<PAGE>
File Nos. 33-21677
811-5547
As filed with the Securities and Exchange Commission on May 1, 1997
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. 13 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT /X/
COMPANY ACT OF 1940
Amendment No. 16 /X/
BARR ROSENBERG SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
3435 Stelzer Road, Columbus, OH 43219
(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.
The Registrant intends to file its 24f-2 Notice for its fiscal year ended March
31, 1997 on or before May 31, 1997.
It is proposed that this filing will become effective:
Immediately upon filing pursuant to paragraph (b)
---
On - pursuant to paragraph (b)
---
x 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 Fund Expenses
Item 3. Condensed Financial Financial Highlights
Information
Item 4. General Description of Description of the Trust
Registrant and Ownership of Shares;
Investment Objectives and
Policies; Cover Page;
and General Description
of Risks and Fund Investments
Item 5. Management of the Fund Management of the Trust;
Back Cover
Item 5A. Management's Discussion Not Applicable
of Fund Performance
Item 6. Capital Stock and Other Description of the Trust
Securities and Ownership of Shares;
Distributions; Multiple
Classes; Shareholder Inquiries;
Taxes; and Back Cover
Item 7. Purchase of Securities Being Purchase of Shares; Exchange of
Offered Shares; Management of the Trust;
Multiple Classes; and
Determination of Net Asset
Value
Item 8. Redemption or Repurchase Redemption of Shares; Exchange
of Shares; and
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; Miscellaneous
Investment Practices; and
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 Determination of Net Asset Value;
and Pricing of Securities See in Part A, Purchase of
Being Offered Shares; Exchange of Shares;
Redemption of Shares;
Determination of Net Asset Value
Item 20. Tax Status Income Dividends,
Distributions and Tax
Status
Item 21. Underwriters Investment Advisory and
Other Services
Item 22. Calculation of Performance Data Not Applicable
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
3435 STELZER ROAD
COLUMBUS, OHIO 43219
1-800-447-3332 (ADVISER AND SELECT SHARES)
1-800-527-6026 (INSTITUTIONAL SHARES)
JUNE , 1997
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: U.S. Small Capitalization
Series, International Small Capitalization Series and 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
future reference.
A Statement of Additional Information dated June , 1997 (the
"Statement") is available free of charge by writing to Barr Rosenberg Funds
Distributor, Inc., the Funds' distributor (the "Distributor"), at 3435 Stelzer
Road, Columbus, Ohio 43219 or by telephoning 1-800-447-3332 (for Adviser and
Select Share customers) and 1-800-527-6026 (for Institutional Share customers).
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
----
FUND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . 7
GENERAL DESCRIPTION OF RISKS AND FUND INVESTMENTS. . . . . . . . . . . . . 10
INVESTMENT PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 13
MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . 16
MULTIPLE CLASSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
RETIREMENT PLAN ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . 28
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
EXCHANGE OF FUND SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . 30
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . 31
DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES . . . . . . . . . . . . . 33
SHAREHOLDER INQUIRIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
<PAGE>
FUND EXPENSES
The 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.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
OTHER TOTAL FUND
MANAGEMENT SHAREHOLDER EXPENSES OPERATING
FEE (AFTER SERVICE DISTRIBUTION (AFTER REIM- EXPENSES
WAIVER) FEE FEE BURSEMENT) (AFTER WAIVER)
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INSTITUTIONAL SHARES
U.S. Small Capitalization Series . . . . . . 0.80% None None 0.35% 1.15%
International Small Capitalization Series. . 0.00% None None 1.50% 1.50%
Japan Series . . . . . . . . . . . . . . . . 0.00% None None 1.50% 1.50%
ADVISER SHARES
U.S. Small Capitalization Series . . . . . . 0.80% 0.25% None 0.35% 1.40%
International Small Capitalization 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 Capitalization Series . . . . . . 0.80% 0.25% 0.25% 0.35% 1.65%
International Small Capitalization Series. . 0.00% 0.25% 0.25% 1.50% 2.00%
Japan Series . . . . . . . . . . . . . . . . 0.00% 0.25% 0.25% 1.50% 2.00%
</TABLE>
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, (1) the U.S. Small Cap Series' management fees
would be % and Total Fund Operating Expenses would be % for
Institutional Shares, % for Adviser Shares and % for Select
Shares; (2) the Japan Series' management fees would be % and Total
Fund Operating Expenses would be % for Institutional Shares, % for
Adviser Shares and % for Select Shares; (3) the International Small
Cap Series' estimated management fees would be % and estimated Total
Fund Operating Expenses would be % for Institutional Shares, % for
Adviser Shares and % for Select Shares. See "Management of the
Trust." For the U.S. Small Cap Series, Other Expenses are based on actual
results for the fiscal year ended March 31, 1997. Actual Other Expenses for
the Institutional Shares, Adviser Shares and Select Shares of the Japan
Series for the fiscal year ended March 31, 1997 were %, % and
%, respectively. Actual Other Expenses for the International Small Cap
Series' first fiscal year are estimated to be % for Institutional Shares,
% for Adviser Shares and % for Select Shares.
<PAGE>
EXAMPLE:
You would pay the following
expenses on a $1,000 investment assuming
a 5% annual return (with or without a
redemption at the end of each
time period):
----------------------------------------
1 3 5 10
year years years years
---- ----- ----- -----
INSTITUTIONAL SHARES
U.S. Small Cap Series. . . . . . . . 12 37 63 140
International Small Cap Series . . . 15 47 __ __
Japan Series . . . . . . . . . . . 15 47 82 179
ADVISER SHARES
U.S. Small Cap Series . . . . . . . 14 44 77 168
International Small Cap Series . . . 18 55 __ __
Japan Series . . . . . . . . . . . . 18 55 95 206
SELECT SHARES
U.S. Small Cap Series. . . . . . . . 17 52 90 195
International Small Cap Series . . . 20 63 __ __
Japan Series . . . . . . . . . . . . 20 63 108 233
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 EXPENSES USED IN THE EXAMPLE, AND THE FIVE PERCENT
ANNUAL RETURN, WHICH IS MANDATED BY THE SECURITIES AND EXCHANGE COMMISSION, ARE
NOT REPRESENTATIONS OF PAST OR FUTURE EXPENSES OR PERFORMANCE; ACTUAL EXPENSES
AND/OR PERFORMANCE MAY BE MORE OR LESS THAN THOSE SHOWN.
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables present per share financial information for the
periods listed for each Fund. 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
(For an Institutional Share outstanding throughout each period)(1)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
--------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 (a)
---- ------- ------- ------- ------- -------- -------- -------- -------
<S> <C> <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 unrealized 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 (2) . . . . . . . . . . . . . % 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) During which only one class of shares was offered.
(2) Total return would have been lower had certain fees and expenses not
been waived.
* Not Annualized.
** Annualized.
<PAGE>
JAPAN SERIES
(For an Institutional Share outstanding throughout each period) (1)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31
-------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 (a)
---- ------- ------- ------- -------- ------- ------- ------- -------
<S> <C> <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 unrealized
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 (2). . . . . . . . . . . . . . % (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) During which only one class of shares was offered.
(2) Total return would have been lower had certain fees and expenses not
been waived.
* Not Annualized.
** Annualized.
<PAGE>
INTERNATIONAL SMALL CAPITALIZATION SERIES
(For a share outstanding throughout the period
September 23, 1996 (Commencement of Operations) through March 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Institutional
Shares Select Shares(a)
------------- ----------------
<S> <C> <C>
Net asset value at beginning of period $10.00 $10.04
------------- -------------
Income from Investment Operations:
Net Investment income 0.01 0.02
Net realized and unrealized gain on investments
and foreign currency 0.12 0.07
------------- -------------
Total from investment operations 0.13 0.09
------------- -------------
Net asset value at end of period $10.13 $10.13
------------- -------------
------------- -------------
Total Return(1) 1.30%* 0.89%*
Net assets, end of period(000) $12,852 $185
------------- -------------
------------- -------------
Ratio of net expenses to average daily net assets 1.49%** 1.45%**
Ratio of net expenses to average daily net assets
before waiver/reimbursement 7.45%** 9.72%**
Ratio of net investment income to average daily net assets 0.05%** 0.21%**
Portfolio turnover rate 6.71% 6.71%
</TABLE>
(a) Select shares were first offered for sale to investors on October 23, 1996.
(1) Total return would have been lower had certain fees and expenses not been
waived.
* Not Annualized.
** Annualized.
<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. The Fund may also invest in stock index futures. See "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
Considerations 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.
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 capitalizations 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.
<PAGE>
There are no prescribed limits on the Fund's 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" 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.
JAPAN SERIES
The investment objective of the Japan Series is to seek 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 or debentures, 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). 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.
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.
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 has from time to time
hedged up to % and reserves the right
---
<PAGE>
to hedge up to 100% of the Fund's total assets against a possible decline in the
Japanese Securities market by utilizing futures and options on futures on
Japanese stock indices as described above.
Because a high percentage of the Fund's assets 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 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
<PAGE>
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 currency futures contract or a call option thereon or sell
(write) a put option to protect against a currency-related 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 use 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."
<PAGE>
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.
A Fund's use of 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. 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 securities 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 the International Equity Series 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
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.
<PAGE>
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 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 securities 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, as
amended) of the Trust or the Manager.
<PAGE>
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 at 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
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 academic journals and in
professional volumes. Many of his papers address various aspects of asset
allocation procedures as well as topics in securities 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 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.
<PAGE>
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 simultaneously adjusts the
segment appraisals to include appraisals for variables which are declared only
for the total company, 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.
<PAGE>
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 benchmark. 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 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.
<PAGE>
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 who is responsible for research and
monitoring each Fund's characteristic performance against the relevant benchmark
and for monitoring cash balances.
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, as amended, 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.
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 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.
<PAGE>
<TABLE>
<CAPTION>
EXPENSE LIMITATION (AS A %
CONTRACTUAL MANAGEMENT FEE (AS OF AVERAGE DAILY NET
A % OF AVERAGE DAILY NET ASSETS) 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>
ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT
BISYS Fund Services ("BISYS" or the "Administrator"),a wholly-owned
subsidiary of The BISYS Group, Inc., 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, BISYS receives a monthly fee
based upon an annual percentage rate of 0.15% of the aggregate average daily net
assets of the Funds.
BISYS 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 3435 Stelzer Road, Columbus, Ohio
43219.
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
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 BISYS. The Distributor's principal
offices are located at 3435 Stelzer Road, Columbus, Ohio 43219. Institutional
Shares are sold directly by 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.
<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. The following table sets forth basic
investment and fee information for each class.
<TABLE>
<CAPTION>
ANNUAL
MINIMUM FUND SUBSEQUENT SHAREHOLDER ANNUAL
NAME OF CLASS INVESTMENT* INVESTMENTS* METHOD OF INVESTMENT* SERVICE FEE DISTRIBUTION FEE
------------- ------------ ------------ --------------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Institutional $ 1 million $ 10,000 Direct None None
Adviser $ 100,000 $ 1,000 Financial Adviser .25% None
Select $ 2,500 $ 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. 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 grandchildren 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.
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 $2,500 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
<PAGE>
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
transmitting 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.
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. See "Determination of Net
Asset Value." Investors may be charged an additional fee by their broker or
agent if they effect transactions through such persons.
As described below, the net asset value of the Japan Series shares is
determined as of 3:00 p.m., Tokyo time. See "Determination of 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 two days later (i.e., not the price
published in the United States on the morning after 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. Please call 1-800-447-3332 for complete wiring
instructions. A completed Account Application must be overnighted to the Trust
at Barr Rosenberg Series Trust c/o BISYS Fund Services, Inc., 3435 Stelzer Road,
Columbus, Ohio 43219-8021. Notification must be given to the Trust at
1-800-447-3332 prior to 4:00 p.m., New York Time, of the wire date. 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 Barr Rosenberg Series
Trust, P.O. Box 182495, Columbus, Ohio 43219-2495.
The Fund(s) to be purchased should be specified on the Account Application.
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 determined after receipt, 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 as noted under "Initial Cash
Investments by Wire". Notification must be given at 1-800-447-3332 prior to
4:00 p.m., New York Time, of the wire date. The minimum amounts for additional
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"
<PAGE>
(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 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
Automatic 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 $2,500 and may elect to make subsequent investments 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 of Adviser Shares or
Select Shares to be in "good order" on a particular day a check or money wire
must be received on or before 4:00 p.m., New York Time of that day. In the case
of Institutional Shares, the investor's securities must be placed on deposit at
the Depository Trust Company 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 4:00 p.m., New York Time, on
the following business day. If the consideration is received by the Trust after
the deadline, the purchase price of Fund shares will be based upon the next
determination of net asset value of Fund shares. No third party or foreign
checks will be accepted.
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 $2,000. A special application must be completed in order to create
such an account. 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.
REDEMPTION OF SHARES
Shares of each Fund may be redeemed by mail, or, if authorized by an
investor in an account application, by telephone. The value of shares redeemed
may be more or less than the original cost of those shares, depending on the
market value of the investment securities held by the particular Fund at the
time of the redemption.
BY MAIL
The Trust will redeem its shares at the net asset value next determined
after the request is received in "good order". See "Determination of Net Asset
Value." Requests should be addressed to Barr Rosenberg Series Trust, P.O. Box
182495, Columbus, Ohio 43219-2495.
<PAGE>
Requests in "good order" must include the following documentation:
(a) a letter of instruction, if required, 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.
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 Agent may act on
telephone instruction from any person representing himself or herself to be a
shareholder and believed by the Transfer Agent 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.
Telephone Redemption will be suspended for a period of 10 days following a
telephonic address change.
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
Purchases of shares of the Trust made by check are not permitted to be
redeemed until payment of the purchase price has been collected, which may take
up to fifteen days after purchase. 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 a redemption
payment wholly or partly in cash, the Fund may pay the redemption price of
Institutional
<PAGE>
Shares in whole or in part by a distribution in kind of readily marketable
securities held by the relevant Fund in lieu of cash. 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. 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. 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.
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
communicated 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. The telephone
exchange privilege will be suspended for a period of 10 days following a
telephonic address change.
<PAGE>
DETERMINATION OF NET ASSET VALUE
The net asset value of each class of shares of the U.S. Small
Capitalization Series and the International Small Capitalization Series will be
determined once on each day on which the New York Stock Exchange is open as of
4:00 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.
Specifically, 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
additional 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.
If you elect to receive distributions in cash and checks (1) are returned
and marked as "undeliverable" or (2) remain uncashed for six months, your cash
election will be changed automatically and your future dividend and capital
gains distributions will be reinvested in the Fund at the per share net asset
value determined as of the date of payment of the distribution. In addition,
any undeliverable checks or checks that remain uncashed for six months will be
canceled and will be reinvested in the Fund at the per share net asset value
determined as of the date of cancellation.
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
<PAGE>
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.
corporations. 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
Massachusetts 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
Capitalization 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 commenced operations on September 20, 1996.
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 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, terminate a series of 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
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.
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
<PAGE>
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.
SHAREHOLDER INQUIRIES
Shareholders may direct inquiries to the Trust at Barr Rosenberg Series
Trust, P.O. Box 182495, Columbus, Ohio 43219-2495.
<PAGE>
BARR ROSENBERG SERIES TRUST
3435 Stelzer Road
Columbus, Ohio 43219
MANAGER
Rosenberg Institutional Equity Management
Four Orinda Way, Suite 300E
Orindo, CA 94563
ADMINISTRATOR, TRANSFER AND DIVIDEND PAYING AGENT
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
DISTRIBUTOR
Barr Rosenberg Funds Distributor, Inc.
3435 Stelzer Road
Columbus, Ohio 43219
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
<PAGE>
BARR ROSENBERG SERIES TRUST
SHAREHOLDER SERVICES
Account Inquiries, Balances
and Transaction Information
FOR ROSENBERG INSTITUTIONAL
EQUITY MANAGEMENT CUSTOMERS
1-800-___-_____
FOR ALL SHAREHOLDERS
1-800-___-_____
Additional Information May Be
Found on the WorldWide Web at
http://riem.com
<PAGE>
BARR ROSENBERG SERIES TRUST
U.S. SMALL CAPITALIZATION SERIES
INTERNATIONAL SMALL CAPITALIZATION SERIES
JAPAN SERIES
STATEMENT OF ADDITIONAL INFORMATION
JUNE , 1997
--------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. THIS STATEMENT OF
ADDITIONAL INFORMATION RELATES TO THE PROSPECTUS DATED JUNE , 1997 AND SHOULD BE
READ IN CONJUNCTION THEREWITH. A COPY OF THE PROSPECTUS MAY BE OBTAINED FROM
BARR ROSENBERG SERIES TRUST, 3435 STELZER ROAD, COLUMBUS, OHIO 43219.
<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 SERVICE. . . . . . . . . . . . . . . . . 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 exchange rates pending the
settlement of securities transactions. The Funds also reserve the right to use
<PAGE>
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, the purchaser 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 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
<PAGE>
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 currency
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.
<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 the currency involved, they tend to limit any potential
gain that might result from the increase in the value of such currency.
<PAGE>
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 the International Small Capitalization Series
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, 1996 and 1997 was
71.87% and %, respectively. The portfolio turnover rate for the Japan
Series for the fiscal years ended March 31, 1996 and 1997 was 60.60% and %,
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.
<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.)
(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.
<PAGE>
(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 of the Trust 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.
Unless otherwise indicated, 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.
<PAGE>
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 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.
<PAGE>
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.
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 under-reported 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* (47) General Partner and Director
President, Trustee of Research, Rosenberg Institutional Equity
Management, June, 1986 to present.
Marlis S. Fritz* (47) General Partner and Director of
Vice President, Trustee Marketing, Rosenberg Institutional Equity
Management, April, 1985 to present.
Nils H. Hakansson (60) 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
<PAGE>
to present.
Barr M. Rosenberg* (54) Managing General Partner, Trustee and
Trustee Chief Investment Officer, Rosenberg
Institutional Equity Management, January,
1985 to present.
William F. Sharpe (63) 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 (31) Accounting Manager, Rosenberg
Treasurer Institutional Equity Management, October,
1989 to present.
Carolyn Demler (53) Administrative Coordinator, Rosenberg
Clerk Institutional Equity Management, December,
1988 to present.
John J. Pileggi (38) Director, Furman Selz LLC 1993 to present.
Assistant Treasurer Managing Director, Furman Selz LLC, 1984 to
1993.
David Bunstine (31) Employee of BISYS Fund Services.
Assistant Treasurer
Bruce Treff (30) Employee of BISYS Fund Services.
Assistant Clerk
Carrie Zuckerman (30) Employee of BISYS Fund Services.
Assistant Clerk
Alaina Metz (30) Employee of BISYS Fund Services.
Assistant Clerk
*
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, 3435 Stelzer Road, Columbus, OH 43219.
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.
<PAGE>
The Trust pays 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, 1997.
<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 $ $0 $0 $
Trustee
William F. Sharpe $ $0 $0 $
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 from 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 further notice so 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
<PAGE>
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 21/2%
of the first $30 million of average net assets, 2% of the next $70 million of
average net assets and 11/2% 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 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 a general
partner and Director of Marketing of the Manager; and Kenneth Reid is a trustee
and President of the Trust as well as a 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:
<PAGE>
Gross Reduction Net
-------- --------- --------
4/1/94 - 3/31/95 $427,746 $148,971 $278,775
4/1/95 - 3/31/96 $514,386 $157,913 $356,473
4/1/96 - 3/31/97
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
-------- --------- ---
4/1/94 - 3/31/95 $ 12,148 $ 12,148 -0-
4/1/95 - 3/31/96 $ 12.093 $ 12,093 -0-
4/1/96 - 3/31/97
For the period from commencement of operations, the International Small
Capitalization Series has paid the following amounts as management fees to the
Manager pursuant to its Management Contract:
GROSS REDUCTION NET
4/1/96 - 3/31/97
ADMINISTRATIVE SERVICES
The Trust has entered into a Fund Administration Agreement with BISYS
Fund Services ("BISYS") pursuant to which BISYS provides certain management
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 BISYS. For these services, BISYS is entitled to receive a
fee, payable monthly, at the annual rate of 0.15% of the average daily net
assets of the Funds for each Fund. The Trust did not pay any such fees to
BISYS through the fiscal year ended March 31, 1997.
<PAGE>
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 BISYS. 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 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
<PAGE>
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 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.
<PAGE>
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 $137,979 for the fiscal year ended March 31, 1995, $220,065.63 for the fiscal
year ended March 31, 1996 and $ for the fiscal year ended March 31,
1997.
The Japan Series paid brokerage commissions in the amounts of $10,763 for the
fiscal year ended March 31, 1995, $6,509.21 for the fiscal year ended March 31,
1996 and $ for the fiscal year ended March 31, 1997.
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 reasonableness of commissions paid to Nomura
Securities and will review these procedures periodically. In the fiscal year
ended March 31, 1995, the Fund paid an aggregate of $2,967 in brokerage
commissions to Nomura Securities. The Fund did not pay any brokerage
commissions to Nomura Securities during its fiscal years ended March 31, 1996
and March 31, 1997.
The International Small Capitalization Series paid brokerage commissions in the
amounts of $ for the fiscal year ended March 31, 1997.
<PAGE>
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, as amended (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's 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 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
<PAGE>
(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 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.
<PAGE>
OWNERS OF 5% OR MORE OF A FUND'S 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 U.S. Small Capitalization Series as of April 6, 1997:
Name and Address Percentage Ownership
of Owner of the Fund
- -------------------- -----------
The Nathan Cummings Foundation 11.03%
50 S. LaSalle St.
Chicago, IL 60675-0001
The Evangelical Lutherans 28.65%
1 Cabot Rd.
Medford, MA 02155-5158
University of Washington
Northern Trust Co. 13.34%
801 S. Canal CB3S
Chicago, IL 60607
Rosenberg Money Purchase Pension Plan 7.26%
101 Carnegie Ctr.
Princeton, NJ 08540-6231
Charles Schwab & Co. Inc. 15.56%
101 Montgomery St.
San Francisco, CA 94104
Currie & Co.
c/o Fiduciary Trust Company Intl. 5.73
P.O. Box 3199 Church Street Station
New York, NY 10008
<PAGE>
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 April 16, 1997:
Name and Address Percentage Ownership
of Owner of the Fund
-------- -----------
Rosenberg Institutional 92.94%
Equity Management
4 Orinda Way, Suite 300E
Orinda, CA 94563
Koko M Baker 5.56%
c/o RIEM
4 Orinda Way
Orinda, CA 94563
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 International Small Capitalization Series as of
April 16, 1997:
Name and Address Percentage Ownership
of Owner of the Fund
-------- -----------
Rosenberg Money Purchase Pension Plan 17.78%
101 Carnegie Ctr
Princeton, NJ 08540-6231
Stetson University Inc. 14.94%
421 N. Woodland Blvd.
Deland Fl 32720
Charles Schwab & Co. Inc. 54.74%
101 Montgomery St.
San Francisco, CA 94104-1299
Harco Investors 7.45%
P.O. Box 15299
Sacramento, CA 95851-1299
The officers and trustees of the Trust, as a group, own less than 1% of any
class of outstanding shares of the Trust except 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, 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 1997 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. The Trust
has elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which
the Trust is obligated to redeem shares solely in cash for any shareholder
during any 90-day period up to the lesser of (i) $250,000 or (ii) 1% of the
total net asset value of the Trust at the beginning of such period. The
procedures for redeeming shares of each of the Funds are described in the
Prospectus.
<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.
<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 _____ ___, 1997.
U.S. Small Capitalization Series
Net Assets at Value (Equivalent to ___ per share
based on ____________ shares of beneficial interest outstanding)
________
Offering Price _____________ = _________
Japan Series
Net Assets at Value (Equivalent to _____ per share
based on _________ shares of beneficial interest outstanding)
__________
Offering Price _________________ = _________
Internation Small Capitalization Series
Net Assets at Value (Equivalent to _____ per share
based on _________ shares of beneficial interest outstanding)
__________
Offering Price _________________ = _________
- ------------------------------------------
A-1
FINANCIAL STATEMENTS
The unaudited financial statements of the International Small
Capitalization Series as of and for the period ended March 31, 1997 are
included herein.
NOTE: The financial statements and schedules required by Item 23 of Form N-1A
will be provided prior to the effective date of this Post-Effective
Amendment No. 13 as part of Post-Effective Amendment No. 14 to the Trust's
Registration Statement filed pursuant to Rule 485(b).
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION SERIES
ASSETS AND LIABILITIES
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments, at value
(cost:$11,948,121) $11,989,570
Foreign currency, at value (cost:$844,487) 835,031
Cash 863,194
Receivable for Fund shares sold 206,630
Receivable for investments sold 26,476
Dividends and interest receivable 31,258
Receivable from Manager 180,180
-----------
Total Assets 14,132,339
-----------
LIABILITIES
Payable for investments purchased 974,468
Other accrued expenses 121,697
-----------
Total Liabilities 1,096,165
-----------
NET ASSETS, applicable to
1,287,505 shares of beneficial
interest outstanding $13,036,174
-----------
-----------
Shares of beneficial interest outstanding - Institutional
Shares 1,269,278
-----------
-----------
Net Asset Value Per Share - Institutional Shares $10.13
-----------
-----------
Shares of beneficial interest outstanding - Select Shares 18,227
-----------
-----------
Net Asset Value Per Share - Select Shares $10.13
-----------
-----------
NET ASSETS CONSIST OF:
Paid-in capital $12,996,170
Accumulated undistributed net investment income 3,836
Accumulated realized gain on investments 4,175
Accumulated net unrealized appreciation
on investments 31,993
-----------
NET ASSETS $13,036,174
-----------
-----------
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION SERIES
STATEMENT OF OPERATIONS
FOR THE PERIOD SEPTEMBER 23, 1996- MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income:
Dividend income (Net of withholding tax of $2,495) $55,861
Interest income 1,546
-------
$ 57,407
--------
Expenses:
Custody fees 82,480
Fund accounting 63,686
Advisory 35,711
Registration 26,292
Audit 20,042
Reports to shareholders 15,016
Shareholder servicing 7,577
Administration 5,357
Trustees 3,476
Legal 2,149
Insurance 1,178
Miscellaneous 6,498
------
Total expenses before waivers/reimbursements 269,462
Less expenses waived/reimbursed (215,891)
--------
Net expenses 53,571
Net investment income 3,836
-------
Realized and unrealized gain on investments:
Net realized gain on investments 4,175
Net change in unrealized appreciation
on investments 31,993
-------
Net realized and unrealized gain on investments 36,168
-------
Net increase in net assets resulting from operations $ 40,004
-------
-------
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION SERIES
STATEMENT OF CHANGES IN NET ASSETS
(unaudited)
<TABLE>
<CAPTION>
September 23, 1996
(Commencement of Operations)
through March 31, 1997
----------------------------
<S> <C>
Operations:
Net investment income $ 3,836
Net realized gain on investments 4,175
Net change in unrealized appreciation
on investments 31,993
-----------
Net increase in net assets resulting
from operations 40,004
-----------
Increase from capital share transactions:
Proceeds from sales of shares:
Institutional Shares 13,079,145
Select Shares 182,551
-----------
13,261,696
Cost of shares redeemed:
Institutional Shares (332,298)
Select Shares -
-----------
(332,298)
Increase in net assets from subscription/redemption fees 66,772
-----------
Net increase in net assets from capital share transactions 12,996,170
-----------
Total increase in net assets 13,036,174
Net assets:
Beginning of period $ 0
-----------
End of period $13,036,174
-----------
-----------
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
SEPTEMBER 23, 1996 (COMMENCEMENT OF OPERATIONS) THROUGH MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
Institutional Select
Shares Shares(a)
-------- --------
<S> <C> <C>
Net asset value at beginning of period $ 10.00 $10.04
------- ------
Income from Investment Operations:
Net investment income 0.01 0.02
Net realized and unrealized gain on investments
and foreign currency 0.12 0.07
------- ------
Total from investment operations 0.13 0.09
------- ------
Net asset value at end of period $ 10.13 $10.13
------- ------
------- ------
Total return(1) 1.30% 0.89%*
Net assets, end of period (000) $12,852 $ 185
Ratio of net expenses to average daily net assets 1.49% 1.45%**
Ratio of net expenses to average daily net assets
before waiver/reimbursement 7.45% 9.72%**
Ratio of net investment income to average daily net assets 0.05% 0.21%**
Portfolio turnover rate 6.71% 6.71%**
</TABLE>
(a) Select shares were first offered for sale to investors on
October 23, 1996.
(1) Total return would have been lower had certain fees and
expenses not been waived.
* Not Annualized.
** Annualized.
<PAGE>
BARR ROSENBERG SERIES TRUST
THE INTERNATIONAL SMALL CAPITALIZATION FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1997
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. The International
Small Capitalization Fund (the "Fund") is one of three portfolios (together, the
"Portfolios") of Rosenberg Series Trust (the "Trust"), an open-end diversified
management investment company. The Fund, which commenced operations on September
23, 1996, has three classes of shares: Institutional Shares, Select Shares and
Adviser Shares (currently, only the Institutional and Select Shares are offered
to investors). The classes differ primarily with respect to the level of
Shareholder Service Fee and Distribution Fee borne by each class. In addition,
an investor's eligibility to purchase each of the three classes of shares
generally depends on the amount invested in the Fund and on whether the investor
makes the investment in the Fund directly or through a financial adviser. 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 Fund 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.
<PAGE>
BARR ROSENBERG SERIES TRUST
THE INTERNATIONAL SMALL CAPITALIZATION FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
MARCH 31, 1997
- --------------------------------------------------------------------------------
DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES
Expenses specific to the Fund are charged directly to the Fund. Common expenses
are allocated to each Portfolio based on their comparative net asset values. In
calculating net asset value per share of each class, investment income, realized
and unrealized gains and losses and expenses other than class specific expenses
are allocated daily to each class of shares based upon the proportion of net
assets attributed to each class at the beginning of each day. Distribution
expenses are solely borne by and charged to the Select Shares; Shareholder
Service fees may only be charged to the Select Shares and Adviser Shares.
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.
NOTE 2. MANAGEMENT FEE. Rosenberg Institutional Equity Management (the
"Manager") provides advisory and management services to the Fund as set forth in
the management contract. Compensation of the Manager is payable quarterly
at the annual rate of 1.00% of the Fund's average daily net assets. The Manager
has agreed with the Fund to reduce its fee until further notice to the extent
necessary to limit the Funds' annual expenses (including the management fee but
excluding the Shareholder Service Fee, the Distribution Fee, brokerage
commissions and transfer taxes) to 1.50% of the Fund's average daily net assets.
NOTE 3. FEDERAL TAXATION. It is the 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. In order to meet certain excise tax distribution
requirements, the 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, the 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 1st and the end of its fiscal
year. For federal tax purposes at March 31, 1997, the amounts of unrealized
appreciation/depreciation and the cost of portfolio securities were as follows:
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED NET UNREALIZED
APPRECIATION DEPRECIATION APPRECIATION COST OF SECURITIES
------------ ------------ -------------- ------------------
<S> <C> <C> <C> <C>
International Small Capitalization Series . . . . $584,113 $(542,665) $41,448 $11,948,121
</TABLE>
NOTE 4. SECURITY PURCHASES AND SALES. For the period ended March 31, 1997
(excluding short-term securities and foreign currency):
<TABLE>
<CAPTION>
PURCHASES OF PORTFOLIO SALES OF PORTFOLIO SECURITIES
SECURITIES
---------------------- -----------------------------
<S> <C> <C>
International Small Capitalization Series . . . . . . . . . . . . $12,345,957 $411,026
</TABLE>
NOTE 5. PRINCIPAL SHAREHOLDERS. Fund shareholders who each held in excess of
10% of the Fund's shares outstanding at March 31, 1997 held the
following aggregate percentages of the Fund's shares:
FUND % OF FUND'S SHARES
---- ------------------
International Small Capitalization . . . . . . . . 90%
<PAGE>
BARR ROSENBERG SERIES TRUST
THE INTERNATIONAL SMALL CAPITALIZATION FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
MARCH 31, 1997
- --------------------------------------------------------------------------------
NOTE 6. TRUSTEE FEES. The unaffiliated Trustees each receive an annual
Trustee's fee of $23,000 plus a $2,500 meeting fee for each Trustee meeting
attended .
NOTE 7. SALES AND REDEMPTIONS OF SHARES. The Fund charges a purchase premium
equal to .50% of the net asset value of the Fund's shares purchased. The premium
on redemptions is .50% of the Fund's shares redeemed. All purchase and
redemption premiums are paid to and retained by the Fund. For the period ended
March 31, 1997, purchase premiums and redemption premiums retained by the Fund
were approximately $64,940 and $1,832, respectively. Purchase premiums are added
to proceeds from shares sold and redemption premiums are 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.
- --------------------------------------------------------------------------------
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
COMMON STOCK -
AUSTRALIA -
<S> <C> <C> <C>
8,000 Adelaide Brighton Ltd 10,801 11,287
1,000 Atkins Carlyle Ltd 2,994 3,253
10,500 Australian Oil & Gas 14,648 17,450
1,100 AWA Limited 822 767
8,200 Bougainville Copper Ltd 2,881 3,857
12,894 Bridgestone Austr. 34,464 34,366
6,090 Consolidated Rutile Ltd 6,690 4,869
3,400 Country Road Ltd 5,043 4,424
900 Defiance Mills Limited 1,399 1,305
2,400 Faulding (FH) & Co 17,143 14,110
1,300 Finemore Holdings 3,008 3,251
4,268 George Weston Foods Ltd 28,294 25,929
16,200 Hardie (James) Indus Ltd. 43,227 49,197
600 Leighton Holdings Limited 2,640 2,512
10,500 Metal Manufactures Ltd 25,394 26,010
5,800 Mount Leyshon Gold Mines Ltd 13,244 9,548
11,400 Normandy Mining Ltd 15,882 15,469
4,100 OPSM Protector Ltd 9,603 9,481
51,600 Orbital Engine Corp Ltd 41,617 40,854
3,900 Pacific Magazines & Printing Ltd 10,212 9,783
1,200 Reece Australia Ltd 6,761 7,714
1,400 RGC Limited 5,643 5,301
600 Rothmans Holdings Ltd 4,056 3,908
5,100 Spicers Paper Ltd 9,347 8,595
1,000 Sunraysia Television Ltd 6,284 6,663
800 Telecast North Queensland 3,235 3,230
700 Villa World Ltd 638 610
- ------- ------- -------
174,952 325,970 323,743
- ------- ------- -------
BELGIUM -
20 BQE Natl Belgique 27,719 31,317
590 Cobepa Cie BelgeParibas 20,582 22,412
230 Colruyt SA 94,072 94,040
130 D'ieteren trading 21,993 24,315
2,240 Gib 98,445 102,629
150 Glaverbel 16,185 18,921
150 Sofina 86,299 93,083
- ------ ------- -------
3,510 365,295 386,717
- ------ ------- -------
CANADA -
1,500 Acklands Limited 19,035 18,458
400 Agra Inc. 3,135 3,721
900 Agrium Inc. 12,538 11,401
700 Alliance Forest Prod Inc. 12,235 14,314
200 Avenor Inc. 3,205 3,257
600 BC Gas 8,143 9,229
800 BC Sugar Refinery Ltd Class A 6,678 7,615
500 Bruncor Inc. 10,583 10,822
300 Cabre Exploration 4,593 4,452
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
2,800 Cambell Resources 3,062 2,229
1,700 Cambior Inc. 23,821 23,073
4,100 Cascades, Inc. 25,353 23,742
1,500 CCL Inds. Inc. 17,260 16,232
400 Chieftain Intl Inc. 8,912 8,006
1,700 C-MAC Industries Inc. 15,242 14,582
400 Coca-Cola Beverages 4,115 4,025
800 Cognos Inc. 21,372 21,136
900 Counsel Corp 9,302 11,726
3,700 Dominion Textile Inc. 18,010 17,676
100 Dundee Bancorp Inc. 1,539 1,954
8,200 Encal Energy 25,058 23,742
400 Ensign Resource Svc 4,150 7,383
700 Euro-Nevada Mining Corp 20,695 20,268
1,100 Fahnestock Viner Hld Class A 17,142 18,473
500 Fortis Inc. 11,760 11,419
100 Franco Nev Mng Ltd 4,027 4,633
500 Intrawest Corp 6,591 8,324
500 Jannock Ltd 5,484 7,600
1,600 Laurentian Bank of Canada 23,823 23,742
1,400 London Insurance 19,160 19,254
700 Maritime Telegram & Telephone Co Ltd 11,617 11,679
1,800 Metall Mining Corp 12,171 10,424
1,400 Miramar Mining Corp 6,429 5,878
2,700 Molson Companies Ltd 46,273 44,756
400 National Trustco Inc. 7,086 6,659
500 Newtel Enterprises 9,002 8,75
200 Newtel Enterprises Ltd 3,375 3,503
300 Pacific Forest Prods 3,606 5,277
900 Penn West Petroleum Ltd 7,676 9,772
1,400 Poco Petroleum Ltd 12,502 12,971
500 Precision Drilling 17,380 21,136
700 Quebec-Telephone 12,178 12,009
1,800 Ranger Oil Ltd 17,068 17,003
6,800 Royal Oak Mines Inc. 21,402 21,412
1,200 Shaw Communications Inc. Class B 20,582 22,584
300 SNC Group Inc. 2,928 3,475
1,000 Southam Inc. 12,875 14,296
800 St Laurent Paper Board Inc. 12,968 10,945
2,965 Stampeder Expl Ltd 13,987 14,487
9,000 Stelco Inc. 48,783 48,208
800 Stone Consld. Corp 8,891 11,611
600 Teleglobe Inc. 12,867 17,416
400 Torstar Corp CL B 9,635 10,568
400 Trimark Finl Corp 10,245 11,727
500 Ulster Petroleum Ltd 3,381 3,583
2,000 United Dominion Inds Ltd 52,098 49,005
600 Videotron Groupe LTEE 4,833 4,995
200 West Fraser Timber Co Ltd 6,696 6,007
- ------- ------- -------
79,865 774,557 792,633
- ------ ------- -------
DENMARK
Aalborg Portland 31,620 37,996
600 Jyske Bank-Reg 47,514 47,956
400 Korn-OG Foderstofkom 16,878 14,664
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
400 luritzen (J) Hldg 44,497 45,942
1,300 Monberg & Thorsen as 60,907 61,360
500 Potague B 69,312 70,800
1,500 Tele Danmark A/S B 81,787 78,824
300 Topdanmark as 35,572 36,816
- ----- ------- -------
5,000 388,087 394,358
- ----- ------- -------
FINLAND -
500 Asko Oy-A 28,569 44,924
4,200 Finair Oy 30,354 31,291
7,400 Kemira Oy 84,499 80,084
4,200 Kesko 63,013 61,480
3,100 Mesta Serla B Shares 20,422 22,533
- ------ ------- -------
19,400 226,857 240,312
- ------ ------- -------
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
FRANCE -
375 Bains De Mer Monaco 36,253 38,310
710 Bis SA 63,859 62,693
120 Bongrain SA 49,034 47,629
1,250 Cie Des Signaux SA 58,002 66,847
10 Cie Generale De Geophysique 665 900
450 Compagnie Fives-Lillie 39,238 42,693
213 Concorde (LA) 35,908 35,610
220 De Dietrich Et Compagnie 7,531 10,632
550 DMC Dollfus-Mieg 12,956 14,364
34 ECIA-Equip & Composa Pour 4,283 5,805
175 Elf Gabon 44,487 54,939
175 Europe 1 Communication 38,656 38,150
23 Esxacompta Clairef 5,540 4,487
100 Gascogne 8,414 8,883
200 GTM Entrepose 8,930 10,980
42 Manitou 4,354 5,686
788 Publicis 78,941 82,881
276 Salins Du Midi &Des Salines 23,371 30,108
40 Sat (Sa De Telecomm) 12,968 13,069
1,732 Seita 67,467 62,529
Sligos Sa 2,088 3,287
25 Societe Financiere Interbail SA 4,502 4,300
66 Taittinger 18,734 26,267
- ----- ------- -------
7,574 626,181 671,049
- ----- ------- -------
GERMANY -
40 *Aachener & Meunch Lebensvers 16,168 20,379
220 Andreae-Noris Zahn AG 80,887 81,755
270 Baywa AG 41,108 46,850
60 Binding Brauerei 22,248 17,082
210 DBV Holding AG 71,497 75,396
300 Fag Kugelfisher 3,927 4,855
290 Holsten Brauerei AG 62,521 57,360
30 Koelnisch Rueckversicherungs 23,209 23,376
250 Oberland Glas AG 47,797 46,452
310 Rheinmetall Berlin 46,088 58,901
460 Ruetgers AG 70,726 79,130
330 Schmalbach Lubeca 69,610 69,624
190 Strabag AG 12,394 19,246
80 Volksfursorge Hldg 28,141 31,263
217 Walter Bau AG(WTB) 38,202 38,889
- ----- ------- -------
3,257 634,523 670,558
- ----- ------- -------
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
HONG KONG -
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
10,000 Associated Intl Hotels 8,103 6,581
36,000 CDL Hotels Intl 19,194 17,770
36,000 Chimney Investment 9,078 7,712
720 Concord Land Dev Co Ltd 324 453
2,000 Harbour Centr Dev 2,779 2,826
9,600 HKR Intl Ltd 12,379 12,698
8,000 Jardine Intl Motor 9,818 9,911
20,000 Lai Sun Garmt Intl 28,705 25,552
6,000 Lane Crawford Intl 9,995 8,595
68,000 Laws Intl Holdings Ltd 10,315 10,179
10,000 Lee Hing Develop 3,831 3,871
50,000 Mingly Corporation 18,637 16,454
6,000 New Asia Realty & Trust Co 24,776 21,835
36,000 Pacific Concord HD 10,554 16,144
20,000 Playmates Toy Hldg 4,585 4,594
4,000 Pokfulam Dev Co 3,013 2,917
22,000 Prestige Prop Hldg 3,577 4,401
6,000 Realty Development Corp 23,684 22,261
10,000 Wing Lung Bank Ltd 70,191 68,719
28,000 Wing On Co Intl Ltd 32,231 31,436
118,000 Yue Yuen Industrial Holdings 46,684 48,729
- ------- ------- -------
506,320 352,453 343,638
- ------- ------- -------
ITALY -
7,000 BCA Di Legnano 25,170 25,890
16,360 Comau Finanziaria Spa 44,800 51,485
10,000 costa Crociere Spa 12,954 22,778
15,000 Editoriale L'Espresso Spa 38,138 51,656
500,000 Ericsson Spa 6,379 7,088
89,000 Finmeccanica Spa 38,009 40,279
10,000 Serfi 53,828 56,287
20,000 Snia BPD 17,052 20,860
10,000 Toro Assicurazioni 121,118 119,886
- ------- ------- -------
677,360 357,448 396,209
- ------- ------- -------
JAPAN -
4,000 Aichi Machine Industries Co Ltd 26,295 20,677
3,000 Aida Engineering Ltd 22,293 18,440
4,000 Amada Sonoike Co Ltd 19,806 15,669
3,000 Aseed Co Ltd 18,552 16,477
2,000 Asia Airy Survey Co 18,570 15,653
2,000 Asti Corporation 16,333 11,792
1,100 Bank of Iwate Ltd 47,649 50,642
3,000 Bunka Shutter Co Ltd 20,271 15,411
1,000 Cemedine co Ltd 4,772 3,594
3,000 Central Glass Co 10,467 7,754
5,000 Chain Store Okuwa 29,437 21,485
5,000 Chubu Steel Plate 26,509 25,402
3,000 Chuetsu Pulp & Paper 14,943 9,450
2,000 Chuo Bussan Corp 9,094 8,238
1,000 CMK Corporation 10,606 9,854
2,000 Coco's Japan Co Lt 19,834 13,165
3,000 Computer Engineer & Consulting 18,708 20,111
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
2,000 Comson Corp 5,618 2,504
12,000 Dai-Ichi Katei Denki Co Ltd 29,196 26,460
5,000 Daido Hoxan Inc 24,288 18,213
375 Daiichi Kosho Co Limited 13,018 12,661
2,000 Daiichi Kyoken Co 17,187 7,932
Daiki Aluminum Ind 8,484 4,862
2,000 Daishinku Corp 19,565 14,425
3,000 Daisyo 24,772 21,808
2,000 Denkyosha Co 18,326 12,680
2,000 Descente Limited 13,087 9,692
3,000 Eiden Sakakiya Co Ltd 24,991 22,680
2,000 Enix Corp 50,340 37,154
1,000 Exedy Corporation 11,327 10,500
100 Ezaki Glico Co Ltd 844 771
7,000 First Credit 31,725 29,343
2,300 Fuji Co Ltd 14,506 9,660
1,000 Fujicco Co 11,025 11,308
2,000 Fujitsu Kiden 18,394 18,254
2,000 Fukuda Denshi 37,155 38,769
2,000 Furuno Electric Co 13,103 8,400
2,000 Godo Steel Ltd 12,588 5,783
2,000 Hamada Printing Press Co 12,909 9,369
2,200 Haruyma Trading Co 27,975 17,591
2,000 Higashi Nihon House 21,305 20,515
2,000 Hitachi Information Systems 20,284 18,254
2,000 Hitachi Plant Eng. 13,608 8,562
3,000 Hokkai Can Co 14,357 13,448
3,000 Hosoda Corporation 26,372 21,323
2,000 Hotel New Hankyu 9,693 7,269
3,000 Ichiyoshi Securities 15,700 8,481
2,000 Intec Inc 29,915 20,354
9,000 Ishizuka Glass Co 33,241 26,169
3,000 Isikawajima Constr. 30,596 14,054
1,000 Japan Industrial Land Development 10,541 10,904
1,000 Jois Co Ltd 11,885 8,028
5,000 Joel Veriteohkubo 28,439 25,685
3,000 Kaneko Seeds Co Ltd 29,701 25,685
2,000 Kansei Corp 16,431 14,231
3,000 Kanseki Co Ltd 11,172 10,177
3,000 Kasumi Co Ltd 22,126 17,664
3,000 Kato Works Co Ltd 18,454 11,025
3,000 Kawasho Corp 11,847 8,578
7,000 Kimmon Mfg Co Ltd 33,868 23,690
7,000 King Co Ltd 26,589 26,008
2,000 Konishi Co Ltd 33,861 32,954
2,000 Kotobukiya Co Ltd 7,309 7,722
1,000 Kyowa Exeo Corporation 7,755 7,471
2,000 Laox Co Ltd 26,437 24,231
2,000 Life Corp 17,997 12,600
1,000 Maeda Seisakusho Co 8,219 7,229
2,000 Matsumura-Sumi Corp 10,002 5,573
3,000 Matsuyadenki co Ltd 27,623 22,050
2,000 Metalart Corp 7,389 4,92
8,000 Mikuni Corp 33,112 25,975
6,000 Mitani Sekisan 22,478 20,838
2,000 Mitsuba Electric Mfg Co 19,182 18,577
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
1,000 Mitsumi Electric Co 18,145 18,335
1,000 Moriya Corp 7,079 4,701
3,000 Nagasakiya Co Ltd 14,098 6,978
2,000 Nakamichi Leasing Co 15,273 11,146
4,000 Nakayama Steel Works Ltd 21,908 15,831
3,000 Nettetsu Mining Co Ltd 24,394 17,688
3,000 Nichiei Construction Co Ltd 24,453 17,349
2,000 Nifco Inc. 20,110 17,285
2,000 Nihon Elect. Wire & Cable 15,409 14,538
5,000 Nippon Chemi-Con Corp 28,584 21,606
9,000 Nippon Columbia Co Ltd 40,398 31,984
2,100 Nippon Denwa Shisetsu 15,747 14,57
3,000 Nippon Konpo Unyu Soko 21,849 16,961
3,000 Nippon Shinyaku co Ltd 26,149 22,413
1,000 Nissei Plastic Industrial Co 10,742 9,046
2,000 Nissho Corporation 20,283 16,638
100 Nissin Company Limited 1,827 1,898
2,000 Ohmoto Gumi Co Ltd 30,718 18,738
1,000 Okamoto Machine Tool Works 2,527 2,504
2,000 Osaka Organic Chemical Industries 20,717 17,769
3,000 Recruit Cosmos Co 22,818 13,327
3,000 Riken Keiki Co Ltd 18,129 15,992
2,000 Royal Hotel Ltd 16,090 10,177
3,000 Sakai Chemical Industry Co 11,333 10,710
3,000 Sankyo Seiki Mfg 12,655 15,047
5,000 Sanoyas Hishino Meisho Corp 24,814 25,886
2,000 Sawai Pharmaceutical Co Ltd 14,077 13,731
4,000 Seibu Electric & Machinery 15,275 14,151
3,000 Senko Corporation Inc. 10,728 11,606
3,000 Shibusawa Warehouse 16,442 12,067
2,000 Shin Nikkei Co Ltd 13,024 6,058
2,000 shindengen Electric Mfg 15,762 16,477
2,000 Shingakukai co 15,457 10,177
8,000 Shinko Kogyo Co Ltd 40,583 33,148
2,000 Showa Manufacturing 14,044 10,015
3,000 Sintokogio 19,221 19,166
1,000 Sodick Co Ltd 9,271 8,400
2,000 Software Research Assoc. 23,658 15,346
3,000 Sogo Co Ltd 13,031 8,457
1,000 Sotetsu Rosen Co Ltd 8,101 6,300
2,000 Starts Corporation 25,585 18,900
4,000 Sumitomo Precision Products 24,431 22,745
4,000 Sumitomo Warehouse 20,080 20,031
2,000 Sumitomo Wiring Systems 20,197 16,961
2,000 Sun Wave Corp 23,999 16,800
3,000 Taisei Fire & Marine 14,916 9,934
3,000 Taki Chemical Co 17,821 10,637
2,000 Tamron Co Ltd 13,953 9,773
4,000 Tamura Corp 19,212 17,769
1,000 Tamura Electric Work 8,918 4,289
1,500 Techmo Ltd 19,255 19,869
3,000 Tenox Corporation 22,176 19,021
2,000 The Biwako Bank Ltd 9,695 7,754
7,000 Titan Kogyo K.K. 25,836 22,050
3,000 Toa Corp 23,461 15,629
4,000 Toho Store Co. Ltd 30,997 28,108
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
1,000 Toko Electric Corp 5,854 3,958
3,000 Toko Inc 16,852 13,327
2,000 Tokyo Printing Ink Mfg 11,662 8,028
3,000 Tokyo Radiator Mfg 11,680 10,419
3,000 Tokyo Rika Mfg 13,756 8,602
3,000 Tokyu Store Chain 22,514 19,481
1,000 Tomiya Apparel 4,645 3,917
2,000 Towa Pharmaceutical 35,428 22,292
3,000 Toyo Engineering Works 13,107 12,866
1,000 Toyo Information Systems 8,671 7,996
3,000 Toyo Tire & Rubber 12,350 8,941
2,000 Toyokuni Electric Cable 12,346 13,085
2,000 Toyota Auto Body Co 21,360 17,769
2,000 Traveler Corp 23,656 15,104
2,000 Tsurukame Corp 10,879 6,542
2,000 Tsurumi Soda Co Ltd 11,632 8,658
2,000 Tsutsunaka Plastic Industry 10,476 10,048
5,000 U-Shin Ltd 30,285 25,846
1,000 USK Corporation 11,001 8,642
2,000 Wakita & Co 26,840 21,485
1,600 Wesco Inc. 11,541 13,569
2,000 Yamaka Electronic Inc. 26,924 16,961
5,000 Yuasa Funashoku Co Ltd 16,377 15,588
1,000 Zojirushi Corp 11,554 9,289
- ------- --------- ---------
418,375 2,848,895 2,301,783
- ------- --------- ---------
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
MALAYSIA -
24,000 Amsteel Corporation BHD 18,474 20,522
6,000 Antah Hldgs BHD 8,088 9,487
4,000 Austral Amalg Tin 6,685 6,550
4,000 Austral Enterprise 7,893 8,309
5,000 Batu Kawan Berhard 10,851 11,697
24,000 Berjaya Industrial 28,474 34,655
20,000 Berjaya Leisure BH 37,522 56,468
4,000 Cement Industries Of Malaysia 12,825 12,746
5,000 Cold Storage (Malay) BHD 7,969 9,519
10,000 Esso Malaysia BHD 27,954 27,427
22,000 Faber Group Berhad 25,532 23,337
18,000 Far East Holdings Berhad 29,796 29,621
4,000 Gadek (Malaysia) Berhad 32,509 30,654
3,000 IOI Properties 9,726 9,922
11,000 Island & Penisular Berhad 39,364 40,374
12,000 Keck Seng (Malaysia) BHD 17,242 16,843
5,000 Kelang Contr Terml 12,308 13,209
5,000 Kinta Kellas Plc. 6,448 6,413
16,000 Kuala Sidim Berhad 39,338 38,721
3,000 Leisure Management Berhad 9,199 15,004
36,000 Lion Land Berhad 40,178 40,076
32,000 Malayan Cement BHD 69,459 65,825
16,000 Malayan United Indus BH 12,389 12,584
13,000 Malaysian Helicopter Services 16,183 16,255
1,000 Malaysian Pacific Industries 3,692 4,033
4,000 Malaysian Plantation 4,841 8,067
1,000 Matsushita Elec Co 10,006 9,720
5,000 MBF Capital Berhad 7,137 8,833
13,000 Multi-Purpose Hldg 22,296 27,266
8,000 Mycom BHD 9,937 10,584
9,000 New Straits Times Press Berhad 51,555 55,177
3,000 Olympia Industries 2,468 3,037
4,200 Oriental Hldgs BHD 23,943 37,946
3,000 Paramount Corp Berhad 3,553 3,727
11,000 Pelangi Berhad 13,002 13,576
4,000 Sapura Telecom 6,794 7,583
10,000 Sarawak Enterprise Corp 17,191 16,537
9,000 Sime UEP Properties Berhad 22,864 21,236
8,000 Sistem Televisyen 16,280 16,779
12,000 TA Enterprise Berhad 17,518 15,875
11,000 Tan Chong Motor BHD 19,930 21,296
5,000 Uniphone Telecommunications 6,254 6,413
12,000 United Plantation Berhad 27,181 26,863
- ------- ------- -------
435,200 812,848 870,766
- ------- ------- -------
NETHERLANDS -
1,640 Apotheker Cooperatie OPG-CV 47,673 50,272
180 Cap Volmac Group 4,262 6,525
1,180 Gist-Brocade-CVA 35,641 38,625
990 Konin Bijenkorf Beh 68,728 74,680
1,700 Koninklijke Hoogoven CVA 64,427 84,103
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
1,260 NKF Holdings NV 40,473 32,780
2,250 Stork NV 83,472 97,158
3,330 VIB NV 90,000 92,845
70 Megener NV 7,039 7,016
1,460 Wereldhave NV 90,377 89,275
- ------ ------- -------
14,060 532,092 573,279
- ------ ------- -------
NORWAY
2,200 Aker ASA - A Shares 45,359 59,019
1,900 Norske Skogindustrie ASA 52,583 58,890
- ----- ------ -------
4,100 97,942 117,909
- ----- ------ -------
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
NEW ZEALAND -
29,000 DB Group Limited 20,688 19,545
1,400 Independent News LT 5,544 6,439
- ------ ------ ------
30,400 26,232 25,984
- ------ ------ ------
SINGAPORE -
2,000 Auric Pacific Group 2,934 3,280
12,000 Chuan Hup Holdings 7,992 8,303
2,000 Focal Finance Ltd 3,679 3,736
5,000 GP Batteries Intl Ltd 14,291 13,950
6,000 Hong Leong Finance 21,175 20,176
4,000 HWA Hong Corporation 5,618 6,642
6,000 Intraco Ltd 9,365 8,427
8,000 Isetan (Singapore) 16,829 15,499
26,000 Malayan Credit Ltd 44,958 44,074
9,000 Resources Develop Corp 27,827 25,531
9,000 Singapore Business Svc 49,520 47,949
5,000 Singapore Reinsurance 6,090 5,812
6,000 Singapore Tech Aero 7,996 9,548
14,000 Singapore Tech Ind. 33,300 34,290
8,000 ST Computer Sys & Service 5,877 5,701
2,000 UTD Industrial CP 1,769 1,619
12,000 WBL Corp Ltd 30,059 29,060
- ------- ------- -------
136,000 289,279 283,597
- ------- ------- -------
SPAIN -
4,000 Asturiana De Zinc SA 51,802 51,915
3,000 Banco Pastor SA 174,168 171,404
5,000 Ebro Agricolas CIA 72,600 94,166
1,200 OCP Construcciones SA 36,550 38,217
10,000 Sarrio SA 32,582 35,551
- ------ ------- -------
23,200 367,702 391,253
- ------ ------- -------
SWEDEN
10,500 Avesta-Sheffield 108,576 113,590
2,700 Bergman & Beving AB- 88,947 84,222
600 Cardo AB 13,865 19,393
4,500 Celsius AB- B Shares 63,895 86,312
1,800 Esselte AB - A Shares 40,162 42,768
2,000 Marieberg Tidnings AB- A Shares 53,583 54,687
5,900 NCC AB- A Shares 70,810 78,315
800 Ratos Forvaltnin AB 21,975 31,538
5,400 SKF AB 130,538 141,922
400 SSAB 6,495 7,274
1,800 Svedala Insustries 31,108 35,122
- ------ ------- -------
36,400 629,954 695,143
- ------ ------- -------
SWITZERLAND -
90 Ascom Hldg AG 95,955 96,272
150 Basler Kantonalek-PC 38,241 38,317
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
50 Bucher Holding AG-B 37,720 42,691
100 Logitech Intl 10,367 19,020
780 Oerlikon-Buhrle HD 79,254 78,374
80 Publicitas Holdings 13,499 14,411
90 Schindler-Hldg AG 91,559 104,956
140 Sibra Holding SA 27,853 28,183
120 Swissair -Registered 104,982 106,955
200 Valora Holding AG 38,268 43,732
- ----- ------- -------
1,800 537,698 572,911
- ----- ------- -------
UNITED KINGDOM -
6,000 600 Group PLC 19,486 12,709
63,000 Aegis Group PLC 63,273 64,654
34,000 AMEC 56,184 77,880
3,000 Anglican Group 10,081 11,995
58,000 APV PLC 68,754 63,332
71,000 Bardon Group PLC 38,316 47,216
25,000 Bibby (J) & Sons PLC 53,646 77,584
16,000 Bladgen Industries 51,219 50,574
12,000 Bullough PLC 14,753 22,463
28,000 C.E. Health PLC 36,958 46,666
3,000 Cape 7,441 8,251
30,000 Cloride Group PLC 16,724 17,241
17,000 Concentric PLC 44,865 39,359
38,000 Cordiant PLC 65,580 77,059
14,000 Dawson International 13,824 15,402
7,000 Eis Group PLC 41,344 40,344
12,000 Exco 12,178 11,724
13,000 George Wimpey PLC 27,852 30,952
16,000 Grampian Holdings 32,677 32,446
22,000 Haden Maclellan HD 38,509 44,974
3,000 Hambros 12,320 11,699
14,000 Hogg Robinson PLC 50,246 45,172
21,000 Howden Group PLC 24,551 44,309
30,000 Iceland Group PLC 41,626 46,058
14,000 Jardine Lloyd Thompson Group 46,381 44,482
10,000 Johnson Group Cleaners PLC 47,906 47,618
3,000 Lex Service PLC 17,489 16,576
11,000 London & Manchester Grp PLC 72,270 75,318
3,000 London Forfaiting Co. 13,936 18,669
45,000 London Merchant Securities PLC 77,829 84,604
7,000 London Pacific Group Ltd 26,262 25,229
4,000 Macro 4 PLC 32,003 26,600
4,000 Manders PLC 13,116 11,264
6,000 Marley 12,981 12,414
14,000 Marston Thomp & Evr 59,671 59,259
22,000 Mathews(Berhard) PLC 46,289 46,239
3,000 Micro Focus Group 41,842 61,698
28,000 Mowlem (John) & Co PLC 50,920 52,872
10,000 National Home LNS 21,502 25,697
3,000 Nestor-BNA PLC 5,312 6,527
42,000 Pentland Group PLC 66,275 77,929
4,000 Perkins Foods PLC 5,329 5,517
2,000 Portsmith & SundNew 23,173 27,257
26,000 Premier Oil PLC 11,701 15,156
</TABLE>
<PAGE>
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SHARES COST VALUE
- ------ ---- -----
<S> <C> <S> <C>
59,000 Readicut International PLC 41,387 37,056
3,000 Scholl PLC 12,597 15,468
4,000 Sema Group PLC 51,150 90,310
25,000 TC Group PLC 48,414 48,234
9,000 Wagon Indl Hldgs 46,418 42,265
2,000 Wolverhampton & Dudley Breweries PLC 19,548 21,970
919,000 1,754,108 1,936,291
TOTAL INVESTMENTS - 98.82% $11,948,121 $11,989,570
----------- -----------
----------- -----------
CASH AND OTHER ASSETS
IN EXCESS OF LIABILITIES - 1.18% 1,046,604
-----------
TOTAL NET ASSETS - 100.00% $13,036,174
-----------
-----------
</TABLE>
<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,
incorporated by reference to 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,
incorporated by reference to 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, incorporated by reference to
Post-Effective Amendment No. 12 filed on August 5, 1996.
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, incorporated
by reference to Post-Effective Amendment No. 12 filed on
August 5, 1996;
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. Distributor's Contract between the Registrant and
Barr Rosenberg Funds Distributor, Inc. relating to the
Registrant's Select shares and Adviser shares -- to be
filed by amendment;
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;
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<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;
8.3. Amendment No.1 to the Custodian Contract between the
Registrant on behalf of its Japan Series and State Street
Bank and Trust Company -- to be filed by amendment;
9. (a) Transfer Agency Agreement between the Registant and
BISYS Fund Services, Inc -- to be filed by amendment.
(b) 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,
incorporated by reference to Post-Effective Amendment
No. 12 filed on August 5, 1996;
(c) Fund Administration Agreement between
Registrant and BISYS Fund Services Limited
Partnership -- to be filed by amendment;
(d) Fund Accounting Agreement between the Registrant and
BISYS Fund Services, Inc. -- to be filed by amendment;
10. Opinion of Ropes & Gray -- to be filed by amendment
11. Consent of Price Waterhouse LLP -- to be filed
by amendment;
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. (a) 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;
(b) Distributor's Contract between the Registrant and Barr
Rosenberg Funds Distributor, Inc. -- to be filed by
amendment;
16. Schedule for Computation of Performance Quotations -- to be
filed by amendment;
17. Financial Data Schedule for Registrant's fiscal year ended
March 31, 1997 -- to be filed by amendment;
18. Form of Multi-Class Plan entered into by Registrant
pursuant to Rule 18f-3 under the Investment Company Act of
1940 incorporated by
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<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 April 1, 1997:
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Shares of Beneficial Interest
U.S. Small Capitalization Series
Select Class 218
Adviser Class 3
Institutional Class 23
Shares of Beneficial Interest
Japan Series
Select Class 3
Adviser Class 0
Institutional Class 2
Shares of Beneficial Interest 0
United States Equity Series
Shares of Beneficial Interest
International Small Capitalization Series
Select Class 15
Adviser Class 0
Institutional Class 13
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<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
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<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.
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<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
------------------ ------------- -------------
David J. Huber President None
Lynn J. Mangum Director None
Kevin J. Dell Vice President, None
Secretary
Michael D. Burns Vice President, Chief None
Financial Officer
Robert J. McMullan Director None
The business address of all directors and officers of the Distributor is 125
W. 55th Street New York, New York 10019
(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
3435 Stelzer Road
Columbus, Ohio 43219
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.
125 W. 55th Street
New York, New York 10019
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 furnish each person to whom a
prospectus is delivered with a copy of the Registrants's latest
annual report to shareholders, upon request and without charge.
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<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust, as amended, of the
Registrant is on file with the Secretary of The Commonweatlh of Massachusetts
and notice is hereby given that this instrument is executed on behalf of the
Registrant by an officer of the Registrant as an officer and not individually
and that the obligations of or arising out of this instrument are not binding
for any of the trustees of shareholders individually but are binding only upon
the assets and property of the Registrant.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 13 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 30th day of April, 1997.
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 30th day of April, 1997.
SIGNATURE TITLE DATE
/s/Marlis S. Fritz Vice President, April 30, 1997
____________________
Marlis S. Fritz Trustee
Kenneth Reid* President April 30, 1997
Kenneth Reid Principal Executive Officer,
Trustee
Po-Len Hew* Treasurer, April 30, 1997
____________________
Po-Len Hew Principal Financial Officer
Trustee
Nils H. Hakansson* Trustee April 30, 1997
____________________
Nils H. Hakansson
Barr M. Rosenberg* Trustee April 30, 1997
____________________
Barr M. Rosenberg
William F. Sharpe* Trustee April 30, 1997
____________________
William F. Sharpe
*By: /s/Marlis S. Fritz
__________________
Marlis S. Fritz
Attorney-in-Fact
Date: April 30, 1997
