BARR ROSENBERG SERIES TRUST, 497, 1999-08-06

BARR ROSENBERG SERIES TRUST
497, 1999-08-06

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BARR ROSENBERG SERIES TRUST

BARR ROSENBERG MARKET NEUTRAL FUND
BARR ROSENBERG DOUBLE ALPHA MARKET FUND
BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND

3435 STELZER ROAD
COLUMBUS, OHIO 43219
1-800-555-5737 (INSTITUTIONAL SHARES)
1-800-447-3332 (INVESTOR SHARES)

JULY 30, 1999

Barr Rosenberg Series Trust is an open-end management investment company
offering six diversified portfolios with different investment objectives and
strategies, including the Barr Rosenberg Market Neutral Fund, Barr Rosenberg
Double Alpha Market Fund and Barr Rosenberg Select Sectors Market Neutral Fund.
The other portfolios of the Trust, which are offered under another prospectus,
are the U.S. Small Capitalization Series, Japan Series and International Small
Capitalization Series. Each Fund's investment adviser is AXA Rosenberg
Investment Management LLC.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIME.
<PAGE>
TABLE OF CONTENTS

PAGE
----

Risk/Return Summary................................................... 3

Barr Rosenberg Market Neutral Fund.................................. 4
Barr Rosenberg Double Alpha Market Fund............................. 7
Barr Rosenberg Select Sectors Market Neutral Fund................... 9

Fees and Expenses..................................................... 11

Investment Objectives and Principal Investment Strategies............. 12

Principal Risks....................................................... 16

Management Discussion of Fund Performance............................. 20

Performance Information for the Adviser's Other Market Neutral
Accounts............................................................. 23

The Adviser's General Investment Philosophy........................... 25

Management of the Trust............................................... 28

Multiple Classes...................................................... 32

Purchasing Shares..................................................... 33

IRA Accounts.......................................................... 35

Redemption of Shares.................................................. 35

Exchanging Shares..................................................... 37

How the Trust Prices Shares of the Funds.............................. 38

Distributions......................................................... 39

Taxes................................................................. 39

Other Information..................................................... 40

Financial Highlights.................................................. 41

2
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RISK/RETURN SUMMARY

The following is a summary of certain key information about the Barr
Rosenberg Market Neutral Fund, Barr Rosenberg Double Alpha Market Fund and Barr
Rosenberg Select Sectors Market Neutral Fund (each a "Series" or a "Fund" and,
collectively, the "Series" or the "Funds"). You will find additional information
about each Fund, including a detailed description of the risks of an investment
in each Fund, after this Summary. This Summary identifies each Fund's investment
objective, principal investment strategies and principal risks. The principal
risks of each Fund are identified and more fully discussed beginning on page 16.
You can find more detailed descriptions of the Funds, including the risks
associated with investing in the Funds, further back in this Prospectus. Please
be sure to read this additional information BEFORE you invest.

This Risk/Return Summary includes a table for the Barr Rosenberg Market
Neutral Fund showing its average annual returns and a bar chart showing its
annual returns. The table and bar chart provide an indication of the historical
risk of an investment in the Fund by showing:

- how the Fund's average annual returns for one year and since inception
compare to those of a broad-based securities market index; and

- changes in the Fund's performance from year to year.

A Fund's past performance, of course, does not necessarily indicate how it
will perform in the future.

Other important things for you to note:

- You may lose money by investing in the Funds.

- An investment in the Funds is not a deposit in a bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

- Except as described in the Investment Restrictions section in the Trust's
Statement of Additional Information, the investment objective and policies
of each of the Funds may be changed without shareholder approval.

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BARR ROSENBERG MARKET NEUTRAL FUND

INVESTMENT OBJECTIVE

The Fund seeks to increase the value of your investment in bull markets and
in bear markets through strategies designed to maintain limited net exposure to
general equity market risk.

SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES

The Fund seeks to achieve its investment objective by buying common stocks
that the Funds' investment adviser, AXA Rosenberg Investment Management LLC (the
"Adviser"), believes are undervalued and by "selling short" stocks that the
Adviser believes are overvalued. The Fund seeks to have approximately equal
dollar amounts invested in long and short positions. The Fund principally
invests in small capitalization and smaller mid-capitalization stocks that are
principally traded in the markets of the United States. The Fund measures its
return by a comparison to the return on 3-Month U.S. Treasury Bills.

By buying and selling short different stocks, the Fund attempts to limit the
effect on its performance of, and the risk associated with, general movements in
the U.S. stock market. Given this use of long and short positions, the Fund
expects that its shares will increase in value if, in the aggregate, prices of
securities in its long portfolio increase more than the prices of securities in
its short portfolio. By contrast, the Fund expects that its shares will decline
in value if, in the aggregate, prices of securities in its short portfolio
increase more than the prices of securities in its long portfolio. The Fund may
enter into repurchase agreements.

The Adviser uses quantitative, proprietary investment computer models to
determine which securities to buy, sell and sell short. Using these models, the
Adviser employs a bottom-up approach based on factors such as a company's fair
value, financial strength, earnings and price momentum, cash flow, book value,
and its competitive position within its industry. These models tend to produce a
"value" style of management by favoring securities believed to be selling below
a price that would accurately value the underlying company.

SUMMARY OF PRINCIPAL RISKS

As with any stock mutual fund, you may lose money if you invest in the Fund.
Among the principal risks that could adversely affect the value of the Fund's
shares and cause you to lose money on your investment are:

INVESTMENT RISKS. Although the Fund's investment strategy seeks to limit
the risk associated with investing in the equity market, the value of Fund
shares still may increase or decrease depending on external conditions affecting
the Fund's portfolio. These conditions depend upon market, economic, political,
regulatory and other factors.

MANAGEMENT RISK. Any actively managed investment portfolio is subject to
the risk that its investment adviser will make poor stock selections. Because
the Adviser could make poor investment decisions about both the long and the
short positions of the Fund, the Fund's losses could exceed those of
conventional stock mutual funds that hold only long portfolios.

PORTFOLIO RISK. Although the Fund seeks to have approximately equal dollar
amounts invested in long and short positions, there is a risk that the Adviser
will fail to construct a portfolio of long and short positions that has limited
exposure to general movements in the U.S. stock market, capitalization or other
risk factors.

4
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RISK OF SHORT SALES. When the Adviser believes that a security is
overvalued relative to other securities, it may sell the security short by
borrowing it from a third party and selling it at the then current market price.
The Fund is then obligated to buy the security on a later date so it can return
the security to the lender. Short sales therefore involve the risk that the Fund
will incur a loss by subsequently buying a security at a higher price than the
price at which the Fund previously sold the security short. Moreover, because
the Fund's loss on a short sale arises from increases in the value of the
security sold short, such loss, like the price of the security sold short, is
theoretically unlimited. By contrast, the Fund's loss on a long position arises
from decreases in the value of the security and therefore is limited by the fact
that a security's value cannot drop below zero.

SMALL AND MID-SIZE COMPANY RISK. The Fund is subject to additional risk
because it invests primarily in the stocks of small capitalization and smaller
mid-sized market capitalization companies, which tend to be less liquid and more
volatile than stocks of companies with relatively large market capitalizations.

FOREIGN INVESTMENT RISK. Although it invests only in securities principally
traded in U.S. markets, the Fund may invest in stocks of foreign companies that
trade on U.S. markets. Investments in securities of foreign issuers involve
certain risks that are less significant for investments in securities of U.S.
issuers. These include risks of adverse changes in foreign economic, political,
regulatory and other conditions, and changes in currency exchange rates or
exchange control regulations (including currency blockage). The Fund may be
unable to obtain and enforce judgments against foreign entities, and issuers of
foreign securities are subject to different, and often less comprehensive,
accounting, reporting and disclosure requirements than domestic issuers. Also,
the securities of some foreign companies may be less liquid and at times more
volatile than securities of comparable U.S. companies.

For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page 16.

This Risk/Return Summary includes a table showing the Fund's average annual
returns and a bar chart showing its annual returns. The table and bar chart
provide an indication of the historical risk of an investment in the Fund by
showing:

- how the Fund's average annual returns for one, five, and ten years (or
over the life of the Fund if the fund is less than ten years old) compare
to those of a broad-based securities market index; and

- changes in the Fund's performance from year to year over ten years (or
over the life of the Fund if the Fund is less than ten years old).

A Fund's past performance, of course, does not necessarily indicate how it
will perform in the future.

5
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YEARLY PERFORMANCE (%) -- INSTITUTIONAL SHARES

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
YEARLY PERFORMANCE
<S> <C>
CALENDAR YEAR END ANNUAL RETURN (%)
1998 -0.71
</TABLE>

During all periods shown in the bar graph, the Fund's highest quarterly return
was 1.90%, for the quarter ended September 30, 1998, and its lowest quarterly
return was -3.04%, for the quarter ended December 31, 1998.

For the period January 1, 1999 through June 30, 1999, the aggregate
(non-annualized) total returns of Institutional Shares and Investor Shares were
- -11.63% and -11.75%, respectively.

PERFORMANCE TABLE

This table shows how the Fund's performance compares with the returns of
3-Month U.S. Treasury Bills.

AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 1998)

<TABLE>
<CAPTION>
SINCE INCEPTION
OF SINCE INCEPTION
ONE YEAR INSTITUTIONAL OF INVESTOR
ENDED SHARES SHARES
DECEMBER 31, 1998 (12/16/97) (12/18/97)
----------------- --------------- ---------------
<S> <C> <C> <C>
Institutional Shares........................................... -0.71% -0.97% --
Investor Shares................................................ -1.07% -- -1.42%
3-Month U.S. T-Bills........................................... 4.89% 5.20% 5.16%
</TABLE>

- ------------------------

6
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BARR ROSENBERG DOUBLE ALPHA MARKET FUND

The Barr Rosenberg Double Alpha Market Fund invests in Institutional Shares
of the Barr Rosenberg Market Neutral Fund. Therefore, you should also consider
the principal investment strategies and principal risks of the Barr Rosenberg
Market Neutral Fund, as described above, in deciding whether to invest in the
Barr Rosenberg Double Alpha Market Fund.

INVESTMENT OBJECTIVE

The Fund seeks a total return greater than that of the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500 Index").

SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES

The Fund invests primarily in shares of the Barr Rosenberg Market Neutral
Fund while simultaneously utilizing S&P 500 Index Futures, options on S&P 500
Index Futures and equity swap contracts to gain exposure to the equity market as
measured by the S&P 500 Index. The Fund will purchase these S&P 500 Index
instruments in an amount approximately equal to the net asset value of the Fund
in order to gain full net exposure to the U.S. equity market as measured by the
S&P 500 Index.

SUMMARY OF PRINCIPAL RISKS

INVESTMENT RISKS. The value of Fund shares may increase or decrease
depending on external conditions affecting the Fund's portfolio. These
conditions depend upon market, economic, political, regulatory and other
factors.

MANAGEMENT RISK. Any actively managed investment portfolio is subject to
the risk that its investment adviser will make poor investment decisions.
Because the Fund invests in shares of the Barr Rosenberg Market Neutral Fund, it
is subject indirectly to the risk that the Adviser could make poor stock
selections with respect to that Fund as well.

INDEX INSTRUMENTS RISK. As indicated above, the Fund may at times use S&P
500 Index Futures, options on S&P 500 Index Futures and equity swap contracts,
each of which is a financial contract whose value depends on, or is derived
from, the value of an underlying asset, reference rate or index. In addition to
other risks such as the risk that the counterparty will be unable or unwilling
to perform its obligations, these financial contracts involve the risk of
mispricing or improper valuation and the risk that changes in the value of a
financial contract may not correlate perfectly with relevant assets, rates and
indices, such as the S&P 500 Index. The liquidity and the value of a financial
contract may be subject to significant fluctuations, and the Fund may at times
be unable to sell a financial contract and may incur ongoing costs associated
with that inability.

RISK OF SHORT SALES. Because the Fund invests in shares of the Barr
Rosenberg Market Neutral Fund, it is subject indirectly to the risk that the
Barr Rosenberg Market Neutral Fund may incur a loss by buying a stock at a
higher price than the price at which it previously sold the security short, as
described above.

7
<PAGE>
RISKS OF EQUITY SWAP CONTRACTS. The Fund may enter into equity swap
contracts, in which a counterparty generally agrees to pay the amount, if any,
by which the agreed upon or "notional" amount specified in the equity swap
contract would have increased in value had it been invested in the basket of
stocks comprising the S&P 500 Index, plus the dividends that would have been
received on those stocks, and in which the Fund agrees to pay to the
counterparty a floating rate of interest (typically the London Inter Bank
Offered Rate) on the notional amount of the equity swap contract plus the
amount, if any, by which that notional amount would have decreased in value had
it been invested in such stocks. If there is a default by the counterparty to an
equity swap contract, the Fund will be limited to contractual remedies pursuant
to the agreements related to the transaction, which may entail additional
expense for the Fund. The Fund's use of equity swap contracts may result in the
Fund realizing more income subject to tax at ordinary income tax rates than it
would if it did not engage in equity swap contracts. There is no assurance that
the equity swap contract counterparties will be able to meet their obligations
or that, in the event of default, the Fund will succeed in pursing contractual
remedies. The Fund thus assumes the risk that it may be delayed in or prevented
from obtaining payments owed to it pursuant to these contracts.

For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page 16.

PERFORMANCE INFORMATION

The Fund does not have performance information for a full calendar year
because it commenced operations on April 22, 1998.

8
<PAGE>
BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND

INVESTMENT OBJECTIVE

The Fund seeks to increase the value of your investment in bull markets and
in bear markets through strategies designed to maintain minimal net exposure to
general equity market risk by investing primarily in the 500 largest
capitalization stocks principally traded in the markets of the United States.

SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES

The Fund seeks to achieve its investment objective by buying common stocks
that the Adviser believes are undervalued and by "selling short" stocks that the
Adviser believes are overvalued. The Fund seeks to have approximately equal
dollar amounts invested in long and short positions. The Fund invests primarily
in the 500 largest capitalization stocks that are principally traded in the
markets of the United States. The Fund measures its return by a comparison to
the return on 3-Month U.S. Treasury Bills.

The Adviser selects sectors to overweight or underweight based on a
bottom-up evaluation of the stocks within a sector. If the models find most
stocks within a sector to be attractive, then the Adviser would tend to
overweight its long positions in that sector. If the models find most stocks
within a sector to be unattractive then the Adviser would tend to take net short
positions with regard to that sector.

SUMMARY OF PRINCIPAL RISKS

MANAGEMENT RISK. Any actively managed investment portfolio is subject to
the risk that the Adviser will make poor stock selections. Because the Adviser
could make poor investment decisions about both the long

9
<PAGE>
and the short positions of the Fund, the Fund's losses could exceed those of
conventional stock mutual funds that hold only long portfolios.

RISK OF SHORT SALES. When the Adviser believes that a security is
overvalued relative to other securities, it may sell the security short by
borrowing it from a third party and selling it at the then current market price.
The Fund is then obligated to buy the security on a later date so it can return
the security to the lender. Short sales therefore involve the risk that the Fund
will incur a loss by subsequently buying a security at a higher price than the
price at which the Fund previously sold the security short. Moreover, because
the Fund's loss on a short sale arises from increases in the value of the
security sold short, such loss, like the price of the security sold short, is
theoretically unlimited. By contrast, the Fund's loss on a long position arises
from decreases in the value of the security and therefore is limited by the fact
that a security's value cannot drop below zero.

RISK OF OVERWEIGHTING. This is the risk that, by overweighting investments
in certain sectors or industries of the U.S. stock market, the Fund will suffer
a loss because of general advances or declines on the prices of stocks in those
sectors or industries.

FOREIGN INVESTMENT RISK. Although it invests only in securities principally
traded in U.S. markets, the Fund may invest in stocks of foreign companies that
trade on U.S. markets. Investments in securities of Foreign issuers involve
certain risks that are less significant for investments in securities of U.S.
issuers. These include risks of adverse changes in foreign economic, political,
regulatory and other conditions, changes in currency exchange rates or exchange
control regulations (including currency blockage). A Fund may be unable to
obtain and enforce judgments against foreign entities, and issuers of foreign
securities are subject to different, and often less comprehensive, accounting,
reporting and disclosure requirements than domestic issuers. Also, the
securities of some foreign companies may be less liquid and at times more
volatile than securities of comparable U.S. companies.

For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page 16.

PERFORMANCE INFORMATION

The Fund does not have performance information for a full calendar year
because it commenced operations on October 19, 1998.

10
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FEES AND EXPENSES

THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND
HOLD SHARES OF THE FUNDS.

ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)

<TABLE>
<CAPTION>
FUND
----------------------------------------------------------------------------------
BARR ROSENBERG
BARR ROSENBERG MARKET BARR ROSENBERG DOUBLE SELECT SECTORS MARKET
NEUTRAL FUND ALPHA MARKET FUND NEUTRAL FUND
-------------------------- -------------------------- --------------------------
CLASS OF SHARES
----------------------------------------------------------------------------------
INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTOR
------------- ----------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Management Fees...................... 1.90% 1.90% .10% .10% 1.00% 1.00%
Distribution and Shareholder Service
(12b-1) Fees........................ None .25%* None .25%* None .25%*
Other Expenses
Dividend Expenses on Securities
Sold Short....................... .85% .85% .85%** .85%** 1.50% 1.50%
Remainder of Other Expenses........ .32% .47% 3.88% 4.03% 1.40% 1.55%
Total Other Expenses***............ 1.17% 1.32% 4.73%** 4.88%** 2.90%**** 3.05%****
Total Annual Fund Operating
Expenses............................ 3.07% 3.47% 4.83% 5.23% 3.90% 4.30%
Expense Waiver*****.................. .22% .22% 1.63% 1.63% 1.15% 1.15%
Net Expenses......................... 2.85% 3.25% 3.20% 3.60% 2.75% 3.15%
</TABLE>

- ------------------------

* As of March 31, 1999, the Trustees have reduced the maximum amount
payable by Investor shares under the Trust's distribution and shareholder
service plan from 0.50% to 0.25% of the average daily net assets
attributable to such shares. These figures therefore are based on the
contractual maximum for the current fiscal year.

** Because the Barr Rosenberg Double Alpha Market Fund invests in the the
Barr Rosenberg Market Neutral Fund, its "Other Expenses" include the net
expenses of the Barr Rosenberg Market Neutral Fund, including that Fund's
net management fees after waiver and its expenses from dividends on
securities sold short.

*** As of March 31, 1999, the Trustees have authorized the payment of up to
0.15% of each Fund's average daily net assets attributable to Investor
Shares for subtransfer and subaccounting services in connection with such
shares. The expense information in the table has therefore been restated
to reflect current fees.

**** Because the Barr Rosenberg Select Sectors Market Neutral Fund is a new
fund (as defined in Form N-1A under the Investment Company Act of 1940,
as amended), "Other Expenses" for that Fund are based on estimated
amounts for the current fiscal year.

***** Reflects an contractual limitation by the Adviser to waive its management
fee and bear certain expenses (exclusive of nonrecurring account fees,
extraordinary expenses and dividends on securities

11
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sold short) until further notice (and in any event at least until March
31, 2000) and/or a conditional fee waiver by the Administrator based on
the reasonable expectation that the relevant conditions will continue
through March 31, 2000.

EXAMPLE

This example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment earns a 5% return each year and that
the Fund's operating expenses remain the same as the Total Annual Fund Operating
Expenses shown above. Your actual costs may be higher or lower. Based on these
assumptions, your costs would be:

<TABLE>
<CAPTION>
FUND CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------- -------------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Barr Rosenberg Market Neutral Fund............................. Institutional $ 288 $ 929 $ 1,597 $ 3,399
Investor $ 328 $ 1,046 $ 1,790 $ 3,767
Barr Rosenberg Double Alpha Market Fund........................ Institutional $ 323 $ 1,324 $ 2,362 $ 5,123
Investor $ 363 $ 1,438 $ 2,544 $ 5,447
Barr Rosenberg Select Sectors Market Neutral Fund.............. Institutional $ 278 $ 1,094 -- --
Investor $ 318 $ 1,210 -- --
</TABLE>

INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES

Except as explicitly described otherwise, the investment objective and
policies of each of the Funds may be changed without shareholder approval.

BARR ROSENBERG MARKET NEUTRAL FUND

The Fund seeks to increase the value of your investment in bull markets and
in bear markets through strategies designed to maintain limited net exposure to
general equity market risk. The Fund compares its return to the return on
3-Month U.S. Treasury Bills. The Fund attempts to achieve its objective by
taking long positions in stocks principally traded in the markets of the United
States that the Adviser has identified as undervalued and short positions in
such stocks that the Adviser has identified as overvalued. When the Adviser
believes that a security is overvalued relative to other securities, it may sell
the security short by borrowing it from a third party and selling it at the then
current market price. By taking long and short positions in different stocks,
the Fund attempts to limit the effect of, and the risk associated with, general
stock market movements on the Fund's performance. It is expected that the Fund
can achieve a positive return if, in the aggregate, prices of securities in its
long portfolio increase more than the prices of the securities in the Fund's
short portfolio. By contrast, it is expected that the Fund will incur losses if,
in the aggregate, prices of securities in the Fund's short portfolio increase
more than the prices of securities in the Fund's long portfolio. The Adviser
will determine the size of each long or short position by analyzing the tradeoff
between the attractiveness of each position and its impact on the risk
characteristics of the overall portfolio.

12
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The Fund seeks to construct a diversified portfolio that has limited net
exposure to the U.S. equity market risk generally and near neutral exposure to
specific industries, specific capitalization ranges and certain other risk
factors. It is currently expected that the long and short positions of the Fund
will be invested primarily in small capitalization stocks and smaller
mid-capitalization stocks. For purposes of the preceding sentence, the 200
stocks principally traded stocks in the markets of the United States with the
largest market capitalizations are considered large capitalization stocks, the
next 800 largest stocks are considered mid-capitalization stocks and all other
stocks are considered small capitalization stocks. Stocks of companies with
small and smaller mid-market capitalizations tend to be less liquid and more
volatile than stocks of companies with relatively large market capitalizations.

The Adviser uses the return that an investor could achieve through an
investment in 3-month U.S. Treasury Bills as a benchmark against which to
measure the Fund's performance. The Adviser attempts to achieve returns for the
Fund's shareholders that exceed the benchmark. An investment in the Fund is
different from an investment in 3-month U.S. Treasury Bills because, among other
things, Treasury Bills are backed by the full faith and credit of the U.S.
Government, Treasury Bills have a fixed rate of return, investors in Treasury
Bills do not risk losing their investment, and an investment in the Fund is more
volatile than an investment in Treasury Bills.

To meet margin requirements related to short sales, redemption requests or
for investment purposes, the Fund may also temporarily hold 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 Adviser to be of comparable quality
to any of the foregoing. The Fund may also enter into repurchase agreements.

The Fund's long and short positions may involve (without limit) equity
securities of foreign issuers that are principally traded in the markets of the
United States. The Fund will not invest in equity securities that are
principally traded outside of the United States.

During the fiscal year ended March 31, 1999, the Fund engaged in active and
frequent trading. Because of the frequency with which the Fund buys and sells
portfolio securities, a larger portion of distributions you receive are likely
to be ordinary dividends, rather than capital gain distributions.

BARR ROSENBERG DOUBLE ALPHA MARKET FUND

The investment objective of the Barr Rosenberg Double Alpha Market Fund is
to seek a total return greater than the return of the S&P 500 Index. The Fund
seeks to achieve its objective by investing in shares of the Barr Rosenberg
Market Neutral Fund while simultaneously utilizing S&P 500 Index Futures,
options on S&P 500 Index Futures, equity swap contracts or a combination thereof
to gain exposure to the equity market as measured by the S&P 500 Index. The Fund
has received an exemptive order from the Securities and Exchange Commission
allowing it to invest in securities other than those described in Section
12(d)(1)(G) of the Investment Company Act of 1940, as amended (the "1940 Act")
while investing without limit in the Barr Rosenberg Market Neutral Fund. Once
the Fund has indirectly constructed a diversified long and short portfolio
through the purchase of shares of the Barr Rosenberg Market Neutral Fund, the
Fund will purchase

13
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S&P 500 Index Futures, options on S&P 500 Index Futures or equity swap contracts
in an amount approximately equal to the net asset value of the Fund in order to
gain full net exposure to the U.S. equity market as measured by the S&P 500
Index.

The S&P 500 Index is an unmanaged index composed of 500 common stocks, most
of which are listed on the New York Stock Exchange. The S&P 500 Index assigns
relative values to the stocks included in the index, weighted according to each
stock's total market value relative to the total market value of the other
stocks included in such index.

As noted above, the Fund may engage in equity swap contracts, through which
a counterparty generally agrees to pay the amount, if any, by which the agreed
upon or "notional" amount specified in the equity swap contract would have
increased in value had it been invested in the basket of stocks comprising the
S&P 500 Index, plus the dividends that would have been received on those stocks.
The Fund agrees to pay to the counterparty a floating rate of interest
(typically the London Inter Bank Offered Rate) on the notional amount of the
equity swap contract plus the amount, if any, by which that notional amount
would have decreased in value had it been invested in such stocks. Therefore,
the return to the Fund on any equity swap contract should be the gain or loss on
the notional amount plus dividends on the stocks comprising the S&P 500 Index
(as if the Fund had invested the notional amount in stocks comprising the S&P
500 Index) less the interest paid by the Fund on the notional amount. Therefore,
the Fund will generally realize a loss if the value of the S&P 500 Index
declines and will generally realize a gain if the value of the S&P 500 Index
rises. The Fund will enter into equity swap contracts only on a net basis, I.E.,
where the two parties' obligations are netted out, with the Fund paying or
receiving, as the case may be, only the net amount of any payments. Equity swap
contracts involve special risks that are described in the Principal Risks
section.

To meet redemption requests or for investment purposes, the Fund may also
temporarily hold a portion of its assets 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 S&P or Prime 2 or "Aa" by 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 Adviser to be of comparable quality
to any of the foregoing. The Fund may also enter into repurchase agreements.

BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND

The investment objective of the Barr Rosenberg Select Sectors Market Neutral
Fund is to seek long-term capital appreciation while maintaining minimal
exposure to general equity market risk. The Fund seeks a total return greater
than the return on 3-month U.S. Treasury Bills. The Fund attempts to achieve its
investment objective by taking long positions primarily in the 500 largest
capitalization stocks principally traded in the markets of the United States
that the Adviser has identified as undervalued and short positions in such
stocks that the Adviser has identified as overvalued. When the Adviser believes
that a security is overvalued relative to other securities, it may sell the
security short by borrowing it from a third party and selling it at the then
current market price. By taking long and short positions in different stocks,
the Fund

14
<PAGE>
attempts to limit the effect of, and the risk associated with, general stock
market movements on the Fund's performance. It is expected that the Fund can
achieve a positive return if, in the aggregate, prices of securities in its long
portfolio increase more than the prices of the securities in the Fund's short
portfolio. By contrast, it is expected that the Fund will incur losses if, in
the aggregate, prices of securities in the Fund's short portfolio increase more
than the prices of securities in the Fund's long portfolio.

The Fund seeks to construct a diversified portfolio that has minimal net
exposure to the U.S. equity market generally. It is currently expected that the
long and short positions of the Fund will be invested primarily in the 500
largest capitalization stocks principally traded in the markets of the United
States. Under normal circumstances, the Adviser's stock selection models will
result in the Fund's long and short positions being overweighted in different
sectors (including industries within different sectors). In other words, the
Fund may take long positions in a sector of the market that are not offset by
short positions in that sector and vice versa. Consequently, the Fund may have
net exposures to different industries and sectors of the market, thereby
increasing the risk of the Fund and the opportunity for loss should the stocks
in a particular industry or sector not perform as predicted by the Adviser's
stock selection models. The Adviser will determine the size of each long or
short position by analyzing the tradeoff between the attractiveness of each
position and its impact on the risk characteristics of the overall portfolio.

The Adviser uses the return that an investor could achieve through an
investment in 3-month U.S. Treasury Bills as a benchmark against which to
measure the Fund's performance. The Adviser attempts to achieve returns for the
Fund's shareholders which exceed the benchmark. An investment in the Fund is
different from an investment in 3-month U.S. Treasury Bills because, among other
differences, Treasury Bills are backed by the full faith and credit of the U.S.
government, Treasury Bills have a fixed rate of return, investors in Treasury
Bills do not risk losing their investment, and an investment in the Fund is more
volatile than an investment in Treasury Bills.

To meet margin requirements related to short sales, to meet redemption
requests or for investment purposes, the Fund may also temporarily hold 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 S&P or Prime
2 or "Aa" by 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 Adviser
to be of comparable quality to any of the foregoing. The Fund may also enter
into repurchase agreements.

15
<PAGE>
PRINCIPAL RISKS

The value of your investment in a Fund changes with the values of the Fund's
investments. Many factors can affect those values. This section describes the
principal risks that may affect a particular Fund's investments as a whole. Any
Fund could be subject to additional principal risks because the types
investments made by the Funds can change over time.

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. Also, a
Fund's long positions may decline in value at the same time that the market
value of securities sold short increases, thereby increasing the magnitude of
the loss that you may suffer on your investment as compared with other stock
mutual funds.

Although the Funds' investment strategies seek to minimize the risk
associated with investing in the equity market, an investment in a Fund will be
subject to various risks, including the risk of poor stock selection by the
Adviser. A Fund will lose money if the Adviser fails to purchase and sell short
different stocks such that the securities in the Fund's long portfolio
outperform the securities in the Fund's short portfolio. Also, the Adviser may
fail to construct a portfolio that has limited exposure to general equity market
risk or that has limited exposure to specific industries, specific
capitalization ranges and certain other risk factors.

MANAGEMENT RISK. Each Fund is subject to management risk because it is an
actively managed investment portfolio. This is the risk that Adviser will make
poor investment decisions. The Adviser will apply its investment techniques and
risk analyses in making investment decisions for each Fund, but there can be no
guarantee that they will produce the desired results. In some cases, certain
investments may be unavailable or the Adviser may not choose certain investments
under market conditions when, in retrospect, their use would have been
beneficial to a particular Fund or Funds. Also, because the Adviser may make
poor investment decisions about both the long and short positions of the Barr
Rosenberg Market Neutral Fund and the Barr Rosenberg Select Sectors Market
Neutral Fund, those Funds' losses (and the losses of the Barr Rosenberg Double
Alpha Market Fund because of its investment in the Barr Rosenberg Market Neutral
Fund) could exceed the losses of conventional stock mutual funds that hold only
long positions.

RISKS OF SHORT SALES. When the Adviser believes that a security is
overvalued relative to other securities, it may sell the security short by
borrowing it from a third party and selling it at the then current market price.
The relevant Fund will incur a loss if the price of the borrowed security
increases between when the Fund sells it and when the Fund replaces it. The Fund
may gain if the price of the borrowed security decreases during that period of
time. A Fund cannot guarantee that it will be able to replace a security at any
particular time or at an acceptable price.

During the time a Fund is short a security, it is always subject to the risk
that the security's lender will terminate the loan at a time when the Fund is
unable to borrow the same security from another lender. If this happens, the
Fund must buy the replacement share immediately at its then market value or "buy
in" by paying the lender an amount equal to the price required to purchase the
security to close out the short position. A Fund's gain on a short sale is
limited by the price at which it sold the borrowed security. By contrast, a
Fund's potential loss on a short sale is limited because the loss increases with
the price of the security sold short, which may rise indefinitely.

16
<PAGE>
Short sales also involve other costs. A Fund must repay to the lender any
dividends or interest that accrue while it is holding a security sold short. To
borrow the security, a Fund also may be required to pay a premium. The Funds
also will incur transaction costs in effecting short sales. The amount of any
ultimate gain for a Fund resulting from a short sale will be decreased, and the
amount of any ultimate loss will be increased, by the amount of premiums,
dividends, interest or expenses the Fund may be required to pay in connection
with a short sale.

Until a Fund replaces a borrowed security, it will maintain daily a
segregated account with its Custodian containing cash, U.S. government
securities, or other liquid securities. The amount deposited in the segregated
account plus any amount deposited as collateral with a broker or other custodian
will at least equal the current market value of the security sold short.
Depending on the arrangements made with such broker or custodian, the Fund might
not receive any payments (including interest) on collateral deposited with the
broker or custodian. No Fund will make a short sale if after giving effect to
the sale the market value of all securities sold short would exceed 100% of the
value of such Fund's net assets.

SPECIAL RISKS OF FOREIGN INVESTMENTS. Although they invest only in
securities principally traded in U.S. markets, the Funds may invest in stocks of
foreign companies that trade on U.S. markets. Investments in securities of
foreign issuers involve certain risks that are less significant for investments
in securities of U.S. issuers. These include risks of adverse changes in foreign
economic, political, regulatory and other conditions, changes in currency
exchange rates or exchange control regulations (including currency blockage). A
foreign government may expropriate or nationalize invested assets, or impose
withholding taxes on dividend or interest payments. A Fund may be unable to
obtain and enforce 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 securities of some foreign companies may be less liquid and at
times more volatile than securities of comparable U.S. companies.

RISKS OF REPURCHASE AGREEMENTS. Each of the Funds may enter into repurchase
agreements, by which a Fund will purchase a security and obtain a simultaneous
commitment from the seller to repurchase the security from the Fund at an
agreed-upon price and date (usually seven days or less from the date of original
purchase). The resale price will exceed the purchase price and reflect an
agreed-upon market rate which is unrelated to the coupon rate of the purchased
security. Entering into repurchase agreements allows the Funds to earn a return
on temporarily available cash. Although the underlying security may be a bill,
certificate of indebtedness, note or bond issued by an agency, authority or
instrumentality of the U.S. government, the obligation of the seller is not
guaranteed by the U.S. government. There is a risk, therefore, that the seller
will fail to honor its repurchase obligation. If this happened, the relevant
Fund would try to exercise its legal rights, including possibly its right to
sell the underlying security in the market. However, a Fund may be subject to
various delays and risks of loss, including possible declines in the value of
the underlying security, inability to enforce its rights, and
enforcement-related expenses.

RISKS OF S&P 500 INDEX FUTURES AND RELATED OPTIONS. The Barr Rosenberg
Double Alpha Market Fund may invest in S&P 500 Index futures and related
Options. An S&P 500 Index Future contract (an "Index Future") is a contract to
buy or sell an integral number of units of the S&P 500 Index at a specified
future

17
<PAGE>
date at a price agreed upon when the contract is made. A unit is the value at a
given time of the S&P 500 Index. Entering into a contract to buy units is
commonly referred to as buying or purchasing a contract or holding a long
position in the S&P 500 Index. An option on an Index Future gives the purchaser
the right, in return for the premium paid, to assume a long or a short position
in an Index Future. The Barr Rosenberg Double Alpha Market Fund will realize a
loss if the value of the S&P 500 Index declines between the time the Fund
purchases an Index Future or takes a long position in an Index Future and may
realize a gain if the value of the S&P 500 Index rises between such dates.

The Barr Rosenberg Double Alpha Market 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. Positions in Index
Futures may be closed out by the 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 Future 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 event, it may not be possible
for the Fund to close its futures contract purchase, and, in the event of
adverse price movements, the Fund would continue to be required to make daily
cash payments of variation margin (payments to and from a broker made on a daily
basis as the price of the Index Future fluctuates). 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. In addition, the price of Index Futures
may not correlate perfectly with movement in the underlying index due to certain
market distortions.

Further, when the Barr Rosenberg Double Alpha Market 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.

The ability to establish and close out positions in options on future
contracts will be subject to the development and maintenance of a liquid
secondary market. It is not certain that such a market will develop. Although
the Barr Rosenberg Double Alpha Market Fund generally will purchase only those
options for which there appears to be an active secondary market, there is no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. In the event no such market exists
for particular options, it might not be possible to effect closing transactions
in such options, with the result that the Fund would have to exercise the
options in order to realize any profit.

RISKS OF EQUITY SWAP CONTRACTS. The Barr Rosenberg Double Alpha Market Fund
may engage in equity swap contracts, through which a counterparty generally
agrees to pay the amount, if any, by which the agreed upon or "notional" amount
specified in the equity swap contract would have increased in value had it been
invested in the basket of stocks comprising the S&P 500 Index, plus the
dividends that would have been received on those stocks. The Fund agrees to pay
to the counterparty a floating rate of interest (typically the London Inter Bank
Offered Rate) on the notional amount of the equity swap contract plus the
amount, if any, by which that notional amount would have decreased in value had
it been invested in such stocks. Therefore, the return to the Fund on any equity
swap contract should be the gain or loss on the notional

18
<PAGE>
amount plus dividends on the stocks comprising the S&P 500 Index (as if the Fund
had invested the notional amount in stocks comprising the S&P 500 Index) less
the interest paid by the Fund on the notional amount. Therefore, the Fund will
generally realize a loss if the value of the S&P 500 Index declines and will
generally realize a gain if the value of the S&P 500 Index rises. The Fund will
enter into equity swap contracts only on a net basis, I.E., where the two
parties' obligations are netted out, with the Fund paying or receiving, as the
case may be, only the net amount of any payments. If there is a default by the
counterparty to an equity swap contract, the Fund will be limited to contractual
remedies pursuant to the agreements related to the transaction. The Fund's use
of equity swap contracts may result in the Fund realizing more income subject to
tax at ordinary income tax rates than it would if it did not engage in equity
swap contracts.

There is no assurance that the equity swap contract counterparties will be
able to meet their obligations or that, in the event of default, the Barr
Rosenberg Double Alpha Market Fund will succeed in pursing contractual remedies.
Pursing contractual remedies will also entail additional expense for the Fund.
The Fund thus assumes the risk that it may be delayed in or prevented from
obtaining payments owed to it pursuant to these contracts. The Fund will closely
monitor the credit of equity swap contract counterparties in order to minimize
this risk. The Fund will not use equity swap contracts for leverage.

The Barr Rosenberg Double Alpha Market Fund will not enter into any equity
swap contract unless, at the time of entering into such transaction, the
unsecured senior debt of the counterparty is rated at least A by Moody's or S&P.
In addition, the staff of the Securities and Exchange Commission considers
equity swap contracts to be illiquid securities. Consequently, while the staff
maintains this position, the Fund will not invest in equity swap contracts if,
as a result of the investment, the total value of such investments together with
that of all other illiquid securities which the Fund owns would exceed 15% of
the Fund's net assets.

The net amount of the excess, if any, of the Fund's obligations over its
entitlement with respect to each equity swap contract will be accrued on a daily
basis, and an amount of cash, U.S. government securities or other liquid
securities having an aggregate market value at least equal to the accrued excess
will be maintained in a segregated account by the Fund's Custodian. The Fund
does not believe that the Fund's obligations under equity swap contracts are
senior securities, so long as such a segregated account is maintained, and
accordingly, the Fund will not treat them as being subject to its borrowing
restrictions.

RISKS OF ILLIQUID SECURITIES. Each Fund may purchase "illiquid securities,"
so long as no more than 15% of the Fund's net assets would be invested in such
securities after giving effect to a purchase. These are securities which cannot
be sold or disposed of in the ordinary course of business within seven days at
approximately the price at which a Fund has valued them. Because there is no
consistent market demand for illiquid securities, investment in illiquid
securities carries the risk that a Fund may be forced to sell them at a discount
from the last offer price.

SMALL COMPANY AND SMALLER MID-SIZE COMPANY RISK. The Barr Rosenberg Market
Neutral Fund is subject to additional risk because it invests primarily in the
stocks of companies with small market capitalizations and smaller mid-sized
market capitalizations, which tend to be less liquid and more volatile than
stocks of companies with relatively large market capitalizations.

PORTFOLIO TURNOVER. The consideration of portfolio turnover will not
constrain the Adviser's investment decisions. Each of the Funds is actively
managed, and, in some cases, each Fund's portfolio turnover may

19
<PAGE>
exceed 100%. Higher portfolio turnover rates are likely to result in
comparatively greater brokerage commissions or transaction costs. Such costs
will reduce the relevant Fund's return. A higher portfolio turnover rate also
may result in the realization of substantial net short-term gains, which are
taxable as ordinary income to shareholders when distributed.

RISK OF YEAR 2000 PROBLEMS. Many services provided to the Funds depend on
the smooth functioning of computer systems. Many systems in use today cannot
distinguish between the year 1900 and the year 2000. Any failure of the service
systems to process information properly could have an adverse impact on the
Funds' operations and the services they provide to shareholders. The Adviser,
Transfer Agent, Custodian, Administrator and certain other service providers to
the Funds have reported that each is working toward minimizing the risks
associated with the so-called "year 2000 problem." However, the Funds and the
Adviser cannot be certain that they or their various service providers will be
able to correct the year 2000 problem in all respects or that such problems will
not adversely affect the Funds' operations and the services provided to
shareholders. The Year 2000 problem may be particularly acute with respect to
foreign markets and the securities of foreign issuers in which the Funds invest
due to a potential lack of Year 2000 compliance efforts in foreign markets and
by foreign issuers.

PRINCIPAL RISKS BY FUND

<TABLE>
<CAPTION>
BARR ROSENBERG BARR ROSENBERG
BARR ROSENBERG DOUBLE ALPHA MARKET SELECT SECTORS
MARKET NEUTRAL FUND FUND MARKET NEUTRAL FUND
------------------- ------------------- -------------------
<S> <C> <C> <C>
Investment Risks................................................... X X X
Management Risk.................................................... X X X
Risks of Short Sales............................................... X * X
Special Risks of Foreign Securities................................ X * X
Risks of Repurchase Agreements..................................... X * X
Risks of S&P 500 Instruments....................................... X
Risks of Equity Swap Contracts..................................... X
Risks of Illiquid Securities....................................... X * X
Small Company and Smaller Mid-Sized Company Risk................... X *
Portfolio Turnover................................................. X X X
Year 2000 Risks.................................................... X X X
</TABLE>

- ------------------------

* The Barr Rosenberg Double Alpha Market Fund incurs these risks indirectly
through its investments in the Barr Rosenberg Market Neutral Fund.

MANAGEMENT DISCUSSION OF FUND PERFORMANCE

BARR ROSENBERG MARKET NEUTRAL FUND

The period from August 1998 to March 1999 was a particularly difficult time
for the Fund. During this time, the market favored high trading activity growth
stocks (stocks with the highest trailing 12-month share turnover and the highest
price-to-earnings ratio). Because the Adviser's stock selection models seeks to

20
<PAGE>
reconcile relative stock price with fundamental value, the Fund did not
participate in the rally associated with this small group of high trading
activity growth stocks.

BARR ROSENBERG MARKET NEUTRAL FUND
(BASED ON THE PERFORMANCE OF INSTITUTIONAL SHARES ONLY)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
BARR ROSENBERG MARKET 3-MONTH U.S.
NEUTRAL FUND TREASURY BILLS
<S> <C> <C>
1997 $1,000,000 $1,000,000
1998 $997,000 $1,014,083
1999 $924,143 $1,063,832
PAST PERFORMANCE IS NOT
PREDICTIVE OF FUTURE PERFORMANCES.
</TABLE>

AVERAGE ANNUAL TOTAL RETURN (FOR PERIODS ENDED MARCH 31, 1999)

<TABLE>
<CAPTION>
SINCE INCEPTION
OF SINCE INCEPTION
ONE YEAR INSTITUTIONAL OF SELECT
ENDED SHARES SHARES
MARCH 31, 1999 (12/16/97) (12/18/97)
--------------- --------------- ---------------
<S> <C> <C> <C>
Institutional Shares.............................................. -7.31% -5.94% --
Investor Shares................................................... -7.66% -- -6.32%
3-Month U.S. T-Bills.............................................. 4.80% 5.07% 5.04%
</TABLE>

THE NUMBERS REPORTED IN BOTH THE GRAPH AND THE TABLE REPRESENT PAST
PERFORMANCE AND ARE NOT PREDICTIVE OF FUTURE PERFORMANCES. THE PERFORMANCE OF
INVESTOR SHARES WILL BE LOWER THAN THE PERFORMANCE OF INSTITUTIONAL SHARES
BECAUSE OF THE HIGHER FEES PAID BY SHAREHOLDERS INVESTING IN SUCH CLASS.

21
<PAGE>
BARR ROSENBERG DOUBLE ALPHA MARKET FUND

The S&P 500 Index rose 18.44% for the year ended March 31, 1999, while the
Russell 2500 Index declined 13.26%. The market rally in the latter half of 1998
and the first quarter of 1999 was led by large cap stocks and the growth sector.
The Fund invests in the Barr Rosenberg Market Neutral Fund and S&P 500 Index
financial contracts. Investing in the Barr Rosenberg Market Neutral Fund
contributed a -8.5% to the total return of the Fund for the period April 22,
1998 (inception of the Fund), to March 31, 1999 while the investment in S&P 500
Index financial contracts contributed positively (approximately 9.4%) to
performance over this period. See the separate commentary for the Barr Rosenberg
Market Neutral Fund.

BARR ROSENBERG DOUBLE ALPHA MARKET FUND
(BASED ON THE PERFORMANCE OF INSTITUTIONAL SHARES ONLY)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
BARR ROSENBERG DOUBLE
ALPHA MARKET FUND S&P 500
<S> <C> <C>
1998 $1,000,000 $1,000,000
1999 $1,005,301 $1,157,459
PAST PERFORMANCE IS NOT
PREDICTIVE OF FUTURE PERFORMANCE.
</TABLE>

22
<PAGE>
CUMULATIVE TOTAL RETURN* (FOR PERIODS ENDED MARCH 31, 1999)

<TABLE>
<CAPTION>
SINCE INCEPTION
---------------
<S> <C>
Barr Rosenberg Double Alpha Market Fund
(Institutional Shares) (Inception date 4/22/98)..................................................... 0.53%
Barr Rosenberg Double Alpha Market Fund
(Investor Shares) (Inception date 4/22/98).......................................................... 0.18%
S&P 500.............................................................................................. 15.75%
</TABLE>

- ------------------------

* The returns are not annualized because the Fund has not yet been operational
for a full fiscal year.

PERFORMANCE INFORMATION FOR THE ADVISER'S OTHER MARKET NEUTRAL ACCOUNTS

The Adviser also serves as the adviser of other accounts (collectively, the
"Private Accounts") that have investment objectives, policies and strategies
that are substantially similar to those of the Barr Rosenberg Market Neutral
Fund. The Private Accounts, together with the Barr Rosenberg Market Neutral
Fund, are collectively referred to herein as the "Market Neutral Accounts". THE
INFORMATION BELOW DOES NOT REPRESENT THE HISTORICAL PERFORMANCE OF ANY OF THE
FUNDS AND SHOULD NOT BE CONSIDERED A PREDICTION OF THEIR FUTURE PERFORMANCE. The
performance of the Funds may be higher or lower than the performance of the
Private Accounts. The performance information shown below is based on a
composite of all of the Adviser's and its predecessor's accounts with
substantially similar investment objectives, policies and strategies as the Barr
Rosenberg Market Neutral Fund and has been adjusted to give effect to the net
expenses (including the Barr Rosenberg Market Neutral Fund's dividend expenses
on short sales) of the Barr Rosenberg Market Neutral Fund. The composite
performance information also includes the performance of the Barr Rosenberg
Market Neutral Fund beginning January 1, 1998. The Private Accounts were not
registered under the 1940 Act and therefore were not subject to certain
investment restrictions imposed by the 1940 Act. If the Private Accounts had
been registered under the 1940 Act, their performance might have been adversely
affected. In addition, the Private Accounts were not subject to Subchapter M of
the Internal Revenue Code. If the Private Accounts had been subject to
Subchapter M, their performance might have been adversely affected.

There have been three modifications to the Adviser's market neutral strategy
since its inception in 1989. First, the Adviser's predecessor incorporated its
Earnings Change Model and Investor Sentiment Model into its market neutral
strategy in October 1992 and April 1993, respectively. The second change to the
Adviser's market neutral strategy occurred in July 1995 when the Adviser's
predecessor focused its strategy on small capitalization and smaller
mid-capitalization companies. Prior to such date, the Adviser's predecessor had
applied its market neutral strategy to companies across the capitalization
spectrum (I.E., large, medium and small capitalization companies). Since the
inception of the market neutral strategy, however, the Adviser and its
predecessor have maintained long and short positions of approximately the same
dollar amounts within a given capitalization sector. The third enhancement to
the Adviser's market neutral strategy occurred in October 1998 when the
Adviser's predecessor combined the Earnings Change Model and the Investor

23
<PAGE>
Sentiment Model into the Near-Term Prospects Model. Despite the three
enhancements to the Adviser's market neutral strategy since 1989, the Barr
Rosenberg Market Neutral Fund has investment objectives, policies and strategies
substantially similar to those of the Private Accounts.

YEARLY PERFORMANCE (%) -- MARKET NEUTRAL ACCOUNTS
(ADJUSTED FOR FEES AND EXPENSES OF INSTITUTIONAL SHARES)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN (%)
CALENDAR YEAR END
<S> <C>
1990 -1.15
1991 -0.24
1992 1.92
1993 10.59
1994 5.58
1995 9.11
1996 27.01
1997 12.86
1998 1.92
</TABLE>

During all periods shown in the bar graph, the Market Neutral Accounts' highest
quarterly return was 8.82% for the quarter ended December 31, 1996, and its
lowest quarterly return was -3.08% for the quarter ended June 30, 1990.

PERFORMANCE TABLE

This table shows how the Market Neutral Accounts' performance compares with
the returns of 3-Month U.S. Treasury Bills.

AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 1998)

<TABLE>
<CAPTION>
SINCE
LAST 5 INCEPTION
LAST 1 YEAR YEARS (3/1/89)
----------- --------- -----------
<S> <C> <C> <C>
Market Neutral Accounts (adjusted for the fees and expenses of Institutional Shares)..... 1.92% 10.97% 6.85%

Market Neutral Accounts (adjusted for the fees and expenses of Investor Shares).......... 1.51% 10.53% 6.42%

3-Month U.S. Treasury Bills.............................................................. 4.96% 5.02% 5.31%
</TABLE>

For the period January 1, 1999 through June 30, 1999, the aggregate
(non-annualized total returns of the Market Neutral Accounts were -12.12% (based
on fees and expenses of Institutional Shares) and -12.29% (based on fees and
expenses of Investor Shares).

24
<PAGE>
MARKET NEUTRAL ACCOUNTS
(ADJUSTED FOR FEES AND EXPENSES OF INSTITUTIONAL SHARES)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
MARKET 3-MONTH U.S.
NEUTRAL ACCOUNTS TREASURY BILLS
<S> <C> <C>
3/31/89 $1,000,000 $1,000,000
3/31/90 $1,004,919 $1,084,182
3/31/91 $1,008,403 $1,164,291
3/31/92 $997,807 $1,223,003
3/31/93 $1,079,227 $1,263,726
3/31/94 $1,128,854 $1,302,293
3/31/95 $1,184,538 $1,365,377
3/31/96 $1,347,315 $1,439,813
3/31/97 $1,699,334 $1,514,079
3/31/98 $1,836,487 $1,593,287
3/31/99 $1,740,728 $1,669,805
</TABLE>

AVERAGE ANNUAL RETURNS (FOR PERIODS ENDED MARCH 31, 1999)

<TABLE>
<CAPTION>
1 YEAR ENDED 5 YEARS ENDED 10 YEARS ENDED
MARCH 31, 1999 MARCH 31, 1999 MARCH 31, 1999
--------------- --------------- -----------------
<S> <C> <C> <C>
Market Neutral Accounts (adjusted for the fees and expenses of
Institutional Shares)............................................ -5.16% 9.05% 5.70%

Market Neutral Accounts (adjusted for the fees and expenses of
Investor Shares)................................................. -5.54% 8.61% 5.28%

3-Month U.S. Treasury Bills........................................ 4.78% 5.09% 5.26%
</TABLE>

THE ADVISER'S GENERAL INVESTMENT PHILOSOPHY

The Adviser attempts to add value relative to a benchmark through a
quantitative stock selection process, and seeks to diversify investment risk
across the holdings in each Fund.

INVESTMENT PHILOSOPHY

The Adviser'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 Adviser believes that

25
<PAGE>
market prices will converge towards fundamental value over time, and that
therefore, if the Adviser can accurately determine fundamental value, and can
apply a disciplined investment process to select those stocks that are currently
undervalued (in the case of purchases) or overvalued (in the case of short
sales), the Adviser will outperform a Fund's benchmark over time.

The premise of the Adviser'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 Adviser identifies and purchases those stocks that
are undervalued (I.E., they are currently cheaper than similar stocks with the
same characteristics) and engages in short sales with respect to those stocks
that are overvalued (I.E., they are currently more expensive than similar stocks
with the same characteristics). The Adviser believes that the market will
recognize the "better value" and that the mispricing will be corrected as the
stocks in the Fund's portfolios are purchased or sold by other investors.

In determining whether or not a stock is attractive, the Adviser considers
the company's current estimated fundamental value as determined by the Adviser's
proprietary Appraisal Model, the company's future earnings, and investor
sentiment toward the stock. The Adviser identifies and causes a Fund to purchase
an undervalued stock and to hold it in the Fund's portfolio until the market
recognizes and corrects for the misvaluation. Conversely, the Adviser identifies
and causes a Fund to sell short an overvalued stock.

DECISION PROCESS

The Adviser's decision process is a continuum. Its research function
develops models that analyze the more than 12,000 securities in the Adviser's
global universe, both fundamentally and technically. The portfolio management
function optimizes each portfolio's composition, executes trades, and monitors
performance and trading costs.

The essence of the Adviser's approach is 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 Adviser assimilates, checks
and structures the input data on which its models rely. The Adviser 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 Adviser's investment process,
and the heart of the valuation process lies in the Adviser's proprietary
Appraisal Model. An important feature of the Appraisal Model is the
classification of companies into one or more of 170 groups of "similar"
businesses. 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 market. In most cases, the comparison is extended to
include companies with similar business operations in different markets. The
Adviser 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 Adviser then integrates the segment appraisals into balance sheet,
income statement, and sales valuation models for the total company, and
simultaneously adjusts the

26
<PAGE>
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 companies followed. The Adviser
considers the difference between the values of stocks as determined by its
Appraisal model and the market prices of such stocks in deciding whether to
purchase or sell stocks.

The Adviser's proprietary Near-Term Prospects Model attempts to predict the
earnings growth of companies over a one-year period. This Model examines, among
other things, measures of company profitability as well as measures of investor
sentiment towards a company, such as broker recommendations, analyst earnings
estimates and prior market performance. The Adviser combines the results of this
Model with the results of the Appraisal Model to measure the attractiveness of a
stock for purchase or sale.

OPTIMIZATION

The Adviser's portfolio optimization system attempts to construct a Fund
portfolio that will outperform the relevant benchmark. The optimizer
simultaneously considers both the results of the Adviser's stock selection
models and risk in determining the benefit to a portfolio of a particular
transaction. No transaction will be executed unless the opportunity offered by a
purchase or sale candidate sufficiently exceeds the potential of an existing
holding to justify the transaction costs.

TRADING

The Adviser's trading system aggregates the recommended transactions for a
Fund 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 Adviser has developed with Instinet Matching
System (IMS) and Portfolio System for Institutional Trading (POSIT) facilitate
large volume trading with little or no price disturbance and low commission
rates.

Accommodative trading (also referred to herein as the Adviser's "match
system") allows institutional buyers and sellers of stock to electronically
present the Adviser with their "interest" lists each morning. Any matches
between the inventory that the brokers have presented and the Adviser's own
recommended trades are signaled to the Adviser's traders. Because the broker is
doing agency business and has a client on the other side of the trade, the
Adviser expects that the other side will be accommodative in the price. The
Adviser's objective in using this match system is to execute most trades on the
Adviser's side of the bid/ask spread so as to minimize market impact.

Package trades further allow the Adviser to trade large lists of orders
simultaneously using state of the art tools such as the Instinet Real-Time
System, Instinet Order Management 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.

27
<PAGE>
The Adviser continuously monitors trading costs to determine the impact of
commissions and price disturbances on a Fund's portfolio.

MANAGEMENT OF THE TRUST

The Trust's trustees oversee the general conduct of the Funds' business.

INVESTMENT ADVISER

As of January 1, 1999, AXA Rosenberg Investment Management LLC (the
"Adviser") succeeded Rosenberg Institutional Equity Management ("RIEM") as the
Trust's investment adviser. The Adviser's address is AXA Rosenberg Investment
Management LLC, Four Orinda Way, Building E, Orinda, CA 94563. The Adviser is
responsible for making investment decisions for the Funds and managing the
Funds' other affairs and business, subject to the supervision of the Board of
Trustees. The Adviser provides investment advisory services to a number of
institutional investors as well as the other portfolios of the Trust. As with
the Adviser's predecessor, RIEM, in the past, each of the Funds will pay the
Adviser a management fee for these services on a monthly basis. The Adviser will
reduce its management fee and bear certain expenses until further notice (but in
any event at least through March 31, 2000) to limit the Fund's total annual
operating expenses. The Barr Rosenberg Market Neutral Fund, the Barr Rosenberg
Double Alpha Market Fund and the Barr Rosenberg Select Sectors Market Neutral
Fund paid the Adviser $4,808,025, $0 and $0, respectively, in fees during the
fiscal year ended March 31, 1999. Management fees reprinted 1.74%, 0% and 0%,
respectively, of the Barr Rosenberg Market Neutral Fund's, the Barr Rosenberg
Double Alpha Market Fund's, and the Barr Rosenberg Select Sectors Market Neutral
Fund's average daily net assets for that period.

PORTFOLIO MANAGERS

BARR ROSENBERG MARKET NEUTRAL FUND AND BARR ROSENBERG DOUBLE ALPHA MARKET
FUND. Management of the portfolio of each Fund is overseen by the Adviser's
executive officers who are responsible for the design and maintenance of the
Adviser's proprietary investment 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. Dr. Rosenberg,
Dr. Reid and F. William Jump, Jr., C.F.A., the portfolio manager, are
responsible for the day-to-day management of the portfolios of the Barr
Rosenberg Market Neutral Fund and Barr Rosenberg Double Alpha Market Fund. Dr.
Rosenberg and Dr. Reid both have been employed by the Adviser or its predecessor
since 1985. Mr. Jump has had numerous responsibilities including trading,
applications programming, new product development and portfolio engineering
since he joined the Adviser's predecessor in 1990. He received a B.A. from
Swarthmore College in 1977 and an M.B.A. from The Wharton School, University of
Pennsylvania in 1983.

BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND. Management of the Fund's
portfolio is overseen by the Adviser's executive officers who are responsible
for the design and maintenance of the Adviser's proprietary investment system,
and by a portfolio manager who is responsible for research and monitoring the
Fund's performance against its benchmark and for monitoring cash balances. Dr.
Rosenberg, Dr. Reid and James Kan, C.F.A., the portfolio manager, are
responsible for the day-to-day management of the Barr Rosenberg Select Sectors
Market Neutral Fund's portfolio. Dr. Rosenberg and Dr. Reid both have been
employed by the Adviser or its predecessor since 1985. Mr. Kan has had numerous
responsibilities including

28
<PAGE>
trading, applications programming and portfolio engineering since he joined the
Adviser's predecessor in 1990. He received a B.S. from the University of British
Colombia in 1984, an M.S. from the University of Southern California in 1987 and
an M.B.A. from the University of Chicago in 1990.

EXECUTIVE OFFICERS

The biography of each of the executive officers of the Adviser is set forth
below. Kenneth Reid is also a Trustee of the Trust.

BARR ROSENBERG. Dr. Rosenberg is the Director of Research of the Adviser,
Chairman of AXA Rosenberg Group LLC, the parent of the Adviser, and Managing
Director of Barr Rosenberg Research Center LLC. As such, he has ultimate
responsibility for the Adviser'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
Adviser's proprietary securities valuation models.

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
known as BARRA) where he was a managing partner, and later chief scientist until
his departure in 1986. Dr. Rosenberg, the founder of the Berkeley Program in
Finance, has experience in the modeling of complex processes with substantial
elements of risk. From 1985 to 1998, he was the founder and Managing General
Partner of Rosenberg Institutional Equity Management, the predecessor company to
the Adviser.

KENNETH REID. Dr. Reid is the Chief Executive Officer of the Adviser. His
work is focused on the design and estimation of the Adviser's valuation models
and he has primary responsibility for analyzing the empirical evidence that
validates and supports the day-to-day recommendations of the Adviser'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 Adviser'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. From 1986 to 1998, Dr. Reid was a general partner of Rosenberg
Institutional Equity Management, the predecessor company of the Adviser.

WILLIAM RICKS. Dr. Ricks is the Chief Investment Officer of the Adviser.
His primary responsibilities are the various aspects of the investment process:
trading, operations, portfolio engineering, and portfolio construction. He is
responsible for the implementation of the investment strategies that are
designed by the Research Center.

29
<PAGE>
Dr. Ricks earned a B.S. from the University of New Orleans, Louisiana and a
Ph.D. from the University of California, Berkeley in 1980. He worked as a senior
accountant for Ernst & Ernst in New Orleans from 1974 to 1976. He was a
financial and managerial accounting instructor at the University of California,
Berkeley from 1978 to 1979, after which he was an associate professor of finance
and accounting at Duke University until 1989. From 1989 to 1998, he was a
research associate, a portfolio engineer and the Director of Accounting Research
at Rosenberg Institutional Equity Management, the predecessor company of the
Adviser.

INDEPENDENT TRUSTEES

William F. Sharpe, Nils H. Hakansson and Dwight M. Jaffee are the Trustees
of the Trust who are not "interested persons" (as defined in the 1940 Act) of
the Trust or the Adviser.

William F. Sharpe is the STANCO 25 Professor Emeritus of Finance at Stanford
University's Graduate School of Business. He joined the Stanford faculty in
1970, having previously taught at the University of Washington and the
University of California at Irvine. He was one of the originators of the Capital
Asset Pricing Model, developed the Sharpe ratio for investment performance
analysis, the binomial method for the valuation of options, the gradient
algorithm for asset allocation optimization, and returns-based style analysis
for evaluating the style and performance of investment funds.

Dr. Sharpe has published articles in a number of professional journals,
including Management Science, The Journal of Business, The Journal of Finance,
The Journal of Financial Economics, The Journal of Financial and Quantitative
Analysis, The Journal of Portfolio Management, and The Financial Analysts'
Journal. 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 Jeffrey Bailey,
Prentice-Hall, 1993), and Investments (with Gordon J. Alexander and Jeffrey
Bailey, Prentice-Hall, 1998)

Dr. Sharpe is past President of the American Finance Association. In 1990 he
received the Nobel Prize in Economic Sciences. He received his Ph.D., M.A. and
B.A. in Economics from the University of California at Los Angeles. He is also
the recipient of a Doctor of Humane Letters, Honoris Causa from DePaul
University as well as the UCLA Medal, UCLA's highest honor. Dr. Sharpe also
serves on the board of the Smith-Breeden Mutual Funds. He is also Chairman of
the Board of Financial Engines, a firm that provides electronic investment
advice to individuals.

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 a number

30
<PAGE>
of 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 Services 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.

Professor Jaffee is the Willis H. Booth Professor of Banking and Finance at
the Haas School of Business, University of California, Berkeley. He was
previously a Professor of Economics at Princeton University for many years,
where he served as the Vice Chairman of the faculty. At Berkeley, he serves on a
continuing basis as the Co-chairman of the Fisher Center for Real Estate and
Urban Economics and as the Director of the UC Berkeley-St. Petersburg University
(Russia) School of Management Program. He has been a Visiting Professor at many
Universities around the world, most recently at the University of Aix/Marseille
in France and at the European University in Florence Italy. Professor Jaffee has
authored five books and numerous articles in academic and professional journals.
His research has focused on three key financial markets: business lending, real
estate finance, and catastrophe insurance. His current research is focused on
methods for securitizing real estate finance and catastrophe insurance risks,
and on the impact of international trade on the U.S. computer industry. He has
served on the editorial boards of numerous academic journals, and has been a
consultant to a number of U.S. government agencies and to the World Bank. In the
past, Professor Jaffee has been a member of the Board of Directors of various
financial institutions, including the Federal Home Loan Bank of New York. He is
currently a Visiting Scholar at the Federal Reserve Bank of San Francisco.

DISTRIBUTOR

Investor 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 The BISYS Group, Inc. The Distributor's principal
offices are located at 90 Park Avenue, New York, New York 10016. Institutional
Shares are sold directly by the Trust.

Solely for the purpose of compensating the Distributor for services and
expenses primarily intended to result in the sale of Investor Shares and/or in
connection with the provision of direct client service, personal services,
maintenance of shareholder accounts and reporting services to holders of
Investor Shares of the Trust, such shares are subject to an annual distribution
and shareholder service fee (the "Distribution and Shareholder Service Fee") of
up to 0.25% of the average daily net assets attributable to such shares in
accordance with a Distribution and Shareholder Service Plan (the "Distribution
and Shareholder Service Plan") adopted by the Trust pursuant to Rule 12b-1 under
the 1940 Act. Currently, each Fund pays the Distributor an annual Distribution
and Shareholder Service Fee of 0.25% of the average daily net assets
attributable to Investor Shares. Expenses and services for which the Distributor
may be reimbursed include, without limitation, compensation to, and expenses
(including overhead and telephone expenses) of, financial consultants or other
employees of the Distributor or of participating or introducing brokers who
engage in distribution of Investor Shares, printing of prospectuses and reports
for other than existing Investor shareholders, advertising, preparing, printing
and distributing sales literature and forwarding communications

31
<PAGE>
from the Trust to Investor shareholders. The Distribution and Shareholder
Service 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 and
Shareholder Service Plan, the fees are payable to compensate the Distributor for
services rendered even if the amount paid exceeds the Distributor's expenses.
Because these fees are paid out of the Fund's assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than other paying types of sales charges.

MULTIPLE CLASSES

As indicated previously, the Funds offer two classes of shares to investors,
with eligibility depending on the amount invested in a particular Fund. The two
classes of shares are Institutional Shares and Investor Shares. The following
table sets forth basic investment and fee information for each class.

<TABLE>
<CAPTION>
ANNUAL DISTRIBUTION
MINIMUM FUND SUBSEQUENT AND SHAREHOLDER
NAME OF CLASS INVESTMENT* INVESTMENTS* SERVICE FEE
- ------------------------------------------------------------------ -------------- ------------ -------------------
<S> <C> <C> <C>
Institutional Shares.............................................. $ 1 million $ 10,000 None
Investor Shares................................................... $ 2,500 $ 500 0.25%
</TABLE>

- ------------------------

* Certain exceptions apply. See "-- Institutional Shares" and "-- Investor
Shares" below.

The offering price of Fund shares is based on the net asset value per share
next determined after an order is received. See "Purchasing Shares," "How the
Trust Prices Shares of the Funds -- Determination of Net Asset Value" and
"Redemption of Shares."

INSTITUTIONAL SHARES

Institutional Shares may be purchased by institutions such as endowments and
foundations, plan sponsors of 401(a), 401(k), 457 and 403(b) plans and
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 Adviser may waive
this minimum investment requirement and the Adviser intends to do so for
employees of the Adviser, for the spouse, parents, children, siblings,
grandparents or grandchildren of such employees, for employees of the
Administrator and for Trustees of the Trust who are not interested persons of
the Trust or Adviser and their spouses. Institutional Shares are sold without
any initial or deferred sales charges and are not subject to any ongoing
Distribution and Shareholder Service Fee.

INVESTOR SHARES

Investor Shares may be purchased by institutions, certain individual
retirement accounts and individuals. In order to be eligible to purchase
Investor Shares, an investor must make an initial investment of at least $2,500
in the particular Fund. In its sole discretion, the Adviser may waive this
minimum investment requirement. Investor Shares are subject to an annual
Distribution and Shareholder Service Fee equal to 0.25% of the average daily net
assets attributable to Investor Shares, and the Trustees have authorized each
Fund to pay up to 0.15% of its average daily net assets attributable to Investor
Shares for subtransfer and

32
<PAGE>
subaccounting services in connection with such shares. As described above, the
Distribution and Shareholder Service Plan permits payments of up to 0.25% of the
Funds' average daily net assets attributable to Investor Shares. See "Management
of the Trust -- Distributor."

GENERAL

The Distribution and Shareholder Service Fee charged with respect to
Investor Shares is intended to compensate the Distributor for services and
expenses primarily intended to result in the sale of Investor Shares and/or in
connection with the provision of shareholder services to holders of Investor
Shares of the Trust.

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
(collectively, "Shareholder Organizations"). Investors purchasing and redeeming
shares of the Funds through a Shareholder Organization may be charged a
transaction-based fee or other fee for the services provided by the Shareholder
Organization. Each such Shareholder Organization 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 should read this Prospectus in
light of the terms governing accounts with their particular organization.

PURCHASING 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 "How the Trust Prices
Shares of the Funds -- Determination of Net Asset Value." Investors may be
charged an additional fee by their broker or agent if they effect transactions
through such persons.

INITIAL CASH INVESTMENTS BY WIRE

Subject to acceptance by the Trust, shares of the Funds may be purchased by
wiring federal funds. Please first contact the Trust at 1-800-447-3332 for
complete wiring instructions. 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 are all open for business. 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.

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 43218-2495.

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 a Fund next determined after receipt, even though the
check may not yet have been converted into federal funds.

33
<PAGE>
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 and
$500 for Investor Shares. In its sole discretion, the Adviser may waive the
minimum additional investment requirements.

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 Adviser that the
stocks to be exchanged are acceptable. Securities accepted by the Adviser in
exchange for Fund shares will be valued as set forth under "How the Trust Prices
Shares of the Funds -- Determination of Net Asset Value" (generally the last
quoted sale price) as of the time of the next determination of net asset value
after such acceptance. All dividends, subscription or other rights which are
reflected in the market price of accepted securities at the time of valuation
become the property of the Fund and must be delivered to the Fund upon receipt
by the investor from the issuer. Generally, the exchange of common stocks for
Institutional Shares will be a taxable event for federal income tax purposes,
which will trigger gain or loss to an investor subject to federal income
taxation, measured by the difference between the value of the Institutional
Shares received and the investor's basis in the securities tendered.

The Adviser will not approve the acceptance of securities in exchange for
Fund shares unless (i) the Adviser, in its sole discretion, believes the
securities are appropriate investments for the Fund; (ii) 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 (iii) the securities may be acquired under the Fund's
investment restrictions.

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 Investor 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 cash purchase order of Fund 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 a purchase
in-kind of Institutional Shares, the investor's securities must be placed on
deposit at DTC prior to 10:00 a.m., New York time. If the consideration is

34
<PAGE>
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 a Fund or to reject purchase orders when, in the judgment
of the Adviser, such suspension or rejection would be in the best interests of
the Trust or a Fund.

Purchases of each Fund's shares may be made in full or in fractional shares
of such Fund calculated to three decimal places. In the interest of economy and
convenience, certificates for shares will not be issued.

IRA ACCOUNTS

Investor Shares of the Funds may be used as a funding medium for IRAs. The
minimum initial investment for an IRA 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, call the Trust at 1-800-447-3332.

REDEMPTION OF SHARES

Shares of the Funds 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 "How the Trust Prices Shares
of the Funds -- Determination of Net Asset Value." Requests should be addressed
to Barr Rosenberg Series Trust, P.O. Box 182495, Columbus, Ohio 43218-2495.

Requests in "good order" must include the following documentation:

(a) a letter of instruction 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; 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 the Transfer Agent from
fraud, signature guarantees may be 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

35
<PAGE>
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 instructions 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 business 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 Trust 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

The Trust will not make payment on redemptions of shares purchased by check
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 Adviser 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 to an Institutional Shareholder wholly or partly in cash, such Fund may
pay the redemption price of Institutional Shares in whole or in part by a
distribution in kind of readily marketable securities held by such Fund in lieu
of cash. Securities used to redeem Fund shares in kind will be valued in
accordance with the Funds' procedures for valuation described under "How the
Trust

36
<PAGE>
Prices Shares of the Funds -- Determination of Net Asset Value." Securities
distributed by a Fund in kind will be selected by the Adviser in light of each
Fund's objective and will not generally represent a PRO RATA distribution of
each security held in a 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.

EXCHANGING SHARES

The Funds offer two convenient ways to exchange shares in one Fund for
shares of another Fund. 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.

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 written confirmation of telephone transactions,
designed to give reasonable assurance that instructions communicated by

37
<PAGE>
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 business days following a telephonic
address change.

HOW THE TRUST PRICES SHARES OF THE FUNDS

The price of each Fund's shares is based on its net asset value as next
determined after receipt of a purchase order.

For purposes of calculating the purchase price of Fund shares, if it does
not reject a purchase order, the Trust considers an order received on the day
that it receives a check or money order on or before 4:00 p.m., New York Time.
If the Trust receives the payment after the deadline, it will base the purchase
price of Fund shares on the next determination of net asset value of Fund
shares.

The Trust reserves the right, in its sole discretion, to suspend the
offering of shares of a Fund or Funds or to reject purchase orders when the
Adviser believes that suspension or rejection would be in the best interests of
the Trust.

Purchases of each Fund's shares may be made in full or in fractional shares
of the relevant Fund calculated to three decimal places. In the interest of
economy and convenience, the Trust will not issue certificates for shares.

DETERMINATION OF NET ASSET VALUE

The net asset value of each class of shares of the Funds 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. 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
distribution and shareholder service 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.

38
<PAGE>
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 short-term capital gains). Each Fund also intends to
distribute substantially all of its net 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. Each
Fund's policy is to distribute net short-term capital gains and net 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 relevant 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 (i) are returned
and marked as "undeliverable" or (ii) 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, as dividends, substantially all of the sum of its taxable
net investment income, its net tax-exempt income (if any), and, the excess, if
any, of net short-term capital gains over net long-term capital losses for such
year 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. Such dividends will be taxable to shareholders
subject to income tax as ordinary income. Distributions of long-term capital
gains (generally taxed at 20%) will be taxable to shareholders as such,
regardless of how long a shareholder has held the shares. Distributions will be
taxed as described above whether received in cash or in shares through the
reinvestment of distributions. A distribution paid to shareholders by a Fund in
January of a year is generally deemed to have been received by shareholders on
December 31 of the preceding year, if the distribution was declared and payable
to shareholders of record on a date in October, November or December of that
preceding year. Each Fund will provide federal tax information annually,
including information about dividends and distributions paid during the
preceding year.

To the extent such investments are permissible for a Fund, the Fund's short
sales and transactions in options, futures contracts, hedging transactions,
forward contracts, equity swap contracts and straddles will be

39
<PAGE>
subject to special tax rules (including mark-to-market, constructive sale,
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. A Fund's use of
such transactions may result in the Fund realizing more short-term capital gains
and ordinary income subject to tax at ordinary income tax rates than it would if
it did not engage in such transactions.

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.

OTHER INFORMATION

Each Fund's investment performance may from time to time be included in
advertisements about such Fund. Total return for a Fund is measured by comparing
the value of an investment in such Fund at the beginning of the relevant period
to the redemption value of the investment in such Fund at the end of such period
(assuming immediate reinvestment of any dividends or capital gains
distributions). All data are based on a Fund's past investment results and do
not predict future performance. Investment performance, which will vary, is
based on many factors, including market conditions, the composition of a Fund's
portfolio and a Fund's operating expenses. Investment performance also often
reflects the risks associated with a Fund's investment objective and policies.
These factors should be considered when comparing a Fund's investment results
with those of other mutual funds and other investment vehicles. Quotations of
investment performance for any period when an expense limitation was in effect
will be greater than if the limitation had not been in effect.

40
<PAGE>
FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand each
Fund's financial performance since its inception. Certain information reflects
financial results for a single Fund share. The total returns in the tables
represent the rate that an investor would have earned (or lost) on an investment
in the particular Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the Trust's financial statements, is included in the
Funds' Statement of Additional Information, or SAI.

BARR ROSENBERG MARKET NEUTRAL FUND

<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
------------------------------------ ------------------------------------
FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD
ENDED ENDED ENDED ENDED
MARCH 31, 1999 MARCH 31, 1998(a) MARCH 31, 1999 MARCH 31, 1998(b)
-------------- ----------------- -------------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 9.97 $ 10.00 $ 9.96 $ 10.00
-------------- -------- ------- -------
Income from investment operations:
Net investment income/(loss).......... 0.29** 0.10** 0.25** 0.08**
Net realized and unrealized
gain/(loss) on investments.......... (1.00) (0.13) (1.00) (0.12)
-------------- -------- ------- -------
Total from investment operations.... (0.71) (0.03) (0.75) (0.04)
-------------- -------- ------- -------
Distributions to shareholders from:
Net investment income................. (0.27) -- (0.23) --
Net realized gain on investments...... -- -- -- --
-------------- -------- ------- -------
Total distributions to
shareholders...................... (0.27) -- (0.23) --
-------------- -------- ------- -------
Net asset value, end of period.......... $ 8.99 $ 9.97 $ 8.98 $ 9.96
-------------- -------- ------- -------
-------------- -------- ------- -------
Total return............................ (7.31)% (0.30)% (7.66)% (0.40)%
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Net assets, end of period (000)....... $ 162,404 $ 168,080 $ 37,387 $ 35,223
Net investment income/(loss) before
waivers/reimbursements.............. 2.75% 2.72%* 2.31% 2.28%*
Net investment income/(loss) net of
waivers/reimbursements.............. 2.97% 3.31%* 2.53% 2.82%*
Expenses before waivers/
reimbursements and dividend
expense............................. 3.07% 3.33%* 3.52% 3.87%*
Expenses (including dividend expense)
net of waivers/reimbursements....... 2.85% 2.75%* 3.31% 3.34%*
Expenses (excluding dividend expense)
net of waivers/reimbursements....... 2.00% 2.00%* 2.45% 2.50%*
Portfolio Turnover Rate............... 205.32% 232.93% 205.32% 232.93%
</TABLE>

- ------------------------

* Annualized.

** Calculated based on the average shares outstanding during the period.

(a) From commencement of operations on December 16, 1997 to March 31, 1998.

(b) From commencement of operations on December 18, 1997 to March 31, 1998.

41
<PAGE>
BARR ROSENBERG DOUBLE ALPHA MARKET FUND

<TABLE>
<CAPTION>
INSTITUTIONAL
SHARES INVESTOR SHARES
----------------- -----------------
FOR THE PERIOD FOR THE PERIOD
ENDED ENDED
MARCH 31, 1999(a) MARCH 31, 1999(a)
----------------- -----------------
<S> <C> <C>
Net asset value, beginning of period........................................... $ 10.00 $ 10.00
------- -------
Income from investment operations:
Net investment income/(loss)................................................. 0.26 0.21
Net realized and unrealized gain/(loss) on investments....................... (0.21) (0.20)
------- -------
Total from investment operations........................................... 0.05 0.01
------- -------
Distributions to shareholders from:
Net investment income........................................................ (0.24) (0.22)
Net realized gain on investments............................................. -- --
------- -------
Total distributions to shareholders........................................ (0.24) (0.22)
------- -------
Net asset value, end of period................................................. $ 9.81 $ 9.79
------- -------
------- -------
Total return................................................................... 0.53% 0.18%
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (000).............................................. $ 7,032 $ 257
Net investment income/(loss) before waivers/reimbursements................... 1.18%* 1.39%*
Net investment income/(loss) net of waivers/reimbursements................... 2.81%* 3.07%*
Expenses before waivers/reimbursements....................................... 1.98%* 2.14%*
Expenses net of waivers/reimbursements....................................... 0.35%* 0.45%*
Portfolio Turnover Rate...................................................... 154.45% 154.45%
</TABLE>

- ------------------------

* Annualized.

(a) From commencement of operations on April 22, 1998 to March 31, 1999.

42
<PAGE>
BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND

<TABLE>
<CAPTION>
INSTITUTIONAL
SHARES INVESTOR SHARES
----------------- -----------------
FOR THE PERIOD FOR THE PERIOD
ENDED ENDED
MARCH 31, 1999(a) MARCH 31, 1999(b)
----------------- -----------------
<S> <C> <C>
Net asset value, beginning of period........................................... $ 10.00 $ 10.00
------- -------
Income from investment operations:
Net investment income/(loss)................................................. 0.11 0.07
Net realized and unrealized gain/(loss) on investments....................... 0.40 0.40
------- -------
Total from investment operations........................................... 0.51 0.47
------- -------
Distributions to shareholders from:
Net investment income........................................................ (0.05) (0.04)
Net realized gain on investments............................................. -- --
------- -------
Total distributions to shareholders........................................ (0.05) (0.04)
------- -------
Net asset value, end of period................................................. $ 10.46 $ 10.43
------- -------
------- -------
Total return................................................................... 5.14% 4.71%
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (000).............................................. $ 28,814 $ 539
Net investment income/(loss) before waivers/reimbursements................... 2.00%* 1.30%*
Net investment income/(loss) net of waivers/reimbursements................... 3.15%* 2.26%*
Expenses before waivers/reimbursements and dividend expense.................. 3.90%* 3.73%*
Expenses (including dividend expense) net of waivers/ reimbursements......... 2.75%* 2.77%*
Expenses (excluding dividend expense) net of waivers/ reimbursements......... 1.25%* 1.46%*
Portfolio Turnover Rate...................................................... 145.22% 145.22%
</TABLE>

- ------------------------

* Annualized.

(a) From commencement of operations on October 19, 1998 to March 31, 1999.

(b) From commencement of operations on November 11, 1998 to March 31, 1999.

43
<PAGE>

The Funds' statement of additional information ("SAI") dated July 30, 1999
contains additional information about the Funds. It is incorporated by
reference into this prospectus, which means that it is part of this prospectus
for legal purposes. Additional information about the Funds' investments is
available in the Funds' annual and semi-annual reports to shareholders. You
may obtain free copies of the SAI and the Funds' annual and semi-annual
reports, request other information about the Funds, or make shareholder
inquiries by writing to the Trust at the address below or by telephoning
1-800-447-3332.

The SAI has been filed with the Securities and Exchange Commission. You may
review and copy information about the Funds, including the SAI, at the
Commission's Public Reference Room in Washington, D.C. You may call the
Commission at 1-800-SEC-0330 for information about the operation of the
Public Reference Room. The Commission maintains a World Wide Web site at
http://www.sec.gov, which contains reports and other information about the
Funds. You may also obtain copies of these materials, upon payment of a
duplicating fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009.

ADDRESS CORRESPONDENCE TO:
Barr Rosenberg Series Trust
3435 Stelzer Road
Columbus, Ohio 43219
1-800-447-3332

SHAREHOLDER SERVICES
1-800-555-5737 (Institutional Shares)
1-800-447-3332 (Investor Shares)

ADVISER
AXA Rosenberg Investment Management LLC
Four Orinda Way, Building E
Orinda, CA 94563

Additional Information about the Adviser may be found on the World Wide Web at
http://www.axarosenberg.com

ADMINISTRATOR, TRANSFER AND DIVIDEND PAYING AGENT

BISYS Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, OH 43219

CUSTODIAN OF ASSETS
Custodial Trust Company
101 Carnegie Center
Princeton, NJ 08540

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
333 Market Street
San Francisco, CA 94104

LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA 02110 BRG - 0037

Investment Company Act File No. 811-05547

[LOGO]
BARR
ROSENBERG
SERIES
TRUST

- - Barr Rosenberg Market Neutral Fund

- - Barr Rosenberg Double Alpha Market Fund

- - Barr Rosenberg Select Sectors Market
Neutral Fund

Prospectus
July 30, 1999
<PAGE>

BARR ROSENBERG SERIES TRUST

BARR ROSENBERG MARKET NEUTRAL FUND
BARR ROSENBERG DOUBLE ALPHA MARKET FUND
BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND

STATEMENT OF ADDITIONAL INFORMATION

JULY 30, 1999

This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the prospectus of the Barr
Rosenberg Market Neutral Fund, the Barr Rosenberg Double Alpha Market Fund and
the Barr Rosenberg Select Sectors Market Neutral Fund of Barr Rosenberg Series
Trust dated July 30, 1999 (the "Prospectus") 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.

MKT485A

<PAGE>

TABLE OF CONTENTS

PAGE
----

<S> <C>
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . 3

MISCELLANEOUS INVESTMENT PRACTICES . . . . . . . . . . . . . . . . . . . . . 5

INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 5

INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS . . . . . . . . . . . . . . . 7

MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . 9

INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . . . . . . . . 12

PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

TOTAL RETURN CALCULATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 18

DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES . . . . . . . . . . . . . . 20

DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . 24

PURCHASE AND REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . . 24

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>

<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

The investment objective and policies of each of the Barr Rosenberg Market
Neutral Fund, the Barr Rosenberg Double Alpha Market Fund and the Barr Rosenberg
Select Sectors Market Neutral Fund (each, a "Fund" and collectively, the
"Funds") of Barr Rosenberg Series Trust (the "Trust") are summarized in the
Prospectus under the heading "Risk/Return Summary" and described in more detail
in the Prospectus under the headings "Principal Investment Strategies" and
"Principal Risks."

The following is an additional description of certain investments of the
Funds.

SHORT SALES (ALL FUNDS). The Barr Rosenberg Market Neutral Fund and the
Barr Rosenberg Select Sectors Market Neutral Fund will seek, and the Barr
Rosenberg Double Alpha Market Fund may seek, to realize additional gains through
short sales. Short sales are transactions in which a Fund sells a security it
does not own, in anticipation of a decline in the value of that security
relative to the long positions held by the Fund. To complete such a transaction,
a Fund must borrow the security to make delivery to the buyer. A Fund then is
obligated to replace the security borrowed by purchasing it at the market price
at or prior to the time of replacement. The price at such time may be more or
less than the price at which the security was sold by a Fund. Until the security
is replaced, a Fund is required to repay the lender any dividends or interest
that accrue during the period of the loan. To borrow the security, a Fund also
may be required to pay a premium, which would increase the cost of the security
sold. The net proceeds of the short sale will be retained by the broker (or by
the Fund's custodian in a special custody account), to the extent necessary to
meet margin requirements, until the short position is closed out. A Fund also
will incur transaction costs in effecting short sales.

A Fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which the
Fund replaces the borrowed security. A Fund may realize a gain if the security
declines in price between those dates. The amount of any gain will be decreased,
and the amount of any loss increased, by the amount of the premium, dividends,
interest or expenses a Fund may be required to pay in connection with a short
sale. There can be no assurance that a Fund will be able to close out a short
position at any particular time or at an acceptable price.

S&P 500 INDEX FUTURES AND RELATED OPTIONS (BARR ROSENBERG DOUBLE ALPHA
MARKET FUND ONLY). An S&P 500 Index Future contract (an "Index Future") is a
contract to buy or sell an integral number of units of the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500 Index") at a specified future date at
a price agreed upon when the contract is made. A unit is the value of the S&P
500 Index from time to time. Entering into a contract to buy units of the S&P
500 Index is commonly referred to as buying or purchasing a contract or holding
a long position in the S&P 500 Index. Index Futures can be traded through all
major commodity brokers. Currently, contracts are expected to expire on the
tenth day of March, June, September and December. The Barr Rosenberg Double
Alpha Market Fund will ordinarily 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.

In contrast to a purchase of common stock, no price is paid or received by
the Barr Rosenberg Double Alpha Market Fund upon the purchase of a futures
contract. Upon entering into a futures contract, the 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 types of instruments that may be
deposited as initial margin, and the required amount of initial margin, are

<PAGE>

determined by the futures exchange(s) 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 S&P 500 Index fluctuates, making the
position in the futures contract more or less valuable, a process known as
"marking to the market." For example, when the Fund has purchased an Index
Future and the price of the S&P 500 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 the Fund has purchased
an Index Future and the price of the S&P 500 Index has declined, the position
would be less valuable and the Fund would be required to make a variation margin
payment to the broker. When the Fund terminates a position in a futures
contract, a final determination of variation margin is made, additional cash is
paid by or to the Fund, and the Fund realizes a gain or a loss.

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 S&P 500 Index and futures markets. Second, 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.

A position in Index Futures may be closed out only if there is a secondary
market for such futures. There can be no assurance that a liquid secondary
market will exist for any particular contract or at any particular time. In such
event, it may not be possible to close a futures position and, in the event
of adverse price movements, the Barr Rosenberg Double Alpha Market Fund would
continue to be required to make daily cash payments of variation margin.

Generally, a futures contract is terminated by entering into an offsetting
transaction. An offsetting transaction for a futures contract purchase is
effected by entering into a futures contract sale for the same aggregate amount
of the specified financial instrument with the same delivery date. If the
offsetting sale price exceeds the purchase price, the Barr Rosenberg Double
Alpha Market Fund realizes a gain, and if the purchase price exceeds the
offsetting price, the Fund realizes a loss.

Options on index futures contracts give the purchaser the right, in return
for the premium paid, to assume a position in an index futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the holder would assume the underlying futures position
and would receive a variation margin payment of cash or securities approximating
the increase in the value of the holder's option position. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash based on the difference between the
exercise price of the option and the closing level of the index on which the
futures contract is based on the expiration date. Purchasers of options who fail
to exercise their options prior to the exercise date suffer a loss of the
premium paid.

<PAGE>

The ability to establish and close out positions in options on futures
contracts will be subject to the development and maintenance of a liquid
secondary market. It is not certain that such a market will develop. Although
the Barr Rosenberg Double Alpha Market Fund generally will purchase only those
options for which there appears to be an active secondary market, there is no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. In the event no such market exists
for particular options, it might not be possible to effect closing transactions
in such options, with the result that the Fund would have to exercise the
options in order to realize any profit.

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 a 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. The portfolio turnover rate for the Barr Rosenberg Market
Neutral Fund for the fiscal year ended March 31, 1999 was 205.32%. The portfolio
turnover rates for the Barr Rosenberg Double Alpha Market Fund and the
Barr Rosenberg Select Sectors Market Neutral Fund for the period from inception
to March 31, 1999 were 154.45% and 145.22%, 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
Funds, 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.

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 or for payments of variation margin
(in the case of the Barr Rosenberg Double Alpha Market Fund only). Such
borrowings will be repaid before any additional investments are purchased. Short
sales and related borrowings of securities are not subject to this restriction.

(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, short sales, 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. 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

<PAGE>

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 if, when
added together, more than 100% of the value of a Fund's net assets would be (i)
deposited as collateral for the obligation to replace securities borrowed to
effect short sales, and (ii) allocated to segregated accounts in connection with
short sales. Short sales "against the box" are not subject to this limitation.

(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") or by an exemptive order issued by the Securities and Exchange
Commission. 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.) The Barr Rosenberg Double Alpha Market
Fund has received an exemptive order from the Securities and Exchange
Commission allowing it to invest in securities other than those described in
Section 2(d)(1)(G) of the Investment Company Act of 1940, as amended (the
"1940 Act") while investing without limit in the Barr Rosenberg Market
Neutral Fund.

(9) Purchase or sell commodities or commodity contracts except that each of
the Funds may purchase and sell stock index and other financial futures
contracts and options thereon.

(10) Make loans, except by purchase of debt obligations or by entering into
repurchase agreements or through the lending of the Fund's portfolio securities.

(11) Issue senior securities. (For the purpose of this restriction none of
the following is deemed to be a senior security: any pledge or other encumbrance
of assets permitted by restriction (2) above; any borrowing permitted by
restriction (1) above; short sales permitted by restriction (4) above; any
collateral arrangements with respect to short sales, swaps, options, future
contracts and options on future contracts and with respect to initial and
variation margin; and the purchase or sale of options, future contracts or
options on future contracts.)

Notwithstanding the latitude permitted by Restriction 9 above, the Funds
have no current intention of purchasing interest rate futures.

It is contrary to the present policy of each of the Funds, which may be
changed by the Trustees of the Trust without shareholder approval, to:

(a) Invest in warrants or rights (other than warrants or rights acquired by
a 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).

(d) Make investments for the purpose of exercising control of a company's

<PAGE>

management.

(e) Invest in (a) securities which at the time of investment are not
readily marketable and (b) 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 such securities.

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 herein,
and the phrase "vote of a majority of the outstanding voting securities," as
used herein, means the affirmative vote of the lesser of (1) more than 50% of
the outstanding shares of a Fund or the Trust, as the case may be, or (2) 67% or
more of the shares of a Fund or the Trust, as the case may be, present at a
meeting if more than 50% of the outstanding shares are represented at the
meeting in person or by proxy.

INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS

The tax status of the Funds and the distributions which they may make are
summarized in the Prospectus under the headings "Distributions" and "Taxes." The
Funds intend to qualify each year as a regulated investment company under the
Internal Revenue Code of 1986, as amended. In order to qualify as a "regulated
investment company" and to qualify for the special tax treatment accorded
regulated investment companies and their shareholders, 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) 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 total assets is invested in the securities of any
issuer (other than U.S. Government securities or securities of other regulated
investment companies); and (c) distribute annually at least 90% of the sum of
its taxable net investment income, its net tax-exempt income (if any), and, the
excess, if any, of net short-term capital gains over net long-term capital
losses for such year. 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.

As described in the Prospectus under the heading "Distributions," each Fund
intends to pay out substantially all of its ordinary income and net short-term
capital gains, and to distribute substantially all of its net capital gains, if
any, after giving effect to any available capital loss carryover. Net capital
gain is the excess of net gains from assets held for more than one year over net
losses from capital assets held for not more than one year. 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

<PAGE>

short-term capital gain are taxable to investors as ordinary income.
Distributions of long-term gains (generally taxed at a 20% rate) will be taxable
to shareholders as such, regardless of how long a shareholder has held the
shares in the Fund. Distributions will be taxable as described above whether
received in cash or in shares through the reinvestment of distributions. 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, provided the Fund and the shareholder
each meet the relevant holding period requirements.

Dividends and distributions on a Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of a particular shareholder's investment.
Such distributions are likely to occur in respect of shares purchased at a time
when a Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed.

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
31% of the taxable dividends and other distributions, whether distributed in
cash or reinvested in shares of the Fund, paid or credited to any shareholder
account for which an incorrect or no taxpayer identification number has been
provided or where the Fund is notified that the shareholder has underreported
income in the past (or the shareholder fails to certify that he is not subject
to such withholding). However, the general back-up withholding rules set forth
above will not apply to tax-exempt entities so long as each such entity
furnishes a Fund with an appropriate certificate.

The Internal Revenue Service recently revised its regulations affecting
the application to foreign investors of the back-up withholding and withholding
tax rules described above. The new regulations will generally be effective for
payments made after December 31, 1999 (although transition rules will apply). In
some circumstances, the new rules will increase the certification and filing
requirements imposed on foreign investors in order to qualify for exemption from
the 31% back-up withholding tax and for reduced withholding tax rates under
income tax treaties. Foreign investors in the Fund should consult their tax
advisors with respect to the potential application of these new regulations.

To the extent such investments are permissible for a particular Fund, the
Fund's transactions in options, futures contracts, hedging transactions, forward
contracts and straddles will be subject to special tax rules (including
mark-to-market, constructive sale, 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, convert
long-term capital gains into short-term capital gains 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.

Pursuant to the 1997 Act, new "constructive sale" provisions apply to
activities by the Funds which lock in gain on an "appreciated financial
position." Generally, a "position" is defined to include stock, a debt
instrument, or partnership interest, or an interest in any of the foregoing,
including through a short sale, a swap contract, or a future or forward
contract. Under the 1997 Act, the entry into a short sale, a swap contract or a
future or forward contract relating to an appreciated direct position in any
stock or debt instrument, or the acquisition of stock or debt instrument at a

<PAGE>

time when a Fund occupies an offsetting (short) appreciated position in the
stock or debt instrument, is treated as a "constructive sale" that gives rise to
the immediate recognition of gain (but not loss). The application of these new
provisions may cause a Fund to recognize taxable income from these offsetting
transactions in excess of the cash generated by such activities.

THE TAX DISCUSSION SET FORTH ABOVE IS A SUMMARY INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. EACH SHAREHOLDER IS ADVISED TO CONSULT ITS OWN TAX
ADVISER WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO IT OF AN INVESTMENT IN
THE FUNDS, INCLUDING THE EFFECT AND APPLICABILITY OF STATE, LOCAL, FOREIGN, AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
THIS DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX PLANNING.

MANAGEMENT OF THE TRUST

The Trust's trustees oversee the general conduct of the Funds' business. The
Trustees and officers of the Trust and their principal occupations during the
past five years are as follows:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Name (Age) Position with the Trust Principal Occupation
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Barr M. Rosenberg (56) Vice President Director of Research, AXA Rosenberg
Investment Management LLC, January
1999 to present; Chairman, AXA
Rosenberg Group LLC, January 1999 to
present; Director, Barr Rosenberg
Research Center LLC, January 1999 to
present; Managing General Partner and
Chief Investment Officer, Rosenberg
Institutional Equity Management,
January 1985 to December 1998.
- -------------------------------------------------------------------------------------------------------------------------
Kenneth Reid* (49) Trustee Chief Executive Officer, AXA
Rosenberg Investment Management LLC,
January 1999 to present; General
Partner and Director of Research,
Rosenberg Institutional Equity
Management, June 1986 to December 1998.
- -------------------------------------------------------------------------------------------------------------------------
Marlis S. Fritz (49) Vice President Vice Chairman and Global Marketing
Director, AXA Rosenberg Group LLC,
January 1999 to present; Managing
Director AXA Rosenberg Global Services
LLC, January 1999 to present; General
Partner and Director of Marketing,
Rosenberg Institutional Equity
Management, April 1985 to December
1998.
- -------------------------------------------------------------------------------------------------------------------------
Nils H. Hakansson (61) Trustee Sylvan C. Coleman
Professor of Finance and
- -------------------------------------------------------------------------------------------------------------------------

<PAGE>

- -------------------------------------------------------------------------------------------------------------------------
Accounting, Haas School of Business,
University of California, Berkeley,
June 1969 to present; Director,
Supershare Services Corporation
(investment management), Los Angeles,
California, November 1989 to 1995.
- -------------------------------------------------------------------------------------------------------------------------
William F. Sharpe (64) Trustee STANCO 25 Professor Emeritus of Finance,
Stanford University, September 1995
to June 1999; Professor of Finance,
Stanford University, September 1992
to September 1995; Timken Professor
Emeritus of Finance, Stanford
University, September 1989 to September
1992; Timken Professor of Finance,
Stanford University, September 1970 to
1989; Chairman, Financial Engines
Incorporated, Los Altos, California
(electronic investment advice),
March 1996 to present.
- -------------------------------------------------------------------------------------------------------------------------
Dwight M. Jaffee (55) Trustee Booth Professor of Banking, Finance
and Real Estate, Haas School of
Business, University of California,
Berkeley, California July 1991 to present;
Professor of Economics, Princeton
University, July 1968 to July 1991.
- -------------------------------------------------------------------------------------------------------------------------
Po-Len Hew (32) Treasurer Director of Finance, AXA Rosenberg
Global Services LLC, January 1999 to
present; Chief Financial Officer, Barr
Rosenberg Investment Management Inc.,
April 1994 to December 1998; Accounting
Manager, Rosenberg Institutional
Equity Management, October 1989 to
December 1998.
- -------------------------------------------------------------------------------------------------------------------------
Sara Ronan (39) Clerk Global Services Coordinator and
Paralegal, AXA Rosenberg Global
Services LLC, January 1999 to
present; Paralegal, Barr Rosenberg
Investment Management, September 1997
to December 1998;
- -------------------------------------------------------------------------------------------------------------------------

<PAGE>

- -------------------------------------------------------------------------------------------------------------------------
Director of Marketing, MIG Realty
Advisors, January 1996 to September
1997; Vice President, Liquidity
Financial Advisors, May, 1985 to
January 1996.
- -------------------------------------------------------------------------------------------------------------------------
Edward H. Lyman (55) Vice President Chief Operating Officer, AXA
Rosenberg Group LLC, January 1999 to
present; Chief Executive Officer,
AXA Rosenberg Global Services LLC,
January 1999 to present; Executive Vice
President, Barr Rosenberg Investment
Management, Inc. and General Counsel to
the Rosenberg Group of companies, 1990
to present.
- -------------------------------------------------------------------------------------------------------------------------
Richard L. Saalfeld (55) President President and Chief Executive Officer,
Barr Rosenberg Mutual Funds, a division
of AXA Rosenberg Investment Management
LLC, January 1999 to present; President
and Chief Executive Officer of mutual
fund unit of Rosenberg Institutional
Equity Management, June 1996 to December
1998; Consultant to Rosenberg
Institutional Equity Management,
September 1995 to May 1996; Chairman and
Chief Executive Officer of CoreLink
Resources, Inc. (mutual fund marketing
organization), Concord, California,
April 1993 to August 1995; Consultant,
December 1992 to March 1993.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------------------
* Trustee who is an "interested person" (as defined in the 1940 Act) of the
Trust or the Adviser.

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

<PAGE>

have held different positions with such employers.

The Trust pays the Trustees other than those who are interested persons of
the Trust or Adviser an annual fee of $45,540 plus $4,950 for each meeting
attended. The Trust does not pay any pension or retirement benefits for its
Trustees. 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 or
Adviser. The following table sets forth information concerning the total
compensation paid to each of the Trustees who are not interested persons of the
Trust or Adviser in the fiscal year ended March 31, 1999:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Name of Person, Aggregate Pension or Retirement Estimated Annual Total Compensation
Position Compensation from Benefits Accrued as Benefits upon from Registrant
Registrant Part of Fund Expenses Retirement and Fund Complex*
Paid to Directors
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nils H.
Hakansson Trustee $68,145 $0 $0 $68,145
- -------------------------------------------------------------------------------------------------------------------------
William F.
Sharpe Trustee $68,145 $0 $0 $68,145
- -------------------------------------------------------------------------------------------------------------------------
Dwight M.
Jaffee $29,947.50 $0 $0 $29,947.50
Trustee
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

* The Fund Complex consists of seven funds: the U.S. Small Capitalization
Series, the International Small Capitalization Series, the Japan Series, the
Barr Rosenberg Market Neutral Fund, the Barr Rosenberg Double Alpha Market Fund,
the Barr Rosenberg Select Sectors Market Neutral Fund and the Barr Rosenberg VIT
Market Neutral Fund. The Barr Rosenberg VIT Market Neutral Fund had not
commenced operations as of March 31, 1999.

Messrs. Rosenberg, Reid, Lyman and Saalfeld and Ms. Fritz, Ronan and
Hew, each being an officer or employee of the Adviser or its affiliates, will
each benefit from the management fees paid by the Trust to the Adviser, but
receive no direct compensation from the Trust.

INVESTMENT ADVISORY AND OTHER SERVICES

INVESTMENT ADVISORY 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 AXA
Rosenberg Investment Management LLC (the "Adviser"), subject to the control of
the Trustees of the Trust and such policies as the Trustees may determine, the
Adviser 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 Adviser furnishes office space and equipment, provides certain
bookkeeping and clerical services and pays all salaries, fees and expenses of
officers and Trustees of the Trust who are affiliated with the Adviser. As
indicated under "Portfolio Transactions -- Brokerage and Research Services," the
Trust's portfolio transactions may be placed with broker-dealers which furnish
the Adviser, at no cost, certain research, statistical and quotation services of
value to the Adviser in advising the Trust or its other clients.

Each of the Funds has agreed to pay the Adviser a monthly management fee at
the annual percentage rate of the relevant Fund's average daily net assets set
forth in the Prospectus. The Adviser has informed the Trust that it will
voluntarily waive some or all of its management fees under the Management

<PAGE>

Contracts and, if necessary, will bear certain expenses of each Fund until
further notice (and in any event at least through 3/31/00) so that each
Fund's total annual operating expenses (exclusive of nonrecurring account
fees, extraordinary expenses and dividends and interest paid on securities
sold short) applicable to each class will not exceed the percentage of each
Fund's average daily net assets attributable to that class as set forth in
the Prospectus. In addition, the Adviser's compensation under each Management
Contract is subject to reduction to the extent that in any year the expenses
of a Fund (including investment advisory fees but excluding taxes, portfolio
brokerage commissions and any distribution and shareholder service expenses
paid by a class of shares of a Fund pursuant to a service plan or a
distribution and shareholder service 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.

Each Management Contract provides that the Adviser 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
one year from the date of its execution, and renewals thereof must be approved
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 Adviser 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 Adviser. In addition, each Management
Contract may be terminated on not more than 60 days' written notice by the
Adviser to the Trust.

The Adviser is wholly owned by AXA Rosenberg Group LLC. AXA Rosenberg
Group LLC is contractually controlled by AXA-IM Rose Inc. AXA-IM Rose Inc. is
wholly owned by AXA-IM Holdings U.S. Inc. AXA-IM Holdings U.S. Inc. is wholly
owned by AXA Investment Managers S.A., a French societe anonyme, which, in turn,
is owned, collectively, by AXA Assurances IARD, S.A., a French societe anonyme,
and AXA-UAP, a French holding company. AXA Assurances IARD, S.A. is owned,
collectively, by AXA France Assurance, a French insurance holding company, and
UAP Incendie Accidents, a French casualty and insurance company, each of which,
in turn, is wholly owned by AXA-UAP. Finaxa, a French holding company,
beneficially owns more than 25% of the voting securities ("Controls") of
AXA-UAP. Mutuelles AXA, a group of four French mutual insurance companies, one
of which Controls Finaxa, acting as a group, Controls both AXA-UAP and Finaxa.
Each of these entities may be deemed a controlling person of the Adviser.

As discussed in this Statement of Additional Information under the heading
"Management of the Trust." Kenneth Reid is a Trustee of the Trust and the Chief
Executive Officer of the Adviser; Barr M. Rosenberg is a Vice President of the
Trust and the Director of Research of the Adviser. Dr. Rosenberg, Dr. Reid and
Marlis S. Fritz, the former general partners of REIM, may be deemed to be
controlling persons of the Adviser as a result of their interest in AXA
Rosenberg Group LLC, the parent of the Adviser.

Since its inception (12/16/97), the Barr Rosenberg Market Neutral Fund
paid the following amounts as management fees to the Adviser pursuant to its
Management Contract:

<PAGE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Time Period Management Fee Amount Waived
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
12/16/97 - 3/31/98 $700,708 $121,673
- -------------------------------------------------------------------------------------------------------------------------
4/1/98 - 3/31/99 $5,247,271 $439,246
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

Since its inception (4/22/98), the Barr Rosenberg Double Alpha Market
Fund paid the following amounts as management fees to the Adviser pursuant to
its Management Contract:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Time Period Management Fee Amount Waived
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
4/22/98 - 3/31/99 $6,732 $6,732
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

Since its inception (10/19/98), the Barr Rosenberg Select Sectors
Market Neutral Fund paid the following amounts as management fees to the Adviser
pursuant to its Management Contract:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Time Period Management Fee Amount Waived
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
10/19/98 - 3/31/99 $93,840 $93,840
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

ADMINISTRATIVE SERVICES. The Trust has entered into a Fund
Administration Agreement with BISYS Fund Services Ohio, Inc. (the
"Administrator") pursuant to which the Administrator 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 adviser,
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 the Administrator. For these
services, the Administrator is entitled to receive a fee, payable monthly, at
the annual rate of 0.15% of the average daily net assets of the Trust. For
the periods indicated, the Administrator was entitled to receive, and waived,
the following amounts:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Fund Time Period Entitled to Receive Waived
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Barr Rosenberg
Market Neutral Fund 3/31/98 to 3/31/99 $414,258 $168,759
- -------------------------------------------------------------------------------------------------------------------------
Barr Rosenberg
Double Alpha 4/22/98 (inception $10,097 $10,097
Market Fund date) to 3/31/99
- -------------------------------------------------------------------------------------------------------------------------
Barr Rosenberg
Select Sectors 10/19/98 (inception date) $14,076 $6,955
Market Neutral Fund to 3/31/99
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

The Trust has also entered into a Fund Accounting Agreement with BISYS Fund
Services Ohio, Inc. (the "Fund Accountant") pursuant to which the Fund
Accountant provides certain accounting services necessary for the Funds'
operations. For these services, the Fund Accountant is entitled to receive

<PAGE>

an annual fee of $50,000 for each Fund. For the periods indicated, the Funds
paid the following amounts in fund accounting fees:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Fund Time Period Amount Paid
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Barr Rosenberg
Market Neutral Fund 3/31/98 to 3/31/99 $107,649*
- -------------------------------------------------------------------------------------------------------------------------
Barr Rosenberg Double 4/22/98 (inception date)
Alpha Market Fund to 3/31/99 $42,666
- -------------------------------------------------------------------------------------------------------------------------
Barr Rosenberg Select
Sectors Market Neutral Fund 10/19/98 (inception date)
to 3/31/99 $24,816*
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Includes reimbursement for out-of-pocket expenses.

DISTRIBUTOR AND DISTRIBUTION AND SHAREHOLDER SERVICE PLAN. As stated in the
Prospectus under the heading "Management of the Trust -- Distributor," Investor
Shares of each Fund are sold on a continuous basis by the Trust's distributor,
Barr Rosenberg Funds Distributor, Inc. (the "Distributor"). 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 and Shareholder Service Plan (the "Plan")
described in the Prospectus, in connection with the distribution of Investor
Shares of the Trust and/or in connection with the provision of direct client
service, personal services, maintenance of shareholder accounts and reporting
services to holders of Investor Shares of the Trust, the Distributor receives
certain distribution and shareholder service fees from the Trust. Subject to
the percentage limitation on the distribution and shareholder service fee set
forth in the Prospectus, the distribution and shareholder service fee may be
paid in respect of services rendered and expenses borne in the past with
respect to Investor Shares as to which no distribution fee was paid on
account of such limitation. The Distributor may pay all or a portion of the
distribution and service fees it receives from the Trust to participating and
introducing brokers.

For the periods indicated, the Funds incurred distribution and shareholder
service expenses and the Distributor paid broker-dealers and other selling
and/or servicing institutions as follows:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Fund Time Period Distribution Expenses Paid out by
Incurred Distributor as
Described Above
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Barr
Rosenberg Market 3/31/98 to 3/31/99 $120,307 $98,790
Neutral Fund
- -------------------------------------------------------------------------------------------------------------------------
Barr Rosenberg Double 4/22/98 (inception date) to $448 $54
Alpha Market Fund 3/31/99
- -------------------------------------------------------------------------------------------------------------------------
Barr Rosenberg
Select Sectors Market 10/19/98 (inception date) $379 $88
Neutral Fund to 3/31/99
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

The following table sets forth the amounts paid by the Funds for each
principal type of distribution-related activity during the fiscal year ended
March 31, 1999:

<PAGE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Activity Barr Barr Rosenberg Double Alpha Barr Rosenberg Select
Rosenberg Market Market Fund (since Sectors Market Neutral Fund
Neutral Fund 4/22/98) (since 10/19/98)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Advertising $0 $0 $0
- -------------------------------------------------------------------------------------------------------------------------
Printing and Mailing of
Prospectuses to other than
Current Shareholders $0 $0 $0
- -------------------------------------------------------------------------------------------------------------------------
Compensation to Underwriters $120,307 $448 $379
- -------------------------------------------------------------------------------------------------------------------------
Compensation to Broker-Dealers $0 $0 $0
- -------------------------------------------------------------------------------------------------------------------------
Compensation to Sales
Personnel $0 $0 $0
- -------------------------------------------------------------------------------------------------------------------------
Interest, Carrying or Other
Financing Charges $0 $0 $0
- -------------------------------------------------------------------------------------------------------------------------
Other $0 $0 $0
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

The Plan may be terminated with respect to Investor Shares by vote of a
majority of the Trustees of the Trust who are not interested persons of the
Trust 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 Investor Shares requires
approval by holders of Investor Shares. 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
Investor 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 Plan and the Distributor's Contract 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 Plan or the Distributor's Contract 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 believe that the Plan will result in greater sales
and/or fewer redemptions of Investor Shares, although it is impossible to know

<PAGE>

for certain the level of sales and redemptions of Investor Shares that would
occur in the absence of the Plan or under alternative distribution schemes. The
Trustees believe that the effect on sales and/or redemptions benefit the Trust
by reducing Fund expense ratios and/or by affording greater flexibility to the
Trust.

CUSTODIAL ARRANGEMENTS. Custodial Trust Company ("CTC"), Princeton, NJ
08540, is the Trust's custodian. As such, CTC 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, CTC 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.

INDEPENDENT ACCOUNTANTS. The Trust's independent accountants are
PricewaterhouseCoopers LLP. PricewaterhouseCoopers 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 Adviser are made by
the Adviser 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 Adviser 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 Adviser is selling the same security on behalf of one or more
other clients. In some instances, therefore, the Adviser, 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 Adviser will seek the best price and execution available, except to
the extent it may be permitted to pay higher brokerage commissions for brokerage
and research services as described below. The determination of what may
constitute best price and execution by a broker-dealer in effecting a securities
transaction involves a number of considerations, including, without limitation,
the overall net economic result to the Fund (involving price paid or received
and any commissions and other costs paid), the efficiency with which the
transaction is effected, the ability to effect the transaction at all where a
large block is involved, availability of the broker to stand ready to execute
possibly difficult transactions in the future and the financial strength and
stability of the broker. Because of such factors, a broker-dealer effecting a
transaction may be paid a commission higher than that charged by another
broker-dealer. Most of the foregoing are judgmental considerations.

Over-the-counter transactions often involve dealers acting for their own

<PAGE>

account. It is the Adviser'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 Adviser does not consider the receipt of research services as
a factor in selecting brokers to effect portfolio transactions for a Fund, the
Adviser will receive such services from brokers who are expected to handle a
substantial amount of a 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 Adviser 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 Adviser may pay an unaffiliated broker or dealer that provides
"brokerage and research services" (as defined in the Act) to the Adviser 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.

For the fiscal year ended March 31, 1999, the Barr Rosenberg Market
Neutral Fund paid $2,848,977, the Barr Rosenberg Double Alpha Market Fund
paid $1,856, and the Barr Rosenberg Select Sectors Market Neutral Fund paid
$119,872 in brokerage commissions.

The Funds pay brokerage commissions to Donaldson Lufkin and Jenrette,
which may be deemed to be an "affiliate of an affiliate" of the Trust.
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 such affiliates and will review these procedures
periodically. During the fiscal year ended March 31, 1999, the Barr Rosenberg
Market Neutral Fund paid $45,163 and the Barr Rosenberg Select Sectors Market
Neutral Fund paid $170 to Donaldson Lufkin and Jenrette in brokerage
commissions.

TOTAL RETURN CALCULATIONS

Each Fund computes its average annual total return separately for its share
classes by determining the average annual compounded rates of return during
specified periods that would equate the initial amount invested in a particular
share class to the ending redeemable value of such investment in such class,
according to the following formula:

n
P(1 + T) = ERV

Where:
T = Average annual total return
ERV = Ending redeemable value of a hypothetical $1,000
investment made at the beginning of a period at the
end of such period
P = A hypothetical initial investment of $1,000
n = Number of years

<PAGE>

Each Fund computes its cumulative total return separately for its share
classes by determining the cumulative rates of return during specified periods
that would equate the initial amount invested in a particular share class to
the ending redeemable value of such investment in such class, according to
the following formula:

T = ERV-1,000
---------
1,000
Where:
T = Cumulative rate of return
ERV = Ending redeemable value of a hypothetical $1,000
investment made at the beginning of a period at the
end of such period.

The calculations of average annual total return and cumulative total return
assume that any dividends and distributions are reinvested immediately, rather
than paid to the investor in cash. The ending redeemable value (variable "ERV"
in each formula) is determined by assuming complete redemption of the
hypothetical investment and the deduction of all nonrecurring charges at the end
of the period covered by the computations.

Unlike bank deposits or other investments that pay a fixed yield or return
for a stated period of time, the return for each Fund will fluctuate from time
to time and does not provide a basis for determining future returns. Average
annual total return and cumulative return are based on many factors, including
market conditions, the composition of a Fund's portfolio and a Fund's operating
expenses.

Average annual total returns are calculated separately for Investor Shares
and Institutional Shares. Investor Shares and Institutional Shares are subject
to different fees and expenses and may have different performance for the same
period.

The average annual total returns for the Funds for the period ended March
31, 1999 were as follows:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Fund Class of Shares 1 Year Since Inception
(inception date)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Barr Rosenberg Institutional -7.31% -5.94% (12/16/97)
Market Neutral -----------------------------------------------------------------------------------------
Fund Investor -7.66% -6.32% (12/18/97)
- -------------------------------------------------------------------------------------------------------------------------
Barr Rosenberg Institutional 0.53%* (4/22/98)
Double Alpha -----------------------------------------------------------------------------------------
Market Fund Investor 0.18%* (4/22/98)
- -------------------------------------------------------------------------------------------------------------------------
Barr Rosenberg Institutional 5.14%* (10/19/98)
Select Sectors -----------------------------------------------------------------------------------------
Market Neutral Fund Investor 4.71%* (11/11/98)
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Because the Barr Rosenberg Double Alpha Market Fund and the Barr Rosenberg
Select Sectors Market Neutral Fund have not yet been operational for a full
calendar year, these figures represent cumulative returns.

PERFORMANCE COMPARISONS. Investors may judge the performance of the Funds
by comparing them to the performance of other mutual fund portfolios with
comparable investment objectives and policies through various mutual fund or
market indices such as those prepared by Dow Jones & Co., Inc. and Standard &
Poor's and to data prepared by Lipper, Inc., a widely recognized independent
service which monitors the performance of mutual funds. Comparisons may also
be made to indices or data published in MONEY MAGAZINE,

<PAGE>

FORBES, BARRON'S, THE WALL STREET JOURNAL, MORNINGSTAR, INC., IBBOTSON
ASSOCIATES, CDA/WIESENBERGER, THE NEW YORK TIMES, BUSINESS WEEK, U.S.A. TODAY,
INSTITUTIONAL INVESTOR and other periodicals. In addition to performance
information, general information about the Funds that appears in a publication
such as those mentioned above may be included in advertisements, sales
literature and reports to shareholders. The Funds may also include in
advertisements and reports to shareholders information discussing the
performance of the Adviser in comparison to other investment advisers and to
other institutions.

From time to time, the Trust may include the following types of information
in advertisements, supplemental sales literature and reports to shareholders:
(1) discussions of general economic or financial principles (such as the effects
of inflation, the power of compounding and the benefits of dollar cost
averaging); (2) discussions of general economic trends; (3) presentations of
statistical data to supplement such discussions; (4) descriptions of past or
anticipated portfolio holdings for the Funds; (5) descriptions of investment
strategies for the Funds; (6) descriptions or comparisons of various investment
products, which may or may not include the Funds; (7) comparisons of investment
products (including the Funds) with relevant market or industry indices or other
appropriate benchmarks; (8) discussions of fund rankings or ratings by
recognized rating organizations; and (9) testimonials describing the experience
of persons that have invested in a Fund. The Trust may also include
calculations, such as hypothetical compounding examples, which describe
hypothetical investment results in such communications. Such performance
examples will be based on an express set of assumptions and are not indicative
of the performance of a Fund.

DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES

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
six series, the Barr Rosenberg Market Neutral Fund, Barr Rosenberg Double Alpha
Market Fund, Barr Rosenberg Select Sectors Market Neutral Fund, U.S. Small
Capitalization Series, International Small Capitalization Series and 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.

Each Fund is further divided into two classes of shares designated as
Institutional Shares and Investor 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

<PAGE>

of the outstanding shares of each series 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 series on all matters except (i) when required by the
1940 Act, shares shall be voted in the aggregate and not by individual series,
and (ii) when the Trustees have determined that the matter affects only the
interests of one or more series, then only shareholders of such series shall be
entitled to vote thereon. Shareholders of one series shall not be entitled to
vote on matters exclusively affecting another series, such matters including,
without limitation, the adoption of or change in any fundamental policies or
restrictions of the other series and the approval of the investment advisory
contracts of the other series.

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 and shareholder service
plan applicable to that class. All classes of shares of a Fund will vote
together, except with respect to any distribution and shareholder service plan
applicable to a class or when a class vote is required as specified above or
otherwise by the 1940 Act.

There will normally be no meetings of shareholders for the purpose of
electing Trustees, except that in accordance with the 1940 Act (i) the Trust
will hold a shareholders' meeting for the election of Trustees at such time as
less than a majority of the Trustees holding office have been elected by
shareholders, and (ii) if, as a result of a vacancy in the Board of Trustees,
less than two-thirds of the Trustees holding office have been elected by the
shareholders, that vacancy may only be filled by a vote of the shareholders. In
addition, Trustees may be removed from office by a written consent signed by the
holders of two-thirds of the outstanding shares and filed with the Trust's
custodian or by a vote of the holders of two-thirds of the outstanding shares at
a meeting duly called for the purpose, which meeting shall be held upon the
written request of the holders of not less than 10% of the outstanding shares.
Upon written request by the holders of at least 1% of the outstanding shares
stating that such shareholders wish to communicate with the other shareholders
for the purpose of obtaining the signatures necessary to demand a meeting to
consider removal of a Trustee, the Trust has undertaken to provide a list of
shareholders or to disseminate appropriate materials (at the expense of the
requesting shareholders). Except as set forth above, the Trustees shall continue
to hold office and may appoint successor Trustees. Voting rights are not
cumulative.

No amendment may be made to the Declaration of Trust without the
affirmative vote of a majority of the outstanding shares of the Trust except (i)
to change the Trust's name or to cure technical problems in the Declaration of
Trust and (ii) to establish, designate or modify new and existing series,
sub-series or classes of shares of any series of Trust shares or other
provisions relating to Trust shares in response to applicable laws or
regulations.

SHAREHOLDER AND TRUSTEE LIABILITY. Under Massachusetts law, shareholders
could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Declaration of Trust disclaims
shareholder liability for acts or obligations of the Trust and requires that
notice of such disclaimer be given in each agreement, obligation, or instrument

<PAGE>

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 series for
all loss and expense of any shareholder of that series 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
series 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
Adviser has agreed to indemnify each Trustee who is not "an interested person"
of the Trust to the maximum extent permitted by the 1940 Act against any
liabilities arising by reason of such Trustee's status as a Trustee of the
Trust.

OWNERS OF 5% OR MORE OF A FUND'S SHARES. The following charts set forth the
names, addresses and percentage ownership of those shareholders owning
beneficially and of record (except as otherwise indicated) 5% or more of the
outstanding shares of the Barr Rosenberg Market Neutral Fund as of July 2, 1999.
Those persons who beneficially own more than 25% of a particular class of
shares may be deemed to control such class. As a result, it may not be
possible for matters subject to a vote of a majority of the outstanding
voting securities of the Fund to be approved without the affirmative vote of
such shareholder, and it may be possible for such matters to be approved by
such shareholder without the affirmative vote of any other shareholder.

Investor Shares

Institutional Shares

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Name and Address Number of Shares Ownership Percentage
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Charles Schwab & Co Inc
The Exclusive Use of our
Customers 3,643,993.970 26.85%
101 Montgomery St.
San Francisco, CA 94104
- -------------------------------------------------------------------------------------------------------------------------
Custodial Trust Co as
Pldg of Barr
Rosenberg Double Alpha
Market Fund 940,977.440 6.93%
101 Carnegie Ctr
Princeton, NJ 08540
- -------------------------------------------------------------------------------------------------------------------------

<PAGE>

- -------------------------------------------------------------------------------------------------------------------------
Rosenberg Alpha LP
4 Orinda Way Bldg E 3,214,925.079 23.68%
Orinda, CA 94563
- -------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Special
Finl Inc
3 World Financial Center 3,026,634.383 22.30%
6th Fl
NY, NY 10285
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

The following charts set forth the names, addresses and percentage
ownership of those shareholders owning beneficially and of record (except as
otherwise indicated) 5% or more of the outstanding shares of the Barr
Rosenberg Double Alpha Market Fund as of July 2, 1999. Those persons who
beneficially own more than 25% of a particular class of shares may be deemed
to control such class. As a result, it may not be possible for matters
subject to a vote of a majority of the outstanding voting securities of the
Fund to be approved without the affirmative vote of such shareholder, and it
may be possible for such matters to be approved by such shareholder without
the affirmative vote of any other shareholder.

Institutional Shares

Investor Shares

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Name and Address Number of Shares Ownership Percentage
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Arthur Wiener
102 Coleridge St 2,576.226 21.22%
Brooklyn, NY 11235
- -------------------------------------------------------------------------------------------------------------------------
Jimmy T Hua
810 Polhemus Rd Apt 61 830.461 6.84%
San Mateo, CA 94402
- -------------------------------------------------------------------------------------------------------------------------
Susan L Duval
11460 Zion Rd 609.699 5.02%
Bloomington, MN 55437
- -------------------------------------------------------------------------------------------------------------------------
Matthew W Buurma
Deborah S Buurma
67 Valley View Ave 2,795.839 23.03%
Summit, NJ 07901
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

The following charts set forth the names, addresses and percentage ownership
of those shareholders owning beneficially and of record (except as otherwise
indicated) 5% or more of the outstanding shares of the Barr Rosenberg Select
Sectors Market Neutral Fund as of July 2, 1999. Those persons who
beneficially own more than 25% of a particular class of shares may be deemed
to control such class. As a result, it may not be possible for matters
subject to a vote of a majority of the outstanding voting securities of the
Fund to be approved without the affirmative vote of such shareholder, and it
may be possible for such matters to be approved by such shareholder without
the affirmative vote of any other shareholder.

Institutional Shares

<PAGE>

Investor Shares

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Name and Address Number of Shares Ownership Percentage
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Resources Trust Co
P O Box 3865 57,751.754 47.97%
Englewood, CO 80155
- -------------------------------------------------------------------------------------------------------------------------
Charles Schwab & Co Inc
The Exclusive Use of Our Customers
101 Montgomery St 28,148.190 23.38%
San Francisco, CA 94104
- -------------------------------------------------------------------------------------------------------------------------
FTC and Co
P O Box 173736 6,026.032 5.00%
Denver, CO 80217
- -------------------------------------------------------------------------------------------------------------------------
Webster Mrak & Blumberg
1325 4th Ave Ste 600 9,718.173 8.07%
Seattle, WA 98101
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

The officers and Trustees of the Trust, as a group, own less than 1% of any
class of outstanding shares of the Funds. The officers and Trustees of the
Trust, as a group, own more than 1% of the securites of certain classes of
outstanding shares of the Trust's other funds. For specific information in this
regard, see the prospectus for the Trust's U.S. Small Capitalization Series,
International Small Capitalization Series and Japan Series.

DETERMINATION OF NET ASSET VALUE

As indicated in the Prospectus, the net asset value of each Fund share 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 Christmas Day, New Year's Day, Martin Luther
King's Day, President's Day, Good Friday, Memorial Day, Independence Day
(observed), Labor Day and Thanksgiving Day.

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 for long securities and the most recent quoted ask price for
securities sold short. 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 for long securities and the most recent
quoted ask price for securities sold short, except that debt obligations with
sixty days or less remaining until maturity may be valued at their amortized
cost. Exchange-traded options on futures are valued at the settlement price as
determined by the appropriate clearing corporation. Futures contracts are valued
by comparing the gain or loss by reference to the current 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.

PURCHASE AND REDEMPTION OF SHARES

The procedures for purchasing shares of each of the Funds and for

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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.

The Funds have authorized one or more brokers to accept on their behalf
purchase and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Funds' behalf.
The Funds will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts
such order. Such orders will be priced at the respective Funds' net asset value
per share next determined after such orders are accepted by an authorized broker
or the broker's authorized designee.

FINANCIAL STATEMENTS

The Report of Independent Accountants, financial highlights and financial
statements of the Funds included in its Annual Report for the period ended
March 31, 1999 (the "Annual Report") are incorporated herein by reference to
such Annual Report. Copies of such Annual Report are available without charge
upon request by writing to Barr Rosenberg Series Trust, 3435 Stelzer Road,
Columbus, Ohio 43219 or telephoning 1-800-447-3332.

The financial statements incorporated by reference into this Statement of
Additional Information have been audited by PricewaterhouseCoopers LLP,
independent accountants, and have been so included and incorporated by reference
in reliance upon the report of said firm, which report is given upon their
authority as experts in auditing and accounting.