>
EXHIBIT A
TRANSFER AGENCY AGREEMENT
COMPENSATION
The Transfer Agent shall receive an account maintenance fee of
$15 per year for each account which is in existence at any time during the month
for which payment is made, such fee to be paid in equal monthly installments,
plus out-of-pocket expenses. The Transfer Agent shall be entitled to this
account maintenance fee on all accounts maintained in its records during the
year, including those accounts which have a zero balance during any portion of
the year. There is a $12,000 per year per Fund minimum for transfer agent
services under the Agreement.
-17-
<PAGE>
APPENDIX A
----------
NAME OFFICE SIGNATURE
- ---- ------ ---------
Kenneth Reid President _______________
Marlis S. Fritz Vice President _______________
Po-Len Hew Treasurer _______________
-18-
<PAGE>
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110-2624
(617) 951-7000
Telecopier (617) 951-7050
May 30, 1996
Rosenberg Series Trust
Four Orinda Way, Suite 300E
Orinda, CA 94563
Gentlemen:
You have informed us that you intend to file a Rule 24f-2 Notice (the
"Notice") with the Securities and Exchange Commission (the "Commission")
pursuant to Rule 24f-2 (the "Rule") under the Investment Company Act of 1940, as
amended, making definite the registration of 119,075 shares of beneficial
interest, without par value (the "Shares"), of the Small Capitalization Series
and the Japan Series (together, the "Funds") of Rosenberg Series Trust (the
"Trust"), sold in reliance upon the Rule during your fiscal year ended March 31,
1996 (the "Fiscal Year"). We also understand that the registration fee in Item
12 of the Notice was calculated by reference to aggregate sales prices of (i)
$878,693 for the Shares, (ii) $12,400,269 for shares of the Funds issued by the
Trust during the Fiscal Year in connection with dividend reinvestment plans and
(iii) $16,207,993 for shares of the Funds redeemed or repurchased by the Trust
during the Fiscal Year ($13,278,962 of which is listed on Item 12(iii) of the
Notice).
We have examined the Trust's Agreement and Declaration of Trust dated
April 1, 1988, as amended, on file in the office of the Secretary of State of
The Commonwealth of Massachusetts (the "Agreement and Declaration of Trust").
We are familiar with the actions taken by the Trust's Trustees to authorize the
issue and sale from time to time of shares of beneficial interest of the Trust
at not less than net asset value and not less than par
<PAGE>
Rosenberg Series Trust -2- May 30, 1996
value, and have assumed that the Shares have been issued and sold in accordance
with such actions. We have also examined a copy of the Trust's By-laws and such
other documents as we have deemed necessary for the purposes of this opinion.
Based on the foregoing, we are of the opinion that the Shares have been
duly authorized and validly issued and are fully paid and non-assessable by the
Trust.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of Trust disclaims shareholder liability
for acts or obligations of the Trust and requires that notice of such disclaimer
be given in each note, bond, contract, instrument, certificate or undertaking
made or issued on behalf of the Trust by the Trustees, by any officers or
officer or otherwise. The Agreement and Declaration of Trust provides for
indemnification out of the property of the particular series of shares for all
loss and expense of any shareholder of that series held personally liable solely
by reason of his being or having been a shareholder. Thus, the risk of
shareholder liability is limited to circumstances in which that series of shares
itself would be unable to meet its obligations.
We consent to this opinion accompanying the Notice when filed with the
Commission.
Very truly yours,
Ropes & Gray
-2-
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 12 to the registration
statement for Barr Rosenberg Series Trust on Form N-1A (the "Registration
Statement") of our report dated May 20, 1996, relating to the financial
statements and financial highlights of Small Capitalization Series and Japan
Series, which appear in such Statement of Additional Information, and to the
incorporation by reference of our report into the Prospectus which constitutes
part of this Registration Statement. We also consent to the references to us
under the headings "Financial Statements," "Experts" and "Independent
Accountants" in such Statement of Additional Information and to the reference to
us under the heading "Financial Highlights" in such Prospectus.
Price Waterhouse LLP
Boston, Massachusetts
July 31, 1996
<PAGE>
<TABLE>
<CAPTION>
Exhibit 16A
ROSENBERG U.S. SMALL CAP SERIES (Institutional Shares) - for periods ended March 31, 1996
NAV Offer Average SEC Ending Red. Avg. NAV Ending NAV
Total Return Total Return Total Return Value Total Return Red. Value
<S> <C> <C> <C> <C> <C> <C>
Inception (February 22, 1989) 174.70 174.70 15.279 2,747.016 15.279 2,747.016
Fiscal Year Ended March 31, 1996 35.690 35.690 35.690 1,356.900 35.690 1,356.900
Year to Date 4.972 4.973 4.973 1,049.727 4.973 1,049.727
12 Month 35.760 35.761 35.761 1,357.608 35.761 1,357.608
6 Month 8.266 8.267 8.267 1,082.665 8.267 1,082.665
3 Month 4.972 4.973 4.973 1,049.727 4.973 1,049.727
1 Month 3.260 3.261 3.261 1,032.612 3.261 1,032.612
2 Years 52.421 52.421 23.423 1,524.211 23.423 1,524.211
3 Years 70.525 70.525 19.452 1,705.25 19.452 1,705.25
4 Years 110.740 110.739 20.471 2,107.389 20.471 2,107.389
5 Years 142.035 142.035 19.314 2,420.35 19.314 2,420.35
10 Years NA NA NA NA NA NA
</TABLE>
Beginning Investment... $1,000.00
TOTAL RATE OF RETURN
CALCULATION FORMULA
n
P(1 + T) = ERV
P = A hypothetical initial payment of $1000
T = Average annual total return
n = Number of years
ERV = Ending redeemable value
<PAGE>
<TABLE>
<CAPTION>
Exhibit 16B
ROSENBERG JAPAN SERIES (Institutional Shares) - for periods ended March 31, 1996
NAV Offer Average SEC Ending Red. Avg. NAV Ending NAV
Total Return Total Return Total Return Value Total Return Red. Value
<S> <C> <C> <C> <C> <C> <C>
Inception (January 3, 1989) -2.274 -2.274 -0.317 977.26 -0.317 977.26
Fiscal Year Ended March 31, 1996 -1.204 -1.204 -1.201 987.959 -1.201 987.959
Year to Date -0.227 -0.227 -0.227 997.727 -0.227 997.727
12 Month -1.204 -1.204 -1.205 987.951 -1.205 987.951
6 Month 5.007 5.007 5.007 1,050.066 5.007 1,050.066
3 Month -0.227 -0.227 -0.227 997.727 -0.227 997.727
1 Month 1.387 1.387 1.387 1,013.873 1.387 1,013.873
2 Years 7.547 7.547 3.699 1,075.465 3.699 1,075.465
3 Years 29.447 29.447 8.976 1,294.470 8.976 1,294.470
4 Years 47.771 47.771 10.247 1,477.708 10.247 1,477.708
5 Years 16.762 16.762 3.144 1,167.62 3.144 1,167.62
10 Years NA NA NA NA NA NA
</TABLE>
Beginning Investment... $1,000.00
TOTAL RATE OF RETURN
CALCULATION FORMULA
n
P(1 + T) = ERV
P = A hypothentical initial payment of $1000
T = Average annual total return
n = Number of years
ERV = Ending redeemable value
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 01
<NAME> ROSENBERG SMALL CAPITALIZATION SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<INVESTMENTS-AT-COST> 46600
<INVESTMENTS-AT-VALUE> 60328
<RECEIVABLES> 269
<ASSETS-OTHER> 6184
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 66781
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6735
<TOTAL-LIABILITIES> 6735
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 42842
<SHARES-COMMON-STOCK> 7902
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 300
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 13124
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 12937
<NET-ASSETS> 60046
<DIVIDEND-INCOME> 838
<INTEREST-INCOME> 23
<OTHER-INCOME> 17
<EXPENSES-NET> 578
<NET-INVESTMENT-INCOME> 300
<REALIZED-GAINS-CURRENT> 16565
<APPREC-INCREASE-CURRENT> 2416
<NET-CHANGE-FROM-OPS> 18981
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 68
<DISTRIBUTIONS-OF-GAINS> 13124
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 867
<NUMBER-OF-SHARES-REDEEMED> 16208
<SHARES-REINVESTED> 12388
<NET-CHANGE-IN-ASSETS> (2953)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 514
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 736
<AVERAGE-NET-ASSETS> 64265
<PER-SHARE-NAV-BEGIN> 6.97
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 1.73
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.74
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.60
<EXPENSE-RATIO> .47
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 02
<NAME> ROSENBERG JAPAN SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<INVESTMENTS-AT-COST> 1260
<INVESTMENTS-AT-VALUE> 1361
<RECEIVABLES> 28
<ASSETS-OTHER> 10
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1399
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 21
<TOTAL-LIABILITIES> 21
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1671
<SHARES-COMMON-STOCK> 157
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 7
<OVERDISTRIBUTION-NII> 12
<ACCUMULATED-NET-GAINS> (363)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 75
<NET-ASSETS> 1378
<DIVIDEND-INCOME> 10
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 013
<NET-INVESTMENT-INCOME> (3)
<REALIZED-GAINS-CURRENT> (15)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> (18)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 12
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 12
<NET-CHANGE-IN-ASSETS> 24
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 96
<AVERAGE-NET-ASSETS> 1342
<PER-SHARE-NAV-BEGIN> 8.96
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .08
<PER-SHARE-DISTRIBUTIONS> .08
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.77
<EXPENSE-RATIO> (.22)
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
