<PAGE>
As filed with the Securities and Exchange Commission on February 16, 2000
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. 30 / X /
----
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / X /
----
Amendment No. 33 / X /
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BARR ROSENBERG SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
c/o AXA Rosenberg Investment Management LLC, Four Orinda Way, Building E,
Orinda, CA 94563
(Address of Principal Executive Offices) (Zip code)
925-254-6464
(Registrant's Telephone Number, including Area Code)
Name and address
of agent for service: Copies to:
--------------------- ----------
Kenneth Reid J.B. Kittredge, Esq.
AXA Rosenberg Investment Ropes & Gray
Management LLC One International Place
Four Orinda Way Boston, MA 02110-2624
Building E
Orinda, CA 94563
Approximate Date of Proposed Public Offering: Continuous.
It is proposed that this filing will become effective (check appropriate box):
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<PAGE>
/ / Immediately upon filing pursuant to paragraph (b) / / On (date)
pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1) / / On (date)
pursuant to paragraph (a)(1)
/ X / 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.
NOTE: THIS AMENDMENT RELATES SOLELY TO SHARES OF BENEFICIAL INTEREST IN THE
AXA ROSENBERG EQUITY ENHANCED INDEX FUND, AXA ROSENBERG INTERNATIONAL EQUITY
FUND AND AXA ROSENBERG GLOBAL 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NEITHER AMENDED NOR SUPERSEDED HEREBY.
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<PAGE>
BARR ROSENBERG SERIES TRUST
AXA ROSENBERG EQUITY ENHANCED INDEX FUND
AXA ROSENBERG INTERNATIONAL EQUITY FUND
AXA ROSENBERG GLOBAL MARKET NEUTRAL FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219
1-800-555-5737 (Institutional Shares)
1-800-447-3332 (Select Shares)
February 16, 2000
Barr Rosenberg Series Trust is an open-end management investment company
offering nine diversified portfolios with different investment objectives and
strategies, including the AXA Rosenberg Equity Enhanced Index Fund, AXA
Rosenberg International Equity Fund and AXA Rosenberg Global Market Neutral
Fund. The other portfolios of the Trust, which are offered under separate
prospectuses, 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. 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.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY SUCH SECURITIES BE ACCEPTED PRIOR TO THE TIME SUCH REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
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<PAGE>
TABLE OF CONTENTS
PAGE
RISK/RETURN SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
AXA ROSENBERG EQUITY ENHANCED INDEX FUND. . . . . . . . . . . . . . . 6
AXA ROSENBERG INTERNATIONAL EQUITY FUND . . . . . . . . . . . . . . . 6
AXA ROSENBERG GLOBAL MARKET NEUTRAL FUND. . . . . . . . . . . . . . . 8
FEES AND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
PRINCIPAL INVESTMENT STRATEGIES. . . . . . . . . . . . . . . . . . . . . . 14
PRINCIPAL RISKS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
CERTAIN INVESTMENT TECHINIQUES AND RELATED RISKS . . . . . . . . . . . . . 19
THE ADVISER'S GENERAL INVESTMENT PHILOSOPHY. . . . . . . . . . . . . . . . 21
MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . 23
MULTIPLE CLASSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
PURCHASING SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
IRA ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
EXCHANGING SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
HOW THE TRUST PRICES SHARES OF THE FUNDS . . . . . . . . . . . . . . . . . 35
DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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RISK/RETURN SUMMARY
The following is a summary of certain key information about the AXA
Rosenberg Equity Enhanced Index Fund, AXA Rosenberg International Equity Fund
and AXA Rosenberg Global Market Neutral Fund (each a "Series" or a "Fund" and,
collectively, the "Series" or the "Funds"). You will find additional information
about each Fund, including a detailed description of the risks of an investment
in each Fund, after this Summary. This Summary identifies each Fund's investment
objective, principal investment strategies and principal risks. The principal
risks of each Fund are identified and more fully discussed beginning on page 15.
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.
Other important things for you to note:
- - You may lose money by investing in the Funds.
- - An investment in the Funds is not a deposit in a bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
- - Except as described in the Investment Restrictions section in the Trust's
Statement of Additional Information, the investment objective and policies
of each of the Funds may be changed without shareholder approval.
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<PAGE>
BARR ROSENBERG EQUITY ENHANCED INDEX FUND
INVESTMENT OBJECTIVE
The Fund seeks to outperform the total return of the S&P 500 Composite
Index (the "S&P 500") while maintaining a level of risk similar to that
associated with the S&P 500 generally. The S&P 500 is an unmanaged weighted
index of 500 industrial, transportation, utility and financial companies and is
widely regarded by investors as representative of the U.S. Stock Market.
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund seeks to achieve its investment objective by investing in S&P 500
companies that are domiciled in the United States and by overweighting its
investments in S&P 500 stocks (relative to their weight in the S&P 500) that the
Fund's investment adviser, AXA Rosenberg Investment Management LLC (the
"Adviser"), believes will outperform the S&P 500 and underweighting (relative to
their weight in the S&P 500 ) its investments in, or avoiding altogether, such
stocks that the Adviser believes will underperform the S&P 500.
The Adviser uses proprietary, quantitative investment computer models to
determine which securities to buy and sell. Using these models, the Adviser
employs a bottom-up approach based on factors such as a company's fair value,
financial strength, earnings and price momentum, cash flow, book value and its
competitive position within its industry.
The Fund may also invest in stock index futures and repurchase
agreements.
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. The success of the Fund's investment strategy depends
upon the Adviser's skill in determining which securities to overweight,
underweight or avoid altogether. Therefore, as with any actively managed
investment portfolio, the Fund is subject to the risk that its investment
adviser will make poor stock selections.
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page 15.
PERFORMANCE INFORMATION
The Fund does not have performance information for a full calendar year because
it has not yet commenced operations.
AXA ROSENBERG INTERNATIONAL EQUITY FUND
INVESTMENT OBJECTIVE
The Fund seeks long-term growth of capital and a total return greater than
that of the Morgan Stanley Capital International Europe Australia and Far East
Index (the "MSCI-EAFE Index"). The MSCI-EAFE Index is an unmanaged weighted
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index composed of a sampling of companies representative of the market structure
of Europe, Australia and the Far East.
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund invests in the common stocks of large foreign companies which the
Adviser believes are undervalued by the market and generally sells such stocks
when the Adviser believes have become overvalued by the market. Although the
Fund invests primarily in the stocks of companies that comprise the MSCI-EAFE
Index, it may invest up to 40% of its assets in the stocks of companies which
are not part of the MSCI-EAFE Index but which have characteristics similar to
those of the MSCI-EAFE companies.
In connection with the Far East component of its investment strategy,
the Fund reserves the right to invest in shares of the Trust's Japan Series
in addition to, or in lieu of, other investments in Japanese companies.
The Adviser uses proprietary, quantitative investment computer models to
determine which securities to buy and sell. Using these models, the Adviser
employs a bottom-up approach based on factors such as a company's fair value,
financial strength, earnings and price momentum, cash flow, book value and its
competitive position within its industry. These models tend to produce a "value"
style of management by favoring securities believed to be selling below a price
that would accurately value the underlying company.
SUMMARY OF PRINCIPAL RISKS
As with any stock mutual fund, you may lose money if you invest in the Fund.
Among the principal risks that could adversely affect the value of the Fund's
shares and cause you to lose money on your investment are:
- - INVESTMENT RISKS. 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. The success of the Fund's investment strategy depends
upon the Adviser's skill in determining which securities to buy and which
securities to sell. Therefore, as with any actively managed investment
portfolio, the Fund is subject to the risk that its investment adviser
will make poor stock selections.
- - FOREIGN INVESTMENT RISK. As a result of its foreign investments, the Fund
may experience more rapid and extreme changes in value than funds that
invest solely in securities of U.S. companies. This is because the
securities markets of many foreign countries are relatively small, with a
limited number of companies representing a small number of industries.
Additionally, issuers of foreign securities are usually not subject to the
same degree of regulation as U.S. issuers. Reporting, accounting and
auditing standards of foreign countries differ, in some cases
significantly, from U.S. standards. Also, nationalization, expropriation
or confiscatory taxation, currency blockage, political changes or
diplomatic developments could adversely affect the Fund's investments in a
foreign country.
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<PAGE>
- - CURRENCY RISK. As a result of its investments in securities denominated
in, and/or receiving revenues in, foreign currencies, the Fund will be
subject to currency risk. This is the risk that those currencies will
decline in value relative to the U.S. Dollar, or, in the case of hedging
positions, that the U.S. Dollar will decline in value relative to the
currency hedged. In either event, the dollar value of these types of
investments would be adversely affected.
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page 15.
PERFORMANCE INFORMATION
The Fund does not have performance information for a full calendar year because
it has not yet commenced operations.
AXA ROSENBERG GLOBAL MARKET NEUTRAL FUND
INVESTMENT OBJECTIVE
The Fund seeks to increase the value of your investment in rising markets
and in falling markets through strategies designed to maintain minimal net
exposure to general equity market risk by investing primarily in common stocks
that are traded principally in the markets of the United States, Japan and the
United Kingdom. The Fund measures its return by a comparison to the return on
3-Month U.S. Treasury Bills.
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund seeks to achieve its investment objective by buying common stocks
that the Adviser believes are undervalued and by "selling short" stocks that the
Advisor believes are overvalued. The Fund seeks to have approximately equal
dollar amounts invested in long and short positions.
By buying and selling short different stocks, the Fund attempts to limit
the effect on its performance of and the risk associated with general stock
market movements. Given this use of long and short positions, the Fund expects
that its shares will increase in value if the securities in its long portfolio
outperform the securities in its short portfolio. By contrast, the Fund expects
that its shares will decline in value if the securities in its
-8-
<PAGE>
short portfolio outperform the securities in its long portfolio. The Fund's
return is therefore designed to be independent of general movements in global
equity markets. The Fund may enter into repurchase agreements.
The Adviser uses proprietary, quantitative investment computer models to
determine which securities to buy, sell and sell short. Using these models, the
Adviser employs a bottom-up approach based on factors such as a company's fair
value, financial strength, earnings and price momentum, cash flow, book value
and its competitive position within its industry. These models tend to produce a
"value" style of management by favoring securities believed to be selling below
a price that would accurately value the underlying company.
SUMMARY OF PRINCIPAL RISKS
As with any stock mutual fund, you may lose money if you invest in the
Fund. Among the principal risks that could adversely affect the value of the
Fund's shares and cause you to lose money on your investment are:
- - INVESTMENT RISKS. Although the Fund's investment strategy seeks to limit
the risk associated with investing in the equity market, the value of Fund
shares still may increase or decrease depending on external conditions
affecting the Fund's portfolio. These conditions depend upon market,
economic, political, regulatory and other factors.
- - MANAGEMENT RISK. Any actively managed investment portfolio is subject to
the risk that 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 global stock market
movements, capitalization, or other risk factors.
- - RISK OF SHORT SALES. When the Adviser believes that a security is
overvalued relative to other securities in the fund's long portfolio, it
may sell the security short by borrowing it from a third party and selling
it at the then current market price. The Fund is then obligated to buy the
security on a later date so it can return the security to the lender.
Short sales therefore involve the risk that the Fund will incur a loss by
subsequently buying a security at a higher price than the price at which
the Fund previously sold the security short. Moreover, because a Fund's
loss on a short sale arises from increases in the value of the security
sold short, such loss, like the price of the security sold short, is
theoretically unlimited. By contrast, a Fund's loss on a long position
arises from decreases in the value of the security and therefore is
limited by the fact that a security's value cannot drop below zero.
- - FOREIGN INVESTMENT RISK. Investments in securities of foreign issuers
involve certain risks that are less significant for investments in
securities of U.S. issuers. These include risks of adverse changes in
foreign economic, political, regulatory and other conditions, changes in
currency exchange rates or exchange control regulations (including
currency blockage). A Fund may be unable to obtain and enforce judgments
against foreign entities, and issuers of foreign securities are subject to
different, and often less comprehensive, accounting, reporting and
disclosure requirements than domestic issuers. Also, the securities of
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<PAGE>
some foreign companies may be less liquid and at times more volatile than
securities of comparable U.S. companies.
- - CURRENCY RISK. As a result of its investments in securities denominated
in, and/or receiving revenues in, foreign currencies, the Fund will be
subject to currency risk. This is the risk that those currencies will
decline in value relative to the U.S. Dollar, or, in the case of hedging
positions, that the U.S. Dollar will decline in value relative to the
currency hedged. In either event, the dollar value of these types of
investments would be adversely affected.
For a more detailed description of these and other risks associated
with an investment in The Fund, turn to page 15.
PERFORMANCE INFORMATION
The Fund does not have performance information for a full calendar year
because it has not yet commenced operations.
FEES AND EXPENSES
THESE TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE FUNDS.
AXA ROSENBERG EQUITY ENHANCED INDEX FUND
SHAREHOLDER FEES (paid directly from your investment):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Institutional Investor A B C
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases None None 3.00%* None 0.75%
- ------------------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load) None None None 5.00%** 0.75%***
- ------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed on Reinvested None None None None None
Dividends
- ------------------------------------------------------------------------------------------------------------------------
Redemption Fee None None None None None
- ------------------------------------------------------------------------------------------------------------------------
Exchange Fee None None None None None
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Class A Shares may be sold at net asset value without payment of any sales
charge to the following entities:
(a) Pension and profit sharing plans, pension funds and other
company-sponsored benefit plans; and
(b) "Wrap" accounts for the benefit of clients of broker-dealers,
financial institutions or financial planners, provided they have
entered an agreement with the Trust or the Distributor.
There is no initial sales charge on purchases of Class A Shares in the
amount of $__________ or more, but you may pay a ___% contingent
deferred sales charge ("CDSC") if you redeem your shares within 1
year. The Adviser may pay the dealer or agent a fee of up to ___% of
the dollar amount purchased.
** The contingent deferred sales charge (CDSC) for Class B Shares decreases
by 1% annually to 1% in the fifth year and 0% in the sixth year of
ownership. Class B Shares convert to Class A Shares approximately six
years after purchase.
*** The CDSC for Class C Shares of 0.75% applies to shares redeemed within
eighteen months of purchase.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
- --------------------------------------------------------------------------------------------------------------
CLASS OF SHARES Institutional Investor A B C
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MANAGEMENT FEES 0.50% 0.50% 0.50% 0.50% 0.50%
- --------------------------------------------------------------------------------------------------------------
DISTRIBUTION AND
SHAREHOLDER SERVICE
(12b-1) FEES None 0.25% 0.50% 1.00% 1.00%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OTHER % % % % %
EXPENSES*
- --------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING
EXPENSES % % % % %
- --------------------------------------------------------------------------------------------------------------
EXPENSE LIMITATION**
% % % % %
- --------------------------------------------------------------------------------------------------------------
NET EXPENSES 1.00% 1.25% 1.50% 2.00% 2.00%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------------------
* "Other Expenses" are based on estimated amounts for the current fiscal
year.
** The Adviser has undertaken to waive its management fee and bear certain
expenses (exclusive of nonrecurring account fees, extraordinary expenses and
dividends and interest paid on securities sold short) until further notice
(and in any event at least until 3/31/01). Any amounts waived or reimbursed
in a particular fiscal year will be subject to repayment by the Fund to the
Adviser to the extent that from time to time through the next two fiscal
years the repayment will not cause a Fund's expenses to exceed the limit, if
any, agreed to by the Adviser at that time.
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the 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
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AXA Institutional $ $
ROSENBERG ---------------------------------------------------------------------------------------------------
EQUITY Investor $ $
ENHANCED ---------------------------------------------------------------------------------------------------
INDEX FUND A $ $
---------------------------------------------------------------------------------------------------
B $ $
---------------------------------------------------------------------------------------------------
C $ $
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
AXA ROSENBERG INTERNATIONAL EQUITY FUND
SHAREHOLDER FEES (paid directly from your investment):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Institutional Investor A B C
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Maximum Sales Charge (Load) None None 4.75%* None 1.00%
Imposed on Purchases
- --------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge None None None 5.00%** 1.00%***
(Load)
- --------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (Load) None None None None None
Imposed on Reinvested Dividends
- --------------------------------------------------------------------------------------------------------------
Redemption Fee None None None None None
- --------------------------------------------------------------------------------------------------------------
Exchange Fee None None None None None
- --------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------------
* Class A Shares may be sold at net asset value without payment of any sales
charge to the following entities:
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<PAGE>
(c) Pension and profit sharing plans, pension funds and other
company-sponsored benefit plans; and
(d) "Wrap" accounts for the benefit of clients of broker-dealers,
financial institutions or financial planners, provided they have
entered an agreement with the Trust or the Distributor.
There is no initial sales charge on purchases of Class A Shares in the
amount of $__________ or more, but you may pay a ___% contingent
deferred sales charge ("CDSC") if you redeem your shares within 1
year. The Adviser may pay the dealer or agent a fee of up to ___% of
the dollar amount purchased.
** The contingent deferred sales charge (CDSC) for Class B Shares decreases
by 1% annually to 1% in the fifth year and 0% in the sixth year of
ownership. Class B Shares convert to Class A Shares approximately six
years after purchase.
*** The CDSC for Class C Shares of 0.75% applies to shares redeemed within
eighteen months of purchase.
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS OF SHARES Institutional Investor A B C
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MANAGEMENT FEES 0.75% 0.75% 0.75% 0.75% 0.75%
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION AND
SHAREHOLDER
SERVICE (12b-1) None 0.25% 0.50% 1.00% 1.00%
FEES
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER % % % % %
EXPENSES*
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING
EXPENSES % % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSE LIMITATION**
% % % % %
- -----------------------------------------------------------------------------------------------------------------------------------
NET EXPENSES
1.25% 1.50% 1.75% 2.25% 2.25%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------------------
* "Other Expenses" are based on estimated amounts for the current fiscal
year.
** The Adviser has undertaken to waive its management fee and bear certain
expenses (exclusive of nonrecurring account fees, extraordinary expenses and
dividends and interest paid on securities sold short) until further notice
(and in any event at least until 3/31/01). Any amounts waived or reimbursed
in a particular fiscal year will be subject to repayment by the Fund to the
Adviser to the extent that from time to time through the next two fiscal
years the repayment will not cause a Fund's expenses to exceed the limit, if
any, agreed to by the Adviser at that time.
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the 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
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AXA ROSENBERG Institutional $ $
EQUITY ENHANCED --------------------------------------------------------------------------------------------
INDEX FUND Investor $ $
--------------------------------------------------------------------------------------------
A $ $
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
B $ $
--------------------------------------------------------------------------------------------
C $ $
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
AXA ROSENBERG GLOBAL MARKET NEUTRAL FUND
SHAREHOLDER FEES (paid directly from your investment):
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Institutional
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
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
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
CLASS OF SHARES Institutional
- ---------------------------------------------------------------------------------------------------
<S> <C>
MANAGEMENT FEES 1.50%
- ---------------------------------------------------------------------------------------------------
DISTRIBUTION AND SHAREHOLDER SERVICE (12b-1) FEES None
- ---------------------------------------------------------------------------------------------------
OTHER EXPENSES* %
- ---------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES %
- ---------------------------------------------------------------------------------------------------
EXPENSE LIMITATION** %
- ---------------------------------------------------------------------------------------------------
NET EXPENSES 2.00%
- ---------------------------------------------------------------------------------------------------
</TABLE>
- -------------------------
* "Other Expenses" are based on estimated amounts for the current fiscal
year.
** The Adviser has undertaken to waive its management fee and bear certain
expenses (exclusive of nonrecurring account fees, extraordinary expenses and
dividends and interest paid on securities sold short) until further notice
(and in any event at least until 3/31/01). Any amounts waived or reimbursed
in a particular fiscal year will be subject to repayment by the Fund to the
Adviser to the extent that from time to time through the next two fiscal
years the repayment will not cause a Fund's expenses to exceed the limit, if
any, agreed to by the Adviser at that time.
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the 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
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AXA ROSENBERG EQUITY ENHANCED
INDEX FUND Institutional $ $
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
-13-
<PAGE>
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
Except as explicitly described otherwise, the investment objective and
policies of each of the Funds may be changed without shareholder approval.
AXA ROSENBERG EQUITY ENHANCED INDEX FUND
The Fund seeks to outperform the total return of the S&P 500 Composite
Index (the "S&P 500") while maintaining a level of risk similar to that
associated with the S&P 500 generally. The S&P 500 is an unmanaged weighted
index of 500 industrial, transportation, utility and financial companies and is
widely regarded by investors as representative of the U.S. Stock Market. Total
return is a combination of capital appreciation and current income (dividend or
interest). The Fund does not seek to MAXIMIZE total return but, as indicated
above, seeks a total return greater than that of the S&P 500.
The Fund seeks to achieve its investment objective by investing in
companies that are listed on the S&P 500 ("S&P 500 Companies") and that are
domiciled in the United States and by overweighting its investments in S&P
500 stocks (relative to their weight in the S&P 500) that the Fund's
investment adviser, AXA Rosenberg Investment Management LLC (the "Adviser"),
believes will outperform the S&P 500 and underweighting (relative to their
weight in the S&P 500) (or avoiding altogether) its investments in such
stocks that the Adviser believes will underperform the S&P 500.
To meet redemption requests or for investment purposes, the Fund may also
temporarily hold a portion of its assets not invested in the stocks of S&P 500
companies in full faith and credit obligations of the United States government
(e.g., U.S. Treasury Bills) and in short-term notes, commercial paper or other
money market instruments of high quality (I.E., rated at least "A-2" or "AA" by
Standard & Poor's ("S&P") or Prime 2 or "Aa" by Moody's Investors Service, Inc.
("Moody's")) issued by companies having an outstanding debt issue rated at least
"AA" by S&P or at least "Aa" by Moody's, or determined by the Adviser to be of
comparable quality to any of the foregoing. The Fund may also invest in stock
index futures and repurchase agreements. See "Certain Investment Techniques and
Related Risks" -- "Stock Index Futures" and -- "Repurchase Agreements."
AXA ROSENBERG INTERNATIONAL EQUITY FUND
The Fund seeks long-term growth of capital and a total return greater than
that of the Morgan Stanley Capital International Europe Australasia and Far East
Index (the "MSCI-EAFE Index"). The MSCI-EAFE Index is an unmanaged weighted
index composed of a sampling of companies representative of the market structure
of Europe, Australia, Asia and the Far East. Total return is a combination of
capital appreciation and current income (dividend or interest). The Fund does
not seek to MAXIMIZE total return but, as indicated above, seeks a total return
greater than that of the MSCI EAFE Index.
The Fund invests in common stocks of large foreign companies which the
Adviser believes are undervalued by the market and generally sells those
Stocks once the Adviser believes they have become overvalued by the market.
In selecting securities for the Fund, the Adviser seeks to match the
capitalization profile of the MSCI EAFE Index, a predominantly large company
index with average capitalization in excess of $50 billion. Although the Fund
invests primarily in the stocks of companies that comprise the MSCI-EAFE
Index, it may invest up to 40% of its assets in the stocks of companies which
are not part of the MSCI-EAFE Index but which have characteristics similar to
those of the MSCI-EAFE companies.
-14-
<PAGE>
In connection with the Far East component of its investment strategy, the
Fund reserves the right to invest in shares of the Trust's Japan Series in
addition to, or in lieu of, other investments in Japanese companies. The Japan
Series invests primarily in the common stocks of well-established Japanese
companies that have an active market for their shares. The Japan Series may also
invest in other Japanese securities, such as convertible preferred stock or
debentures, and may purchase futures contracts or options on futures contracts
on the Tokyo Stock Price Index or the NIKKEI 225 Index. The Trust on behalf of
its Funds 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 in the Japan Series. For more information on the Japan
Series, please see the Trust's prospectus which relates to that Fund.
There are no prescribed limits on the Fund's geographic asset
distribution, and the Fund has the authority to invest in securities traded in
securities markets of any country in the world. It is currently expected that
the Fund will invest in approximately 20 different countries across three
regions -- Europe, the Far East and Australia. Under certain adverse investment
conditions, the Fund may restrict the number of securities markets in which its
assets will be invested, although under normal market circumstances, the Fund's
investments will involve securities principally traded in at least three
different countries.
The Fund will not normally invest in securities of United States issuers
traded on United States securities markets.
AXA ROSENBERG GLOBAL MARKET NEUTRAL FUND
The Fund seeks to increase the value of your investment in rising markets
and in falling markets through strategies designed to maintain minimal net
exposure to general equity market risk by investing primarily in stocks that are
traded principally in the markets of the United States, Japan and the United
Kingdom. The Fund measures its return by a comparison to the return on 3-Month
U.S. Treasury Bills.
The Fund seeks to achieve its investment objective by buying common
stocks that the Adviser believes are undervalued and by "selling short"
such stocks that the Adviser believes are overvalued. The Fund seeks to
have approximately equal dollar amounts invested in long and short positions.
The Fund uses fundamental and quantitative investment computer models to
determine which securities to buy, sell and sell short. Using these models, the
Adviser employs a bottom-up approach based on factors such as a company's fair
value, financial strength, earnings and price momentum, cash flow, book value,
neglect (a measure of low analyst coverage and low price volatility), and its
competitive position within its industry.
By buying and selling short different stocks, the Fund attempts to
limit the effect on its performance of, and the risk associated with, general
stock market movements. Given this use of long and short positions, the Fund
expects that its shares will increase in value if the securities in its long
portfolio outperform the securities in its short portfolio. By contrast, the
Fund expects that its shares will decline in value if the securities in its
short portfolio outperform the securities in its long portfolio. The Fund's
return is therefore designed to be independent of general movements in global
equity markets. The Fund may enter into repurchase agreements.
PRINCIPAL RISKS
-15-
<PAGE>
The value of your investment in a Fund changes with the values of the
Fund's investments. Many factors can affect those values. This section describes
the principal risks that may affect a particular Fund's investments as a whole.
Any Fund could be subject to additional principal risks because the types
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, the AXA Rosenberg Global Market Neutral Fund is
subject to the risk that its 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.
- - SPECIAL RISKS OF FOREIGN INVESTMENTS. Investments in securities of foreign
issuers involve certain risks that are less significant for investments in
securities of U.S. issuers. These include risks of adverse changes in
foreign economic, political, regulatory and other conditions, changes in
currency exchange rates or exchange control regulations (including
currency blockage). A foreign government may expropriate or nationalize
invested assets, or impose withholding taxes on dividend or interest
payments. A Fund may be unable to obtain and enforce judgments against
foreign entities. Furthermore, issuers of foreign securities are subject
to different, and often less comprehensive, accounting, reporting and
disclosure requirements than domestic issuers. In certain countries, legal
remedies available to investors may be more limited than those available
with respect to investments in the United States or other countries. The
securities of some foreign companies may be less liquid and at times more
volatile than securities of comparable U.S. companies.
- - RISKS OF REPURCHASE AGREEMENTS. Each of the Funds may enter into
repurchase agreements, by which a Fund will purchase a security and obtain
a simultaneous commitment from the seller to repurchase the security from
the Fund at an agreed-upon price and date (usually seven days or less from
the date of original purchase). The resale price will exceed the purchase
price and reflect an agreed-upon market rate which is unrelated to the
coupon rate of the purchased security. Entering into repurchase agreements
allows the Funds to earn a return on temporarily available cash. Although
the underlying security may be a bill, certificate of indebtedness, note
or bond issued by an agency, authority or instrumentality of the U.S.
Government, the obligation of the seller is not guaranteed by the U.S.
Government. There is a risk, therefore, that the seller will fail to honor
its repurchase obligation. If this happened, the relevant Fund would try
to exercise its legal rights, including possibly its right to sell the
underlying security in the market. However, a Fund may be subject to
various delays and risks of loss, including possible declines in the value
of the underlying security, inability to enforce its rights, and
enforcement-related expenses.
- - RISKS OF 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
-16-
<PAGE>
securities, investment in illiquid securities carries the risk that a Fund
may be forced to sell them at a discount from the last offer price.
- - SMALL AND MID-SIZE COMPANY RISK. The AXA Rosenberg Global Market Neutral
Fund is subject to additional risk because it invests a portion of its
assets in the stocks of companies with small and mid-sized market
capitalizations, which tend to be less liquid and more volatile than
stocks of companies with relatively large market capitalizations.
- - RISKS OF SHORT SALES. When the Adviser believes that a security is
overvalued, it may cause the AXA Rosenberg Global Market Neutral Fund to
sell the security short by borrowing it from a third party and selling it
at the then current market price. The Fund will incur a loss if the price
of the borrowed security increases between the time the Fund sells it
short and the time the Fund replaces it. The Fund may incur a gain if the
price of the borrowed security decreases during that period of time. The
Fund cannot guarantee that it will be able to replace a security at any
particular time or at an acceptable price.
While the 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 the
stock's then market price or "buy in" by paying the lender an amount equal
to the cost of purchasing the security to close out the short position.
The Fund's gain on a short sale is limited to the difference between the
price at which it sold the borrowed security and the price it paid to
purchase the security to return to the lender. By contrast, its potential
loss on a short sale is unlimited because the loss increases as the price
of the security sold short increases, and this price may rise
indefinitely.
Short sales also involve other costs. The AXA Rosenberg Global
Market Neutral Fund must repay to the lender any dividends or interest
that accrue while it is holding a security sold short. To borrow the
security, the Fund also may be required to pay a premium. The Fund also
will incur transaction costs in effecting short sales. The amount of any
ultimate gain for the 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 the 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. The Fund will not
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.
- - PORTFOLIO TURNOVER. Portfolio turnover related considerations will not
limit or constrain the Adviser's investment decisions. The rate of each
Fund's portfolio 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
-17-
<PAGE>
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.
- - CURRENCY RISK. As a result of their investments in securities denominated
in, and/or receiving revenues in, foreign currencies, the International
Equity Fund and the AXA Rosenberg Global Market Neutral Fund will be
subject to currency risk. This is the risk that those currencies will
decline in value relative to the U.S. Dollar, or, in the case of hedging
positions, that the U.S. Dollar will decline in value relative to the
currency hedged. In either event, the dollar value of these types of
investments would be adversely affected.
- - LIQUIDITY RISK. Each Fund may purchase "illiquid securities," defined as
securities which cannot be sold or disposed of in the ordinary course of
business within seven days at approximately the value at which a Fund has
valued such securities, so long as no more than 15% of the Fund's net
assets would be invested in such illiquid securities after giving effect
to the purchase. Investment in illiquid securities involves the risk that,
because of the lack of consistent market demand for such securities, the
Fund may be forced to sell them at a discount from the last offer price.
- - MANAGEMENT RISK. Each Fund is subject to management risk because it is an
actively managed investment portfolio. Management risk is the risk that
Adviser will make poor stock selections. The Adviser will apply its
investment techniques and risk analyses in making investment decisions for
each Fund, but there can be no guarantee that the Adviser will produce the
desired results. In some cases, certain investments may be unavailable or
the Adviser may not choose certain investments under market conditions
when, in retrospect, their use would have been beneficial to a particular
Fund or Funds.
The AXA Rosenberg Global Market Neutral Fund will lose money if the
Adviser fails to purchase, sell or sell short different stocks such that
the securities in the Fund's long portfolio outperform the securities in
the Fund's short portfolio. In addition, management risk is heightened for
that Fund because the Adviser could make poor stock selections for both
the long and the short portfolios. Also, the Adviser may fail to construct
a portfolio for the AXA Rosenberg Global Market Neutral Fund that has
limited exposure to general equity market risk or that has limited
exposure to specific industries, specific capitalization ranges and
certain other risk factors.
-18-
<PAGE>
PRINCIPAL RISKS BY FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
AXA Rosenberg Equity AXA Rosenberg AXA Rosenberg Global
Enhanced Index Fund International Equity Fund Market Neutral Fund
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Risks X X X
- ----------------------------------------------------------------------------------------------------------------------
Risks of Foreign Securities X X
- ----------------------------------------------------------------------------------------------------------------------
Risks of Repurchase Agreements X X X
- ----------------------------------------------------------------------------------------------------------------------
Risks of Illiquid Securities X X X
- ----------------------------------------------------------------------------------------------------------------------
Small and Mid-Sized Company Risk X
- ----------------------------------------------------------------------------------------------------------------------
Currency Risk X X
- ----------------------------------------------------------------------------------------------------------------------
Liquidity Risk X X
- ----------------------------------------------------------------------------------------------------------------------
Risks of Short Sales X
- ----------------------------------------------------------------------------------------------------------------------
Portfolio Turnover X X X
- ----------------------------------------------------------------------------------------------------------------------
Management Risk X X X
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
CERTAIN INVESTMENT TECHNIQUES AND RELATED RISKS
The Funds have the flexibility to invest, within limits, in a variety of
instruments designed to enhance their investment capabilities. A brief
description of certain of these investment instruments and the risks associated
with them appears below. You can find more detailed information in the Trust's
Statement of Additional Information ("SAI").
FOREIGN EXCHANGE TRANSACTIONS. The AXA Rosenberg International Equity Fund
and the AXA Rosenberg Global Market Neutral Fund (collectively, the
"International Equity Portfolios") do not currently intend to hedge the currency
risk associated with investments in securities denominated in foreign
currencies. However, in order to hedge against possible variations in foreign
exchange rates pending the settlement of securities transactions, the
International Equity Portfolios reserve the right to buy or sell foreign
currencies or to deal in forward foreign currency contracts; that is, to agree
to buy or sell a specified currency at a specified price and future date. The
International Equity Portfolios also reserve the right to purchase currency
futures contracts and related options thereon for similar purposes. For example,
if the Adviser anticipates that the value of the yen will rise relative to the
dollar, a Fund could purchase a currency futures contract or a call option
thereon or sell (write) a put option to protect against a currency-related
increase in the price of yen-denominated securities such Fund intends to
purchase. If the Adviser anticipates a fall in the value of the yen relative to
the dollar, a Fund could sell a currency futures contract or a call option
thereon or purchase a put option on such futures contract as a hedge. If the
International Equity Portfolios change their present intention and decide to
utilize hedging strategies, futures contracts and related options will be used
only as a hedge against anticipated currency rate changes (not for investment
purposes) and all options on currency futures written by a Fund will be covered.
These practices, if utilized, may present risks different from or in addition to
the risks associated with investments in foreign currencies.
STOCK INDEX FUTURES. A stock index futures contract (an "Index Future")
is a contract to buy an integral number of units of the relevant index at a
specified future date at a price agreed upon when the contract is made. A
unit is the value at a given time of the relevant index. An option on an
Index Future gives the purchaser the right, in return for the premium paid,
to assume a long or a short position in an Index Future. A Fund will realize
a loss if the value of an Index Future declines between the time the Fund
purchases an Index Future or takes a long position in an Index Future and may
realize a gain if the value of the Index Future rises between such dates.
In connection with a Fund's investment in common stocks, a Fund may invest
in Index Futures while the Adviser seeks favorable terms from brokers to effect
transactions in common stocks selected for purchase. A Fund may also invest in
Index Futures when the Adviser believes that there are not enough attractive
common stocks available to maintain the standards of diversity and liquidity set
for the Fund pending investment in such stocks when they do
-19-
<PAGE>
become available. Through the use of Index Futures, a Fund may maintain a
portfolio with diversified risk without incurring the substantial brokerage
costs which may be associated with investment in multiple issuers. This may
permit a Fund to avoid potential market and liquidity problems (e.g., driving up
or forcing down the price by quickly purchasing or selling shares of a portfolio
security) which may result from increases or decreases in positions already held
by a Fund. A Fund may also use Index Futures in order to hedge its equity
positions.
In contrast to purchases of a common stock, no price is paid or received
by a Fund upon the purchase of a futures contract. Upon entering into a
futures contract, a Fund will be required to deposit with its custodian in a
segregated account in the name of the futures broker a specified amount of
cash or securities. This is known by participants in the market as "initial
margin." The type of instruments that may be deposited as initial margin, and
the required amount of initial margin, are determined by the futures exchange
on which the Index Futures are traded. The nature of initial margin in
futures transactions is different from that of margin in securities
transactions in that futures contract margin does not involve the borrowing
of funds by the customer to finance the transactions. Rather, the initial
margin is in the nature of a performance bond or good faith deposit on the
contract which is returned to the Fund upon termination of the futures
contract, assuming all contractual obligations have been satisfied.
Subsequent payments, called "variation margin," to and from the broker, will
be made on a daily basis as the price of the particular Index fluctuates,
making the position in the futures contract more or less valuable, a process
known as "marking to the market."
A Fund may close out a futures contract purchase by entering into a futures
contract sale. This will operate to terminate the Fund's position in the futures
contract. Final determinations of variation margin are then made, additional
cash is required to be paid by or released to the Fund, and the Fund realizes a
loss or a gain.
A Fund's use of Index Futures involves risk. Positions in Index Futures may
be closed out by a Fund only on the futures exchanges on which the Index Futures
are then traded. There can be no assurance that a liquid market will exist for
any particular contract at any particular time. The liquidity of the market in
futures contracts could be adversely affected by "daily price fluctuation
limits" established by the relevant futures exchange which limit the amount of
fluctuation in the price of an Index Futures contract during a single trading
day. Once the daily limit has been reached in the contract, no trades may be
entered into at a price beyond the limit. In such events, it may not be possible
for a Fund to close its futures contract purchase, and, in the event of adverse
price movements, a Fund would continue to be required to make daily cash
payments of variation margin. The futures market may also attract more
speculators than does the securities market, because deposit requirements in the
futures market are less onerous than margin requirements in the securities
market. Increased participation by speculators in the futures market may also
cause price distortions. In addition, the price of Index Futures may not
correlate perfectly with movement in the underlying index due to certain market
disturbances.
A Fund will not purchase Index Futures if, as a result, the Fund's initial
margin deposits on transactions that do not constitute "bona fide hedging"
under relevant regulations of the
-20-
<PAGE>
Commodities Futures Trading Commission would be greater than 5% of the
Fund's total assets. In addition to margin deposits, when a Fund purchases an
Index Future, it is required to maintain, at all times while an Index Future
is held by the Fund, cash. U.S. Government securities or other high grade
liquid securities in a segragated account with its Custodian, in an amount
which, together with the initial margin deposit on the futures contract, is
equal to the current value of the futures contract.
Further, the ability to establish and close out positions in options on
future contracts will be subject to the development and maintenance of a
liquid secondary market. It is not certain that such a market will develop.
There is no assurance that a liquid secondary market will exist for any
particular option or at any particular time.
REPURCHASE AGREEMENTS. Each Fund may enter into repurchase agreements,
by which a Fund purchases a security and obtains a simultaneous commitment
from the seller (a bank or, to the extent permitted by the 1940 Act, a
recognized securities dealer) to repurchase the security at an agreed-upon
price and date (usually seven days or less from the date of original
purchase). The resale price is in excess of the purchase price and reflects
an agreed-upon market rate unrelated to the coupon rate on the purchased
security. Such transactions afford a Fund the opportunity to earn a return on
temporarily available cash. Although the underlying security may be a bill,
certificate of indebtedness, note or bond issued by an agency, authority or
instrumentality of the U.S. Government, the obligation of the seller is not
guaranteed by the U.S. Government and there is a risk that the seller may
fail to repurchase the underlying security. In such event, a Fund would
attempt to exercise rights with respect to the underlying security, including
possible disposition in the market. However, a Fund may be subject to various
delays and risks of loss, including (a) possible declines in the value of the
underlying security during the period while a Fund seeks to enforce its
rights thereto and (b) inability to enforce rights and the expenses involved
in attemped enforcement.
LOANS OF PORTFOLIO SECURITIES. Each Fund may lend some or all of its
portfolio securities to broker-dealers. Securities loans are made to
broker-dealers pursuant to agreements requiring that loans be continuously
secured by collateral in cash or U.S. Government securities at least equal to
at all times to the market value of the securities lent. The borrower pays to
the lending Fund an amount equal to any dividends or interest received on the
securities lent. When the collateral is cash, the Fund may invest the cash
collateral in interest-bearing, short-term securities. When the collateral is
U.S. Government securities, the Fund usually receives a fee from the
borrower. Although voting rights or rights to consent with respect to the
loaned securities pass to the borrower, a Fund retains the right to call the
loans at any time on reasonable notice, and it will do so in order that the
securities may be voted by the Fund if the holders of such securities are
asked to vote upon or consent to matters materially affecting the investment.
A Fund may also call loans in order to sell the securities involved. The
risks in lending portfolio securities, as with other extensions of credit,
include possible delay in recovery of the securities or possible loss of
rights in the collateral should the borrower fail financially. However, such
loans will be made only to broker-dealers that are believed by the Adviser to
be of relatively high credit standing.
THE ADVISER'S GENERAL INVESTMENT PHILOSOPHY
The Adviser attempts to add value relative to a benchmark through a quantitative
stock selection process, and seeks to diversify investment risk across the
holdings in each Fund.
INVESTMENT PHILOSOPHY
The Adviser's investment strategy is based on the belief that stock prices
imperfectly reflect the present value of the expected future earnings of
companies, their "fundamental value." The Adviser believes that 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 sells (or engages in short sales in the case of AXA
the Rosenberg Global Market Neutral Fund) 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 mispricings will be corrected as the stocks in the
Fund's portfolios are purchased or sold by other investors.
-21-
<PAGE>
In determining whether or not a stock is attractive, the Adviser estimates
the company's current fundamental value, changes in the company's future
earnings and investor sentiment toward the stock. The Adviser identifies and
causes a Fund to purchase undervalued stocks and to hold them in the Fund's
portfolio until the market recognizes and corrects for the mispricings.
Conversely, the Adviser identifies and causes a Fund to sell (or sell short, in
the case of the AXA Rosenberg Global Market Neutral Fund) overvalued stocks.
DECISION PROCESS
The Adviser's decision process is a continuum. Its research function
develops models that analyze the more than 14,000 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 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 170 groups of "similar" businesses. Each company
is broken down into its individual business segments, and each segment is
compared with similar business operations of other companies doing business in
the same geographical market. In most cases, the comparison is extended to
include companies with similar business operations in different markets. The
Adviser appraises the company's assets, operating earnings and sales within each
business segment, accepting the market's valuation of that category of business
as fair. The Adviser then integrates the segment appraisals into balance sheet,
income statement, and sales valuation models for the total company, and
simultaneously adjusts the 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 evaluates 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 change for companies over a one-year period. This Model examines,
among other things, measures of company profitability, measures of operational
-22-
<PAGE>
efficiency, analysts earnings estimates and measures of investor sentiment,
including broker recommendations, earnings surprise and prior market
performance. In different markets around the world, the Adviser has different
levels of investor sentiment data available and observes differing levels of
market response to the model's various predictors.
The Adviser combines the results of the Near-Term Prospects Model with the
results of the Appraisal Model to determine 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 recommendations of the Adviser's stock
selection models and risk in determining portfolio transactions. No transaction
will be executed unless the opportunity offered by a purchase or sale candidate
sufficiently exceeds the potential of an existing holding to justify the
transaction costs.
TRADING
The Adviser's trading system aggregates the recommended transactions for a Fund
and determines the feasibility of each recommendation in light of the stock's
liquidity, the expected transaction costs, and general market conditions. It
relays target price information to a trader for each stock considered for
purchase or sale. Trades are executed through any one of four trading
strategies: traditional brokerage, networks, accommodation, and package or
"basket" trades.
In the United States, 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 the other side to be accommodative in setting 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.
-23-
<PAGE>
INVESTMENT ADVISER
AXA Rosenberg Investment Management LLC (the "Adviser") is Trust's
investment adviser. The Adviser's address is Four Orinda Way, Building E
Orinda, CA 94563. The Adviser is responsible for making investment decisions
for the Funds and managing the Funds' other affairs and business, subject to
the supervision of the Board of Trustees. The Adviser provides investment
advisory services to a number of institutional investors as well as the other
portfolios of the Trust and the portfolio of Barr Rosenberg Variable
Insurance Trust. As with the Adviser's predecessor RIEM in the past, each of
the Funds will pay the Adviser a management fee for these services on a
monthly basis. The Adviser will reduce its management fee and bear certain
expenses until further notice (but in any event at least through 3/31/01) to
limit the Fund's total annual operating expenses. Any amounts waived or
reimbursed in a particular fiscal year will be subject to repayment by the
Fund to the Adviser to the extent that from time to time through the next two
fiscal years the repayment will not cause a Fund's expenses to exceed the
limit, if any, agreed to by the Adviser at that time. The Trust paid the
Adviser $_____ in aggregate fees during the fiscal year ended March 31, 1999.
PORTFOLIO MANAGERS
AXA ROSENBERG EQUITY ENHANCED INDEX 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 ____________, C.F.A., the portfolio
manager, are responsible for the day-to-day management of the portfolios of the
AXA Rosenberg Equity Enhanced Index Fund. Dr. Rosenberg and Dr. Reid both have
been employed by the Adviser or its predecessor since 1985. Mr. _________ has
had numerous responsibilities including ______________ since he joined the
Adviser's predecessor in ____. He received a [insert description of education
here].
AXA ROSENBERG INTERNATIONAL EQUITY 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 _______________, C.F.A., the portfolio
manager, are responsible for the day-to-day management of the portfolios of the
AXA Rosenberg International Equity Fund. Dr. Rosenberg and Dr. Reid both have
been employed by the Adviser or its predecessor since 1985. Mr. ________ has had
numerous responsibilities including ______________ since he joined the Adviser's
predecessor in ____. He received a [insert description of education here].
BARR ROSENBERG GLOBAL 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 ___________, 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. _____________ has had
numerous responsibilities including ____________________ since he joined the
Adviser's predecessor in ____. He received a [insert description of education
here].
-25-
<PAGE>
EXECUTIVE OFFICERS
The biography of each of the executive officers of the Adviser is set
forth below. Kenneth Reid is also a Trustee of the Trust.
BARR ROSENBERG. Dr. Rosenberg is the Director of Research of the Adviser,
Chairman of AXA Rosenberg Group LLC, the parent of the Adviser, and Managing
Director of Barr Rosenberg Research Center LLC. As such, he has ultimate
responsibility for the Adviser's securities valuation and portfolio optimization
systems used to manage the Funds and for the implementation of the decisions
developed therein. His area of special concentration is the design of the
Adviser's proprietary securities valuation 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, he was a
research associate, a portfolio engineer and the Director of Accounting Research
at Rosenberg Institutional Equity Management.
-26-
<PAGE>
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 Services
Corporation and of Theatrix Interactive, Inc. He is also a Fellow of the
Accounting Researchers International Association and a member of the Financial
Economists Roundtable.
Professor Jaffee is the Willis H. Booth Professor of Banking and Finance
at the Haas School of Business, University of California, Berkeley. He was
previously a Professor of Economics at Princeton University for many years,
where he served as the Vice Chairman of the faculty. At Berkeley, he serves on a
continuing basis as the Co-chairman of the Fisher Center for Real Estate and
Urban Economics and as the Director of the UC Berkeley-St. Petersburg University
(Russia) School of Management Program. He has been a Visiting Professor at many
Universities around the world, most recently at the University of Aix/Marseille
in France and at the European University in Florence Italy. Professor Jaffee has
authored 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
-27-
<PAGE>
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 and Class A, B and C 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, Class A
Shares, Class B Shares and Class C 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, Class A Shares, Class B Shares and Class C Shares of the
Trust, shares of each such class are subject to an annual distribution and
shareholder service fee (each a "Distribution and Shareholder Service Fee") in
accordance with a Distribution and Shareholder Service Plan (each a
"Distribution and Shareholder Service Plan") adopted by the Trust pursuant to
Rule 12b-1 under the 1940 Act. Under the Distribution and Shareholder Service
Plans, the various classes of the Funds will pay annual distribution and
shareholder service fees up to the following percentages:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Institutional Investor A B C
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
AXA Rosenberg
Equity Enhanced
Index Fund None 0.25% 0.50% 1.00% 1.00%
- --------------------------------------------------------------------------------------------------------------------
AXA Rosenberg
International
Equity Fund None 0.25% 0.50% 1.00% 1.00%
- --------------------------------------------------------------------------------------------------------------------
AXA Rosenberg
Global Market
Neutral Fund None n/a n/a n/a n/a
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
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 the relevant Shares, printing of prospectuses and reports for
other than existing Investor, Class A, Class B and Class C shareholders,
advertising, preparing, printing and distributing sales literature and
forwarding communications from the Trust to such shareholders. Each Distribution
and Shareholder Service Plan is of the type known as a "compensation" plan. This
means that, although the trustees of the Trust are expected to take into account
the expenses of the Distributor in their periodic review of the Distribution and
-28-
<PAGE>
Shareholder Service Plans, the fees are payable to compensate the Distributor
for services rendered even if the amount paid exceeds the Distributor's
expenses. Because these fees are paid out of the Fund's assets on an ongoing
basis, over time these fees will increase the cost of your investment and may
cost you more than other paying types of sales charges.
MULTIPLE CLASSES
As indicated previously, the Funds offer five classes of shares to
investors, with eligibility for purchase of Institutional Shares depending on
the amount invested in a particular Fund. The five classes of shares are
Institutional Shares, Investor Shares, Class A Shares, Class B Shares and
Class C Shares. The following table sets forth basic investment and fee
Information for each class.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
ANNUAL DISTRIBUTION AND
SHAREHOLDER
NAME OF CLASS MINIMUM FUND INVESTMENT* SUBSEQUENT INVESTMENTS* SERVICE FEE OR ASSET BASED
SALES CHARGE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional $1 million $10,000 None
- ----------------------------------------------------------------------------------------------------------------
Investor $2,500 $500 0.25%
- ----------------------------------------------------------------------------------------------------------------
A $ $ %
- ----------------------------------------------------------------------------------------------------------------
B $ $ %
- ----------------------------------------------------------------------------------------------------------------
C $ $ %
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* Certain exceptions apply. See " -- Institutional Shares" and "-- Investor
Shares" below."
The offering price of Fund shares is based on the net asset value per
share next determined after an order is received. See "Purchasing Shares," "How
the Trust Prices Shares of the Funds -- Determination of Net Asset Value" and
"Redemption of Shares."
INSTITUTIONAL SHARES
Institutional Shares may be purchased by institutions such as endowments
and foundations, plan sponsors of 401(a), 401(k), 457 and 403(b) plans and
individuals. In order to be eligible to purchase Institutional Shares, an
institution, plan or individual must make an initial investment of at least $1
million in the particular Fund. In its sole discretion, the Adviser may waive
this minimum investment requirement and the Adviser intends to do so for
employees of the Adviser, for the spouse, parents, children, siblings,
grandparents or grandchildren of such employees, for employees of the
Administrator and for Trustees of the Trust who are not interested persons of
the Trust or Adviser and their spouses. Institutional Shares are sold without
any initial or deferred sales charges and are not subject to any ongoing
Distribution and Shareholder Service Fee.
INVESTOR SHARES
Investor Shares may be purchased by institutions, certain individual
retirement accounts and individuals. In order to be eligible to purchase
Investor Shares, an investor must make an initial investment of at least $2,500
in the particular Fund. In its sole discretion, the Adviser may waive this
minimum investment requirement. Investor Shares are subject to an annual
Distribution and Shareholder Service Fee equal to 0.25% of the average daily net
assets attributable to Investor Shares, and the Trustees have authorized each
Fund to pay up to 0.15% of its average daily net assets attributable to Investor
Shares for subtransfer and subaccounting services in connection with such
shares. As described above, the Distribution and Shareholder Service Plan in
connection with Investor Shares permits payments of up to 0.25% of the Funds'
-29-
<PAGE>
average daily net assets attributable to Investor Shares. See "Management of the
Trust -- Distributor."
CLASS A SHARES--INITIAL SALES CHARGE ALTERNATIVE
You can purchase Class A shares at net asset value with an initial sales
charge as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Initial Sales Charge
- -------------------------------------------------------------------------------------------------------------------
Commission
to Dealer/
As % of Net Amount As % of Offering Agent as %
Invested Price of
Amount Purchased Offering Price
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Up to $100,000 % % %
- -------------------------------------------------------------------------------------------------------------------
$100,000 up to $250,000 % % %
- -------------------------------------------------------------------------------------------------------------------
$250,000 up to $500,000 % % %
- -------------------------------------------------------------------------------------------------------------------
$500,000 up to $1,000,000 % % %
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
You pay no initial sales charge on purchases of Class A Shares in the amount
of $___________ or more, but may pay a ___% contingent deferred sales charge
("CDSC") if you redeem your shares within 1 year. The Adviser may pay the
dealer or agent a fee of up to ___% of the dollar amount purchased.
CLASS B SHARES--DEFERRED SALES CHARGE ALTERNATIVE
You can purchase Class B Shares at net asset value without an initial
sales charge. A Fund will thus receive the full amount of your purchase. Your
investment, however, will be subject to a CDSC if you redeem shares within 5
years of purchase. The CDSC varies depending on the number of years you hold the
shares. The CDSC amounts are:
<TABLE>
<CAPTION>
<S> <C>
Years Since Purchase CDSC
First 5.0%
Second 4.0%
Third 3.0%
Fourth 2.0%
Fifth 1.0%
Sixth None
</TABLE>
If you exchange your shares for the Class B shares of another AXA Rosenberg
Mutual Fund, the CDSC also will apply to those Class B shares. The CDSC period
begins with the date of your original purchase, not the date of exchange for the
other Class B shares.
The Fund's Class B shares purchased for cash automatically convert to
Class A shares 6 years after the end of the month of your purchase. If you
purchase shares by exchange for the Class B shares of another Fund, the
conversion period runs from the date of your original purchase.
CLASS C SHARES--ASSET-BASED SALES CHARGE ALTERNATIVE
You can purchase Class C Shares at net asset value without an initial sales
charge. A Fund will thus receive the full amount of your purchase. Your
investment, however, will be subject to a 0.75% CDSC if you redeem your
shares within 18 months. If you exchange your shares for the Class C shares
of another AXA Rosenberg Mutual Fund, the 0.75% CDSC also will apply to those
Class C shares. The 1-year period for the CDSC begins with the date of your
original purchase, not
-30-
<PAGE>
the date of the exchange for the other Class C shares. Class C shares do not
convert to any other class of shares of the Fund.
GENERAL
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 with respect to purchases and redemptions of
Fund shares. Customers of Shareholder Organizations should read this Prospectus
in light of the terms governing accounts with their particular organization.
PURCHASING SHARES
The offering price for shares of each Fund is the net asset value per
share next determined after receipt of a purchase order. See "How the Trust
Prices Shares of the Funds --Determination of Net Asset Value." Investors may be
charged an additional fee by their broker or agent if they effect transactions
through such persons.
INITIAL CASH INVESTMENTS BY WIRE
Subject to acceptance by the Trust, shares of the Funds may be
purchased by wiring federal funds. Please first contact the Trust at
1-800-447-3332 for complete wiring instructions. Notification must be given
to the Trust at 1-800-447-3332 prior to 4:00 p.m., New York Time, of the wire
date. Federal funds purchases will be accepted only on a day on which the
Trust, the Distributor and the Custodian are all open for business. A
completed Account Application must be overnighted to the Trust at Barr
Rosenberg Series Trust c/o BISYS Fund Services, Inc., 3435 Stelzer Road,
Columbus, Ohio 43219-8021. Please note the minimum initial investment
requirements for each class as set forth above under "Multiple Classes."
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. Please note minimum initial investment requirements for each class as
set forth above under "Multiple Classes."
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 or to the appropriate broker-dealer prior to 4:00 p.m., New
York time, of the wire date. Please note each class' minimum additional
investment requirements as set forth above under "Multiple Classes." In its
sole discretion, the Adviser may waive the minimum
-31-
<PAGE>
additional investment requirements.
INVESTMENTS IN-KIND (INSTITUTIONAL SHARES)
Institutional Shares may be purchased in exchange for common stocks on
deposit at The Depository Trust Company ("DTC") or by a combination of such
common stocks and cash. Purchase of Institutional Shares of a Fund in exchange
for stocks is subject in each case to the determination by the Adviser that the
stocks to be exchanged are acceptable. Securities accepted by the Adviser in
exchange for Fund shares will be valued as set forth under "How the Trust Prices
Shares of the Funds -- Determination of Net Asset Value" (generally the last
quoted sale price) as of the time of the next determination of net asset value
after such acceptance. All dividends, subscription or other rights which are
reflected in the market price of accepted securities at the time of valuation
become the property of the Fund and must be delivered to the Fund upon receipt
by the investor from the issuer. Generally, the exchange of common stocks for
Institutional Shares will be a taxable event for federal income tax purposes,
which will trigger gain or loss to an investor subject to federal income
taxation, measured by the difference between the value of the Institutional
Shares received and the investor's basis in the securities tendered.
The Adviser will not approve the acceptance of securities in exchange for
Fund shares unless (i) the Adviser, in its sole discretion, believes the
securities are appropriate investments for the Fund; (ii) the investor
represents and agrees that all securities offered to the Fund are not subject to
any restrictions upon their sale by the Fund under the Securities Act of 1933,
or otherwise; and (iii) the securities may be acquired under the Fund's
investment restrictions.
OTHER PURCHASE INFORMATION
An eligible shareholder may also participate in the Barr Rosenberg
Automatic Investment Program, an investment plan that automatically debits
money from the shareholder's bank account and invests it in Investor Shares,
Class A Shares, Class B Shares or Class C 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
-32-
<PAGE>
Investor Shares, Class A Shares, Class B Shares and Class C Shares of
the Funds may be used as a funding medium for IRAs. The minimum initial
investment for an IRA is $2,000. A special application must be completed in
order to create such an account. Contributions to IRAs are subject to
prevailing amount limits set by the Internal Revenue Service. For more
information about IRAs, call the Trust at 1-800-447-3332.
REDEMPTION OF SHARES
Shares of the Funds may be redeemed by mail, or, if authorized by an
investor in an Account Application, by telephone. The value of shares redeemed
may be more or less than the original cost of those shares, depending on the
market value of the investment securities held by the particular Fund at the
time of the redemption.
BY MAIL
The Trust will redeem its shares at the net asset value next determined
after the request is received in "good order." See "How the Trust Prices Shares
of the Funds -- Determination of Net Asset Value." Requests should be addressed
to Barr Rosenberg Series Trust, P.O. Box 182495, Columbus, Ohio 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; 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
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Agent's records of such instructions are binding and the shareholder, and not
the Trust or the Transfer Agent, bears the risk of loss in the event of
unauthorized instructions reasonably believed by the Transfer Agent to be
genuine. The Transfer Agent will employ reasonable procedures to confirm that
instructions communicated are genuine and, if it does not, it may be liable for
any losses due to unauthorized or fraudulent instructions. The procedures
employed in connection with transactions initiated by telephone include tape
recording of telephone instructions and requiring some form of personal
identification prior to acting upon instructions received by telephone.
Telephone Redemption will be suspended for a period of 10 days following a
telephonic address change.
SYSTEMATIC WITHDRAWAL PLAN
An owner of $12,000 or more of shares of a Fund may elect to have periodic
redemptions made from the investor's account to be paid on a monthly, quarterly,
semiannual or annual basis. The maximum payment per year is 12% of the account
value at the time of the election. The Trust will normally redeem a sufficient
number of shares to make the scheduled redemption payments on a date selected by
the shareholder. Depending on the size of the payment requested and fluctuation
in the net asset value, if any, of the shares redeemed, redemptions for the
purpose of making such payments may reduce or even exhaust the account. A
shareholder may request that these payments be sent to a predesignated bank or
other designated party. Capital gains and dividend distributions paid to the
account will automatically be reinvested at net asset value on the distribution
payment date.
FURTHER REDEMPTION INFORMATION
The Trust will not make payment on redemptions of shares purchased by check
until payment of the purchase price has been collected, which may take up to
fifteen days after purchase. Shareholders can avoid this delay by utilizing the
wire purchase option.
If the Adviser determines, in its sole discretion, that it would not be in
the best interests of the remaining shareholders of a Fund to make a redemption
payment to an Institutional Shareholder wholly or partly in cash, such Fund may
pay the redemption price of Institutional Shares in whole or in part by a
distribution in kind of readily marketable securities held by such Fund in lieu
of cash. Securities used to redeem Fund shares in kind will be valued in
accordance with the Funds' procedures for valuation described under "How the
Trust Prices Shares of the Funds -- Determination of Net Asset Value."
Securities distributed by a Fund in kind will be selected by the Adviser in
light of each Fund's objective and will not generally represent a pro rata
distribution of each security held in a Fund's portfolio. Investors may incur
brokerage charges on the sale of any such securities so received in payment of
redemptions.
The Trust may suspend the right of redemption and may postpone payment for
more than seven days when the New York Stock Exchange is closed for other than
weekends or holidays, or if permitted by the rules of the Securities and
Exchange Commission, during periods when trading on the Exchange is restricted
or during an emergency which makes it impracticable for the Funds to dispose of
their securities or to fairly determine the value of their net assets, or during
any other period permitted by the Securities and Exchange Commission for the
protection of investors.
EXCHANGING SHARES
The Funds offer two convenient ways to exchange shares in one Fund for
shares of another Fund. Shares of a particular class of a Fund may be exchanged
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only for shares of the same class in another Fund. There is no sales charge on
exchanges. Before engaging in an exchange transaction, a shareholder should read
carefully the information in the Prospectus describing the Fund into which the
exchange will occur. A shareholder may not exchange shares of a class of one
Fund for shares of the same class of another Fund that is not qualified for sale
in the state of the shareholder's residence. Although the Trust has no current
intention of terminating or modifying the exchange privilege, it reserves the
right to do so at any time.
An exchange is taxable as a sale of a security on which a gain or loss may
be recognized. Shareholders should receive written confirmation of the exchange
within a few days of the completion of the transaction.
A new account opened by exchange must be established with the same
name(s), address and social security number as the existing account. All
exchanges will be made based on the respective net asset values next determined
following receipt of the request by the Funds containing the information
indicated below.
EXCHANGE BY MAIL
To exchange Fund shares by mail, shareholders should simply send a letter
of instruction to the Trust. The letter of instruction must include: (a) the
investor's account number; (b) the class of shares to be exchanged; (c) the Fund
from and the Fund into which the exchange is to be made; (d) the dollar or share
amount to be exchanged; and (e) the signatures of all registered owners or
authorized parties.
EXCHANGE BY TELEPHONE
To exchange Fund shares by telephone or to ask questions about the
exchange privilege, shareholders may call the Trust at 1-800-447-3332. If you
wish to exchange shares, please be prepared to give the telephone representative
the following information: (a) the account number, social security number and
account registration; (b) the class of shares to be exchanged; (c) the name of
the Fund from which and the Fund into which the exchange is to be made; and (d)
the dollar or share amount to be exchanged. Telephone exchanges are available
only if the shareholder so indicates by checking the "yes" box on the Account
Application. The Trust employs procedures, including recording telephone calls,
testing a caller's identity, and written confirmation of telephone transactions,
designed to give reasonable assurance that instructions communicated by
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 in good order.
For purposes of calculating the purchase price of Fund shares, if it does
not reject a purchase order, the Trust considers an order received on the day
that it receives a check or money order on or before 4:00 p.m., New York Time.
If the Trust receives the payment after the deadline, it will base the purchase
price of Fund shares on the next determination of net asset value of Fund
shares.
The Trust reserves the right, in its sole discretion, to suspend the
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offering of shares of a Fund or Funds or to reject purchase orders when the
Adviser believes that suspension or rejection would be in the best interests of
the Trust.
Purchases of each Fund's shares may be made in full or in fractional
shares of the relevant Fund calculated to three decimal places. In the interest
of economy and convenience, the Trust will not issue certificates for shares.
DETERMINATION OF NET ASSET VALUE
The net asset value of each class of shares of the Funds will be
determined once on each day on which the New York Stock Exchange is open as of
4:00 p.m., New York time. The net asset value per share of each class of a Fund
is determined by dividing the particular class's proportionate interest in the
total market value of the Fund's portfolio investments and other assets, less
any applicable liabilities, by the total outstanding shares of that class of the
Fund. Specifically, each Fund's liabilities are allocated among its classes. The
total of such liabilities allocated to a particular class plus that class's
distribution and shareholder service expenses, if any, and any other expenses
specially allocated to that class are then deducted from the class's
proportionate interest in the Fund's assets. The resulting amount for each class
is divided by the number of shares of that class outstanding to produce the "net
asset value" per share.
Portfolio securities listed on a securities exchange for which market
quotations are available are valued at the last quoted sale price on each
business day, or, if there is no such reported sale, at the most recent quoted
bid price for long securities and the most recent quoted ask price for
securities sold short. Price information on listed securities is generally taken
from the closing price on the exchange where the security is primarily traded.
Unlisted securities for which market quotations are readily available are valued
at the most recent quoted bid price or 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
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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 and the excess, if any, of net short-term
capital gains over net long-term capital losses for such year and otherwise
qualifies for the special rules governing the taxation of regulated
investment companies, the Fund itself will not pay federal income tax on the
amount distributed. Such dividends will be taxable to shareholders subject to
income tax as ordinary income. Distributions of long-term capital gains
(generally taxed at 20%) will be taxable to shareholders as such, regardless
of how long a shareholder has held the shares. Distributions will be taxed as
described above whether received in cash or in shares through the
reinvestment of distributions. A distribution paid to shareholders by a Fund
in January of a year is generally deemed to have been received by
shareholders on December 31 of the preceding year, if the distribution was
declared and payable to shareholders of record on a date in October, November
or December of that preceding year. Each Fund will provide federal tax
information annually, including information about dividends and distributions
paid during the preceding year.
If more than 50% of a Fund's assets at fiscal year-end is represented by
debt and equity securities of foreign corporations, the Fund may (and the AXA
Rosenberg Internatinal Equity Fund and the AXA Rosenberg Global Market Neutral
Fund intend to) elect to permit shareholders who are U.S. citizens or U.S.
corporations to claim a foreign tax credit or deduction (but not both) on their
U.S. income tax returns for their pro rata portion of qualified taxes paid by
the Fund to foreign countries. As a result, the amounts of foreign income taxes
paid by such Fund would be treated as additional income to shareholders of such
Fund for purposes of the foreign tax credit. Each such shareholder would include
in gross income from foreign sources its pro rata share of such taxes. Certain
limitations imposed by the Internal Revenue Code may prevent shareholders from
receiving a full foreign tax credit or deduction for their allocable amount of
such taxes.
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.
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
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reflects the risks associated with a Fund's investment objective and policies.
These factors should be considered when comparing a Fund's investment results
with those of other mutual funds and other investment vehicles. Quotations of
investment performance for any period when an expense limitation was in effect
will be greater than if the limitation had not been in effect.
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[ Back cover ]
The Funds' statement of additional information ("SAI") dated February
16, 2000 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. You may obtain a copy of the Funds' SAI,
request other information about the Funds, or make shareholder inquiries by
writing to the Trust at the address below or by telephoning 1-800-447-3332.
The SAI has been filed with the Securities and Exchange Commission. You
may review and copy information about the Funds, including the SAI, at the
Commission's Public Reference Room in Washington, D.C. You may call the
Commission at 1-800-SEC-0330 for information about the operation of the Public
Reference Room. The Commission maintains a World Wide Web site at
http://www.sec.gov, which contains reports and other information about the
Funds. You may also obtain copies of these materials, upon payment of a
duplicating fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009.
ADDRESS CORRESPONDENCE TO:
Barr Rosenberg Series Trust
3435 Stelzer Road
Columbus, Ohio 43219.
1-800-447-3332
Shareholder Services
1-800-555-5737 (Institutional Shares)
1-800-447-3332 (Investor Shares)
1-800-___-____ (Class A, B and C Shares)
ADVISER
AXA Rosenberg Investment Management LLC
Four Orinda Way, Building E
Orinda, CA 94563
ADMINISTRATOR, TRANSFER AND DIVIDEND PAYING AGENT
BISYS Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, OH 43219
CUSTODIAN OF ASSETS
Custodial Trust Company
101 Carnegie Center
Princeton, NJ 08540
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
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333 Market Street
San Francisco, CA 94104
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA 02110
Investment Company Act File No. 811-05547
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BARR ROSENBERG SERIES TRUST
AXA ROSENBERG EQUITY ENHANCED INDEX FUND
AXA ROSENBERG INTERNATIONAL EQUITY FUND
AXA ROSENBERG GLOBAL MARKET NEUTRAL FUND
STATEMENT OF ADDITIONAL INFORMATION
February 16, 2000
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the prospectus of the AXA
Rosenberg Equity Enhanced Index Fund, the AXA Rosenberg International Equity
Fund and the AXA Rosenberg Global Market Neutral Fund of Barr Rosenberg Series
Trust dated February 16, 2000 (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.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INVESTMENT OBJECTIVES AND POLICIES ..........................................3
MISCELLANEOUS INVESTMENT PRACTICES ..........................................8
INVESTMENT RESTRICTIONS .....................................................8
INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS ..............................10
MANAGEMENT OF THE TRUST .....................................................12
INVESTMENT ADVISORY AND OTHER SERVICES ......................................15
PORTFOLIO TRANSACTIONS ......................................................19
TOTAL RETURN CALCULATIONS ...................................................20
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES ............................22
DETERMINATION OF NET ASSET VALUE ............................................24
PURCHASE AND REDEMPTION OF SHARES ...........................................24
</TABLE>
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INVESTMENT OBJECTIVES AND POLICIES
The investment objective and policies of each of the AXA Rosenberg Equity
Enhanced Index Fund, the AXA Rosenberg International Equity Fund and the AXA
Rosenberg Global 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.
INDEX FUTURES (ALL FUNDS). An index futures contract (an "Index Future") is a
contract to buy or sell an integral number of units of an Index at a specified
future date at a price agreed upon when the contract is made. A unit is the
value of the relevant Index from time to time. Entering into a contract to buy
units is commonly referred to as buying or purchasing a contract or holding a
long position in an Index.
Index Futures contracts can be traded through all major commodity
brokers. Currently, contracts are expected to expire on the tenth day of March,
June, September and December. A Fund will ordinarily be able to close open
positions on the United States futures exchange on which Index Futures are then
traded at any time up to and including the expiration day.
Upon entering into a futures contract, a Fund will be required to deposit
initial margin with its custodian in a segregated account in the name of the
futures broker. Variation margin will be paid to and received from the broker on
a daily basis as the contracts are marked to market. For example, when a Fund
has purchased an Index Future and the price of the relevant Index has risen,
that position will have increased in value and the Fund will receive from the
broker a variation margin payment equal to that increase in value. Conversely,
when a Fund has purchased an Index Future and the price of the relevant Index
has declined, the position would be less valuable and the Fund would be required
to make a variation margin payment to the broker.
The price of Index Futures may not correlate perfectly with movement in
the underlying Index due to certain market distortions. First, all participants
in the futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit requirements,
investors may close futures contracts through offsetting transactions which
could distort the normal relationship between the Index and futures markets.
Secondly, the deposit requirements in the futures market are less onerous than
margin requirements in the securities market, and as a result the futures market
may attract more speculators than does the securities market. Increased
participation by speculators in the futures market may also cause temporary
price distortions. In addition, with respect to the Japan Series, trading hours
for Index Futures may not correspond perfectly to hours of trading on the Tokyo
Stock Exchange. This may result in a disparity between the price of Index
Futures and the value of the underlying Index due to the lack of continuous
arbitrage between the Index Futures price and the value of the underlying Index.
FOREIGN CURRENCY TRANSACTIONS (AXA ROSENBERG INTERNATIONAL EQUITY FUND
AND AXA ROSENBERG GLOBAL MARKET NEUTRAL FUND). The Funds do not currently intend
to hedge the foreign currency risk associated with investments in securities
denominated in foreign currencies. However, the Funds reserve the right to buy
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or sell foreign currencies or to deal in forward foreign currency contracts to
hedge against possible variations in foreign exchange rates pending the
settlement of securities transactions. The Funds also reserve the right to use
currency futures contracts and related options thereon for similar purposes. By
entering into a futures or forward contract for the purchase or sale, for a
fixed amount of dollars, of the amount of foreign currency involved in the
underlying security transactions, a Fund will be able to protect itself against
a possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the subject foreign currency during the period between the date
on which the security is purchased or sold and the date on which payment is made
or received. A Fund's dealing in forward contracts will be limited to this type
of transaction. A Fund will not engage in currency futures transactions for
leveraging purposes. A put option on a futures contract gives a Fund the right
to assume a short position in the futures contract until the expiration of the
option. A call option on a futures contract gives a Fund the right to assume a
long position in the futures contract until the expiration of the option.
CURRENCY FORWARD CONTRACTS (AXA ROSENBERG INTERNATIONAL EQUITY FUND AND
AXA ROSENBERG GLOBAL MARKET NEUTRAL FUND). A forward foreign currency exchange
contract involves an obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days from the date of the contract
as agreed by the parties, at a price set at the time of the contract. In the
case of a cancelable forward contract, the holder has the unilateral right to
cancel the contract at maturity by paying a specified fee. The contracts traded
in the interbank market are negotiated directly between currency traders
(usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades.
CURRENCY FUTURES TRANSACTIONS (AXA ROSENBERG INTERNATIONAL EQUITY FUND
AND AXA ROSENBERG GLOBAL MARKET NEUTRAL FUND). A currency futures contract sale
creates an obligation by the seller to deliver the amount of currency called for
in the contract in a specified delivery month for a stated price. A currency
futures contract purchase creates an obligation by the purchaser to take
delivery of the underlying amount of currency in a specified delivery month at a
stated price. Futures contracts are traded only on commodity exchanges -- known
as "contract markets" -- approved for such trading by the Commodity Futures
Trading Commission ("CFTC"), and must be executed through a futures commission
merchant, or brokerage firm, which is a member of the relevant contract market.
Although futures contracts by their terms call for actual delivery or
acceptance, in most cases the contracts are closed out before the settlement
date without the making or taking of delivery. Closing out a futures contract
sale is effected by purchasing a futures contract for the same aggregate amount
of the specific type of financial instrument or commodity and the same delivery
date. If the price of the initial sale of the futures contract exceeds the price
of the offsetting purchase, the seller is paid the difference and realizes a
gain. Conversely, if the price of the offsetting purchase exceeds the price of
the initial sale, the seller realizes a loss. Similarly, the closing out of a
futures contract purchase is effected by the purchaser entering into a futures
contract sale. If the offsetting sale price exceeds the purchase price, the
purchaser realizes a gain, and if the purchase price exceeds the offsetting sale
price, the purchaser realizes a loss.
The purchase or sale of a futures contract differs from the purchase or
sale of a security, in that no price or premium is paid or received. Instead, an
amount of cash or U.S. Treasury bills generally not exceeding 5% of the contract
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amount must be deposited with the broker. This amount is known as initial
margin. Subsequent payments to and from the broker, known as variation margin,
are made on a daily basis as the price of the underlying futures contract
fluctuates making the long and short positions in the futures contract more or
less valuable, a process known as "marking to the market." At any time prior to
the settlement date of the futures contract, the position may be closed out by
taking an opposite position which will operate to terminate the position in the
futures contract. A final determination of variation margin is then made,
additional cash is required to be paid to or released by the broker, and the
purchaser realizes a loss or gain. In addition, a commission is paid on each
completed purchase and sale transaction.
Unlike a currency futures contract, which requires the parties to buy and
sell currency on a set date, an option on a futures contract entitles its holder
to decide on or before a future date whether to enter into such a contract. If
the holder decides not to enter into the contract, the premium paid for the
option is lost. Since the value of the option is fixed at the point of sale,
there are no daily payments of cash in the nature of "variation" or
"maintenance" margin payments to reflect the change in the value of the
underlying contract as there are by a purchaser or seller of a currency futures
contract.
The ability to establish and close out positions on options on futures
will be subject to the development and maintenance of a liquid secondary market.
It is not certain that this market will develop or be maintained.
The Funds will write (sell) only covered put and call options on currency
futures. This means that a Fund will provide for its obligations upon exercise
of the option by segregating sufficient cash or short-term obligations or by
holding an offsetting position in the option or underlying currency future, or a
combination of the foregoing. Set forth below is a description of methods of
providing cover that the Funds currently expect to employ, subject to applicable
exchange and regulatory requirements. If other methods of providing appropriate
cover are developed, a Fund reserves the right to employ them to the extent
consistent with applicable regulatory and exchange requirements.
A Fund will, so long as it is obligated as the writer of a call option on
currency futures, own on a contract-for-contract basis an equal long position in
currency futures with the same delivery date or a call option on currency
futures with the difference, if any, between the market value of the call
written and the market value of the call or long currency futures purchased
maintained by the Fund in cash, U.S. Government securities, or other high-grade
liquid debt obligations in a segregated account with its custodian. If at the
close of business on any day the market value of the call purchased by a Fund
falls below 100% of the market value of the call written by the Fund, the Fund
will so segregate an amount of cash, U.S. Government securities, or other
high-grade liquid debt obligations equal in value to the difference.
Alternatively, a Fund may cover the call option through segregating with its
custodian an amount of the particular foreign currency equal to the amount of
foreign currency per futures contract option times the number of options written
by the Fund.
In the case of put options on currency futures written by a Fund, the
Fund will hold the aggregate exercise price in cash, U.S. Government securities,
or other high-grade liquid debt obligations in a segregated account with its
custodian, or own put options on currency futures or short currency futures,
with the difference, if any, between the market value of the put written and the
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market value of the puts purchased or the currency futures sold maintained by
the Fund in cash, U.S. Government securities, or other high-grade liquid debt
obligations in a segregated account with its custodian. If at the close of
business on any day the market value of the put options purchased or the
currency futures sold by a Fund falls below 100% of the market value of the put
options written by the Fund, the Fund will so segregate an amount of cash, U.S.
Government securities, or other high-grade liquid debt obligations equal in
value to the difference.
A Fund may not enter into currency futures contracts or related options
thereon if immediately thereafter the amount committed to margin plus the amount
paid for premiums for unexpired options on currency futures contracts exceeds 5%
of the market value of the Fund's total assets.
LIMITATIONS ON THE USE OF CURRENCY FUTURES CONTRACTS (AXA ROSENBERG
INTERNATIONAL EQUITY FUND AND AXA ROSENBERG GLOBAL MARKET NEUTRAL FUND). A
Fund's ability to engage in the currency futures transactions described above
will depend on the availability of liquid markets in such instruments. Markets
in currency futures are relatively new and still developing. It is impossible to
predict the amount of trading interest that may exist in various types of
currency futures. Therefore no assurance can be given that a Fund will be able
to utilize these instruments effectively for the purposes set forth above.
Furthermore, a Fund's ability to engage in such transactions may be limited by
tax considerations.
RISK FACTORS IN CURRENCY FUTURES TRANSACTIONS (AXA ROSENBERG
INTERNATIONAL EQUITY FUND AND AXA ROSENBERG GLOBAL MARKET NEUTRAL FUND).
Investment in currency futures contracts involves risk. Some of that risk may be
caused by an imperfect correlation between movements in the price of the futures
contract and the price of the currency being hedged. The hedge will not be fully
effective where there is such imperfect correlation. To compensate for imperfect
correlations, a Fund may purchase or sell futures contracts in a greater amount
than the hedged currency if the volatility of the hedged currency is
historically greater than the volatility of the futures contracts. Conversely, a
Fund may purchase or sell fewer contracts if the volatility of the price of the
hedged currency is historically less than that of the futures contracts. The
risk of imperfect correlation generally tends to diminish as the maturity date
of the futures contract approaches.
The successful use of transactions in futures and related options also
depends on the ability of the Adviser to forecast correctly the direction and
extent of exchange rate and stock price movements within a given time frame. It
is impossible to forecast precisely what the market value of securities a Fund
anticipates buying will be at the expiration or maturity of a currency forward
or futures contract. Accordingly, in cases where a Fund seeks to protect against
an increase in value of the currency in which the securities are denominated
through a foreign currency transaction, it may be necessary for the Fund to
purchase additional foreign currency on the spot market (and bear the expense of
such currency purchase) if the market value of the securities to be purchased is
less than the amount of foreign currency the Fund contracted to purchase.
Conversely, it may be necessary to sell on the spot market some of the foreign
currency received upon the sale of the portfolio security or securities if the
market value of such security or securities exceeds the value of the securities
purchased. When a Fund purchases forward or futures contracts (or options
thereon) to hedge against a possible increase in the price of currency in which
is denominated the securities the Fund anticipates purchasing, it is possible
that the market may instead decline. If a Fund does not then invest in such
-6-
<PAGE>
securities because of concern as to possible further market decline or for other
reasons, the Fund may realize a loss on the forward or futures contract that is
not offset by a reduction in the price of the securities purchased. As a result,
a Fund's total return for such period may be less than if it had not engaged in
the forward or futures transaction.
Foreign currency transactions that are intended to hedge the value of
securities a Fund contemplates purchasing do not eliminate fluctuations in the
underlying prices of those securities. Rather, such currency transactions simply
establish a rate of exchange which can be used at some future point in time.
Additionally, although these techniques tend to minimize the risk of loss due to
a change in the value of the currency involved, they tend to limit any potential
gain that might result from the increase in the value of such currency.
The amount of risk a Fund assumes when it purchases an option on a
currency futures contract is the premium paid for the option plus related
transaction costs. In addition to the correlation risks discussed above, the
purchase of an option also entails the risk that changes in the value of the
underlying futures contract will not be fully reflected in the value of the
option purchased.
The liquidity of a secondary market in a currency futures contract may be
adversely affected by "daily price fluctuation limits" established by commodity
exchanges which limit the amount of fluctuation in a futures contract price
during a single trading day. Once the daily limit has been reached in the
contract, no trades may be entered into at a price beyond the limit, thus
preventing the liquidation of open futures positions. Prices have in the past
exceeded the daily limit on a number of consecutive trading days.
A Fund's ability to engage in currency forward and futures transactions
may be limited by tax considerations.
SHORT SALES (AXA ROSENBERG GLOBAL MARKET NEUTRAL FUND). The Barr
Rosenberg Global Market Neutral Fund will 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. The
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 the Fund. Until
the security is replaced, the Fund is required to repay the lender any dividends
or interest that accrue during the period of the loan. To borrow the security,
the 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.
The Fund also will incur transaction costs in effecting short sales.
The 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. The 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 the Fund will be able to close out
a short position at any particular time or at an acceptable price.
-7-
<PAGE>
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. As disclosed in the Prospectus, high portfolio turnover
involves correspondingly greater brokerage commissions and other transaction
costs, which will be borne directly by the Funds, and could involve realization
of capital gains that would be taxable when distributed to shareholders of a
Fund. To the extent that portfolio turnover results in the realization of net
short-term capital gains, such gains are ordinarily taxed to shareholders at
ordinary income tax rates.
NOTICE ON SHAREHOLDER APPROVAL. Unless otherwise indicated in the
Prospectus or this Statement of Additional Information, the investment objective
and policies of each of the Funds may be changed without shareholder approval.
INVESTMENT RESTRICTIONS
Without a vote of the majority of the outstanding voting securities of a
Fund, the Trust will not take any of the following actions with respect to such
Fund:
(1) Borrow money in excess of 10% of the value (taken at the lower of
cost or current value) of the Fund's total assets (not including the amount
borrowed) at the time the borrowing is made, and then only from banks as a
temporary measure to facilitate the meeting of redemption requests (not for
leverage) which might otherwise require the untimely disposition of portfolio
investments or for extraordinary or emergency purposes or for payments of
variation margin. 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.
-8-
<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 Funds' 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.
(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.
-9-
<PAGE>
Unless otherwise indicated, all percentage limitations on investments set
forth herein and in the Prospectus will apply at the time of the making of an
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment.
The phrase "shareholder approval," as used in the Prospectus and herein,
and the phrase "vote of a majority of the outstanding voting securities," as
used herein, means the affirmative vote of the lesser of (1) more than 50% of
the outstanding shares of a Fund or the Trust, as the case may be, or (2) 67% or
more of the shares of a Fund or the Trust, as the case may be, present at a
meeting if more than 50% of the outstanding shares are represented at the
meeting in person or by proxy.
INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
The tax status of the Funds and the distributions which they may make are
summarized in the Prospectus under the headings "Distributions" and "Taxes." The
Funds intend to qualify each year as a regulated investment company under the
Internal Revenue Code of 1986, as amended. In order to qualify as a "regulated
investment company" and to qualify for the special tax treatment accorded
regulated investment companies and their shareholders, each Fund must, among
other things, (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to certain securities loans, gains from the sale
or other disposition of securities or foreign currencies or other income
(including but not limited to gains from options, futures or forward contracts)
derived with respect to its business of investing in such securities or
currencies; (b) diversify its holdings so that, at the close of each quarter of
its taxable year, (i) at least 50% of the value of its total assets consists of
cash, cash items, U.S. Government securities, securities of other regulated
investment companies, and other securities limited generally with respect to any
one issuer to not more than 5% of the total assets of such Fund and not more
than 10% of the outstanding voting securities of such issuer, and (ii) not more
than 25% of the value of its total assets is invested in the securities of any
issuer (other than U.S. Government securities or securities of other regulated
investment companies); and (c) distribute annually at least 90% of the sum of
its taxable net investment income, its net tax-exempt income (if any), and, the
excess, if any, of net short-term capital gains over net long-term capital
losses for such year. To the extent a Fund qualifies for treatment as a
regulated investment company, the Fund will not be subject to federal income tax
on income paid to its shareholders in the form of dividends or capital gain
distributions.
As described in the Prospectus under the heading "Distributions," each
Fund intends to pay out substantially all of its ordinary income and net
short-term capital gains, and to distribute substantially all of its net capital
gains, if any, after giving effect to any available capital loss carryover. Net
capital gain is the excess of net gains from assets held for more than one year
over net losses from capital assets held for not more than one year. In order to
avoid an excise tax imposed on certain undistributed income, a Fund must
distribute prior to each calendar year end without regard to the Fund's fiscal
year end (i) 98% of the Fund's ordinary income, (ii) 98% of the Fund's
capital gain net income, if any, realized in the one-year period ending on
October 31, and (iii) 100% of any undistributed income from prior years.
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
-10-
<PAGE>
to shareholders as such, regardless of how long a shareholder has held the
shares in the Fund. Distributions will be taxable as described above whether
received in cash or in shares through the reinvestment of distributions. The
dividends-received deduction for corporations will generally apply to a Fund's
dividends from investment income to the extent derived from dividends received
by the Fund from domestic corporations, provided the Fund and the shareholder
each meet the relevant holding period requirements.
Dividends and distributions on a Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of a particular shareholder's investment.
Such distributions are likely to occur in respect of shares purchased at a time
when a Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed.
Certain tax-exempt organizations or entities may not be subject to
federal income tax on dividends or distributions from a Fund. Each organization
or entity should review its own circumstances and the federal tax treatment of
its income.
Each Fund is generally required to withhold and remit to the U.S.
Treasury 31% of the taxable dividends and other distributions, whether
distributed in cash or reinvested in shares of the Fund, paid or credited to any
shareholder account for which an incorrect or no taxpayer identification number
has been provided or where the Fund is notified that the shareholder has
underreported income in the past (or the shareholder fails to certify that he is
not subject to such withholding). However, the general back-up withholding rules
set forth above will not apply to tax-exempt entities so long as each such
entity furnishes a Fund with an appropriate certificate.
The Internal Revenue Service recently revised its regulations
affecting the application to foreign investors of the back-up withholding and
withholding tax rules described above. The new regulations generally will
become effective for payments made after December 31, 2000. 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.
"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. The entry into a short sale, a
swap contract or a
-11-
<PAGE>
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 Trust's trustees oversee the general conduct of the Funds' business. The
Trustees and officers of the Trust and their principal occupations during the
past five years are as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Name (Age) Position with the Trust Principal Occupation
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Barr M. Rosenberg (56) Vice President Director of Research, AXA
Rosenberg Investment Management
LLC, January 1999 to present;
Chairman, AXA Rosenberg Group
LLC, January 1999 to present;
Director, Barr Rosenberg
Research Center LLC, January
1999 to present; Managing
General Partner and Chief
Investment Officer, Rosenberg
Institutional Equity Management,
January 1985 to December 1998.
- --------------------------------------------------------------------------------------------------------------------
Kenneth Reid* (49) Trustee Chief Executive Officer, AXA
Rosenberg Investment Management
LLC, January 1999 to present;
General Partner and Director of
Research, Rosenberg
Institutional Equity Management,
June 1986 to December 1998.
- --------------------------------------------------------------------------------------------------------------------
Marlis S. Fritz (49) Vice President Vice Chairman and Global
Marketing Director, AXA
Rosenberg Group LLC, January
1999 to present; Managing
Director AXA Rosenberg Global
Services LLC, January 1999 to
present; General Partner and
- --------------------------------------------------------------------------------------------------------------------
-12-
<PAGE>
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Director of Marketing, Rosenberg
Institutional Equity Management,
April 1985 to December 1998.
- --------------------------------------------------------------------------------------------------------------------
Nils H. Hakansson (61) Trustee Sylvan C. Coleman Professor of
Finance and Accounting, Haas
School of Business, University
of California, Berkeley, June
1969 to present; Director,
Supershare Services Corporation
(investment management), Los
Angeles, California, November
1989 to 1995.
- --------------------------------------------------------------------------------------------------------------------
William F. Sharpe (64) Trustee STANCO 25 Professor of Finance,
Stanford 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) Truste Professor of Finance and Real
Estate, Haas School of Business,
University of California,
Berkeley, California, July 1991
to present.
- --------------------------------------------------------------------------------------------------------------------
Po-Len Hew (32) Treasurer Director of Finance, AXA
Rosenberg Global Services LLC,
January 1999 to present; Chief
Financial Officer, Barr
Rosenberg Investment Management
Inc., April 1994 to December
1998; Accounting Manager,
Rosenberg Institutional Equity
Management, October 1989 to
December 1998.
- --------------------------------------------------------------------------------------------------------------------
Sara Ronan (39) Clerk Global Services Coordinator and
- --------------------------------------------------------------------------------------------------------------------
-13-
<PAGE>
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paralegal, AXA 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) Vice President Chief Operating Officer, AXA
Rosenberg Group LLC, January
1999 to present; Chief Executive
Officer, AXA Rosenberg Global
Services LLC, January 1999 to
present; Executive Vice
President, Barr Rosenberg
Investment Management, Inc. and
General Counsel to the Rosenberg
Group of companies, 1990 to
present.
- --------------------------------------------------------------------------------------------------------------------
Richard L. Saalfeld (55) President President and Chief Executive
Officer, Barr Rosenberg Mutual
Funds, a division of AXA
Rosenberg Investment Management
LLC, January 1999 to present;
President and Chief Executive
Officer of mutual fund unit of
Rosenberg Institutional Equity
Management, June 1996 to
December 1998; Consultant to
Rosenberg Institutional Equity
Management, September 1995 to
May 1996; Chairman and Chief
Executive Officer of CoreLink
Resources, Inc. (mutual fund
marketing organization),
Concord, California, April 1993
to August 1995; Consultant,
December 1992 to March 1993.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------------------
-14-
<PAGE>
* Trustee who is an "interested person" (as defined in the 1940 Act) of the
Trust or the Adviser.
The mailing address of each of the officers and Trustees is c/o Barr
Rosenberg Series Trust, 3435 Stelzer Road, Columbus, OH 43219.
The principal occupations of the officers and Trustees for the last five
years have been with the employers as shown above, although in some cases they
have held different positions with such employers.
The Trust pays the Trustees other than those who are interested persons
of the Trust or Adviser an annual fee of $45,540 plus $4,950 for each meeting
attended. The Trust does not pay any pension or retirement benefits for its
Trustees. The Trust does not pay any compensation to officers or Trustees of the
Trust other than those Trustees who are not interested persons of the Trust or
Adviser. The following table sets forth information concerning the total
compensation paid to each of the Trustees who are not interested persons of the
Trust or Adviser in the fiscal year ended March 31, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Name of Aggregate Pension or Estimated Total
Person, Compensation Retirement Annual Compensation
Position from Benefits Benefits upon from
Registrant Accrued as Retirement Registrant
Part of Fund and Fund
Expenses Complex* Paid
to Directors
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nils H.
Hakansson $68,145 $0 $0 $68,145
Trustee
- -------------------------------------------------------------------------------------------------------------------------
William F.
Sharpe Trustee $68,145 $0 $0 $68,145
- -------------------------------------------------------------------------------------------------------------------------
Dwight M.
Jaffee $29,947.50 $0 $0 $29,947.50
Trustee
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Prior to the introduction of the AXA Rosenberg Equity Enhanced Index
Fund, the AXA Rosenberg International Equity Fund and the AXA Rosenberg Global
Market Neutral Fund, the Fund Complex consisted of seven funds: the U.S. Small
Capitalization Series, the International Small Capitalization Series, the Japan
Series, the Barr Rosenberg Market Neutral Fund, the Barr Rosenberg Double Alpha
Market Fund, the Barr Rosenberg Select Sectors Market Neutral Fund and the Barr
Rosenberg VIT Market Neutral Fund.
Messrs. Rosenberg, Reid, Lyman and Saalfeld and Ms. Fritz, Ronan and Hew,
each being an officer or employee of the Adviser or its affiliates, will each
benefit from the management fees paid by the Trust to the Adviser, but receive
no direct compensation from the Trust.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISORY CONTRACTS. As disclosed in the Prospectus under the
heading "Management of the Trust," under management contracts (each a
"Management Contract") between the Trust, on behalf of each Fund, and AXA
Rosenberg Investment Management LLC (the "Adviser"), subject to the control of
the Trustees of the Trust and such policies as the Trustees may determine, the
-15-
<PAGE>
Adviser will furnish continuously an investment program for each Fund and will
make investment decisions on behalf of each Fund and place all orders for the
purchase and sale of portfolio securities. Subject to the control of the
Trustees, the Adviser furnishes office space and equipment, provides certain
bookkeeping and clerical services and pays all salaries, fees and expenses of
officers and Trustees of the Trust who are affiliated with the Adviser. As
indicated under "Portfolio Transactions -Brokerage and Research Services," the
Trust's portfolio transactions may be placed with broker-dealers which furnish
the Adviser, at no cost, certain research, statistical and quotation services of
value to the Adviser in advising the Trust or its other clients.
Each of the Funds has agreed to pay the Adviser a monthly management fee
at the annual percentage rate of the relevant Fund's average daily net assets
set forth in the Prospectus. The Adviser has informed the Trust that it will
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 (but in
any event at least through 3/31/01) so that each Fund's total annual operating
expenses (exclusive of nonrecurring account fees, extraordinary expenses and
dividends and interest paid on securities sold short) applicable to each class
will not exceed the percentage of each Fund's average daily net assets
attributable to that class as set forth in the Prospectus. In addition, the
Adviser's compensation under each Management Contract is subject to reduction to
the extent that in any year the expenses of a Fund (including investment
advisory fees but excluding taxes, portfolio brokerage commissions and any
distribution and shareholder service expenses paid by a class of shares of a
Fund pursuant to a distribution and shareholder service plan or otherwise)
exceed the limits on investment company expenses imposed by any statute or
regulatory authority of any jurisdiction in which shares of the Fund are
qualified for offer and sale.
Each Management Contract provides that the Adviser shall not be subject
to any liability to the Trust or to any shareholder of the Trust in connection
with the performance of its services thereunder in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties thereunder.
Each Management Contract will continue in effect for a period no more
than one year from the date of its execution, and renewals thereof must be
approved by (i) vote, cast in person at a meeting called for that purpose, of a
majority of those Trustees who are not "interested persons" of the Adviser or
the Trust, and by (ii) the majority vote of either the full Board of Trustees or
the vote of a majority of the outstanding shares of the relevant Fund. Each
Management Contract automatically terminates on assignment, and is terminable on
not more than 60 days' notice by the Trust to the Adviser. In addition, each
Management Contract may be terminated on not more than 60 days' written notice
by the Adviser to the Trust.
The Adviser is wholly owned by AXA Rosenberg Group LLC. AXA Rosenberg
Group LLC is contractually controlled by AXA-IM Rose Inc. AXA-IM Rose Inc. is
wholly owned by AXA-IM Holdings U.S. Inc. AXA-IM Holdings U.S. Inc. is wholly
owned by AXA Investment Managers S.A., a French societe anonyme, which, in turn,
is owned, collectively, by AXA Assurances IARD, S.A., a French societe anonyme,
and AXA-UAP, a French holding company. AXA Assurances IARD, S.A. is owned,
collectively, by AXA France Assurance, a French insurance holding company, and
UAP Incendie Accidents, a French casualty and insurance company, each of which,
in turn, is wholly owned by AXA-UAP. Finaxa, a French holding company,
-16-
<PAGE>
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.
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.
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.
DISTRIBUTOR AND DISTRIBUTION AND SHAREHOLDER SERVICE PLAN. As stated in
the Prospectus under the heading "Management of the Trust -- Distributor,"
Investor Shares, Class A Shares, Class B Shares and Class C 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 Distribution and Shareholder Service Plans (the "Plans")
described in the Prospectus, in connection with the distribution of Investor
Shares, Class A Shares, Class B Shares and Class C 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, Class A Shares, Class B Shares and
Class C Shares of the Trust, the Distributor receives certain distribution and
shareholder service fees from the Trust. Subject to the percentage limitation on
the distribution and shareholder service fee set forth in the Prospectus, the
distribution and shareholder service fee may be paid in respect of services
rendered and expenses borne in the past with respect to Investor Shares, Class A
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Shares, Class B Shares and Class C 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.
Each of the Plans may be terminated with respect to Investor Shares,
Class A Shares, Class B Shares or Class C 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 Plans
or the Distributor's Contract (the "Independent Trustees"), or by vote of a
majority of the outstanding voting securities of the relevant class. Any
change in the Plans that would materially increase the cost to Investor
Shares, Class A Shares, Class B Shares or Class C Shares requires approval by
holders of the relevant class of 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 Plans 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 Plans are 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, Class A Shares, Class B Shares or Class C 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 Plans 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 Plans 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 each of the Plans will provide
benefits to the Trust. The Trustees believe that the Plans will result in
greater sales and/or fewer redemptions of Investor Shares, Class A Shares,
Class B Shares and Class C Shares, although it is impossible to know for
certain the level of sales and redemptions of Investor Shares, Class A
Shares, Class B Shares or Class C Shares that would occur in the absence of
the Plans 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, Princeton, NJ 08540, for
the AXA Rosenberg Global Market Neutral Fund, and State Street Bank and Trust
Company, Boston, Massachusetts 02102, for the AXA Rosenberg Equity Enhanced
Index Fund and the AXA Rosenberg International Equity Fund, are the Trust's
custodians (each a "Custodian" and, collectively, the "Custodians"). As such,
each Custodian holds in safekeeping certificated securities and cash
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belonging to the Trust and, in such capacity, is the registered owner of
securities in book-entry form belonging to the relevant Fund. Upon instruction,
each Custodian receives and delivers cash and securities of the relevant 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
________________ LLP. _________________ LLP conducts an annual audit of the
Trust's financial statements, assists in the preparation of the Trust's federal
and state income tax returns and the Trust's filings with the Securities and
Exchange Commission, and consults with the Trust as to matters of accounting and
federal and state income taxation.
PORTFOLIO TRANSACTIONS
INVESTMENT DECISIONS. The purchase and sale of portfolio securities for
the Funds and for the other investment advisory clients of the Adviser are made
by the Adviser with a view to achieving each client's investment objective. For
example, a particular security may be purchased or sold on behalf of certain
clients of the Adviser even though it could also have been purchased or sold for
other clients at the same time.
Likewise, a particular security may be purchased on behalf of one or more
clients when the Adviser is selling the same security on behalf of one or more
other clients. In some instances, therefore, the Adviser, acting for one client
may sell indirectly a particular security to another client. It also happens
that two or more clients may simultaneously buy or sell the same security, in
which event purchases or sales are effected PRO RATA on the basis of cash
available or other equitable basis so as to avoid any one account's being
preferred over any other account.
BROKERAGE AND RESEARCH SERVICES. Transactions on stock exchanges and
other agency transactions involve the payment of negotiated brokerage
commissions. Such commissions vary among different brokers. There is generally
no stated commission in the case of securities traded in the over-the-counter
markets, but the price paid for such securities usually includes an undisclosed
dealer commission or mark up. In placing orders for the portfolio transactions
of a Fund, the Adviser will seek the best price and execution available, except
to the extent it may be permitted to pay higher brokerage commissions for
brokerage and research services as described below. The determination of what
may constitute best price and execution by a broker-dealer in effecting a
securities transaction involves a number of considerations, including, without
limitation, the overall net economic result to the Fund (involving price paid or
received and any commissions and other costs paid), the efficiency with which
the transaction is effected, the ability to effect the transaction at all where
a large block is involved, availability of the broker to stand ready to execute
possibly difficult transactions in the future and the financial strength and
stability of the broker. Because of such factors, a broker-dealer effecting a
transaction may be paid a commission higher than that charged by another
broker-dealer. Most of the foregoing are judgmental considerations.
Over-the-counter transactions often involve dealers acting for their own
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.
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Although the Adviser does not consider the receipt of research services
as a factor in selecting brokers to effect portfolio transactions for a Fund,
the Adviser will receive such services from brokers who are expected to handle a
substantial amount of a Fund's portfolio transactions. Research services may
include a wide variety of analyses, reviews and reports on such matters as
economic and political developments, industries, companies, securities and
portfolio strategy. The Adviser uses such research in servicing other clients as
well as the Trust.
As permitted by Section 28(e) of the Securities Exchange Act of 1934, as
amended, and subject to such policies as the Trustees of the Trust may
determine, the Adviser may pay an unaffiliated broker or dealer that provides
"brokerage and research services" (as defined in the Act) to the Adviser an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction.
The Funds may pay brokerage commissions to Donaldson Lufkin and Jenrette,
which may be deemed to be an "affiliate of an affiliate" of the Trust.
Securities and Exchange Commission rules require that commissions paid to an
affiliate of an affiliate by the Fund for portfolio transactions not exceed
"usual and customary" brokerage commissions. The rules define "usual and
customary" commissions to include amounts which are "reasonable and fair
compared to the commission, fee or other remuneration received or to be received
by other brokers in connection with comparable transactions involving similar
securities being purchased or sold on a securities exchange during a comparable
period of time." The Trustees, including those who are not "interested persons"
of the Trust, have adopted procedures for evaluating the reasonableness of
commissions paid to such affiliates and will review these procedures
periodically.
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
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Where:
T = Cumulative rate of return
ERV = Ending redeemable value of a hypothetical $1,000
investment made at the beginning of a period at the end
of such period.
The calculations of average annual total return and cumulative total
return assume that any dividends and distributions are reinvested immediately,
rather than paid to the investor in cash. The ending redeemable value (variable
"ERV" in each formula) is determined by assuming complete redemption of the
hypothetical investment and the deduction of all nonrecurring charges at the end
of the period covered by the computations.
Unlike bank deposits or other investments that pay a fixed yield or
return for a stated period of time, the return for each Fund will fluctuate from
time to time and does not provide a basis for determining future returns.
Average annual total return and cumulative return are based on many factors,
including market conditions, the composition of a Fund's portfolio and a Fund's
operating expenses.
Average annual total returns are calculated separately for Investor
Shares and Institutional Shares. Investor Shares and Institutional Shares are
subject to different fees and expenses and may have different performance for
the same period.
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
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
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hypothetical investment results in such communications. Such performance
examples will be based on an express set of assumptions and are not indicative
of the performance of a Fund.
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES
The Trust is a diversified open-end series investment company organized
as a Massachusetts business trust. A copy of the Agreement and Declaration of
Trust of the Trust, as amended (the "Declaration of Trust"), is on file with the
Secretary of The Commonwealth of Massachusetts. The fiscal year of the Trust
ends on March 31. The Trust changed its name to "Barr Rosenberg Series Trust"
from "Rosenberg Series Trust" on August 5, 1996.
Interests in the Trust's portfolios are currently represented by shares
of nine series, the AXA Rosenberg Equity Enhanced Index Fund, the AXA Rosenberg
International Equity Fund, the AXA Rosenberg Global Market Neutral Fund, the
Barr Rosenberg Market Neutral Fund, Barr Rosenberg Double Alpha Market Fund,
Barr Rosenberg Select Sectors Market Neutral Fund, U.S. Small Capitalization
Series, International Small Capitalization Series and Japan Series, issued
pursuant to the Declaration of Trust. The rights of shareholders and powers of
the Trustees of the Trust with respect to such shares are described in the
Prospectus.
Each Fund is further divided into five classes of shares designated as
Institutional Shares, Investor Shares, Class A Shares, Class B Shares and Class
C Shares. Each class of shares of each Fund represents interests in the assets
of the Fund and has identical dividend, liquidation and other rights and the
same terms and conditions except that expenses, if any, related to the
distribution and shareholder servicing of a particular class are borne solely by
such class and each class may, at the discretion of the Trustees of the Trust,
also pay a different share of other expenses, not including advisory or
custodial fees or other expenses related to the management of the Trust's
assets, if these expenses are actually incurred in a different amount by that
class, or if the class receives services of a different kind or to a different
degree than the other classes. All other expenses are allocated to each class on
the basis of the net asset value of that class in relation to the net asset
value of the particular Fund.
The Declaration of Trust provides for the perpetual existence of the
Trust. The Trust may, however, be terminated at any time by vote of at least
two-thirds of the outstanding shares of each series of the Trust.
VOTING RIGHTS. Shareholders are entitled to one vote for each full share
held (with fractional votes for fractional shares held) and will vote (to the
extent provided herein) in the election of Trustees and the termination of the
Trust and on other matters submitted to the vote of shareholders. Shareholders
will vote by individual series on all matters except (i) when required by the
1940 Act, shares shall be voted in the aggregate and not by individual series,
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
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each class has exclusive voting rights on any matter submitted to shareholders
that relates solely to that class, and has separate voting rights on any matter
submitted to shareholders in which the interests of one class differ from the
interests of any other class. Each class of shares has exclusive voting rights
with respect to matters pertaining to any distribution and shareholder service
plan applicable to that class. All classes of shares of a Fund will vote
together, except with respect to any distribution and shareholder service plan
applicable to a class or when a class vote is required as specified above or
otherwise by the 1940 Act.
There will normally be no meetings of shareholders for the purpose of
electing Trustees, except that in accordance with the 1940 Act (i) the Trust
will hold a shareholders' meeting for the election of Trustees at such time as
less than a majority of the Trustees holding office have been elected by
shareholders, and (ii) if, as a result of a vacancy in the Board of Trustees,
less than two-thirds of the Trustees holding office have been elected by the
shareholders, that vacancy may only be filled by a vote of the shareholders. In
addition, Trustees may be removed from office by a written consent signed by the
holders of two-thirds of the outstanding shares and filed with the Trust's
custodian or by a vote of the holders of two-thirds of the outstanding shares at
a meeting duly called for the purpose, which meeting shall be held upon the
written request of the holders of not less than 10% of the outstanding shares.
Upon written request by the holders of at least 1% of the outstanding shares
stating that such shareholders wish to communicate with the other shareholders
for the purpose of obtaining the signatures necessary to demand a meeting to
consider removal of a Trustee, the Trust has undertaken to provide a list of
shareholders or to disseminate appropriate materials (at the expense of the
requesting shareholders). Except as set forth above, the Trustees shall continue
to hold office and may appoint successor Trustees. Voting rights are not
cumulative.
No amendment may be made to the Declaration of Trust without the
affirmative vote of a majority of the outstanding shares of the Trust except (i)
to change the Trust's name or to cure technical problems in the Declaration of
Trust and (ii) to establish, designate or modify new and existing series,
sub-series or classes of shares of any series of Trust shares or other
provisions relating to Trust shares in response to applicable laws or
regulations.
SHAREHOLDER AND TRUSTEE LIABILITY. Under Massachusetts law, shareholders
could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Declaration of Trust disclaims
shareholder liability for acts or obligations of the Trust and requires that
notice of such disclaimer be given in each agreement, obligation, or instrument
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,
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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.
The officers and Trustees of the Trust, as a group, own less than 1% of
any class of outstanding shares of the Funds. The officers and Trustees of the
Trust, as a group, own more than 1% of the securities of certain classes of
outstanding shares of the Trust's other funds. For specific information in this
regard, see the prospectus for the Trust's U.S. Small Capitalization Series,
International Small Capitalization Series and Japan Series.
DETERMINATION OF NET ASSET VALUE
As indicated in the Prospectus, the net asset value of each Fund share is
determined on each day on which the New York Stock Exchange is open for trading.
The Trust expects that the days, other than weekend days, that the New York
Stock Exchange will not be open are Christmas Day, New Year's Day, Martin Luther
King's Day, President's Day, Good Friday, Memorial Day, Independence Day
(observed), Labor Day and Thanksgiving Day.
Portfolio securities listed on a securities exchange for which market
quotations are available are valued at the last quoted sale price on each
business day, or, if there is no such reported sale, at the most recent quoted
bid price for long securities and the most recent quoted ask price for
securities sold short. Price information on listed securities is generally taken
from the closing price on the exchange where the security is primarily traded.
Unlisted securities for which market quotations are readily available are valued
at the most recent quoted bid price for long securities and the most recent
quoted ask price for securities sold short, except that debt obligations with
sixty days or less remaining until maturity may be valued at their amortized
cost. Exchange-traded options on futures are valued at the settlement price as
determined by the appropriate clearing corporation. Futures contracts are valued
by comparing the gain or loss by reference to the current settlement price as
determined by the appropriate clearing corporation. Other assets and securities
for which no quotations are readily available are valued at fair value as
determined in good faith by the Trustees of the Trust or by persons acting at
their direction.
PURCHASE AND REDEMPTION OF SHARES
The procedures for purchasing shares of each of the Funds and for
determining the offering price of such shares are described in the Prospectus.
The Trust has elected to be governed by Rule 18f-1 under the 1940 Act pursuant
to which the Trust is obligated to redeem shares solely in cash for any
shareholder during any 90-day period up to the lesser of (i) $250,000 or (ii) 1%
of the total net asset value of the Trust at the beginning of such period. The
procedures for redeeming shares of each of the Funds are described in the
Prospectus.
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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.
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PART C
OTHER INFORMATION --
THE AXA ROSENBERG EQUITY ENHANCED INDEX FUND,
THE AXA ROSENBERG INTERNATIONAL EQUITY FUND, AND
THE AXA ROSENBERG GLOBAL 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 -- incorporated by
reference to Post-Effective Amendment No. 24 to the Registration
Statement filed on May 28, 1999;
(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 AXA
Rosenberg Equity Enhanced Index Fund and AXA Rosenberg Investment
Management LLC - to be filed by amendment;
(2) Management Contract between the Registrant on behalf of its AXA
Rosenberg International Equity Fund and AXA Rosenberg Investment
Management LLC -- to be filed by amendment;
(3) Management Contract between the Registrant on behalf of its AXA
Rosenberg Global Market Neutral Fund and AXA Rosenberg Investment
Management LLC -- to be filed by amendment;
(e) Amended and Restated Distributor's Contract between the Registrant and
Barr Rosenberg Funds Distributor, Inc. -- incorporated by reference to
Post-Effective Amendment No. 19 to the Registration Statement filed on
July 29, 1998;
(f) None;
(g) (1) Custody Agreement between the Registrant and Custodial Trust
Company -- incorporated by reference to Post-Effective Amendment
No. 19 to the Registration Statement filed on July 29, 1998;
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(2) Custody Agreement between the Registrant and State Street Bank and
Trust Company - to be filed by amendment;
(3) 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;
(4) 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 Funds -- to be filed by amendment;
(3) 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 - to be filed by amendment;
(j) Consent of __________________ LLP -- 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) (1) Amended and Restated Distribution and Shareholder Service Plan for
Investor shares -- to be filed by amendment;
(2) Amended and Restated Distribution and Shareholder Service Plan for
Class A, Class B and Class C shares - to be filed by amendment;
(n) Financial Data Schedule for Registrant's fiscal year ended
March 31, 2000 -- to be filed by amendment;
(o) Further Amended and Restated Multi-Class Plan -- to be filed by
amendment;
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(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 -- incorporated by reference
to Post-Effective Amendment No. 24 to the Registration Statement
filed on May 28, 1999.
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, 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
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its Shareholders by reason of willful 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 willful 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 willful 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 willful 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 willful
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
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exempted from being an "interested person" by any rule, regulation or
order of the Commission ) and against whom none of such actions, suits or
other proceedings or another action, suit or other proceeding on the same
or similar grounds is then or has been pending. Nothing contained in this
Article shall affect any rights to indemnification to which personnel of
the Trust, other than Trustees or officers, and other persons may be
entitled by contract or otherwise under law, nor the power of the Trust
to purchase and maintain liability insurance on behalf of any such
person; provided, however, that the Trust shall not purchase or maintain
any such liability insurance in contravention of applicable law,
including without limitation the 1940 Act.
SECTION 4. SHAREHOLDERS. In case any Shareholder or former
Shareholder shall be held to be personally liable solely by reason of his
or her being or having been a Shareholder and not because of his or her
acts or omissions or for some other reason, the Shareholder or former
Shareholder (or his or her heirs, executors, administrators or other
legal representatives or in the case of a corporation or other entity,
its corporate or other general successor) shall be entitled to be held
harmless from and indemnified against all loss and expense arising from
such liability, but only out of the assets of the particular series of
Shares of which he or she is or was a Shareholder."
(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:
Name and Position with Adviser Business and Other Connections
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
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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 Officer 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.
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.
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(b) Information with respect to the Distributor's directors and officers is
as follows:
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ --------------------- ---------------------
David J. Huber President None
Lynn J. Mangum Director, Chairman None
Kevin J. Dell Vice President, Secretary None
Michael D. Burns Vice President, Chief None
Financial Officer
Robert J. McMullan Vice President, Director, None
Treasurer
The business address of all directors and officers of the Distributor is 90 Park
Avenue, New York, NY 10016.
(c) None
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940, as amended, and the rules
thereunder will be maintained at the offices of:
1. Barr Rosenberg Series Trust
3435 Stelzer Road
Columbus, Ohio 43219
Rule 31a-1 (b)(1),(2),(3), (4), (5), (6), (7), (8), (9), (10), (11)
Rule 31a-2 (a)
2. AXA Rosenberg Investment Management LLC
Four Orinda Way
Building E
Orinda, CA 94563
Rule 31a-1 (f)
Rule 31a-2 (e)
3. Barr Rosenberg Funds Distributor, Inc.
90 Park Avenue
New York, NY 10016
Rule 31a-1 (d)
Rule 31a-2 (c)
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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.
NOTICE
A copy of the Agreement and Declaration of Trust, as amended, of the
Registrant is on file with the Secretary of The Commonwealth of Massachusetts
and notice is hereby given that this instrument is executed on behalf of the
Registrant by an officer of the Registrant as an officer and not individually
and that the obligations of or arising out of this instrument are not binding
for any of the trustees or shareholders individually but are binding only upon
the assets and property of the Registrant.
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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. 30 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 15th day of February, 2000.
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 15th day of February, 2000.
SIGNATURE TITLE DATE
--------- ----- ----
KENNETH REID Trustee February 15, 2000
------------
Kenneth Reid
Po-Len Hew* Treasurer (principal February 15, 2000
---------- financial and accounting
Po-Len Hew officer)
William F. Sharpe* Trustee February 15, 2000
-----------------
William F. Sharpe
Nils H. Hakansson* Trustee February 15, 2000
-----------------
Nils H. Hakansson
Dwight M. Jaffee* Trustee February 15, 2000
----------------
Dwight M. Jaffee
*By: KENNETH REID
------------
Kenneth Reid
Attorney-in-Fact
Date: February 15, 2000
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