<PAGE>
As filed with the Securities and Exchange Commission on May 28, 1999
Registration Nos. 33-21677,
811-5547
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
----
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 25 / X /
----
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / X /
----
Amendment No. 28 / X /
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BARR ROSENBERG SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
c/o AXA Rosenberg Investment Management LLC, Four Orinda Way, Building E,
Orinda, CA 94563
(Address of Principal Executive Offices) (Zip code)
925-254-6464
(Registrant's Telephone Number, including Area Code)
Name and address
of agent for service: Copies to:
-------------------- ---------
Kenneth Reid J.B. Kittredge, Esq.
AXA Rosenberg Investment Ropes & Gray
Management LLC One International Place
Four Orinda Way Boston, MA 02110-2624
Building E
Orinda, CA 94563
Approximate Date of Proposed Public Offering: Continuous.
It is proposed that this filing will become effective (check appropriate box):
<TABLE>
<S><C>
/ / Immediately upon filing purusant to paragraph (b) / / On (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1) / / On (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to (a)(2) / / On (date) pursuant to paragraph (a)(2)
of Rule 485.
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date for a previously
filed post-effective amendment.
</TABLE>
NOTE: This amendment relates solely to shares of beneficial interest in the
U.S. Small Capitalization Series, the International Small Capitalization Series
and the Japan Series. Information contained in the Trust's Registration
Statement relating to the other series of the Trust is neither amended nor
superseded hereby.
<PAGE>
BARR ROSENBERG SERIES TRUST
U.S. SMALL CAPITALIZATION SERIES
JAPAN SERIES
INTERNATIONAL SMALL CAPITALIZATION SERIES
3435 STELZER ROAD
COLUMBUS, OHIO 43219
1-925-254-6464
MAY 28, 1999
Barr Rosenberg Series Trust is an open-end management investment company
offering six diversified portfolios with different investment objectives and
strategies, including the U.S. Small Capitalization Series, Japan Series and
International Small Capitalization Series. The other portfolios of the Trust,
which are offered under an additional prospectus, are the Barr Rosenberg Market
Neutral Fund, Barr Rosenberg Double Alpha Market Fund and Barr Rosenberg Select
Sectors Market Neutral Fund. 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
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
RISK/RETURN SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. SMALL CAPITALIZATION SERIES. . . . . . . . . . . . . . . . . . .
INTERNATIONAL SMALL CAPITALIZATION SERIES . . . . . . . . . . . . . .
JAPAN SERIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FEES AND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PRINCIPAL INVESTMENT STRATEGIES. . . . . . . . . . . . . . . . . . . . . .
PRINCIPAL RISKS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CERTAIN INVESTMENT TECHNIQUES AND RELATED RISKS. . . . . . . . . . . . . .
MANAGEMENT DISCUSSION OF FUND PERFORMANCE. . . . . . . . . . . . . . . . .
THE ADVISER'S GENERAL INVESTMENT PHILOSOPHY. . . . . . . . . . . . . . . .
MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . .
MULTIPLE CLASSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PURCHASING SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IRA ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXCHANGING SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
HOW THE TRUST PRICES SHARES OF THE FUNDS . . . . . . . . . . . . . . . . .
DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES . . . . . . . . . . . . .
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
-2-
<PAGE>
RISK/RETURN SUMMARY
The following is a summary of certain key information about the Barr
Rosenberg U.S. Small Capitalization Series, Barr Rosenberg International Small
Capitalization Series and Barr Rosenberg Japan Series (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 summary of each Fund's principal investment strategies is
accompanied by a short discussion of some of the Fund's principal risks. The
principal risks of each Fund are identified and more fully discussed beginning
on page __. 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 each 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 each 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.
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 explicitly described otherwise, the investment objective and
policies of each of the Funds may be changed without shareholder approval.
-3-
<PAGE>
U.S. SMALL CAPITALIZATION SERIES
INVESTMENT OBJECTIVE
The Fund seeks a return greater than that of the Russell 2000 Index.
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund invests primarily in equity securities of smaller companies that
are traded principally in the markets of the United States. At all times, at
least 65% of the Fund's total assets will be invested in these small
capitalization securities. The Fund will place relatively greater emphasis on
capital appreciation than on current income.
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. 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 stock selections. The
Funds' investment adviser, AXA Rosenberg Investment Management LLC (the
"Adviser") will apply its investment techniques and risk analyses in making
investment decisions for the Fund, but there can be no guarantee that they
will produce the desired results.
- - SMALLER COMPANY RISK. Market risk is particularly pronounced for this Fund
because it invests a significant percentage of its assets in the stocks of
companies with relatively small market capitalizations. These companies may
have limited product lines, markets or financial resources or may depend on
a few key employees.
- - LIQUIDITY RISK. Liquidity risk exists when particular investments are
difficult to purchase or sell, possibly preventing a Portfolio from
selling out of these illiquid securities at an advantageous price.
Portfolios such as the U.S. Small Capitalization Series and the
International Small Capitalization Series that invest significant
percentages of their assets in smaller companies are exposed to
liquidity risk because the stocks of smaller companies are more volatile
and therefore may at times be more difficult to sell.
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page __.
-4-
<PAGE>
YEARLY PERFORMANCE (%) - INSTITUTIONAL SHARES
[GRAPH]
<TABLE>
<CAPTION>
CALENDER YEAR END
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ANNUAL RETURN (%)
</TABLE>
During all periods shown in the bar graph, the Fund's highest quarterly return
was ___% and its lowest quarterly return was ___%.
PERFORMANCE TABLE
This table shows how the Fund's performance compares with the returns of a broad
based securities market index.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Past One Past Five Past Ten
Total Returns (for Year Years Years
periods ending
December 31, 1998)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Shares
- --------------------------------------------------------------------------------
Select Shares
- --------------------------------------------------------------------------------
Adviser Shares
- --------------------------------------------------------------------------------
Russell 2000 Index
- --------------------------------------------------------------------------------
</TABLE>
INTERNATIONAL SMALL CAPITALIZATION SERIES
INVESTMENT OBJECTIVE
-5-
<PAGE>
The Fund seeks a return greater than that of the Casenove Rosenberg Global
Smaller Companies Index excluding the United States ("CRIexUS").
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund invests primarily in equity securities of smaller companies that
are traded principally in markets outside the United States with market
capitalizations of between $__ million and $__ billion at the time of purchase
by the Fund. Under normal circumstances, the Fund invests at least 90% of its
net assets in these international small-capitalization companies. The Fund will
place relatively greater emphasis on capital appreciation than on current
income.
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. 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 stock selections. The
Adviser will apply its investment techniques and risk analyses in making
investment decisions for the Fund, but there can be no guarantee that they
will produce the desired results.
- - SMALLER COMPANY RISK. Market risk is particularly pronounced for this Fund
because it invests a significant percentage of its assets in the stocks of
companies with relatively small market capitalizations. These companies may
have limited product lines, markets or financial resources or may depend on
a few key employees.
- - FOREIGN INVESTMENT RISK. As a result of its foreign investments, the Fund
may experience more rapid and extreme changes in value than funds that
invest solely in securities of U.S. companies. This is because the
securities markets of many foreign countries are relatively small, with a
limited number of companies representing a small number of industries.
Additionally, issuers of foreign securities are usually not subject to the
same degree of regulation as U.S. issuers. Reporting, accounting and
auditing standards of foreign countries differ, in some cases
significantly, from U.S. standards. Also, nationalization, expropriation or
confiscatory taxation, currency blockage, political changes or diplomatic
developments could adversely affect a Fund's investments in a foreign
country.
- - CURRENCY RISK. As a result of its investments in securities denominated
in, and/or receiving revenues in, foreign currencies, the Fund will be
subject to currency risk. This is the risk that those currencies will
decline in value relative to the U.S. Dollar, or, in the case of hedging
positions, that the U.S. Dollar will decline in value relative to the
currency hedged. In either event, the dollar value of these types of
investments would be adversely affected.
- - LIQUIDITY RISK. Liquidity risk exists when particular investments are
difficult to purchase or sell, possibly preventing a Portfolio from
selling out of these illiquid securities at an advantageous price.
Portfolios such as the U.S. Small Capitalization Series and the
International Small Capitalization Series that invest significant
percentages of their assets in smaller companies are exposed to
liquidity risk because the stocks of smaller companies are more volatile
and therefore may at times be more difficult to sell.
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page __.
-6-
<PAGE>
YEARLY PERFORMANCE (%) - INSTITUTIONAL SHARES
[GRAPH]
<TABLE>
<CAPTION>
CALENDER YEAR END
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ANNUAL RETURN (%)
</TABLE>
During all periods shown in the bar graph, the Fund's highest quarterly return
was ___% and its lowest quarterly return was ___%.
PERFORMANCE TABLE
This table shows how the Fund's performance compares with the returns of an
index of funds with similar investment objectives and the returns of a broad
based securities market index.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Past One Past Five Past Ten
Total Returns (for Year Years Years
periods ending
December 31, 1998)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Shares
- --------------------------------------------------------------------------------
Select Shares
- --------------------------------------------------------------------------------
CRIexUS Index
- --------------------------------------------------------------------------------
Salomon Smith Barney
World ex US EMI
- --------------------------------------------------------------------------------
</TABLE>
JAPAN SERIES
INVESTMENT OBJECTIVE
The Fund seeks a return greater than that of the Tokyo Stock Price Index
("TOPIX").
-7-
<PAGE>
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund invests primarily in the common stocks of well-established
Japanese companies that have an active market for their shares. The Fund may
also invest in other Japanese securities, such as convertible preferred stock or
debentures, and may purchase futures contracts or options on futures contracts
on the Tokyo Stock Price Index or the NIKKEI 225 Index. At all times, at least
65% of the Fund's total assets will be invested in Japanese securities.
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. 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 stock selections. The
Adviser will apply its investment techniques and risk analyses in making
investment decisions for the Fund, but there can be no guarantee that they
will produce the desired results.
- - FOREIGN INVESTMENT RISK. As a result of its foreign investments, the Fund
may experience more rapid and extreme changes in value than funds that
invest solely in securities of U.S. companies. Additionally, issuers of
foreign securities are usually not subject to the same degree of regulation
as U.S. issuers. Reporting, accounting and auditing standards of foreign
countries differ, in some cases significantly, from U.S. standards. Also,
nationalization, expropriation or confiscatory taxation, currency blockage,
political changes or diplomatic developments could adversely affect a
Fund's investments in a foreign country.
- - RISKS OF INVESTING IN JAPANESE SECURITIES. Unlike other mutual funds which
invest in the securities of many countries, the Fund will invest almost
exclusively in Japanese Securities. In addition to the risks associated
with investing in foreign securities generally, investments in the Fund
will be subject to the market risk associated with investing almost
exclusively in stocks of companies which are subject to Japanese economic
factors and conditions. Since the Japanese economy is dependent to a
significant extent on foreign trade, the relationships between Japan and
its trading partners and between the yen and other currencies are expected
to have a significant impact on particular Japanese companies and on the
Japanese economy generally.
- - CURRENCY RISK. As a result of its investments in securities denominated
in, and/or receiving revenues in, foreign currencies, the Fund will be
subject to currency risk. This is the risk that those currencies will
decline in value relative to the U.S. Dollar, or, in the case of hedging
positions, that the U.S. Dollar will decline in value relative to the
currency hedged. In either event, the dollar value of these types of
investments would be adversely affected.
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page __.
-8-
<PAGE>
YEARLY PERFORMANCE (%) - INSTITUTIONAL SHARES
[GRAPH]
<TABLE>
<CAPTION>
CALENDER YEAR END
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ANNUAL RETURN (%)
</TABLE>
During all periods shown in the bar graph, the Fund's highest quarterly return
was ___% and its lowest quarterly return was ___%.
PERFORMANCE TABLE
This table shows how the Fund's performance compares with the returns of a broad
based securities market index.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Past One Past Five Past Ten
Total Returns (for Year Years Years
periods ending
December 31, 1998)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Shares
- --------------------------------------------------------------------------------
Select Shares
- --------------------------------------------------------------------------------
TOPIX
- --------------------------------------------------------------------------------
</TABLE>
-9-
<PAGE>
FEES AND EXPENSES
THESE TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE FUNDS.
SHAREHOLDER FEES (paid directly from your investment):
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None
Redemption Fee None
Exchange Fee None
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
FUND U.S. Small Capitalization International Small Japan Series
Series Capitalization Series
- ------------------------------------------------------------------------------------------------------------------------
CLASS OF SHARES Institutional Adviser Select Institutional Select Institutional Select
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MANAGEMENT FEES % % % % % % %
- ------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION AND SHAREHOLDER % % % % % % %
SERVICE (12b-1) FEES
- ------------------------------------------------------------------------------------------------------------------------
OTHER EXPENSES * % % % % % % %
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING % % % % % % %
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------
FEE WAIVER AND/OR EXPENSE % % % % % % %
LIMITATION
- ------------------------------------------------------------------------------------------------------------------------
NET EXPENSES % % % % % % %
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Trustees have authorized the payment of up to 0.15% of each Fund's
average daily net assets attributable to Select Shares for subtransfer and
subaccounting services in connection with such shares.
-10-
<PAGE>
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>
U.S. SMALL Institutional $ $ $ $
CAPITALIZATION ---------------------------------------------------------------
SERIES Adviser $ $ $ $
---------------------------------------------------------------
Select $ $ $ $
- --------------------------------------------------------------------------------
INTERNATIONAL Institutional $ $ $ $
SMALL
CAPITALIZATION ---------------------------------------------------------------
SERIES Select $ $ $ $
- --------------------------------------------------------------------------------
JAPAN SERIES Institutional $ $ $ $
---------------------------------------------------------------
Select $ $ $ $
- --------------------------------------------------------------------------------
</TABLE>
-11-
<PAGE>
PRINCIPAL INVESTMENT STRATEGIES
U.S. SMALL CAPITALIZATION SERIES
The investment objective of the U.S. Small Capitalization Series is to seek
total return greater than that of the Russell 2000 Index through investment
primarily in equity securities of smaller companies (i.e. - companies that
have market capitalizations of less then $_________) that are traded
principally in the markets of the United States ("Small Capitalization
Securities"). Total return is a combination of capital appreciation and
current income (dividend or interest). The Fund does not seek to MAXIMIZE
total return but, as indicated above, seeks a total return greater than that
of the index referred to above. Because the companies in which the Fund
invests typically do not distribute significant amounts of company earnings
to shareholders, the Fund's objective will place relatively greater emphasis
on capital appreciation than on current income. The Fund's investment
objective is non-fundamental and thus may be changed by the Trustees without
shareholder approval.
It is currently expected that, under normal circumstances, most of the
Fund's assets will be invested in small capitalization securities. Investments
in issuers of small capitalization securities may present greater opportunities
for capital appreciation because of high potential earnings growth, but may also
involve greater risk. See "Principal Risks -- Smaller Company Risk."
To meet redemption requests or for investment purposes, the Fund may also
temporarily hold a portion of its assets not invested in small capitalization
securities in full faith and credit obligations of the United States government
(E.G., U.S. Treasury Bills) and in short-term notes, commercial paper or other
money market instruments of high quality (I.E., rated at least "A-2" or "AA" by
Standard & Poor's ("S&P") or Prime 2 or "Aa" by Moody's Investors Service, Inc.
("Moody's")) issued by companies having an outstanding debt issue rated at least
"AA" by S&P or at least "Aa" by Moody's, or determined by the Adviser to be of
comparable quality to any of the foregoing. The Fund may also invest in stock
index futures and repurchase agreements. See "Certain Investment Techniques and
Related Risks -- Stock Index Futures and -- Repurchase Agreements."
Also, the Fund may invest without limit in common stocks of foreign issuers
that are principally traded in the markets of the United States. Investments in
common stocks of foreign issuers may involve certain special risks due to
foreign economic, political and legal developments. See "Principal Risks --
Foreign Investment Risk." The Fund will not invest in securities which are
principally traded outside of the United States.
FUNDAMENTAL POLICIES. The Fund will normally invest most of its assets in
small capitalization securities, and it is a fundamental policy of the Fund,
which may not be changed without shareholder approval, that at least 65% of the
Fund's total assets will be invested in Small Capitalization Securities.
INTERNATIONAL SMALL CAPITALIZATION SERIES
The investment objective of the International Small Capitalization Series
is to seek total return greater than that of the Cazenove Rosenberg Global
Smaller Companies Index excluding the United States ("CRIexUS") through
investment primarily in equity securities that are traded principally in
securities markets outside of the United States of companies with market
capitalizations of between $__ million and $__ billion at the time of purchase
by the Fund ("international small capitalization
-12-
<PAGE>
companies"). This corresponds with the current defining range of market
capitalization of companies in CRIexUS, which represents the performance of
companies in the lowest 15% by market capitalization in mature markets other
than the United States. The definition of international small capitalization
companies may change from time to time to correspond with the market
capitalizations of companies included in CRIexUS as it may be adjusted from time
to time. Total return is a combination of capital appreciation and current
income (dividend or interest). The Fund does not seek to MAXIMIZE total return
but, as indicated above, seeks a total return greater than that of the index
referred to above. Because the companies in which the Fund invests typically do
not distribute significant amounts of company earnings to shareholders, the
Fund's objective will place relatively greater emphasis on capital appreciation
than on current income. The Fund's investment objective is non-fundamental and
thus may be changed by the Trustees without shareholder approval.
There are no prescribed limits on the Fund's geographic asset distribution,
and the Fund has the authority to invest in securities traded in securities
markets of any country in the world. It is currently expected that the Fund will
invest in approximately twenty-one different countries across three regions --
Europe, Pacific and North America (excluding the United States). Under certain
adverse investment conditions, the Fund may restrict the number of securities
markets in which its assets will be invested, although under normal market
circumstances, the Fund's investments will involve securities principally traded
in at least three different countries.
Under normal circumstances, at least 90% of the Fund's net assets will be
invested in common stocks of international small capitalization companies and it
is the non-fundamental policy of the Fund to invest at least 65% of the Fund's
total assets in common stocks of international small capitalization companies.
Investments in such companies may present greater opportunities for capital
appreciation because of high potential earnings growth, but may also involve
greater risk. See "Principal Risks -- Smaller Company Risk."
The Fund will not normally invest in securities of United States issuers
traded on United States securities markets.
JAPAN SERIES
The investment objective of the Japan Series is to seek total return
greater than that of the Tokyo Stock Price Index ("TOPIX") of the Tokyo Stock
Exchange. TOPIX is a capitalization-weighted index of all stocks in the First
Section of the Tokyo Stock Exchange. The Fund will seek to meet this objective
primarily through investment in Japanese equity securities, primarily in common
stocks of Japanese companies. Total return is a combination of capital
appreciation and current income (dividend or interest). The Fund does not seek
to MAXIMIZE total return but, as indicated above, seeks a total return greater
than that of the index referred to above. The Fund expects that any income it
derives will be from dividend or interest payments on securities. The Fund's
investment objective is non-fundamental and thus may be changed by the Trustees
without shareholder approval.
It is currently expected that, under normal circumstances, the Fund will
invest at least 90% of its net assets in "Japanese Securities," that is,
securities issued by entities ("Japanese Companies") that are organized under
the laws of Japan and that either have 50% or more of their assets in Japan or
derive 50% or more of their revenues from Japan. Although the Fund will invest
primarily in common stocks of Japanese Companies, it may also invest in other
Japanese Securities, such as convertible
-13-
<PAGE>
preferred stock or debentures, warrants or rights, as well as short-term
government debt securities or other short-term prime obligations (I.E., high
quality debt obligations maturing not more than one year from the date of
issuance). The Fund will not ordinarily purchase warrants or rights, although it
may receive warrants or rights through distributions on other securities it
owns. In those cases, the Fund expects to sell such warrants and rights within a
reasonable period of time following their distribution to the Fund. The Fund
does not currently expect to own warrants or rights with an aggregate value of
greater than 5% of the Fund's net assets.
The Fund currently intends to make its investments in Japanese
Securities, principally in well-established Japanese Companies that have an
active market for their shares. Japanese Companies will be considered
well-established if they have been subject for at least two years to the
financial accounting rules for a company whose securities are traded on a
Japanese securities exchange. In the discretion of the Fund's management, the
balance of the Fund's investments may be in companies that do not meet such
qualifications, although the nature of the market for the shares will always be
an important consideration in determining whether the Fund will invest in such
shares. The Fund anticipates that most Japanese equity securities in which it
will invest, either directly or indirectly (by means of convertible debentures),
will be listed on securities exchanges in Japan.
Unlike other mutual funds which invest in the securities of many countries,
the Fund will invest almost exclusively in Japanese Securities. Generally, the
Adviser will not vary the percentage of the Fund's assets which are invested in
Japanese Securities based on its assessment of Japanese economic, political or
regulatory developments or changes in currency exchange rates. However, the
Adviser has from time to time hedged up to 21% of the Fund's portfolio value and
reserves the right to hedge up to 100% of the Fund's total assets against a
possible decline in the Japanese Securities market by utilizing futures and
options on futures on Japanese stock indices as described above.
Because a high percentage of the Fund's assets will be invested in Japanese
Securities, investment in the Fund will involve the general risks associated
with investing in foreign securities. See "Principal Risks -- Foreign Investment
Risk." In addition, investors will be subject to the market risk associated
with investing almost exclusively in stocks of companies which are subject to
Japanese economic factors and conditions. Since the Japanese economy is
dependent to a significant extent on foreign trade, the relationships between
Japan and its trading partners and between the yen and other currencies are
expected to have a significant impact on particular Japanese companies and on
the Japanese economy generally. The Fund is designed for investors who are
willing to accept the risks associated with changes in such conditions and
relationships.
INDEX FUTURES. The Fund may also purchase futures contracts or options on
futures contracts on TOPIX or the NIKKEI 225 Index ("NIKKEI") for investment
purposes. TOPIX futures are traded on the Chicago Board of Trade and NIKKEI
futures are traded on the Chicago Mercantile Exchange. See "Certain Investment
Techniques and Related Risks -- Stock Index Futures."
FUNDAMENTAL POLICIES. The Fund will normally invest at least 90% of its
net assets in Japanese Securities, and it is a fundamental policy of the Fund,
which may not be changed without shareholder approval, that at least 65% of the
Fund's total assets will be invested in Japanese Securities.
PRINCIPAL RISKS
-14-
<PAGE>
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 of 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.
- - 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 stock selections. The Adviser will apply its investment
techniques and risk analyses in making investment decisions for the 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.
- - SMALLER COMPANY RISK. As specified above, the U.S. Small Capitalization
Series and the International Small Capitalization Series will invest a
relatively high percentage of their assets in companies with relatively
small market capitalizations. Companies with small market capitalizations
may be dependent upon a single proprietary product or market niche, may
have limited product lines, markets or financial resources, or may depend
on a limited management group. Typically, such companies have fewer
securities outstanding, which may be less liquid than securities of larger
companies. Their common stock and other securities may trade less
frequently and in limited volume and are generally more sensitive to
purchase and sale transactions. Therefore, the prices of such securities
tend to be more volatile than the prices of securities of companies with
larger market capitalizations. As a result, the absolute values of changes
in the price of securities of companies with small market capitalizations
may be greater than those of larger, more established companies.
- - FOREIGN INVESTMENT RISK. Investing in foreign securities (I.E. those which
are traded principally in markets outside of the United States) involves
certain risks not typically found in investing in U.S. domestic securities.
These include risks of adverse changes in foreign economic, political,
regulatory and other conditions, and changes in currency exchange rates,
exchange control regulations (including currency blockage), expropriation
of assets or nationalization, imposition of withholding taxes on dividend
or interest payments, and possible difficulty in obtaining and enforcing
judgments against foreign entities. Furthermore, issuers of foreign
securities are subject to different, and often less comprehensive,
accounting, reporting and disclosure requirements than domestic issuers. In
certain countries, legal remedies available to investors may be more
limited than those available with respect to investments in the United
States or other countries. The laws of some foreign countries may limit a
Fund's ability to invest in securities of certain issuers located in those
countries. The securities of some foreign issuers and securities traded
principally in foreign securities markets are less liquid and at times more
volatile than securities of comparable U.S. issuers and securities traded
principally in
-15-
<PAGE>
U.S. securities markets. Foreign brokerage commissions and other fees are
also generally higher than those charged in the United States. There are
also special tax considerations which apply to securities of foreign
issuers and securities traded principally in foreign securities markets.
See "Taxes."
- - JAPANESE SECURITIES RISK. Investment in the Japan Series will involve
foreign investment risk because that Fund will invest almost exclusively in
Japanese Securities. In addition, investors will be subject to the market
risk associated with investing almost exclusively in stocks of companies
which are subject to Japanese economic factors and conditions. Since the
Japanese economy is dependent to a significant extent on foreign trade, the
relationships between Japan and its trading partners and between the yen
and other currencies are expected to have a significant impact on
particular Japanese companies and on the Japanese economy generally.
- - CURRENCY RISK. As a result of their investments in securities denominated
in, and/or receiving revenues in, foreign currencies, the International
Equity Portfolios of the Trust (I.E. the International Small Capitalization
Series and the Japan Series) will be subject to currency risk. This is the
risk that those currencies will decline in value relative to the U.S.
Dollar, or, in the case of hedging positions, that the U.S. Dollar will
decline in value relative to the currency hedged. In either event, the
dollar value of these types of investments would be adversely affected.
- - INDEX FUTURES RISK. Each of the Funds may at times use index futures,
which are financial contracts whose value depends on, or is derived from,
the value of an underlying index. Index futures involve the risk of
mispricing or improper valuation and the risk that changes in the value of
an index future may not correlate perfectly with the relevant index.
- - LIQUIDITY RISK. Each Fund may purchase "illiquid securities," defined
as securities which cannot be sold or disposed of in the ordinary course
of business within seven days at approximately the value at which a Fund
has valued such securities, so long as no more than 15% of the Fund's
net assets would be invested in such illiquid securities after giving
effect to the purchase. Investment in illiquid securities involves the
risk that, because of the lack of consistent market demand for such
securities, the Fund may be forced to sell them at a discount from the
last offer price.
- - PORTFOLIO TURNOVER. Portfolio turnover is not a limiting factor with
respect to investment decisions. The rate of a Fund's portfolio turnover
may vary significantly from time to time depending on the volatility of
economic and market conditions. High portfolio turnover involves
correspondingly greater brokerage commissions or dealer markup and other
transaction costs, which will be borne directly by a Fund, and could
involve realization of capital gains that would be taxable when distributed
to shareholders of such Fund. To the extent portfolio turnover results in
the realization of net short-term capital gains, such gains ordinarily are
taxed to shareholders at ordinary income tax rates. See "Taxes."
- - 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 and that
such problems will not adversely affect the Funds' operations and the
services provided to shareholders.
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<PAGE>
CERTAIN INVESTMENT TECHNIQUES AND RELATED RISKS
The Funds have the flexibility to invest, within limits, in a variety of
instruments designed to enhance their investment capabilities. A brief
description of certain of these investment instruments and the risks associated
with them appears below. You can find more detailed information in the Trust's
Statement of Additional Information ("SAI").
- - FOREIGN EXCHANGE TRANSACTIONS. The International Equity Portfolios of the
Trust do not currently intend to hedge the currency risk associated with
investments in securities denominated in foreign currencies. However, in
order to hedge against possible variations in foreign exchange rates
pending the settlement of securities transactions, the International Equity
Portfolios reserve the right to buy or sell foreign currencies or to deal
in forward foreign currency contracts; that is, to agree to buy or sell a
specified currency at a specified price and
-17-
<PAGE>
future date. The International Equity Portfolios also reserve the right to
purchase currency futures contracts and related options thereon for similar
purposes. For example, if the Adviser anticipates that the value of the yen
will rise relative to the dollar, a Fund could purchase a currency futures
contract or a call option thereon or sell (write) a put option to protect
against a currency-related increase in the price of yen-denominated
securities such Fund intends to purchase. If the Adviser anticipates a fall
in the value of the yen relative to the dollar, a Fund could sell a
currency futures contract or a call option thereon or purchase a put option
on such futures contract as a hedge. If the International Equity Portfolios
change their present intention and decide to utilize hedging strategies,
futures contracts and related options will be used only as a hedge against
anticipated currency rate changes (not for investment purposes) and all
options on currency futures written by a Fund will be covered. These
practices, if utilized, may present risks different from or in addition to
the risks associated with investments in foreign currencies.
- - STOCK INDEX FUTURES. A stock index futures contract (an "Index Future") is
a contract to buy an integral number of units of the relevant index at a
specified future date at a price agreed upon when the contract is made. A
unit is the value at a given time of the relevant index. 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. A Fund will
realize a loss if the value of an Index Future 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 Index Future rises
between such dates.
In connection with a Fund's investment in common stocks, a Fund may
invest in Index Futures while the Adviser seeks favorable terms from
brokers to effect transactions in common stocks selected for purchase. A
Fund may also invest in Index Futures when the Adviser believes that there
are not enough attractive common stocks available to maintain the standards
of diversity and liquidity set for the Fund pending investment in such
stocks when they do become available. Through the use of Index Futures, a
Fund may maintain a portfolio with diversified risk without incurring the
substantial brokerage costs which may be associated with investment in
multiple issuers. This may permit a Fund to avoid potential market and
liquidity problems (E.G., driving up or forcing down the price by quickly
purchasing or selling shares of a portfolio security) which may result from
increases or decreases in positions already held by a Fund. A Fund may also
use Index Futures in order to hedge its equity positions.
In contrast to purchases of a common stock, no price is paid or
received by a Fund upon the purchase of a futures contract. Upon entering
into a futures contract, a Fund will be required to deposit with its
custodian in a segregated account in the name of the futures broker a
specified amount of cash or securities. This is known by participants in
the market as "initial margin." The type of instruments that may be
deposited as initial margin, and the required amount of initial margin, are
determined by the futures exchange on which the Index Futures are traded.
The nature of initial margin in futures transactions is different from that
of margin in securities transactions in that futures contract margin does
not involve the borrowing of funds by the customer to finance the
transactions. Rather, the initial margin is in the nature of a performance
bond or good faith deposit on the contract which is returned to the Fund
upon termination of the futures contract, assuming all contractual
obligations have been satisfied. Subsequent payments, called "variation
margin," to and from the broker, will be made on a
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<PAGE>
daily basis as the price of the particular Index fluctuates, making the
position in the futures contract more or less valuable, a process known as
"marking to the market."
A Fund may close out a futures contract purchase by entering into a
futures contract sale. This will operate to terminate the Fund's position
in the futures contract. Final determinations of variation margin are then
made, additional cash is required to be paid by or released to the Fund,
and the Fund realizes a loss or a gain.
A Fund's use of Index Futures involves risk. Positions in Index
Futures may be closed out by a Fund only on the futures exchanges on which
the Index Futures are then traded. There can be no assurance that a liquid
market will exist for any particular contract at any particular time. The
liquidity of the market in futures contracts could be adversely affected by
"daily price fluctuation limits" established by the relevant futures
exchange which limit the amount of fluctuation in the price of an Index
Futures contract during a single trading day. Once the daily limit has been
reached in the contract, no trades may be entered into at a price beyond
the limit. In such events, it may not be possible for a Fund to close its
futures contract purchase, and, in the event of adverse price movements, a
Fund would continue to be required to make daily cash payments of variation
margin. The futures market may also attract more speculators than does the
securities market, because deposit requirements in the futures market are
less onerous than margin requirements in the securities market. Increased
participation by speculators in the futures market may also cause price
distortions. In addition, the price of Index Futures may not correlate
perfectly with movement in the underlying index due to certain market
disturbances.
A Fund will not purchase Index Futures if, as a result, the Fund's
initial margin deposits on transactions that do not constitute "bona fide
hedging" under relevant regulations of the Commodities Futures Trading
Commission would be greater than 5% of the Fund's total assets. In addition
to margin deposits, when a Fund purchases an Index Future, it is required
to maintain, at all times while an Index Future is held by the Fund, cash,
U.S. Government securities or other high grade liquid securities in a
segregated account with its Custodian, in an amount which, together with
the initial margin deposit on the futures contract, is equal to the current
value of the futures contract.
Further, 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.
There is no assurance that a liquid secondary market will exist for any
particular option or at any particular time.
- - REPURCHASE AGREEMENTS. Each Fund may enter into repurchase agreements, by
which a Fund purchases a security and obtains a simultaneous commitment
from the seller (a bank or, to the extent permitted by the Investment
Company Act of 1940, as amended (the "1940 Act") a recognized securities
dealer) to repurchase the security at an agreed-upon price and date
(usually seven days or less from the date of original purchase). The resale
price is in excess of the purchase price and reflects an agreed-upon market
rate unrelated to the coupon rate on the purchased security. Such
transactions afford a Fund the opportunity 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.
-19-
<PAGE>
Government, the obligation of the seller is not guaranteed by the U.S.
Government and there is a risk that the seller may fail to repurchase the
underlying security. In such event, a Fund would attempt to exercise rights
with respect to the underlying security, including possible disposition in
the market. However, a Fund may be subject to various delays and risks of
loss, including (a) possible declines in the value of the underlying
security during the period while a Fund seeks to enforce its rights thereto
and (b) inability to enforce rights and the expenses involved in attempted
enforcement.
- - LOANS OF PORTFOLIO SECURITIES. Each Fund may lend some or all of its
portfolio securities to broker-dealers. Securities loans are made to
broker-dealers pursuant to agreements requiring that loans be continuously
secured by collateral in cash or U.S. Government securities at least equal
at all times to the market value of the securities lent. The borrower pays
to the lending Fund an amount equal to any dividends or interest received
on the securities lent. When the collateral is cash, the Fund may invest
the cash collateral in interest-bearing, short-term securities. When the
collateral is U.S. Government securities, the Fund usually receives a fee
from the borrower. Although voting rights or rights to consent with respect
to the loaned securities pass to the borrower, a Fund retains the right to
call the loans at any time on reasonable notice, and it will do so in order
that the securities may be voted by the Fund if the holders of such
securities are asked to vote upon or consent to matters materially
affecting the investment. A Fund may also call such loans in order to sell
the securities involved. The risks in lending portfolio securities, as with
other extensions of credit, include possible delay in recovery of the
securities or possible loss of rights in the collateral should the borrower
fail financially. However, such loans will be made only to broker-dealers
that are believed by the Adviser to be of relatively high credit standing.
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
U.S. SMALL CAPITALIZATION SERIES
For the fiscal year ended March 31, 1999, the total return of the U.S.
Small Capitalization Series (Institutional Shares) was ____% after deduction of
fees and expenses, ____% above [below] the total return of the Russell 2000
Index. The Adviser believes that the Fund's total return was the result of the
Adviser's identification of undervalued U.S. small company stocks combined with
an overall rise in the market. In the last fiscal year, the prices of the U.S.
small company stocks selected by the Adviser generally rose towards the
Adviser's estimates of their fair value. [The total return of the Institutional
Shares of the U.S. Small Capitalization Series has exceeded the total return of
the Russell 2000 Index since inception of the Fund as well as in the latest 3-
and 5-year fiscal periods of the Fund.]
U.S. SMALL CAPITALIZATION SERIES
(BASED ON THE PERFORMANCE OF INSTITUTIONAL SHARES ONLY)(1)
[LINE GRAPH]
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<PAGE>
AVERAGE ANNUAL TOTAL RETURN (FOR PERIODS ENDED 3/31/98)
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
------ ------- ------- ---------------
<S> <C> <C> <C> <C>
U.S. Small Capitalization Series (Institutional Shares)....
(Inception date February 22, 1989)
U.S. Small Capitalization Series (Select Shares)...........
(Inception date October 22, 1996)
U.S. Small Capitalization Series (Adviser Shares)..........
(Inception date January 21, 1997)
Russell 2000 Index.........................................
</TABLE>
THE NUMBERS REPORTED IN BOTH THE GRAPH AND THE TABLE REPRESENT PAST
PERFORMANCE AND ARE NOT PREDICTIVE OF FUTURE PERFORMANCES. THE PERFORMANCE OF
ADVISER SHARES AND SELECT SHARES WILL BE LOWER THAN THE PERFORMANCE OF
INSTITUTIONAL SHARES BECAUSE OF THE HIGHER FEES PAID BY SHAREHOLDERS INVESTING
IN SUCH CLASSES.
INTERNATIONAL SMALL CAPITALIZATION SERIES
For the fiscal year ended March 31, 1999, the total return of the
International Small Capitalization Series (Institutional Shares) after deduction
of fees and expenses was ___%. This exceeded [underperformed] the Fund's
CRIexUS(1) benchmark (which is administered by an affiliate of the Adviser) by
more than ___%. During the same period, the Salomon Smith Barney World ex US
Extended Market Index (a broad-based securities market index) returned ___%. The
Adviser believes that the Fund's total return was the result of identifying
undervalued international small company stocks. During the last fiscal year,
international small company stocks generally underperformed international large
company stocks. The relative underperformance of international small company
stocks and the continued weakness in Asian markets were both factors affecting
the Fund's total return
- -------------------
(1) CRIexUS Index includes 21 developed countries: Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy,
Japan, Malaysia, Netherlands, New Zealand, Norway, Singapore, Spain,
Sweden, Switzerland and the U.K.
INTERNATIONAL SMALL CAPITALIZATION SERIES
(BASED ON THE PERFORMANCE OF INSTITUTIONAL SHARES ONLY)(1)
[LINE GRAPH]
AVERAGE ANNUAL TOTAL RETURN (FOR PERIODS ENDED 3/31/99)
<TABLE>
<CAPTION>
1 YEAR SINCE INCEPTION
------ ---------------
<S> <C> <C>
International Small Capitalization Series (Institutional Shares)....
(Inception date September 23, 1996)
International Small Capitalization Series (Select Shares)...........
(Inception date October 29, 1996)
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<PAGE>
CRIexUS Index
Salomon Smith Barney World ex Us Emi................................
</TABLE>
THE NUMBERS REPORTED IN BOTH THE GRAPH AND THE TABLE REPRESENT PAST
PERFORMANCE AND ARE NOT PREDICTIVE OF FUTURE RESULTS. THE PERFORMANCE OF SELECT
SHARES WILL BE LOWER THAN THE PERFORMANCE OF INSTITUTIONAL SHARES BECAUSE OF THE
HIGHER FEES PAID BY SHAREHOLDERS INVESTING IN SUCH CLASSES.
JAPAN SERIES
During the fiscal year ended March 31, 1999, the total return of the Japan
Series (Institutional Shares) after deduction of fees and expenses was less
[greater] than the total return of its TOPIX benchmark by ____%. The Adviser
believes that the Fund's total return was the result of a general decline in the
Japanese market combined with a steeper relative decline in the value stocks
(high book to price ratio stocks) that the Adviser generally invests in. [Since
inception in January 1989, the Institutional Shares of the Japan Series have
underperformed TOPIX by an average of ____% per year.]
[LINE GRAPH]
AVERAGE ANNUAL TOTAL RETURN (FOR PERIODS ENDED 3/31/99)
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
------ ------- ------- ---------------
<S> <C> <C> <C> <C>
Japan Series (Institutional Shares).......................
(Inception date January 3, 1989)
Japan Series (Select Shares)..............................
(Inception date October 22, 1996)
TOPIX Index...............................................
</TABLE>
THE NUMBERS REPORTED IN BOTH THE GRAPH AND THE TABLES REPRESENT PAST
PERFORMANCE AND ARE NOT PREDICTIVE OF FUTURE PERFORMANCES. THE PERFORMANCE OF
SELECT SHARES WILL BE LOWER THAN THE PERFORMANCE OF INSTITUTIONAL SHARES BECAUSE
OF THE HIGHER FEES PAID BY SHAREHOLDERS INVESTING IN SUCH CLASS.
THE ADVISER'S GENERAL INVESTMENT PHILOSOPHY
The Adviser attempts to add value relative to the designated benchmark
through a quantitative stock selection process and seeks to diversify investment
risk across the holdings in each of the Funds. In seeking to outperform each
Fund's designated benchmark, the Adviser also attempts to control risk in the
Fund's portfolio relative to the securities constituting that benchmark. Since
each Fund is substantially invested in equities at all times, the Adviser does
not earn the extraordinary return, or "alpha," by timing the market. The Adviser
seeks to avoid constructing portfolios that significantly differ from the
relevant benchmark with respect to characteristics such as market
capitalization, historic volatility or "beta," and industry weightings. Each
Fund seeks to have exposure to these factors similar to that of the designated
benchmark.
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
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<PAGE>
believes that market prices will converge towards fundamental value over time,
and that therefore, any investor who can accurately determine fundamental value,
and who applies a disciplined investment process to select those stocks that are
currently undervalued (I.E., the price is less than fundamental value), will
outperform the market over time.
The premise of the 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). The Adviser believes that the market will recognize the
"better value" and that the mispricing will be corrected as the stocks in the
Funds' portfolios are purchased by other investors.
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 relevant Fund's portfolio until the
market recognizes and corrects for the misvaluation.
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 global
universe, both fundamentally and technically, and determines the risk
characteristics of the relevant Fund's benchmark. The portfolio management
function optimizes each portfolio's composition, executes trades, and monitors
performance and trading costs.
The essence of the 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. Analysis of companies in the United States and Canada is
conducted in a single unified model. The Appraisal Model discriminates where the
two markets are substantially different, while simultaneously comparing
companies in the two markets according to their degrees of similarity. European
companies and Asian companies (other than Japanese companies) are analyzed in a
nearly global model, which includes the United States and Canada as a further
basis for comparative valuation, but which excludes Japan. Japanese companies
are analyzed in an independent national model. The Appraisal Model incorporates
the various accounting standards that apply in different markets and makes
adjustments to ensure meaningful comparisons.
-23-
<PAGE>
An important feature of the Appraisal Model is the classification of
companies into one or more of 166 groups of "similar" businesses. Currently, in
the United States, 160 groups are applicable; in Japan, 122 groups are
applicable; and in Europe, 154 groups are applicable. Each company is broken
down into its individual business segments, and each segment is compared with
similar business operations of other companies doing business in the same
geographical market. In most cases, the comparison is extended to include
companies with similar business operations in different markets. Subject to the
availability of data in different markets, the 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
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.
With regard to the U.S. Small Capitalization Series, the Adviser's attempts
to predict the earnings growth of companies over a one-year period through its
proprietary Near-Term Prospects Model. 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 for the U.S. Small Capitalization Series.
With regard to the International Small Capitalization Series and the Japan
Series, the Adviser's proprietary Earnings Change Model analyzes more than 20
variables to predict individual company earnings over a one-year horizon. The
variables are fundamental and fall into three categories: measures of past
profitability, measures of company operations and consensus earnings forecasts.
The Earnings Change Model is independent of the Appraisal Model and projects the
change in a company's earnings in cents/current price. The value of the
projected earnings change is converted to an "earnings change alpha" by
multiplying the projected change by the market's historical response to changes
of that magnitude.
Also with regard to the International Small Capitalization Series and the
Japan Series, the Adviser's proprietary Investor Sentiment Model quantifies
investor sentiment about features of stocks which influence price but which are
not captured by the Appraisal Model or the Earnings Change Model. This Model
measures company quality by looking at past price patterns and by predicting the
probability of deficient earnings. The Investor Sentiment Model also captures
market enthusiasm towards individual stocks by looking at broker recommendations
and analyst estimates. Investor sentiment alphas are developed by multiplying
the Model's sentiment scores by the market's historical response to such scores.
Each company's earnings change alpha and investor sentiment alpha are added
to its appraisal alpha to arrive at a total company alpha. Stocks with large
positive total company alphas are candidates for purchase for the portfolios of
the International Small Capitalization Series and/or the Japan Series. Stocks
held in a portfolio with total company alphas that are only slightly positive,
zero or negative are candidates for sale by those Funds.
-24-
<PAGE>
Before trading for the International Small Capitalization Series or the
Japan Series, the Adviser systematically analyzes the short-term price behavior
of individual stocks to determine the timing of trades. The Investor Sentiment
Model quantifies investor enthusiasm for each stock by analyzing its short-term
performance relative to similar stocks, changes in analyst and broker opinions
about the stock, and earnings surprises. The Adviser develops a "trading alpha"
for each stock (i.e., the expected short-term extraordinary return) which is
designed to enable the International Small Capitalization Series and the Japan
Series to purchase stocks from supply and to sell stocks into demand, greatly
reducing trading costs.
OPTIMIZATION
The Adviser's portfolio optimization system attempts to construct a Fund
portfolio that will outperform the relevant benchmark, while maintaining
portfolio risk characteristics similar to those of the Fund's 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
each of the Funds and determines the feasibility of each recommendation in light
of the stock's liquidity, the expected transaction costs, and general market
conditions. It relays target price information to a trader for each stock
considered for purchase or sale. Trades are executed through any one of four
trading strategies: traditional brokerage, networks, accommodation, and package
or "basket" trades.
The network arrangements the Adviser has developed with Instinet Matching
System (IMS), Portfolio System for Institutional Trading (POSIT), and the
Arizona Stock Exchange (AZX) facilitate large volume trading with little or no
price disturbance and low commission rates.
Accommodative trading (which we also refer to as the 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 Matching System and Lattice Trading System. Those tools
provide order entry, negotiation and execution capabilities, either directly to
other institutions or electronically to the floor of the exchange. The
advantages of using such systems include speed of execution, low commissions,
anonymity and very low market impact.
The Adviser continuously monitors trading costs to determine the impact of
commissions and price disturbances on the Funds' portfolios.
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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") has succeeded Rosenberg Institutional Equity Management ("RIEM") as
the Trust's investment adviser. 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 and
several mutual funds. 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. See "Fees and Expenses." The Adviser will reduce its
management fee and bear certain expenses until further notice to limit each
Fund's total annual operating expenses. See "Fees and Expenses."
PORTFOLIO MANAGERS
Management of the portfolio of each Fund is overseen by the Adviser's executive
officers who are responsible for design and maintenance of the Adviser's
portfolio system, and by a portfolio manager who is responsible for research and
monitoring each Fund's characteristic performance against the relevant benchmark
and for monitoring cash balances.
U.S. SMALL CAPITALIZATION SERIES. Dr. Rosenberg, Dr. Reid and Floyd
Coleman, the portfolio manager, are responsible, and have been responsible since
inception, for the day-to-day management of the U.S. Small Capitalization
Series' portfolio. Dr. Rosenberg and Dr. Reid both have been employed by the
Adviser or its predecessor since 1985. Mr. Coleman has been a trader and
portfolio manager for the Adviser or its predecessor since 1988. He received a
B.S. from Northwestern University in 1982, a M.S. from Polytechnic Institute,
Brooklyn in 1984 and a M.B.A. from Harvard Business School in 1988.
INTERNATIONAL SMALL CAPITALIZATION SERIES. Dr. Rosenberg, Dr. Reid and
Joseph Leung, the portfolio manager, are responsible, and have been responsible
since inception, for the day-to-day management of the International Small
Capitalization Series' portfolio. Mr. Leung has been a senior research
associate, programmer and portfolio manager with the Adviser or its predecessor
since 1993. He received a B.S. and a B.A. from Queen's University, Ontario,
Canada in 1989 and a M.B.A. from the University of Chicago in 1993. Mr. Leung is
a chartered financial analyst.
JAPAN SERIES. Dr. Rosenberg, Dr. Reid, and Cheng S. Liao, the portfolio
manager, are responsible, and have been responsible since inception, for the
day-to-day management of the Japan Series' portfolio. Mr. Liao has been a senior
research associate, programmer and portfolio manager, specializing in the
Japanese market with the Adviser or its predecessor since 1989. Mr. Liao has
also been a trader for the Adviser or its predecessor in Japanese securities
since 1994. He received a B.S. from Tohobu University, Japan, in 1984, a M.S.
from Stanford University in 1986, and a M.S. in Computer Science from
Polytechnic Institute, New York in 1988.
EXECUTIVE OFFICERS
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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 model.
Dr. Rosenberg earned a B.A. degree from the University of California,
Berkeley, in 1963. He earned an M.Sc. from the London School of Economics in
1965, and a Ph.D. from Harvard University, Cambridge, Massachusetts, in 1968.
From 1968 until 1983, Dr. Rosenberg was a Professor of Finance, Econometrics,
and Economics at the School of Business Administration at the University of
California, Berkeley. Concurrently, from 1968 until 1974, Dr. Rosenberg worked
as a consultant in applied decision theory in finance, banking and medicine. In
1975, he founded Barr Rosenberg Associates, a financial consulting firm (now
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.
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.
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
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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.
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.
Dr. Sharpe is the STANCO 25 Professor of Finance at Stanford University's
Graduate School of Business. He is best known as one of the developers of the
Capital Asset Pricing Model, including the beta and alpha concepts used in risk
analysis and performance measurement. He developed the widely-used binomial
method for the valuation of options and other contingent claims. He also
developed the computer algorithm used in many asset allocation procedures. Dr.
Sharpe has published articles in a number of professional journals. He has also
written six books, including PORTFOLIO THEORY AND CAPITAL MARKETS, (McGraw-Hill,
1970), ASSET ALLOCATION TOOLS, (Scientific Press, 1987), FUNDAMENTALS OF
INVESTMENTS (with Gordon J. Alexander and Jeffery Bailey, Prentice-Hall, 1993)
and INVESTMENTS (with Gordon J. Alexander and Jeffery Bailey, Prentice-Hall,
1995). Dr. Sharpe is a past President of the American Finance Association. He
is currently Chairman of Financial Engines Incorporated, an electronic
investment advice company. He has also served as consultant to a number of
corporations and investment organizations. He is also a member of the Board of
Trustees of Smith Breeden Trust, an investment company, and a director at CATS
Software and Stanford Management Company. He received the Nobel Prize in
Economic Sciences in 1990.
Professor Hakansson is the Sylvan C. Coleman Professor of Finance and
Accounting at the Haas School of Business, University of California, Berkeley.
He is a former member of the faculty at UCLA as well as at Yale University. At
Berkeley, he served as Director of the Berkeley Program in Finance (1988-1991)
and as Director of the Professional Accounting Program (1985-1988). Professor
Hakansson is a Certified Public Accountant and spent three years with Arthur
Young & Company prior to receiving his Ph.D. from UCLA in 1966. He has twice
been a Visiting Scholar at Bell Laboratories in New Jersey and was, in 1975, the
Hoover Fellow at the University of New South Wales in Sydney and, in 1982, the
Chevron Fellow at Simon Fraser University in British Columbia. In 1984,
Professor Hakansson was a Special Visiting Professor at the Stockholm School of
Economics, where he was also awarded an honorary doctorate in economics. He is
a past president of the Western Finance Association (1983-1984). Professor
Hakansson has published a number 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 Service
Corporation and of Theatrix Interactive, Inc. He is also a Fellow of the
Accounting Researchers International Association and a member of the Financial
Economists Roundtable.
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
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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 5 books and numerous articles in academic and professional
journals. His research has focused on 3 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
Adviser Shares of the U.S. Small Capitalization Series and Select Shares of
each Fund are sold on a continuous basis by the Company's distributor, Barr
Rosenberg Funds Distributor, Inc. (the "Distributor"), a wholly-owned subsidiary
of 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 Select Shares and/or in
connection with the provision of direct client service, personal services,
maintenance of shareholder accounts and reporting services ("Shareholder
Services") to holders of Select Shares of the Trust, such shares are subject to
an annual distribution and 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 Select 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 Select Shares, printing of prospectuses and
reports for other than existing Select shareholders, advertising, preparing,
printing and distributing sales literature and forwarding communications from
the Trust to Select 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.
Under a Service plan adopted by the Trustees, the Distributor may also
provide (or arrange for another intermediary or agent to provide) personal
and/or account maintenance services to holders of Adviser Shares of the U.S.
Small Capitalization Series (the Distributor or such entity is referred to as a
"Servicing Agent" in such capacity). A Servicing Agent will be paid some or all
of the Shareholder Servicing Fees charged with respect to Adviser Shares
pursuant to Servicing Plan for such shares.
MULTIPLE CLASSES
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As indicated previously, the U.S. Small Capitalization Series offer three
classes of shares to investors, Institutional Shares, Adviser Shares and Select
Shares and each of the Japan Series and International Small Capitalization
Series offers two classes of shares to investors, Institutional Shares and
Select Shares. Eligibility to invest in a particular class generally depends on
the amount invested in the particular Fund and whether the investor makes the
investment directly or through a financial adviser. The following table sets
forth basic investment and fee information for each class.
<TABLE>
<CAPTION>
ANNUAL
DISTRIBUTION
AND
MINIMUM SHAREHOLDER
FUND SUBSEQUENT METHOD OF ANNUAL SERVICE
NAME OF CLASS INVESTMENT* INVESTMENTS* INVESTMENT* SERVICE FEE FEE
- ------------- ----------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Institutional...................
Adviser.........................
Select..........................
</TABLE>
- --------------------
* Certain exceptions apply. See "Institutional Shares", "Adviser Shares" and
"Select Shares" below.
The offering price is based on the net asset value per share next
determined after an order is received. See "Purchasing Shares," "Redemption of
Shares" and "How the Trust Prices Shares of the Funds -- Determination of Net
Asset Value."
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 fees.
ADVISER SHARES
Adviser shares may be purchased solely through accounts established under a
fee-based program which is sponsored and maintained by a registered
broker-dealer or other financial adviser approved by the Trust's Distributor and
under which each investor pays a fee to the broker-dealer or other financial
adviser, or its affiliate or agent, for investment managery or administrative
services. In order to be eligible to purchase Adviser Shares, a broker-dealer or
other financial adviser must make an initial investment of at least $100,000 of
its client's assets in the U.S. Small Capitalization Series. In its sole
discretion, the Adviser may waive this minimum asset investment requirement.
Adviser Shares are sold without any initial or deferred sales charges and are
not subject to ongoing distribution fees, but are subject to a Service Fee at an
annual rate equal to 0.25% of the U.S. Small Capitalization Series average daily
net assets attributable to Adviser Shares.
SELECT SHARES
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Select Shares may be purchased by institutions, certain individual
retirement accounts and individuals. In order to be eligible to purchase Select
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. Select Shares are subject to an annual Distribution Fee
equal to 0.25% of the average daily net assets attributable to Select Shares,
and the Trustees have authorized each Fund to pay up to 0.15% of its average
daily net assets attributable to Select Shares for subtransfer and 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 Select Shares. See "Management of the
Trust -- Distributor."
GENERAL
The Service Fee charged with respect to Adviser Shares is intended to be
compensation for direct client service, maintenance and reporting with respect
to such shares. The Distribution and Shareholder Service Fee charged with
respect to Select Shares is intended to compensate the Distributor for services
and expenses primarily intended to result in the sale of Select Shares and/or in
connection with the provision of Shareholder Services to holders of Select
Shares of the Trust. See "Management of the Trust -- Distributor."
As described above, shares of the Funds may be sold to corporations or
other institutions such as trusts, foundations or broker-dealers purchasing for
the accounts of others (collectively, "Shareholder Organizations"). Investors
purchasing and redeeming shares of the Funds through a Shareholder Organization
or through financial advisers may be charged a transaction-based fee or other
fee for the services provided by the Shareholder Organization or financial
adviser. Each such Shareholder Organization and financial adviser is responsible
for transmitting to its customers a schedule of any such fees and information
regarding any additional or different conditions regarding purchases and
redemptions of Fund shares. Customers of Shareholder Organizations and financial
advisers should read this Prospectus in light of the terms governing accounts
with their particular organization.
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.
The U.S. Small Capitalization Series was closed to all investments
effective January 1, 1999, except that (i) participants in 401(k) plans may
continue to direct the purchase of investments in the U.S. Small Capitalization
Series by their plan account until and including June 30, 1999; (ii)
participants in certain "wrap programs" that have entered into contractual
arrangements with the Trust and/or Distributor will be eligible to purchase
shares of the U.S. Small Capitalization Series quarterly to rebalance their
accounts for as long as the "wrap program" continues to own shares of such Fund;
(iii) certain bank "asset allocation programs" that have entered into an
agreement with the Trust and/or Distributor will be eligible to purchase shares
of the U.S. Small Capitalization Series under the terms of such agreement and to
rebalance accounts quarterly; (iv) holders of accounts in the Rosenberg Money
Purchase Plan and the Rosenberg Daily Valuation 401(k) Plan will be eligible to
purchase shares of the
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U.S. Small Capitalization Series for such accounts; (v)
employees of, and consultants to, the Adviser and any entities under common
control with the Adviser will be eligible to purchase shares of the U.S. Small
Capitalization Series; and (vi) the Trustees of the Trust may continue to invest
in the U.S. Small Capitalization Series.
Shareholders of other Funds will not be permitted to exchange any of their
shares for shares of the U.S. Small Capitalization Series unless such
shareholders are independently eligible to purchase shares of the U.S. Small
Capitalization Series as described above. The Trust reserves the right at any
time to modify the restrictions set forth above, including the suspension of all
sales of all shares of the U.S. Small Capitalization Series or the lifting of
restrictions on different classes of investors and/or transactions."
INITIAL CASH INVESTMENTS BY WIRE
Subject to acceptance by the Trust, shares of each Fund 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 43219-2495. The Fund(s) to be purchased
should be specified on the Account Application. In all cases, subject to
acceptance by the Trust, payment for the purchase of shares received by mail
will be credited to a shareholder's account at the net asset value per share of
the Fund next determined after receipt, even though the check may not yet have
been converted into federal funds.
ADDITIONAL CASH INVESTMENTS
Additional cash investments may be made at any time by mailing a check to
the Trust at the address noted under "-- Initial Cash Investments by Mail"
(payable to Barr Rosenberg Series Trust) or by wiring monies as noted under "--
Initial Cash Investments by Wire." Notification must be given at 1-800-447-3332
prior to 4:00 p.m., New York time, of the wire date. The minimum amounts for
additional cash investments are $10,000 for Institutional Shares, $1,000 for
Adviser Shares and $500 for Select Shares.
INVESTMENTS IN-KIND (INSTITUTIONAL SHARES)
Institutional Shares may be purchased in exchange for common stocks on
deposit at The Depository Trust Company ("DTC") or by a combination of such
common stocks and cash. Purchase of Institutional Shares of a Fund in exchange
for stocks is subject in each case to the determination by the 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 "Determination of Net
Asset Value"
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(generally the last quoted sale price) as of the time of the next determination
of net asset value after such acceptance. All dividends, subscription or other
rights which are reflected in the market price of accepted securities at the
time of valuation become the property of the Fund and must be delivered to the
Fund upon receipt by the investor from the issuer. A gain or loss for federal
income tax purposes would be realized by investors subject to federal income
taxation upon the exchange, depending upon the investor's basis in the
securities tendered.
The 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 Select Shares of one or
more of the Funds through the use of electronic funds transfers. Investors may
commence their participation in this program with a minimum initial investment
of $2,500 and may elect to make subsequent investments by transfers of a minimum
of $50 into their established Fund account. You may contact the Trust for more
information about the Barr Rosenberg Automatic Investment Program.
For purposes of calculating the purchase price of Fund shares, a purchase
order is received by the Trust on the day that it is in "good order" unless it
is rejected by the Distributor. For a purchase order of 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
the DTC prior to 10:00 a.m., New York time. If the consideration is received by
the Trust after the deadline, the purchase price of Fund shares will be based
upon the next determination of net asset value of Fund shares. No third party or
foreign checks will be accepted.
The Trust reserves the right, in its sole discretion, to suspend the
offering of shares of its Funds or to reject purchase orders when, in the
judgment of the Adviser, such suspension or rejection would be in the best
interests of the Trust or a Fund.
Purchases of a Fund's shares may be made in full or in fractional shares of
the Fund calculated to three decimal places. In the interest of economy and
convenience, certificates for shares will not be issued.
IRA ACCOUNTS
Select Shares of all 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.
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REDEMPTION OF SHARES
Shares of each Fund may be redeemed by mail, or, if authorized by an
investor in an Account Application, by telephone. The value of shares redeemed
may be more or less than the original cost of those shares, depending on the
market value of the investment securities held by the particular Fund at the
time of the redemption.
BY MAIL
The Trust will redeem its shares at the net asset value next determined
after the request is received in "good order." See "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 43219-2495.
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 (see "Signature Guarantees,"
below); and
(c) other supporting legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pension and
profit sharing plans and other organizations.
SIGNATURE GUARANTEES
To protect shareholder accounts, the Trust and 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 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
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representing himself or herself to be a shareholder and believed by the Transfer
Agent to be genuine. The Transfer Agent's records of such instructions are
binding and the shareholder, and not the Trust or the Transfer Agent, bears the
risk of loss in the event of unauthorized instructions reasonably believed by
the Transfer Agent to be genuine. The Transfer Agent will employ reasonable
procedures to confirm that instructions communicated are genuine and, if it does
not, it may be liable for any losses due to unauthorized or fraudulent
instructions. The procedures employed in connection with transactions initiated
by telephone include tape recording of telephone instructions and requiring some
form of personal identification prior to acting upon instructions received by
telephone. Telephone Redemption will be suspended for a period of 10 days
following a telephonic address change.
SYSTEMATIC WITHDRAWAL PLAN
An owner of $12,000 or more of shares of a Fund may elect to have periodic
redemptions made from the investor's account to be paid on a monthly, quarterly,
semiannual or annual basis. The maximum payment per year is 12% of the account
value at the time of the election. The 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
Purchases of shares of the Funds made by check are not permitted to be
redeemed until payment of the purchase price has been collected, which may take
up to fifteen days after purchase. Shareholders can avoid this delay by
utilizing the wire purchase option.
If the 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 wholly or partly in cash, the Fund may pay the redemption price of
Institutional Shares in whole or in part by a distribution in kind of readily
marketable securities held by the relevant Fund in lieu of cash. Securities used
to redeem Fund shares in kind will be valued in accordance with the Fund's
procedures for valuation described under "Determination of Net Asset Value."
Securities distributed by the Fund in kind will be selected by the Adviser in
light of the Fund's objective and will not generally represent a PRO RATA
distribution of each security held in the Fund's portfolio. Investors may incur
brokerage charges on the sale of any such securities so received in payment of
redemptions.
The Trust may suspend the right of redemption and may postpone payment for
more than seven days when the New York Stock Exchange is closed for other than
weekends or holidays, or if permitted by the rules of the Securities and
Exchange Commission, during periods when trading on the Exchange is restricted
or during an emergency which makes it impracticable for the Funds to dispose of
their securities or to fairly determine the value of their net assets, or during
any other period permitted by the Securities and Exchange Commission for the
protection of investors.
EXCHANGING SHARES
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The Funds offer two convenient ways to exchange shares in one Fund for
shares of another Fund in the Trust. Shares of a particular class of a Fund may
be exchanged only for shares of the same class in another Fund. There is no
sales charge on exchanges. Before engaging in an exchange transaction, a
shareholder should read carefully the information in the Prospectus describing
the Fund into which the exchange will occur. A shareholder may not exchange
shares of a class of one Fund for shares of the same class of another Fund that
is not qualified for sale in the state of the shareholder's residence. Although
the Trust has no current intention of terminating or modifying the exchange
privilege, it reserves the right to do so at any time.
An exchange is taxable as a sale of a security on which a gain or loss may
be recognized. Shareholders should receive written confirmation of the exchange
within a few days of the completion of the transaction.
A new account opened by exchange must be established with the same name(s),
address and social security number as the existing account. All exchanges will
be made based on the respective net asset values next determined following
receipt of the request by the Funds containing the information indicated below.
EXCHANGE BY MAIL
To exchange Fund shares by mail, shareholders should simply send a letter
of instruction to the Trust. The letter of instruction must include: (a) the
investor's account number; (b) the class of shares to be exchanged; (c) the Fund
from and the Fund into which the exchange is to be made; (d) the dollar or share
amount to be exchanged; and (e) the signatures of all registered owners or
authorized parties.
EXCHANGE BY TELEPHONE
To exchange Fund shares by telephone or to ask questions about the exchange
privilege, shareholders may call the Trust at 1-800-447-3332. If you wish to
exchange shares, please be prepared to give the telephone representative the
following information: (a) the account number, social security number and
account registration; (b) the class of shares to be exchanged; (c) the name of
the Fund from which and the Fund into which the exchange is to be made; and (d)
the dollar or share amount to be exchanged. Telephone exchanges are available
only if the shareholder so indicates by checking the "yes" box on the Account
Application. The Trust employs procedures, including recording telephone calls,
testing a caller's identity, and sending written confirmation of telephone
transactions, designed to give reasonable assurance that instructions
communicated by telephone are genuine, and to discourage fraud. To the extent
that a Fund does not follow such procedures, it may be liable for losses due to
unauthorized or fraudulent telephone instructions. A Fund will not be liable for
acting upon instructions communicated by telephone that it reasonably believes
to be genuine. The Trust reserves the right to suspend or terminate the
privilege of exchanging by mail or by telephone at any time. The telephone
exchange privilege will be suspended for a period of 10 days following a
telephonic address change.
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. See "Determination of Net Asset
Value," below.
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<PAGE>
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
shareholder servicing and/or distribution expenses, if any, and any other
expenses specially allocated to that class are then deducted from the class's
proportionate interest in the Fund's assets. The resulting amount for each class
is divided by the number of shares of that class outstanding to produce the "net
asset value" per share.
Portfolio securities listed on a securities exchange for which market
quotations are available are valued at the last quoted sale price on each
business day, or, if there is no such reported sale, at the most recent quoted
bid price. Price information on listed securities is generally taken from the
closing price on the exchange where the security is primarily traded. Unlisted
securities for which market quotations are readily available are valued at the
most recent quoted bid price, except that debt obligations with sixty days or
less remaining until maturity may be valued at their amortized cost.
Exchange-traded options, futures and options on futures are valued at the
settlement price as determined by the appropriate clearing corporation. Other
assets and securities for which no quotations are readily available are valued
at fair value as determined in good faith by the Trustees of the Trust or by
persons acting at their direction.
DISTRIBUTIONS
Each Fund intends to pay out as dividends substantially all of its net
investment income (which comes from dividends and any interest it receives from
its investments and net realized short-term capital gains). Each Fund also
intends to distribute substantially all of its net realized long-term capital
gains, if any, after giving effect to any available capital loss carryover. Each
Fund's policy is to declare and pay distributions of its dividends and interest
annually although it may do so more frequently as determined by the Trustees of
the Trust. The Funds' policy is to distribute net realized short-term capital
gains and net realized long-term gains annually, although it may do so more
frequently as determined by the Trustees of the Trust to the extent permitted by
applicable regulations.
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<PAGE>
All dividends and/or distributions will be paid out in the form of
additional shares of the Fund to which the dividends and/or distributions relate
at net asset value unless the shareholder elects to receive cash. Shareholders
may make this election by marking the appropriate box on the Account Application
or by writing to the Administrator.
If you elect to receive distributions in cash and checks (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 substantially all of its dividend, interest and certain other
income, its net realized short-term capital gains and its net realized long-term
capital gains to its shareholders and otherwise qualifies for the special rules
governing the taxation of regulated investment companies, the Fund itself will
not pay federal income tax on the amount distributed. Dividend distributions
(I.E., distributions derived from interest, dividends and certain other income,
including, in general, short-term capital gains) will be taxable to shareholders
subject to income tax as ordinary income. Distributions of any long-term capital
gains (generally taxed at a 20% rate) are taxable as such to shareholders
subject to income tax, regardless of how long a shareholder may have owned
shares in such Fund. A distribution paid to shareholders by a Fund in January of
a year is generally deemed to have been received by shareholders on December 31
of the preceding year, if the distribution was declared and payable to
shareholders of record on a date in October, November or December of that
preceding year. Some 1998 distributions of long-term capital gains recognized in
1997 may be subject to tax at a 28% rate. Each Fund will provide federal tax
information annually, including information about dividends and distributions
paid during the preceding year.
If more than 50% of a Fund's assets at fiscal year-end is represented by
debt and equity securities of foreign corporations, the Fund may (and the Japan
Series and the International Small Capitalization Series intend to) elect to
permit shareholders who are U.S. citizens or U.S. corporations to claim a
foreign tax credit or deduction (but not both) on their U.S. income tax returns
for their pro rata portion of qualified taxes paid by the Fund to foreign
countries. As a result, the amounts of foreign income taxes paid by such Fund
would be treated as additional income to shareholders of such Fund for purposes
of the foreign tax credit. Each such shareholder would include in gross income
from foreign sources its pro rata share of such taxes. Certain limitations
imposed by the Internal Revenue Code may prevent shareholders from receiving a
full foreign tax credit or deduction for their allocable amount of such taxes.
The foregoing is a general summary of the federal income tax consequences
of investing in a Fund to shareholders who are U.S. citizens or U.S.
corporations. Shareholders should consult their own tax advisers about the tax
consequences of an investment in the Funds in light of each shareholder's
particular tax situation. Shareholders should also consult their own tax
advisers about consequences under foreign, state, local or other applicable tax
laws.
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<PAGE>
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES
The Trust is a diversified open-end series management investment company
organized as a Massachusetts business trust under the laws of The Commonwealth
of Massachusetts by an Agreement and Declaration of Trust dated April 1, 1988,
as amended (the "Declaration of Trust"). The U.S. Small Capitalization Series
commenced operations on or about February 22, 1989. The Japan Series commenced
operations on or about January 3, 1989. The International Small Capitalization
Series commenced operations on September 23, 1996.
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest which are presently divided
into five series. Interests in each of the Funds described in this Prospectus
are represented by shares of such Fund. The Declaration of Trust also permits
the Trustees, without shareholder approval, to subdivide any series of shares
into various sub-series of shares with such preferences and other rights as the
Trustees may designate. Although the Trustees have no current intention to
exercise this power, it is intended to allow them to provide for an equitable
allocation of the impact of any future regulatory requirements which might
affect various classes of shareholders differently. The Trustees may also,
without shareholder approval, establish one or more additional separate
portfolios for investments in the Trust, terminate a series of the Trust or
merge two or more existing portfolios. Shareholders' investments in such a
portfolio would be evidenced by a separate series of shares.
The U.S. Small Capitalization Series is further divided into three classes
of shares designated as Institutional Shares, Adviser Shares and Select Shares.
The Japan Series and International Small Capitalization Series are further
divided into Institutional Shares and Select Shares. Each class of shares of
each Fund represents interests in the assets of that Fund and has identical
dividend, liquidation and other rights and the same terms and conditions except
that expenses, if any, related to the distribution and shareholder servicing of
a particular class are borne solely by such class and each class may, at the
Trustees' discretion, also pay a different share of other expenses, not
including advisory or custodial fees or other expenses related to the management
of the Trust's assets, if these expenses are actually incurred in a different
amount by that class, or if the class receives services of a different kind or
to a different degree than the other classes. All other expenses are allocated
to each class on the basis of the net asset value of that class in relation to
the net asset value of the particular Fund.
Each class of shares of each Fund has identical voting rights except that
each class has exclusive voting rights on any matter submitted to shareholders
that relates solely to that class, and has separate voting rights on any matter
submitted to shareholders in which the interests of one class differ from the
interests of any other class. Each class of shares has exclusive voting rights
with respect to matters pertaining to any distribution or servicing plan
applicable to that class. Matters submitted to shareholder vote must be approved
by each Fund separately except (i) when required by the 1940 Act, all shares
shall be voted together and (ii) when the Trustees have determined that the
matter does not affect all series, then only shareholders of the series affected
shall be entitled to vote on the matter. All three classes of shares of a Fund
will vote together, except with respect to any distribution or servicing plan
applicable to a class or when a class vote is required as specified above or
otherwise by the 1940 Act. Shares are freely transferable, are entitled to
dividends as declared by the Trustees and, in liquidation of a Fund portfolio,
are entitled to receive the net assets of that portfolio, but not of the other
portfolios. The Trust does not generally hold annual meetings of shareholders
and will do so only
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<PAGE>
when required by law. Shareholders holding a majority of the outstanding shares
may remove Trustees from office by votes cast in person or by proxy at a meeting
of shareholders or by written consent.
The Declaration of Trust provides for the perpetual existence of the Trust.
The Trust, may, however, be terminated at any time by vote of at least
two-thirds of the outstanding shares of each series of the Trust.
Shareholders could, under certain circumstances, be held personally liable
for the obligations of the Trust. However, the risk of a shareholder incurring
financial loss on account of that liability is considered remote since it may
arise only in very limited circumstances.
As of June 30, 1999, AXA Rosenberg Investment Management LLC may be deemed
to control the Institutional Shares of the Japan Series because it beneficially
owned, either directly or indirectly, more than 25% of such shares of such Fund.
OTHER INFORMATION
The Funds' investment performance may from time to time be included in
advertisements about the Funds. Total return for a Fund is measured by comparing
the value of an investment in a 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 gain
distributions). All data are based on the Funds' 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.
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<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand each
Fund's financial performance for the past 5 years (or, if shorter, for the
life of the Fund). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by ______________, whose report, along with the Trust's financial
statements, is included in the SAI. Additional unaudited performance
information is contained in the Trust's Annual Report, which is available
upon request.
[To be updated.]
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<PAGE>
(Back cover)
The Funds' statement of additional information ("SAI") dated June 1, 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 (Adviser and Select 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
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CUSTODIAN OF ASSETS
Custodial Trust Company
101 Carnegie Center
Princeton, NJ 08540
INDEPENDENT ACCOUNTANTS
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA 02110
Investment Company Act File No. 811-05547
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<PAGE>
BARR ROSENBERG SERIES TRUST
U.S. SMALL CAPITALIZATION SERIES
INTERNATIONAL SMALL CAPITALIZATION SERIES
JAPAN SERIES
STATEMENT OF ADDITIONAL INFORMATION
MAY 28, 1999
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the prospectus of the U.S. Small
Capitalization Series, Japan Series and International Small Capitalization
Series of Barr Rosenberg Series Trust dated May 28, 1999 and should be read in
conjunction therewith. A copy of the Prospectus may be obtained from Barr
Rosenberg Series Trust, 3435 Stelzer Road, Columbus, Ohio 43219.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . . . .
MISCELLANEOUS INVESTMENT PRACTICES . . . . . . . . . . . . . . . . . . . . . . . .
INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS . . . . . . . . . . . . . . . . . .
MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . . . . . . . . . . .
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL RETURN CALCULATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES . . . . . . . . . . . . . . . . .
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . .
PURCHASE AND REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
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INVESTMENT OBJECTIVES AND POLICIES
The investment objective and policies of each of the U.S. Small
Capitalization Series, International Small Capitalization Series and Japan
Series (each a "Fund" and collectively, the "Funds") of Barr Rosenberg Series
Trust (the "Trust") are summarized on the front page of the Prospectus and in
the text of the Prospectus under the headings "Investment Objectives and
Policies" and "General Description of Risks and Fund Investments."
The following is an additional description of certain investments and/or
policies of the Fund(s).
INDEX FUTURES (ALL FUNDS). An index futures contract (an "Index
Future") is a contract to buy or sell an integral number of units of an Index
at a specified future date at a price agreed upon when the contract is made.
A unit is the value of the relevant Index from time to time. Entering into a
contract to buy units is commonly referred to as buying or purchasing a
contract or holding a long position in an Index.
Index Futures contracts can be traded through all major commodity brokers.
Currently, contracts are expected to expire on the tenth day of March, June,
September and December. A Fund will 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.
As noted in the Prospectus, upon entering into a futures contract, a
Fund will be required to deposit initial margin with its custodian in a
segregated account in the name of the futures broker. Variation margin will
be paid to and received from the broker on a daily basis as the contracts are
marked to market. For example, when a Fund has purchased an Index Future and
the price of the relevant Index has risen, that position will have increased
in value and the Fund will receive from the broker a variation margin payment
equal to that increase in value. Conversely, when a Fund has purchased an
Index Future and the price of the relevant Index has declined, the position
would be less valuable and the Fund would be required to make a variation
margin payment to the broker.
The price of Index Futures may not correlate perfectly with movement in
the underlying Index due to certain market distortions. First, all
participants in the futures market are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin deposit
requirements, investors may close futures contracts through offsetting
transactions which could distort the normal relationship between the Index
and futures markets. Secondly, the deposit requirements in the futures market
are less onerous than margin requirements in the securities market, and as a
result the futures market may attract more speculators than does the
securities market. Increased participation by speculators in the futures
market may also cause temporary price distortions. In addition, with respect
to the Japan Series, trading hours for Index Futures may not correspond
perfectly to hours of trading
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<PAGE>
on the Tokyo Stock Exchange. This may result in a disparity between the
price of Index Futures and the value of the underlying Index due to the lack
of continuous arbitrage between the Index Futures price and the value of the
underlying Index.
FOREIGN CURRENCY TRANSACTIONS (INTERNATIONAL SMALL CAPITALIZATION SERIES
AND JAPAN SERIES). As is disclosed in the Prospectus following the heading
"General Description of Risks and Fund Investments," the Funds do not
currently intend to hedge the foreign currency risk associated with
investments in securities denominated in foreign currencies. However, the
Funds reserve the right to buy or sell foreign currencies or to deal in
forward foreign currency contracts to hedge against possible variations in
foreign exchange rates pending the settlement of securities transactions.
The Funds also reserve the right to use currency futures contracts and
related options thereon for similar purposes. By entering into a futures or
forward contract for the purchase or sale, for a fixed amount of dollars, of
the amount of foreign currency involved in the underlying security
transactions, a Fund will be able to protect itself against a possible loss
resulting from an adverse change in the relationship between the U.S. dollar
and the subject foreign currency during the period between the date on which
the security is purchased or sold and the date on which payment is made or
received. A Fund's dealing in forward contracts will be limited to this type
of transaction. A Fund will not engage in currency futures transactions for
leveraging purposes. A put option on a futures contract gives a Fund the
right to assume a short position in the futures contract until the expiration
of the option. A call option on a futures contract gives a Fund the right to
assume a long position in the futures contract until the expiration of the
option.
CURRENCY FORWARD CONTRACTS (INTERNATIONAL SMALL CAPITALIZATION SERIES
AND JAPAN SERIES). A forward foreign currency exchange contract involves an
obligation to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract as agreed by
the parties, at a price set at the time of the contract. In the case of a
cancelable forward contract, the holder has the unilateral right to cancel
the contract at maturity by paying a specified fee. The contracts traded in
the interbank market are negotiated directly between currency traders
(usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades.
CURRENCY FUTURES TRANSACTIONS (INTERNATIONAL SMALL CAPITALIZATION SERIES
AND JAPAN SERIES). A currency futures contract sale creates an obligation by
the seller to deliver the amount of currency called for in the contract in a
specified delivery month for a stated price. A currency futures contract
purchase creates an obligation by the purchaser to take delivery of the
underlying amount of currency in a specified delivery month at a stated
price. Futures contracts are traded only on commodity exchanges -- known as
"contract markets" -- approved for such trading by the Commodity Futures
Trading Commission ("CFTC"), and must be executed through a futures
commission merchant, or brokerage firm, which is a member of the relevant
contract market.
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Although futures contracts by their terms call for actual delivery or
acceptance, in most cases the contracts are closed out before the settlement
date without the making or taking of delivery. Closing out a futures
contract sale is effected by purchasing a futures contract for the same
aggregate amount of the specific type of financial instrument or commodity
and the same delivery date. If the price of the initial sale of the futures
contract exceeds the price of the offsetting purchase, the seller is paid the
difference and realizes a gain. Conversely, if the price of the offsetting
purchase exceeds the price of the initial sale, the seller realizes a loss.
Similarly, the closing out of a futures contract purchase is effected by the
purchaser entering into a futures contract sale. If the offsetting sale
price exceeds the purchase price, the purchaser realizes a gain, and if the
purchase price exceeds the offsetting sale price, the purchaser realizes a
loss.
The purchase or sale of a futures contract differs from the purchase or
sale of a security, in that no price or premium is paid or received.
Instead, an amount of cash or U.S. Treasury bills generally not exceeding 5%
of the contract amount must be deposited with the broker. This amount is
known as initial margin. Subsequent payments to and from the broker, known
as variation margin, are made on a daily basis as the price of the underlying
futures contract fluctuates making the long and short positions in the
futures contract more or less valuable, a process known as "marking to the
market." At any time prior to the settlement date of the futures contract,
the position may be closed out by taking an opposite position which will
operate to terminate the position in the futures contract. A final
determination of variation margin is then made, additional cash is required
to be paid to or released by the broker, and the purchaser realizes a loss or
gain. In addition, a commission is paid on each completed purchase and sale
transaction.
Unlike a currency futures contract, which requires the parties to buy
and sell currency on a set date, an option on a futures contract entitles its
holder to decide on or before a future date whether to enter into such a
contract. If the holder decides not to enter into the contract, the premium
paid for the option is lost. Since the value of the option is fixed at the
point of sale, there are no daily payments of cash in the nature of
"variation" or "maintenance" margin payments to reflect the change in the
value of the underlying contract as there are by a purchaser or seller of a
currency futures contract.
The ability to establish and close out positions on options on futures will
be subject to the development and maintenance of a liquid secondary market. It
is not certain that this market will develop or be maintained.
The Funds will write (sell) only covered put and call options on currency
futures. This means that a Fund will provide for its obligations upon exercise
of the option by segregating sufficient cash or short-term obligations or by
holding an offsetting position in the option or underlying currency future, or a
combination of the foregoing. Set forth below is a description of methods of
providing cover that the Funds currently expect to employ, subject to applicable
exchange and regulatory requirements. If other methods of providing appropriate
cover are
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<PAGE>
developed, a Fund reserves the right to employ them to the extent consistent
with applicable regulatory and exchange requirements.
A Fund will, so long as it is obligated as the writer of a call option on
currency futures, own on a contract-for-contract basis an equal long position in
currency futures with the same delivery date or a call option on currency
futures with the difference, if any, between the market value of the call
written and the market value of the call or long currency futures purchased
maintained by the Fund in cash, U.S. Government securities, or other high-grade
liquid debt obligations in a segregated account with its custodian. If at the
close of business on any day the market value of the call purchased by a Fund
falls below 100% of the market value of the call written by the Fund, the Fund
will so segregate an amount of cash, U.S. Government securities, or other
high-grade liquid debt obligations equal in value to the difference.
Alternatively, a Fund may cover the call option through segregating with its
custodian an amount of the particular foreign currency equal to the amount of
foreign currency per futures contract option times the number of options written
by the Fund.
In the case of put options on currency futures written by a Fund, the Fund
will hold the aggregate exercise price in cash, U.S. Government securities, or
other high-grade liquid debt obligations in a segregated account with its
custodian, or own put options on currency futures or short currency futures,
with the difference, if any, between the market value of the put written and the
market value of the puts purchased or the currency futures sold maintained by
the Fund in cash, U.S. Government securities, or other high-grade liquid debt
obligations in a segregated account with its custodian. If at the close of
business on any day the market value of the put options purchased or the
currency futures sold by a Fund falls below 100% of the market value of the put
options written by the Fund, the Fund will so segregate an amount of cash, U.S.
Government securities, or other high-grade liquid debt obligations equal in
value to the difference.
A Fund may not enter into currency futures contracts or related options
thereon if immediately thereafter the amount committed to margin plus the amount
paid for premiums for unexpired options on currency futures contracts exceeds 5%
of the market value of the Fund's total assets.
LIMITATIONS ON THE USE OF CURRENCY FUTURES CONTRACTS (INTERNATIONAL SMALL
CAPITALIZATION SERIES AND JAPAN SERIES). A Fund's ability to engage in the
currency futures transactions described above will depend on the availability of
liquid markets in such instruments. Markets in currency futures are relatively
new and still developing. It is impossible to predict the amount of trading
interest that may exist in various types of currency futures. Therefore no
assurance can be given that a Fund will be able to utilize these instruments
effectively for the purposes set forth above. Furthermore, a Fund's ability to
engage in such transactions may be limited by tax considerations.
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<PAGE>
RISK FACTORS IN CURRENCY FUTURES TRANSACTIONS (INTERNATIONAL SMALL
CAPITALIZATION SERIES AND JAPAN SERIES). Investment in currency futures
contracts involves risk. Some of that risk may be caused by an imperfect
correlation between movements in the price of the futures contract and the price
of the currency being hedged. The hedge will not be fully effective where there
is such imperfect correlation. To compensate for imperfect correlations, a Fund
may purchase or sell futures contracts in a greater amount than the hedged
currency if the volatility of the hedged currency is historically greater than
the volatility of the futures contracts. Conversely, a Fund may purchase or
sell fewer contracts if the volatility of the price of the hedged currency is
historically less than that of the futures contracts. The risk of imperfect
correlation generally tends to diminish as the maturity date of the futures
contract approaches.
The successful use of transactions in futures and related options also
depends on the ability of the Adviser to forecast correctly the direction and
extent of exchange rate and stock price movements within a given time frame. It
is impossible to forecast precisely what the market value of securities a Fund
anticipates buying will be at the expiration or maturity of a currency forward
or futures contract. Accordingly, in cases where a Fund seeks to protect
against an increase in value of the currency in which the securities are
denominated through a foreign currency transaction, it may be necessary for the
Fund to purchase additional foreign currency on the spot market (and bear the
expense of such currency purchase) if the market value of the securities to be
purchased is less than the amount of foreign currency the Fund contracted to
purchase. Conversely, it may be necessary to sell on the spot market some of
the foreign currency received upon the sale of the portfolio security or
securities if the market value of such security or securities exceeds the value
of the securities purchased. When a Fund purchases forward or futures contracts
(or options thereon) to hedge against a possible increase in the price of
currency in which is denominated the securities the Fund anticipates purchasing,
it is possible that the market may instead decline. If a Fund does not then
invest in such securities because of concern as to possible further market
decline or for other reasons, the Fund may realize a loss on the forward or
futures contract that is not offset by a reduction in the price of the
securities purchased. As a result, a Fund's total return for such period may be
less than if it had not engaged in the forward or futures transaction.
Foreign currency transactions that are intended to hedge the value of
securities a Fund contemplates purchasing do not eliminate fluctuations in the
underlying prices of those securities. Rather, such currency transactions
simply establish a rate of exchange which can be used at some future point in
time. Additionally, although these techniques tend to minimize the risk of loss
due to a change in the value of the currency involved, they tend to limit any
potential gain that might result from the increase in the value of such
currency.
The amount of risk a Fund assumes when it purchases an option on a currency
futures contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the purchase of an
option also entails the risk that changes in
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<PAGE>
the value of the underlying futures contract will not be fully reflected in the
value of the option purchased.
The liquidity of a secondary market in a currency futures contract may be
adversely affected by "daily price fluctuation limits" established by commodity
exchanges which limit the amount of fluctuation in a futures contract price
during a single trading day. Once the daily limit has been reached in the
contract, no trades may be entered into at a price beyond the limit, thus
preventing the liquidation of open futures positions. Prices have in the past
exceeded the daily limit on a number of consecutive trading days.
A Fund's ability to engage in currency forward and futures transactions may
be limited by tax considerations.
WARRANTS (JAPAN SERIES). The Japan Series may from time to time purchase
warrants; however, not more than 5% of its net assets (at the time of purchase)
will be invested in warrants other than warrants acquired in units or attached
to other securities. Of such 5%, not more than 2% of such net assets at the
time of purchase may be invested in warrants that are not listed on the New York
Stock Exchange or American Stock Exchange. Warrants have no voting rights, pay
no dividends and have no rights with respect to the assets of the corporation
issuing them. Warrants represent options to purchase equity securities of an
issuer at a specific price for a specific period of time. They do not represent
ownership of such securities, but only the right to buy them.
MISCELLANEOUS INVESTMENT PRACTICES
PORTFOLIO TURNOVER. A change in securities held by a Fund is known as
"portfolio turnover" and almost always involves the payment by the Fund of
brokerage commissions or dealer markup and other transaction costs on the sale
of securities as well as on the reinvestment of the proceeds in other
securities. Portfolio turnover is not a limiting factor with respect to
investment decisions. The portfolio turnover rate for the U.S. Small
Capitalization Series for the fiscal years ended March 31, 1997 and 1998 was
126.83% and 77.70%, respectively. The portfolio turnover rate for the Japan
Series for the fiscal years ended March 31, 1997 and 1998 was 51.70% and
102.13%, respectively. The portfolio turnover rate for the International Small
Capitalization Series for the period ended March 31, 1997 and for the fiscal
year ended March 31, 1998 was 6.71% and 77.72%, respectively. As disclosed in
the Prospectus, high portfolio turnover involves correspondingly greater
brokerage commissions and other transaction costs, which will be borne directly
by the Fund, and could involve realization of capital gains that would be
taxable when distributed to shareholders of a Fund. To the extent that portfolio
turnover results in the realization of net short-term capital gains, such gains
are ordinarily taxed to shareholders at ordinary income tax rates. See "Income
Dividends, Distributions and Tax Status" and "Portfolio Transactions."
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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. Such borrowings will be repaid
before any additional investments are purchased.
(2) Pledge, hypothecate, mortgage or otherwise encumber its assets in
excess of 10% of the Fund's total assets (taken at cost) and then only to
secure borrowings permitted by Restriction 1 above. (For the purposes of
this restriction, collateral arrangements with respect to options, stock
index, interest rate, currency or other futures, options on futures contracts
and collateral arrangements with respect to initial and variation margin are
not deemed to be a pledge or other encumbrance of assets. With respect to
the International Small Capitalization Series and the Japan Series,
collateral arrangements with respect to swaps and other derivatives are also
not deemed to be a pledge or other encumbrance of assets.)
(3) Purchase securities on margin, except such short-term credits as
may be necessary for the clearance of purchases and sales of securities.
(For this purpose, the deposit or payment of initial or variation margin in
connection with futures contracts or related options transactions is not
considered the purchase of a security on margin.)
(4) Make short sales of securities or maintain a short position for the
Fund's account unless at all times when a short position is open the Fund owns
an equal amount of such securities or owns securities which, without payment of
any further consideration, are convertible into or exchangeable for securities
of the same issue as, and equal in amount to, the securities sold short.
(5) Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under federal securities laws.
(6) Purchase or sell real estate, although it may purchase securities of
issuers which deal in real estate, including securities of real estate
investment trusts, and may purchase securities which are secured by interests in
real estate.
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<PAGE>
(7) Concentrate more than 25% of the value of its total assets in any one
industry.
(8) Invest in securities of other investment companies, except to the
extent permitted by the Investment Company Act of 1940, as amended (the "1940
Act"). Under the 1940 Act, no registered investment company may generally
(a) invest more than 10% of its total assets (taken at current value) in
securities of other investment companies, (b) own securities of any one
investment company having a value in excess of 5% of its total assets (taken
at current value), or (c) own more than 3% of the outstanding voting stock of
any one investment company.)
(9) Purchase or sell commodities or commodity contracts except that
each of the Funds may purchase and sell foreign currency, currency futures
contracts and options thereon, stock index and other financial futures
contracts and options thereon.
(10) Make loans, except by purchase of debt obligations or by entering
into repurchase agreements or through the lending of the Fund's portfolio
securities.
(11) Issue senior securities. (For the purpose of this restriction
none of the following is deemed to be a senior security: any pledge or other
encumbrance of assets permitted by restriction (2) above; any borrowing
permitted by restriction (1) above; any collateral arrangements with respect
to options, future contracts and options on future contracts and with respect
to initial and variation margin; and the purchase or sale of options, forward
contracts, future contracts or options on future contracts.)
Notwithstanding the latitude permitted by Restrictions 1, 2, 3, 4 and 9
above, the Funds have no current intention of (a) borrowing money, (b)
purchasing interest rate futures or (c) entering into short sales.
It is contrary to the present policy of each Fund, which may be changed by
the Trustees of the Trust without shareholder approval, to:
(a) With the exception of the Japan Series, invest in warrants or
rights (other than warrants or rights acquired by the Fund as a part of a
unit or attached to securities at the time of purchase).
(b) Write, purchase or sell options on particular securities (as
opposed to market indices or currencies).
(c) Buy or sell oil, gas or other mineral leases, rights or royalty
contracts.
(d) Make investments for the purpose of exercising control of a
company's management.
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<PAGE>
(e) Invest in (a) securities which at the time of investment are not
readily marketable, (b) securities the disposition of which is restricted under
the federal securities laws, and (c) repurchase agreements maturing in more than
seven days if, as a result, more than 15% of the Fund's net assets (taken at
current value) would then be invested in securities described in (a), (b) and
(c) above.
(f) With respect to 75% of its total assets, invest in a security if,
as a result of such investment, it would hold more than 10% (taken at the
time of such investment) of the outstanding voting securities of any one
issuer, except that this restriction does not apply to securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities.
Unless otherwise indicated, all percentage limitations on investments
set forth herein and in the Prospectus will apply at the time of the making
of an investment and shall not be considered violated unless an excess or
deficiency occurs or exists immediately after and as a result of such
investment.
The phrase "shareholder approval," as used in the Prospectus and 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" "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 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
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<PAGE>
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.
The Japan Series and the International Small Capitalization Series may be
subject to foreign withholding taxes on income and gains derived from foreign
investments. Such taxes would reduce the yield on such Funds' investments, but,
as discussed in the Prospectus, may be taken as either a deduction or a credit
by U.S. citizens and corporations. Investment by either Fund in certain
"passive foreign investment companies" could subject the Fund to a U.S. federal
income tax or other charge on distributions received from, or on the sale of its
investment in, such a company. Such a tax cannot be eliminated by making
distributions to Fund shareholders. A Fund may avoid this tax by making an
election to mark such securities to the market annually. Alternatively, where
it is in a position to do so, a Fund may elect to treat a passive foreign
investment company as a "qualified electing fund," in which case different rules
will apply, although the Funds generally do not expect to be in the position to
make such elections.
As described in the Prospectus under the heading "Distributions," each Fund
intends to pay out substantially all of its ordinary income and net realized
short-term capital gains, and to distribute substantially all of its net
realized capital gains, if any, after giving effect to any available capital
loss carryover. Net realized capital gain is the excess of net realized
long-term capital gain over net realized short-term capital loss. Under the Tax
Reform Act of 1986, in order to avoid an excise tax imposed on certain
undistributed income, a Fund must distribute prior to each calendar year end
without regard to the Fund's fiscal year end (i) 98% of the Fund's ordinary
income, and (ii) 98% of the Fund's capital gain net income, if any, realized in
the one-year period ending on October 31.
In general, all dividend distributions derived from ordinary income and
short-term capital gain are taxable to investors as ordinary income and
long-term capital gain distributions are taxable to investors as long-term
capital gains (generally taxed at 20%), whether such dividends or distributions
are received in shares or cash. Some 1998 distributions of long-term capital
gains recognized in 1997 may be taxed at 28%. The Fund generally does not
expect its dividends to be eligible for dividends-received deduction for
corporations.
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.
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<PAGE>
Certain tax exempt organizations or entities may not be subject to federal
income tax on dividends or distributions from a Fund. Each organization or
entity should review its own circumstances and the federal tax treatment of its
income.
Each Fund is generally required to withhold and remit to the U.S.
Treasury 31% of all dividends from net investment income and capital gain
distributions, whether distributed in cash or reinvested in shares of the
Fund, paid or credited to any shareholder account for which an incorrect or
no taxpayer identification number has been provided or where the Fund is
notified that the shareholder has underreported income in the past (or the
shareholder fails to certify that he is not subject to such withholding). In
addition, the Fund will generally be required to withhold and remit to the
U.S. Treasury 31% of the amount of the proceeds of any redemption of Fund
shares from a shareholder account for which an incorrect or no taxpayer
identification number has been provided. However, the general back-up
withholding rules set forth above will not apply to tax exempt entities so
long as each such entity furnishes the Fund with an appropriate certificate.
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, straddles and foreign currencies will be subject to special tax rules
(including mark-to-market, straddle, wash sale, constructive 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.
THE TAX DISCUSSION SET FORTH ABOVE IS A SUMMARY INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. EACH SHAREHOLDER IS ADVISED TO CONSULT ITS OWN TAX
ADVISOR 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. THIS DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX
PLANNING.
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MANAGEMENT OF THE TRUST
The Trustees and officers of the Trust and their principal occupations
during the past five years are as follows:
Barr M. Rosenberg (56) Director of Reasearch, AXA Rosenberg Investment
Vice President 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) Chief Executive Officer, AXA Rosenberg
President, Trustee 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 Chairman and Global Marketing Director, AXA
Vice President 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) Sylvan C. Coleman Professor of Finance and
Trustee 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) STANCO 25 Professor of Finance, Stanford
Trustee University, September 1995 to present; 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) Professor of Finance and Real Estate, Haas
Trustee School of Business, University of California,
Berkeley, California, July 1991 to present.
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Po-Len Hew (32) Director of Finance, AXA Rosenberg Global
Treasurer 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) Global Services Coordinator and Paralegal, AXA
Clerk Rosenberg Global Services LLC, January 1999 to
present; Paralegal, Barr Rosenberg Investment
Management, September 1997 to December 1998;
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) Chief Operating Officer, AXA Rosenberg Group
Vice President 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 and Chief Executive Officer, Barr
Vice President 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.
Harold L. Arbit (51) Managing Director, Barr Rosenberg Mutual Funds,
Vice President a division of AXA Rosenberg Investment
Management LLC, January 1999 to present; Limited
Partner, Rosenberg Alpha L.P., 1984 to December
1998.
F. William Jump, Jr. (42) Strategy Engineer, AXA Rosenberg Investment
Vice President Management, LLC, January 1999 to present;
Portfolio Engineer, Rosenberg Institutional
Equity Management, August 1990 to December 1998.
- ----------------------------------
* Trustee who is an "interested person" (as defined in the 1940 Act) of the
Trust or the Adviser.
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The mailing address of each of the officers and Trustees is c/o Barr
Rosenberg Series Trust, 3435 Stelzer Road, Columbus, OH 43219.
The principal occupations of the officers and Trustees for the last five
years have been with the employers as shown above, although in some cases they
have held different positions with such employers.
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>
Pension or Total
Retirement Compansation
Benefits from Registrant
Aggregate Accrued as Part of Estimated and Fund
Name of Compansation Fund Annual Benefits Complex Paid
Person, Position from Registrant Expenses upon Retirement to Directors
---------------- --------------- ------------------ --------------- ---------------
<S> <C> <C> <C> <C>
Nils H.
Hakansson $ $ $ $
Trustee
William F.
Sharpe $ $ $ $
Trustee
Dwight M.
Jaffee $ $ $ $
Trustee
</TABLE>
Messrs. Rosenberg, Reid, Arbit, Lyman, Saalfeld and Jump 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.
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INVESTMENT ADVISORY AND OTHER SERVICES
MANAGEMENT CONTRACTS. As disclosed in the Prospectus under the heading
"Management of the Trust," under management contracts (each a "Management
Contract") between the Trust, on behalf of each Fund, and 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 quarterly 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
Contracts and, if necessary, will bear certain expenses of each Fund until
further notice so that such Fund's total annual operating expenses (which do not
include nonrecurring account fees and extraordinary expenses) applicable to each
class will not exceed the percentage of such Fund's average daily net assets
attributable to that class as set forth in the Prospectus. In addition, the
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 expenses paid by a class of shares of a Fund pursuant to a
distribution plan or otherwise) exceed the limits on investment company expenses
imposed by any statute or regulatory authority of any jurisdiction in which
shares of the Fund are qualified for offer and sale.
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.
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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 RIEM,
may be deemed to be controlling persons of the Adviser as a result of their
interest in Area Rosenberg Group LLC, the parent of the Adviser.
During the last three fiscal years, the U.S. Small Capitalization Series
has paid the following amounts as management fees to the Adviser pursuant to
its Management Contract:
< TABLE >
During the last three fiscal years, the Japan Series has paid the
following amounts as management fees to the Adviser pursuant to its
Management Contract:
< TABLE >
For the period from September 23, 1996 (inception date) to March 31,
1997 and the fiscal year ended March 31, 1998, the International Small
Capitalization Series has paid the following amounts as management fees to
the Adviser pursuant to its Management Contract:
< TABLE >
ADMINISTRATIVE SERVICES. The Trust has entered into a Fund Administration
Agreement with BISYS Fund Services ("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
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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
fiscal year ended March 31, 1997, the U.S. Small Capitalization Series, Japan
Series and the International Small Capitalization Series paid $______, $______
and $_____ in administration fees, respectively. For the fiscal year ended
March 31, 1998, the Administrator was entitled to receive $_______, $______ and
$______ in administration fees from the U.S. Small Capitalization Series, Japan
Series and International Small Capitalization Series, respectively. The
Administrator waived fees of $_______, $_____ and $______, from the U.S.
Small Capitalization Series, Japan Series and International Small
Capitalization Series, respectively. For the fiscal ended March 31, 1999,
the Administrator was entitled to receive $______, $______, and $______ in
administrative fees from the U.S. Small Capitalization Series, the Japan
Series and the International Small Capitalization Series, respectively. The
Administrator waived fees of $______, $______, and $______ from the U.S.
Small Capitalization Series, the Japan Series and the International Small
Capitalization Series, respectively.
The Trust has also entered into a Fund Accounting Agreement with the
Administrator Fund Services, 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 an
annual fee of $30,000 for each Fund. For the fiscal year ended March 31, 1997
the U.S. Small Capitalization Series, Japan Trust and the International Small
Capitalization Series paid $______, $______ and $______ in fund accounting fees,
respectively. For the fiscal year ended March 31, 1998, the Fund Accountant was
entitled to $______, $______ and $_______ in fund accounting fees from the U.S.
Small Capitalization Series, Japan Series and International Small Capitalization
Series, respectively. The Fund Accountant waived fees of $_____, $_____ and
$_____, from the U.S. Small Capitalization Series, Japan Series and
International Small Capitalization Series, respectively. For the fiscal
ended March 31, 1999, the U.S. Small Capitalization Series, the Japan Series
and the International Small Capitalization Series paid $______, $______, and
$______ in fund accounting fees, respectively. The Fund Accountant waived
fees of $______, $______, and $______ from the U.S. Small Capitalization
Series, the Japan Series and the International Small Capitalization Series,
respectively.
DISTRIBUTOR AND SHAREHOLDER SERVICE DISTRIBUTION PLAN. As stated in the
Prospectus under the heading "Management of the Trust -- Distributor," Adviser
Shares of the U.S. Small Capitalization Series and Select Shares of each Fund
are sold on a continuous basis by the Trust's distributor, Barr Rosenberg Funds
Distributor, Inc. (the "Distributor"). The Distributor is an affiliate of the
Administrator and Fund Accountant. 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 Select
Shares of the Trust and/or in connection with the provision of direct client
service, personal services, maintenance of shareholder accounts and reporting
services ("Shareholder Services") to holders of Select Shares of the Trust, the
Distributor receives certain distribution and service fees from the
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Trust. Subject to the percentage limitation on the distribution and service fee
set forth in the Prospectus, the distribution and service fee may be paid in
respect of services rendered and expenses borne in the past with respect to each
such class as to which no distribution fee was paid on account of such
limitation. The Distributor may pay all or a portion of the distribution and
service fees it receives from the Trust to participating and introducing
brokers. The Distributor did not charge any distribution fees to the Trust
through the fiscal year ended March 31, 1997. For the fiscal year ended March
31, 1998, the U.S. Small Capitalization Series, Japan Series and International
Small Capitalization Series incurred distribution expenses in the amount of
$______, $___ and $_____, respectively. Of these amounts the Distributor
retained $______, $__ and $___ and waived $______, $__ and $_____ for the
U.S. Small Capitalization Series, Japan Series and International Small
Capitalization Series, respectively. For the fiscal ended March 31, 1999, the
U.S. Small Capitalization Series, the Japan Series and the International
Small Capitalization Series incurred distribution expenses in the amount of
$______, $______, and $______, respectively. Of these amounts, the
Distributor retained $______, $______, and $______ and waived $______,
$______, and $______ for the U.S. Small Capitalization Series, the Japan
Series and the International Small Capitalization Series, respectively. The
Distributor paid to broker-dealers and other selling and/or servicing
institutions the amounts of $_____, $__ and $___ for the U.S. Small
Capitalization Series, Japan Series and International Small Capitalization
Series, respectively, from the distribution expenses incurred by the Funds
during the fiscal year ended March 31, 1999. The Distributor paid to
broker-dealers and other selling and/or servicing institutions the amounts of
$____, $____ and $____for the U.S. Small Capitalization Series, Japan Series
and International Small Capitalization Series, respectively, from the
distribution expenses incurred by the Funds during the fiscal year ended
March 31, 1999.
The Plan may be terminated with respect to Select 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 Select Shares requires
approval by holders of Select 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 that purpose. For so long as the Plan is
in effect, selection and nomination of those trustees of the Trust who are not
interested persons of the Trust shall be committed to the discretion of such
disinterested persons.
The Distributor's Contract may be terminated with respect to any Fund or
class of shares thereof at any time by not more than 60 days' nor less than 30
days' written notice without payment of any penalty either by the Distributor or
by such Fund or class and will terminate automatically, without the payment of
any penalty, in the event of its assignment.
The 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.
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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 of the Trust believe that the Plan will result in
greater sales and/or fewer redemptions of Select Shares, although it is
impossible to know for certain the level of sales and redemptions of Select
Shares that would occur in the absence of the Plan or under alternative
distribution schemes. The Trustees of the Trust believe that the effect on
sales and/or redemptions benefit the Trust by reducing Fund expense ratios
and/or by affording greater flexibility to the Trust.
CUSTODIAL ARRANGEMENTS. State Street Bank and Trust Company ("State
Street Bank"), Boston, Massachusetts 02102, is the Trust's custodian. As
such, State Street Bank holds in safekeeping certificated securities and cash
belonging to the Trust and, in such capacity, is the registered owner of
securities in book-entry form belonging to a Fund. Upon instruction, State
Street Bank receives and delivers cash and securities of a Fund in connection
with Fund transactions and collects all dividends and other distributions
made with respect to Fund portfolio securities. State Street Bank has also
contracted with certain foreign banks and depositories to hold portfolio
securities outside of the United States on behalf of the Trust.
INDEPENDENT ACCOUNTANTS. The Trust's independent accountants are
_______________________. _________________ 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.
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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
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 such Fund's portfolio transactions. Research
services may include a wide variety of analyses, reviews and reports on such
matters as economic and political developments, industries, companies,
securities and portfolio strategy. The 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.
The U.S. Small Capitalization Series paid brokerage commissions in the
amounts of $_______ for the fiscal year ended March 31, 1997, $_______ for
the fiscal year ended March 31, 1998 and $_________ for the fiscal year ended
March 31, 1999. The increase in brokerage commissions incurred during the
fiscal year ended March 31, 1999 was due to an increase in the assets of the
U.S. Small Capitalization Series.
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The Japan Series paid brokerage commissions in the amounts of $_____ for
the fiscal year ended March 31, 1997, $_____ for the fiscal year ended March
31, 1998 and $_____ for the fiscal year ended March 31, 1999.
The Japan Series may pay brokerage commissions to Nomura Securities
Company, Inc. ("Nomura Securities"), which may be deemed to be an "affiliate
of an affiliate" of the Trust, for acting as the Fund's agent on purchases
and sales of securities for the portfolio of the Fund. Securities and
Exchange Commission rules require that commissions paid to an affiliate of an
affiliate by the Fund for portfolio transactions not exceed "usual and
customary" brokerage commissions. The rules define "usual and customary"
commissions to include amounts which are "reasonable and fair compared to the
commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions involving similar
securities being purchased or sold on a securities exchange during a
comparable period of time." The Trustees, including those who are not
"interested persons" of the Trust, have adopted procedures for evaluating the
reasonableness of commissions paid to Nomura Securities and will review these
procedures periodically. The Fund did not pay any brokerage commissions to
Nomura Securities during its fiscal years ended March 31, 1996, March 31,
1997 and March 31, 1998.
The International Small Capitalization Series paid brokerage commissions in
the amount of $32,340 for the period from September 23, 1996 (inception date) to
March 31, 1997 and $100,120 for the fiscal year ended March 31, 1998.
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
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
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amount invested in a particular share class to the ending redeemable value of
such investment in the 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 a Fund will fluctuate from
time to time and does not provide a basis for determining future returns.
Average annual total return and cumulative total 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 return and cumulative return are calculated
separately for Select Shares, Adviser Shares and Institutional Shares.
Select Shares, Adviser 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 each of the Funds for periods ended
March 31, 1999 were as follows:
< TABLES >
U.S. SMALL CAPITALIZATION SERIES
JAPAN SERIES
INTERNATIONAL SMALL CAPITALIZATION SERIES
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The cumulative total returns for each of the Funds for periods ended March
31, 1999 were as follows:
< TABLE >
U.S. SMALL CAPITALIZATION SERIES
JAPAN SERIES
INTERNATIONAL SMALL CAPITALIZATION SERIES
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 Analytical Services, 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,
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 local 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
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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
As more fully described in the Prospectus, the Trust is a diversified
open-end series investment company organized as a Massachusetts business trust.
A copy of the Agreement and Declaration of Trust of the Trust, as amended (the
"Declaration of Trust") is on file with the Secretary of The Commonwealth of
Massachusetts. The fiscal year of the Trust ends on March 31. The Trust
changed its name to "Barr Rosenberg Series Trust" from "Rosenberg Series Trust"
on August 5, 1996.
Interests in the Trust's portfolios are currently represented by shares
of six series, the U.S. Small Capitalization Series, International Small
Capitalization Series, Japan Series, Barr Rosenberg Market Neutral Fund, Barr
Rosenberg Double Alpha Market Fund and the Barr Rosenberg Select Sectors
Market Neutral Fund, issued pursuant to the Declaration of Trust. The rights
of shareholders and powers of the Trustees of the Trust with respect to such
shares are described in the Prospectus.
As described in the Prospectus, the U.S. Small Capitalization Series is
further divided into three classes of shares designated as Institutional Shares,
Adviser Shares and Select Shares and the Japan Series and International Small
Capitalization Series are further divided into Institutional Shares and Select
Shares. Each class of shares of each Fund represents interests in the assets of
the Fund and has identical dividend, liquidation and other rights and the same
terms and conditions except that expenses, if any, related to the distribution
and shareholder servicing of a particular class are borne solely by such class
and each class may, at the discretion of the Trustees of the Trust, also pay a
different share of other expenses, not including advisory or custodial fees or
other expenses related to the management of the Trust's assets, if these
expenses are actually incurred in a different amount by that class, or if the
class receives services of a different kind or to a different degree than the
other classes. All other expenses are allocated to each class on the basis of
the net asset value of that class in relation to the net asset value of the
particular Fund.
The Declaration of Trust provides for the perpetual existence of the Trust.
The Trust may, however, be terminated at any time by vote of at least two-thirds
of the outstanding shares of 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,
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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 or servicing plan
applicable to that class. All classes of shares of a Fund will vote together,
except with respect to any distribution or servicing plan applicable to a class
or when a class vote is required as specified above or otherwise by the 1940
Act.
There will normally be no meetings of shareholders for the purpose of
electing Trustees, except that in accordance with the 1940 Act (i) the Trust
will hold a shareholders' meeting for the election of Trustees at such time as
less than a majority of the Trustees holding office have been elected by
shareholders, and (ii) if, as a result of a vacancy in the Board of Trustees,
less than two-thirds of the Trustees holding office have been elected by the
shareholders, that vacancy may only be filled by a vote of the shareholders. In
addition, Trustees may be removed from office by a written consent signed by the
holders of two-thirds of the outstanding shares and filed with the Trust's
custodian or by a vote of the holders of two-thirds of the outstanding shares at
a meeting duly called for the purpose, which meeting shall be held upon the
written request of the holders of not less than 10% of the outstanding shares.
Upon written request by the holders of at least 1% of the outstanding shares
stating that such shareholders wish to communicate with the other shareholders
for the purpose of obtaining the signatures necessary to demand a meeting to
consider removal of a Trustee, the Trust has undertaken to provide a list of
shareholders or to disseminate appropriate materials (at the expense of the
requesting shareholders). Except as set forth above, the Trustees shall
continue to hold office and may appoint successor Trustees. Voting rights are
not cumulative.
No amendment may be made to the Declaration of Trust without the
affirmative vote of a majority of the outstanding shares of the Trust except
(i) to change the Trust's name or to cure technical problems in the
Declaration of Trust and (ii) to establish, designate or modify new and
existing series, sub-series or classes of shares of any series of Trust
shares or other provisions relating to Trust shares in response to applicable
laws or regulations.
SHAREHOLDER AND TRUSTEE LIABILITY. Under Massachusetts law, shareholders
could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Declaration of Trust disclaims
shareholder liability for acts or obligations of the Trust and requires that
notice of such disclaimer be given in each agreement, obligation, or
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instrument entered into or executed by the Trust or the trustees. The
Declaration of Trust provides for indemnification out of all the property of the
relevant 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 chart sets 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 U.S. Small Capitalization Series as of June 30, 1998:
< TABLE >
The following chart sets 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 Japan Series
as of June 30, 1998:
< TABLE >
As of June 30, 1999, AXA Rosenberg Investment Management LLC may be
deemed to control the Institutional Shares of the Japan Series because it
beneficially owned more than 25% of such shares. 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.
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The following chart sets forth the names, addresses and percentage
ownership of those shareholders owning of record 5% or more of the
outstanding shares of the International Small Capitalization Series as of
June 30, 1998:
< TABLE >
The officers and Trustees of the Trust, as a group, own less than 1% of any
class of outstanding shares of the Trust except of the Japan Series.
DETERMINATION OF NET ASSET VALUE
As indicated in the Prospectus, the net asset value of each Fund share is
determined on each day on which the New York Stock Exchange is open for trading.
The Trust expects that the days, other than weekend days, that the New York
Stock Exchange will not be open are Independence Day, Labor Day, Thanksgiving
Day, Christmas Day, New Year's Day, Martin Luther King, Jr. Day, President's
Day, Good Friday and Memorial 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. Price information on listed securities is generally taken from the
closing price on the exchange where the security is primarily traded. Unlisted
securities for which market quotations are readily available are valued at the
most recent quoted bid price, except that debt obligations with sixty days or
less remaining until maturity may be valued at their amortized cost.
Exchange-traded options, futures and options on futures are valued at the
settlement price as determined by the appropriate clearing corporation. Other
assets and securities for which no quotations are readily available are valued
at fair value as determined in good faith by the Trustees of the Trust or by
persons acting at their direction.
PURCHASE AND REDEMPTION OF SHARES
The procedures for purchasing shares of each of the Funds and for
determining the offering price of such shares are described in the Prospectus.
The Trust has elected to be governed by Rule 18f-1 under the 1940 Act pursuant
to which the Trust is obligated to redeem shares solely in cash for any
shareholder during any 90-day period up to the lesser of (i) $250,000 or (ii) 1%
of the total net asset value of the Trust at the beginning of such period. The
procedures for redeeming shares of each of the Funds are described in the
Prospectus.
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
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<PAGE>
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 their 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 ____________________, 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.
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<PAGE>
PART C
OTHER INFORMATION --
THE U.S. SMALL CAPITALIZATION SERIES,
THE INTERNATIONAL SMALL CAPITALIZATION SERIES, AND
THE JAPAN SERIES ONLY
ITEM 23. EXHIBITS.
(a) (1) Second Amended and Restated Agreement and Declaration of Trust of the
Registrant -- incorporated by reference to Post-Effective Amendment
No. 19 to the Registration Statement filed on July 29, 1998;
(2) Amendment No. 1 to Second Amended and Restated Agreement and
Declaration of Trust of the Registrant -- incorporated by reference to
Post-Effective Amendment No. 19 to the Registration Statement filed on
July 29, 1998;
(3) Amendment No. 2 to Second Amended and Restated Agreement and
Declaration of Trust of the Registrant -- filed herewith;
(b) By-Laws of the Registrant -- incorporated by reference to
Post-Effective Amendment No. 17 to the Registration Statement filed on
December 9, 1997;
(c) Not applicable;
(d) (1) Management Contract between the Registrant on behalf of its U.S. Small
Capitalization Series and AXA Rosenberg Investment Management LLC --
filed herewith;
(2) Management Contract between the Registrant on behalf of its
International Small Capitalization Series and AXA Rosenberg Investment
Management LLC -- filed herewith;
(3) Management Contract between the Registrant on behalf of its Japan
Series and AXA Rosenberg Investment Management LLC -- filed herewith;
(e) Amended and Restated Distributor's Contract between the Registrant and Barr
Rosenberg Funds Distributor, Inc. -- incorporated by reference to
Post-Effective Amendment No. 19 to the Registration Statement filed on July
29, 1998;
(f) None;
(g) (1) Custody Agreement between the Registrant and Custodial Trust Company
-- incorporated by reference to Post-Effective Amendment No. 19 to the
Registration Statement filed on July 29, 1998;
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<PAGE>
(2) Form of Special Custody Account Agreement among the Registrant,
Custodial Trust Company and Bear, Stearns Securities Corp. --
incorporated by reference to Post-Effective Amendment No. 17 to the
Registration Statement filed on December 9, 1997;
(3) Schedule of remuneration to Custody Agreement between the Registrant
and Custodial Trust Company -- incorporated by reference to
Post-Effective Amendment No. 18 to the Registration Statement filed on
May 29, 1998;
(h) (1) Transfer Agency Agreement between the Registant and BISYS Fund
Services, Inc. -- incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement filed on July 18, 1997;
(2) Notification of Expense Limitation by AXA Rosenberg Investment
Management LLC to the U.S. Small Capitalization Series -- filed
herewith;
(3) Notification of Expense Limitation by AXA Rosenberg Investment
Management LLC to the International Small Capitalization Series --
filed herewith;
(4) Notification of Expense Limitation by AXA Rosenberg Investment
Management LLC to the Japan Series -- filed herewith;
(5) Fund Administration Agreement between the Registrant and BISYS Fund
Services Limited Partnership -- incorporated by reference to
Post-Effective Amendment No. 15 to the Registration Statement filed on
July 18, 1997;
(6) Fund Accounting Agreement between the Registrant and BISYS Fund
Services, Inc. -- incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement filed on July 18, 1997;
(i) Opinion of Ropes & Gray -- incorporated by reference to Post-Effective
Amendment No. 17 to the Registration Statement filed on December 9, 1997;
(j) Consent of -- to be filed by amendment;
(k) None;
(l) Investment letter regarding initial capital -- incorporated by reference to
Post-Effective Amendment No. 19 to the Registration Statement filed on July
29, 1998;
(m) Amended and Restated Distribution and Shareholder Service Plan for Select
shares -- filed herewith;
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<PAGE>
(n) Financial Data Schedule for Registrant's fiscal year ended March 31, 1999
-- to be filed by amendment;
(o) Further Amended and Restated Multi-Class Plan -- filed herewith;
(p) (1) Power of Attorney of Po-Len Hew -- incorporated by reference to
Post-Effective Amendment No. 19 to the Registration Statement filed on
July 29, 1998
(2) Power of Attorney of Nils H. Hakansson -- incorporated by reference to
Post-Effective Amendment No. 19 to the Registration Statement filed on
July 29, 1998
(3) Power of Attorney of William F. Sharpe -- incorporated by reference to
Post-Effective Amendment No. 19 to the Registration Statement filed on
July 29, 1998
(4) Power of Attorney of Dwight M. Jaffee -- filed herewith;
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
The Board of Trustees of Registrant is substantially similar to the Board of
Trustees of other Funds advised by AXA Rosenberg Investment Management LLC. In
addition, the officers of these Funds are substantially identical. Nonetheless,
the Registrant takes the position that it is not under common control with these
other Funds since the power residing in the respective boards and officers
arises as the result of an official position with the respective Funds.
ITEM 25. INDEMNIFICATION.
(a) Indemnification
Article VIII of the Registrant's Second Amended and Restated Agreement and
Declaration of Trust reads as follows (referring to the Registrant as the
"Trust"):
ARTICLE VIII
Indemnification
SECTION 1. TRUSTEES, OFFICERS, ETC. The Trust shall indemnify each
of its Trustees and officers (including persons who serve at the Trust's
request as directors, officers or trustees of another organization in which
the Trust has any interest as a shareholder, creditor or otherwise)
(hereinafter referred to as a "Covered Person") against all liabilities and
expenses, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and counsel fees
reasonably incurred by any Covered Person in connection with the defense or
disposition of any action, suit or other proceeding,
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<PAGE>
whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been
involved as a party or otherwise or with which such Covered Person may be
or may have been threatened, while in office or thereafter, by reason of
being or having been such a Covered Person except with respect to any
matter as to which such Covered person shall have been finally adjudicated
in any such action, suit or other proceeding to be liable to the Trust or
its Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
such Covered Person's office. Expenses, including counsel fees so incurred
by any such Covered Person (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties), shall be paid from time
to time by the Trust in advance of the final disposition of any such
action, suit or proceeding upon receipt of an undertaking by or on behalf
of such Covered Person to repay amounts so paid to the Trust if it is
ultimately determined that indemnification of such expenses is not
authorized under this Article, provided, however, that either (a) such
Covered Person shall have provided appropriate security for such
undertaking, (b) the Trust shall be insured against losses arising from any
such advance payments or (c) either a majority of the dsinterested Trustees
acting on the matter (provided that a majority of the disinterested
Trustees then in office act on the matter), or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a full trial type inquiry) that there is
reason to believe that such Covered Person will be found entitled to
indemnification under this Article.
SECTION 2. COMPROMISE PAYMENT. As to any matter disposed of (whether
by a compromise payment, pursuant to a consent decree or otherwise) without
an adjudication by a court, or by any other body before which the
proceeding was brought, that such Covered Person is liable to the Trust or
its Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his or her office, indemnification shall be provided if (a) approved, after
notice that it involves such indemnification, by at least a majority of the
disinterested Trustees acting on the matter (provided that a majority of
the disinterested Trustees then in office act on the matter) upon a
determination, based upon a review of readily available fact (as opposed to
a full trial type inquiry) that such Covered Person is not liable to the
Trust or its Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his or her office, or (b) there has been obtained an opinion in writing of
independent legal counsel, based upon a review of readily available facts
(as opposed to a full trial type inquiry) to the effect that such
indemnification would not protect such Person against any liability to the
Trust to which he would otherwise be subject by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office. Any approval pursuant to
this Section shall not prevent the recovery from any Covered Person of any
amount paid to such Covered Person in accordance with this Section as
indemnification if such Covered Person is subsequently adjudicated by a
court of competent jurisdiction to have been liable to the Trust or its
Shareholders by reason of wilful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such Covered
Person's office.
SECTION 3. INDEMNIFICATION NOT EXCLUSIVE. The right of
indemnification hereby provided shall not be exclusive of or affect any
other rights to which such Covered Person may be entitled. As used in this
Article VIII, the term "Covered Person" shall include such person's heirs,
executors and administrators and a "disinterested Trustee" is a Trustee who
is not an "interested person" of the Trust as defined in Section 2(a)(19)
of the Investment Company Act of 1940, as amended, (or who has been
exempted from being an "interested
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<PAGE>
person" by any rule, regulation or order of the Commission) and against
whom none of such actions, suits or other proceedings or another action,
suit or other proceeding on the same or similar grounds is then or has been
pending. Nothing contained in this Article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees or
officers, and other persons may be entitled by contract or otherwise under
law, nor the power of the Trust to purchase and maintain liability
insurance on behalf of any such person; provided, however, that the Trust
shall not purchase or maintain any such liability insurance in
contravention of applicable law, including without limitation the 1940 Act.
SECTION 4. SHAREHOLDERS. In case any Shareholder or former
Shareholder shall be held to be personally liable solely by reason of his
or her being or having been a Shareholder and not because of his or her
acts or omissions or for some other reason, the Shareholder or former
Shareholder (or his or her heirs, executors, administrators or other legal
representatives or in the case of a corporation or other entity, its
corporate or other general successor) shall be entitled to be held harmless
from and indemnified against all loss and expense arising from such
liability, but only out of the assets of the particular series of Shares of
which he or she is or was a Shareholder."
(b) Insurance
The Trust maintains Professional Liability Insurance for each of its
directors and officers. The Trust's policy is carried by the American
International Specialty Lines Insurance Company and insures each director
and officer against professional liability for decisions made in connection
with the Trust, to the extent permitted by the 1940 Act, up to a maximum of
$3,000,000.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
AXA Rosenberg Investment Management LLC (the "Adviser") was organized as a
limited liability company under the laws of the State of Delaware in 1998, and
is registered as an investment adviser under the Investment Advisers Act of
1940. The Manager provides investment advisory services to a substantial number
of institutional investors, to the Barr Rosenberg Market Neutral Fund, the Barr
Rosenberg Double Alpha Market Fund and the Barr Rosenberg Select Sectors Market
Neutral Fund (the other series of the Trust), and to the series of Barr
Rosenberg Variable Insurance Trust, an open-end management investment company.
Set forth below are the substantial business engagements during at least
the past two fiscal years of each director or officer of the Adviser:
Name and Position with Adviser Business and Other Connections
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<PAGE>
Barr M. Rosenberg General Partner, Rosenberg Alpha L.P.
Director of Research (formerly RBR Partners (limited
partner of Manager)), 12 El Sueno,
Orinda, California, December 1984 to
present; Chairman of the Board,
Rosenberg Management Company S.A., 2
Place WinstonChurchill, L-1340
Luxembourg, April 1989 to present;
Chairman of the Board, Rosenberg U.S.
Japan Management Company S.A., 2 Place
Winston Churchill, L-1340 Luxembourg,
July 1989 to present. Chairman of the
Board, Rosenberg Global Management
Company, S.A., 2 Place Winston
Churchill, L-1340 Luxemburg, April
1990 to present; Director and Chairman
of the Board, Rosenberg Nomura Asset
Management Company, Ltd., Dai-Ichi
Edobashi Bldg., 1-11-1 Nihonbashi
Chuo-Ku, Tokyo 103, Japan; Chairman of
the Board and Director of Barr
Rosenberg Investment Management, Inc.,
4 Orinda Way, Orinda, California,
February 1990 to present. Chairman,
Barr Rosenberg European Management,
Ltd., 9A Devonshire Square, London
EC2M 4LY, United Kingdom, March 1990
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 Director, Barr Rosenberg Investment
Chief Executive Officer Management, Inc., 4 Orinda Way,
Orinda, California, February 1990 to
present; General Partner and Director
of Research, Rosenberg Institutional
Equity Management, June 1986 to
December 1998.
William Ricks Director of Accounting Research,
Chief Investment Adviser Portfolio Engineer and Research
Associate, Rosenberg Institutional
Equity Management, 1989 to 1998.
Cecelia Baron Marketing Director, Rosenberg
Marketing Director Institutional Equity Management, 1993
to 1998; Vice president and Manager of
Business Development, Fischer Francis
Trees & Watts, New York, 1985 to 1993.
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<PAGE>
ITEM 27. PRINCIPAL UNDERWRITERS:
(a) Barr Rosenberg Funds Distributor, Inc. (the "Distributor") is the principal
underwriter of the Trust's Select shares. The Distributor does not act as
principal underwriter, depositor or investment adviser for any other
investment company.
(b) Information with respect to the Distributor's directors and officers is as
follows:
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ --------------------- ---------------------
David J. Huber President None
Lynn J. Mangum Director, Chairman None
Kevin J. Dell Vice President, Secretary None
Michael D. Burns Vice President, Chief None
Financial Officer
Robert J. McMullan Vice President, Director, None
Treasurer
The business address of all directors and officers of the Distributor is 90 Park
Avenue, New York, NY 10016.
(c) None
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940, as amended, and the rules
thereunder will be maintained at the offices of:
1. Barr Rosenberg Series Trust
3435 Stelzer Road
Columbus, Ohio 43219
Rule 31a-1 (b)(1),(2),(3), (4), (5), (6), (7), (8), (9), (10), (11)
Rule 31a-2 (a)
2. AXA Rosenberg Investment Management LLC
Four Orinda Way
Building E
Orinda, CA 94563
Rule 31a-1 (f)
Rule 31a-2 (e)
3. Barr Rosenberg Funds Distributor, Inc.
90 Park Avenue
New York, NY 10016
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<PAGE>
Rule 31a-1 (d)
Rule 31a-2 (c)
ITEM 29. MANAGEMENT SERVICES.
None.
ITEM 32. UNDERTAKINGS.
The Registrant undertakes to comply with the last three paragraphs of
Section 16(c) of the Investment Company Act of 1940 as though such provisions of
the Act were applicable to the Trust.
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<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust, as amended, of the
Registrant is on file with the Secretary of The Commonwealth of Massachusetts
and notice is hereby given that this instrument is executed on behalf of the
Registrant by an officer of the Registrant as an officer and not individually
and that the obligations of or arising out of this instrument are not binding
for any of the trustees or shareholders individually but are binding only upon
the assets and property of the Registrant.
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<PAGE>
SIGNATURES
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment No. 25 to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Orinda, and the State of
California, on the 28th day of May, 1999.
BARR ROSENBERG SERIES TRUST
By: KENNETH REID
---------------------
Kenneth Reid
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
its Registration Statement has been signed below by the following persons in the
capacities indicated and on the 28th day of May, 1999.
SIGNATURE TITLE DATE
--------- ----- ----
KENNETH REID President and Trustee May 28, 1999
------------ (principal executive
Kenneth Reid officer)
Po-Len Hew* Treasurer (principal May 28, 1999
----------- financial and accounting
Po-Len Hew officer)
William F. Sharpe* Trustee May 28, 1999
------------------
William F. Sharpe
Nils H. Hakansson* Trustee May 28, 1999
------------------
Nils H. Hakansson
Dwight M. Jaffee* Trustee May 28, 1999
-----------------
Dwight M. Jaffee
*By: KENNETH REID
----------------
Kenneth Reid
Attorney-in-Fact
Date: May 28, 1999
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<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
23(A)(3) Amendment No. 2 to Second Amended and Restated Agreement and
Declaration of Trust of the Registrant
23(d)(1) Management Contract between the Registrant on behalf of its
U.S. Small Capitalization Series and AXA Rosenberg
Investment Management LLC -- filed herewith;
23(d)(2) Management Contract between the Registrant on behalf of its
International Small Capitalization Series and AXA Rosenberg
Investment Management LLC -- filed herewith;
23(d)(3) Management Contract between the Registrant on behalf of its
Japan Series and AXA Rosenberg Investment Management LLC --
filed herewith;
23(h)(2) Notification of Expense Limitation by AXA Rosenberg
Investment Management LLC to the U.S. Small Capitalization
Series -- filed herewith;
23(h)(3) Notification of Expense Limitation by AXA Rosenberg
Investment Management LLC to the International Small
Capitalization Series -- filed herewith;
23(h)(4) Notification of Expense Limitation by AXA Rosenberg
Investment Management LLC to the Japan Series -- filed
herewith;
23(m) Amended and Restated Distribution and Shareholder Service
Plan for Select shares
23(o) Further Amended and Restated Multi-Class Plan
23(p)(4) Power of Attorney of Dwight M. Jaffee
<PAGE>
Exhibit 23 (a)(3)
- -----------------
BARR ROSENBERG SERIES TRUST
AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
The undersigned, being all of the trustees of Barr Rosenberg Series Trust,
a Massachusetts business trust created and existing under an Agreement and
Declaration of Trust dated April 1, 1988, as amended, a copy of which is on file
in the Office of the Secretary of The Commonwealth of Massachusetts (the
"Trust"), having determined that the creation of a new Series of the Trust is
consistent with the fair and equitable treatment of all Shareholders, do hereby
direct that this Amendment No. 2 be filed with the Secretary of The Commonwealth
of Massachusetts and do hereby consent to and adopt the following amendment to
the Second Amended and Restated Agreement and Declaration of Trust:
1. The first sentence of Section 6 of Article III of the Second Amended
and Restated Agreement and Declaration of Trust is amended and restated to read
in its entirety as follows:
"Without limiting the authority of the Trustees set forth in Section
5, INTER ALIA, to establish and designate any further Series or Classes of
Shares or to modify the rights and preferences of any Series or Class, the
"Japan Series," "U.S. Small Capitalization Series" (formerly the Small
Capitalization Series), "International Small Capitalization Series," "Barr
Rosenberg Market Neutral Fund," "Barr Rosenberg Double Alpha Market Fund"
and "Barr Rosenberg Select Sectors Market Neutral Fund" shall be, and are
hereby, established and designated; and with respect to the U.S. Small
Capitalization Series, Japan Series and International Small Capitalization
Series, the Institutional Shares Class, Adviser Shares Class and Select
Shares Class, which may be issued by each such Series from time to time,
shall be, and are hereby, established and designated, and with respect to
the Barr Rosenberg Market Neutral Fund, Barr Rosenberg Double Alpha Market
Fund and Barr Rosenberg Select Sectors Market Neutral Fund, the
Institutional Shares Class and Investor Shares Class, which may be issued
by each such Series from time to time, shall be, and are hereby,
established and designated, all of which Classes shall have the respective
rights and preferences as are set forth in the Plan attached as Exhibit 3.6
hereto as such Plan may be amended from time to time by the Board of
Trustees."
The foregoing amendment shall become effective as of the time it is filed
with the Secretary of State of The Commonwealth of Massachusetts.
<PAGE>
IN WITNESS WHEREOF, each of the undersigned Trustees as aforesaid do hereto
set their hands this ____ day of October, 1998.
MARLIS S. FRITZ
------------------------------
Marlis S. Fritz
NILS HAKANSSON
------------------------------
Nils Hakansson
KENNETH REID
------------------------------
Kenneth Reid
BARR M. ROSENBERG
------------------------------
Barr M. Rosenberg
WILLIAM F. SHARPE
------------------------------
William F. Sharpe
<PAGE>
Exhibit 23(d)(1)
- ----------------
MANAGEMENT CONTRACT
Management Contract executed as of December 30, 1998 between Barr Rosenberg
Series Trust, a Massachusetts business trust (the "Trust"), on behalf of its
U.S. Small Capitalization Series (the "Fund"), and Axa Rosenberg Investment
Management LLC, a Delaware limited liability company (the "Manager").
W I T N E S S E T H:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY THE MANAGER TO THE TRUST.
(a) Subject always to the control of the Trustees of the Trust and to such
policies as the Trustees may determine, the Manager will, at its expense, (i)
furnish continuously an investment program for the Fund and make investment
decisions on behalf of the Fund and place all orders for the purchase and sale
of its portfolio securities, (ii) furnish office space and equipment, provide
bookkeeping and clerical services (excluding determination of net asset value,
shareholder accounting services and fund accounting services for the Fund being
supplied by BISYS Fund Services Ohio, Inc. or its successors and permitted
assigns), and (iii) pay all salaries, fees and expenses of officers and Trustees
of the Trust who are affiliated with the Manager. In the performance of its
duties, the Manager will comply with the provisions of the Agreement and
Declaration of Trust and By-laws of the Trust, each as amended from time to
time, and the Fund's stated investment objective, policies and restrictions.
(b) In placing orders for the portfolio transactions of the Fund, the
Manager will seek the best price and execution available, except to the extent
it may be permitted to pay higher brokerage commissions for brokerage and
research services as described below. In using its best efforts to obtain for
the Fund the most favorable price and execution available, the Manager shall
consider all factors it deems relevant, 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, the availability of the broker to stand ready to execute possibly
difficult transactions in the future, and the financial strength and stability
of the broker. Subject to such policies as the Trustees may determine, the
Manager shall not be deemed to have acted unlawfully or to have breached any
duty created by this Contract or otherwise solely by reason of its having caused
the Fund to pay a broker or dealer that provides brokerage and research services
to the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, provided that the Manager
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Trust and to other
clients of the Manager as to which the Manager exercises investment discretion.
(c) Other than as provided in Section 3, the Manager shall not be
obligated under this Contract to pay any expenses of or for the Trust or the
Fund not expressly assumed by the Manager pursuant to this Section 1 .
2. OTHER AGREEMENTS, ETC.
<PAGE>
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a partner, shareholder, director, officer or
employee of, or be otherwise interested in, the Manager or any person
controlling, controlled by or under common control with the Manager, and that
the Manager and any person controlling, controlled by or under common control
with the Manager may have an interest in the Trust. It is also understood that
the Manager and persons controlling, controlled by or under common control with
the Manager have and may have advisory, management service, distribution or
other contracts with other organizations and persons, and may have other
interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's services
rendered, for the facilities furnished and for the expenses borne by the Manager
pursuant to Section 1, a fee, computed and paid quarterly at the annual rate of
.90% of the Fund's average daily net asset value. Such average daily net asset
value of the Fund shall be determined by taking an average of all of the
determinations of such net asset value during such quarter at the close of
business on each business day during such quarter while this Contract is in
effect. Such fee shall be payable for each quarter within five (5) business
days after the end of such quarter.
In the event that expenses of the Fund (including investment advisory fees
but excluding taxes, portfolio brokerage commissions and any distribution
expenses paid by the Fund pursuant to a distribution plan or otherwise) for any
fiscal year should exceed the expense limitation on investment company expenses
imposed by any statute or regulatory authority of any jurisdiction in which
shares of the Fund are qualified for offer and sale, the compensation due the
Manager for such fiscal year shall be reduced by the amount of such excess by
reduction or refund thereof. In the event that the expenses of the Fund exceed
any expense limitation that the Manager may, by written notice to the Trust,
voluntarily declare to be effective with respect to the Fund, subject to such
terms and conditions as the Manager may prescribe in such notice, the
compensation due the Manager shall be reduced, and, if necessary, the Manager
shall bear the Fund's expenses to the extent required by such expense
limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment is approved in such manner as may be required by the
Investment Company Act of 1940, as amended.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall remain
in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this Contract by
not more than sixty days' written notice delivered or mailed by registered
mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust by majority vote or the
shareholders by the affirmative vote of a majority of the outstanding
shares of the Fund, and (ii) a majority of the Trustees of the
<PAGE>
Trust who are not interested persons of the Trust or the Manager, by vote
cast in person at a meeting called for the purpose of voting on such
approval, do not specifically approve at least annually the continuance of
this Contract, then this Contract shall automatically terminate at the
close of business on the first anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the continuance
of this Contract is submitted to the shareholders of the Fund for their
approval and such shareholders fail to approve such continuance of this
Contract as provided herein, the Manager may continue to serve hereunder in
a manner consistent with the Investment Company Act of 1940 and the rules
and regulations thereunder.
Action by the Trust under paragraph (a) above may be taken either (i) by
vote of a majority of its Trustees, or (ii) by the affirmative vote of a
majority of the outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be without
the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares" of the Fund means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of the
shares of the Fund present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares of the Fund
entitled to vote at such meeting are present in person or by proxy, or (b) of
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting.
For the purposes of this Contract, the terms "control", "interested person"
and "assignment" shall have their respective meanings defined in the Investment
Company Act of 1940 and the rules and regulations thereunder, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act; and the phrase "specifically approve at least annually" shall be
construed in a manner consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or in
connection with, rendering services hereunder.
8. THE NAMES "ROSENBERG" AND "BARR ROSENBERG".
The Manager owns the right to use the names "Rosenberg" and "Barr
Rosenberg" in connection with investment-related services or products, and such
names may be used by the Trust only with the consent of the Manager. The
Manager consents to the use by the Trust of the name "Barr Rosenberg Series
Trust" or any other name embodying the name "Rosenberg" or "Barr Rosenberg", in
such forms as the Manager shall in writing approve, but only on the condition
that and so long as (i) this Contract shall remain in full force, and (ii) the
Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use the names "Rosenberg"
and/or "Barr Rosenberg" as part of a business or name is not exclusive of the
right of the
<PAGE>
Manager itself to use, or to authorize others to use, said name; the Trust
acknowledges and agrees that as between the Manager and the Trust, the Manager
has the exclusive right to use, or to authorize others to use, said names; and
the Trust agrees, on behalf of the Fund, to take such action as may reasonably
be requested by the Manager to give full effect to the provisions of this
section (including, without limitation, consenting to such use of said names).
Without limiting the generality of the foregoing, the Trust agrees that, upon
any termination of this Contract by either party or upon the violation of any of
its provisions by the Trust, the Trust will, at the request of the Manager made
within six months after the Manager has knowledge of such termination or
violation, use its best efforts to change the name of the Trust so as to
eliminate all reference, if any, to the names "Rosenberg" and "Barr Rosenberg"
and will not thereafter transact any business in a name containing the name
"Rosenberg" or "Barr Rosenberg" in any form or combination whatsoever, or
designate itself as the same entity as or successor to an entity f such name, or
otherwise use the name "Rosenberg" or "Barr Rosenberg" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Trust's Agreement and Declaration of Trust, as amended, is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of the Fund.
<PAGE>
IN WITNESS WHEREOF, Barr Rosenberg Series Trust, on behalf of its U.S.
Small Capitalization Series, and Axa Rosenberg Investment Management LLC have
each caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative, all as of the day and year first above written.
BARR ROSENBERG SERIES TRUST, on behalf of its U.S.
Small Capitalization Series
By KENNETH REID
-------------------------------
Title: President
AXA ROSENBERG INVESTMENT
MANAGEMENT LLC
By KENNETH REID
-------------------------------
Title: A duly authorized signatory
<PAGE>
Exhibit 23(d)(2)
- ----------------
MANAGEMENT CONTRACT
Management Contract executed as of December 30, 1998 between Barr Rosenberg
Series Trust, a Massachusetts business trust (the "Trust"), on behalf of its
International Small Capitalization Series (the "Fund"), and Axa Rosenberg
Investment Management LLC, a Delaware limited liability company (the "Manager").
W I T N E S S E T H:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY THE MANAGER TO THE TRUST.
(a) Subject always to the control of the Trustees of the Trust and to such
policies as the Trustees may determine, the Manager will, at its expense, (i)
furnish continuously an investment program for the Fund and make investment
decisions on behalf of the Fund and place all orders for the purchase and sale
of its portfolio securities, (ii) furnish office space and equipment, provide
bookkeeping and clerical services (excluding determination of net asset value,
shareholder accounting services and fund accounting services for the Fund being
supplied by BISYS Fund Services Ohio, Inc. or its successors and permitted
assigns), and (iii) pay all salaries, fees and expenses of officers and Trustees
of the Trust who are affiliated with the Manager. In the performance of its
duties, the Manager will comply with the provisions of the Agreement and
Declaration of Trust and By-laws of the Trust, each as amended from time to
time, and the Fund's stated investment objective, policies and restrictions.
(b) In placing orders for the portfolio transactions of the Fund, the
Manager will seek the best price and execution available, except to the extent
it may be permitted to pay higher brokerage commissions for brokerage and
research services as described below. In using its best efforts to obtain for
the Fund the most favorable price and execution available, the Manager shall
consider all factors it deems relevant, 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, the availability of the broker to stand ready to execute possibly
difficult transactions in the future, and the financial strength and stability
of the broker. Subject to such policies as the Trustees may determine, the
Manager shall not be deemed to have acted unlawfully or to have breached any
duty created by this Contract or otherwise solely by reason of its having caused
the Fund to pay a broker or dealer that provides brokerage and research services
to the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Manager determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Manager's overall
responsibilities with respect to the Trust and to other clients of the Manager
as to which the Manager exercises investment discretion.
(c) Other than as provided in Section 3, the Manager shall not be
obligated under this Contract to pay any expenses of or for the Trust or the
Fund not expressly assumed by the Manager pursuant to this Section 1 .
<PAGE>
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a partner, shareholder, director, officer or
employee of, or be otherwise interested in, the Manager or any person
controlling, controlled by or under common control with the Manager, and that
the Manager and any person controlling, controlled by or under common control
with the Manager may have an interest in the Trust. It is also understood that
the Manager and persons controlling, controlled by or under common control with
the Manager have and may have advisory, management service, distribution or
other contracts with other organizations and persons, and may have other
interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's services
rendered, for the facilities furnished and for the expenses borne by the Manager
pursuant to Section 1, a fee, computed and paid quarterly at the annual rate of
1.00% of the Fund's average daily net asset value. Such average daily net asset
value of the Fund shall be determined by taking an average of all of the
determinations of such net asset value during such quarter at the close of
business on each business day during such quarter while this Contract is in
effect. Such fee shall be payable for each quarter within five (5) business
days after the end of such quarter.
In the event that expenses of the Fund (including investment advisory fees
but excluding taxes, portfolio brokerage commissions and any distribution
expenses paid by the Fund pursuant to a distribution plan or otherwise) for any
fiscal year should exceed the expense limitation on investment company expenses
imposed by any statute or regulatory authority of any jurisdiction in which
shares of the Fund are qualified for offer and sale, the compensation due the
Manager for such fiscal year shall be reduced by the amount of such excess by
reduction or refund thereof. In the event that the expenses of the Fund exceed
any expense limitation that the Manager may, by written notice to the Trust,
voluntarily declare to be effective with respect to the Fund, subject to such
terms and conditions as the Manager may prescribe in such notice, the
compensation due the Manager shall be reduced, and, if necessary, the Manager
shall bear the Fund's expenses to the extent required by such expense
limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment is approved in such manner as may be required by the
Investment Company Act of 1940, as amended.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall remain
in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this Contract by
not more than sixty days' written notice delivered or mailed by registered
mail, postage prepaid, to the other party, or
<PAGE>
(b) If (i) the Trustees of the Trust by majority vote or the
shareholders by the affirmative vote of a majority of the outstanding
shares of the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval, do
not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close of
business on the first anniversary of its execution, or upon the expiration
of one year from the effective date of the last such continuance, whichever
is later; provided, however, that if the continuance of this Contract is
submitted to the shareholders of the Fund for their approval and such
shareholders fail to approve such continuance of this Contract as provided
herein, the Manager may continue to serve hereunder in a manner consistent
with the Investment Company Act of 1940 and the rules and regulations
thereunder.
Action by the Trust under paragraph (a) above may be taken either (i) by
vote of a majority of its Trustees, or (ii) by the affirmative vote of a
majority of the outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be without
the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares" of the Fund means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of the
shares of the Fund present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares of the Fund
entitled to vote at such meeting are present in person or by proxy, or (b) of
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting.
For the purposes of this Contract, the terms "control", "interested person"
and "assignment" shall have their respective meanings defined in the Investment
Company Act of 1940 and the rules and regulations thereunder, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act; and the phrase "specifically approve at least annually" shall be
construed in a manner consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or in
connection with, rendering services hereunder.
8. THE NAMES "ROSENBERG" AND "BARR ROSENBERG".
The Manager owns the right to use the names "Rosenberg" and "Barr
Rosenberg" in connection with investment-related services or products, and such
names may be used by the Trust only with the consent of the Manager. The
Manager consents to the use by the Trust of the name "Barr Rosenberg Series
Trust" or any other name embodying the name "Rosenberg" or "Barr Rosenberg", in
such forms as the Manager shall in writing approve, but only on the condition
that and so long as (i) this Contract shall remain in full force, and (ii) the
Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as
<PAGE>
in this section provided. The foregoing authorization by the Manager to the
Trust to use the names "Rosenberg" and/or "Barr Rosenberg" as part of a business
or name is not exclusive of the right of the Manager itself to use, or to
authorize others to use, said name; the Trust acknowledges and agrees that as
between the Manager and the Trust, the Manager has the exclusive right to use,
or to authorize others to use, said names; and the Trust agrees, on behalf of
the Fund, to take such action as may reasonably be requested by the Manager to
give full effect to the provisions of this section (including, without
limitation, consenting to such use of said names). Without limiting the
generality of the foregoing, the Trust agrees that, upon any termination of this
Contract by either party or upon the violation of any of its provisions by the
Trust, the Trust will, at the request of the Manager made within six months
after the Manager has knowledge of such termination or violation, use its best
efforts to change the name of the Trust so as to eliminate all reference, if
any, to the names "Rosenberg" and "Barr Rosenberg" and will not thereafter
transact any business in a name containing the name "Rosenberg" or "Barr
Rosenberg" in any form or combination whatsoever, or designate itself as the
same entity as or successor to an entity f such name, or otherwise use the name
"Rosenberg" or "Barr Rosenberg" or any other reference to the Manager. Such
covenants on the part of the Trust shall be binding upon it, its trustees,
officers, stockholders, creditors and all other persons claiming under or
through it.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Trust's Agreement and Declaration of Trust, as amended, is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of the Fund.
<PAGE>
IN WITNESS WHEREOF, Barr Rosenberg Series Trust, on behalf of its
International Small Capitalization Series, and Axa Rosenberg Investment
Management LLC have each caused this instrument to be signed in duplicate on its
behalf by its duly authorized representative, all as of the day and year first
above written.
BARR ROSENBERG SERIES TRUST, on behalf of its
International Small Capitalization Series
By KENNETH REID
--------------------
Title: President
AXA ROSENBERG INVESTMENT
MANAGEMENT LLC
By KENNETH REID
--------------------
Title: A duly authorized signatory
<PAGE>
Exhibit 23(d)(3)
- ----------------
MANAGEMENT CONTRACT
Management Contract executed as of December 30, 1998 between Barr Rosenberg
Series Trust, a Massachusetts business trust (the "Trust"), on behalf of its
Japan Series (the "Fund"), and Axa Rosenberg Investment Management LLC, a
Delaware limited liability company (the "Manager").
W I T N E S S E T H:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY THE MANAGER TO THE TRUST.
(a) Subject always to the control of the Trustees of the Trust and to such
policies as the Trustees may determine, the Manager will, at its expense, (i)
furnish continuously an investment program for the Fund and make investment
decisions on behalf of the Fund and place all orders for the purchase and sale
of its portfolio securities, (ii) furnish office space and equipment, provide
bookkeeping and clerical services (excluding determination of net asset value,
shareholder accounting services and fund accounting services for the Fund being
supplied by BISYS Fund Services Ohio, Inc. or its successors and permitted
assigns), and (iii) pay all salaries, fees and expenses of officers and Trustees
of the Trust who are affiliated with the Manager. In the performance of its
duties, the Manager will comply with the provisions of the Agreement and
Declaration of Trust and By-laws of the Trust, each as amended from time to
time, and the Fund's stated investment objective, policies and restrictions.
(b) In placing orders for the portfolio transactions of the Fund, the
Manager will seek the best price and execution available, except to the extent
it may be permitted to pay higher brokerage commissions for brokerage and
research services as described below. In using its best efforts to obtain for
the Fund the most favorable price and execution available, the Manager shall
consider all factors it deems relevant, 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, the availability of the broker to stand ready to execute possibly
difficult transactions in the future, and the financial strength and stability
of the broker. Subject to such policies as the Trustees may determine, the
Manager shall not be deemed to have acted unlawfully or to have breached any
duty created by this Contract or otherwise solely by reason of its having caused
the Fund to pay a broker or dealer that provides brokerage and research services
to the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Manager determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Manager's overall
responsibilities with respect to the Trust and to other clients of the Manager
as to which the Manager exercises investment discretion.
(c) Other than as provided in Section 3, the Manager shall not be
obligated under this Contract to pay any expenses of or for the Trust or the
Fund not expressly assumed by the Manager pursuant to this Section 1 .
2. OTHER AGREEMENTS, ETC.
<PAGE>
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a partner, shareholder, director, officer or
employee of, or be otherwise interested in, the Manager or any person
controlling, controlled by or under common control with the Manager, and that
the Manager and any person controlling, controlled by or under common control
with the Manager may have an interest in the Trust. It is also understood that
the Manager and persons controlling, controlled by or under common control with
the Manager have and may have advisory, management service, distribution or
other contracts with other organizations and persons, and may have other
interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's services
rendered, for the facilities furnished and for the expenses borne by the Manager
pursuant to Section 1, a fee, computed and paid quarterly at the annual rate of
1.00% of the Fund's average daily net asset value. Such average daily net asset
value of the Fund shall be determined by taking an average of all of the
determinations of such net asset value during such quarter at the close of
business on each business day during such quarter while this Contract is in
effect. Such fee shall be payable for each quarter within five (5) business
days after the end of such quarter.
In the event that expenses of the Fund (including investment advisory fees
but excluding taxes, portfolio brokerage commissions and any distribution
expenses paid by the Fund pursuant to a distribution plan or otherwise) for any
fiscal year should exceed the expense limitation on investment company expenses
imposed by any statute or regulatory authority of any jurisdiction in which
shares of the Fund are qualified for offer and sale, the compensation due the
Manager for such fiscal year shall be reduced by the amount of such excess by
reduction or refund thereof. In the event that the expenses of the Fund exceed
any expense limitation that the Manager may, by written notice to the Trust,
voluntarily declare to be effective with respect to the Fund, subject to such
terms and conditions as the Manager may prescribe in such notice, the
compensation due the Manager shall be reduced, and, if necessary, the Manager
shall bear the Fund's expenses to the extent required by such expense
limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment is approved in such manner as may be required by the
Investment Company Act of 1940, as amended.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall remain
in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this Contract by
not more than sixty days' written notice delivered or mailed by registered
mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust by majority vote or the
shareholders by the affirmative vote of a majority of the outstanding
shares of the Fund, and (ii) a majority of the Trustees of the
<PAGE>
Trust who are not interested persons of the Trust or the Manager, by vote
cast in person at a meeting called for the purpose of voting on such
approval, do not specifically approve at least annually the continuance of
this Contract, then this Contract shall automatically terminate at the
close of business on the first anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the continuance
of this Contract is submitted to the shareholders of the Fund for their
approval and such shareholders fail to approve such continuance of this
Contract as provided herein, the Manager may continue to serve hereunder in
a manner consistent with the Investment Company Act of 1940 and the rules
and regulations thereunder.
Action by the Trust under paragraph (a) above may be taken either (i) by
vote of a majority of its Trustees, or (ii) by the affirmative vote of a
majority of the outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be without
the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares" of the Fund means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of the
shares of the Fund present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares of the Fund
entitled to vote at such meeting are present in person or by proxy, or (b) of
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting.
For the purposes of this Contract, the terms "control", "interested person"
and "assignment" shall have their respective meanings defined in the Investment
Company Act of 1940 and the rules and regulations thereunder, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act; and the phrase "specifically approve at least annually" shall be
construed in a manner consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or in
connection with, rendering services hereunder.
8. THE NAMES "ROSENBERG" AND "BARR ROSENBERG".
The Manager owns the right to use the names "Rosenberg" and "Barr
Rosenberg" in connection with investment-related services or products, and such
names may be used by the Trust only with the consent of the Manager. The
Manager consents to the use by the Trust of the name "Barr Rosenberg Series
Trust" or any other name embodying the name "Rosenberg" or "Barr Rosenberg", in
such forms as the Manager shall in writing approve, but only on the condition
that and so long as (i) this Contract shall remain in full force, and (ii) the
Trust shall fully perform, fulfill and comply with all provisions of this
Contract expressed herein to be performed, fulfilled or complied with by it. No
such name shall be used by the Trust at any time or in any place or for any
purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use the names "Rosenberg"
and/or "Barr Rosenberg" as part of a business or name is not exclusive of the
right of the
<PAGE>
Manager itself to use, or to authorize others to use, said name; the Trust
acknowledges and agrees that as between the Manager and the Trust, the Manager
has the exclusive right to use, or to authorize others to use, said names; and
the Trust agrees, on behalf of the Fund, to take such action as may reasonably
be requested by the Manager to give full effect to the provisions of this
section (including, without limitation, consenting to such use of said names).
Without limiting the generality of the foregoing, the Trust agrees that, upon
any termination of this Contract by either party or upon the violation of any of
its provisions by the Trust, the Trust will, at the request of the Manager made
within six months after the Manager has knowledge of such termination or
violation, use its best efforts to change the name of the Trust so as to
eliminate all reference, if any, to the names "Rosenberg" and "Barr Rosenberg"
and will not thereafter transact any business in a name containing the name
"Rosenberg" or "Barr Rosenberg" in any form or combination whatsoever, or
designate itself as the same entity as or successor to an entity f such name, or
otherwise use the name "Rosenberg" or "Barr Rosenberg" or any other reference to
the Manager. Such covenants on the part of the Trust shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Trust's Agreement and Declaration of Trust, as amended, is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of the Fund.
<PAGE>
IN WITNESS WHEREOF, Barr Rosenberg Series Trust, on behalf of its Japan
Series, and Axa Rosenberg Investment Management LLC have each caused this
instrument to be signed in duplicate on its behalf by its duly authorized
representative, all as of the day and year first above written.
BARR ROSENBERG SERIES TRUST, on behalf of its
Japan Series
By KENNETH REID
--------------------
Title: President
AXA ROSENBERG INVESTMENT
MANAGEMENT LLC
By KENNETH REID
--------------------
Title: A duly authorized signatory
<PAGE>
Exhibit 23(h)(2)
- ----------------
NOTIFICATION OF
EXPENSE LIMITATION
NOTIFICATION made this 31st day of March, 1999 by Axa Rosenberg Investment
Management LLC, a Delaware limited liability company (the "Adviser"), to Barr
Rosenberg Series Trust, a Massachusetts business trust (the "Trust"), and its
U.S. Small Capitalization Series (the "Fund").
WITNESSETH:
WHEREAS, the Adviser serves as investment adviser for the Fund;
WHEREAS, the Fund offers shares that are subject to various fees and
expenses; and
WHEREAS, the Adviser believes it would benefit from a high sales volume of
shares of the Fund in that such a volume would maximize the Adviser's fee as
investment adviser to the Fund; and
WHEREAS, the Adviser has undertaken to furnish certain services and, as
necessary, to voluntarily bear a portion of the costs thereof and/or reimburse
certain expenses so as to enable the Fund to offer competitive returns with
respect to investments in shares of the Fund.
NOW THEREFORE, pursuant to Section 3 of the Management Contract between the
Adviser and the Trust on behalf of the Fund (the "Management Contract"), the
Adviser hereby notifies the Trust that the Adviser shall, until further notice,
voluntarily reduce its compensation due under the Management Contract and, if
necessary, bear certain expenses of the Fund to the extent required to limit the
expenses (which do not include extraordinary expenses and dividends and interest
paid on securities sold short) of each class of shares of the Fund to the
percentage of the Fund's average daily net assets attributable to that class
listed below.
Total Fund Operating Expenses
applicable after waiver
-----------------------
Barr Rosenberg U.S. Small Capitalization Series
Institutional Shares 1.15%
Advisor Shares 1.40%
Select Shares 1.55%
<PAGE>
IN WITNESS WHEREOF, the Adviser has executed this Notification of Expense
Limitation on the day and year first above written.
AXA ROSENBERG INVESTMENT MANAGEMENT LLC
By:KENNETH REID
------------------------------
Title: A duly authorized signatory
The foregoing is hereby accepted:
BARR ROSENBERG SERIES TRUST,
on behalf of its U.S. Small Capitalization Series
By:KENNETH REID
--------------------
Title: President
<PAGE>
Exhibit 23(h)(3)
- ----------------
NOTIFICATION OF
EXPENSE LIMITATION
NOTIFICATION made this 31st day of March, 1999 by Axa Rosenberg Investment
Management LLC, a Delaware limited liability company (the "Adviser"), to Barr
Rosenberg Series Trust, a Massachusetts business trust (the "Trust"), and its
International Small Capitalization Series (the "Fund").
WITNESSETH:
WHEREAS, the Adviser serves as investment adviser for the Fund;
WHEREAS, the Fund offers shares that are subject to various fees and
expenses; and
WHEREAS, the Adviser believes it would benefit from a high sales volume of
shares of the Fund in that such a volume would maximize the Adviser's fee as
investment adviser to the Fund; and
WHEREAS, the Adviser has undertaken to furnish certain services and, as
necessary, to voluntarily bear a portion of the costs thereof and/or reimburse
certain expenses so as to enable the Fund to offer competitive returns with
respect to investments in shares of the Fund.
NOW THEREFORE, pursuant to Section 3 of the Management Contract between the
Adviser and the Trust on behalf of the Fund (the "Management Contract"), the
Adviser hereby notifies the Trust that the Adviser shall, until further notice,
voluntarily reduce its compensation due under the Management Contract and, if
necessary, bear certain expenses of the Fund to the extent required to limit the
expenses (which do not include extraordinary expenses and dividends and interest
paid on securities sold short) of each class of shares of the Fund to the
percentage of the Fund's average daily net assets attributable to that class
listed below.
Total Fund Operating Expenses
applicable after waiver
-----------------------------
Barr Rosenberg International Small
Capitalization Series
Institutional Shares 1.50%
Select Shares 1.90%
<PAGE>
IN WITNESS WHEREOF, the Adviser has executed this Notification of Expense
Limitation on the day and year first above written.
AXA ROSENBERG INVESTMENT MANAGEMENT LLC
By:KENNETH REID
-------------------------
Title: A duly authorized signatory
The foregoing is hereby accepted:
BARR ROSENBERG SERIES TRUST,
on behalf of its International Small Capitalization Series
By:KENNETH REID
--------------------
Title: President
<PAGE>
Exhibit 23(h)(4)
- ----------------
NOTIFICATION OF
EXPENSE LIMITATION
NOTIFICATION made this 31st day of March, 1999 by Axa Rosenberg Investment
Management LLC, a Delaware limited liability company (the "Adviser"), to Barr
Rosenberg Series Trust, a Massachusetts business trust (the "Trust"), and its
Japan Series (the "Fund").
WITNESSETH:
WHEREAS, the Adviser serves as investment adviser for the Fund;
WHEREAS, the Fund offers shares that are subject to various fees and
expenses; and
WHEREAS, the Adviser believes it would benefit from a high sales volume of
shares of the Fund in that such a volume would maximize the Adviser's fee as
investment adviser to the Fund; and
WHEREAS, the Adviser has undertaken to furnish certain services and, as
necessary, to voluntarily bear a portion of the costs thereof and/or reimburse
certain expenses so as to enable the Fund to offer competitive returns with
respect to investments in shares of the Fund.
NOW THEREFORE, pursuant to Section 3 of the Management Contract between the
Adviser and the Trust on behalf of the Fund (the "Management Contract"), the
Adviser hereby notifies the Trust that the Adviser shall, until further notice,
voluntarily reduce its compensation due under the Management Contract and, if
necessary, bear certain expenses of the Fund to the extent required to limit the
expenses (which do not include extraordinary expenses and dividends and interest
paid on securities sold short) of each class of shares of the Fund to the
percentage of the Fund's average daily net assets attributable to that class
listed below.
Total Fund Operating Expenses
applicable after waiver
-----------------------
Barr Rosenberg Japan Series
Institutional Shares 1.50%
Select Shares 1.90%
<PAGE>
IN WITNESS WHEREOF, the Adviser has executed this Notification of Expense
Limitation on the day and year first above written.
AXA ROSENBERG INVESTMENT MANAGEMENT LLC
By:KENNETH REID
-----------------------
Title: A duly authorized signatory
The foregoing is hereby accepted:
BARR ROSENBERG SERIES TRUST,
on behalf of its Japan Series
By: KENNETH REID
--------------------
Title: President
<PAGE>
Exhibit 23(m)
- -------------
BARR ROSENBERG SERIES TRUST
Amended and Restated Distribution and Shareholder Service Plan (Select
Shares)
(Effective as of February 22, 1999)
This Plan (the "PLAN"), as amended from time to time, constitutes
the Distribution and Shareholder Service Plan with respect to the Select
shares of BARR ROSENBERG SERIES TRUST, a Massachusetts business trust (the
"TRUST").
SECTION 1. The Trust may pay a fee (the "DISTRIBUTION AND
SERVICE FEE") for services rendered and expenses borne in connection with the
distribution of Select shares of the Trust and/or in connection with the
provision of direct client service, personal services, maintenance of
shareholder accounts and reporting services ("SHAREHOLDER SERVICES") to
holders of Select shares of the Trust. Such Shareholder Services may
include, without limitation, professional and informative reporting, client
account information, personal and electronic access to fund information,
access to analysis and explanation of fund reports and assistance in the
correction and maintenance of client-related information. The Distribution
and Service Fee may be paid at an annual rate with respect to each series of
shares of beneficial interest of the Trust (each a "FUND" and, collectively,
the "FUNDS") not to exceed 0.25% of a Fund's average daily net assets
attributable to its Select shares. Subject to such limits and subject to the
provisions of Section 8 hereof, the Distribution and Service Fee shall be as
approved from time to time by (a) the Trustees of the Trust and (b) the
Independent Trustees of the Trust, and may be paid in respect of services
rendered and expenses borne in the past as to which no Distribution and
Service Fee was paid on account of such limitation. If at any time this Plan
shall not be in effect with respect to all Funds of the Trust, the
Distribution and Service Fee shall be computed on the basis of net assets
attributable to Select shares (as applicable) of those Funds for which the
Plan is in effect. The Distribution and Service Fee shall be accrued daily
and paid monthly or at such other intervals as the Trustees shall determine.
SECTION 2. The Distribution and Service Fee may be spent by its
recipient(s) on any activities or expenses primarily intended to result in
the sale of Select shares of the Trust and/or in connection with the
provision of Shareholder Services to holders of Select shares of the Trust.
Such permissible activities, expenses and services include, without
limitation, compensation to, and expenses (including overhead and telephone
expenses) of, financial consultants or other employees of a recipient of the
Distribution and Service Fee or of participating or introducing brokers who
engage in distribution of Select shares, printing of prospectuses and reports
for other than existing Select shareholders, advertising, preparing, printing
and distributing sales literature and forwarding communications from the
Trust to Select shareholders. A recipient's expenditures may include, without
limitation, compensation to, and expenses (including telephone and overhead
expenses) of, financial consultants or other employees of such recipient or
of participating or introducing brokers, certain banks and other financial
intermediaries who aid in the processing of purchase or redemption requests
for Select shares or the processing of dividend payments with respect to
Select shares, who provide information periodically to shareholders showing
their positions in a Fund's Select shares, who forward communications from
the Trust to Select shareholders, who render ongoing advice concerning the
suitability of particular investment opportunities offered by the Trust in
light of a shareholder's needs, who respond to inquiries from Select
shareholders relating to such services, or who train personnel in the
provision of such services.
SECTION 3. This Plan shall not take effect until it has been
approved, together with any related agreements, by votes of the majority (or
whatever greater percentage may, from time to time, be
<PAGE>
required by Section 12(b) of the Investment Company Act of 1940, as amended
(the "ACT"), or the rules and regulations thereunder), of both (a) the
Trustees of the Trust, and (b) the Independent Trustees of the Trust cast in
person at a meeting called for the purpose of voting on this Plan or such
agreement.
SECTION 4. This Plan shall continue in effect for a period of
more than one year after it takes effect only so long as such continuance is
specifically approved at least annually in the manner provided for approval
of this Plan in Section 3 hereof. It is acknowledged that a recipient may
expend or impute interest expense in respect of its activities or expenses
under this Plan and the Trustees and the Independent Trustees may give such
weight to such interest expense as they determine in their discretion.
SECTION 5. Any person authorized to direct the disposition of
monies paid or payable by the Trust pursuant to this Plan or any related
agreement shall provide to the Trustees of the Trust, and the Trustees shall
review, at least quarterly, a written report of the amounts so expended and
the purposes for which such expenditures were made.
SECTION 6. This Plan may be terminated at any time with respect
to a class of shares of any Fund by vote of a majority of the Independent
Trustees, or by vote of a majority of the outstanding voting securities of
that class.
SECTION 7. All agreements with any person relating to
implementation of this Plan with respect to any Fund shall be in writing, and
any agreement related to this Plan with respect to any Fund shall provide:
A. That such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the
Independent Trustees or by vote of a majority of the
outstanding Select share voting securities of such Fund, on
not more than 60 days' written notice to any other party to
the agreement; and
B. That such agreement shall terminate automatically in the
event of its assignment.
SECTION 8. This Plan may not be amended to increase materially
the Distribution and Service Fee permitted pursuant to Section 1 hereof
without approval by a vote of at least a majority of the outstanding Select
share voting securities of a Fund, and all material amendments to this Plan
shall be approved in the manner provided for approval of this Plan in Section
3 hereof.
SECTION 9. As used in this Plan, (a) the term "Independent
Trustees" shall mean those Trustees of the Trust who are not interested
persons of the Trust, and have no direct or indirect financial interest in
the operation of this Plan or any agreements related to it, (b) the terms
"assignment", "interested person" and "majority of the outstanding voting
securities" shall have the respective meanings specified in the Act and the
rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission, (c) the term "introducing
broker" shall mean any broker or dealer who is a member of the National
Association of Securities Dealers, Inc. and who is acting as an introducing
broker pursuant to clearing agreements with the Distributor; and (d) the term
"participating broker" shall mean any broker or dealer who is a member of the
National Association of Securities Dealers, Inc. and who has entered into a
selling or dealer agreement with the Distributor.
<PAGE>
SECTION 10. This Plan has been adopted pursuant to Rule 12b-1
under the Act and is designed to comply with all applicable requirements
imposed under such Rule. All Distribution and Service Fees shall be deemed
to have been paid under this Plan and pursuant to clause (b) of such Rule.
<PAGE>
Exhibit 23(o)
- -------------
BARR ROSENBERG SERIES TRUST
Plan pursuant to Rule 18f-3(d) under the Investment Company Act of 1940
-----------------------------------------------------------------------
Effective August 5, 1996
Amended and Restated December 8, 1997
Further Amended and Restated February 22, 1999
WHEREAS, the Board of Trustees of Barr Rosenberg Series Trust (the "TRUST")
has considered the following multi-class plan (the "PLAN") under which the Trust
may offer multiple classes of shares of its now existing and hereafter created
series pursuant to Rule 18f-3 (the "RULE") under the Investment Company Act of
1940 (the "1940 ACT"); and
WHEREAS, a majority of the Trustees of the Trust and a majority of the
Trustees who are not interested persons of the Trust have found the Plan, as
proposed, to be in the best interests of each class of shares of each series of
the Trust individually and the Trust as a whole.
NOW, THEREFORE, the Trust hereby approves and adopts the following Plan
pursuant to the Rule.
THE PLAN
Each now existing and hereafter created series (each, a "FUND")(1) of the
Trust may from time to time issue one or more of the following classes of
shares: Institutional shares, Adviser shares, Select shares and Investor shares.
Each class is subject to such investment minimums and other conditions of
eligibility as are set forth in the Trust's prospectuses, each as from time to
time in effect. The differences in expenses among these classes of shares, and
the conversion and exchange features of each class of shares, are set forth
below in this Plan, which is subject to change, to the extent permitted by law
and by the Agreement and Declaration of Trust and By-laws of the Trust, as
amended from time to time, by action of the Board of Trustees of the Trust.
CLASS CHARACTERISTICS
Institutional, Adviser, Select and Investor shares of a Fund represent
interests in the assets of such Fund and have identical dividend and liquidation
rights. The classes differ materially only with respect to (i) the level of
shareholder service fee ("SERVICE FEE"), if any, borne by each class, (ii) the
level of distribution and service fee ("DISTRIBUTION AND SERVICE FEE"), if any,
borne by each class, and (iii) the level of transfer agency fee, if any, borne
by each class. Service Fees are paid for services rendered and expenses borne
in connection with personal services rendered to shareholders of a class and the
maintenance of shareholder accounts. Service Fees are paid pursuant to plans
(each, a "SERVICE PLAN") for applicable classes. Distribution and Service Fees
are paid in connection with services and expenses primarily intended to result
in the sale of shares of the Trust and/or in connection with direct client
service, personal services, maintenance of shareholder accounts and
- ------------------------------
(1) The current Funds of the Trust are the U.S. Small Capitalization
Series, Japan Series, International Small Capitalization Series, Barr
Rosenberg Market Neutral Fund, Barr Rosenberg Double Alpha Market Fund and
Barr Rosenberg Select Sectors Market Neutral Fund.
<PAGE>
reporting services to or for certain shareholders of the Trust. Distribution
and Services Fees are paid pursuant to plans (each, a "DISTRIBUTION AND
SHAREHOLDER SERVICE PLAN") for applicable classes adopted by the Trust pursuant
to Rule 12b-1 under the 1940 Act.
(1) INSTITUTIONAL SHARES are sold without any initial or deferred sales
charges and are not subject to any ongoing Distribution and Service Fees or
Service Fees.
(2) ADVISER SHARES are sold without any initial or deferred sales charges
and are not subject to any ongoing Distribution and Service Fees, but are
subject to a Service Fee at an annual rate with respect to a Fund of up to 0.25%
of such Fund's average daily net assets attributable to Adviser shares.
(3) SELECT SHARES are sold without any initial or deferred sales charges
and are not subject to any Service Fees, but are subject to a Distribution and
Service Fee at an annual rate with respect to a Fund of up to 0.25% per annum of
such Fund's average daily net assets attributable to Select shares.
(4) INVESTOR SHARES are sold without any initial or deferred sales charges
and are not subject to any Service Fees, but are subject to a Distribution and
Service Fee at an annual rate with respect to a Fund of up to 0.25% per annum of
such Fund's average daily net assets attributable to Investor shares.
EXPENSE ALLOCATIONS
Institutional, Adviser, Select and Investor shares pay the expenses
associated with their different distribution and/or shareholder servicing
arrangements. Each class also bears its own transfer agency fees. Each class
may, at the Trustees' discretion, also pay a different share of other expenses,
not including advisory or custodial fees or other expenses related to the
management of the Trust's assets, if these expenses are actually incurred in a
different amount by that class, or if the class receives services of a different
kind or to a different degree than the other classes ("CLASS EXPENSES"). All
other expenses will be allocated to each class on the basis of the net asset
value of that class in relation to the net asset value of a particular Fund
attributable to that class.
EXCHANGE FEATURES/CONVERSIONS
Shares of any particular class of a Fund may be exchanged only for shares
of the same class of another Fund or, if such other Fund does not offer the same
class of shares, then the class of shares of such Fund with the lowest expenses
that a shareholder is eligible to purchase. There is no sales charge on
exchanges. A shareholder may not exchange shares of a class of one Fund for
shares of a 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. All exchanges will be made based on the respective net asset
values next determined following receipt of the request by the applicable Funds.
The Trust does not currently offer any automatic conversion feature among
the classes.
DIVIDENDS/DISTRIBUTIONS
<PAGE>
Each Fund intends to pay out as dividends substantially all of its net
investment income (which comes from dividends and any interest it receives from
its investments and net realized short-term capital gains). Each Fund also
intends to distribute substantially all of its net realized long-term capital
gains, if any, after giving effect to any available capital loss carryover.
Dividends paid by the Funds with respect to Institutional, Adviser, Select and
Investor shares, to the extent any dividends are paid, will be calculated in the
same manner, at the same time, and will be in the same amount, except that (i)
any Service Fee or Distribution and Service Fee charged to a particular class
will be borne solely by such class, (ii) if applicable, transfer agency fees
relating to a particular class may be borne exclusively by that class, and
(iii), at the Trustees' discretion, Class Expenses relating to a particular
class may be borne exclusively by that class.
VOTING RIGHTS
Each class of shares of each Fund has identical voting rights except that
each class has exclusive voting rights on any matter submitted to shareholders
that relates solely to that class, and has separate voting rights on any matter
submitted to shareholders in which the interests of one class differ from the
interests of any other class. Each class of shares has exclusive voting rights
with respect to matters pertaining to any Distribution and Shareholder Service
Plan or 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 or Service Plan applicable to a class or when a class vote is
required by the 1940 Act.
RESPONSIBILITIES OF THE TRUSTEES
On an ongoing basis, the Trustees will monitor the Trust for the existence
of any material conflicts among the interests of the classes of shares. The
Trustees shall further monitor on an ongoing basis the use of waivers or
reimbursement of expenses by the Manager to guard against cross-subsidization
between classes. The Trustees, including a majority of the independent
Trustees, shall take such action as is reasonably necessary to eliminate any
such conflict that may develop.
REPORTS TO THE TRUSTEES
The Manager and/or the Administrator will be responsible for reporting any
potential or existing conflicts among the classes of shares to the Trustees.
AMENDMENTS
The Plan may be amended from time to time in accordance with the provisions
and requirements of the Rule.
<PAGE>
Exhibit 23(p)(4)
- ----------------
POWER OF ATTORNEY
The undersigned hereby constitutes Kenneth Reid his true and lawful
attorney, with full power to sign for him, in his name and in the capacity
indicated below, any and all registration statements of Barr Rosenberg Series
Trust, a Massachusetts business trust, under the Securities Act of 1933 or the
Investment Company Act of 1940, and generally to do all things in his name and
in his behalf to enable Barr Rosenberg Series Trust to comply with the
provisions of the Securities Act of 1933, the Investment Company Act of 1940,
and all requirements and regulations of the Securities and Exchange Commission,
hereby ratifying and confirming his signature as it may be signed by his said
attorney to any and all registration statements and amendments thereto.
Witness my hand this 27th day of May, 1999.
DWIGHT M. JAFFEE
-----------------------------
Dwight M. Jaffee
Trustee
