<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. 24 / X /
----
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / X /
----
Amendment No. 27 / X /
----
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>
<CAPTION>
<S> <C>
/ / Immediately upon filing pursuant 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>
<PAGE>
NOTE: This amendment relates solely to shares of beneficial interest in the
Barr Rosenberg Market Neutral Fund, Barr Rosenberg Double Alpha Market Fund and
Barr Rosenberg Select Sectors Market Neutral Fund. 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neither amended nor superseded hereby.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
BARR ROSENBERG MARKET NEUTRAL FUND
BARR ROSENBERG DOUBLE ALPHA MARKET FUND
BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219
1-925-254-6464
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 Barr Rosenberg Market Neutral Fund, Barr Rosenberg
Double Alpha Market Fund and Barr Rosenberg Select Sectors Market Neutral Fund.
The other portfolios of the Trust, which are offered under an additional
prospectus, are the U.S. Small Capitalization Series, Japan Series and
International Small Capitalization Series. Each Fund's investment adviser is
AXA Rosenberg Investment Management LLC.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIME.
MKT485A
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
RISK/RETURN SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . .
BARR ROSENBERG MARKET NEUTRAL FUND. . . . . . . . . . . . . . . . . .
BARR ROSENBERG DOUBLE ALPHA MARKET FUND . . . . . . . . . . . . . . .
BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND . . . . . . . . . .
FEES AND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PRINCIPAL INVESTMENT STRATEGIES. . . . . . . . . . . . . . . . . . . . . .
PRINCIPAL 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 Market Neutral Fund, Barr Rosenberg Double Alpha Market Fund and Barr
Rosenberg Select Sectors Market Neutral Fund (each a "Series" or a "Fund" and,
collectively, the "Series" or the "Funds"). You will find additional information
about each Fund, including a detailed description of the risks of an investment
in each Fund, after this Summary. This Summary identifies each Fund's
investment objective, principal investment strategies and principal risks. The
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>
BARR ROSENBERG MARKET NEUTRAL FUND
INVESTMENT OBJECTIVE
The Fund seeks to increase the value of your investment in bull markets and
in bear markets through strategies designed to maintain limited net exposure to
general equity market risk.
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund seeks to achieve its investment objective by buying stocks that
the Funds' investment adviser, AXA Rosenberg Investment Management LLC (the
"Adviser") believes are undervalued and by "selling short" stocks that its
investment adviser believes are overvalued. The Fund invests in stocks that are
principally traded in the markets of the United States.
By buying and selling short different stocks, the Fund attempts to limit
the effect on its performance of general U.S. stock market movements. Because
the Fund uses long and short positions in this way, the Fund expects that its
shares will increase in value if its long portfolio outperforms its short
portfolio. By contrast, the Fund expects that its shares will decline in value
if its short portfolio outperforms its long portfolio.
SUMMARY OF PRINCIPAL RISKS
As with any stock mutual fund, you may lose money if you invest in the
Fund. Among the principal risks that could adversely affect the value of the
Fund's shares and cause you to lose money on your investment are:
- - INVESTMENT RISKS. Although the Fund's investment strategy seeks to limit
the risk associated with investing in the equity market, the value of Fund
shares still may increase or decrease depending on external conditions
affecting the Fund's portfolio. These conditions depend upon market,
economic, political, regulatory and other factors.
- - MANAGEMENT RISK. Any actively managed investment portfolio is subject to
the risk that its investment adviser will make poor stock selections.
Because the Adviser could make poor investment decisions about both the
long and the short positions of the Fund, the Fund's potential losses
exceed those of conventional stock mutual funds that hold only long
portfolios.
- - PORTFOLIO RISK. Although the Fund seeks to have approximately equal dollar
amounts invested in long and short positions, there is a risk that the
Adviser will fail to construct a portfolio of long and short positions that
has limited exposure to general U.S. stock market movements, capitalization
or other risk factors.
-4-
<PAGE>
- - RISK OF SHORT SALES. This is the risk that the Fund will incur a loss by
buying a stock at a higher price than the price at which the Fund
previously sold the security short. Moreover, a Fund's loss on a short
sale is limited only by the maximum attainable price of the security
sold short (which theoretically is limitless) less its price at the time
it was borrowed, while its loss on a long position is limited by the fact
that a stock's value cannot drop below zero.
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page __.
YEARLY PERFORMANCE (%) - INSTITUTIONAL SHARES
[GRAPH]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</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.
Average Annual Total Returns (for periods ending December 31, 1998).
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Past One Since Inception
Year
- --------------------------------------------------------------------------------
<S> <C> <C>
Institutional Shares
- --------------------------------------------------------------------------------
Investor Shares
- --------------------------------------------------------------------------------
3-Month U.S. T-Bills
- --------------------------------------------------------------------------------
</TABLE>
-5-
<PAGE>
BARR ROSENBERG DOUBLE ALPHA MARKET FUND
INVESTMENT OBJECTIVE
The Fund seeks a total return greater than that of the Standard & Poor's
500 Composite Stock Price Index (the "S&P 500 Index").
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund invests primarily in shares of the Barr Rosenberg Market Neutral
Fund while simultaneously utilizing S&P 500 Index Futures, options on S&P 500
Index Futures and equity swap contracts to gain exposure to the equity market as
measured by the S&P 500 Index. In addition to purchasing shares of the Barr
Rosenberg Market Neutral Fund, the Fund may also take long positions in stocks
principally traded in the markets of the United States that the Adviser has
identified as undervalued and short positions in such stocks that the Adviser
has identified as overvalued.
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.
Because the investment adviser could make poor investment decisions about
both the long and the short positions of the Fund, the Fund's potential
losses exceed those of conventional stock mutual funds that hold only long
portfolios. Also, because the Fund invests in shares of the Barr Rosenberg
Market Neutral Fund, it is subject indirectly to the risk that the Adviser
could make poor stock selections with respect to that Fund as well.
- - INDEX FUTURES RISK. As indicated above, the Fund may at times use S&P 500
Index Futures, options on S&P 500 Index Futures and equity swap contracts,
each of which is a financial contract whose value depends on, or is
derived from, the
-6-
<PAGE>
value of an underlying asset, reference rate or index. In addition to
other risks such as the credit risk of the counterparty, derivatives
involve the risk of mispricing or improper valuation and the risk that
changes in the value of a derivative may not correlate perfectly with
relevant assets, rates and indices, such as the S&P 500 Index. The
liquidity and the value of a derivative may be subject to significant
fluctuations, and the Fund may at times be unable to sell a derivative
and may incur ongoing costs associated with that inability.
- - RISK OF SHORT SALES. This is the risk that the Fund will incur a loss
by buying a stock at a higher price than the price at which the Fund
previously sold the security short. Moreover, a Fund's loss on a short
sale is limited only by the maximum attainable price of the security
sold short (which theoretically is limitless) less its price at the time
it was sold, while its loss on a long position is limited by the
fact that a stock's value cannot drop below zero. Also, because the
Fund invests in shares of the Barr Rosenberg Market Neutral Fund,
it is subject indirectly to the risk that the Barr Rosenberg Market
Neutral Fund may incur a loss by buying a stock at a higher price
than the price at which it previously sold the security short.
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page __.
[GRAPH]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
YEARLY PERFORMANCE (%) - INSTITUTIONAL SHARES
During all periods shown in the bar graph, the Fund's highest quarterly return
was ___% and its lowest quarterly return was ___%.
-7-
<PAGE>
PERFORMANCE TABLE
This table shows how the Fund's performance compares with the returns of a broad
based securities market index.
Average Annual Total Returns (for periods ending December 31, 1998).
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Past One Since Inception
Year
- --------------------------------------------------------------------------------
<S> <C> <C>
Institutional Shares
- --------------------------------------------------------------------------------
Investor Shares
- --------------------------------------------------------------------------------
S&P 500 Index
- --------------------------------------------------------------------------------
</TABLE>
BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND
INVESTMENT OBJECTIVE
The Fund seeks to increase the value of your investment in bull markets and
in bear markets through strategies designed to maintain minimal net exposure to
general equity market risk by investing primarily in the 500 largest
capitalization stocks principally traded in the markets of the United States.
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund seeks to achieve its investment objective by buying stocks long
that its investment adviser believes are undervalued and by borrowing and
"selling short" stocks that its investment adviser believes are overvalued.
The Fund invests primarily in the 500 largest capitalization stocks that are
principally traded in the markets of the United States.
By buying long and selling short different stocks, the Fund attempts to
neutralize the effect on its performance of general U.S. stock market movements.
Because the Fund uses long and short positions in this way, the Fund expects
that its shares will increase in value if its long portfolio outperforms its
short portfolio. By contrast, the Fund expects that its shares will decline in
value if its short portfolio outperforms its long portfolio. Under normal
circumstances, the Adviser's selection models will result in the Fund's long
and short positions being overweighted in different sectors (including
industries within different sectors).
SUMMARY OF PRINCIPAL RISKS
-8-
<PAGE>
As with any stock mutual fund, you may lose money if you invest in the
Fund. Among the principal risks that could adversely affect the value of the
Fund's shares and cause you to lose money on your investment are:
- - INVESTMENT RISKS. Although the Fund's investment strategy seeks to limit
the risk associated with investing in the equity market, the value of Fund
shares still may increase or decrease depending on external conditions
affecting the Fund's portfolio. These conditions depend upon market,
economic, political, regulatory and other factors.
- - MANAGEMENT RISK. Any actively managed investment portfolio is subject
to the risk that the Adviser will make poor stock selections. Because
the investment adviser could make poor investment decisions about both
the long and the short positions of the Fund, the Fund's potential
losses exceed those of conventional stock mutual funds that hold only
long portfolios.
- - PORTFOLIO RISK. Although the Fund seeks to have approximately equal
dollar amounts invested in long and short positions, there is a risk
that the Fund's investment adviser will fail to construct a portfolio of
long and short positions that has limited exposure to general U.S. stock
market movements, capitalization, or other risk factors.
- - RISK OF SHORT SALES. This is the risk that the Fund will incur a loss
by replacing a security that it has borrowed to effect a short sale at a
time when the security's price is higher than the price at which the
Fund sold it short. Moreover, a Fund's loss on a short sale is limited
only by the maximum attainable price of the security sold short (which
theoretically is limitless) less its price at the time it was borrowed,
while its loss on a long position is limited by the fact that a stock's
value cannot drop below zero.
- - RISK OF OVERWEIGHTING. This is the risk that, by overweighting
investments in certain sectors or industries of the U.S. stock market,
the Fund will suffer a loss because of general advances or declines on
the prices of stocks in those sectors or industries.
PERFORMANCE INFORMATION
The Fund has not yet been operational for a full calender year.
-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 Barr Rosenberg Market Barr Rosenberg Double Alpha Barr Rosenberg Select
Neutral Fund Market Fund Sectors Market Neutral
Fund
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS OF Institutional Investor Institutional Investor Institutional Investor
SHARES
- ---------------------------------------------------------------------------------------------------------
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>
BARR Institutional $ $ $ $
ROSENBERG
MARKET ---------------------------------------------------------
NEUTRAL
FUND Investor $ $ $ $
- --------------------------------------------------------------------------
BARR Institutional $ $ $ $
ROSENBERG
DOUBLE ---------------------------------------------------------
ALPHA
MARKET FUND Investor $ $ $ $
- --------------------------------------------------------------------------
BARR Institutional $ $ $ $
ROSENBERG
SELECT ---------------------------------------------------------
SECTORS MARKET
NEUTRAL FUND Investor $ $ $ $
- --------------------------------------------------------------------------
</TABLE>
PRINCIPAL INVESTMENT STRATEGIES
Except as explicitly described otherwise, the investment objective and
policies of each of the Funds may be changed without shareholder approval.
BARR ROSENBERG MARKET NEUTRAL FUND
-11-
<PAGE>
The investment objective of the Barr Rosenberg Market Neutral Fund is to
seek long-term capital appreciation while maintaining limited exposure to
general equity market risk. The Fund seeks a total return greater than the
return on 3-month U.S. Treasury Bills. The Fund attempts to achieve its
objective by taking long positions in stocks principally traded in the markets
of the United States that the Adviser has identified as undervalued and short
positions in such stocks that the Adviser has identified as overvalued. By
taking long and short positions in different stocks, the Fund attempts to limit
the effect of general stock market movements on the Fund's performance. It is
expected that the Fund can achieve a positive return if the Fund's long
portfolio outperforms the Fund's short portfolio. Conversely, it is expected
that the Fund will incur losses if the Fund's long portfolio underperforms the
Fund's short portfolio. The Adviser will determine the size of each long or
short position by analyzing the tradeoff between the attractiveness of each
position and its impact on the risk characteristics of the overall portfolio.
The Fund seeks to construct a diversified portfolio that has limited net
exposure to the U.S. equity market risk generally and near neutral exposure to
specific industries, specific capitalization ranges and certain other risk
factors. It is currently expected that the long and short positions of the Fund
will be invested primarily in small capitalization stocks and smaller
mid-capitalization stocks. For purposes of the preceding sentence, the 200
stocks principally traded stocks in the markets of the United States with the
largest market capitalizations are considered large capitalization stocks, the
next 800 largest stocks are considered mid-capitalization stocks and all other
stocks are considered small capitalization stocks. Stocks of companies with
relatively small market capitalizations tend to be less liquid and more volatile
than stocks of companies with relatively large market capitalizations.
The Adviser uses the return that an investor could achieve through an
investment in 3-month U.S. Treasury Bills as a benchmark against which to
measure the Fund's performance. The Adviser attempts to achieve returns for the
Fund's shareholders that exceed the benchmark. An investment in the Fund is
different from an investment in 3-month U.S. Treasury Bills because, among other
things, Treasury Bills are backed by the full faith and credit of the U.S.
Government, Treasury Bills have a fixed rate of return, investors in Treasury
Bills do not risk losing their investment, and an investment in the Fund is more
volatile than an investment in Treasury Bills.
To meet margin requirements related to short sales, redemption requests or
for investment purposes, the Fund may also temporarily hold a portion of its
assets in full faith and credit obligations of the United States government
(E.G., U.S. Treasury Bills) and in short-term notes, commercial paper or other
money market instruments of high quality (I.E., rated at least "A-2" or "AA" by
Standard & Poor's ("S&P") or Prime 2 or "Aa" by Moody's Investors Service, Inc.
("Moody's")) issued by companies having an outstanding debt issue rated at least
"AA" by S&P or at least "Aa" by Moody's, or determined by the Adviser to be of
comparable quality to any of the foregoing. The Fund may also enter into
repurchase agreements. See "Principal Risks" -- "Risks of Repurchase
Agreements."
-12-
<PAGE>
The Fund's long and short positions may involve (without limit) equity
securities of foreign issuers that are principally traded in the markets of the
United States. See "Principal Risks -- Special Risks of Foreign Investments."
The Fund will not invest in equity securities that are principally traded
outside of the United States.
BARR ROSENBERG DOUBLE ALPHA MARKET FUND
The investment objective of the Barr Rosenberg Double Alpha Market Fund
is to seek a total return greater than the return of the S&P 500 Index. The
Fund seeks to achieve its objective by investing in shares of the Barr
Rosenberg Market Neutral Fund while simultaneously utilizing S&P 500 Index
Futures, options on S&P 500 Index Futures, equity swap contracts or a
combination thereof to gain exposure to the equity market as measured by the
S&P 500 Index. See "Principal Risks --Risks of S&P 500 Index Futures and
Related Options" and "Principal Risks --Equity Swap Contracts" below. The
Fund has received an exemptive order from the Securities and Exchange
Commission allowing it to invest in securities other than those described in
Section 12(d)(1)(G) of the Investment Company Act of 1940, as amended (the
"1940 Act") while investing without limit in the Barr Rosenberg Market
Neutral Fund. Once the Fund has indirectly constructed a diversified long and
short portfolio through the purchase of shares of the Barr Rosenberg Market
Neutral Fund, the Fund will purchase S&P 500 Index Futures, options on S&P
500 Index Futures and equity swap contracts in an amount approximately equal
to the net asset value of the Fund in order to gain full net exposure to the
U.S. equity market as measured by the S&P 500 Index. In addition to
purchasing shares of the Barr Rosenberg Market Neutral Fund, the Fund may
also take long positions in stocks principally traded in the markets of the
United States that the Adviser has identified as undervalued and short
positions in such stocks that the Adviser has identified as overvalued. See
"Principal Risks -- Risks of Short Sales."
The S&P 500 Index is an unmanaged index composed of 500 common stocks, most
of which are listed on the New York Stock Exchange. The S&P 500 Index assigns
relative values to the stocks included in the index, weighted according to each
stock's total market value relative to the total market value of the other
stocks included in such index.
To meet redemption requests or for investment purposes, the Fund may also
temporarily hold a portion of its assets in full faith and credit obligations of
the United States government (E.G., U.S. Treasury Bills) and in short-term
notes, commercial paper or other money market instruments of high quality (I.E.,
rated at least "A-2" or "AA" by S&P or Prime 2 or "Aa" by Moody's) issued by
companies having an outstanding debt issue rated at least "AA" by S&P or at
least "Aa" by Moody's, or determined by the Adviser to be of comparable quality
to any of the foregoing. The Fund may also enter into repurchase agreements.
The Fund's long and short positions may involve (without limit) equity
securities of foreign issuers that are principally traded in the markets of the
United States. See Principal Risks -- Special Risks of Foreign Investments." The
Fund will not invest in equity securities that are principally traded outside of
the United States.
-13-
<PAGE>
BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND
The investment objective of the Barr Rosenberg Select Sectors Market
Neutral Fund is to seek long-term capital appreciation while maintaining minimal
exposure to general equity market risk. The Fund seeks a total return greater
than the return on 3-month U.S. Treasury Bills. The Fund attempts to achieve
its investment objective by taking long positions primarily in the 500 largest
capitalization stocks principally traded in the markets of the United States
that the Adviser has identified as undervalued and short positions in such
stocks that the Adviser has identified as overvalued. See "Principal Risks --
Risks of Short Sales" below. By taking long and short positions in different
stocks, the Fund attempts to cancel out the effect of general stock market
movements on the Fund's performance. It is expected that the Fund can achieve a
positive return if the Fund's long portfolio outperforms the Fund's short
portfolio. Conversely, it is expected that the Fund will incur losses if the
Fund's long portfolio underperforms the Fund's short portfolio. See "The
Adviser's General Investment Philosophy."
The Fund seeks to construct a diversified portfolio that has minimal net
exposure to the U.S. equity market generally. It is currently expected that the
long and short positions of the Fund will be invested primarily in the 500
largest capitalization stocks principally traded in the markets of the United
States. Under normal circumstances, the investment adviser's selection models
will result in the Fund's long and short positions being overweighted in
different sectors (including industries within different sectors). In other
words, the Fund may take long positions in a sector of the market that are not
offset by short positions in that sector and vice versa. Consequently, the Fund
may have net exposures to different industries and sectors of the market,
thereby increasing the risk of the Fund and the opportunity for loss should the
stocks in a particular industry or sector not perform as predicted by the
Adviser's stock selection models. The Adviser will determine the size of each
long or short position by analyzing the tradeoff between the attractiveness of
each position and its impact on the risk characteristics of the overall
portfolio.
The Adviser uses the return that an investor could achieve through an
investment in 3-month U.S. Treasury Bills as a benchmark against which to
measure the Fund's performance. The Adviser attempts to achieve returns for the
Fund's shareholders which exceed the benchmark.
-14-
<PAGE>
An investment in the Fund is different from an investment in 3-month U.S.
Treasury Bills because, among other differences, Treasury Bills are backed by
the full faith and credit of the U.S. Government, Treasury Bills have a fixed
rate of return, investors in Treasury Bills do not risk losing their investment,
and an investment in the Fund is more volatile than an investment in Treasury
Bills.
To meet margin requirements related to short sales, to meet redemption
requests or for investment purposes, the Fund may also hold a portion of its
assets in full faith and credit obligations of the United States government
(E.G., U.S. Treasury Bills) and in short-term notes, commercial paper or
other money market instruments of high quality (I.E., rated at least "A-2" or
"AA" by S&P or Prime 2 or "Aa" by Moody's issued by companies having an
outstanding debt issue rated at least "AA" by S&P or at least "Aa" by
Moody's, or determined by the Adviser to be of comparable quality to any of
the foregoing. The Fund may also enter into repurchase agreements.
The Fund's long and short positions may involve (without limit) equity
securities of foreign issuers that are principally traded in the markets of the
United States. See "Principal Risks -- Special Risks of Foreign Investments."
The Fund will not invest in equity securities that are principally traded
outside of the United States.
PRINCIPAL RISKS
The value of your investment in a Fund changes with the values of the
Fund's investments. Many factors can affect those values. This section
describes the principal risks that may affect a particular Fund's investments as
a whole. Any Fund could be subject to additional principal risks because the
types investments made by the Funds can change over time.
- - INVESTMENT RISKS. An investment in the Funds involves risks similar to
those of investing in common stocks directly. Just as with common stocks,
the value of Fund shares may increase or decrease depending on market,
economic, political, regulatory and other conditions affecting a Fund's
portfolio. These types of risks may be greater with respect to investments
in securities of foreign issuers. Investment in shares of the Funds is,
like investment in common stocks, more volatile and risky than some other
forms of investment. Also, a Fund's long positions may decline in value at
the same time that the market value of securities sold short increases,
thereby increasing the magnitude of the loss that you may suffer on your
investment as compared with other stock mutual funds.
Although the Funds' investment strategies seek to minimize the risk
associated with investing in the equity market, an investment in a Fund
will be subject to various risks, including the risk of poor stock
selection by the Adviser. The Adviser may fail to purchase and sell short
different stocks such that the long positions outperform the short
positions. Also, the Adviser may fail to construct a portfolio that has
limited exposure to
-15-
<PAGE>
general equity market risk or that has limited exposure to specific
industries, specific capitalization ranges and certain other risk factors.
An investment in the Fund is different from an investment in 3-month
U.S. Treasury Bills because, among other differences, Treasury Bills are
backed by the full faith and credit of the U.S. Government, Treasury Bills
have a fixed rate of return, investors in Treasury Bills do not risk losing
their investment, and an investment in the Fund is more volatile than an
investment in Treasury Bills.
- - RISKS OF SHORT SALES. When the Adviser believes that a security is
overvalued, it may sell the security short by borrowing it from a third
party and selling it at the then current market price. The relevant Fund
will incur a loss if the price of the borrowed security increases between
when the Fund sells it and when the Fund replaces it. The Fund may gain if
the price of the borrowed security decreases during that period of time. A
Fund cannot guarantee that it will be able to replace a security at any
particular time or at an acceptable price.
During the time a Fund is short a security, it is always subject to
the risk that the security's lender will terminate the loan at a time when
the Fund is unable to borrow the same security from another lender. If
this happens, the Fund must buy the replacement share immediately at its
then market value or "buy in" by paying the lender an amount equal to the
price required to purchase the security to close out the short position. A
Fund's gain on a short sale is limited by the price at which it sold the
borrowed security. By contrast, its loss on a short sale is limited only
by the maximum attainable price of the security less the price at which it
was sold.
Short sales also involve other costs. A Fund must repay to the lender
any dividends or interest that accrue while it is holding a security sold
short. To borrow the security, a Fund also may be required to pay a
premium. The Funds also will incur transaction costs in effecting short
sales. The amount of any ultimate gain for a Fund resulting from a short
sale will be decreased, and the amount of any ultimate loss will be
increased, by the amount of premiums, dividends, interest or expenses the
Fund may be required to pay in connection with a short sale.
Until a Fund replaces a borrowed security, it will maintain daily a
segregated account with its Custodian containing cash, U.S. Government
securities, or other liquid securities. The amount deposited in the
segregated account plus any amount deposited as collateral with a broker or
other custodian will at least equal the current market value of the
security sold short. Depending on the arrangements made with such broker
or custodian, the Fund might not receive any payments (including interest)
on collateral deposited with the broker or custodian. No Fund will make a
short sale if after giving effect to the sale the market value of all
securities sold short would exceed 100% of the value of such Fund's
net assets.
-16-
<PAGE>
- - SPECIAL RISKS OF FOREIGN INVESTMENTS. Although invest only in securities
principally traded in U.S. markets, the Funds may invest in stocks of
foreign companies that trade on U.S. markets. Investments in securities of
foreign issuers involve certain risks that generally do not apply to
investments in securities of U.S. issuers. These include risks of adverse
changes in foreign economic, political, regulatory and other conditions,
changes in currency exchange rates or exchange control regulations
(including currency blockage). A foreign government may expropriate or
nationalize invested assets, or impose withholding taxes on dividend or
interest payments. A Fund may be unable to obtain and enforce judgments
against foreign entities. Furthermore, issuers of foreign securities are
subject to different, and often less comprehensive, accounting, reporting
and disclosure requirements than domestic issuers. In certain countries,
legal remedies available to investors may be more limited than those
available with respect to investments in the United States or other
countries. The securities of some foreign companies may be less liquid and
at times more volatile than securities of comparable U.S. companies.
- - RISKS OF REPURCHASE AGREEMENTS. Each of the Funds may enter into
repurchase agreements, by which a Fund will purchase a security and obtain
a simultaneous commitment from the seller to repurchase the security from
the Fund at an agreed-upon price and date (usually seven days or less from
the date of original purchase). The resale price will exceed the purchase
price and reflect an agreed-upon market rate which is unrelated to the
coupon rate of the purchased security. Entering into repurchase agreements
allows the Funds to earn a return on temporarily available cash. Although
the underlying security may be a bill, certificate of indebtedness, note or
bond issued by an agency, authority or instrumentality of the U.S.
Government, the obligation of the seller is not guaranteed by the U.S.
Government. There is a risk, therefore, that the seller will fail to honor
its repurchase obligation. If this happened, the relevant Fund would try
to exercise its legal rights, including possibly its right to sell the
underlying security in the market. However, a Fund may be subject to
various delays and risks of loss, including possible declines in the value
of the underlying security, inability to enforce its rights, and
enforcement-related expenses.
- - RISKS OF S&P 500 INDEX FUTURES AND RELATED OPTIONS. The Barr Rosenberg
Double Alpha Market Fund may invest in S&P 500 Index futures and related
Options. An S&P 500 Index Future contract (an "Index Future") is a
contract to buy or sell an integral number of units of the S&P 500 Index at
a specified future date at a price agreed upon when the contract is made. A
unit is the value at a given time of the S&P 500 Index. Entering into a
contract to buy units is commonly referred to as buying or purchasing a
contract or holding a long position in the S&P 500 Index. An option on an
Index Future gives the purchaser the right, in return for the premium paid,
to assume a long or a short position in an Index Future. The Barr Rosenberg
Double Alpha Market Fund will realize a loss if the value of the S&P 500
Index declines between the time the Fund purchases an
-17-
<PAGE>
Index Future or takes a long position in an Index Future and may realize a
gain if the value of the S&P 500 Index rises between such dates.
The Barr Rosenberg Double Alpha Market Fund may close out a futures
contract purchase by entering into a futures contract sale. This will
operate to terminate the Fund's position in the futures contract. Positions
in Index Futures may be closed out by the Fund only on the futures
exchanges on which the Index Futures are then traded. There can be no
assurance that a liquid market will exist for any particular contract at
any particular time. The liquidity of the market in futures contracts could
be adversely affected by "daily price fluctuation limits" established by
the relevant futures exchange which limit the amount of fluctuation in the
price of an Index Future during a single trading day. Once the daily limit
has been reached in the contract, no trades may be entered into at a price
beyond the limit. In such event, it may not be possible for the Fund to
close its futures contract purchase, and, in the event of adverse price
movements, the Fund would continue to be required to make daily cash
payments of variation margin (payments to and from a broker made on a daily
basis as the price of the Index Future fluctuates). The futures market may
also attract more speculators than does the securities market, because
deposit requirements in the futures market are less onerous than margin
requirements in the securities market. Increased participation by
speculators in the futures market may also cause price distortions. In
addition, the price of Index Futures may not correlate perfectly with
movement in the underlying index due to certain market distortions.
Further, when the Barr Rosenberg Double Alpha Market Fund purchases an
Index Future, it is required to maintain, at all times while an Index
Future is held by the Fund, cash, U.S. Government securities or other high
grade liquid securities in a segregated account with its Custodian, in an
amount which, together with the initial margin deposit on the futures
contract, is equal to the current value of the futures contract.
The ability to establish and close out positions in options on future
contracts will be subject to the development and maintenance of a liquid
secondary market. It is not certain that such a market will develop.
Although the Barr Rosenberg Double Alpha Market Fund generally will
purchase only those options for which there appears to be an active
secondary market, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option or at any particular time.
In the event no such market exists for particular options, it might not be
possible to effect closing transactions in such options, with the result
that the Fund would have to exercise the options in order to realize any
profit.
- - EQUITY SWAP CONTRACTS. The Barr Rosenberg Double Alpha Market Fund may
engage in equity swap contracts, through which a counterparty generally
agrees to pay the amount, if any, by which the notional amount of the
equity swap contract would have increased in value had it been invested in
the basket of stocks comprising the S&P 500 Index, plus the dividends that
would have been received on those stocks. The Fund agrees to pay to the
-18-
<PAGE>
counterparty a floating rate of interest (typically the London Inter Bank
Offered Rate) on the notional amount of the equity swap contract plus the
amount, if any, by which that notional amount would have decreased in value
had it been invested in such stocks. Therefore, the return to the Fund on
any equity swap contract should be the gain or loss on the notional amount
plus dividends on the stocks comprising the S&P 500 Index (as if the Fund
had invested the notional amount in stocks comprising the S&P 500 Index)
less the interest paid by the Fund on the notional amount. Therefore, the
Fund will generally realize a loss if the value of the S&P 500 Index
declines and will generally realize a gain if the value of the S&P 500
Index rises. The Fund will enter into equity swap contracts only on a net
basis, I.E., where the two parties' obligations are netted out, with the
Fund paying or receiving, as the case may be, only the net amount of any
payments. If there is a default by the counterparty to an equity swap
contract, the Fund will be limited to contractual remedies pursuant to the
agreements related to the transaction. The Fund's use of equity swap
contracts may result in the Fund realizing more income subject to tax at
ordinary income tax rates than it would if it did not engage in equity swap
contracts.
There is no assurance that the equity swap contract counterparties
will be able to meet their obligations or that, in the event of default,
the Barr Rosenberg Double Alpha Market Fund will succeed in pursing
contractual remedies. Pursing contractual remedies will also entail
additional expense for the Fund. The Fund thus assumes the risk that it may
be delayed in or prevented from obtaining payments owed to it pursuant to
these contracts. The Fund will closely monitor the credit of equity swap
contract counterparties in order to minimize this risk. The Fund will not
use equity swap contracts for leverage.
The Barr Rosenberg Double Alpha Market Fund will not enter into any
equity swap contract unless, at the time of entering into such transaction,
the unsecured senior debt of the counterparty is rated at least A by
Moody's or S&P. In addition, the staff of the Securities and Exchange
Commission considers equity swap contracts to be illiquid securities.
Consequently, while the staff maintains this position, the Fund will not
invest in equity swap contracts if, as a result of the investment, the
total value of such investments together with that of all other illiquid
securities which the Fund owns would exceed 15% of the Fund's net assets.
The net amount of the excess, if any, of the Fund's obligations over
its entitlement with respect to each equity swap contract will be accrued
on a daily basis, and an amount of cash, U.S. Government Securities or
other liquid securities having an aggregate market value at least equal to
the accrued excess will be maintained in a segregated account by the Fund's
Custodian. The Fund does not believe that the Fund's obligations under
equity swap contracts are senior securities, so long as such a segregated
account is maintained, and accordingly, the Fund will not treat them as
being subject to its borrowing restrictions.
-19-
<PAGE>
- - RISKS OF ILLIQUID SECURITIES. Each Fund may purchase "illiquid
securities," so long as no more than 15% of the Fund's net assets would be
invested in such securities after giving effect to a purchase. These are
securities which cannot be sold or disposed of in the ordinary course of
business within seven days at approximately the price at which a Fund has
valued them. Because there is no consistent market demand for illiquid
securities, investment in illiquid securities carries the risk that a Fund
may be forced to sell them at a discount from the last offer price.
- - PORTFOLIO TURNOVER. Portfolio turnover related considerations will not
limit or constrain the Adviser's investment decisions. The rate of each
Fund's long and short portfolios turnover may vary significantly from time
to time depending on the volatility of economic and market conditions.
Although the rate of portfolio turnover is difficult to predict, under
normal circumstances the annual turnover rate of each Fund's portfolios
should not exceed 150%. It is, however, impossible to predict portfolio
turnover in future years. High portfolio turnover involves correspondingly
greater brokerage commissions, dealer markup and other transaction costs
for the relevant Fund. Such costs will reduce the Fund's return.
- - RISK OF YEAR 2000 PROBLEMS. Many services provided to the Funds depend on
the smooth functioning of computer systems. Many systems in use today
cannot distinguish between the year 1900 and the year 2000. Any failure of
the service systems to process information properly could have an adverse
impact on the Funds' operations and the services they provide to
shareholders. The Adviser, Transfer Agent, Custodian, Administrator and
certain other service providers to the Funds have reported that each is
working toward minimizing the risks associated with the so-called "year
2000 problem." However, the Funds and the Adviser cannot be certain that
they or their various service providers will be able to correct the year
2000 problem in all respects or that such problems will not adversely
affect the Funds' operations and the services provided to shareholders.
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
THE BARR ROSENBERG MARKET NEUTRAL FUND
The period since August 1998, has been a particularly difficult time for the
Fund. Over the last eight months, the market has favored high trading
activity growth stocks (stocks with the highest trailing 12-month share
turnover and the highest price-to-earnings ratio), regardless of the
underlying fundamentals associated with the issuing companies. Because the
Manager's stock selection models seeks to reconcile relative stock price with
fundamental value, the Fund has not participated in the rally associated with
this small group of high trading activity growth stocks. The Manager believes
that the dominance of this group of stocks is not sustainable and does not
signal the kind of change in the long-term drivers of equity returns that
would lead to a change in the Manager's investment strategy. The portfolio
consists of over 800 long securities and 500 short securities. The portfolio
is constructed so that the total long positions and the total short positions
are similar in terms of risk characteristics and have approximately the same
dollar amount invested with minimal exposure to sectors or industries.
BARR ROSENBERG MARKET NEUTRAL FUND
(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 3 YEARS 5 YEARS SINCE INCEPTION
------ ------- ------- ---------------
<S> <C> <C> <C> <C>
Barr Rosenberg Market Neutral Fund (Institutional Shares). .
(Inception date ___________)
Barr Rosenberg Market Neutral Fund (Investor Shares) . . . .
(Inception date ___________)
3-Month US Treasury Bills. . . . . . . . . . . . . . . . . .
</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.
THE BARR ROSENBERG DOUBLE ALPHA MARKET FUND
The S&P 500 Index 1 rose 18.44% for the year ended March 31, 1999, while the
Russell 2500 Index 2 declined 13.26%. The past year has been marked by investor
exuberance for stocks with "compelling stories" rather than compelling
fundamentals. The market rally in the latter half of 1998 and the first quarter
of 1999 was led by large cap stocks and the growth sector. The Fund invests in
the Barr Rosenberg Market Neutral Fund and S&P 500 Index Futures. Investing in
the Barr Rosenberg Market Neutral Fund contributed a -8.5% to the total return
of the Fund for the period April 22, 1998 (inception of the Fund), to March 31,
1999 while the investment in S&P 500 Index Futures contributed positively
(approximately 9.4%) to performance over this period. See the separate
commentary for the Barr Rosenberg Market Neutral Fund.
BARR ROSENBERG DOUBLE ALPHA MARKET FUND
(BASED ON THE PERFORMANCE OF INSTITUTIONAL SHARES ONLY)(1)
[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>
Barr Rosenberg Double Alpha Market Fund (Institutional Shares)
(Inception date ________). . . . . . . . . . . . . . . . . . . .
Barr Rosenberg Double Alpha Market Fund (Investor Shares)
(Inception date __________). . . . . . . . . . . . . . . . . . .
3-Month US Treasury Bills . . . . . . . . . . . . . . . . . . . . .
</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.
THE ADVISER'S GENERAL INVESTMENT PHILOSOPHY
The Adviser attempts to add value relative to a benchmark through a quantitative
stock selection process, and seeks to diversify investment risk across the
holdings in each Fund.
INVESTMENT PHILOSOPHY
The Adviser's investment strategy is based on the belief that stock prices
imperfectly reflect the present value of the expected future earnings of
companies, their "fundamental value."
-20-
<PAGE>
The Adviser believes that market prices will converge towards fundamental value
over time, and that therefore, if the Adviser can accurately determine
fundamental value, and can apply a disciplined investment process to select
those stocks that are currently undervalued (in the case of purchases) or
overvalued (in the case of short sales), the Adviser will outperform a Fund's
benchmark over time.
The premise of the Adviser's investment philosophy is that there is a link
between the price of a stock and the underlying financial and operational
characteristics of the company. In other words, the price reflects the market's
assessment of how well the company is positioned to generate future earnings
and/or future cash flow. The Adviser identifies and purchases those stocks that
are undervalued (I.E., they are currently cheaper than similar stocks with the
same characteristics) and engages in short sales with respect to those stocks
that are overvalued (I.E., they are currently more expensive than similar stocks
with the same characteristics). The Adviser believes that the market will
recognize the "better value" and that the mispricing will be corrected as the
stocks in the Fund's portfolios are purchased or sold by other investors.
In determining whether or not a stock is attractive, the Adviser considers
the company's current estimated fundamental value as determined by the Adviser's
proprietary Appraisal Model, the Adviser's model for expected earnings, and
analysis of investor sentiment toward the stock. The Adviser identifies and
causes a Fund to purchase an undervalued stock and to hold it in the Fund's
portfolio until the market recognizes and corrects for the misvaluation.
Conversely, the Adviser identifies and causes a Fund to sell short an overvalued
stock.
DECISION PROCESS
The Adviser's decision process is a continuum. Its research function
develops models that analyze the more than 12,000 securities in the global
universe, both fundamentally and technically. The portfolio management function
optimizes each portfolio's composition, executes trades, and monitors
performance and trading costs.
The essence of the Adviser's approach is attention to important aspects of
the investment process. Factors crucial to successful stock selection include:
(1) accurate and timely data on a large universe of companies; (2) subtle
quantitative descriptors of value and predictors of changes in value; and (3)
insightful definitions of similar businesses. The Adviser assimilates, checks
and structures the input data on which its models rely. The Adviser believes
that if the data is correct, the recommendations made by the system will be
sound.
STOCK SELECTION
Fundamental valuation of stocks is key to the Adviser's investment process,
and the heart of the valuation process lies in the Adviser's proprietary
Appraisal Model. 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
-21-
<PAGE>
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.
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.
The Adviser's proprietary Near-Term Prospects Model attempts to predict the
earnings growth of companies over a one-year period. This Model examines, among
other things, measures of company profitability as well as measures of investor
sentiment towards a company, such as broker recommendations, analyst earnings
estimates and prior market performance. The Adviser combines the results of
this Model with the results of the Appraisal Model to measure the attractiveness
of a stock for purchase or sale.
OPTIMIZATION
The Adviser's portfolio optimization system attempts to construct a Fund
portfolio that will outperform the relevant benchmark. The optimizer
simultaneously considers both the results of the Adviser's stock selection
models and risk in determining the benefit to a portfolio of a particular
transaction. No transaction will be executed unless the opportunity offered by a
purchase or sale candidate sufficiently exceeds the potential of an existing
holding to justify the transaction costs.
TRADING
-22-
<PAGE>
The Adviser's trading system aggregates the recommended transactions for a
Fund and determines the feasibility of each recommendation in light of the
stock's liquidity, the expected transaction costs, and general market
conditions. It relays target price information to a trader for each stock
considered for purchase or sale. Trades are executed through any one of four
trading strategies: traditional brokerage, networks, accommodation, and package
or "basket" trades.
The network arrangements the Adviser has developed with Instinet Matching
System (IMS), 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 (also referred to herein as the Adviser's "match
system") allows institutional buyers and sellers of stock to electronically
present the Adviser with their "interest" lists each morning. Any matches
between the inventory that the brokers have presented and the Adviser's own
recommended trades are signaled to the Adviser's traders. Because the broker is
doing agency business and has a client on the other side of the trade, the
Adviser expects that the other side will be accommodative in the price. The
Adviser's objective in using this match system is to execute most trades on the
Adviser's side of the bid/ask spread so as to minimize market impact.
Package trades further allow the Adviser to trade large lists of orders
simultaneously using state of the art tools such as the Instinet Real-Time
System, Instinet Order 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 a Fund's portfolio.
MANAGEMENT OF THE TRUST
The Trust's trustees oversee the general conduct of the Funds' business.
INVESTMENT ADVISER
As of January 1, 1999, AXA Rosenberg Investment Management LLC (the
"Adviser") 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, the
each of the Funds will pay the Adviser a management fee for these services on a
monthly basis.
-23-
<PAGE>
See "Fees and Expenses." The Adviser will reduce its management fee and bear
certain expenses until further notice to limit the Fund's total annual operating
expenses. See "Fees and Expenses."
PORTFOLIO MANAGERS
BARR ROSENBERG MARKET NEUTRAL FUND AND BARR ROSENBERG DOUBLE ALPHA MARKET
FUND. Management of the portfolio of each Fund is overseen by the Adviser's
executive officers who are responsible for the design and maintenance of the
Adviser's 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. Dr. Rosenberg, Dr. Reid
and F. William Jump, Jr., C.F.A., the portfolio manager, are responsible for the
day-to-day management of the portfolios of the Barr Rosenberg Market Neutral
Fund and Barr Rosenberg Double Alpha Market Fund. Dr. Rosenberg and Dr. Reid
both have been employed by the Adviser or its predecessor since 1985. Mr. Jump
has had numerous responsibilities including trading, applications programming,
new product development and portfolio engineering since he joined the Adviser's
predecessor in 1990. He received a B.A. from Swarthmore College in 1977 and an
M.B.A. from The Wharton School, University of Pennsylvania in 1983.
BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND. Management of the
Fund's portfolio is overseen by the Adviser's executive officers who are
responsible for the design and maintenance of the Adviser's portfolio system,
and by a portfolio manager who is responsible for research and monitoring the
Fund's performance against its benchmark and for monitoring cash balances. Dr.
Rosenberg, Dr. Reid and James Kan, C.F.A., the portfolio manager, are
responsible for the day-to-day management of the Barr Rosenberg Select Sectors
Market Neutral Fund's portfolio. Dr. Rosenberg and Dr. Reid both have been
employed by the Adviser or its predecessor since 1985. Mr. Kan has had numerous
responsibilities including trading, applications programming and portfolio
engineering since he joined the Adviser's predecessor in 1990. He received a
B.S. from the University of British Colombia in 1984, an M.S. from the
University of Southern California in 1987 and an M.B.A. from the University of
Chicago in 1990.
EXECUTIVE OFFICERS
The biography of each of the executive officers of the Adviser is set forth
below. Kenneth Reid is also a Trustee of the Trust.
BARR ROSENBERG. Dr. Rosenberg is the Director of Research of the Adviser,
Chairman of AXA Rosenberg Group LLC, the parent of the Adviser, and Managing
Director of Barr Rosenberg Research Center LLC. As such, he has ultimate
responsibility for the Adviser's
-24-
<PAGE>
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 finance
and accounting at Duke University until 1989. From 1989 to 1998,
-25-
<PAGE>
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
-26-
<PAGE>
also a Fellow of the Accounting Researchers International Association and a
member of the Financial Economists Roundtable.
Professor Jaffee is the Willis H. Booth Professor of Banking and Finance at
the Haas School of Business, University of California, Berkeley. He was
previously a Professor of Economics at Princeton University for many years,
where he served as the Vice Chairman of the faculty. At Berkeley, he serves on
a continuing basis as the Co-chairman of the Fisher Center for Real Estate and
Urban Economics and as the Director of the UC Berkeley-St. Petersburg University
(Russia) School of Management Program. He has been a Visiting Professor at many
Universities around the world, most recently at the University of Aix/Marseille
in France and at the European University in Florence Italy. Professor Jaffee
has authored 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
Investor Shares of each Fund are sold on a continuous basis by the
Company's distributor, Barr Rosenberg Funds Distributor, Inc. (the
"Distributor"), a wholly-owned subsidiary of The BISYS Group, Inc. The
Distributor's principal offices are located at 90 Park Avenue, New York, New
York 10016. Institutional Shares are sold directly by the Trust.
Solely for the purpose of compensating the Distributor for services and
expenses primarily intended to result in the sale of Investor Shares and/or in
connection with the provision of direct client service, personal services,
maintenance of shareholder accounts and reporting services ("Shareholder
Services") to holders of Investor 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 Investor Shares. Expenses and services for which the
Distributor may be reimbursed include, without limitation, compensation to, and
expenses (including overhead and telephone expenses) of, financial consultants
or other employees of the Distributor or of participating or introducing brokers
who engage in distribution of Investor Shares, printing of prospectuses and
reports for other than existing Investor shareholders, advertising, preparing,
printing and distributing sales literature and forwarding communications from
the Trust to Investor shareholders. The Distribution and Shareholder Service
Plan is of the type known as a
-27-
<PAGE>
"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.
MULTIPLE CLASSES
As indicated previously, the Funds offer two classes of shares to
investors, with eligibility depending on the amount invested in a particular
Fund. The two classes of shares are Institutional Shares and Investor Shares.
The following table sets forth basic investment and fee information for each
class.
<TABLE>
<CAPTION>
ANNUAL
DISTRIBUTION
AND
MINIMUM SHAREHOLDER
FUND SUBSEQUENT SERVICE
NAME OF CLASS INVESTMENT* INVESTMENTS* FEE
<S> <C> <C> <C>
Institutional Shares. . . . . . . . . . . . . . . . None
Investor Shares . . . . . . . . . . . . . . . . . . .25%
</TABLE>
- -------------------
* Certain exceptions apply. See " -- Institutional Shares" and "-- Investor
Shares" below."
The offering price of Fund shares is based on the net asset value per share
next determined after an order is received. See "Purchasing Shares," "How the
Trust Prices Shares of the Funds -- Determination of Net Asset Value" and
"Redemption of Shares."
INSTITUTIONAL SHARES
Institutional Shares may be purchased by institutions such as endowments
and foundations, plan sponsors of 401(a), 401(k), 457 and 403(b) plans and
individuals. In order to be eligible to purchase Institutional Shares, an
institution, plan or individual must make an initial investment of at least $1
million in the particular Fund. In its sole discretion, the Adviser may waive
this minimum investment requirement and the Adviser intends to do so for
employees of the Adviser, for the spouse, parents, children, siblings,
grandparents or grandchildren of such employees, for employees of the
Administrator and for Trustees of the Trust who are not interested persons of
the Trust or Adviser and their spouses. Institutional Shares are sold without
any initial or deferred sales charges and are not subject to any ongoing
distribution and shareholder service fees.
INVESTOR SHARES
-28-
<PAGE>
Investor Shares may be purchased by institutions, certain individual
retirement accounts and individuals. In order to be eligible to purchase
Investor Shares, an investor must make an initial investment of at least $2,500
in the particular Fund. In its sole discretion, the Adviser may waive this
minimum investment requirement. Investor Shares are subject to an annual
Distribution and Shareholder Service Fee equal to 0.25% of the average daily net
assets attributable to Investor Shares, and the Trustees have authorized each
Fund to pay up to 0.15% of its average daily net assets attributable to Investor
Shares for subtransfer and subaccounting services in connection with such
shares. As described above, the Distribution and Shareholder Service Plan
permits payments of up to 0.25% of the Funds' average daily net assets
attributable to Investor Shares. See "Management of the Trust -- Distributor."
GENERAL
The Distribution and Shareholder Service Fee charged with respect to
Investor Shares is intended to compensate the Distributor for services and
expenses primarily intended to result in the sale of Investor Shares and/or in
connection with the provision of Shareholder Services to holders of Investor
Shares of the Trust. See "Management of the Trust -- Distributor."
Shares of the Funds may be sold to corporations or other institutions such
as trusts, foundations or broker-dealers purchasing for the accounts of others
(collectively, "Shareholder Organizations"). Investors purchasing and redeeming
shares of the Funds through a Shareholder Organization may be charged a
transaction-based fee or other fee for the services provided by the Shareholder
Organization. Each such Shareholder Organization is responsible for transmitting
to its customers a schedule of any such fees and information regarding any
additional or different conditions regarding purchases and redemptions of Fund
shares. Customers of Shareholder Organizations should read this Prospectus in
light of the terms governing accounts with their particular organization.
PURCHASING SHARES
The offering price for shares of each Fund is the net asset value per share
next determined after receipt of a purchase order. See "How the Trust Prices
Shares of the Funds --Determination of Net Asset Value." Investors may be
charged an additional fee by their broker or agent if they effect transactions
through such persons.
INITIAL CASH INVESTMENTS BY WIRE
Subject to acceptance by the Trust, shares of the Funds may be purchased by
wiring federal funds. Please first contact the Trust at 1-800-447-3332 for
complete wiring instructions. Notification must be given to the Trust at
1-800-447-3332 prior to 4:00 p.m., New York Time, of the wire date. Federal
funds purchases will be accepted only on a day on which the Trust, the
Distributor and the Custodian are all open for business. A completed Account
Application must
-29-
<PAGE>
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 a 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 and $500 for
Investor Shares. In its sole discretion, the Adviser may waive the minimum
additional investment requirements.
INVESTMENTS IN-KIND (INSTITUTIONAL SHARES)
Institutional Shares may be purchased in exchange for common stocks on
deposit at The Depository Trust Company ("DTC") or by a combination of such
common stocks and cash. Purchase of Institutional Shares of a Fund in exchange
for stocks is subject in each case to the determination by the Adviser that the
stocks to be exchanged are acceptable. Securities accepted by the Adviser in
exchange for Fund shares will be valued as set forth under "How the Trust Prices
Shares of the Funds -- Determination of Net Asset Value" (generally the last
quoted sale price) as of the time of the next determination of net asset value
after such acceptance. All dividends, subscription or other rights which are
reflected in the market price of accepted securities at the time of valuation
become the property of the Fund and must be delivered to the Fund upon receipt
by the investor from the issuer. Generally, the exchange of common stocks for
Institutional Shares will be a taxable event for federal income tax purposes,
which will trigger gain or loss to an investor subject to federal income
taxation, measured by the difference between the value of the Institutional
Shares received and the investor's basis in the securities tendered.
The Adviser will not approve the acceptance of securities in exchange for
Fund shares unless (i) the Adviser, in its sole discretion, believes the
securities are appropriate investments for the Fund; (ii) the investor
represents and agrees that all securities offered to the Fund are not
-30-
<PAGE>
subject to any restrictions upon their sale by the Fund under the Securities Act
of 1933, or otherwise; and (iii) the securities may be acquired under the Fund's
investment restrictions.
OTHER PURCHASE INFORMATION
An eligible shareholder may also participate in the Barr Rosenberg
Automatic Investment Program, an investment plan that automatically debits money
from the shareholder's bank account and invests it in Investor Shares of one or
more of the Funds through the use of electronic funds transfers. Investors may
commence their participation in this program with a minimum initial investment
of $2,500 and may elect to make subsequent investments by transfers of a minimum
of $50 into their established Fund account. You may contact the Trust for more
information about the Barr Rosenberg Automatic Investment Program.
For purposes of calculating the purchase price of Fund shares, a purchase
order is received by the Trust on the day that it is in "good order" unless it
is rejected by the Distributor. For a cash purchase order of Fund shares to be
in "good order" on a particular day, a check or money wire must be received on
or before 4:00 p.m., New York time, of that day. In the case of a purchase
in-kind of Institutional Shares, the investor's securities must be placed on
deposit at DTC prior to 10:00 a.m., New York time. If the consideration is
received by the Trust after the deadline, the purchase price of Fund shares will
be based upon the next determination of net asset value of Fund shares. No third
party or foreign checks will be accepted.
The Trust reserves the right, in its sole discretion, to suspend the
offering of shares of a Fund or to reject purchase orders when, in the judgment
of the Adviser, such suspension or rejection would be in the best interests of
the Trust or a Fund.
Purchases of each Fund's shares may be made in full or in fractional shares
of such Fund calculated to three decimal places. In the interest of economy and
convenience, certificates for shares will not be issued.
IRA ACCOUNTS
Investor Shares of the Funds may be used as a funding medium for IRAs. The
minimum initial investment for an IRA is $2,000. A special application must be
completed in order to create such an account. Contributions to IRAs are subject
to prevailing amount limits set by the Internal Revenue Service. For more
information about IRAs, call the Trust at 1-800-447-3332.
REDEMPTION OF SHARES
Shares of the Funds may be redeemed by mail, or, if authorized by an
investor in an Account Application, by telephone. The value of shares redeemed
may be more or less than the original cost of those shares, depending on the
market value of the investment securities held by the particular Fund at the
time of the redemption.
-31-
<PAGE>
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 representing himself or herself to be a
shareholder and believed by the Transfer Agent to be genuine. The Transfer
Agent's records of
-32-
<PAGE>
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, such Fund may pay the redemption price of
Institutional Shares in whole or in part by a distribution in kind of readily
marketable securities held by such Fund in lieu of cash. Securities used to
redeem Fund shares in kind will be valued in accordance with the Funds'
procedures for valuation described under "How the Trust Prices Shares of the
Funds -- Determination of Net Asset Value." Securities distributed by a Fund in
kind will be selected by the Adviser in light of each Fund's objective and will
not generally represent a pro rata distribution of each security held in a
Fund's portfolio. Investors may incur brokerage charges on the sale of any such
securities so received in payment of redemptions.
The Trust may suspend the right of redemption and may postpone payment for
more than seven days when the New York Stock Exchange is closed for other than
weekends or holidays, or if permitted by the rules of the Securities and
Exchange Commission, during periods when
-33-
<PAGE>
trading on the Exchange is restricted or during an emergency which makes it
impracticable for the Funds to dispose of their securities or to fairly
determine the value of their net assets, or during any other period permitted by
the Securities and Exchange Commission for the protection of investors.
EXCHANGING SHARES
The Funds offer two convenient ways to exchange shares in one Fund for
shares of another Fund. Shares of a particular class of a Fund may be exchanged
only for shares of the same class in another Fund. There is no sales charge on
exchanges. Before engaging in an exchange transaction, a shareholder should read
carefully the information in the Prospectus describing the Fund into which the
exchange will occur. A shareholder may not exchange shares of a class of one
Fund for shares of the same class of another Fund that is not qualified for sale
in the state of the shareholder's residence. Although the Trust has no current
intention of terminating or modifying the exchange privilege, it reserves the
right to do so at any time.
An exchange is taxable as a sale of a security on which a gain or loss may
be recognized. Shareholders should receive written confirmation of the exchange
within a few days of the completion of the transaction.
A new account opened by exchange must be established with the same name(s),
address and social security number as the existing account. All exchanges will
be made based on the respective net asset values next determined following
receipt of the request by the Funds containing the information indicated below.
EXCHANGE BY MAIL
To exchange Fund shares by mail, shareholders should simply send a letter
of instruction to the Trust. The letter of instruction must include: (a) the
investor's account number; (b) the class of shares to be exchanged; (c) the Fund
from and the Fund into which the exchange is to be made; (d) the dollar or share
amount to be exchanged; and (e) the signatures of all registered owners or
authorized parties.
EXCHANGE BY TELEPHONE
To exchange Fund shares by telephone or to ask questions about the exchange
privilege, shareholders may call the Trust at 1-800-447-3332. If you wish to
exchange shares, please be prepared to give the telephone representative the
following information: (a) the account number, social security number and
account registration; (b) the class of shares to be exchanged; (c) the name of
the Fund from which and the Fund into which the exchange is to be made; and (d)
the dollar or share amount to be exchanged. Telephone exchanges are available
only if the shareholder so indicates by checking the "yes" box on the Account
Application. The Trust employs procedures, including recording telephone calls,
testing a caller's identity, and sending
-34-
<PAGE>
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.
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
-35-
<PAGE>
reported sale, at the mean between the most recent quoted bid price and the most
recent quoted ask 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 mean between the most recent quoted bid price and the most
recent quoted ask 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 short-term capital gains). Each Fund also intends to
distribute substantially all of its net long-term capital gains, if any, after
giving effect to any available capital loss carryover. Each Fund's policy is to
declare and pay distributions of its dividends and interest annually although it
may do so more frequently as determined by the Trustees of the Trust. Each
Fund's policy is to distribute net short-term capital gains and net long-term
gains annually, although it may do so more frequently as determined by the
Trustees of the Trust to the extent permitted by applicable regulations.
All dividends and/or distributions will be paid out in the form of
additional shares of the relevant Fund to which the dividends and/or
distributions relate at net asset value unless the shareholder elects to receive
cash. Shareholders may make this election by marking the appropriate box on the
Account Application or by writing to the Administrator.
If you elect to receive distributions in cash and checks (i) are returned
and marked as "undeliverable" or (ii) remain uncashed for six months, your cash
election will be changed automatically and your future dividend and capital
gains distributions will be reinvested in the Fund at the per share net asset
value determined as of the date of payment of the distribution. In addition, any
undeliverable checks or checks that remain uncashed for six months will be
canceled and will be reinvested in the Fund at the per share net asset value
determined as of the date of cancellation.
TAXES
Each Fund intends to qualify each year as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended. So long as
a Fund distributes, as dividends, substantially all of the sum of its taxable
net investment income, its net tax-exempt income (if any), and, the excess, if
any, of net short-term capital gains over net long-term capital losses for such
year and otherwise qualifies for the special rules governing the taxation of
regulated investment companies, the Fund itself will not pay federal income tax
on the amount distributed. Such dividends will be taxable to shareholders
subject to income tax as ordinary
-36-
<PAGE>
income. Distributions of long-term capital gains (generally taxed at 20%) will
be taxable to shareholders as such, regardless of how long a shareholder has
held the shares. Some 1998 distributions of long-term capital gains recognized
in 1997 may be taxed at 28%. Distributions will be taxed as described above
whether received in cash or in shares through the reinvestment of distributions.
A distribution paid to shareholders by a Fund in January of a year is generally
deemed to have been received by shareholders on December 31 of the preceding
year, if the distribution was declared and payable to shareholders of record on
a date in October, November or December of that preceding year. Each Fund will
provide federal tax information annually, including information about dividends
and distributions paid during the preceding year.
To the extent such investments are permissible for a Fund, the Fund's short
sales and transactions in options, futures contracts, hedging transactions,
forward contracts, equity swap contracts and straddles will be subject to
special tax rules (including mark-to-market, constructive sale, straddle, wash
sale and short sale rules), the effect of which may be to accelerate income to
the Fund, defer losses to the Fund, cause adjustments in the holding periods of
the Fund's securities and convert short-term capital losses into long-term
capital losses. These rules could therefore affect the amount, timing and
character of distributions to shareholders. A Fund's use of such transactions
may result in the Fund realizing more short-term capital gains and ordinary
income subject to tax at ordinary income tax rates than it would if it did not
engage in such transactions.
The foregoing is a general summary of the federal income tax consequences
of investing in a Fund to shareholders who are U.S. citizens or U.S.
corporations. Shareholders should consult their own tax advisers about the tax
consequences of an investment in the Funds in light of each shareholder's
particular tax situation. Shareholders should also consult their own tax
advisers about consequences under foreign, state, local or other applicable tax
laws.
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 Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest which are presently divided
into six 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
-37-
<PAGE>
portfolios for investments in the Trust, terminate a series of the Trust or
merge two or more existing portfolios. Shareholders' investments in such a
portfolio would be evidenced by a separate series of shares.
Each Fund is further divided into two classes of shares designated as
Institutional Shares and Investor Shares. Each class of shares of a Fund
represents interests in the assets of such 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 such Fund.
Each class of shares of a 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 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 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, ___________ may be deemed to control the Investor
Shares of the Barr Rosenberg Double Alpha Market Fund because he beneficially
owned more than 25% of such shares of such Fund.]
-38-
<PAGE>
OTHER INFORMATION
Each Fund's investment performance may from time to time be included in
advertisements about such Fund. Total return for a Fund is measured by comparing
the value of an investment in such Fund at the beginning of the relevant period
to the redemption value of the investment in such Fund at the end of such period
(assuming immediate reinvestment of any dividends or capital gains
distributions). All data are based on a Fund's past investment results and do
not predict future performance. Investment performance, which will vary, is
based on many factors, including market conditions, the composition of a Fund's
portfolio and a Fund's operating expenses. Investment performance also often
reflects the risks associated with a Fund's investment objective and policies.
These factors should be considered when comparing a Fund's investment results
with those of other mutual funds and other investment vehicles. Quotations of
investment performance for any period when an expense limitation was in effect
will be greater than if the limitation had not been in effect.
-39-
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights tables are 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 tables represent the rate that an investor would
have earned (or lost) on an investment in the particular Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by ____________________________, 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. ]
-40-
<PAGE>
[ Back cover ]
The Funds' statement of additional information ("SAI") dated May 28,
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
-41-
<PAGE>
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
-42-
<PAGE>
BARR ROSENBERG SERIES TRUST
BARR ROSENBERG MARKET NEUTRAL FUND
BARR ROSENBERG DOUBLE ALPHA MARKET FUND
BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND
STATEMENT OF ADDITIONAL INFORMATION
MAY 28, 1999
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the prospectus of the Barr
Rosenberg Market Neutral Fund, the Barr Rosenberg Double Alpha Market Fund and
the Barr Rosenberg Select Sectors Market Neutral Fund of Barr Rosenberg Series
Trust dated May 28, 1999 (the "Prospectus") and should be read in conjunction
therewith. A copy of the Prospectus may be obtained from Barr Rosenberg Series
Trust, 3435 Stelzer Road, Columbus, Ohio 43219.
MKT485A
<PAGE>
TABLE OF CONTENTS
PAGE
----
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-44-
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objective and policies of each of the Barr Rosenberg Market
Neutral Fund, the Barr Rosenberg Double Alpha Market Fund and the Barr Rosenberg
Select Sectors Market Neutral Fund (each, a "Fund" and collectively, the
"Funds") of Barr Rosenberg Series Trust (the "Trust") are summarized in the
Prospectus under the heading "Risk/Return Summary and described in more detail
in the Prospectus under the headings "Principal Investment Strategies" and
"Principal Risks."
The following is an additional description of certain investments of the
Funds.
SHORT SALES (ALL FUNDS). The Barr Rosenberg Market Neutral Fund and the
Barr Rosenberg Select Sectors Market Neutral Fund will seek, and the Barr
Rosenberg Double Alpha Market Fund may seek, to realize additional gains through
short sales. Short sales are transactions in which a Fund sells a security it
does not own, in anticipation of a decline in the value of that security
relative to the long positions held by the Fund. To complete such a
transaction, a Fund must borrow the security to make delivery to the buyer. A
Fund then is obligated to replace the security borrowed by purchasing it at the
market price at or prior to the time of replacement. The price at such time may
be more or less than the price at which the security was sold by a Fund. Until
the security is replaced, a Fund is required to repay the lender any dividends
or interest that accrue during the period of the loan. To borrow the security,
a Fund also may be required to pay a premium, which would increase the cost of
the security sold. The net proceeds of the short sale will be retained by the
broker (or by the Fund's custodian in a special custody account), to the extent
necessary to meet margin requirements, until the short position is closed out.
A Fund also will incur transaction costs in effecting short sales.
A Fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which the
Fund replaces the borrowed security. A Fund may realize a gain if the security
declines in price between those dates. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of the premium,
dividends, interest or expenses a Fund may be required to pay in connection with
a short sale. There can be no assurance that a Fund will be able to close out a
short position at any particular time or at an acceptable price.
S&P 500 INDEX FUTURES AND RELATED OPTIONS (BARR ROSENBERG DOUBLE ALPHA
MARKET FUND ONLY). An S&P 500 Index Future contract (an "Index Future") is a
contract to buy or sell an integral number of units of the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500 Index") at a specified future date at
a price agreed upon when the contract is made. A unit is the value of the S&P
500 Index from time to time. Entering into a contract to buy units of the S&P
500 Index is commonly referred to as buying or purchasing a contract or holding
a long position in the S&P 500 Index.
-45-
<PAGE>
Index Futures can be traded through all major commodity brokers. Currently,
contracts are expected to expire on the tenth day of March, June, September and
December. The Barr Rosenberg Double Alpha Market Fund will ordinarily be able
to close open positions on the United States futures exchange on which Index
Futures are then traded at any time up to and including the expiration day.
In contrast to a purchase of common stock, no price is paid or received by
the Barr Rosenberg Double Alpha Market Fund upon the purchase of a futures
contract. Upon entering into a futures contract, the Fund will be required to
deposit with its custodian in a segregated account in the name of the futures
broker a specified amount of cash or securities. This is known by participants
in the market as "initial margin." The types of instruments that may be
deposited as initial margin, and the required amount of initial margin, are
determined by the futures exchange(s) on which the Index Futures are traded. The
nature of initial margin in futures transactions is different from that of
margin in securities transactions in that futures contract margin does not
involve the borrowing of funds by the customer to finance the transactions.
Rather, the initial margin is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund upon termination of the
futures contract, assuming all contractual obligations have been satisfied.
Subsequent payments, called "variation margin," to and from the broker, will be
made on a daily basis as the price of the S&P 500 Index fluctuates, making the
position in the futures contract more or less valuable, a process known as
"marking to the market." For example, when the Fund has purchased an Index
Future and the price of the S&P 500 Index has risen, that position will have
increased in value and the Fund will receive from the broker a variation margin
payment equal to that increase in value. Conversely, when the Fund has
purchased an Index Future and the price of the S&P 500 Index has declined, the
position would be less valuable and the Fund would be required to make a
variation margin payment to the broker. When the Fund terminates a position in
a futures contract, a final determination of variation margin is made,
additional cash is paid by or to the Fund, and the Fund realizes a gain or a
loss.
The price of Index Futures may not correlate perfectly with movement in the
underlying index due to certain market distortions. First, all participants in
the futures market are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements, investors may close
futures contracts through offsetting transactions which could distort the normal
relationship between the S&P 500 Index and futures markets. Second, the deposit
requirements in the futures market are less onerous than margin requirements in
the securities market, and as a result the futures market may attract more
speculators than does the securities market. Increased participation by
speculators in the futures market may also cause temporary price distortions.
Position in Index Futures may be closed out only if there is a secondary
market for such futures. There can be no assurance that a liquid secondary
market will exist for any particular contract or at any particular time. In
such event, it may not be possible to close a futures position and, in the event
of adverse price movements, the Barr Rosenberg Double
-46-
<PAGE>
Alpha Market Fund would continue to be required to make daily cash payments of
variation margin.
Generally, a futures contract is terminated by entering into an offsetting
transaction. An offsetting transaction for a futures contract purchase is
effected by entering into a futures contract sale for the same aggregate amount
of the specified financial instrument with the same delivery date. If the
offsetting sale price exceeds the purchase price, the Barr Rosenberg Double
Alpha Market Fund realizes a gain, and if the purchase price exceeds the
offsetting price, the Fund realizes a loss.
Options on index futures contracts give the purchaser the right, in return
for the premium paid, to assume a position in an index futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the holder would assume the underlying futures position
and would receive a variation margin payment of cash or securities approximating
the increase in the value of the holder's option position. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash based on the difference between the
exercise price of the option and the closing level of the index on which the
futures contract is based on the expiration date. Purchasers of options who
fail to exercise their options prior to the exercise date suffer a loss of the
premium paid.
The ability to establish and close out positions in options on futures
contracts will be subject to the development and maintenance of a liquid
secondary market. It is not certain that such a market will develop. Although
the Barr Rosenberg Double Alpha Market Fund generally will purchase only those
options for which there appears to be an active secondary market, there is no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. In the event no such market exists
for particular options, it might not be possible to effect closing transactions
in such options, with the result that the Fund would have to exercise the
options in order to realize any profit.
MISCELLANEOUS INVESTMENT PRACTICES
PORTFOLIO TURNOVER. A change in securities held by a Fund is known as
"portfolio turnover" and almost always involves the payment by a Fund of
brokerage commissions or dealer markup and other transaction costs on the sale
of securities as well as on the reinvestment of the proceeds in other
securities. Portfolio turnover is not a limiting factor with respect to
investment decisions. The portfolio turnover rate for the Barr Rosenberg Market
Neutral Fund for the fiscal year ended March 31, 1999 was ______%. The
portfolio turnover rates for the Barr Rosenberg Double Alpha Market Fund and the
Barr Rosenberg Select Sectors Market Neutral Fund for the period ended March 31,
1999 were ______% and ______%, respectively. As disclosed in the Prospectus,
high portfolio turnover involves correspondingly greater brokerage commissions
and other transaction costs, which will be
-47-
<PAGE>
borne directly by the Funds, and could involve realization of capital gains that
would be taxable when distributed to shareholders of a Fund. To the extent that
portfolio turnover results in the realization of net short-term capital gains,
such gains are ordinarily taxed to shareholders at ordinary income tax rates.
See "Income Dividends, Distributions and Tax Status" and "Portfolio
Transactions."
NOTICE ON SHAREHOLDER APPROVAL. Unless otherwise indicated in the
Prospectus or this Statement of Additional Information, the investment objective
and policies of each of the Funds may be changed without shareholder approval.
INVESTMENT RESTRICTIONS
Without a vote of the majority of the outstanding voting securities of a
Fund, the Trust will not take any of the following actions with respect to such
Fund:
(1) Borrow money in excess of 10% of the value (taken at the lower of cost
or current value) of the Fund's total assets (not including the amount borrowed)
at the time the borrowing is made, and then only from banks as a temporary
measure to facilitate the meeting of redemption requests (not for leverage)
which might otherwise require the untimely disposition of portfolio investments
or for extraordinary or emergency purposes or for payments of variation margin
(in the case of the Barr Rosenberg Double Alpha Market Fund only). Such
borrowings will be repaid before any additional investments are purchased. Short
sales and related borrowings of securities are not subject to this restriction.
(2) Pledge, hypothecate, mortgage or otherwise encumber its assets in
excess of 10% of the Fund's total assets (taken at cost) and then only to secure
borrowings permitted by Restriction 1 above. (For the purposes of this
restriction, collateral arrangements with respect to options, short sales, stock
index, interest rate, currency or other futures, options on futures contracts
and collateral arrangements with respect to initial and variation margin are not
deemed to be a pledge or other encumbrance of assets. Collateral arrangements
with respect to swaps and other derivatives are also not deemed to be a pledge
or other encumbrance of assets.)
(3) Purchase securities on margin, except such short-term credits as may
be necessary for the clearance of purchases and sales of securities. (For this
purpose, the deposit or payment of initial or variation margin in connection
with futures contracts or related options transactions is not considered the
purchase of a security on margin.)
(4) Make short sales of securities or maintain a short position if, when
added together, more than 100% of the value of a Fund's net assets would be (i)
deposited as collateral for the obligation to replace securities borrowed to
effect short sales, and (ii) allocated to segregated accounts in connection with
short sales. Short sales "against the box" are not subject to this limitation.
-48-
<PAGE>
(5) Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under federal securities laws.
(6) Purchase or sell real estate, although it may purchase securities of
issuers which deal in real estate, including securities of real estate
investment trusts, and may purchase securities which are secured by interests in
real estate.
(7) Concentrate more than 25% of the value of its total assets in any one
industry.
(8) Invest in securities of other investment companies, except to the
extent permitted by the Investment Company Act of 1940, as amended (the "1940
Act"), or by an exemptive order issued by the Securities and Exchange
Commission.
(9) Purchase or sell commodities or commodity contracts except that each
of the Funds may purchase and sell stock index and other financial futures
contracts and options thereon.
(10) Make loans, except by purchase of debt obligations or by entering into
repurchase agreements or through the lending of the Fund's portfolio securities.
(11) Issue senior securities. (For the purpose of this restriction none of
the following is deemed to be a senior security: any pledge or other encumbrance
of assets permitted by restriction (2) above; any borrowing permitted by
restriction (1) above; short sales permitted by restriction (4) above; any
collateral arrangements with respect to short sales, swaps, options, future
contracts and options on future contracts and with respect to initial and
variation margin; and the purchase or sale of options, future contracts or
options on future contracts.)
Notwithstanding the latitude permitted by Restriction 9 above, the Funds
have no current intention of purchasing interest rate futures.
It is contrary to the present policy of each of the Funds, which may be
changed by the Trustees of the Trust without shareholder approval, to:
(a) Invest in warrants or rights (other than warrants or rights acquired
by a Fund as a part of a unit or attached to securities at the time of
purchase).
(b) Write, purchase or sell options on particular securities (as opposed
to market indices).
(c) Buy or sell oil, gas or other mineral leases, rights or royalty
contracts.
-49-
<PAGE>
(d) Make investments for the purpose of exercising control of a company's
management.
(e) Invest in (a) securities which at the time of investment are not
readily marketable and (b) repurchase agreements maturing in more than seven
days if, as a result, more than 15% of the Fund's net assets (taken at current
value) would then be invested in such securities.
Unless otherwise indicated, all percentage limitations on investments set
forth herein and in the Prospectus will apply at the time of the making of an
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment.
The phrase "shareholder approval," as used in the Prospectus and herein,
and the phrase "vote of a majority of the outstanding voting securities," as
used herein, means the affirmative vote of the lesser of (1) more than 50% of
the outstanding shares of a Fund or the Trust, as the case may be, or (2) 67% or
more of the shares of a Fund or the Trust, as the case may be, present at a
meeting if more than 50% of the outstanding shares are represented at the
meeting in person or by proxy.
INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
The tax status of the Funds and the distributions which they may make are
summarized in the Prospectus under the headings "Distributions" and "Taxes." The
Funds intend to qualify each year as a regulated investment company under the
Internal Revenue Code of 1986, as amended. In order to qualify as a "regulated
investment company" and to qualify for the special tax treatment accorded
regulated investment companies and their shareholders, each Fund must, among
other things, (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to certain securities loans, gains from the sale
or other disposition of securities or foreign currencies or other income
(including but not limited to gains from options, futures or forward contracts)
derived with respect to its business of investing in such securities or
currencies; (b) diversify its holdings so that, at the close of each quarter of
its taxable year, (i) at least 50% of the value of its total assets consists of
cash, cash items, U.S. Government securities, securities of other regulated
investment companies, and other securities limited generally with respect to any
one issuer to not more than 5% of the total assets of such Fund and not more
than 10% of the outstanding voting securities of such issuer, and (ii) not more
than 25% of the value of its total assets is invested in the securities of any
issuer (other than U.S. Government securities or securities of other regulated
investment companies); and (c) distribute annually at least 90% of the sum of
its taxable net investment income, its net tax-exempt income (if any), and, the
excess, if any, of net short-term capital gains over net long-term capital
losses for such year. To the extent a Fund qualifies for
-50-
<PAGE>
treatment as a regulated investment company, the Fund will not be subject to
federal income tax on income paid to its shareholders in the form of dividends
or capital gain distributions.
As described in the Prospectus under the heading "Distributions," each Fund
intends to pay out substantially all of its ordinary income and net short-term
capital gains, and to distribute substantially all of its net capital gains, if
any, after giving effect to any available capital loss carryover. Net capital
gain is the excess of net gains from assets held for more than one year over net
losses from capital assets held for not more than one year. In order to avoid
an excise tax imposed on certain undistributed income, a Fund must distribute
prior to each calendar year end without regard to the Fund's fiscal year end (i)
98% of the Fund's ordinary income, and (ii) 98% of the Fund's capital gain net
income, if any, realized in the one-year period ending on October 31.
In general, all dividend distributions derived from ordinary income and
short-term capital gain are taxable to investors as ordinary income.
Distributions of long-term gains (generally taxed at a 20% rate) will be taxable
to shareholders as such, regardless of how long a shareholder has held the
shares in the Fund. Some 1998 distributions of long-term capital gains
recognized in 1997 may be subject to tax at 28%. Distributions will be taxable
as described above whether received in cash or in shares through the
reinvestment of distributions. The dividends-received deduction for
corporations will generally apply to a Fund's dividends from investment income
to the extent derived from dividends received by the Fund from domestic
corporations, provided the Fund and the shareholder each meet the relevant
holding period requirements.
Dividends and distributions on a Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of a particular shareholder's investment.
Such distributions are likely to occur in respect of shares purchased at a time
when a Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed.
Certain tax-exempt organizations or entities may not be subject to federal
income tax on dividends or distributions from a Fund. Each organization or
entity should review its own circumstances and the federal tax treatment of its
income.
Each Fund is generally required to withhold and remit to the U.S. Treasury
31% of the taxable dividends and other distributions, whether distributed in
cash or reinvested in shares of the Fund, paid or credited to any shareholder
account for which an incorrect or no taxpayer identification number has been
provided or where the Fund is notified that the shareholder has underreported
income in the past (or the shareholder fails to certify that he is not subject
to such withholding). However, the general back-up withholding rules set forth
above will not apply to tax-exempt entities so long as each such entity
furnishes a Fund with an appropriate certificate.
-51-
<PAGE>
The Internal Revenue Service recently revised its regulations affecting the
application to foreign investors of the back-up withholding and withholding tax
rules described above. The new regulations will generally be effective for
payments made after December 31, 1999 (although transition rules will apply). In
some circumstances, the new rules will increase the certification and filing
requirements imposed on foreign investors in order to qualify for exemption from
the 31% back-up withholding tax and for reduced withholding tax rates under
income tax treaties. Foreign investors in the Fund should consult their tax
advisors with respect to the potential application of these new regulations.
To the extent such investments are permissible for a particular Fund, the
Fund's transactions in options, futures contracts, hedging transactions, forward
contracts and straddles will be subject to special tax rules (including
mark-to-market, constructive sale, straddle, wash sale and short sale rules),
the effect of which may be to accelerate income to the Fund, defer losses to the
Fund, cause adjustments in the holding periods of the Fund's securities, convert
long-term capital gains into short-term capital gains and convert short-term
capital losses into long-term capital losses. These rules could therefore
affect the amount, timing and character of distributions to shareholders.
Pursuant to the 1997 Act, new "constructive sale" provisions apply to
activities by the Funds which lock in gain on an "appreciated financial
position." Generally, a "position" is defined to include stock, a debt
instrument, or partnership interest, or an interest in any of the foregoing,
including through a short sale, a swap contract, or a future or forward
contract. Under the 1997 Act, the entry into a short sale, a swap contract or a
future or forward contract relating to an appreciated direct position in any
stock or debt instrument, or the acquisition of stock or debt instrument at a
time when a Fund occupies an offsetting (short) appreciated position in the
stock or debt instrument, is treated as a "constructive sale" that gives rise to
the immediate recognition of gain (but not loss). The application of these new
provisions may cause a Fund to recognize taxable income from these offsetting
transactions in excess of the cash generated by such activities.
THE TAX DISCUSSION SET FORTH ABOVE IS A SUMMARY INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. EACH SHAREHOLDER IS ADVISED TO CONSULT ITS OWN TAX
ADVISER WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO IT OF AN INVESTMENT IN
THE FUNDS, INCLUDING THE EFFECT AND APPLICABILITY OF STATE, LOCAL, FOREIGN, AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
THIS DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX PLANNING.
MANAGEMENT OF THE TRUST
The Trustees and officers of the Trust and their principal occupations
during
-52-
<PAGE>
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 Investment
President, Trustee 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 School
Trustee of Business, University of California, Berkeley,
California, July 1991 to present.
Po-Len Hew (32) Director of Finance, AXA Rosenberg Global Services
Treasurer LLC, January 1999 to present; Chief Financial
Officer, Barr Rosenberg Investment Management
Inc., April 1994 to
-53-
<PAGE>
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 LLC,
Vice President 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, a
Vice President 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.
The mailing address of each of the officers and Trustees is c/o Barr
Rosenberg Series Trust, 3435 Stelzer Road, Columbus, OH 43219.
-54-
<PAGE>
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 Estimated and Fund
Name of Compansation Part of Fund Annual Benefits Complex Paid to
Person, Position from Registrant Expenses upon Retirement 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.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISORY CONTRACTS. As disclosed in the Prospectus under the
heading "Management of the Trust," under management contracts (each a
"Management Contract") between the Trust, on behalf of each Fund, and AXA
Rosenberg Investment Management LLC
-55-
<PAGE>
(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 each Fund's total annual operating expenses (exclusive of
nonrecurring account fees, extraordinary expenses and dividends and interest
paid on securities sold short) applicable to each class will not exceed the
percentage of each Fund's average daily net assets attributable to that class as
set forth in the Prospectus. In addition, the Adviser's compensation under each
Management Contract is subject to reduction to the extent that in any year the
expenses of a Fund (including investment advisory fees but excluding taxes,
portfolio brokerage commissions and any distribution 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.
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
-56-
<PAGE>
owned by AXA-IM Holdings U.S. Inc. AXA-IM Holdings U.S. Inc. is wholly owned by
AXA Investment Managers S.A., a French societe anonyme, which, in turn, is
owned, collectively, by AXA Assurances IARD, S.A., a French societe anonyme, and
AXA-UAP, a French holding company. AXA Assurances IARD, S.A. is owned,
collectively, by AXA France Assurance, a French insurance holding company, and
UAP Incendie Accidents, a French casualty and insurance company, each of which,
in turn, is wholly owned by AXA-UAP. Finaxa, a French holding company,
beneficially owns more than 25% of the voting securities ("Controls") of
AXA-UAP. Mutuelles AXA, a group of four French mutual insurance companies, one
of which Controls Finaxa, acting as a group, Controls both AXA-UAP and Finaxa.
Each of these entities may be deemed a controlling person of the Adviser.
As discussed in this Statement of Additional Information under the
heading "Management of the Trust." Kenneth Reid is a Trustee of the Trust
and the Chief Executive Officer of the Adviser; Barr M. Rosenberg is a Vice
President of the Trust and the Director of Research of the Adviser. Dr.
Rosenberg, Dr. Reid and Marlis S. Fritz, the former general partners of REIM,
may be deemed to be controlling persons of the Adviser as a result of their
interest in AXA Rosenberg Group LLC, the parent of the Adviser.
During the period from March 31, 1998 (inception date) to March 31, 1999,
the Barr Rosenberg Market Neutral Fund 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 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 period from March 31, 1998
to March 31, 1999, the Administrator was entitled to receive from the Barr
Rosenberg Market Neutral Fund $______ in administration fees. Of this amount
the Administrator waived $______. For the period from _______, 1998 (inception
date) to March 31, 1999, the Administrator was entitled to receive from the
Barr Rosenberg Double Alpha Market Fund $______ in
-57-
<PAGE>
administration fees. Of this amount the Administrator waived $______. For the
period from _______, 1998 (inception date) to March 31, 1999, the
Administrator was entitled to receive from the Barr Rosenberg Select Sectors
Market Neutral Fund $______ in administration fees. Of this amount the
Administrator waived $______.
The Trust has also entered into a Fund Accounting Agreement with BISYS
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 $50,000 for each Fund. For the period from March 31, 1998
to March 31, 1999 the Barr Rosenberg Market Neutral Fund paid $_______ in
fund accounting fees. For the period from __________, 1998 (inception date)
to March 31, 1999 the Barr Rosenberg Double Alpha Market Fund paid $_______
in fund accounting fees. For the period from _________, 1998 (inception date)
to March 31, 1999 the Barr Rosenberg Select Sectors Market Neutral Fund paid
$_______ in fund accounting fees. The Trust's principal underwriter is an
affiliate of the Fund Accountant.
DISTRIBUTOR AND DISTRIBUTION AND SHAREHOLDER SERVICE PLAN. As stated in the
Prospectus under the heading "Management of the Trust -- Distributor," Investor
Shares of each Fund are sold on a continuous basis by the Trust's distributor,
Barr Rosenberg Funds Distributor, Inc. (the "Distributor"). Under the
Distributor's Contract between the Trust and the Distributor (the "Distributor's
Contract"), the Distributor is not obligated to sell any specific amount of
shares of the Trust and will purchase shares for resale only against orders for
shares.
Pursuant to the Distribution and Shareholder Service Plan (the "Plan")
described in the Prospectus, in connection with the distribution of Investor
Shares of the Trust and/or in connection with the provision of direct client
service, personal services, maintenance of shareholder accounts and reporting
services ("Shareholder Services") to holders of Investor Shares of the Trust,
the Distributor receives certain distribution and service fees from the 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 Investor
Shares as to which no distribution fee was paid on account of such limitation.
The Distributor may pay all or a portion of the distribution and service fees it
receives from the Trust to participating and introducing brokers.
For the period March 31, 1998 (inception date) to March 31, 1999, the
Barr Rosenberg Market Neutral Fund incurred distribution expenses of $______. Of
this amount, the Distributor retained $_____. The Distributor paid $_____ to
broker-dealers and other selling and/or servicing institutions. For the
period _______, 1998 (inception date) to March 31, 1998, the Barr Rosenberg
Double Alpha Market Fund incurred distribution expenses of $________. Of this
amount, the Distributor retained $__________. The Distributor paid $_______
to broker-dealers and other selling and/or servicing institutions. For the
period ___________, 1998 (inception date) to March 31, 1998, the Barr
Rosenberg Select Sectors Market Neutral Fund incurred distribution expenses
of $_______. Of this amount, the Distributor retained $_________. The
Distributor paid $_______ to broker-dealers and other selling and/or
servicing institutions.
The Plan may be terminated with respect to Investor Shares by vote of a
majority of the Trustees of the Trust who are not interested persons of the
Trust and who have no direct or indirect financial interest in the operation of
the Plan or the Distributor's Contract (the "Independent Trustees"), or by vote
of a majority of the outstanding voting securities of that
-58-
<PAGE>
class. Any change in the Plan that would materially increase the cost to
Investor Shares requires approval by holders of Investor Shares. The Trustees
of the Trust review quarterly a written report of such costs and the purposes
for which such costs have been incurred. Except as described above, the Plan
may be amended by vote of the Trustees of the Trust, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose. For
so long as the Plan is in effect, selection and nomination of those Trustees of
the Trust who are not interested persons of the Trust shall be committed to the
discretion of such disinterested persons.
The Distributor's Contract may be terminated with respect to any Fund or
Investor Shares thereof at any time by not more than 60 days' nor less than 30
days' written notice without payment of any penalty either by the Distributor or
by such Fund or class and will terminate automatically, without the payment of
any penalty, in the event of its assignment.
The Plan and the Distributor's Contract will continue in effect with
respect to each class of shares to which they relate for successive one-year
periods, provided that each such continuance is specifically approved (i) by the
vote of a majority of the Independent Trustees and (ii) by the vote of a
majority of the entire Board of Trustees (or by vote of a majority of the
outstanding shares of a class, in the case of the Distributor's Contract) cast
in person at a meeting called for that purpose.
If the Plan or the Distributor's Contract are terminated (or not renewed)
with respect to one or more classes, they may continue in effect with respect to
any class of any Fund as to which they have not been terminated (or have been
renewed).
The Trustees of the Trust believe that the Plan will provide benefits to
the Trust. The Trustees believe that the Plan will result in greater sales
and/or fewer redemptions of Investor Shares, although it is impossible to know
for certain the level of sales and redemptions of Investor Shares that would
occur in the absence of the Plan or under alternative distribution schemes. The
Trustees believe that the effect on sales and/or redemptions benefit the Trust
by reducing Fund expense ratios and/or by affording greater flexibility to the
Trust.
CUSTODIAL ARRANGEMENTS. Custodial Trust Company ("CTC"), Princeton, NJ
08540, is the Trust's custodian. As such, CTC holds in safekeeping certificated
securities and cash belonging to the Trust and, in such capacity, is the
registered owner of securities in book-entry form belonging to a Fund. Upon
instruction, CTC receives and delivers cash and securities of a Fund in
connection with Fund transactions and collects all dividends and other
distributions made with respect to Fund portfolio securities.
INDEPENDENT ACCOUNTANTS. The Trust's independent accountants are
__________________________________. _________________________ 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
-59-
<PAGE>
filings with the Securities and Exchange Commission, and consults with the Trust
as to matters of accounting and federal and state income taxation.
PORTFOLIO TRANSACTIONS
INVESTMENT DECISIONS. The purchase and sale of portfolio securities for
the Funds and for the other investment advisory clients of the Adviser are made
by the Adviser with a view to achieving each client's investment objective. For
example, a particular security may be purchased or sold on behalf of certain
clients of the Adviser even though it could also have been purchased or sold for
other clients at the same time.
Likewise, a particular security may be purchased on behalf of one or more
clients when the Adviser is selling the same security on behalf of one or more
other clients. In some instances, therefore, the Adviser, acting for one client
may sell indirectly a particular security to another client. It also happens
that two or more clients may simultaneously buy or sell the same security, in
which event purchases or sales are effected PRO RATA on the basis of cash
available or other equitable basis so as to avoid any one account's being
preferred over any other account.
BROKERAGE AND RESEARCH SERVICES. Transactions on stock exchanges and other
agency transactions involve the payment of negotiated brokerage commissions.
Such commissions vary among different brokers. There is generally no stated
commission in the case of securities traded in the over-the-counter markets, but
the price paid for such securities usually includes an undisclosed dealer
commission or mark up. In placing orders for the portfolio transactions of a
Fund, the Adviser will seek the best price and execution available, except to
the extent it may be permitted to pay higher brokerage commissions for brokerage
and research services as described below. The determination of what may
constitute best price and execution by a broker-dealer in effecting a securities
transaction involves a number of considerations, including, without limitation,
the overall net economic result to the Fund (involving price paid or received
and any commissions and other costs paid), the efficiency with which the
transaction is effected, the ability to effect the transaction at all where a
large block is involved, availability of the broker to stand ready to execute
possibly difficult transactions in the future and the financial strength and
stability of the broker. Because of such factors, a broker-dealer effecting a
transaction may be paid a commission higher than that charged by another
broker-dealer. Most of the foregoing are judgmental considerations.
Over-the-counter transactions often involve dealers acting for their own
account. It is the Adviser's policy to place over-the-counter market orders for
a Fund with primary market makers unless better prices or executions are
available elsewhere.
Although the Adviser does not consider the receipt of research services as
a factor in selecting brokers to effect portfolio transactions for a Fund, the
Adviser will receive such services from brokers who are expected to handle a
substantial amount of a Fund's portfolio
-60-
<PAGE>
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 Barr Rosenberg Market Neutral Fund paid brokerage commissions of
$________ for the period from March 31, 1998 to March 31, 1999. The Barr
Rosenberg Double Alpha Market Fund paid brokerage commissions of $________ for
the period from __________, 1998 (inception date) to March 31, 1999. The Barr
Rosenberg Select Sectors Market Neutral Fund paid brokerage commissions of
$________ for the period from __________, 1998 (inception date) to March 31,
1999.
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 amount invested in a particular share class to the
ending redeemable value of such investment in such class, according to the
following formula:
T = ERV-1,000
---------
1,000
-61-
<PAGE>
Where:
T = Cumulative rate of return
ERV = Ending redeemable value of a hypothetical $1,000 investment
made at the beginning of a period at the end of such period.
The calculations of average annual total return and cumulative total return
assume that any dividends and distributions are reinvested immediately, rather
than paid to the investor in cash. The ending redeemable value (variable "ERV"
in each formula) is determined by assuming complete redemption of the
hypothetical investment and the deduction of all nonrecurring charges at the end
of the period covered by the computations.
Unlike bank deposits or other investments that pay a fixed yield or return
for a stated period of time, the return for each Fund will fluctuate from time
to time and does not provide a basis for determining future returns. Average
annual total return and cumulative return are based on many factors, including
market conditions, the composition of a Fund's portfolio and a Fund's operating
expenses.
Average annual total return and cumulative return are calculated separately
for Investor Shares and Institutional Shares. Investor Shares and Institutional
Shares are subject to different fees and expenses and may have different
performance for the same period.
The cumulative return of the Funds for the period from March 31, 1998 (or,
in the case of the Barr Rosenberg Double Alpha Market Fund and the Barr
Rosenberg Select Sectors Market Neutral Fund, from _________, 1998 and
__________, 1998, respectively) to March 31, 1998 is as follows:
< TABLE >
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 other periodicals. In addition to performance
information, general information about the Funds that appears in a publication
such as those mentioned above may be included in advertisements, sales
literature and reports to shareholders. The Funds may also include in
advertisements and reports to shareholders information discussing the
-62-
<PAGE>
performance of the Adviser in comparison to other investment advisers and to
other institutions.
From time to time, the Trust may include the following types of information
in advertisements, supplemental sales literature and reports to shareholders:
(1) discussions of general economic or financial principles (such as the effects
of inflation, the power of compounding and the benefits of dollar cost
averaging); (2) discussions of general economic trends; (3) presentations of
statistical data to supplement such discussions; (4) descriptions of past or
anticipated portfolio holdings for the Funds; (5) descriptions of investment
strategies for the Funds; (6) descriptions or comparisons of various investment
products, which may or may not include the Funds; (7) comparisons of investment
products (including the Funds) with relevant market or industry indices or other
appropriate benchmarks; (8) discussions of fund rankings or ratings by
recognized rating organizations; and (9) testimonials describing the experience
of persons that have invested in a Fund. The Trust may also include
calculations, such as hypothetical compounding examples, which describe
hypothetical investment results in such communications. Such performance
examples will be based on an express set of assumptions and are not indicative
of the performance of a Fund.
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES
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 Barr Rosenberg Market Neutral Fund, Barr Rosenberg Double
Alpha Market Fund, Barr Rosenberg Select Sectors Market Neutral Fund, U.S.
Small Capitalization Series, International Small Capitalization Series and
Japan Series, issued pursuant to the Declaration of Trust. The rights of
shareholders and powers of the Trustees of the Trust with respect to such
shares are described in the Prospectus.
As described in the Prospectus, each Fund is further divided into two
classes of shares designated as Institutional Shares and Investor Shares. Each
class of shares of each Fund represents interests in the assets of the Fund and
has identical dividend, liquidation and other rights and the same terms and
conditions except that expenses, if any, related to the distribution and
shareholder servicing of a particular class are borne solely by such class and
each class may, at the discretion of the Trustees of the Trust, also pay a
different share of other expenses, not including advisory or custodial fees or
other expenses related to the management of the Trust's assets, if these
expenses are actually incurred in a different amount by that class, or if the
class receives services of a different kind or to a different degree than
-63-
<PAGE>
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,
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
-64-
<PAGE>
(at the expense of the requesting shareholders). Except as set forth above, the
Trustees shall continue to hold office and may appoint successor Trustees.
Voting rights are not cumulative.
No amendment may be made to the Declaration of Trust without the
affirmative vote of a majority of the outstanding shares of the Trust except (i)
to change the Trust's name or to cure technical problems in the Declaration of
Trust and (ii) to establish, designate or modify new and existing series,
sub-series or classes of shares of any series of Trust shares or other
provisions relating to Trust shares in response to applicable laws or
regulations.
SHAREHOLDER AND TRUSTEE LIABILITY. Under Massachusetts law, shareholders
could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Declaration of Trust disclaims
shareholder liability for acts or obligations of the Trust and requires that
notice of such disclaimer be given in each agreement, obligation, or instrument
entered into or executed by the Trust or the Trustees. The Declaration of Trust
provides for indemnification out of all the property of the relevant 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 Barr Rosenberg Market Neutral Fund as of June 30,
1999:
< TABLE >
-65-
<PAGE>
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 Barr Rosenberg
Double Alpha Market Fund as of June 30, 1999:
< 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 Barr Rosenberg Select
Sectors Market Neutral Fund as of June 30, 1999:
< TABLE >
The officers and Trustees of the Trust, as a group, own less than 1% of any
class of outstanding shares of the Trust.
DETERMINATION OF NET ASSET VALUE
As indicated in the Prospectus, the net asset value of each Fund share is
determined on each day on which the New York Stock Exchange is open for trading.
The Trust expects that the days, other than weekend days, that the New York
Stock Exchange will not be open are Christmas Day, New Year's Day, Martin Luther
King's Day, President's Day, Good Friday, Memorial Day, Independence Day
(observed), Labor Day and Thanksgiving Day.
Portfolio securities listed on a securities exchange for which market
quotations are available are valued at the last quoted sale price on each
business day, or, if there is no such reported sale, at the mean between the
most recent quoted bid price and the most recent quoted ask 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 mean between the
most recent quoted bid price and the most recent quoted ask price, except that
debt obligations with sixty days or less remaining until maturity may be valued
at their amortized cost. Exchange-traded options on futures are valued at the
settlement price as determined by the appropriate clearing corporation. Futures
contracts are valued by comparing the gain or loss by reference to the current
settlement price as determined by the appropriate clearing corporation. Other
assets and securities for which no quotations are readily available are valued
at fair value as determined in good faith by the Trustees of the Trust or by
persons acting at their direction.
PURCHASE AND REDEMPTION OF SHARES
The procedures for purchasing shares of each of the Funds and for
determining the offering price of such shares are described in the Prospectus.
The Trust has elected to be
-66-
<PAGE>
governed by Rule 18f-1 under the 1940 Act pursuant to which the Trust is
obligated to redeem shares solely in cash for any shareholder during any 90-day
period up to the lesser of (i) $250,000 or (ii) 1% of the total net asset value
of the Trust at the beginning of such period. The procedures for redeeming
shares of each of the Funds are described in the Prospectus.
The Funds have authorized one or more brokers to accept on their behalf
purchase and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Funds' behalf.
The Funds will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts
such order. Such orders will be priced at the respective Funds' net asset value
per share next determined after such orders are accepted by an authorized broker
or the broker's authorized designee.
FINANCIAL STATEMENTS
The Report of Independent Accountants, financial highlights and financial
statements of the Barr Rosenberg Market Neutral Fund included in its Annual
Report for the period ended March 31, 1999 (the "Annual Report") are
incorporated herein by reference to such Annual Report. Copies of such Annual
Report are available without charge upon request by writing to Barr Rosenberg
Series Trust, 3435 Stelzer Road, Columbus, Ohio 43219 or telephoning
1-800-447-3332.
The financial statements incorporated by reference into this Statement of
Additional Information have been audited by_________________________________,
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.
-67-
<PAGE>
PART C
OTHER INFORMATION --
THE BARR ROSENBERG MARKET NEUTRAL FUND,
THE BARR ROSENBERG DOUBLE ALPHA MARKET FUND, AND
THE BARR ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND 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 Barr
Rosenberg Market Neutral Fund and AXA Rosenberg Investment Management
LLC -- filed herewith;
(2) Management Contract between the Registrant on behalf of its Barr
Rosenberg Double Alpha Market Fund and AXA Rosenberg Investment
Management LLC -- filed herewith;
(3) Management Contract between the Registrant on behalf of its Barr
Rosenberg Select Sectors Market Neutral Fund 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;
C-1
<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 Registrant 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 Barr Rosenberg Market Neutral Fund -- filed
herewith;
(3) Notification of Expense Limitation by AXA Rosenberg Investment
Management LLC to the Barr Rosenberg Double Alpha Market Fund -- filed
herewith;
(4) Notification of Expense Limitation by AXA Rosenberg Investment
Management LLC to the Barr Rosenberg Select Sectors Market Neutral
Fund -- 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 Investor
shares -- filed herewith;
C-2
<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,
C-3
<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 disinterested
Trustees acting on the matter (provided that a majority of the
disinterested Trustees then in office act on the matter), or independent
legal counsel in a written opinion, shall have determined, based upon a
review of readily available facts (as opposed to a full trial type inquiry)
that there is reason to believe that such Covered Person will be found
entitled to indemnification under this Article.
SECTION 2. COMPROMISE PAYMENT. As to any matter disposed of (whether
by a compromise payment, pursuant to a consent decree or otherwise) without
an adjudication by a court, or by any other body before which the
proceeding was brought, that such Covered Person is liable to the Trust or
its Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his or her office, indemnification shall be provided if (a) approved, after
notice that it involves such indemnification, by at least a majority of the
disinterested Trustees acting on the matter (provided that a majority of
the disinterested Trustees then in office act on the matter) upon a
determination, based upon a review of readily available fact (as opposed to
a full trial type inquiry) that such Covered Person is not liable to the
Trust or its Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his or her office, or (b) there has been obtained an opinion in writing of
independent legal counsel, based upon a review of readily available facts
(as opposed to a full trial type inquiry) to the effect that such
indemnification would not protect such Person against any liability to the
Trust to which he would otherwise be subject by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office. Any approval pursuant to
this Section shall not prevent the recovery from any Covered Person of any
amount paid to such Covered Person in accordance with this Section as
indemnification if such Covered Person is subsequently adjudicated by a
court of competent 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
C-4
<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 U.S. Small Capitalization Series, the
International Small Capitalization Series and the Japan Series (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:
<TABLE>
<CAPTION>
Name and Position with Adviser Business and Other Connections
<S> <C>
C-5
<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.
</TABLE>
C-6
<PAGE>
ITEM 27. PRINCIPAL UNDERWRITERS:
(a) Barr Rosenberg Funds Distributor, Inc. (the "Distributor") is the principal
underwriter of the Trust's Investor 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:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ --------------------- ---------------------
<S> <C> <C>
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
</TABLE>
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
C-7
<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.
C-8
<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.
C-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment No. 24 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
C-10
<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
Barr Rosenberg Market Neutral Fund and AXA Rosenberg
Investment Management LLC
23(d)(2) Management Contract between the Registrant on behalf of its
Barr Rosenberg Double Alpha Market Fund and AXA Rosenberg
Investment Management LLC
23(d)(3) Management Contract between the Registrant on behalf of its
Barr Rosenberg Select Sectors Market Neutral Fund and AXA
Rosenberg Investment Management LLC
23(h)(2) Notification of Expense Limitation by AXA Rosenberg
Investment Management LLC to the Barr Rosenberg Market
Neutral Fund
23(h)(3) Notification of Expense Limitation by AXA Rosenberg
Investment Management LLC to the Barr Rosenberg Double Alpha
Market Fund
23(h)(4) Notification of Expense Limitation by AXA Rosenberg
Investment Management LLC to the Barr Rosenberg Select
Sectors Market Neutral Fund
23(m) Amended and Restated Distribution and Shareholder Service
Plan for Investor 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
Barr Rosenberg Market Neutral Fund (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
1.90% 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 Barr
Rosenberg Market Neutral Fund, 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 Barr
Rosenberg Market Neutral Fund
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
Barr Rosenberg Double Alpha Market Fund (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
0.10% 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 Barr
Rosenberg Double Alpha Market Fund, 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 Barr
Rosenberg Double Alpha Market Fund
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
Barr Rosenberg Select Sectors Market Neutral Fund (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 Barr
Rosenberg Select Sectors Market Neutral Fund, 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 Barr
Rosenberg Select Sectors Market Neutral Fund
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
Barr Rosenberg Market Neutral Fund (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 Market Neutral Fund
Institutional Shares 2.00%
Investor Shares 2.40%
<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 Market Neutral Fund
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
Barr Rosenberg Double Alpha Market Fund (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 Double Alpha Market Fund
Institutional Shares 2.35%
Investor Shares 2.75%
<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 Double Alpha Market Fund
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
Barr Rosenberg Select Sectors Market Neutral Fund (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 Select Sectors Market Neutral Fund
Institutional Shares 1.25%
Investor Shares 1.65%
<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 Select Sectors Market Neutral Fund
By KENNETH REID
------------------------
Title: President
<PAGE>
EXHIBIT 23(m)
BARR ROSENBERG SERIES TRUST
Amended and Restated Distribution and Shareholder Service Plan (Investor 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 Investor 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
Investor shares of the Trust and/or in connection with the provision of direct
client service, personal services, maintenance of shareholder accounts and
reporting services ("SHAREHOLDER SERVICES") to holders of Investor 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 Investor 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
Investor 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 Investor shares of the Trust and/or in connection with the provision of
Shareholder Services to holders of Investor 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 Investor shares, printing of prospectuses and reports for other
than existing Investor shareholders, advertising, preparing, printing and
distributing sales literature and forwarding communications from the Trust to
Investor 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
Investor shares or the processing of dividend payments with respect to Investor
shares, who provide information periodically to shareholders showing their
positions in a Fund's Investor shares, who forward communications from the Trust
to Investor 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 Investor 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 Investor 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 Investor 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 reporting
services to or for certain shareholders of the Trust. Distribution and Services
Fees are paid pursuant to plans (each, a
- --------------
(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>
"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
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
<PAGE>
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
