<PAGE>
As filed with the Securities and Exchange Commission on May 31, 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. 32 / X /
----
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / X /
----
Amendment No. 35 / 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):
/ / Immediately upon filing pursuant to paragraph (b) / / On (date)
pursuant to paragraph (b)
/ X / 60 days after filing pursuant to paragraph (a)(1) / / On (date)
pursuant to paragraph (a)(1)
/ ___ / 75 days after filing pursuant to (a)(2) / / On (date)
<PAGE>
pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
BARR ROSENBERG SERIES TRUST
AXA ROSENBERG US SMALL CAPITALIZATION FUND
AXA ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
AXA ROSENBERG JAPAN FUND
AXA ROSENBERG VALUE MARKET NEUTRAL FUND
AXA ROSENBERG DOUBLE ALPHA MARKET FUND
AXA ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND
AXA ROSENBERG ENHANCED 500 FUND
AXA ROSENBERG INTERNATIONAL EQUITY FUND
AXA ROSENBERG MULTI-STRATEGY MARKET NEUTRAL FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219
1-800-555-5737 (INSTITUTIONAL SHARES)
1-800-447-3332 (INVESTOR, CLASS A, CLASS B AND CLASS C SHARES)
JULY 31, 2000
Barr Rosenberg Series Trust is an open-end management investment company
offering nine diversified portfolios with different investment objectives and
strategies, the AXA Rosenberg U.S. Small Capitalization Fund, AXA Rosenberg
International Small Capitalization Fund, AXA Rosenberg Japan Fund,
AXA Rosenberg Value Market Neutral Fund, AXA Rosenberg Double Alpha Market Fund,
AXA Rosenberg Select Sectors Market Neutral Fund, AXA Rosenberg Enhanced
500 Fund, AXA Rosenberg International Equity Fund and AXA Rosenberg
Multi-Strategy Market Neutral Fund. Each Fund's investment adviser is
AXA Rosenberg Investment Management LLC.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIME.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
RISK/RETURN SUMMARY....................................................... 3
AXA ROSENBERG U.S. SMALL CAPITALIZATION FUND............................ 3
AXA ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND................... 6
AXA ROSENBERG JAPAN FUND................................................ 9
AXA ROSENBERG VALUE MARKET NEUTRAL FUND................................. 12
AXA ROSENBERG DOUBLE ALPHA MARKET FUND.................................. 15
AXA ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND........................ 18
AXA ROSENBERG ENHANCED 500 FUND......................................... 21
AXA ROSENBERG INTERNATIONAL EQUITY FUND................................. 22
AXA ROSENBERG MULTI-STRATEGY MARKET NEUTRAL FUND........................ 23
FEES AND EXPENSES......................................................... 25
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES................. 39
PRINCIPAL RISKS........................................................... 47
CERTAIN ADDITIONAL INVESTMENT TECHNIQUES AND RELATED RISKS................ 52
MANAGEMENT DISCUSSION OF FUND PERFORMANCE................................. 55
THE ADVISER'S GENERAL INVESTMENT PHILOSOPHY............................... 62
MANAGEMENT OF THE TRUST................................................... 65
MULTIPLE CLASSES.......................................................... 70
PURCHASING SHARES......................................................... 74
IRA ACCOUNTS.............................................................. 76
REDEMPTION OF SHARES...................................................... 76
EXCHANGING SHARES......................................................... 78
HOW THE TRUST PRICES SHARES OF THE FUNDS.................................. 79
DISTRIBUTIONS............................................................. 80
TAXES..................................................................... 81
OTHER INFORMATION......................................................... 82
</TABLE>
2
<PAGE>
RISK/RETURN SUMMARY
The following is a summary of certain key information about the AXA
Rosenberg U.S. Small Capitalization Fund, AXA Rosenberg International Small
Capitalization Fund, AXA Rosenberg Japan Fund, AXA Rosenberg Value Market
Neutral Fund, AXA Rosenberg Double Alpha Market Fund, AXA Rosenberg Select
Sectors Market Neutral Fund, AXA Rosenberg Enhanced 500 Fund, AXA Rosenberg
International Equity Fund and AXA Rosenberg Multi-Strategy Market Neutral Fund
(each a "Fund" and, collectively, the "Funds"). 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 . You can find more detailed descriptions of 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.
- The investment objective and policies of each of the Funds may be changed
without shareholder approval.
AXA ROSENBERG U.S. SMALL CAPITALIZATION FUND
INVESTMENT OBJECTIVE
The Fund seeks a return greater than that of the Russell 2000 Index. The
Russell 2000 Index consists of the smallest 2000 securities in the Russell 3000
Index. Widely regarded in the industry as the premier measure of small
capitalization stocks, the Russell 2000 Index represents approximately % of
the Russell 3000 Index total market capitalization.
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund invests primarily in equity securities of smaller companies that
are traded principally in the markets of the United States. At all times, at
least 65% of the Fund's total assets will be invested in these small
capitalization securities. The Fund will place relatively greater emphasis on
capital appreciation than on current income.
The Adviser uses fundamental and quantitative investment principals to
determine which securities to buy and sell. Using these principals, the Adviser
employs a bottom-up approach based on two stock selection models: (1) an
appraisal model, which estimates a fair value for each company in the Adviser's
database based on various fundamental data and (2) a near-term prospects model,
which estimates year-ahead earnings based on fundamental data as well as
investor sentiment data such as analysts' earnings estimates and broker buy/
sell recommendations. These models tend to produce a "value" style of investment
by favoring securities believed to be selling below a price that would
accurately value the underlying company. The appraisal model is more likely to
identify stocks that have low trading activity and lower price-to-earnings and
price-to-book
3
<PAGE>
ratios as attractive for purchase. Conversely, the model will tend to identify
high trading activity stocks and stocks with high forecasted earnings growth as
less attractive for purchase.
SUMMARY OF PRINCIPAL RISKS
As with any stock mutual fund, you may lose money if you invest in the Fund.
Among the principal risks that could adversely affect the value of the Fund's
shares and cause you to lose money on your investment are:
INVESTMENT RISKS. The value of Fund shares may increase or decrease
depending on external conditions affecting the Fund's portfolio. These
conditions depend upon market, economic, political, regulatory and other
factors.
MANAGEMENT RISK. Any actively managed investment portfolio is subject to
the risk that its investment adviser will make poor stock selections. The Funds'
investment adviser, AXA Rosenberg Investment Management LLC (the "Adviser") will
apply its investment techniques and risk analyses in making investment decisions
for the Fund, but there can be no guarantee that they will produce the desired
results.
SMALLER COMPANY RISK. Market risk is particularly pronounced for this Fund
because it invests a significant percentage of its assets in the stocks of
companies with relatively small market capitalizations. These companies may have
limited product lines, markets or financial resources or may depend on a few key
employees.
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page .
PERFORMANCE INFORMATION
The Fund's past performance is not necessarily indicative of its future
performance.
4
<PAGE>
YEARLY PERFORMANCE (%) -- INSTITUTIONAL SHARES
This chart provides some indication of the risks of investing in the Fund by
showing changes in the Fund's performance from year to year.
[To be updated]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
YEARLY PERFORMANCE
CALENDAR YEAR END ANNUAL RETURN (%)
<S> <C>
1990 -19.88%
1991 34.45%
1992 22.00%
1993 22.50%
1994 5.41%
1995 38.18%
1996 26.53%
1997 30.63%
1998 -4.03%
</TABLE>
During all periods shown in the bar graph, the Fund's highest quarterly
return was %, for the quarter ended , and its lowest quarterly return
was %, for the quarter ended .
PERFORMANCE TABLE [To be updated.]
This table shows how the Fund's performance compares with the returns of a
broad based securities market index.
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 1999)
<TABLE>
<CAPTION>
PAST ONE PAST FIVE PAST 10 SINCE SINCE
YEAR YEARS YEARS INCEPTION* INCEPTION*
-------- --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Institutional Shares............................ % % %
Investor Shares................................. % %
Adviser Shares.................................. % %
Russell 2000 Index.............................. % % % %** %***
</TABLE>
------------------------
* Inception Dates: 10/22/96 for Investor shares; and 1/21/97 for Adviser
shares.
** The Russell 2000 consists of the smallest 2000 securities in the Russell
3000 Index. (The Russell 3000 Index represents approximately 98% of the
investable U.S. equity market.) The Russell 2000 Index,
5
<PAGE>
widely regarded in the industry as the premier measure of small
capitalization stocks, represents approximately 11% of the Russell 3000
Index total market capitalization.
For the period January 1, 2000 through March 31, 2000, the aggregate
(non-annualized) total returns of Institutional Shares, Investor Shares and
Adviser Shares were %, % and %, respectively. Index return for that
period was %.
AXA ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
INVESTMENT OBJECTIVE
The Fund seeks a return greater than that of the Casenove Rosenberg Global
Smaller Companies Index excluding the United States ("CRIexUS"). The CRlexUS is
an unmanaged index of non-U.S. companies with market capitalizations up to $
billion.
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund invests primarily in equity securities of smaller companies that
are traded principally in markets outside the United States with market
capitalizations of between $ million and $ billion at the time of purchase
by the Fund. Under normal circumstances, the Fund invests at least 90% of its
net assets in these international small capitalization companies. The Fund will
place relatively greater emphasis on capital appreciation than on current
income. The Adviser selects stocks for investment based on certain selection
models that are described further back in this Prospectus.
The Adviser uses fundamental and quantitative investment principals to
determine which securities to buy and sell. Using these principals, the Adviser
employs a bottom-up approach based on two stock selection models (1) an
appraisal model, which estimates a fair value for each company in the Adviser's
database based on various fundamental data and (2) a near-term prospects model,
which estimates year-ahead earnings based on fundamental data as well as
investor sentiment data such as analysts' earnings estimates and broker buy/
sell recommendations. These models tend to produce a "value" style of investment
by favoring securities believed to be selling below a price that would
accurately value the underlying company. The appraisal model is more likely to
identify stocks that have low trading activity and lower price-to-earnings and
price-to-book ratios as attractive for purchase. Conversely, the model will tend
to identify high trading activity stocks and stocks with high forecasted
earnings growth as less attractive for purchase.
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.
6
<PAGE>
MANAGEMENT RISK. Any actively managed investment portfolio is subject to
the risk that its investment adviser will make poor stock selections. The
Adviser will apply its investment techniques and risk analyses in making
investment decisions for the Fund, but there can be no guarantee that they will
produce the desired results.
SMALLER COMPANY RISK. Market risk is particularly pronounced for this Fund
because it invests a significant percentage of its assets in the stocks of
companies with relatively small market capitalizations. These companies may have
limited product lines, markets or financial resources or may depend on a few key
employees.
FOREIGN INVESTMENT RISK. As a result of its foreign investments, the Fund
may experience more rapid and extreme changes in value than funds that invest
solely in securities of U.S. companies. This is because the securities markets
of many foreign countries are relatively small, with a limited number of
companies representing a small number of industries. Additionally, issuers of
foreign securities are usually not subject to the same degree of regulation as
U.S. issuers. Reporting, accounting and auditing standards of foreign countries
differ, in some cases significantly, from U.S. standards. Also, nationalization,
expropriation or confiscatory taxation, currency blockage, political changes or
diplomatic developments could adversely affect the Fund's investments in a
foreign country.
CURRENCY RISK. As a result of its investments in securities denominated in,
and/or receiving revenues in, foreign currencies, the Fund will be subject to
currency risk. This is the risk that those currencies will decline in value
relative to the U.S. Dollar, or, in the case of hedging positions, that the U.S.
Dollar will decline in value relative to the currency hedged. In either event,
the dollar value of these types of investments would be adversely affected.
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page .
PERFORMANCE INFORMATION
The Fund's past performance is not necessarily indicative of its future
performance.
7
<PAGE>
YEARLY PERFORMANCE(%) -- INSTITUTIONAL SHARES
This chart provides some indication of the risks of investing in the Fund by
showing changes in the Fund's performance from year to year.
[To be updated.]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
YEARLY PERFORMANCE
<TABLE>
<CAPTION>
CALENDAR YEAR END ANNUAL RETURN (%)
<S> <C>
1997
1998
</TABLE>
During all periods shown in the bar graph, the Fund's highest quarterly
return was %, for the quarter ended , and its lowest quarterly return
was %, for the quarter ended .
PERFORMANCE TABLE [To be updated.]
This table shows how the Fund's performance compares with the returns of an
index of funds with similar investment objectives and the returns of a broad
based securities market index.
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 1999)
<TABLE>
<CAPTION>
PAST ONE SINCE SINCE
YEAR INCEPTION* INCEPTION*
-------- ---------- ----------
<S> <C> <C> <C>
Institutional Shares........................................ % % %
Investor Shares............................................. % %
Salomon Smith Barney World ex US EMI........................ % % %
CRIexUS Index**............................................. % % %
</TABLE>
------------------------
* Inception Dates: 9/23/96 for Institutional shares and 10/29/96 for Investor
shares.
** The Cazenove Rosenberg Global Smaller Companies Index excluding the U.S.
(CRlexUS) is the benchmark for the AXA Rosenberg International Small
Capitalization Fund. It is an unmanaged index of non-U.S. companies with
market capitalizations up to $ billion. The index includes 21 developed
countries: Australia, Austria, Belgium, Canada, Denmark, Finland, France,
Germany, Hong Kong,
8
<PAGE>
Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal,
Singapore, Spain, Sweden, Switzerland and U.K. Investors cannot invest
directly in any Index.
For the period January 1, 2000 through March 31, 2000, the aggregate
(non-annualized) total returns of Institutional Shares and Investor Shares were
% and %, respectively. Returns for the Salomon Smith Barney World ex US
EMI and the CRIexUS Index for that period were % and %, respectively.
AXA ROSENBERG JAPAN FUND
INVESTMENT OBJECTIVE
The Fund seeks a return greater than that of the Tokyo Stock Price Index
("TOPIX"). TOPIX is a capitalization-weighted index of all stocks in the First
Section of the Tokyo Stock Exchange.
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund invests primarily in the common stocks of Japanese companies that
are listed and traded on any of the eight Japanese exchanges or traded over the
counter. The Fund may also invest in other Japanese securities, such as
convertible preferred stock or debentures, and may purchase futures contracts or
options on futures contracts on the Tokyo Stock Price Index or the NIKKEI 225
Index. At all times, at least 65% of the Fund's total assets will be invested in
Japanese securities. The Adviser may hedge up to 100% of the Fund's total assets
against a possible decline in the Japanese Securities market by utilizing
futures and options on futures on Japanese stock indices. The Adviser selects
stocks for investment based on certain selection models that are described
further back in this Prospectus.
The Adviser uses fundamental and quantitative investment principals to
determine which securities to buy and sell. Using these principals, the Adviser
employs a bottom-up approach based on two stock selection models (1) an
appraisal model, which estimates a fair value for each company in the Adviser's
database based on various fundamental data and (2) a near-term prospects model,
which estimates year-ahead earnings based on fundamental data as well as
investor sentiment data such as analysts' earnings estimates and broker buy/
sell recommendations. These models tend to produce a "value" style of investment
by favoring securities believed to be selling below a price that would
accurately value the underlying company. The appraisal model is more likely to
identify stocks that have low trading activity and lower price-to-earnings and
price-to-book ratios as attractive for purchase. Conversely, the model will tend
to identify high trading activity stocks and stocks with high forecasted
earnings growth as less attractive for purchase.
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.
9
<PAGE>
MANAGEMENT RISK. Any actively managed investment portfolio is subject to
the risk that its investment adviser will make poor stock selections. The
Adviser will apply its investment techniques and risk analyses in making
investment decisions for the Fund, but there can be no guarantee that they will
produce the desired results.
FOREIGN INVESTMENT RISK. As a result of its foreign investments, the Fund
may experience more rapid and extreme changes in value than funds that invest
solely in securities of U.S. companies. Additionally, issuers of foreign
securities are usually not subject to the same degree of regulation as U.S.
issuers. Reporting, accounting and auditing standards of foreign countries
differ, in some cases significantly, from U.S. standards. Also, nationalization,
expropriation or confiscatory taxation, currency blockage, political changes or
diplomatic developments could adversely affect the Fund's investments in a
foreign country.
RISKS OF INVESTING IN JAPANESE SECURITIES. Unlike other mutual funds which
invest in the securities of many countries, the Fund will invest almost
exclusively in Japanese Securities. In addition to the risks associated with
investing in foreign securities generally, investments in the Fund will be
subject to the market risk associated with investing almost exclusively in
stocks of companies which are subject to Japanese economic factors and
conditions. Since the Japanese economy is dependent to a significant extent on
foreign trade, the relationships between Japan and its trading partners and
between the yen and other currencies are expected to have a significant impact
on particular Japanese companies and on the Japanese economy generally.
CURRENCY RISK. As a result of its investments in securities denominated in,
and/or receiving revenues in, foreign currencies, the Fund will be subject to
currency risk. This is the risk that those currencies will decline in value
relative to the U.S. Dollar, or, in the case of hedging positions, that the U.S.
Dollar will decline in value relative to the currency hedged. In either event,
the dollar value of these types of investments would be adversely affected.
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page .
PERFORMANCE INFORMATION
The Fund's past performance is not necessarily indicative of its future
performance.
10
<PAGE>
YEARLY PERFORMANCE (%) -- INSTITUTIONAL SHARES
This chart provides some indication of the risks of investing in the Fund by
showing changes in the Fund's performance from year to year.
[To be Updated.]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
YEARLY PERFORMANCE
<TABLE>
<CAPTION>
CALENDAR YEAR END ANNUAL RETURN (%)
<S> <C>
1990 -29.75%
1991 3.57%
1992 -21.57%
1993 21.73%
1994 25.59%
1995 0.10%
1996 -19.09%
1997 -34.75%
1998 5.65%
</TABLE>
During all periods shown in the bar graph, the Fund's highest quarterly
return was %, for the quarter ended , and its lowest quarterly return
was %, for the quarter ended .
PERFORMANCE TABLE [To be updated.]
This table shows how the Fund's performance compares with the returns of a
broad based securities market index.
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 1999)
<TABLE>
<CAPTION>
PAST ONE PAST FIVE PAST TEN SINCE
YEAR YEARS YEARS INCEPTION*
-------- --------- -------- ----------
<S> <C> <C> <C> <C>
Institutional Shares..................................... % % %
Investor Shares.......................................... % %
TOPIX**.................................................. % % % %
</TABLE>
------------------------
* Inception Date: 10/22/96 for Investor shares.
** The Tokyo Stock Price Index is a capitalization-weighted index of all stocks
in the First Section of the Tokyo Stock Exchange.
11
<PAGE>
For the period January 1, 2000 through March 31, 2000, the aggregate
(non-annualized) total returns of Institutional Shares and Investor Shares were
% and %, respectively. Index return for that period was %.
AXA ROSENBERG VALUE MARKET NEUTRAL FUND
INVESTMENT OBJECTIVE
The Fund seeks to increase the value of your investment in bull markets and
in bear markets through strategies designed to maintain limited net exposure to
general equity market risk. 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
Adviser believes are overvalued. The Fund seeks to have approximately equal
dollar amounts invested in long and short positions. The Fund invests in small
and mid-capitalization stocks that are principally traded in the markets of the
United States.
By buying and selling short different stocks, the Fund attempts to limit the
effect on its performance of and the risk associated with general U.S. 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 Adviser uses fundamental and quantitative investment principles to
determine which securities to buy, sell and sell short. Using these principles,
the Adviser employs a bottom-up approach based on two stock selection models:
(1) an appraisal model, which estimates a fair value for each company in the
Adviser's database based on various fundamental data and (2) a near-term
prospects model, which estimates year-ahead earnings based on fundamental data
as well as investor sentiment data such as analysts' earnings estimates and
broker buy-sell recommendations. These models tend to produce a "value" style of
investment by favoring securities believed to be selling below a price that
would accurately value the underlying company. The appraisal model is more
likely to identify stocks that have low trading activity and lower
price-to-earnings and price-to-book ratios as attractive for purchase.
Conversely, the model will tend to identify high trading activity stocks and
stocks with high forecasted earnings growth as less attractive for purchase.
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.
12
<PAGE>
MANAGEMENT RISK. Any actively managed investment portfolio is subject to
the risk that its investment adviser will make poor stock selections. Because
the Adviser could make poor investment decisions about both the long and the
short positions of the Fund, the Fund's potential losses exceed those of
conventional stock mutual funds that hold only long portfolios.
PORTFOLIO RISK. Although the Fund seeks to have approximately equal dollar
amounts invested in long and short positions, there is a risk that the Adviser
will fail to construct a portfolio of long and short positions that has limited
exposure to general U.S. stock market movements, capitalization or other risk
factors.
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.
SMALL AND MID-SIZE COMPANY RISK. The Fund is subject to additional risk
because it invests primarily 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.
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page .
PERFORMANCE INFORMATION
The Fund's past performance is not necessarily indicative of its future
performance.
13
<PAGE>
YEARLY PERFORMANCE (%) -- INSTITUTIONAL SHARES
This chart provides some indication of the risks of investing in the Fund by
showing changes in the Fund's performance from year to year.
[To be updated.]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
YEARLY PERFORMANCE
CALENDAR YEAR END ANNUAL RETURN (%)
<S> <C>
1998 0.71%
</TABLE>
During all periods shown in the bar graph, the Fund's highest quarterly
return was %, for the quarter ended , and its lowest quarterly return
was %, for the quarter ended .
PERFORMANCE TABLE [To be updated.]
This table shows how the Fund's performance compares with the returns of
3-Month U.S. Treasury Bills and the returns of a constructed supplemental
benchmark with a value tilt similar to that of the Fund.
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 1999)
<TABLE>
<CAPTION>
SINCE SINCE
PAST ONE INCEPTION* INCEPTION*
YEAR (12/16/97) (12/18/97)
-------- ---------- ----------
<S> <C> <C> <C>
Institutional Shares........................................ % %
Investor Shares............................................. % %
3-Month U.S. T-Bills........................................ % % %
Supplemental Benchmark**.................................... -10.80% -4.58% -4.77%
</TABLE>
------------------------
* Inception Dates: 12/16/97 for Institutional Shares; 12/18/97 for Investor
Shares.
** The supplemental benchmark is defined as the return over the evaluation
period to the following combination: 3-month U.S. T-Bills + 0.35 (Russell
2500 Value Index -- Russell 2500 Growth Index). Using this formula, the
supplemental benchmark's monthly returns will ebb and flow along with the
peformance of value stocks at large. As noted above, the Fund has a value
orientation. In very general
14
<PAGE>
terms, this value orientation implies that the Fund's performance will be
affected by many of the same economic factors that influence the performance
of all value stocks and strategies. By comparing this supplemental benchmark
to the Fund's relative performance, the investor will be able to guage value
versus growth cycles in the market, and measure the Fund's performance
relative to a benchmark with a value orientation.
For the period January 1, 2000 through March 31, 2000, the aggregate
(non-annualized) total returns of Institutional Shares and Investor Shares were
% and %, respectively. The return on 3-Month U.S. T-Bills for that period
was %. Supplemental index return for that period was %.
AXA ROSENBERG DOUBLE ALPHA MARKET FUND
The AXA Rosenberg Double Alpha Market Fund currently invests in the AXA
Rosenberg Value Market Neutral Fund. Once the AXA Rosenberg Multi-Strategy
Market Neutral Fund Becomes operational, the Fund will invest in that Fund
instead of the AXA Rosenberg Value Market Neutral Fund. The Trust expects that
AXA Rosenberg Multi-Strategy Market Neutral Fund to become operational on or
about , 2000. If that Fund becomes operational either
significantly sooner or significantly later than , 2000, the Trust
will supplement this prospectus to reflect that variance from its expectations.
Therefore, you should also consider the principal investment strategies and
principal risks of the AXA Rosenberg Value Market Neutral Fund or the risks of
the AXA Rosenberg Multi-Strategy Market Neutral Fund, as applicable, as
described above and below, respectively, in deciding whether to invest in the
AXA Rosenberg Double Alpha Market Fund.
INVESTMENT OBJECTIVE
The Fund seeks a total return greater than that of the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500 Index").
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund invests primarily in shares of the AXA Rosenberg Value Market
Neutral Fund (or, when it becomes operational, the AXA Rosenberg Multi-Strategy
Market Neutral Fund) while simultaneously utilizing S&P 500 Index Futures,
options on S&P 500 Index Futures and equity swap contracts to gain exposure to
the equity market as measured by the S&P 500 Index. The Fund will purchase these
S&P 500 Index instruments in an amount approximately equal to the net asset
value of the Fund in order to gain full net exposure to the U.S. equity market
as measured by the S&P 500 Index.
SUMMARY OF PRINCIPAL RISKS
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.
15
<PAGE>
MANAGEMENT RISK. Any actively managed investment portfolio is subject to
the risk that its investment adviser will make poor stock selections. Because
the investment adviser could make poor investment decisions about both the long
and the short positions of the Fund, the Fund's potential losses exceed those of
conventional stock mutual funds that hold only long portfolios.
INDEX FUTURES RISK. As indicated above, the Fund may at times use S&P 500
Index Futures, options on S&P 500 Index Futures and equity swap contracts, each
of which is a financial contract whose value depends on, or is derived from, the
value of an underlying asset, reference rate or index. In addition to other
risks such as the risk that the counterparty will be unable or unwilling to
perform its obligations, derivatives involve the risk of mispricing or improper
valuation and the risk that changes in the value of a derivative may not
correlate perfectly with relevant assets, rates and indices, such as the S&P 500
Index. The liquidity and the value of a derivative may be subject to significant
fluctuations, and the Fund may at times be unable to sell a derivative and may
incur ongoing costs associated with that inability.
RISKS OF EQUITY SWAP CONTRACTS. The Fund may engage in equity swap
contracts, through which a counterparty generally agrees to pay the amount, if
any, by which the agreed upon or "notional" amount specified in the equity swap
contract would have increased in value had it been invested in the basket of
stocks comprising the S&P 500 Index, plus the dividends that would have been
received on those stocks. If there is a default by the counterparty to an equity
swap contract, the Fund will be limited to contractual remedies pursuant to the
agreements related to the transaction, which may entail additional expense for
the Fund. The Fund's use of equity swap contracts may result in the Fund
realizing more income subject to tax at ordinary income tax rates than it would
if it did not engage in equity swap contracts. There is no assurance that the
equity swap contract counterparties will be able to meet their obligations or
that, in the event of default, the AXA Rosenberg Double Alpha Market Fund will
succeed in pursing contractual remedies. Pursing contractual remedies will. The
Fund thus assumes the risk that it may be delayed in or prevented from obtaining
payments owed to it pursuant to these contracts.
INDIRECT RISKS THROUGH INVESTMENT IN THE AXA ROSENBERG VALUE MARKET NEUTRAL
FUND OR THE AXA ROSENBERG MULTI-STRATEGY MARKET NEUTRAL FUND, AS
APPLICABLE. Because the Fund invests in shares of the AXA Rosenberg Value
Market Neutral Fund (or, once it becomes operational, the AXA Rosenberg
Multi-Strategy Market Neutral Fund), it is subject indirectly to the risks to
which that applicable Fund is subject (see above and below).
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page .
PERFORMANCE INFORMATION
The Fund's past performance is not necessarily indicative of its future
performance.
16
<PAGE>
YEARLY PERFORMANCE (%) -- INSTITUTIONAL SHARES
This chart provides some indication of the risks of investing in the Fund by
showing changes in the Fund's performance from year to year.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
YEARLY PERFORMANCE
CALENDAR YEAR END ANNUAL RETURN (%)
<S> <C>
1998 0.71%
</TABLE>
During all periods shown in the bar graph, the Fund's highest quarterly
return was %, for the quarter ended , and its lowest quarterly return
was %, for the quarter ended .
PERFORMANCE TABLE [To be updated.]
This table shows how the Fund's performance compares with the returns of
3-Month U.S. Treasury Bills.
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 1999)
<TABLE>
<CAPTION>
PAST ONE SINCE
YEAR INCEPTION*
-------------- --------------
<S> <C> <C>
Institutional Shares........................................ %
Investor Shares............................................. %
3-Month U.S. T-Bills........................................ %
</TABLE>
------------------------
* Inception Date: 4/22/98.
For the period January 1, 2000 through March 31, 2000, the aggregate
(non-annualized) total returns of Institutional Shares and Investor Shares were
% and %, respectively. Index return for that period was %.
17
<PAGE>
AXA ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND
INVESTMENT OBJECTIVE
The Fund seeks to increase the value of your investment in bull markets and
in bear markets through strategies designed to maintain minimal net exposure to
general equity market risk. 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
Adviser believes are overvalued. The Fund seeks to have approximately equal
dollar amounts invested in long and short positions. The Fund invests primarily
in the 500 largest capitalization stocks that are principally traded in the
markets of the United States.
By buying and selling short different stocks, the Fund attempts to limit the
effect on its performance of and the risk associated with general U.S. 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. Under normal circumstances, the
Adviser's stock selection models will result in the Fund's long and short
positions being overweighted in different sectors (including industries within
different sectors).
The Adviser uses fundamental and quantitative investment principles to
determine which securities to buy, sell and sell short. Using these principles,
the Adviser employs a bottom-up approach based on two stock selection models:
(1) an appraisal model, which estimates a fair value for each company in the
Adviser's database based on various fundamental data and (2) a near-term
prospects model, which estimates year-ahead earnings based on fundamental data
as well as investor sentiment data such as analysts' earnings estimates and
broker buy/sell recommendations. These models tend to produce a "value" style of
investment by favoring securities believed to be selling below a price that
would accurately value the underlying company. The appraisal model is more
likely to identify stocks that have low trading activity and lower
price-to-earnings and price-to-book ratios as attractive for purchase.
Conversely, the model will tend to identify high trading activity stocks and
stocks with high forecasted earnings growth as less attractive for purchase.
The Adviser selects sectors to overweight or underweight based on a
bottom-up evaluation of the stocks within a sector. The proprietary stock
selection models evaluate the 500 largest capitalization stocks principally
traded in the markets of the United States. If the models found most stocks
within a sector to be attractive, then the Adviser would tend to overweight that
sector. If the models found most stocks within a sector to be unattractive then
the Adviser would tend to engage in more short sales with regard to that sector.
The optimizer weighs the potential gain of a position against the risk in having
overweighted/underweighted industry exposures (in addition to other risk
measures) and suggests trades to improve the return and risk characteristics of
the portfolio.
18
<PAGE>
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 U.S. 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.
RISK OF OVERWEIGHTING. This is the risk that, by overweighting investments
in certain sectors or industries of the U.S. stock market, the Fund will suffer
a loss because of general advances or declines on the prices of stocks in those
sectors or industries.
PERFORMANCE INFORMATION
The Fund's past performance is not necessarily indicative of its future
performance.
19
<PAGE>
YEARLY PERFORMANCE (%) -- INSTITUTIONAL SHARES
This chart provides some indication of the risks of investing in the Fund by
showing changes in the Fund's performance from year to year. [To be updated.]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
YEARLY PERFORMANCE
CALENDAR YEAR END ANNUAL RETURN (%)
<S> <C>
1998 0.71%
</TABLE>
During all periods shown in the bar graph, the Fund's highest quarterly
return was %, for the quarter ended , and its lowest quarterly return
was %, for the quarter ended .
PERFORMANCE TABLE [To be updated.]
This table shows how the Fund's performance compares with the returns of
3-Month U.S. Treasury Bills.
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 1999)
<TABLE>
<CAPTION>
PAST ONE SINCE
YEAR INCEPTION*
-------------- --------------
<S> <C> <C>
Institutional Shares........................................ %
Investor Shares............................................. %
3-Month U.S. T-Bills........................................ %
</TABLE>
------------------------
* Inception Date: 10/19/98.
For the period January 1, 2000 through March 31, 2000, the aggregate
(non-annualized) total returns of Institutional Shares and Investor Shares were
% and %, respectively. Index return for that period was %.
20
<PAGE>
AXA ROSENBERG ENHANCED 500 FUND
INVESTMENT OBJECTIVE
The Fund seeks to outperform the total return of the S&P 500 Composite Index
(the "S&P 500"). 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 companies
that are listed on the S&P 500 and domiciled in the United States. The Fund will
generally overweight investments in such companies that the Adviser believes
will outperform the S&P 500 and will generally underweight, or avoid altogether,
investments in such companies that the Adviser believes will underperform the
S&P 500. The Fund attempts to maintain a level of risk that is similar to that
associated with the S&P 500 generally.
The Adviser uses fundamental and quantitative investment principles to
determine which securities to buy, sell and sell short. Using these principles,
the Adviser employs a bottom-up approach based on two stock selection models:
(1) an appraisal model, which estimates a fair value for each company in the
Adviser's database based on various fundamental data and (2) a near-term
prospects model, which estimates year-ahead earnings based on fundamental data
as well as investor sentiment data such as analysts' earnings estimates and
broker buy/sell recommendations.
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.
PERFORMANCE INFORMATION
The Fund does not have performance information because it has not yet been
operational for a full calendar year.
21
<PAGE>
AXA ROSENBERG INTERNATIONAL EQUITY FUND
INVESTMENT OBJECTIVE
The Fund seeks a total return greater than that of the Morgan Stanley
Capital International Europe Australasia, Far East Index (the "MSCI-EAFE
Index"). The MSCI-EAFE Index is a well-known, international, unmanaged, weighted
stock market index that includes over 1,000 securities listed on the stock
exchanges of 20 developed market countries from Europe, Australia, Asia 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 they 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 (such as, for example, the size of the company's market
capitalization, the general type of industry to which the company's activities
relate and country in which the company operates) similar to those of the
MSCI-EAFE companies.
The Adviser uses proprietary, quantitative investment principles to
determine which securities to buy and sell. Using these principles, the Adviser
employs a bottom-up approach based on two stock selection models: (1) an
appraisal model, which estimates a fair value for each company in the Adviser's
database based on various fundamental data and (2) a near-term prospects model,
which estimates year-ahead earnings based on fundamental data as well as
investor sentiment data such as analysts' earnings estimates and broker buy/sell
recommendations. These models tend to produce a "value" style of investment by
favoring securities believed to be selling below a price that would accurately
value the underlying company. The appraisal model is more likely to identify
stocks that have low trading activity and lower price-to-earnings and
price-to-book ratios as attractive for purchase. Conversely, the model will tend
to identify high trading activity stocks and stocks with high forecasted
earnings growth as less attractive for purchase.
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. 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
22
<PAGE>
economic, political, regulatory and other conditions, changes in currency
exchange rates or exchange control regulations (including currency blockage). A
Fund may be unable to obtain and enforce judgments against foreign entities, and
issuers of foreign securities are subject to different, and often less
comprehensive, accounting, reporting and disclosure requirements than domestic
issuers. Also, the securities of some foreign companies may be less liquid and
at times more volatile than securities of comparable U.S. companies.
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. In either event, the dollar value of these types of
investments would be adversely affected.
PERFORMANCE INFORMATION
The Fund does not have performance information because it has not yet been
operational for a full calendar year.
AXA ROSENBERG MULTI-STRATEGY MARKET NEUTRAL FUND
INVESTMENT OBJECTIVE
The Fund seeks to increase the value of your investment in bull markets and
in bear markets through strategies designed to maintain minimal net exposure to
general equity market risk. 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
from all capitalization ranges that the Adviser believes are undervalued and by
"selling short" such stocks that the Advisor believes are overvalued. The Fund
invests primarily in common stocks that are traded principally in the markets of
the United States, Japan and the United Kingdom. The Adviser's computerized
investment process is designed to maintain continually approximately equal
dollar amounts invested in long and short positions. When the Adviser believes
that a security is overvalued relative to other securities, it may sell the
security short by borrowing it from a third party and selling it at the then
current market price. When the Adviser believes that a security is undervalued
relative to other securities, it may purchase the security long and hold it for
as long as it deems appropriate under the circumstances.
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 and growth and value cycles. 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 Adviser's stock selection models may result in the Fund's long
and short positions being overweighted in different sectors (including
industries within sectors).
The Adviser uses fundamental and quantitative investment principles to
determine which securities to buy, sell and sell short. Using these principles,
the Adviser employs a bottom-up approach based on two stock
23
<PAGE>
selection models: (1) an appraisal model, which estimates a fair value for each
company in the Adviser's database based on various fundamental data and (2) a
near-term prospects model, which estimates year-ahead earnings based on
fundamental data as well as investor sentiment data such as analysts' earnings
estimates and broker buy/sell recommendations.
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 some foreign companies may be less liquid and at times more
volatile than securities of comparable U.S. companies.
24
<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.
SMALL AND MID-SIZE COMPANY RISK. The 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.
RISK OF OVERWEIGHTING. This is the risk that, by overweighting investments
in certain sectors or industries of the U.S. stock market, the Fund will suffer
a loss because of general advances or declines on the prices of stocks in those
sectors or industries.
PERFORMANCE INFORMATION
The Fund does not have performance information because it has not yet been
operational for a full calendar year.
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 U.S. SMALL CAPITALIZATION FUND [TO BE UPDATED.]
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR ADVISER
------------- -------- --------
<S> <C> <C> <C>
SHAREHOLDER FEES (paid directly from your investment):
Maximum Sales Charge (Load)............................... None None None
Maximum Sales Charge (Load) Imposed on Purchases.......... None None None
Maximum Deferred Sales Charge (Load)...................... None None None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends............................................... None None None
Redemption Fee............................................ None None None
Exchange Fee.............................................. None None None
</TABLE>
25
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
CLASS OF SHARES INSTITUTIONAL INVESTOR
--------------- ------------- --------
<S> <C> <C>
Management Fees............................................. 0.90% 0.90%
Distribution and Shareholder Service (12b-1) Fees........... None 0.25%
Other Expenses.............................................. % %(a)
Total Annual Fund Operating Expenses........................ % %
---- ----
Fee Waiver and/or Expense Reimbursement(b).................. % %
Net Expenses................................................ 1.15% 1.55%
==== ====
</TABLE>
------------------------
(a) The Trustees have authorized the payment of up to 0.15% of the Fund's
average daily net assets attributable to Investor Shares for subtransfer and
subaccounting service in connection with such shares.
(b) The Adviser has undertaken to waive its management fee and bear certain
expenses (exclusive of nonrecurring account fees and extraordinary expenses)
until further notice (and in any event at least until 3/31/01).
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>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Institutional... $ $ $ $
Investor....... $ $ $ $
Adviser........ $ $ $ $
</TABLE>
26
<PAGE>
AXA ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND [TO BE UPDATED.]
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR A B C
------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER FEES (paid directly from your
investment):
Maximum Sales Charge (Load)................. None None 4.75% 5.00% 2.00%
Maximum Sales Charge (Load) Imposed on
Purchases................................. None None 4.75%(a) None 1.00%
Maximum Deferred Sales Charge (Load)........ None None None 5.00%(b) 1.00%(c)
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends...................... None None None None None
Redemption Fee.............................. None None None None None
Exchange Fee................................ None None None None None
</TABLE>
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.................................... 1.00% 1.00% 1.00% 1.00% 1.00%
Distribution and Shareholder Service (12b-1)
Fees............................................. None 0.25% 0.50% 1.00% 1.00%
Other Expenses..................................... % %(d) % % %
Total Annual Fund Operating Expenses............... % % % % %
---- ---- ---- ---- ----
Fee Waiver and/or Expense Reimbursement(e)......... % % % % %
Net Expenses....................................... 1.50% 1.90% 2.00% 2.50% 2.50%
==== ==== ==== ==== ====
</TABLE>
------------------------
(a) Class A Shares may be sold at net asset value without payment of any sales
charge to the following entities:
(1) Pension and profit sharing plans, pension funds and other
company-sponsored benefit plans; and
(2) "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.
(b) 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.
(d) The CDSC for Class C Shares of % applies to shares redeemed within
eighteen months of purchase.
(d) The Trustees have authorized the payment of up to 0.15% of the Fund's
average daily net assets attributable to Investor Shares for subtransfer and
subaccounting service in connection with such shares.
(e) The Adviser has undertaken to waive its management fee and bear certain
expenses (exclusive of nonrecurring account fees and extraordinary expenses
until further notice (and in any event at least until 3/31/01).
27
<PAGE>
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>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Institutional... $ $ $ $
Investor....... $ $ $ $
A.............. $ $ $ $
B.............. $ $ $ $
C.............. $ $ $ $
</TABLE>
AXA ROSENBERG JAPAN FUND [TO BE UPDATED.]
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR
------------- --------
<S> <C> <C>
SHAREHOLDER FEES (paid directly from your investment):
Maximum Sales Charge (Load)............................... None None
Maximum Sales Charge (Load) Imposed on Purchases.......... None None
Maximum Deferred Sales Charge (Load)...................... None None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends............................................... None None
Redemption Fee............................................ None None
Exchange Fee.............................................. None None
</TABLE>
28
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
CLASS OF SHARES INSTITUTIONAL INVESTOR
--------------- ------------- --------
<S> <C> <C>
Management Fees............................................. 1.00% 1.00%
Distribution and Shareholder Service (12b-1) Fees........... None 0.25%
Other Expenses.............................................. % %(a)
Total Annual Fund Operating Expenses........................ % %
---- ----
Fee Waiver and/or Expense Reimbursement(b).................. % %
Net Expenses................................................ 1.50% 1.90%
==== ====
</TABLE>
------------------------
(a) The Trustees have authorized the payment of up to 0.15% of the Fund's
average daily net assets attributable to Investor Shares for subtransfer and
subaccounting service in connection with such shares.
(b) The Adviser has undertaken to waive its management fee and bear certain
expenses (exclusive of nonrecurring account fees and extraordinary expenses
until further notice (and in any event at least until 3/31/01).
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>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Institutional............. $ $ $ $
Investor.................. $ $ $ $
</TABLE>
AXA ROSENBERG VALUE MARKET NEUTRAL FUND [TO BE UPDATED.]
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR A B C
------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER FEES (paid directly from your
investment):
Maximum Sales Charge (Load)................. None None 4.75% 5.00% 2.00%
Maximum Sales Charge (Load) Imposed on
Purchases................................. None None 4.75%(a) None 1.00%
Maximum Deferred Sales Charge (Load)........ None None None 5.00%(b) 1.00%(c)
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends...................... None None None None None
Redemption Fee.............................. None None None None None
Exchange Fee................................ None None None None None
</TABLE>
29
<PAGE>
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.................................... 1.50% 1.50% 1.50% 1.50% 1.50%
Distribution and Shareholder Service (12b-1)
Fees............................................. None 0.25% 0.50% 1.00% 1.00%
Other Expenses
Dividend Expenses on Securities Sold Short....... % % % % %
Remainder of Other Expenses...................... % % % % %
Total............................................ %(d) % % % %
---- ---- ---- ---- ----
Total Annual Fund Operating Expenses............... % % % % %
---- ---- ---- ---- ----
Fee Waiver and/or Expense Reimbursement(e)......... % % % % %
Net Expenses....................................... % % % % %
==== ==== ==== ==== ====
</TABLE>
------------------------
(a) Class A Shares may be sold at net asset value without payment of any sales
charge to the following entities:
(1) Pension and profit sharing plans, pension funds and other
company-sponsored benefit plans; and
(2) "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.
(b) 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.
(f) The CDSC for Class C Shares of % applies to shares redeemed within
eighteen months of purchase.
(d) The Trustees have authorized the payment of up to 0.15% of the Fund's
average daily net assets attributable to Investor Shares for subtransfer and
subaccounting service in connection with such shares.
(e) 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).
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
30
<PAGE>
Operating Expenses shown above. Your actual costs may be higher or lower. Based
on these assumptions, your costs would be:
<TABLE>
<CAPTION>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Institutional............. $ $ $ $
Investor.................. $ $ $ $
A......................... $ $ $ $
B......................... $ $ $ $
C......................... $ $ $ $
</TABLE>
AXA ROSENBERG DOUBLE ALPHA MARKET FUND [TO BE UPDATED.]
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR A B C
------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER FEES (paid directly from your
investment):
Maximum Sales Charge (Load)................. None None 4.75% 5.00% 2.00%
Maximum Sales Charge (Load) Imposed on
Purchases................................. None None 4.75%(a) None 1.00%
Maximum Deferred Sales Charge (Load)........ None None None 5.00%(b) 1.00%(c)
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends...................... None None None None None
Redemption Fee.............................. None None None None None
Exchange Fee................................ None None None None None
</TABLE>
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.................................... 0.10% 0.10% 0.10% 0.10% 0.10%
Distribution and Shareholder Service (12b-1)
Fees............................................. None 0.25% 0.50% 1.00% 1.00%
Other Expenses..................................... % %(d) % % %
---- ---- ---- ---- ----
Total Annual Fund Operating Expenses............... % % % % %
---- ---- ---- ---- ----
Fee Waiver and/or Expense Reimbursement(e)......... % % % % %
Net Expenses....................................... % % % % %
==== ==== ==== ==== ====
</TABLE>
------------------------
(a) Class A Shares may be sold at net asset value without payment of any sales
charge to the following entities:
(1) Pension and profit sharing plans, pension funds and other
company-sponsored benefit plans; and
(2) "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.
31
<PAGE>
(b) 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 % applies to shares redeemed
within eighteen months of purchase.
(d) The Trustees have authorized the payment of up to 0.15% of the Fund's
average daily net assets attributable to Investor Shares for subtransfer and
subaccounting service in connection with such shares.
(e) 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).
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>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Institutional............. $ $ $ $
Investor.................. $ $ $ $
A......................... $ $ $ $
B......................... $ $ $ $
C......................... $ $ $ $
</TABLE>
AXA ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND [TO BE UPDATED.]
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR A B C
------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER FEES (paid directly from your
investment):
Maximum Sales Charge (Load)................. None None 4.75% 5.00% 2.00%
Maximum Sales Charge (Load) Imposed on
Purchases................................. None None 4.75%(a) None 1.00%
Maximum Deferred Sales Charge (Load)........ None None None 5.00%(b) 1.00%(c)
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends...................... None None None None None
Redemption Fee.............................. None None None None None
Exchange Fee................................ None None None None None
</TABLE>
32
<PAGE>
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.................................... % % % % %
Distribution and Shareholder Service (12b-1)
Fees............................................. None 0.25% 0.50% 1.00% 1.00%
Other Expenses
Dividend Expenses on Securities Sold Short....... % % % % %
Remainder of Other Expenses...................... % % % % %
Total.............................................. %(d) % % % %
---- ---- ---- ---- ----
Total Annual Fund Operating Expenses............... % % % % %
---- ---- ---- ---- ----
Fee Waiver and/or Expense Reimbursement(e)......... % % % % %
Net Expenses....................................... % % % % %
==== ==== ==== ==== ====
</TABLE>
------------------------
(a) Class A Shares may be sold at net asset value without payment of any sales
charge to the following entities:
(1) Pension and profit sharing plans, pension funds and other
company-sponsored benefit plans; and
(2) "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.
(b) 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.
(c) The CDSC for Class C Shares of % applies to shares redeemed within
eighteen months of purchase.
(d) The Trustees have authorized the payment of up to 0.15% of the Fund's
average daily net assets attributable to Investor Shares for subtransfer and
subaccounting service in connection with such shares.
(e) 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).
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
33
<PAGE>
Operating Expenses shown above. Your actual costs may be higher or lower. Based
on these assumptions, your costs would be:
<TABLE>
<CAPTION>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Institutional............. $ $ $ $
Investor.................. $ $ $ $
A......................... $ $ $ $
B......................... $ $ $ $
C......................... $ $ $ $
</TABLE>
AXA ROSENBERG ENHANCED 500 FUND [TO BE UPDATED.]
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR A B C
------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER FEES (paid directly from your
investment):
Maximum Sales Charge (load)................. None None 3.00% 5.00% 1.50%
Maximum Sales Charge (Load) Imposed on
Purchases................................. None None 3.00%(a) None 0.75%
Maximum Deferred Sales Charge (Load)........ None None None 5.00%(b) 0.75%(c)
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends...................... None None None None None
Redemption Fee.............................. None None None None None
Exchange Fee................................ None None None None None
</TABLE>
34
<PAGE>
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.................................... 0.50% 0.50% 0.50% 0.50% 0.50%
Distribution and Shareholder Service (12b-1)
Fees............................................. None 0.25% 0.50% 1.00% 1.00%
Other Expenses(d).................................. % %(e) % % %
Total Annual Fund Operating Expenses............... % % % % %
---- ---- ---- ---- ----
Fee Waiver and/or Expense Reimbursement(f)......... % % % % %
Net Expenses....................................... 1.00% 1.25% 1.50% 2.00% 2.00%
==== ==== ==== ==== ====
</TABLE>
------------------------
(a) Class A Shares may be sold at net asset value without payment of any sales
charge to the following entities:
(1) Pension and profit sharing plans, pension funds and other
company-sponsored benefit plans; and
(2) "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.
(b) 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.
(c) The CDSC for Class C Shares of 0.75% applies to shares redeemed within
eighteen months of purchase.
(d) Because the Fund is a new fund (as defined in Form N-1A under the Investment
Company Act of 1940, as amended), "Other Expenses" are based on estimated
amounts for the current fiscal year.
(e) The Trustees have authorized the payment of up to 0.15% of the Fund's
average daily net assets attributable to Investor Shares for subtransfer and
subaccounting service in connection with such shares.
(f) The Adviser has undertaken to waive its management fee and bear certain
expenses (exclusive of nonrecurring account fees and extraordinary expenses
until further notice (and in any event at least until 3/31/01).
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
35
<PAGE>
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 Enhanced 500 Fund Institutional................... $ $
Investor........................ $ $
A............................... $ $
B............................... $ $
C............................... $ $
</TABLE>
AXA ROSENBERG INTERNATIONAL EQUITY FUND [TO BE UPDATED.]
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR A B C
------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER FEES (paid directly from your
investment):
Maximum Sales Charge (Load)............... None None 4.75% 5.00% 2.00%
Maximum Sales Charge (Load) Imposed on
Purchases............................... None None 4.75% (a) None 1.00%
Maximum Deferred Sales Charge (Load)...... None None None 5.00% (b) 1.00% (c)
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends.................... None None None None None
Redemption Fee............................ None None None None None
Exchange Fee.............................. None None None None None
</TABLE>
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)
Fees........................................... None 0.25% 0.50% 1.00% 1.00%
Other Expenses(d)................................ % % (e) % % %
Total Annual Fund Operating Expenses............. % % % % %
------- ----- ------- ------- -------
Fee Waiver and/or Expense Reimbursement(f)....... % % % % %
Net Expenses..................................... 1.25% 1.50% 1.75% 2.25% 2.25%
======= ===== ======= ======= =======
</TABLE>
------------------------
(a) Class A Shares may be sold at net asset value without payment of any sales
charge to the following entities:
(1) Pension and profit sharing plans, pension funds and other
company-sponsored benefit plans; and
(2) "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.
36
<PAGE>
(b) 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.
(i) The CDSC for Class C Shares of 1.00% applies to shares redeemed within
eighteen months of purchase.
(d) Because the Fund is a new fund (as defined in Form N-1A under the Investment
Company Act of 1940, as amended), "Other Expenses" are based on estimated
amounts for the current fiscal year.
(e) The Trustees have authorized the payment of up to 0.15% of the Fund's
average daily net assets attributable to Investor Shares for subtransfer and
subaccounting service in connection with such shares.
(f) The Adviser has undertaken to waive its management fee and bear certain
expenses (exclusive of nonrecurring account fees and extraordinary expenses
until further notice (and in any event at least until 3/31/01).
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>
CLASS 1 YEAR 3 YEARS
----- -------- --------
<S> <C> <C>
Institutional................................... $ $
Investor........................................ $ $
A............................................... $ $
B............................................... $ $
C............................................... $ $
</TABLE>
AXA ROSENBERG MULTI-STRATEGY MARKET NEUTRAL FUND [TO BE UPDATED.]
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR A B C
------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER FEES (paid directly from your
investment):
Maximum Sales Charge (Load)............... None None 5.25% None 2.00%
Maximum Sales Charge (Load) Imposed on
Purchases............................... None None 5.25% (a) None 1.00%
Maximum Deferred Sales Charge (Load)...... None None None 5.00% (b) 1.00% (c)
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends.................... None None None None None
Redemption Fee............................ None None None None None
Exchange Fee.............................. None None None None None
</TABLE>
37
<PAGE>
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.................................... 1.50% 1.50% 1.50% 1.50% 1.50%
Distribution and Shareholder Service (12b-1)
Fees............................................. None 0.25% 0.50% 1.00% 1.00%
Other Expenses(d)
Dividend Expenses on Securities Sold Short....... 1.00% 1.00% 1.00% 1.00% 1.00%
Remainder of Other Expenses...................... 0.69% 0.69% 0.69% 0.69% 0.69%
Total............................................ 1.69% 1.69%(e) 1.69% 1.69% 1.69%
Total Annual Fund Operating Expenses............... 3.19% 3.44% 3.69% 4.19% 4.19%
---- ---- ---- ---- ----
Fee Waiver and/or Expense Reimbursement(f)......... 0.69% 0.69% 0.69% 0.69% 0.69%
Net Expenses....................................... % % % % %
==== ==== ==== ==== ====
</TABLE>
------------------------
(a) Class A Shares may be sold at net asset value without payment of any sales
charge to the following entities:
(1) Pension and profit sharing plans, pension funds and other
company-sponsored benefit plans; and
(2) "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.
(b) 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.
(j) The CDSC for Class C Shares of % applies to shares redeemed within
eighteen months of purchase.
(d) Because the Fund is a new fund (as defined in Form N-1A under the Investment
Company Act of 1940, as amended), "Other Expenses" are based on estimated
amounts for the current fiscal year.
(e) The Trustees have authorized the payment of up to 0.15% of the Fund's
average daily net assets attributable to Investor Shares for subtransfer and
subaccounting service in connection with such shares.
(f) 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).
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
38
<PAGE>
Operating Expenses shown above. Your actual costs may be higher or lower. Based
on these assumptions, your costs would be:
<TABLE>
<CAPTION>
CLASS 1 YEAR 3 YEARS
----- -------- --------
<S> <C> <C>
Institutional................................... $ $
Investor........................................ $ $
A............................................... $ $
B............................................... $ $
C............................................... $ $
</TABLE>
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
Except as explicitly described otherwise, the investment objective and
policies of each of the Funds may be changed without shareholder approval.
AXA ROSENBERG U.S. SMALL CAPITALIZATION FUND
The investment objective of the AXA Rosenberg U.S. Small Capitalization Fund
is to seek a total return greater than that of the Russell 2000 Index through
investment primarily in equity securities of smaller companies (i.e. - companies
that have market capitalizations of up to $ billion, which corresponds with
the market capitalization of the largest company in the Russell 2000 after the
reconstitution of the Index on May 31, 2000) that are traded principally in the
markets of the United States ("Small Capitalization Securities"). The definition
of Small Capitalization Securities may change from time to time to correspond
with the market capitalization of the largest company in the Russell 2000. Total
return is a combination of capital appreciation and current income (dividend or
interest). The Fund does not seek to MAXIMIZE total return but, as indicated
above, seeks a total return greater than that of the index referred to above.
Because the companies in which the Fund invests typically do not distribute
significant amounts of company earnings to shareholders, the Fund's objective
will place relatively greater emphasis on capital appreciation than on current
income. The Fund's investment objective is non-fundamental and thus may be
changed by the Trustees without shareholder approval.
It is currently expected that, under normal circumstances, most of the
Fund's assets will be invested in small capitalization securities. Investments
in issuers of small capitalization securities may present greater opportunities
for capital appreciation because of high potential earnings growth, but may also
involve greater risk. See "Principal Risks -- Smaller Company Risk."
During the fiscal year ended March 31, 2000, the Fund engaged in active and
frequent trading. Because of the frequency with which the Fund buys and sells
portfolio securities, a larger portion of distributions you receive are likely
to be ordinary dividends, rather than capital gain distributions.
FUNDAMENTAL POLICIES. It is a fundamental policy of the Fund, which may not
be changed without shareholder approval, that at least 65% of the Fund's total
assets will be invested in Small Capitalization Securities.
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<PAGE>
AXA ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
The investment objective of the AXA Rosenberg International Small
Capitalization Fund is to seek a total return greater than that of the Cazenove
Rosenberg Global Smaller Companies Index excluding the United States ("CRIexUS")
through investment primarily in equity securities that are traded principally in
securities markets outside of the United States of companies with market
capitalizations of $ million and $ billion at the time of purchase by the
Fund ("International Small Capitalization Companies"). This corresponds with the
defining range (as of May 1, 2000) of market capitalization of companies in
CRIexUS, which represents the performance of companies in the lowest 15% by
market capitalization in mature markets (1) other than the United States. The
definition of international small capitalization companies may change from time
to time to correspond with the adjustments in the specific market capitalization
range of companies included in CRIexUS. Total return is a combination of capital
appreciation and current income (dividend or interest). The Fund does not seek
to MAXIMIZE total return but, as indicated above, seeks a total return greater
than that of the index referred to above. Because the companies in which the
Fund invests typically do not distribute significant amounts of company earnings
to shareholders, the Fund's objective will place relatively greater emphasis on
capital appreciation than on current income. The Fund's investment objective is
non-fundamental and thus may be changed by the Trustees without shareholder
approval.
There are no prescribed limits on the Fund's geographic asset distribution,
and the Fund has the authority to invest in securities traded in securities
markets of any country in the world. It is currently expected that the Fund will
invest in approximately twenty-one different countries across three regions --
Europe, Pacific and North America (excluding the United States). Under certain
adverse investment conditions, the Fund may restrict the number of securities
markets in which its assets will be invested, although under normal market
circumstances, the Fund's investments will involve securities principally traded
in at least three different countries.
Under normal circumstances, at least 90% of the Fund's net assets will be
invested in common stocks of international small capitalization companies and it
is the non-fundamental policy of the Fund to invest at least 65% of the Fund's
total assets in common stocks of international small capitalization companies.
Investments in such companies may present greater opportunities for capital
appreciation because of high potential earnings growth, but may also involve
greater risk. See "Principal Risks -- Smaller Company Risk."
The Fund will not normally invest in securities of United States issuers
traded on United States securities markets.
During the fiscal year ended March 31, 2000, the Fund engaged in active and
frequent trading. Because of the frequency with which the Fund buys and sells
portfolio securities, a larger portion of distributions you receive are likely
to be ordinary dividends, rather than capital gain distributions.
------------------------
(1) The index includes 21 developed countries: Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan,
Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden,
Switzerland and the U.K.
40
<PAGE>
AXA ROSENBERG JAPAN FUND
The investment objective of the AXA Rosenberg Japan Fund is to seek a total
return greater than that of the Tokyo Stock Price Index ("TOPIX") of the Tokyo
Stock Exchange. TOPIX is a capitalization-weighted index of all stocks in the
First Section of the Tokyo Stock Exchange. The Fund will seek to meet this
objective primarily through investment in Japanese equity securities, primarily
in common stocks of Japanese companies. Total return is a combination of capital
appreciation and current income (dividend or interest). The Fund does not seek
to MAXIMIZE total return but, as indicated above, seeks a total return greater
than that of the index referred to above. The Fund expects that any income it
derives will be from dividend or interest payments on securities. The Fund's
investment objective is non-fundamental and thus may be changed by the Trustees
without shareholder approval.
It is currently expected that, under normal circumstances, the Fund will
invest at least 90% of its net assets in "Japanese Securities," that is,
securities issued by entities ("Japanese Companies") that are organized under
the laws of Japan and that either have 50% or more of their assets in Japan or
derive 50% or more of their revenues from Japan. Although the Fund will invest
primarily in common stocks of Japanese Companies, it may also invest in other
Japanese Securities, such as convertible preferred stock or debentures, warrants
or rights, as well as short-term government debt securities or other short-term
prime obligations (I.E., high quality debt obligations maturing not more than
one year from the date of issuance). The Fund will not ordinarily purchase
warrants or rights, although it may receive warrants or rights through
distributions on other securities it owns. In those cases, the Fund expects to
sell such warrants and rights within a reasonable period of time following their
distribution to the Fund.
The Fund currently intends to make its investments principally in the
securities of Japanese Companies that have an active market for their shares and
have been subject for at least two years to the financial accounting rules for a
company whose securities are traded on a Japanese securities exchange. In the
discretion of the Fund's management, the balance of the Fund's investments may
be in companies that do not meet such qualifications, although the nature of the
market for the shares will always be an important consideration in determining
whether the Fund will invest in such shares. The Fund anticipates that most
Japanese equity securities in which it will invest, either directly or
indirectly (by means of convertible debentures), will be listed on securities
exchanges in Japan.
Unlike other mutual funds which invest in the securities of many countries,
the Fund will invest almost exclusively in Japanese Securities. Generally, the
Adviser will not vary the percentage of the Fund's assets which are invested in
Japanese Securities based on its assessment of Japanese economic, political or
regulatory developments or changes in currency exchange rates. However, the
Adviser has from time to time hedged up to 21% of the Fund's portfolio value and
reserves the right to hedge up to 100% of the Fund's total assets against a
possible decline in the Japanese Securities market by utilizing futures and
options on futures on Japanese stock indices as described above.
Because a high percentage of the Fund's assets will be invested in Japanese
Securities, investment in the Fund will involve the general risks associated
with investing in foreign securities. See "Principal Risks -- Foreign Investment
Risk." In addition, investors will be subject to the market risk associated with
investing almost exclusively in stocks of companies which are subject to
Japanese economic factors and conditions. Since the Japanese economy is
dependent to a significant extent on foreign trade, the relationships between
41
<PAGE>
Japan and its trading partners and between the yen and other currencies are
expected to have a significant impact on particular Japanese companies and on
the Japanese economy generally. The Fund is designed for investors who are
willing to accept the risks associated with changes in such conditions and
relationships.
During the fiscal year ended March 31, 2000, the Fund engaged in active and
frequent trading. Because of the frequency with which the Fund buys and sells
portfolio securities, a larger portion of distributions you receive are likely
to be ordinary dividends, rather than capital gain distributions.
INDEX FUTURES. The Fund may also purchase futures contracts or options on
futures contracts on TOPIX or the NIKKEI 225 Index ("NIKKEI") for investment
purposes. TOPIX futures are traded on the Chicago Board of Trade and NIKKEI
futures are traded on the Chicago Mercantile Exchange. See "Certain Investment
Techniques and Related Risks -- Stock Index Futures."
FUNDAMENTAL POLICIES. The Fund will normally invest at least 90% of its net
assets in Japanese Securities, and it is a fundamental policy of the Fund, which
may not be changed without shareholder approval, that at least 65% of the Fund's
total assets will be invested in Japanese Securities.
AXA ROSENBERG VALUE MARKET NEUTRAL FUND
The Fund seeks to increase the value of your investment in bull markets and
in bear markets through strategies designed to maintain limited net exposure to
general equity market risk. The Fund measures its return by a comparison to the
return on 3-Month U.S. Treasury Bills. The Fund attempts to achieve its
objective by taking long positions in stocks principally traded in the markets
of the United States that the Adviser has identified as undervalued and short
positions in such stocks that the Adviser has identified as overvalued. When the
Adviser believes that a security is overvalued relative to other securities 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. By taking long and
short positions in different stocks, the Fund attempts to limit the effect of
general stock market movements on the Fund's performance. It is expected that
the Fund can achieve a positive return if the securities in the Fund's long
portfolio outperform the securities in the Fund's short portfolio. Conversely,
it is expected that the Fund will incur losses if the securities in the Fund's
long portfolio underperform the securities in the Fund's short portfolio. The
Adviser will determine the size of each long or hort position by analyzing the
tradeoff between the attractiveness of each position and its impact on the risk
characteristics of the overall portfolio.
The Fund seeks to construct a diversified portfolio that has limited net
exposure to the U.S. equity market risk generally and near neutral exposure to
specific industries, specific capitalization ranges and certain other risk
factors. It is currently expected that the long and short positions of the Fund
will be invested primarily in small and mid-capitalization stocks. For purposes
of the preceding sentence, the 200 stocks principally traded stocks in the
markets of the United States with the largest market capitalizations are
considered large capitalization stocks, the next 800 largest stocks are
considered mid-capitalization stocks and all other stocks are considered small
capitalization stocks. Stocks of companies with relatively small market
capitalizations tend to be less liquid and more volatile than stocks of
companies with relatively large market capitalizations.
42
<PAGE>
The Adviser uses the return that an investor could achieve through an
investment in 3-month U.S. Treasury Bills as a benchmark against which to
measure the Fund's performance. The Adviser attempts to achieve returns for the
Fund's shareholders that exceed the benchmark. An investment in the Fund is
different from an investment in 3-month U.S. Treasury Bills because, among other
things, Treasury Bills are backed by the full faith and credit of the U.S.
Government, Treasury Bills have a fixed rate of return, investors in Treasury
Bills do not risk losing their investment, and an investment in the Fund is more
volatile than an investment in Treasury Bills.
During the fiscal year ended March 31, 2000, the Fund engaged in active and
frequent trading. Because of the frequency with which the Fund buys and sells
portfolio securities, a larger portion of distributions you receive are likely
to be ordinary dividends, rather than capital gain distributions.
AXA ROSENBERG DOUBLE ALPHA MARKET FUND
The investment objective of the AXA Rosenberg Double Alpha Market Fund is to
seek a total return greater than the return of the S&P 500 Index. The Fund seeks
to achieve its objective by investing in shares of the AXA Rosenberg Value
Market Neutral Fund (or the AXA Rosenberg Multi-Strategy Market Neutral Fund,
once that Fund becomes operational) while simultaneously utilizing S&P 500 Index
Futures, options on S&P 500 Index Futures, equity swap contracts or a
combination thereof to gain exposure to the equity market as measured by the S&P
500 Index. Once the AXA Rosenberg Multi-Strategy Market Neutral Fund becomes
operational, the Fund will invest in that Fund instead of the AXA Rosenberg
Value Market Neutral Fund. The Trust expects that AXA Rosenberg Multi-Strategy
Market Neutral Fund to become operational on or about , 2000. If
that Fund becomes operational either significantly sooner or significantly later
than , 2000, the Trust will supplement this prospectus to reflect
that variance from its expectations. The Fund has received an exemptive order
from the Securities and Exchange Commission allowing it to invest in securities
other than those described in Section 12(d)(1)(G) of the Investment Company Act
of 1940, as amended (the "1940 Act") while investing without limit in other
Funds of the Trust. Once the Fund has indirectly constructed a diversified long
and short portfolio through the purchase of shares of the AXA Rosenberg Value
Market Neutral Fund (or the AXA Rosenberg Multi-Strategy Market Neutral Fund,
once that Fund becomes operational), the Fund will purchase S&P 500 Index
Futures, options on S&P 500 Index Futures or equity swap contracts in an amount
approximately equal to the net asset value of the Fund in order to gain full net
exposure to the U.S. equity market as measured by the S&P 500 Index.
The S&P 500 Index is an unmanaged index composed of 500 common stocks, most
of which are listed on the New York Stock Exchange. The S&P 500 Index assigns
relative values to the stocks included in the index, weighted according to each
stock's total market value relative to the total market value of the other
stocks included in such index.
As noted above, the Fund may engage in equity swap contracts, through which
a counterparty generally agrees to pay the amount, if any, by which the agreed
upon or "notional" amount specified in the equity swap contract would have
increased in value had it been invested in the basket of stocks comprising the
S&P 500 Index, plus the dividends that would have been received on those stocks.
The Fund agrees to pay to the counterparty a floating rate of interest
(typically the London Inter Bank Offered Rate) on the notional amount of the
equity swap contract plus the amount, if any, by which that notional amount
would have decreased in value had it been invested in such stocks. Therefore,
the return to the Fund on any equity swap
43
<PAGE>
contract should be the gain or loss on the notional amount plus dividends on the
stocks comprising the S&P 500 Index (as if the Fund had invested the notional
amount in stocks comprising the S&P 500 Index) less the interest paid by the
Fund on the notional amount. Therefore, the Fund will generally realize a loss
if the value of the S&P 500 Index declines and will generally realize a gain if
the value of the S&P 500 Index rises. The Fund will enter into equity swap
contracts only on a net basis, I.E., where the two parties' obligations are
netted out, with the Fund paying or receiving, as the case may be, only the net
amount of any payments. Equity swap contracts involve special risks that are
described in the Principal Risks section.
During the fiscal year ended March 31, 2000, the Fund engaged in active and
frequent trading. Because of the frequency with which the Fund buys and sells
portfolio securities, a larger portion of distributions you receive are likely
to be ordinary dividends, rather than capital gain distributions.
AXA ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND
The investment objective of the AXA Rosenberg Select Sectors Market Neutral
Fund is to seek long-term capital appreciation while maintaining minimal
exposure to general equity market risk. The Fund seeks a total return greater
than the return on 3-month U.S. Treasury Bills. The Fund attempts to achieve its
investment objective by taking long positions primarily in the 500 largest
capitalization stocks principally traded in the markets of the United States
that the Adviser has identified as undervalued and short positions in such
stocks that the Adviser has identified as overvalued. When the Adviser believes
that a security is overvalued relative to other securities 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. By taking long and short positions
in different stocks, the Fund attempts to cancel out the effect of general stock
market movements on the Fund's performance. It is expected that the Fund can
achieve a positive return if the securities in the Fund's long portfolio
outperform the securities in the Fund's short portfolio. Conversely, it is
expected that the Fund will incur losses if the securities in the Fund's long
portfolio underperform the securities in the Fund's short portfolio.
The Fund seeks to construct a diversified portfolio that has minimal net
exposure to the U.S. equity market generally. It is currently expected that the
long and short positions of the Fund will be invested primarily in the 500
largest capitalization stocks principally traded in the markets of the United
States. Under normal circumstances, the Adviser's stock selection models will
result in the Fund's long and short positions being overweighted in different
sectors (including industries within different sectors). In other words, the
Fund may take long positions in a sector of the market that are not offset by
short positions in that sector and vice versa. Consequently, the Fund may have
net exposures to different industries and sectors of the market, thereby
increasing the risk of the Fund and the opportunity for loss should the stocks
in a particular industry or sector not perform as predicted by the Adviser's
stock selection models. The Adviser will determine the size of each long or
short position by analyzing the tradeoff between the attractiveness of each
position and its impact on the risk characteristics of the overall portfolio.
The Adviser uses the return that an investor could achieve through an
investment in 3-month U.S. Treasury Bills as a benchmark against which to
measure the Fund's performance. The Adviser attempts to achieve returns for the
Fund's shareholders which exceed the benchmark. An investment in the Fund is
different from an investment in 3-month U.S. Treasury Bills because, among other
differences, Treasury Bills are backed by the full faith and credit of the U.S.
Government, Treasury Bills have a fixed rate of return,
44
<PAGE>
investors in Treasury Bills do not risk losing their investment, and an
investment in the Fund is more volatile than an investment in Treasury.
During the fiscal year ended March 31, 2000, the Fund engaged in active and
frequent trading. Because of the frequency with which the Fund buys and sells
portfolio securities, a larger portion of distributions you receive are likely
to be ordinary dividends, rather than capital gain distributions.
AXA ROSENBERG ENHANCED 500 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 included in the S&P 500 ("S&P 500 Companies"). The Fund generally will
overweight investments in S&P 500 Companies that the Adviser expects to
outperform the S&P 500 and underweight, or avoid altogether, investments in such
companies that the Adviser expects to underperform the S&P 500.
AXA ROSENBERG INTERNATIONAL EQUITY FUND
The Fund seeks a total return greater than that of the Morgan Stanley
Capital International Europe Australasia, Far East Index (the "MSCI-EAFE
Index"). The MSCI-EAFE Index is a well-known, international, unmanaged, weighted
stock market index that includes over 1,000 securities listed on the stock
exchanges of 20 developed market countries from 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. 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 as sets in the stocks of companies which are not part of the
MSCI-EAFE Index but which have characteristics (such as, for example, the size
of the company's market capitalization, the general type of industry to which
the company's activities relate and country in which the company operates)
similar to those of the MSCI-EAFE companies.
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.
45
<PAGE>
The Fund will not normally invest in securities of United States issuers
traded on United States securities markets.
AXA ROSENBERG MULTI-STRATEGY MARKET NEUTRAL FUND
The Fund seeks long term growth of capital while maintaining minimal net
exposure to general equity market risk by investing primarily in stocks from
across all capitalization ranges 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. 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 Adviser's computerized
investment process is designed to maintain continually 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 of each of the countries the Fund invests in. Within markets, the Fund
also seeks "style neutrality," i.e., risk and reward uncorrected with value and
growth cycles. 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 Adviser's stock selection models may result in the Fund's long and short
positions being overweighted in different sectors (including industries within
different sectors). In other words, the Fund may take long positions in a sector
of the market that are not offset by short positions in that sector and vice
versa. Consequently, the Fund may have net exposures to different industries and
sectors of the market, thereby increasing the risk of the Fund and the
opportunity for loss should the stocks in a particular industry or sector not
perform as predicted by the Adviser's stock selection models. The Adviser will
determine the size of each long or short position by analyzing the tradeoff
between the attractiveness of each position and its impact on the risk
characteristics of the overall portfolio.
The Adviser uses the return that an investor could achieve through an
investment in 3-month U.S. Treasury Bills as a benchmark against which to
measure the Fund's performance. The Adviser attempts to achieve returns for the
Fund's shareholders which exceed the benchmark. an investment in the Fund is
different from an investment in 3-month U.S. Treasury Bills because, among other
differences, Treasury Bills are backed by the full faith and credit of the U.S.
Government, Treasury Bills have a fixed rate of return, investors in Treasury
Bills do not risk losing their investment, and an investment in the Fund is more
volatile than an investment in Treasury.
46
<PAGE>
PRINCIPAL RISKS
The value of your investment in a Fund changes with the values of the Fund's
investments. Many factors can affect those values. This section describes the
principal risks that may affect a particular Fund's investments as a whole. Any
Fund could be subject to additional risks because the types of investments made
by the Funds can change over time.
PRINCIPAL RISKS BY FUND
<TABLE>
<CAPTION>
RISKS
OF
S&P 500
SPECIAL INDEX RISKS SMALL
RISKS FUTURES OF AND RISKS
OF AND EQUITY MID-SIZED OF
INVESTMENT FOREIGN RELATED SWAP COMPANY CURRENCY SHORT PORTFOLIO MANAGEMENT
RISKS INVESTMENTS OPTIONS CONTRACTS RISK RISK SALES TURNOVER RISK
---------- ----------- -------- --------- --------- -------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AXA Rosenberg U.S.
Small
Capitalization Fund X X X X
AXA Rosenberg
International Small
Capitalization Fund X X X X X X
AXA Rosenberg Japan
Fund X X X X X
AXA Rosenberg Value
Market Neutral Fund X X X X X
AXA Rosenberg Double
Alpha Market Fund X X X X* X* X X
AXA Rosenberg Select
Sectors Market
Neutral Fund X X X X
AXA Rosenberg
Enhanced 500 Fund X X X
AXA Rosenberg
International
Equity Fund X X X X X
AXA Rosenberg
Multi-Strategy
Market Neutral Fund X X X X X X X
<CAPTION>
JAPANESE RISKS
PORTFOLIO SECURITIES OF
RISK RISK OVERWEIGHTING
--------- ---------- -------------
<S> <C> <C> <C>
AXA Rosenberg U.S.
Small
Capitalization Fund
AXA Rosenberg
International Small
Capitalization Fund
AXA Rosenberg Japan
Fund X
AXA Rosenberg Value
Market Neutral Fund X
AXA Rosenberg Double
Alpha Market Fund X*
AXA Rosenberg Select
Sectors Market
Neutral Fund X X
AXA Rosenberg
Enhanced 500 Fund
AXA Rosenberg
International
Equity Fund
AXA Rosenberg
Multi-Strategy
Market Neutral Fund X X
</TABLE>
------------------------------
* This risk is incurred indirectly by virtue of the Fund's investment in the
AXA Rosenberg Value Market Neutral Fund or, once it becomes effective, the
AXA Rosenberg Multi-Strategy Market Neutral Fund.
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
47
<PAGE>
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, each of the AXA Rosenberg Value Market Neutral Fund, AXA
Rosenberg Select Sectors Market Neutral Fund and AXA Rosenberg Multi-Strategy
Market Neutral Fund (collectively, the "Market Neutral Funds") 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 limitations on
currency movements and exchanges). 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 S&P 500 INDEX FUTURES AND RELATED OPTIONS. The AXA Rosenberg
Double Alpha Market Fund may invest in S&P 500 Index futures and related
Options. An S&P 500 Index Future contract (an "Index Future") is a contract to
buy or sell an integral number of units of the S&P 500 Index at a specified
future date at a price agreed upon when the contract is made. A unit is the
value at a given time of the S&P 500 Index. Entering into a contract to buy
units is commonly referred to as buying or purchasing a contract or holding a
long position in the S&P 500 Index. An option on an Index Future gives the
purchaser the right, in return for the premium paid, to assume a long or a short
position in an Index Future. The AXA Rosenberg Double Alpha Market Fund will
realize a loss if the value of the S&P 500 Index declines between the time the
Fund purchases an Index Future or takes a long position in an Index Future and
may realize a gain if the value of the S&P 500 Index rises between such dates.
The AXA Rosenberg Double Alpha Market Fund may close out a futures contract
purchase by entering into a futures contract sale. This will operate to
terminate the Fund's position in the futures contract. Positions in Index
Futures may be closed out by the Fund only on the futures exchanges on which the
Index Futures are then traded. There can be no assurance that a liquid market
will exist for any particular contract at any particular time. The liquidity of
the market in futures contracts could be adversely affected by "daily price
fluctuation limits" established by the relevant futures exchange which limit the
amount of fluctuation in the price of an Index Future during a single trading
day. Once the daily limit has been reached in the contract, no trades may be
entered into at a price beyond the limit. In such event, it may not be possible
for the Fund to close its futures contract purchase, and, in the event of
adverse price movements, the Fund would continue to be required to make daily
cash payments of variation margin (payments to and from a broker made on a daily
basis as the price of the Index Future fluctuates). The futures market may also
attract more speculators than does the securities market, because deposit
requirements in the futures market are less onerous than margin
48
<PAGE>
requirements in the securities market. Increased participation by speculators in
the futures market may also cause price distortions. In addition, the price of
Index Futures may not correlate perfectly with movement in the underlying index
due to certain market distortions.
Further, when the AXA Rosenberg Double Alpha Market Fund purchases an Index
Future, it is required to maintain, at all times while an Index Future is held
by the Fund, cash, U.S. government securities or other high grade liquid
securities in a segregated account with its Custodian, in an amount which,
together with the initial margin deposit on the futures contract, is equal to
the current value of the futures contract.
The ability to establish and close out positions in options on future
contracts will be subject to the development and maintenance of a liquid
secondary market. It is not certain that such a market will develop. Although
the AXA Rosenberg Double Alpha Market Fund generally will purchase only those
options for which there appears to be an active secondary market, there is no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. In the event no such market exists
for particular options, it might not be possible to effect closing transactions
in such options, with the result that the Fund would have to exercise the
options in order to realize any profit.
RISKS OF EQUITY SWAP CONTRACTS. The AXA Rosenberg Double Alpha Market Fund
may engage in equity swap contracts, through which a counterparty generally
agrees to pay the amount, if any, by which the agreed upon or "notional" amount
specified in the equity swap contract would have increased in value had it been
invested in the basket of stocks comprising the S&P 500 Index, plus the
dividends that would have been received on those stocks. The Fund agrees to pay
to the counterparty a floating rate of interest (typically the London Inter Bank
Offered Rate) on the notional amount of the equity swap contract plus the
amount, if any, by which that notional amount would have decreased in value had
it been invested in such stocks. Therefore, the return to the Fund on any equity
swap contract should be the gain or loss on the notional amount plus dividends
on the stocks comprising the S&P 500 Index (as if the Fund had invested the
notional amount in stocks comprising the S&P 500 Index) less the interest paid
by the Fund on the notional amount. Therefore, the Fund will generally realize a
loss if the value of the S&P 500 Index declines and will generally realize a
gain if the value of the S&P 500 Index rises. The Fund will enter into equity
swap contracts only on a net basis, I.E., where the two parties' obligations are
netted out, with the Fund paying or receiving, as the case may be, only the net
amount of any payments. If there is a default by the counterparty to an equity
swap contract, the Fund will be limited to contractual remedies pursuant to the
agreements related to the transaction. The Fund's use of equity swap contracts
may result in the Fund realizing more income subject to tax at ordinary income
tax rates than it would if it did not engage in equity swap contracts.
There is no assurance that the equity swap contract counterparties will be
able to meet their obligations or that, in the event of default, the AXA
Rosenberg Double Alpha Market Fund will succeed in pursing contractual remedies.
Pursing contractual remedies will also entail additional expense for the Fund.
The Fund thus assumes the risk that it may be delayed in or prevented from
obtaining payments owed to it pursuant to these contracts. The Fund will closely
monitor the credit of equity swap contract counterparties in order to minimize
this risk. The Fund will not use equity swap contracts for leverage.
The AXA Rosenberg Double Alpha Market Fund will not enter into any equity
swap contract unless, at the time of entering into such transaction, the
unsecured senior debt of the counterparty is rated at least A by Moody's or S&P.
In addition, the staff of the Securities and Exchange Commission considers
equity swap
49
<PAGE>
contracts to be illiquid securities. Consequently, while the staff maintains
this position, the Fund will not invest in equity swap contracts if, as a result
of the investment, the total value of such investments together with that of all
other illiquid securities which the Fund owns would exceed 15% of the Fund's net
assets.
The net amount of the excess, if any, of the Fund's obligations over its
entitlement with respect to each equity swap contract will be accrued on a daily
basis, and an amount of cash, U.S. government securities or other liquid
securities having an aggregate market value at least equal to the accrued excess
will be maintained in a segregated account by the Fund's Custodian. The Fund
does not believe that the Fund's obligations under equity swap contracts are
senior securities, so long as such a segregated account is maintained, and
accordingly, the Fund will not treat them as being subject to its borrowing
restrictions.
SMALL AND MID-SIZE COMPANY RISK. Companies with small or mid-sized market
capitalizations may be dependent upon a single proprietary product or market
niche, may have limited product lines, markets or financial resources, or may
depend on a limited management group. Typically, such companies have fewer
securities outstanding, which may be less liquid than securities of larger
companies. Their common stock and other securities may trade less frequently and
in limited volume and are generally more sensitive to purchase and sale
transactions. Therefore, the prices of such securities tend to be more volatile
than the prices of securities of companies with larger market capitalizations.
As a result, the absolute values of changes in the price of securities of
companies with small or mid-sized market capitalizations may be greater than
those of larger, more established companies.
CURRENCY RISK. As a result of their investments in securities denominated
in, and/or receiving revenues in, foreign currencies, the International Equity
Portfolios of the Trust (I.E. the AXA Rosenberg International Small
Capitalization Fund, the AXA Rosenberg AXA Rosenberg Japan Fund, the AXA
Rosenberg International Equity Fund and the AXA Rosenberg Multi-Strategy 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. In that event, the
dollar value of these types of investments would be adversely affected.
RISKS OF SHORT SALES. When the Adviser believes that a security is
overvalued, it may cause one or more of the Market Neutral Funds 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. No Fund can 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 current 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.
50
<PAGE>
Short sales also involve other costs. Each 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 relevant Fund replaces a borrowed security, it will maintain daily
a segregated account with its Custodian containing cash, U.S. government
securities, or other liquid securities. The amount deposited in the segregated
account plus any amount deposited as collateral with a broker or other custodian
will at least equal the current market value of the security sold short.
Depending on the arrangements made with such broker or custodian, the Fund might
not receive any payments (including interest) on collateral deposited with the
broker or custodian. No Fund will make a short sale if after giving effect to
the sale the market value of all securities sold short would exceed 100% of the
value of such Fund's net assets.
PORTFOLIO TURNOVER. The consideration of portfolio turnover will not
constrain the Adviser's investment decisions. Each of the Funds is actively
managed and, in some cases, each Fund's portfolio turnover may exceed 100%.
Higher portfolio turnover rates are likely to result in comparatively greater
brokerage commissions or transaction costs. Such costs will reduce the relevant
Fund's return. A higher portfolio turnover rate may also result in the
realization of substantial net short-term gains, which are taxable as ordinary
income to shareholders when distributed.
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.
Each Market Neutral Fund will lose money if the Adviser fails to purchase,
sell or sell short different stocks such that the securities in the relevant
Fund's long portfolio outperform the securities in the Fund's short portfolio.
In addition, management risk is heightened for those Funds 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 a Market Neutral Fund
that has limited exposure to general equity market risk or that has limited
exposure to specific industries (in the case of the AXA Rosenberg Value Market
Neutral Fund), specific capitalization ranges and certain other risk factors.
PORTFOLIO RISK. Although each of the Market Neutral Funds seeks to have
approximately equal dollar amounts invested in long and short positions, there
is a risk that the Adviser will fail to construct for any given Fund a portfolio
of long and short positions that has limited exposure to general U.S. stock
market movements, capitalization or other risk factors.
JAPANESE SECURITIES RISK. Investment in the AXA Rosenberg Japan Fund will
involve foreign investment risk because that Fund will invest almost exclusively
in Japanese Securities. In addition, investors will be subject to the market
risk associated with investing almost exclusively in stocks of companies which
are
51
<PAGE>
subject to Japanese economic factors and conditions. Since the Japanese economy
is dependent to a significant extent on foreign trade, the relationships between
Japan and its trading partners and between the yen and other currencies are
expected to have a significant impact on particular Japanese companies and on
the Japanese economy generally.
RISK OF OVERWEIGHTING. This is the risk that, by overweighting investments
in certain sectors or industries of the stock market, the AXA Rosenberg Select
Sectors Market Neutral Fund and/or the AXA Rosenberg Multi-Strategy Market
Neutral Fund will suffer a loss because of general advances or declines on the
prices of stocks in those sectors or industries.
CERTAIN ADDITIONAL 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").
CERTAIN ADDITIONAL TECHNIQUES OF THE AXA ROSNBERG U.S. SMALL CAPITALIZATION
FUND, AXA ROSENBERG VALUE MARKET NEUTRAL FUND, AXA ROSENBERG DOUBLE ALPHA MARKET
FUND, AXA ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND AND AXA ROSENBERG
ENHANCED 500 FUND. To meet redemption requests or for investment purposes, each
of these Funds may temporarily hold a portion of its assets in full faith and
credit obligations of the United States government (E.G., U.S. Treasury Bills)
and in short-term notes, commercial paper or other money market instruments of
high quality (I.E., rated at least "A-2" or "AA" by Standard & Poor's ("S&P") or
Prime 2 or "Aa" by Moody's Investors Service, Inc. ("Moody's")) issued by
companies having an outstanding debt issue rated at least "AA" by S&P or at
least "Aa" by Moody's, or determined by the Adviser to be of comparable quality
to any of the foregoing.
FOREIGN EXCHANGE TRANSACTIONS. 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.
52
<PAGE>
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
and the time it sells it 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, each Fund may
invest in Index Futures while the Adviser seeks favorable terms from brokers to
effect transactions in common stocks selected for purchase. A Fund may also
invest in Index Futures when the Adviser believes that there are not enough
attractive common stocks available to maintain the standards of diversity and
liquidity set for the Fund, pending investment in such stocks when they do
become available. Through the use of Index Futures, a Fund may maintain a
portfolio with diversified risk without incurring the substantial brokerage
costs which may be associated with investment in multiple issuers. This may
permit a Fund to avoid potential market and liquidity problems (E.G., driving up
or forcing down the price by quickly purchasing or selling shares of a portfolio
security) which may result from increases or decreases in positions already held
by a Fund. A Fund may also use Index Futures in order to hedge its equity
positions.
In contrast to purchases of a common stock, no price is paid or received by
a Fund upon the purchase of a futures contract. Upon entering into a futures
contract, a Fund will be required to deposit with its custodian in a segregated
account in the name of the futures broker a specified amount of cash or
securities. This is known by participants in the market as "initial margin." The
type of instruments that may be deposited as initial margin, and the required
amount of initial margin, are determined by the futures exchange on which the
Index Futures are traded. The nature of initial margin in futures transactions
is different from that of margin in securities transactions in that futures
contract margin does not involve the borrowing of funds by the customer to
finance the transactions. Rather, the initial margin is in the nature of a
performance bond or good faith deposit on the contract which is returned to the
Fund upon termination of the futures contract, assuming all contractual
obligations have been satisfied. Subsequent payments, called "variation margin,"
to and from the broker, will be made on a 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,
53
<PAGE>
because deposit requirements in the futures market are less onerous than margin
requirements in the securities market. Increased participation by speculators in
the futures market may also cause price distortions. In addition, the price of
Index Futures may not correlate perfectly with movement in the underlying index
due to certain market disturbances.
A Fund will not purchase Index Futures if, as a result, the Fund's initial
margin deposits on transactions that do not constitute "bona fide hedging" under
relevant regulations of the Commodities Futures Trading Commission would be
greater than 5% of the Fund's total assets. In addition to margin deposits, when
a Fund purchases an Index Future, it is required to maintain, at all times while
an Index Future is held by the Fund, cash, U.S. Government securities or other
high grade liquid securities in a 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. There is
a risk, therefore, that the seller will fail to honor its repurchase obligation.
In such event, the relevant 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 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
54
<PAGE>
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.
ILLIQUID SECURITIES. Each Fund may purchase "illiquid securities," defined
as securities which cannot be sold or disposed of in the ordinary course of
business within seven days at approximately the value at which a Fund has valued
such securities, so long as no more than 15% of the Fund's net assets would be
invested in such illiquid securities after giving effect to the purchase.
Investment in illiquid securities involves the risk that, because of the lack of
consistent market demand for such securities, the Fund may be forced to sell
them at a discount from the last offer price.
FOREIGN INVESTMENTS BY THE AXA ROSENBERG U.S. SMALL CAPITALIZATION FUND, THE
AXA ROSENBERG VALUE MARKET NEUTRAL FUND AND THE AXA ROSENBERG SELECT SECTORS
MARKET NEUTRAL FUND. Although they invest primarily in securities principally
traded in U.S. markets, these Funds may occasionally invest in (and, in the case
of the AXA Rosenberg Value Market Neutral Fund and the AXA Rosenberg Select
Sectors Market Neutral Fund, engage in short sales with respect to) stocks of
foreign companies that trade on U.S. markets. Investments in securities of
Foreign issuers involve certain risks that are less significant for investments
in securities of U.S. issuers. These include risks of adverse changes in foreign
economic, political, regulatory and other conditions, changes in currency
exchange rates or exchange control regulations (including currency blockage). A
Fund may be unable to obtain and enforce judgments against foreign entities, and
issuers of foreign securities are subject to different, and often less
comprehensive, accounting, reporting and disclosure requirements than domestic
issuers. Also, the securities of some foreign companies may be less liquid and
at times more volatile than securities of comparable U.S. companies.
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
AXA ROSENBERG U.S. SMALL CAPITALIZATION FUND
The dominance of small cap growth stocks over small cap value stocks during
the last fiscal year was a difficult market environment for the Fund. The
Adviser's stock selection models tend to favor stocks that are seen as
underpriced relative to their fundamental financial characteristics when
compared with other similar stocks. This tendency leads to a portfolio with a
modest value bias. In such an extreme growth environment, this value bias hurt
the performance of the Fund relative to its benchmark.
While the Fund's value exposures detracted from relative performance, other
risk factor and industry exposures contributed positively to performance. The
Fund's slight positive exposure to stocks with positive price momentum (relative
strength risk factor) helped the most as the return associated with this feature
of stocks rose to historic highs. Among industries, an overexposure to the
electronics industry (2.8% above the Russell 2000 index exposure) during the
past 12 months boosted relative performance.
The bulk of the Fund's underperformance was attributable to the independent
effect of stock selection and not the aggregate influence of risk factor and
industry exposures. This result is not surprising given the Fund's tight
management of risk factor and industry exposures and given the types of stocks
that were rewarded and punished by investors over the past 12 months.
Fundamental to the Adviser's stock selection process is the belief that a
portfolio of stocks that produce more future earnings per dollar of initial cost
(an
55
<PAGE>
"earnings advantage") than the benchmark should be rewarded with above benchmark
performance. In the past year, the stocks held by the Fund did consistently
produce more future earnings per dollar of cost than the benchmark; however,
investors did not reward these superior earnings. In fact, investors strongly
favored stocks with no earnings or negative earnings. In environments like
these, when investors do not focus on reconciling current stock prices with
likely future earnings or other fundamental measures of value, the Adviser's
stock selection performance will suffer.
AXA ROSENBERG U.S. SMALL CAPITALIZATION FUND
(BASED ON THE PERFORMANCE OF INSTITUTIONAL SHARES ONLY)
[To be updated.]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
$ MILLIONS US SMALL CAP SERIES RUSSELL 2000
<S> <C> <C>
1989 $1,000,000 $1,000,000
1990 $1,074,145 $1,055,330
1991 $1,090,875 $1,126,901
1992 $1,263,166 $1,363,735
1993 $1,547,461 $1,566,262
1994 $1,745,950 $1,738,538
1995 $1,959,423 $1,834,212
1996 $2,658,626 $2,367,285
1997 $3,177,964 $2,488,269
1998 $4,606,424 $3,533,668
1999 $3,659,382 $2,959,009
</TABLE>
$3,659,382 Portfolio $2,959,009 Benchmark
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
AVERAGE ANNUAL TOTAL RETURN (FOR PERIODS ENDED 3/31/99) [TO BE UPDATED.]
<TABLE>
<CAPTION>
PAST PAST PAST SINCE INCEPTION* SINCE INCEPTION*
ONE YEAR FIVE YEARS TEN YEARS (10/22/96) (1/21/97)
--------------- ---------- --------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Institutional Shares................. -20.56% 15.95% 13.85%
Investor Shares...................... -20.75% 8.60%
Adviser Shares....................... -20.70% 4.82%
Russell 2000 Index................... -16.26% 11.22% 11.46% 7.37% 4.12%
</TABLE>
------------------------
* Inception dates: October 22, 1996 for Investor Shares and January 21, 1997
for Adviser Shares.
THE NUMBERS REPORTED IN BOTH THE GRAPH AND THE TABLE REPRESENT PAST
PERFORMANCE AND ARE NOT PREDICTIVE OF FUTURE PERFORMANCES. THE PERFORMANCE OF
ADVISER SHARES AND INVESTOR SHARES WILL BE LOWER THAN THE PERFORMANCE OF
INSTITUTIONAL SHARES BECAUSE OF THE HIGHER FEES PAID BY SHAREHOLDERS INVESTING
IN SUCH CLASSES.
56
<PAGE>
AXA ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
For the year ending March 31, 2000, the Fund outperformed its benchmark. The
outperformance was a combination of stock selection and risk management. The
portfolio had a slight value bias, which hurt performance during the fourth
quarter of 1999, but on average, helped over the whole year. The Adviser strives
to add value consistently through bottom-up stock selection and avoids heavy
bets on countries and industries. The portfolio closely tracks the country and
industry exposures of the benchmark. As a result, the contributions to the
outperformance from industry and country selection were positive but modest,
whereas stock selection accounted for most of the outperformance. In particular,
the Manager's stock selection models worked well in Europe.
AXA ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
(BASED ON THE PERFORMANCE OF INSTITUTIONAL SHARES ONLY)
[To be updated.]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
$ MILLIONS INT'L SMALL CAP SERIES CRIEXUS SALOMON SMITH BARNEY WORLD EX US EMI
<S> <C> <C> <C>
1996 $1,000,000 $1,000,000 $1,000,000
1997 $1,013,000 $991,182 $1,089,046
1998 $1,038,436 $995,775 $975,381
1999 $946,721 $883,210 $798,555
</TABLE>
$946,721 Portfolio $883,210 Benchmark $798,555 Benchmark
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
AVERAGE ANNUAL TOTAL RETURN (FOR PERIODS ENDED 3/31/99) [TO BE UPDATED.]
<TABLE>
<CAPTION>
PAST ONE SINCE INCEPTION* SINCE INCEPTION*
YEAR (9/23/96) (10/29/96)
--------------- ---------------- ----------------
<S> <C> <C> <C>
Institutional Shares................................... -8.83% -2.15%
Investor Shares........................................ -9.16% -2.66%
Salomon Smith Barney World ex US EMI................... -18.13% -8.61% -7.78%
CRIexUS Index**........................................ -11.30% -4.85% -5.02%
</TABLE>
------------------------
* Inception Dates: September 23, 1996 for Institutional Shares; October 29,
1996 for Investor Shares.
THE NUMBERS REPORTED IN BOTH THE GRAPH AND THE TABLE REPRESENT PAST
PERFORMANCE AND ARE NOT PREDICTIVE OF FUTURE RESULTS. THE PERFORMANCE OF
INVESTOR SHARES WILL BE LOWER THAN THE PERFORMANCE OF INSTITUTIONAL SHARES
BECAUSE OF THE HIGHER FEES PAID BY SHAREHOLDERS INVESTING IN SUCH CLASSES.
57
<PAGE>
AXA ROSENBERG JAPAN FUND
The Fund gained more than 45% but under-performed its benchmark by more than
11% for the year ended March 31, 2000. The unprecedented performance spread
between growth stocks and value stocks, especially during the second half of the
year as high flying large growth stocks drove the market, created an unfavorable
market environment for the Fund. Stock selection and the portfolio's negative
exposure to relative strength (measure of trailing 12-month price performance)
were the major contributors to the Fund's underperformance. The Adviser's stock
selection models, based on fundamental analysis, favor value stocks. In a
momentum market, driven by growth stocks with relative strength, the models are
unable to reconcile current prices with the underlying company fundamentals.
AXA ROSENBERG JAPAN FUND
(BASED ON THE PERFORMANCE OF INSTITUTIONAL SHARES ONLY)
[To be updated.]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$ Millions
<TABLE>
<CAPTION>
JAPAN SERIES TOPIX
<S> <C> <C>
1989 $1,000,000 $1,000,000
1990 $835,992 $764,258
1991 $852,236 $763,343
1992 $672,513 $585,714
1993 $768,292 $689,935
1994 $924,653 $851,308
1995 $1,006,408 $849,462
1996 $993,949 $887,082
1997 $708,883 $646,116
1998 $539,666 $551,502
1999 $624,288 $635,573
</TABLE>
<TABLE>
<CAPTION>
$635,573 BENCHMARK $624,288 PORTFOLIO
<S> <C>
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
AVERAGE ANNUAL TOTAL RETURN (FOR PERIODS ENDED 3/31/99) [TO BE UPDATED.]
<TABLE>
<CAPTION>
PAST PAST PAST SINCE INCEPTION*
ONE YEAR FIVE YEARS TEN YEARS (10/22/96)
--------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
Institutional Shares.............................. 15.68% -7.56% -4.60%
Investor Shares................................... 15.50% -14.67%
TOPIX............................................. 15.24% -5.68% -4.43% -9.98%
</TABLE>
------------------------
* Inception date: October 22, 1996 for Investor Shares.
THE NUMBERS REPORTED IN BOTH THE GRAPH AND THE TABLES REPRESENT PAST
PERFORMANCE AND ARE NOT PREDICTIVE OF FUTURE PERFORMANCES. THE PERFORMANCE OF
INVESTOR SHARES WILL BE LOWER THAN THE PERFORMANCE OF INSTITUTIONAL SHARES
BECAUSE OF THE HIGHER FEES PAID BY SHAREHOLDERS INVESTING IN SUCH CLASS.
58
<PAGE>
AXA ROSENBERG VALUE MARKET NEUTRAL FUND
The year ending March 31, 2000 was extremely difficult for the Fund. The
Fund underperformed its benchmark by more than -19%.
The Adviser's stock selection models produce long and short portfolios with
a consistent net exposure to value characteristics, as well as a bias toward
companies whose stock is less frequently traded. When the long portfolio is
compared to the short portfolio, it is possible to gauge approximately how much
was gained and lost due to the net portfolio characteristics. The two largest
risk exposures reflect the value bias in the net portfolio: positive exposure to
earnings/price and book/price. The negative exposure to trading activity
indicates the net portfolio's moderate dislike of stocks that are frequently
traded. Of particular significance over the last year (especially the first
quarter of 2000) was the positive exposure to relative strength, a measure of
price momentum.
Exposure to common risk factors contributed -5.18% to the Fund's
underperformance. The positive exposures to earnings/price and yield, -2.89% and
-1.97% respectively, negatively impacted performance. In comparison, the bias
toward stocks whose performance is momentum driven made the most significant
positive contribution to return because of the very large contribution of
relative strength (+6.75%). The exposure to trading activity (-3.78) worked to
further dampen performance for the same reason.
The bulk of the Fund's underperformance is UNEXPLAINED by common risk factor
exposures. The most significant factor was stock selection. Reviewing the types
of stocks that were rewarded (and the types that were punished) over the last
year gives insight into why the contribution attributable to stock selection was
so negative. Fundamental to the Adviser's stock selection process is the belief
that a portfolio with a net earnings advantage will be rewarded. Though the
stocks that the Adviser bought long did consistently produce more future
earnings per dollar of cost than the stocks sold short, the market did not
reward earnings. In fact, at certain times over the year, the market seemed to
be actively penalizing stocks with good long-term earnings prospects in favor of
those with no earnings or negative earnings. In sum, the Adviser's stock
selection process will suffer when investors are not interested in reconciling
current prices with future earnings or other fundamental measures of value.
The AXA Rosenberg Value Market Neutral Fund has a value orientation. In very
general terms, this value orientation implies that the Fund's performance will
be affected by many of the same economic factors that influence the performance
of all value stocks and strategies. There is, in fact, a positive correlation
between the outperformance of the Fund and the outperformance of a passive value
strategy. As a supplement to the 3-month U.S. T-Bill (the official benchmark for
the Fund), we suggest that investors consider a benchmark that reflects the
Fund's alpha and the market's value/growth cycle.
The supplemental benchmark listed below is defined as the return over the
evaluation period to: 3-month U.S. T-Bills + 0.35 (Russell 2500 Value Index --
Russell 2500 Growth Index). Using this formula, the supplemental benchmark's
monthly returns will ebb and flow along with the performance of value at large.
By monitoring this supplemental benchmark -- and the Fund's relative
performance -- the investor will be able to guage value versus growth cycles in
the market, and measure the Fund's performance relative to a benchmark with a
value orientation.
59
<PAGE>
AXA ROSENBERG VALUE MARKET NEUTRAL FUND
(BASED ON THE PERFORMANCE OF INSTITUTIONAL SHARES ONLY)
[To be updated.]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$ Millions
<TABLE>
<CAPTION>
AXA ROSENBERG MARKET NEUTRAL FUND 3-MONTH U.S. TREASURY BILLS
<S> <C> <C>
1997 $1,000,000 $1,000,000
1998 $997,000 $1,014,083
1999 $924,000 $1,063,832
</TABLE>
<TABLE>
<CAPTION>
$1,063,832 BENCHMARK $924,000 PORTFOLIO
<S> <C>
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
AVERAGE ANNUAL TOTAL RETURN (FOR PERIODS ENDED 3/31/99) [TO BE UPDATED.]
<TABLE>
<CAPTION>
PAST SINCE INCEPTION* SINCE INCEPTION*
ONE YEAR (12/16/97) (12/18/97)
-------------- ---------------- ----------------
<S> <C> <C> <C>
Institutional Shares........................................ -7.31% -5.94%
Investor Shares............................................. -7.66% -6.32%
3-Month U.S. T-Bills........................................ 4.80% 5.07% 5.04%
Supplemental Benchmark...................................... -12.50% -5.56% -5.73%
</TABLE>
THE NUMBERS REPORTED IN BOTH THE GRAPH AND THE TABLE REPRESENT PAST
PERFORMANCE AND ARE NOT PREDICTIVE OF FUTURE PERFORMANCES. THE PERFORMANCE OF
INVESTOR SHARES WILL BE LOWER THAN THE PERFORMANCE OF INSTITUTIONAL SHARES
BECAUSE OF THE HIGHER FEES PAID BY SHAREHOLDERS INVESTING IN SUCH CLASS.
60
<PAGE>
AXA ROSENBERG DOUBLE ALPHA MARKET FUND
The Fund underperformed its benchmark for the year ended March 31, 2000, by
more than -20.5%. The Fund holds S&P 500 Index Futures contracts and shares in
the AXA Rosenberg Value Market Neutral Fund. The Institutional shares of the AXA
Rosenberg Value Market Neutral Fund returned -14.13% for year. Investment in S&P
500 Futures also contributed negatively to performance during the year by
slightly more than -6%.
AXA ROSENBERG DOUBLE ALPHA MARKET FUND
(BASED ON THE PERFORMANCE OF INSTITUTIONAL SHARES ONLY)
[To be updated.]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
$ Millions
<TABLE>
<CAPTION>
AXA ROSENBERG DOUBLE
ALPHA MARKET FUND S&P 500
<S> <C> <C>
1998 $1,000,000 $1,000,000
1999 $1,005,299 $1,157,459
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
AVERAGE ANNUAL TOTAL RETURN* (FOR PERIODS ENDED 3/31/99) [TO BE UPDATED.]
<TABLE>
<CAPTION>
SINCE INCEPTION
---------------
<S> <C>
AXA Rosenberg Double Alpha Market Fund (Institutional
Shares)
(Inception date 4/22/98).................................. 0.53%
AXA Rosenberg Double Alpha Market Fund (Investor Shares)
(Inception date 4/22/98).................................. 0.18%
S&P 500..................................................... 15.75%
</TABLE>
------------------------
*
THE NUMBERS REPORTED IN BOTH THE GRAPH AND THE TABLE REPRESENT PAST
PERFORMANCE AND ARE NOT PREDICTIVE OF FUTURE PERFORMANCES. THE PERFORMANCE OF
INVESTOR SHARES WILL BE LOWER THAN THE PERFORMANCE OF INSTITUTIONAL SHARES
BECAUSE OF THE HIGHER FEES PAID BY SHAREHOLDERS INVESTING IN SUCH CLASS.
61
<PAGE>
AXA ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND
For the year ended on March 31, 2000, the Fund outperformed its benchmark,
U.S. 90-day Treasury Bills, by more than 4%. In addition to the positive
contributions from the exposures to relative strength (measure of trailing
12-month price performance) (+4.99%) and to trading activity (measure of
trailing 12-month share turnover) (+3.17%) during this period, the Fund
benefited from long industry exposures to office machinery (+2.87%), services
(+1.96%) and electric utilities (+1.49%). Short industry exposures to drugs
(-2.59%), paper (-0.77%) and media (-0.67%) contributed negatively to
performance. Stock selection further dampened performance (-4.72%).
AXA ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND
(BASED ON THE PERFORMANCE OF INSTITUTIONAL SHARES ONLY)
[To be provided.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED MARCH 31, 2000) [TO BE UPDATED.]
<TABLE>
<CAPTION>
SINCE SINCE
INCEPTION OF INCEPTION OF
PAST INSTITUTIONAL SHARES INVESTOR SHARES
ONE YEAR (10/19/98) (11/11/98)
-------- -------------------- ---------------
<S> <C> <C> <C>
Institutional Shares................................... 9.82% 10.43%
Investor Shares........................................ 9.39% 10.29%
3-Month U.S. T-Bills................................... 4.94% 4.92% 4.99%
</TABLE>
THE ADVISER'S GENERAL INVESTMENT PHILOSOPHY
The Adviser attempts to add value relative to each designated benchmark
through a quantitative stock selection process and seeks to diversify investment
risk across the holdings in each of the Funds. In seeking to outperform each
Fund's designated benchmark, the Adviser also attempts to control risk in the
Fund's portfolio relative to the securities constituting that benchmark. Since
each Fund is substantially invested in equities at all times, the Adviser does
not earn extraordinary return, or "alpha," by timing the market. The Adviser
seeks to avoid constructing portfolios that significantly differ from the
relevant benchmark with respect to characteristics such as market
capitalization, historic volatility or "beta," and industry weightings. Each
Fund seeks to have exposure to these factors similar to that of the designated
benchmark.
INVESTMENT PHILOSOPHY
The Adviser's investment strategy is based on the belief that stock prices
imperfectly reflect the present value of the expected future earnings of
companies, their "fundamental value." The Adviser 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
62
<PAGE>
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 the
Market Neutral Funds) 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.
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 Market Neutral Funds) 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. These models include analyses of both fundamental data and historical
price performance. 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.
63
<PAGE>
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. Each segment is compared
with similar segments of other companies doing business in the same geographical
market and, in most cases, in different markets. The Adviser appraises the
company's assets, operating earnings and sales within each business segment,
using the market's valuation of the relevant category of business as a guide
where possible. The Adviser then puts the segment appraisals together to create
balance sheet, income statement, and sales valuation models for each total
company, while adjusting the segment appraisals to reflect variables which apply
only to the total company, such as taxes, capital structure, and pension
funding.
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
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 the risks 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) and Portfolio System for Institutional
Trading (POSIT) facilitate large volume trading with little or no price
disturbance and low commission rates.
Accommodative trading (also referred to herein as the Adviser's "match
system") allows institutional buyers and sellers of stock to electronically
present the Adviser with their "interest" lists each morning. Any matches
between the inventory that the brokers have presented and the Adviser's own
recommended trades are signaled to the Adviser's traders. Because the broker is
doing agency business and has a client on the other side of the trade, the
Adviser expects the other side to be accommodative in setting the price. The
64
<PAGE>
Adviser's objective in using this match system is to execute most trades on the
Adviser's side of the bid/ask spread so as to minimize market impact.
Package trades further allow the Adviser to trade large lists of orders
simultaneously using state of the art tools such as the Instinet Real-Time
System, Instinet Order Matching System and Lattice Trading System. Those tools
provide order entry, negotiation and execution capabilities, either directly to
other institutions or electronically to the floor of the exchange. The
advantages of using such systems include speed of execution, low commissions,
anonymity and very low market impact.
The Adviser continuously monitors trading costs to determine the impact of
commissions and price disturbances on a Fund's portfolio.
MANAGEMENT OF THE TRUST
The Trust's trustees oversee the general conduct of the Funds' business.
INVESTMENT ADVISER
AXA Rosenberg Investment Management LLC (the "Adviser") is the 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 portfolio of Barr
Rosenberg Variable Insurance Trust. Each of the Funds will pay the Adviser a
management fee for these services on a monthly basis. Each of the AXA Rosenberg
U.S. Small Capitalization Fund, the AXA Rosenberg International Small
Capitalization Fund, the AXA Rosenberg Value Market Neutral Fund, AXA Rosenberg
Double Alpha Market Fund, the AXA Rosenberg Select Sectors Market Neutral Fund,
the AXA Rosenberg Enhanced 500 Fund, the AXA Rosenberg International Equity Fund
and the AXA Rosenberg Multi-Strategy Market Neutral Fund will pay the Adviser
0.90%, 1.00%, 1.00%, 1.50%, 0.10%, 1.00%, 0.50%, 0.85% and 1.50%, respectively,
of its average daily net assets per year as management fees. The Adviser has
entered into a contractual undertaking to reduce its management fee and bear
certain expenses until March 31, 2001 to limit each Fund's total annual
operating expenses. Any amounts waived or reimbursed in a particular fiscal year
will be subject to repayment by the relevant Fund to the Adviser to the extent
that from time to time through the next two fiscal years the repayment will not
cause the Fund's expenses to exceed the limit, if any, agreed to by the Adviser
at that time. The AXA Rosenberg U.S. Small Capitalization Fund, AXA Rosenberg
International Small Capitalization Fund, AXA Rosenberg Japan Fund, AXA Rosenberg
Value Market Neutral Fund, AXA Rosenberg Double Alpha Market Fund and AXA
Rosenberg Select Sectors Market Neutral Fund paid the Advisor $4,157,169,
$247,311, $0, %1,909,073, $0 and $142,806, respectively, in fees for the fiscal
year ended March 31, 2000. This represented %, %, 0%, %, 0% and % of
the average daily net assets of the AXA Rosenberg U.S. Small Capitalization
Fund, AXA Rosenberg International Small Capitalization Fund, AXA Rosenberg Japan
Fund, AXA Rosenberg Value Market Neutral Fund, AXA Rosenberg Double Alpha Market
Fund and AXA Rosenberg Select Sectors Market Neutral Fund. The AXA Rosenberg
Enhanced 500 Fund, AXA Rosenberg International Equity Fund and AXA Rosenberg
Multi-Strategy Market Neutral Fund were not operational for the fiscal year
ended March 31, 2000.
65
<PAGE>
PORTFOLIO MANAGERS
Management of the portfolio of each Fund is overseen by the Adviser's
executive officers who are responsible for design and maintenance of the
Adviser's portfolio system, and by a portfolio manager who is responsible for
research and monitoring each Fund's characteristic performance against the
relevant benchmark and for monitoring cash balances.
AXA ROSENBERG U.S. SMALL CAPITALIZATION FUND. Dr. Barr Rosenberg,
Dr. Kenneth Reid and Floyd Coleman, the portfolio manager, are responsible, and
have been responsible since inception, for the day-to-day management of the AXA
Rosenberg U.S. Small Capitalization Fund's portfolio. Dr. Rosenberg and
Dr. Reid both have been employed by the Adviser or its predecessor since 1985.
Mr. Coleman has been a trader and portfolio manager for the Adviser or its
predecessor since 1988. He received a B.S. from Northwestern University in 1982,
a M.S. from Polytechnic Institute, Brooklyn in 1984 and a M.B.A. from Harvard
Business School in 1988.
AXA ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND AND AXA ROSENBERG
INTERNATIONAL EQUITY FUND. Dr. Rosenberg, Dr. Reid and Joseph Leung, the
portfolio manager, are responsible, and have been responsible since inception,
for the day-to-day management of portfolios of the AXA Rosenberg International
Small Capitalization Fund and AXA Rosenberg International Equity Fund.
Mr. Leung has been a senior research associate, programmer and portfolio manager
with the Adviser or its predecessor since 1993. He received a B.S. and a B.A.
from Queen's University, Ontario, Canada in 1989 and a M.B.A. from the
University of Chicago in 1993. Mr. Leung is a chartered financial analyst.
AXA ROSENBERG JAPAN FUND. Dr. Rosenberg, Dr. Reid, and Cheng S. Liao, the
portfolio manager, are responsible, and have been responsible since inception,
for the day-to-day management of the AXA Rosenberg Japan Fund's portfolio.
Mr. Liao has been a senior research associate, programmer and portfolio manager,
specializing in the Japanese market with the Adviser or its predecessor since
1989. Mr. Liao has also been a trader for the Adviser or its predecessor in
Japanese securities since 1994. He received a B.S. from Tohobu University,
Japan, in 1984, a M.S. from Stanford University in 1986, and a M.S. in Computer
Science from Polytechnic Institute, New York in 1988.
AXA ROSENBERG VALUE MARKET NEUTRAL FUND, AXA ROSENBERG DOUBLE ALPHA MARKET
FUND AND AXA ROSENBERG MULTI-STRATEGY MARKET NEUTRAL FUND. Dr. Rosenberg,
Dr. Reid and F. William Jump, Jr., C.F.A., the portfolio manager, are
responsible for the day-to-day management of the portfolios of the AXA Rosenberg
Value Market Neutral Fund, AXA Rosenberg Double Alpha Market Fund and AXA
Rosenberg Multi-Strategy Market Neutral Fund. Dr. Rosenberg and Dr. Reid both
have been employed by the Adviser or its predecessor since 1985. Mr. Jump has
had numerous responsibilities including trading, applications programming, new
product development and portfolio engineering since he joined the Adviser's
predecessor in 1990. He received a B.A. from Swarthmore College in 1977 and an
M.B.A. from The Wharton School, University of Pennsylvania in 1983.
AXA ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND. Dr. Rosenberg, Dr. Reid
and James Kan, C.F.A., the portfolio manager, are responsible for the day-to-day
management of the AXA Rosenberg Select Sectors Market Neutral Fund's portfolio.
Dr. Rosenberg and Dr. Reid both have been employed by the Adviser or its
66
<PAGE>
predecessor since 1985. Mr. Kan has had numerous responsibilities including
trading, applications programming and portfolio engineering since he joined the
Adviser's predecessor in 1990. He received a B.S. from the University of British
Colombia in 1984, an M.S. from the University of Southern California in 1987 and
an M.B.A. from the University of Chicago in 1990.
AXA ROSENBERG ENHANCED 500 FUND. Dr. Rosenberg, Dr. Reid and Douglas
Burton, the portfolio manager, are responsible for the day-to-day anagement of
the AXA Rosenberg Enhanced 500 Fund's portfolio. Dr. Rosenberg and Dr. Reid both
have been employed by the Adviser or its predecessor since 1985. Mr. Burton has
had portfolio management, marketing and client service responsibilities since he
joined the Adviser's predecessor in 1998. He received a B.S. in 1986 and an
M.B.A. in 1988 from Brigham Young University. He received an M.S. from the
University of Utah in 1997. Mr. Burton is a chartered financial analyst.
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.
67
<PAGE>
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.
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 Emeritus 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, 2000) and INVESTMENTS (with Gordon J. Alexander and Jeffery
Bailey, Prentice-Hall, 1999). Dr. Sharpe is a past President of the American
Finance Association. He is currently Chairman of Financial Engines Incorporated,
an on-line 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
of 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
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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 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, Institutional Shares, Class A, Class B and Class C Shares
of each Fund and the Adviser Shares of the AXA Rosenberg U.S. Small
Capitalization 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 3435 Stelzer Road, Columbus, Ohio 43219. 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 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. Although
the Distributor sells Institutional Shares of the Funds, as noted below, the
Funds pay no
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fees to the Distributor for such shares. 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 U.S. Small Capitalization Fund........ None 0.25% 0.50% 1.00% 1.00%
AXA Rosenberg International Small Capitalization
Fund.............................................. None 0.25% 0.50% 1.00% 1.00%
AXA Rosenberg Japan Fund............................ None 0.25% 0.50% 1.00% 1.00%
AXA Rosenberg Value Market Neutral Fund............. None 0.25% 0.50% 1.00% 1.00%
AXA Rosenberg Double Alpha Market Fund.............. None 0.25% 0.50% 1.00% 1.00%
AXA Rosenberg Select Sectors Market Neutral Fund.... None 0.25% 0.50% 1.00% 1.00%
AXA Rosenberg Enhanced 500 Fund 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 Multi-Strategy Market Neutral Fund.... None 0.25% 0.50% 1.00% 1.00%
</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
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 types of sales charges.
Under a Service Plan adopted by the Trustees, the Distributor may also
provide (or arrange for another intermediary or agent to provide) personal
and/or account maintenance services to holders of Adviser Shares of the AXA
Rosenberg U.S. Small Capitalization Fund (the Distributor or such entity is
referred to as a "Servicing Agent" in such capacity). A Servicing Agent will be
paid some or all of the Servicing Fees charged with respect to Adviser Shares
pursuant to Servicing Plan for such shares.
MULTIPLE CLASSES
As indicated previously, the Funds offer five classes of shares to
investors, with eligibility for purchase 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 AXA Rosenberg
U.S. Small
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Capitalization Fund also offers a sixth class: the Adviser Shares. The following
table sets forth basic investment and fee Information for each class.
<TABLE>
<CAPTION>
ANNUAL
DISTRIBUTION
AND
MINIMUM FUND SUBSEQUENT ANNUAL SHAREHOLDER
NAME OF CLASS INVESTMENT* INVESTMENT* SERVICE FEE SERVICE FEE
------------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Institutional................................... $1 million $10,000 None None
Adviser......................................... $ 100,000 $ 1,000 0.25% None
Investor........................................ $ 2,500 $ 500 None 0.25%
Class A......................................... $ 1,000 $ 100 None 0.50%
Class B......................................... $ 1,000 $ 100 None 1.00%
Class C......................................... $ 1,000 $ 100 None 1.00%
</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.
ADVISER SHARES
Adviser shares may be purchased solely through accounts established under a
fee-based program which is sponsored and maintained by a registered
broker-dealer or other financial adviser approved by the Trust's Distributor and
under which each investor pays a fee to the broker-dealer or other financial
adviser, or its affiliate or agent, for investment managery or administrative
services. In order to be eligible to purchase Adviser Shares, a broker-dealer or
other financial adviser must make an initial investment of at least $100,000 of
its client's assets in the AXA Rosenberg U.S. Small Capitalization Fund. In its
sole discretion, the Adviser may waive this minimum asset investment
requirement. Adviser Shares are sold without any initial or deferred sales
charges and are not subject to ongoing distribution fees, but are subject to a
Service Fee at an annual rate equal to 0.25% of the AXA Rosenberg U.S. Small
Capitalization Fund average daily net assets attributable to Adviser Shares.
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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'
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:
AXA ROSENBERG ENHANCED 500 FUND
<TABLE>
<CAPTION>
INITIAL SALES CHARGE
-----------------------------------------------------
COMMISSION
TO DEALER/
AGENT AS % OF
AS % OF NET AMOUNT AS % OF OFFERING OFFERING
AMOUNT PURCHASED INVESTED PRICE PRICE
---------------- ------------------ ---------------- -------------
<S> <C> <C> <C>
Up to $100,000..................................... 3.09% 3.00% 2.700%
$100,000 up to $250,000............................ 2.30% 2.25% 2.025%
$250,000 up to $500,000............................ 1.52% 1.50% 1.350%
$500,000 up to $1,000,000.......................... 1.00% 1.00% 0.900%
</TABLE>
AXA ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND, AXA ROSENBERG VALUE
MARKET NEUTRAL FUND, AXA ROSENBERG DOUBLE ALPHA MARKET FUND, AXA ROSENBERG
SELECT SECTORS MARKET NEUTRAL FUND, AXA ROSENBERG INTERNATIONAL EQUITY FUND,
AND AXA ROSENBERG MULTI-STRATEGY MARKET NEUTRAL FUND
<TABLE>
<CAPTION>
INITIAL SALES CHARGE
-----------------------------------------------------
COMMISSION
TO DEALER/
AGENT AS % OF
AS % OF NET AMOUNT AS % OF OFFERING OFFERING
AMOUNT PURCHASED INVESTED PRICE PRICE
---------------- ------------------ ---------------- -------------
<S> <C> <C> <C>
Up to $100,000..................................... 4.99% 4.75% 4.275%
$100,000 up to $250,000............................ 3.90% 3.75% 3.375%
$250,000 up to $500,000............................ 2.83% 2.75% 2.475%
$500,000 up to $1,000,000.......................... 2.30% 2.25% 2.025%
</TABLE>
You pay no initial sales charge on purchases of Class A Shares in the amount
of $1,000,000 or more, but may pay a 1% contingent deferred sales charge
("CDSC") if you redeem your shares within 1 year.
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<PAGE>
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>
YEARS SINCE PURCHASE CDSC
-------------------- --------
<S> <C>
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 Fund of the
Trust, 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 automatically convert to Class A Shares 6 years
after the end of the month of your purchase. If you purchase shares by exchange
of 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 [TO BE UPDATED.]
Initial Sales Charge on purchases of up $1,000,000:
<TABLE>
<CAPTION>
AS % OF AMOUNT AS % OF
FUND INVESTED OFFERING PRICE
---- -------------- --------------
<S> <C> <C>
AXA Rosenberg International Small Capitalization
Fund.............................................. % %
AXA Rosenberg Value Market Neutral Fund............. % %
AXA Rosenberg Double Alpha Market Fund.............. % %
AXA Rosenberg Select Sectors Market Neutral Fund.... % %
AXA Rosenberg Enhanced 500 Fund..................... 0.76% 0.75%
AXA Rosenberg International Equity Fund............. 1.01% 1.00%
AXA Rosenberg Multi-Strategy Market Neutral Fund.... % %
</TABLE>
You pay no initial sales charge on Purchases of Class C Shares in the amount
of $1,000,000 or more. All investments will be subject to a CDSC if you redeem
your shares within 18 months. If you exchange your shares for Class C Shares of
another Fund of the Trust, the CDSC will also apply to those Class C Shares. The
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<PAGE>
18 month period for the CDSC begins with the date of your initial purchase, not
the date of the subsequent exchange. Class C Shares do not convert to any other
class of shares of the Fund.
<TABLE>
<CAPTION>
FUND CDSC
---- --------
<S> <C>
AXA Rosenberg International Small Capitalization Fund....... %
AXA Rosenberg Value Market Neutral Fund..................... %
AXA Rosenberg Double Alpha Market Fund...................... %
AXA Rosenberg Select Sectors Market Neutral Fund............ %
AXA Rosenberg Enhanced 500 Fund............................. 0.75%
AXA Rosenberg International Equity Fund..................... 1.00%
AXA Rosenberg Multi-Strategy Market Neutral Fund............ %
</TABLE>
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.
The AXA Rosenberg U.S. Small Capitalization Fund was reopened to all
investors effective March 27, 2000. As with the Trust's other series of
beneficial interest, the Trust reserves the right to close the AXA Rosenberg
U.S. Small Capitalization Fund to one or more classes of investors at any time
and will close the Fund to new investors when its net assets reach
$750 million.
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."
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<PAGE>
INITIAL CASH INVESTMENTS BY MAIL
Subject to acceptance by the Trust, an account may be opened by completing
and signing an Account Application and mailing it to Barr Rosenberg Series
Trust, P.O. Box 182495, Columbus, Ohio 43218-2495.
The Fund(s) to be purchased should be specified on the Account Application.
In all cases, subject to acceptance by the Trust, payment for the purchase of
shares received by mail will be credited to a shareholder's account at the net
asset value per share of a Fund next determined after receipt, even though the
check may not yet have been converted into federal funds. 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 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
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<PAGE>
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. 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. In the case of a purchase in-kind of
Institutional Shares, such purchase order will be rejected if the investor's
securities are not placed on deposit at DTC prior to 10:00 a.m., New York time.
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. The Funds do not allow investments by market timers. You
will be considered a market timer if you buy and sell your shares within 30 days
or otherwise seem, in the judgment of the Adviser, to follow a timing pattern.
Purchases of each Fund's shares may be made in full or in fractional shares
of such Fund calculated to three decimal places. In the interest of economy and
convenience, certificates for shares will not be issued.
IRA ACCOUNTS
Investor Shares, Class A Shares, Class B Shares and Class C Shares of the
Funds may be used as funding mediums for IRAs. The minimum initial investment
for an IRA is $2,000. A special application must be completed in order to create
such an account. Contributions to IRAs are subject to prevailing amount limits
set by the Internal Revenue Service. For more information about IRAs, call the
Trust at 1-800-447-3332.
REDEMPTION OF SHARES
Shares of the Funds may be redeemed by mail, or, if authorized by an
investor in an Account Application, by telephone. The value of shares redeemed
may be more or less than the original cost of those shares, depending on the
market value of the investment securities held by the particular Fund at the
time of the redemption.
BY MAIL
The Trust will redeem its shares at the net asset value next determined
after the request is received in "good order." See "How the Trust Prices Shares
of the Funds -- Determination of Net Asset Value." Requests should be addressed
to Barr Rosenberg Series Trust, P.O. Box 182495, Columbus, Ohio 43218-2495.
Requests in "good order" must include the following documentation:
(a) a letter of instruction specifying the number of shares or dollar
amount to be redeemed, signed by all registered owners of the shares in the
exact names in which they are registered;
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(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
Agent's records of such instructions are binding and the shareholder, and not
the Trust or the Transfer Agent, bears the risk of loss in the event of
unauthorized instructions reasonably believed by the Transfer Agent to be
genuine. The Transfer Agent will employ reasonable procedures to confirm that
instructions communicated are genuine and, if it does not, it may be liable for
any losses due to unauthorized or fraudulent instructions. The procedures
employed in connection with transactions initiated by telephone include tape
recording of telephone instructions and requiring some form of personal
identification prior to acting upon instructions received by telephone.
Telephone Redemption will be suspended for a period of 10 business days
following a telephonic address change.
SYSTEMATIC WITHDRAWAL PLAN
An owner of $12,000 or more of shares of a Fund may elect to have periodic
redemptions made from the investor's account to be paid on a monthly, quarterly,
semiannual or annual basis. The maximum payment per year is 12% of the account
value at the time of the election. The Trust will normally redeem a sufficient
number of shares to make the scheduled redemption payments on a date selected by
the shareholder. Depending on the size of the payment requested and fluctuation
in the net asset value, if any, of the shares redeemed, redemptions for the
purpose of making such payments may reduce or even exhaust the account. A
shareholder may request that these payments be sent to a predesignated bank or
other designated party.
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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 of one Fund for
shares of another Fund. Shares of a particular class of a Fund may be exchanged
only for shares of the same class in another Fund. There is no sales charge on
exchanges. Before engaging in an exchange transaction, a shareholder should read
carefully the information in the Prospectus describing the Fund into which the
exchange will occur. A shareholder may not exchange shares of a class of one
Fund for shares of the same class of another Fund that is not qualified for sale
in the state of the shareholder's residence. Although the Trust has no current
intention of terminating or modifying the exchange privilege, it reserves the
right to do so at any time.
An exchange is taxable as a sale of a security on which a gain or loss may
be recognized. Shareholders should receive written confirmation of the exchange
within a few days of the completion of the transaction.
A new account opened by exchange must be established with the same name(s),
address and social security number as the existing account. All exchanges will
be made based on the respective net asset values next determined following
receipt of the request by the Funds containing the information indicated below.
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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
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 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. Shares will not be priced on the days
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on which the New York Stock Exchange is closed for trading. Because the AXA
Rosenberg International Small Capitalization Fund, AXA Rosenberg Japan Fund, AXA
Rosenberg International Equity Fund and AXA Rosenberg Multi-Strategy Market
Neutral Fund may invest in securities that are primarily listed on foreign
exchanges that trade on weekends or other days when the Funds do not price their
shares, the net asset value of the shares of those Funds may change on days when
shareholders will not be able to purchase or redeem shares. 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
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
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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 International Equity Fund and the AXA Rosenberg Multi-Strategy 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.
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OTHER INFORMATION
Each Fund's investment performance may from time to time be included in
advertisements about such Fund. Total return for a Fund is measured by comparing
the value of an investment in such Fund at the beginning of the relevant period
to the redemption value of the investment in such Fund at the end of such period
(assuming immediate reinvestment of any dividends or capital gains
distributions). All data are based on a Fund's past investment results and do
not predict future performance. Investment performance, which will vary, is
based on many factors, including market conditions, the composition of a Fund's
portfolio and a Fund's operating expenses. Investment performance also often
reflects the risks associated with a Fund's investment objective and policies.
These factors should be considered when comparing a Fund's investment results
with those of other mutual funds and other investment vehicles. Quotations of
investment performance for any period when an expense limitation was in effect
will be greater than if the limitation had not been in effect.
FINANCIAL HIGHLIGHTS
The Report of Independent Accountants, financial highlights and financial
statements of the Funds included in its Annual Report for the period ended
March 31, 1999 (the "Annual Report") are incorporated herein by reference to
such Annual Report. Copies of such Annual Report are available without charge
upon request by writing to Barr Rosenberg Series Trust, 3435 Stelzer Road,
Columbus, Ohio 43219 or telephoning 1-800-447-3332.
The financial statements incorporated by reference into this Statement of
Additional Information have been audited by , independent
accountants, and have been so included and incorporated by reference in reliance
upon the report of said firm, which report is given upon their authority as
experts in auditing and accounting.
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The Funds' statement of additional information ("SAI") dated July __, 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 free 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.
You can review and copy the Annual and Semi-Annual Reports and the SAI at the
Public Reference Room of the Securities and Exchange Commission. You can get
text-only copies, for a fee, by writing the Public Reference Section of the
Commission, Washington, D.C. 20549-0102, or calling 1-202-942-8090, or by
electronic request, by emailing the SEC at the following address:
[email protected], or at no charge from the Edgar database on the
Commission's Website at http://www.sec.gov.
ADDRESS CORRESPONDENCE TO:
Barr Rosenberg Series Trust
3435 Stelzer Road
Columbus, Ohio 43219-8021
1-800-447-3332
SHAREHOLDER SERVICES
1-800-555-5737 (Institutional Shares)
1-800-447-3332 (Investor Shares, 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
CUSTODIANS OF ASSETS
Custodial Trust Company
101 Carnegie Center
Princeton, NJ 08540
State Street Bank and Trust Company
Mutual Funds Division
Boston, MA 02102
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
333 Market Street
San Francisco, CA 94104
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA 02110 BRG - 0055
Investment Company Act File No. 811-05547
BARR
ROSENBERG
SERIES
TRUST
-- AXA Rosenberg U.S. Small Capitalization Fund
-- AXA Rosenberg International Small Capitalization Fund
-- AXA Rosenberg Japan Fund
-- AXA Rosenberg Value Market Neutral Fund
-- AXA Rosenberg Double Alpha Market Fund
-- AXA Rosenberg Select Sectors Market Neutral Fund
-- AXA Rosenberg Enhanced 500 Fund
-- AXA Rosenberg International Equity Fund
-- AXA Rosenberg Multi-Strategy Market Neutral Fund
PROSPECTUS
JULY __, 2000
<PAGE>
BARR ROSENBERG SERIES TRUST
AXA ROSENBERG U.S. SMALL CAPITALIZATION FUND
AXA ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND
AXA ROSENBERG JAPAN FUND
AXA ROSENBERG VALUE MARKET NEUTRAL FUND
AXA ROSENBERG DOUBLE ALPHA MARKET FUND
AXA ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND
AXA ROSENBERG ENHANCED 500 FUND
AXA ROSENBERG INTERNATIONAL EQUITY FUND
AXA ROSENBERG MULTI-STRATEGY MARKET NEUTRAL FUND
STATEMENT OF ADDITIONAL INFORMATION
JULY 31, 2000
This Statement of Additional Information is not a prospectus. This Statement
of Additional Information relates to the prospectus dated July 31, 2000 of the
AXA Rosenberg U.S. Small Capitalization Fund, AXA Rosenberg International Small
Capitalization Fund, AXA Rosenberg Japan Fund, AXA Rosenberg Value Market
Neutral Fund, AXA Rosenberg Double Alpha Market Fund, AXA Rosenberg Select
Sectors Market Neutral Fund, AXA Rosenberg Enhanced 500 Fund, AXA Rosenberg
International Equity Fund and AXA Rosenberg Multi-Strategy Market Neutral Fund
of Barr Rosenberg Series Trust (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.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INVESTMENT OBJECTIVES AND POLICIES........................................ 3
MISCELLANEOUS INVESTMENT PRACTICES........................................ 9
INVESTMENT RESTRICTIONS................................................... 10
INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS............................ 12
MANAGEMENT OF THE TRUST................................................... 15
INVESTMENT ADVISORY AND OTHER SERVICES.................................... 18
PORTFOLIO TRANSACTIONS.................................................... 25
TOTAL RETURN CALCULATIONS................................................. 27
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES.......................... 29
DETERMINATION OF NET ASSET VALUE.......................................... 38
PURCHASE AND REDEMPTION OF SHARES......................................... 38
</TABLE>
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INVESTMENT OBJECTIVES AND POLICIES
The investment objective and policies of each of the AXA Rosenberg
U.S. Small Capitalization Fund, AXA Rosenberg International Small Capitalization
Fund, AXA Rosenberg Japan Fund, AXA Rosenberg Value Market Neutral Fund,
AXA Rosenberg Double Alpha Market Fund, AXA Rosenberg Select Sectors Market
Neutral Fund, AXA Rosenberg Enhanced 500 Fund, AXA Rosenberg International
Equity Fund and AXA Rosenberg Multi-Strategy 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 AXA Rosenberg Japan Fund, AXA Rosenberg
International Small Capitalization Fund, AXA Rosenberg International Equity Fund
and AXA Rosenberg Multi-Strategy Market Neutral Fund 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.
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FOREIGN CURRENCY TRANSACTIONS (AXA ROSENBERG INTERNATIONAL SMALL
CAPITALIZATION FUND AXA ROSENBERG JAPAN FUND, AXA ROSENBERG INTERNATIONAL EQUITY
FUND AND AXA ROSENBERG MULTI-STRATEGY 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 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 SMALL CAPITALIZATION
FUND, AXA ROSENBERG JAPAN FUND, AXA ROSENBERG INTERNATIONAL EQUITY FUND AND
AXA ROSENBERG MULTI-STRATEGY 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 enerally has no deposit requirement, and no commissions are charged at
any stage for trades.
CURRENCY FUTURES TRANSACTIONS (AXA ROSENBERG INTERNATIONAL SMALL
CAPITALIZATION FUND, AXA ROSENBERG JAPAN FUND, AXA ROSENBERG INTERNATIONAL
EQUITY FUND AND AXA ROSENBERG MULTI-STRATEGY 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
4
<PAGE>
futures contract sale. If the offsetting sale price exceeds the purchase price,
the purchaser realizes a gain, and if the purchase price exceeds the offsetting
sale price, the purchaser realizes a loss.
The purchase or sale of a futures contract differs from the purchase or sale
of a security, in that no price or premium is paid or received. Instead, an
amount of cash or U.S. Treasury bills generally not exceeding 5% of the contract
amount must be deposited with the broker. This amount is known as initial
margin. Subsequent payments to and from the broker, known as variation margin,
are made on a daily basis as the price of the underlying futures contract
fluctuates making the long and short positions in the futures contract more or
less valuable, a process known as "marking to the market." At any time prior to
the settlement date of the futures contract, the position may be closed out by
taking an opposite position which will operate to terminate the position in the
futures contract. A final determination of variation margin is then made,
additional cash is required to be paid to or released by the broker, and the
purchaser realizes a loss or gain. In addition, a commission is paid on each
completed purchase and sale transaction.
Unlike a currency futures contract, which requires the parties to buy and
sell currency on a set date, an option on a futures contract entitles its holder
to decide on or before a future date whether to enter into such a contract. If
the holder decides not to enter into the contract, the premium paid for the
option is lost. Since the value of the option is fixed at the point of sale,
there are no daily payments of cash in the nature of "variation" or
"maintenance" margin payments to reflect the change in the value of the
underlying contract as there are by a purchaser or seller of a currency futures
contract.
The ability to establish and close out positions on options on futures will
be subject to the development and maintenance of a liquid secondary market. It
is not certain that this market will develop or be maintained.
The Funds will write (sell) only covered put and call options on currency
futures. This means that a Fund will provide for its obligations upon exercise
of the option by segregating sufficient cash or short-term obligations or by
holding an offsetting position in the option or underlying currency future, or a
combination of the foregoing. Set forth below is a description of methods of
providing cover that the Funds currently expect to employ, subject to applicable
exchange and regulatory requirements. If other methods of providing appropriate
cover are 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
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account with its custodian, or own put options on currency futures or short
currency futures, with the difference, if any, between the market value of the
put written and the market value of the puts purchased or the currency futures
sold maintained by the Fund in cash, U.S. government securities, or other
high-grade liquid debt obligations in a segregated account with its custodian.
If at the close of business on any day the market value of the put options
purchased or the currency futures sold by a Fund falls below 100% of the market
value of the put options written by the Fund, the Fund will so segregate an
amount of cash, U.S. government securities, or other high-grade liquid debt
obligations equal in value to the difference.
A Fund may not enter into currency futures contracts or related options
thereon if immediately thereafter the amount committed to margin plus the amount
paid for premiums for unexpired options on currency futures contracts exceeds 5%
of the market value of the Fund's total assets.
LIMITATIONS ON THE USE OF CURRENCY FUTURES CONTRACTS (AXA ROSENBERG
INTERNATIONAL SMALL CAPITALIZATION FUND, AXA ROSENBERG JAPAN FUND,
AXA ROSENBERG INTERNATIONAL EQUITY FUND AND AXA ROSENBERG MULTI-STRATEGY 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
SMALL CAPITALIZATION FUND, AXA ROSENBERG JAPAN FUND, AXA ROSENBERG INTERNATIONAL
EQUITY FUND AND AXA ROSENBERG MULTI-STRATEGY 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
edged 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
uch 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
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purchasing, it is possible that the market may instead decline. If a Fund does
not then invest in such securities because of concern as to possible further
market decline or for other reasons, the Fund may realize a loss on the forward
or futures contract that is not offset by a reduction in the price of the
securities purchased. As a result, a Fund's total return for such period may be
less than if it had not engaged in the forward or futures transaction.
Foreign currency transactions that are intended to hedge the value of
securities a Fund contemplates purchasing do not eliminate fluctuations in the
underlying prices of those securities. Rather, such currency transactions simply
establish a rate of exchange which can be used at some future point in time.
Additionally, although these techniques tend to minimize the risk of loss due to
a change in the value of the currency involved, they tend to limit any potential
gain that might result from the increase in the value of such currency.
The amount of risk a Fund assumes when it purchases an option on a currency
futures contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the purchase of an
option also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the option purchased.
The liquidity of a secondary market in a currency futures contract may be
adversely affected by "daily price fluctuation limits" established by commodity
exchanges which limit the amount of fluctuation in a futures contract price
during a single trading day. Once the daily limit has been reached in the
contract, no trades may be entered into at a price beyond the limit, thus
preventing the liquidation of open futures positions. Prices have in the past
exceeded the daily limit on a number of consecutive trading days.
A Fund's ability to engage in currency forward and futures transactions may
be limited by tax considerations.
WARRANTS (AXA ROSENBERG JAPAN FUND). The AXA Rosenberg Japan Fund may from
time to time purchase warrants; however, not more than 5% of its net assets (at
the time of purchase) will be invested in warrants or rights other than warrants
acquired in units or attached to other securities. Of such 5%, not more than 2%
of such net assets at the time of purchase may be invested in warrants that are
not listed on the New York Stock Exchange or American Stock Exchange. Warrants
have no voting rights, pay no dividends and have no rights with respect to the
assets of the corporation issuing them. Warrants represent options to purchase
equity securities of an issuer at a specific price for a specific period of
time. They do not represent ownership of such securities, but only the right to
buy them.
SHORT SALES (THE MARKET NEUTRAL FUNDS). The AXA Rosenberg Value Market
Neutral Fund, the AXA Rosenberg Select Sectors Market Neutral Fund and the
AXA Rosenberg Multi-Strategy Market Neutral Fund (collectively, the "Market
Neutral Funds") will seek, and the AXA Rosenberg Double Alpha Market Fund may
seek, to realize additional gains through short sales. Short sales are
transactions in which a Fund sells a security it does not own, in anticipation
of a decline in the value of that security relative to the long positions held
by the Fund. To complete such a transaction, a Fund must borrow the security to
make delivery to the buyer. A Fund then is obligated to replace the security
borrowed by purchasing it at the market price at or prior to the time of
replacement. The price at such time may be more or less than the price at which
the security was sold by a Fund. Until the security is replaced, a Fund is
required to repay the lender
7
<PAGE>
any dividends or interest that accrue during the period of the loan. To borrow
the security, a Fund also may be required to pay a premium, which would increase
the cost of the security sold. The net proceeds of the short sale will be
retained by the broker (or by the Fund's custodian in a special custody
account), to the extent necessary to meet margin requirements, until the short
position is closed out. A Fund also will incur transaction costs in effecting
short sales.
A Fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which the
Fund replaces the borrowed security. A Fund may realize a gain if the security
declines in price between those dates. The amount of any gain will be decreased,
and the amount of any loss increased, by the amount of the premium, dividends,
interest or expenses a Fund may be required to pay in connection with a short
sale. There can be no assurance that a Fund will be able to close out a short
position at any particular time or at an acceptable price.
S&P 500 INDEX FUTURES AND RELATED OPTIONS (AXA ROSENBERG DOUBLE ALPHA MARKET
FUND ONLY). An S&P 500 Index Future contract (an "Index Future") is a contract
to buy or sell an integral number of units of the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500 Index") at a specified future date at
a price agreed upon when the contract is made. A unit is the value of the
S&P 500 Index from time to time. Entering into a contract to buy units of the
S&P 500 Index is commonly referred to as buying or purchasing a contract or
holding a long position in the S&P 500 Index. Index Futures can be traded
through all major commodity brokers. Currently, contracts are expected to expire
on the tenth day of March, June, September and December. The AXA Rosenberg
Double Alpha Market Fund will ordinarily be able to close open positions on the
United States futures exchange on which Index Futures are then traded at any
time up to and including the expiration day.
In contrast to a purchase of common stock, no price is paid or received by
the AXA Rosenberg Double Alpha Market Fund upon the purchase of a futures
contract. Upon entering into a futures contract, the Fund will be required to
deposit with its custodian in a segregated account in the name of the futures
broker a specified amount of cash or securities. This is known by participants
in the market as "initial margin." The types of instruments that may be
deposited as initial margin, and the required amount of initial margin, are
determined by the futures exchange(s) on which the Index Futures are traded. The
nature of initial margin in futures transactions is different from that of
margin in securities transactions in that futures contract margin does not
involve the borrowing of funds by the customer to finance the transactions.
Rather, the initial margin is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund upon termination of the
futures contract, assuming all contractual obligations have been satisfied.
Subsequent payments, called "variation margin," to and from the broker, will be
made on a daily basis as the price of the S&P 500 Index fluctuates, making the
position in the futures contract more or less valuable, a process known as
"marking to the market." For example, when the Fund has purchased an Index
Future and the price of the S&P 500 Index has risen, that position will have
increased in value and the Fund will receive from the broker a variation margin
payment equal to that increase in value. Conversely, when the Fund has purchased
an Index Future and the price of the S&P 500 Index has declined, the position
would be less valuable and the Fund would be required to make a variation margin
payment to the broker. When the Fund terminates a position in a futures
contract, a final determination of variation margin is made, additional cash is
paid by or to the Fund, and the Fund realizes a gain or a loss.
8
<PAGE>
The price of Index Futures may not correlate perfectly with movement in the
underlying index due to certain market distortions. First, all participants in
the futures market are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements, investors may close
futures contracts through offsetting transactions which could distort the normal
relationship between the S&P 500 Index and futures markets. Second, the deposit
requirements in the futures market are less onerous than margin requirements in
the securities market, and as a result the futures market may attract more
speculators than does the securities market. Increased participation by
speculators in the futures market may also cause temporary price distortions.
A position in Index Futures may be closed out only if there is a secondary
market for such futures. There can be no assurance that a liquid secondary
market will exist for any particular contract or at any particular time. In such
event, it may not be possible to close a futures position and, in the event of
adverse price movements, the AXA Rosenberg Double Alpha Market Fund would
continue to be required to make daily cash payments of variation margin.
Generally, a futures contract is terminated by entering into an offsetting
transaction. An offsetting transaction for a futures contract purchase is
effected by entering into a futures contract sale for the same aggregate amount
of the specified financial instrument with the same delivery date. If the
offsetting sale price exceeds the purchase price, the AXA Rosenberg Double Alpha
Market Fund realizes a gain, and if the purchase price exceeds the offsetting
price, the Fund realizes a loss.
Options on index futures contracts give the purchaser the right, in return
for the premium paid, to assume a position in an index futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the holder would assume the underlying futures position
and would receive a variation margin payment of cash or securities approximating
the increase in the value of the holder's option position. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash based on the difference between the
exercise price of the option and the closing level of the index on which the
futures contract is based on the expiration date. Purchasers of options who fail
to exercise their options prior to the exercise date suffer a loss of the
premium paid.
The ability to establish and close out positions in options on futures
contracts will be subject to the development and maintenance of a liquid
secondary market. It is not certain that such a market will develop. Although
the AXA Rosenberg Double Alpha Market Fund generally will purchase only those
options for which there appears to be an active secondary market, there is no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. In the event no such market exists
for particular options, it might not be possible to effect closing transactions
in such options, with the result that the Fund would have to exercise the
options in order to realize any profit.
MISCELLANEOUS INVESTMENT PRACTICES
PORTFOLIO TURNOVER. A change in securities held by a Fund is known as
"portfolio turnover" and almost always involves the payment by a Fund of
brokerage commissions or dealer markup and other transaction costs on the sale
of securities as well as on the reinvestment of the proceeds in other
securities. Portfolio turnover is not a limiting factor with respect to
investment decisions. The portfolio turnover rate for the
9
<PAGE>
AXA Rosenberg U.S. Small Capitalization Fund for the fiscal years ended
March 31, 2000 and 1999 was 141.78% and 123.66%, respectively. The portfolio
turnover rate for the AXA Rosenberg Japan Fund for the fiscal years ended
March 31, 2000 and 1999 was 100.31% and 152.20%, respectively. The portfolio
turnover rate for the AXA Rosenberg International Small Capitalization Fund for
the for the fiscal years ended March 31, 2000 and 1999 was 148.72% and 111.05%,
respectively. The portfolio turnover rate for the AXA Rosenberg Value Market
Neutral Fund for the fiscal years ended March 31, 2000 and 1999 was 139.22% and
205.32%, respectively. The portfolio turnover rate for the AXA Rosenberg Double
Alpha Market Fund for the fiscal year ended March 31, 2000 and for the period
from inception through March 31, 1999 were 144.75% and 154.45%, respectively.
The portfolio turnover rate for the AXA Rosenberg Select Sectors Market Neutral
Fund for the fiscal year ended March 31, 2000 and for the period from inception
March 31, 1999 were 368.26% and 145.22%, respectively. As disclosed in the
Prospectus, high portfolio turnover involves correspondingly greater brokerage
commissions and other transaction costs, which will be borne directly by the
Funds, and could involve realization of capital gains that would be taxable when
distributed to shareholders of a Fund. To the extent that portfolio turnover
results in the realization of net short-term capital gains, such gains are
ordinarily taxed to shareholders at ordinary income tax rates.
NOTICE ON SHAREHOLDER APPROVAL. Unless otherwise indicated in the
Prospectus or this Statement of Additional Information, the investment objective
and policies of each of the Funds may be changed without shareholder approval.
INVESTMENT RESTRICTIONS
Without a vote of the majority of the outstanding voting securities of a
Fund, the Trust will not take any of the following actions with respect to such
Fund:
(1) Borrow money in excess of 10% of the value (taken at the lower of cost
or current value) of the Fund's total assets (not including the amount borrowed)
at the time the borrowing is made, and then only from banks as a temporary
measure to facilitate the meeting of redemption requests (not for leverage)
which might otherwise require the untimely disposition of portfolio investments
or for extraordinary or emergency purposes or for payments of variation margin.
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
10
<PAGE>
borrowed to effect short sales, and (ii) allocated to segregated accounts in
connection with short sales. Short sales "against the box" are not subject to
this limitation.
(5) Underwrite securities issued by other persons except to the extent that,
in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under federal securities laws.
(6) Purchase or sell real estate, although it may purchase securities of
issuers which deal in real estate, including securities of real estate
investment trusts, and may purchase securities which are secured by interests in
real estate.
(7) Concentrate more than 25% of the value of its total assets in any one
industry.
(8) Invest in securities of other investment companies, except to the extent
permitted by the Investment Company Act of 1940, as amended (the "1940 Act"), or
by an exemptive order issued by the Securities and Exchange Commission.
(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.
(f) With respect to 75% of its total assets, invest in a security if, as a
result of such investment, (a) more than 5% of the Fund's total assets would be
invested in the securities of that issuer, or (b) it would hold more
11
<PAGE>
than 10% (taken at the time of such investment) of the outstanding voting
securities of any one issuer, except that this restriction does not apply to
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities.
Unless otherwise indicated, all percentage limitations on investments set
forth herein and in the Prospectus will apply at the time of the making of an
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment.
The phrase "shareholder approval," as used in the Prospectus and herein, and
the phrase "vote of a majority of the outstanding voting securities," as used
herein, means the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of a Fund or the Trust, as the case may be, or (2) 67% or
more of the shares of a Fund or the Trust, as the case may be, present at a
meeting if more than 50% of the outstanding shares are represented at the
meeting in person or by proxy.
INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
The tax status of the Funds and the distributions which they may make are
summarized in the Prospectus under the headings "Distributions" 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.
The AXA Rosenberg International Small Capitalization Fund, the AXA Rosenberg
Japan Fund, the AXA Rosenberg International Equity Fund and the AXA Rosenberg
Multi-Strategy Market Neutral Fund may be subject to foreign withholding taxes
on income and gains derived from foreign investments. Such taxes would reduce
the yield on such Funds' investments, but, as discussed in the Prospectus, may
be taken as either a deduction or a credit by U.S. citizens and corporations.
Investment by either Fund in certain "passive foreign investment companies"
could subject the Fund to a U.S. federal income tax or other charge on
distributions received from, or on the sale of its investment in, such a
company. Such a tax cannot be eliminated by making distributions to Fund
shareholders. A Fund may avoid this tax by making an election to mark such
securities to the market annually. Alternatively, where it is in a position to
do so, a Fund may elect
12
<PAGE>
to treat a passive foreign investment company as a "qualified electing fund," in
which case different rules will apply, although the Funds generally do not
expect to be in the position to make such elections.
As described in the Prospectus under the heading "Distributions," each Fund
intends to pay out substantially all of its ordinary income and net 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
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.
13
<PAGE>
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 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.
14
<PAGE>
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 (57).... 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* (50)........ 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 (50)...... Vice President Vice Chairman and Global Marketing Director, AXA Rosenberg
Group LLC, January 1999 to present; Managing Director AXA
Rosenberg Global Services LLC, January 1999 to present;
General Partner and Director of Marketing, Rosenberg
Institutional Equity Management, April 1985 to
December 1998.
Nils H. Hakansson (62).... 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.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
NAME (AGE) POSITION WITH THE TRUST PRINCIPAL OCCUPATION
---------- ----------------------- ------------------------------------------------------------
<S> <C> <C>
William F. Sharpe (65).... Trustee STANCO 25 Professor of Finance Emeritus, Stanford
University, September 1999 to present; STANCO 25 Professor
of Finance, Stanford University, September 1995 to
September 1999; Professor of Finance, Stanford University,
September 1992 to September 1995; Timken Professor Emeritus
of Finance, Stanford University, September 1989 to
September 1992; Timken Professor of Finance, Stanford
University, September 1970 to 1989; Chairman, Financial
Engines Incorporated, Los Altos, California (online
investment advice), March 1996 to present.
Dwight M. Jaffee (56)..... Trustee Professor of Finance and Real Estate, Haas School of
Business, University of California, Berkeley, California,
July 1991 to present.
Po-Len Hew (33)........... 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 (40)........... Clerk Global Services Coordinator and Paralegal, AXA Rosenberg
Global Services LLC, January 1999 to present; Paralegal,
Barr Rosenberg Investment Management, September 1997 to
December 1998; 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.
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
NAME (AGE) POSITION WITH THE TRUST PRINCIPAL OCCUPATION
---------- ----------------------- ------------------------------------------------------------
<S> <C> <C>
Richard L. Saalfeld President President and Chief Executive Officer, Barr Rosenberg Mutual
(56).................... Funds, a division of AXA Rosenberg Investment Management
LLC, January 1999 to present; President and Chief Executive
Officer of mutual fund unit of Rosenberg Institutional
Equity Management, June 1996 to December 1998; Consultant
to Rosenberg Institutional Equity Management,
September 1995 to May 1996; Chairman and Chief Executive
Officer of CoreLink Resources, Inc. (mutual fund marketing
organization), Concord, California, April 1993 to
August 1995; Consultant, December 1992 to March 1993.
</TABLE>
------------------------
* Trustee who is an "interested person" (as defined in the 1940 Act) of the
Trust or the Adviser.
The mailing address of each of the officers and Trustees is c/o Barr
Rosenberg Series Trust, 3435 Stelzer Road, Columbus, OH 43219.
The principal occupations of the officers and Trustees for the last five
years have been with the employers as shown above, although in some cases they
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 an additional fee 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 accrued and payable to each of the Trustees of the Trust or Adviser
in the fiscal year ended March 31, 2000:
<TABLE>
<CAPTION>
TOTAL
PENSION OR COMPENSATION
RETIREMENT FROM
BENEFITS ESTIMATED REGISTRANT
AGGREGATE ACCRUED AS ANNUAL AND FUND
COMPENSATION PART OF FUND BENEFITS UPON COMPLEX* PAID TO
NAME OF PERSON, POSITION FROM REGISTRANT EXPENSES RETIREMENT DIRECTORS
------------------------ --------------- ------------ ------------- ----------------
<S> <C> <C> <C> <C>
Nils H. Hakansson Trustee............. $70,290** $0 $0 $81,180**
William F. Sharpe Trustee............. $70,290** $0 $0 $81,180**
Dwight M. Jaffee Trustee.............. $70,290** $0 $0 $81,180**
Kenneth Reid Trustee.................. $ 0 $0 $0 $ 0
</TABLE>
------------------------
* Prior to the introduction of the AXA Rosenberg Enhanced 500 Fund, the AXA
Rosenberg International Equity Fund and the AXA Rosenberg Multi-Strategy
Market Neutral Fund, the Fund Complex consisted of seven funds: the AXA
Rosenberg U.S. Small Capitalization Fund, the AXA Rosenberg International
Small Capitalization Fund, the AXA Rosenberg Japan Fund, the AXA Rosenberg
Value Market Neutral Fund, the AXA Rosenberg Double Alpha Market Fund, the
AXA Rosenberg Select Sectors Market
17
<PAGE>
Neutral Fund and the Barr Rosenberg VIT Market Neutral Fund. The AXA
Rosenberg Enhanced 500 Fund, the AXA Rosenberg International Equity Fund and
the AXA Rosenberg Multi-Strategy Market Neutral Fund were not operational
for the fiscal year ended March 31, 2000.
** Reflects fees accrued for the fiscal year regardless of the actual payment
date.
Messrs. Rosenberg, Reid, Lyman and Saalfeld and Ms. Fritz, Ronan and Hew,
each being an officer or employee of the Adviser or its affiliates, will each
benefit from the management fees paid by the Trust to the Adviser, but receive
no direct compensation from the Trust.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISORY CONTRACTS. As disclosed in the Prospectus under the
heading "Management of the Trust," under management contracts (each a
"Management Contract") between the Trust, on behalf of each Fund, and AXA
Rosenberg Investment Management LLC (the "Adviser"), subject to the control of
the Trustees of the Trust and such policies as the Trustees may determine, the
Adviser will furnish continuously an investment program for each Fund and will
make investment decisions on behalf of each Fund and place all orders for the
purchase and sale of portfolio securities. Subject to the control of the
Trustees, the Adviser furnishes office space and equipment, provides certain
bookkeeping and clerical services and pays all salaries, fees and expenses of
officers and Trustees of the Trust who are affiliated with the Adviser. As
indicated under "Portfolio Transactions -Brokerage and Research Services," the
Trust's portfolio transactions may be placed with broker-dealers which furnish
the Adviser, at no cost, certain research, statistical and quotation services of
value to the Adviser in advising the Trust or its other clients.
Each of the Funds has agreed to pay the Adviser a monthly management fee at
the annual percentage rate of the relevant Fund's average daily net assets set
forth in the Prospectus. The Adviser has informed the Trust that it will 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
18
<PAGE>
(ii) the majority vote of either the full Board of Trustees or the vote of a
majority of the outstanding shares of the relevant Fund. Each Management
Contract automatically terminates on assignment, and is terminable on not more
than 60 days' notice by the Trust to the Adviser. In addition, each Management
Contract may be terminated on not more than 60 days' written notice by the
Adviser to the Trust.
The Adviser is wholly owned by AXA Rosenberg Group LLC. AXA Rosenberg Group
LLC is contractually controlled by AXA-IM Rose Inc. AXA-IM Rose Inc. is wholly
owned by AXA-IM Holdings U.S. Inc. AXA-IM Holdings U.S. Inc. is wholly owned by
AXA Investment Managers S.A., a French societe anonyme, which, in turn, is
owned, collectively, by AXA Assurances IARD, S.A., a French societe anonyme, and
AXA-UAP, a French holding company. AXA Assurances IARD, S.A. is owned,
collectively, by AXA France Assurance, a French insurance holding company, and
UAP Incendie Accidents, a French casualty and insurance company, each of which,
in turn, is wholly owned by AXA-UAP. Finaxa, a French holding company,
beneficially owns more than 25% of the voting securities ("Controls") of
AXA-UAP. Mutuelles AXA, a group of four French mutual insurance companies, one
of which Controls Finaxa, acting as a group, Controls both AXA-UAP and Finaxa.
Each of these entities may be deemed a controlling person of the Adviser.
As discussed in this Statement of Additional Information under the heading
"Management of the Trust." Kenneth Reid is a Trustee of the Trust and the Chief
Executive Officer of the Adviser; Barr M. Rosenberg is a Vice President of the
Trust and the Director of Research of the Adviser. Dr. Rosenberg, Dr. Reid and
Marlis S. Fritz, the former general partners of Rosenberg Institutional Equity
Management, 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.
[To be updated.]
During the last three fiscal years, the AXA Rosenberg U.S. Small
Capitalization Fund has paid the following amounts as management fees to the
Adviser pursuant to its Management Contract:
<TABLE>
<CAPTION>
TIME PERIOD MANAGEMENT FEE AMOUNT WAIVED
----------- -------------- -------------
<S> <C> <C>
4/1/97 -- 3/31/98......................... $2,571,254 $206,166
4/1/98 -- 3/31/99......................... $5,065,260 $ 0
4/1/98 -- 3/31/00......................... $ $
</TABLE>
During the last three fiscal years, the AXA Rosenberg Japan Fund has paid
the following amounts as management fees to the Adviser pursuant to its
Management Contract:
<TABLE>
<CAPTION>
TIME PERIOD MANAGEMENT FEE AMOUNT WAIVED
----------- -------------- -------------
<S> <C> <C>
4/1/97 -- 3/31/98......................... $10,618 $10,618
4/1/98 -- 3/31/99......................... $ 9,032 $ 9,032
4/1/98 -- 3/31/00......................... $ $
</TABLE>
19
<PAGE>
During the last three fiscal years, the AXA Rosenberg International Small
Capitalization Fund has paid the following amounts as management fees to the
Adviser pursuant to its Management Contract:
<TABLE>
<CAPTION>
TIME PERIOD MANAGEMENT FEE AMOUNT WAIVED
----------- -------------- -------------
<S> <C> <C>
4/1/97 -- 3/31/98......................... $245,559 $221,059
4/1/98 -- 3/31/99......................... $424,779 $173,417
4/1/98 -- 3/31/00......................... $ $
</TABLE>
During the last three fiscal years, the AXA Rosenberg Value Market Neutral
Fund paid the following amounts as management fees to the Adviser pursuant to
its Management Contract:
<TABLE>
<CAPTION>
TIME PERIOD MANAGEMENT FEE AMOUNT WAIVED
----------- -------------- -------------
<S> <C> <C>
12/16/97 -- 3/31/98....................... $ 700,708 $121,673
4/1/98 -- 3/31/99......................... $5,247,271 $439,246
4/1/98 -- 3/31/00......................... $ $
</TABLE>
Since its inception (4/22/98), the AXA Rosenberg Double Alpha Market Fund
paid the following amounts as management fees to the Adviser pursuant to its
Management Contract:
<TABLE>
<CAPTION>
TIME PERIOD MANAGEMENT FEE AMOUNT WAIVED
----------- -------------- -------------
<S> <C> <C>
4/22/98 -- 3/31/99........................ $6,732 $6,732
4/22/98 -- 3/31/00........................ $ $
</TABLE>
Since its inception (10/19/98), the AXA Rosenberg Select Sectors Market
Neutral Fund paid the following amounts as management fees to the Adviser
pursuant to its Management Contract:
<TABLE>
<CAPTION>
TIME PERIOD MANAGEMENT FEE AMOUNT WAIVED
----------- -------------- -------------
<S> <C> <C>
10/19/98 -- 3/31/99....................... $93,840 $93,840
10/19/98 -- 3/31/00....................... $ $
</TABLE>
ADMINISTRATIVE SERVICES. The Trust has entered into a Fund Administration
Agreement with BISYS Fund Services Ohio, Inc. (the "Administrator") pursuant to
which the Administrator provides certain management and administrative services
necessary for the Funds' operations including: (i) general supervision of the
operation of the Funds including coordination of the services performed by the
Funds' investment adviser, transfer agent, custodian, independent accountants
and legal counsel, regulatory compliance, including the compilation of
information for documents such as reports to, and filings with, the SEC and
state securities commissions, and preparation of proxy statements and
shareholder reports for the Funds; (ii) general supervision relative to the
compilation of data required for the preparation of periodic reports distributed
to the Funds' officers and Board of Trustees; and (iii) furnishing office space
and certain facilities required for conducting the business of the Funds. The
Trust's principal underwriter is an affiliate of the Administrator. For these
services, the Administrator is entitled to receive a fee, payable monthly, at
the annual rate of 0.15%
20
<PAGE>
of the average daily net assets of the Trust. For the periods indicated, the
Administrator was entitled to receive, and waived, the following amounts: [To be
updated.]
<TABLE>
<CAPTION>
FISCAL YEAR ENDED: ENTITLED TO
FUND MARCH 31 RECEIVE WAIVED
---- ------------------- ----------- --------
<S> <C> <C> <C>
AXA Rosenberg U.S. Small 2000
Capitalization Fund 1999 $844,211 $343,817
1998 $428,543 $142,850
AXA Rosenberg International 2000
Small Capitalization Fund 1999 $ 1,355 $ 1,355
1998 $ 36,834 $ 23,451
AXA Rosenberg Japan Fund 2000
1999 $ 63,717 $ 25,953
1998 $ 1,593 $ 1,593
AXA Rosenberg Value 3/31/99 to 3/31/00
Market Neutral Fund 3/31/98 to 3/31/99 $414,258 $168,759
AXA Rosenberg Double 3/31/99 to 3/31/00
Alpha Market Fund 4/22/98 (inception $ 10,097 $ 10,097
date) to 3/31/99
AXA Rosenberg Select Sectors 3/31/99 to 3/31/00
Market Neutral Fund 10/19/98 (inception $ 14,076 $ 6,955
date) to 3/31/99
</TABLE>
The Trust has also entered into a Fund Accounting Agreement with BISYS Fund
Services, Inc. (the "Fund Accountant") pursuant to which the Fund Accountant
provides certain accounting services necessary for the Funds' operations. For
these services, the Fund Accountant is entitled to receive an annual fee of
$50,000 for each Fund. For the periods indicated, the Funds paid, and the Fund
Accountant waived, the following amounts in fund accounting fees: [To be
updated.]
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
MARCH 31
FUND (OR TIME PERIOD) AMOUNT PAID AMOUNT WAIVED
---- ------------------- ----------- -------------
<S> <C> <C> <C>
AXA Rosenberg U.S. Small 2000 $ $
Capitalization Fund 1999 $ 60,767 $ 0
1998 $ 76,899 $ 7,500
AXA Rosenberg International 2000 $ $
Small Capitalization Fund 1999 $ 90,266 $ 0
1998 $103,482 $ 7,500
AXA Rosenberg Japan Fund 2000 $ $
1999 $ 38,842 $ 0
1998 $ 35,288 $ 7,500
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
MARCH 31
FUND (OR TIME PERIOD) AMOUNT PAID AMOUNT WAIVED
---- ------------------- ----------- -------------
<S> <C> <C> <C>
AXA Rosenberg Value 2000
Market Neutral Fund 1999 $107,649
AXA Rosenberg Double 2000
Alpha Market Fund 4/22/98 (inception $ 42,666
date) to 3/31/99
AXA Rosenberg Select Sectors 2000
Market Neutral Fund 10/19/98 (inception $ 24,816
date) to 3/31/99
</TABLE>
DISTRIBUTOR AND DISTRIBUTION AND SHAREHOLDER SERVICE PLAN. As stated in the
Prospectus under the heading "Management of the Trust -- Distributor,"
institutional Shares, 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 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 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. The Funds pay no fees in connection with the distribution of
Institutional Shares.
For the periods indicated, the Funds incurred distribution and shareholder
service expenses and the Distributor paid broker-dealers and other selling
and/or servicing institutions as follows: [To be updated.]
<TABLE>
<CAPTION>
PAID OUT BY
AMOUNT DISTRIBUTOR
DISTRIBUTION RETAINED AS
TIME EXPENSES BY AMOUNT DESCRIBED
FUND PERIOD INCURRED DISTRIBUTOR WAIVED ABOVE
---- -------- ------------ ----------- -------- -----------
<S> <C> <C> <C> <C> <C>
AXA Rosenberg U.S. Small
Capitalization Fund
AXA Rosenberg International
Small Capitalization Fund
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
PAID OUT BY
AMOUNT DISTRIBUTOR
DISTRIBUTION RETAINED AS
TIME EXPENSES BY AMOUNT DESCRIBED
FUND PERIOD INCURRED DISTRIBUTOR WAIVED ABOVE
---- -------- ------------ ----------- -------- -----------
<S> <C> <C> <C> <C> <C>
AXA Rosenberg
Japan Fund
AXA Rosenberg Value
Market Neutral Fund
AXA Rosenberg Double
Alpha Market Fund
AXA Rosenberg Select Sectors
Market Neutral Fund
</TABLE>
The following table sets forth the amounts paid by the Funds for each
principal type of distribution-related activity during the fiscal year ended
March 31, 2000:
[To be updated.]
<TABLE>
<CAPTION>
AXA
AXA ROSENBERG
ROSENBERG SELECT
AXA DOUBLE SECTORS
AXA ROSENBERG ALPHA MARKET
ROSENBERG INTERNATIONAL AXA BARR MARKET NEUTRAL
U.S. SMALL SMALL ROSENBERG ROSENBERG FUND FUND
CAPITALIZATION CAPITALIZATION JAPAN VALUE MARKET (SINCE (SINCE
ACTVIITY FUND FUND FUND NEUTRAL FUND 4/22/98) 10/19/98)
-------- -------------- -------------- --------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Advertising.................. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Printing and Mailing of
Prospectuses to Other Than
Current Shareholders..... $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Compensation to
Underwriters................. $56,973 $ 5,405 $111 $120,307 $448 $379
Compensation to Broker-
Dealers.................... $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Compensation to Sales
Personnel.................. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Interest, Carrying or Other
Financing Charges.......... $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Other........................ $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
</TABLE>
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
23
<PAGE>
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
anytime 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.
The Plans are 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 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
relevant Funds' assets on an ongoing basis, over time these fees will increase
the cost of your investment and may cost you more than paying other types of
sales charges.
CUSTODIAL ARRANGEMENTS. Custodial Trust Company, Princeton, NJ 08540, for
the AXA Rosenberg Value Market Neutral Fund, the AXA Rosenberg Double Alpha
Market Fund, the AXA Rosenberg Select Sectors Market Neutral Fund, the AXA
Rosenberg Enhanced 500 Fund and the AXA Rosenberg Multi-Strategy Market Neutral
Fund, and State Street Bank and Trust Company, Boston, Massachusetts 02102, for
the AXA Rosenberg U.S. Small Capitalization Fund, the AXA Rosenberg Japan Fund,
the AXA Rosenberg International Small Capitalization 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 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
24
<PAGE>
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.
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,
25
<PAGE>
companies, securities and portfolio strategy. The Adviser uses such research in
servicing other clients as well as the Trust.
As permitted by Section 28(e) of the Securities Exchange Act of 1934, as
amended, and subject to such policies as the Trustees of the Trust may
determine, the Adviser may pay an unaffiliated broker or dealer that provides
"brokerage and research services" (as defined in the Act) to the Adviser an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction.
For the period indicated, the Funds paid brokerage commissions as follows:
[To be updated.]
<TABLE>
<CAPTION>
3/31/97 -- 3/31/98 3/31/98 -- 3/31/99 3/31/99 -- 3/31/00
------------------ ------------------ ------------------
<S> <C> <C> <C>
AXA Rosenberg U.S. Small Capitalization Fund...... $1,096,445 $2,056,871
AXA Rosenberg Japan Fund.......................... $ 3,750 $ 3,072
AXA Rosenberg International Small Capitalization
Fund............................................ $ 100,120 $ 124,891
AXA Rosenberg Value Market Neutral Fund........... $2,848,977
AXA Rosenberg Double Alpha Market Fund............ $ 1,856
AXA Rosenberg Select Sectors Market Neutral
Fund............................................ $ 119,872
</TABLE>
The Funds may pay brokerage commissions to Donaldson Lufkin and Jenrette and
Nomura International, each of which may be deemed to be an "affiliate of an
affiliate" of the Trust. Securities and Exchange Commission rules require that
commissions paid to an affiliate of an affiliate by the Fund for portfolio
transactions not exceed "usual and customary" brokerage commissions. The rules
define "usual and customary" commissions to include amounts which are
"reasonable and fair compared to the commission, fee or other remuneration
received or to be received by other brokers in connection with comparable
transactions involving similar securities being purchased or sold on a
securities exchange during a comparable period of time." The Trustees, including
those who are not "interested persons" of the Trust, have adopted procedures for
evaluating the reasonableness of commissions paid to such affiliates and will
review these procedures periodically. During the fiscal year ended March 31,
2000, the AXA Rosenberg U.S. Small Capitalization Fund, the AXA Rosenberg Value
Market Neutral Fund and the AXA Rosenberg Select Sectors Market Neutral Fund
paid $ , $ and $ , respectively to Donaldson Lufkin and Jenrette in
brokerage commissions. The AXA Rosenberg International Small Capitalization Fund
and the AXA Rosenberg Japan Fund paid $ and $ respectively to Nomura
International in brokerage commissions.
26
<PAGE>
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:
P(1 + T)TO THE POWER OF N = ERV
<TABLE>
<C> <C> <S>
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
</TABLE>
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:
<TABLE>
<C> <C> <S>
T = ERV-1,000
---------
1,000
</TABLE>
<TABLE>
<C> <C> <S>
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.
</TABLE>
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,
Institutional Shares and Class A, B and C Shares. Investor Shares, Institutional
Shares and Class A, B and C Shares are subject to different fees and expenses
and may have different performance for the same period.
27
<PAGE>
The average annual total returns for the Funds for the period ended
March 31, 2000 were as follows: [To be updated.]
<TABLE>
<CAPTION>
SINCE INCEPTION
10 (INCEPTION
FUND CLASS OF SHARES 1 YEAR 5 YEARS YEARS DATE)
---- ---------------- -------- -------- -------- ---------------
<S> <C> <C> <C> <C> <C>
AXA Rosenberg............................ Institutional % % %
U.S. Small Investor (20.75)% (10/22/96)
Capitalization Fund Adviser (20.70)% % (1/21/97)
AXA Rosenberg............................ Institutional (8.83)% % (9/23/96)
International Small Investor 6 % % (10/29/96)
Capitalization Fund
AXA Rosenberg............................ Institutional % % %
Japan Fund Investor % % (10/22/96)
AXA Rosenberg............................ Institutional % (5.94)% (12/16/97)
Value Market NeutralFund Investor % (6.32)% (12/18/97)
AXA Rosenberg............................ Institutional % 0.53 % (4/22/98)
Double Alpha Market Fund Investor % 0.18 % (4/22/98)
AXA Rosenberg............................ Institutional % 5.14 % (10/19/98)
Select Sectors Market Neutral Fund Investor % 4.71 % (11/11/98)
</TABLE>
PERFORMANCE COMPARISONS. Investors may judge the performance of the Funds
by comparing them to the performance of other mutual fund portfolios with
comparable investment objectives and policies through various mutual fund or
market indices such as those prepared by Dow Jones & Co., Inc. and Standard &
Poor's and to data prepared by Lipper, 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
28
<PAGE>
invested in a Fund. The Trust may also include calculations, such as
hypothetical compounding examples, which describe hypothetical investment
results in such communications. Such performance examples will be based on an
express set of assumptions and are not indicative of the performance of a Fund.
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES
The Trust is a diversified open-end series investment company organized as a
Massachusetts business trust. A copy of the Agreement and Declaration of Trust
of the Trust, as amended (the "Declaration of Trust"), is on file with the
Secretary of The Commonwealth of Massachusetts. The fiscal year of the Trust
ends on March 31. The Trust changed its name to "Barr Rosenberg Series Trust"
from "Rosenberg Series Trust" on August 5, 1996.
Interests in the Trust's portfolios are currently represented by shares of
nine series, the AXA Rosenberg Enhanced 500 Fund, the AXA Rosenberg
International Equity Fund, the AXA Rosenberg Multi-Strategy Market Neutral Fund,
the AXA Rosenberg Value Market Neutral Fund, AXA Rosenberg Double Alpha Market
Fund, AXA Rosenberg Select Sectors Market Neutral Fund, AXA Rosenberg U.S. Small
Capitalization Fund, AXA Rosenberg International Small Capitalization Fund and
AXA Rosenberg Japan Fund, issued pursuant to the Declaration of Trust. The
rights of shareholders and powers of the Trustees of the Trust with respect to
such shares are described in the Prospectus.
The AXA Rosenberg Japan Fund is divided into two classes of shares:
Institutional Shares and Investor Shares. The AXA Rosenberg U.S. Small
Capitalization Fund is divided into three classes of Shares: Institutional
Shares, Investor Shares and Adviser Shares. Each other series of the Trust is
divided into five classes of shares: 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.
29
<PAGE>
Each class of shares of each Fund has identical voting rights except that
each class has exclusive voting rights on any matter submitted to shareholders
that relates solely to that class, and has separate voting rights on any matter
submitted to shareholders in which the interests of one class differ from the
interests of any other class. Each class of shares has exclusive voting rights
with respect to matters pertaining to any distribution and shareholder service
plan applicable to that class. All classes of shares of a Fund will vote
together, except with respect to any distribution and shareholder service plan
applicable to a class or when a class vote is required as specified above or
otherwise by the 1940 Act.
There will normally be no meetings of shareholders for the purpose of
electing Trustees, except that in accordance with the 1940 Act (i) the Trust
will hold a shareholders' meeting for the election of Trustees at such time as
less than a majority of the Trustees holding office have been elected by
shareholders, and (ii) if, as a result of a vacancy in the Board of Trustees,
less than two-thirds of the Trustees holding office have been elected by the
shareholders, that vacancy may only be filled by a vote of the shareholders. In
addition, Trustees may be removed from office by a written consent signed by the
holders of two-thirds of the outstanding shares and filed with the Trust's
custodian or by a vote of the holders of two-thirds of the outstanding shares at
a meeting duly called for the purpose, which meeting shall be held upon the
written request of the holders of not less than 10% of the outstanding shares.
Upon written request by the holders of at least 1% of the outstanding shares
stating that such shareholders wish to communicate with the other shareholders
for the purpose of obtaining the signatures necessary to demand a meeting to
consider removal of a Trustee, the Trust has undertaken to provide a list of
shareholders or to disseminate appropriate materials (at the expense of the
requesting shareholders). Except as set forth above, the Trustees shall continue
to hold office and may appoint successor Trustees. Voting rights are not
cumulative.
No amendment may be made to the Declaration of Trust without the affirmative
vote of a majority of the outstanding shares of the Trust except (i) to change
the Trust's name or to cure technical problems in the Declaration of Trust and
(ii) to establish, designate or modify new and existing series, sub-series or
classes of shares of any series of Trust shares or other provisions relating to
Trust shares in response to applicable laws or regulations.
SHAREHOLDER AND TRUSTEE LIABILITY. Under Massachusetts law, shareholders
could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Declaration of Trust disclaims
shareholder liability for acts or obligations of the Trust and requires that
notice of such disclaimer be given in each agreement, obligation, or instrument
entered into or executed by the Trust or the Trustees. The Declaration of Trust
provides for indemnification out of all the property of the relevant series for
all loss and expense of any shareholder of that series held personally liable
for the obligations of the Trust. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is considered remote since it
is limited to circumstances in which the disclaimer is inoperative and the
series of which he is or was a shareholder would be unable to meet its
obligations.
The Declaration of Trust further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, nothing in
the Declaration of Trust protects a Trustee against any liability to which the
Trustee would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office. The Declaration of Trust also provides for indemnification by the
Trust of the Trustees and the officers of the Trust against liabilities and
expenses reasonably incurred in connection with litigation in which they may be
involved because of their offices with
30
<PAGE>
the Trust, except if it is determined in the manner specified in the Declaration
of Trust that such Trustees are liable to the Trust or its shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of his or her duties. In addition, the Adviser has agreed to indemnify each
Trustee who is not "an interested person" of the Trust to the maximum extent
permitted by the 1940 Act against any liabilities arising by reason of such
Trustee's status as a Trustee of the Trust.
OWNERS OF 5% OR MORE OF A FUND'S SHARES. [TO BE UPDATED.]
The following chart sets forth the names, addresses and percentage ownership
of those shareholders owning beneficially and of record (except as otherwise
indicated) 5% or more of the outstanding shares of the AXA Rosenberg U.S. Small
Capitalization Fund as of July , 2000. Those persons who beneficially own more
than 25% of a particular class of shares may be deemed to control such class. As
a result, it may not be possible for matters subject to a vote of a majority of
the outstanding voting securities of the Fund to be approved without the
affirmative vote of such shareholder, and it may be possible for such matters to
be approved by such shareholder without the affirmative vote of any other
shareholder.
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
Charles Schwab & Co Inc .................................... 15,439,778.796 29.39%
The Exclusive Use of our Customers
101 Montgomery St.
San Francisco, CA 94104
Citizens Bank .............................................. 6,749,157.639 12.85%
101 N Washington Ave
Saginaw, MI 48607
The Evangelical Lutherans .................................. 3,064,867.779 5.83%
Jeanie Seto
1 Cabot Rd
Medford, MA 02155
</TABLE>
INVESTOR SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
Charles Schwab & Co Inc .................................... 479,697.713 27.12%
The Exclusive Use of our Customers
101 Montgomery St.
San Francisco, CA 94104
National Investor Services Corp ............................ 121,251.505 6.85%
55 Water St. 32nd Floor
NY, NY 10041
</TABLE>
31
<PAGE>
ADVISER SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
Prudential Securities ...................................... 402,322.280 27.79%
For Exclsv Bnft of Our Customers
1 New York Plz
NY, NY 10292
FTC and Co ................................................. 143,938.333 9.94%
P O Box 173736
Denver, CO 80217
National Investor Services Corp ............................ 72,430.955 5.00%
The Exclusive Benefit of Customers
55 Water St. 32nd Floor
NY, NY 10041
Vanguard Fiduciary Trust Co ................................ 75,754.720 5.23%
Dresser-Rand Co Rmt Svgs Pln A 91621
P O Box 2600
Valley Forge, PA 19482
Roderick M Williams ........................................ 92,406.022 6.38%
GM Nameplate Inc 401K Prft Shrg Pln
2040 15th Ave West
Seattle, WA 98119
Fifth Third Bank ........................................... 74,120.577 5.12%
Harrington Bank 03-3443900
P O Box 630074
Cincinnati, OH 45263
</TABLE>
32
<PAGE>
The following chart sets forth the names, addresses and percentage ownership
of those shareholders owning beneficially and of record (except as otherwise
indicated) 5% or more of the outstanding shares of the AXA Rosenberg Japan Fund
as of July , 2000. Those persons who beneficially own more than 25% of a
particular class of shares may be deemed to control such class. As a result, it
may not be possible for matters subject to a vote of a majority of the
outstanding voting securities of the Fund to be approved without the affirmative
vote of such shareholder, and it may be possible for such matters to be approved
by such shareholder without the affirmative vote of any other shareholder.
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
AXA Rosenberg Group ........................................ 159,951.776 83.79%
4 Orinda Way Bldg E
Orinda, CA 94563
Koko M Baker ............................................... 14,362.949 7.52%
C/O RIEM 4 Orinda Way
Orinda, CA 94563
</TABLE>
INVESTOR SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
National Investor Services Corp ............................ 4,598.845 35.30%
55 Water St. 32nd Floor
NY, NY 10041
Omprakash N Sureka ......................................... 3,309.685 25.41%
Anuradha O Sureka
5431 W Stonebridge Ct
Peoria, IL 61615
Sandra B Cook .............................................. 1,248.388 9.58%
Sandra B Cook Family Trust
425 N Martingale Rd 19 Floor
Schaumburg, IL 60173
Arthur Y Liss .............................................. 1,985.567 15.24%
1400 N Woodward Ave 100
Bloomfield, MI 48304
Charles B Murdock .......................................... 961.478 7.38%
Amanda S Murdock
818 Thackston Dr
Spartanburg, SC 29307
</TABLE>
33
<PAGE>
The following chart sets forth the names, addresses and percentage ownership
of those shareholders owning of record 5% or more of the outstanding shares of
the AXA Rosenberg International Small Capitalization Fund as of July , 2000.
Those persons who beneficially own more than 25% of a particular class of shares
may be deemed to control such class. As a result, it may not be possible for
matters subject to a vote of a majority of the outstanding voting securities of
the Fund to be approved without the affirmative vote of such shareholder, and it
may be possible for such matters to be approved by such shareholder without the
affirmative vote of any other shareholder.
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
Charles Schwab & Co Inc .................................... 3,464,982.181 93.61%
The Exclusive Use of our Customers
101 Montgomery St.
San Francisco, CA 94104
</TABLE>
INVESTOR SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
Charles Schwab & Co Inc .................................... 106,228.319 59.26%
The Exclusive Use of our Customers
101 Montgomery St.
San Francisco, CA 94104
National Investor Services Corp ............................ 10,806.147 6.03%
55 Water St 32nd Floor
NY, NY 10041-3299
</TABLE>
34
<PAGE>
The following charts set forth the names, addresses and percentage ownership
of those shareholders owning beneficially and of record (except as otherwise
indicated) 5% or more of the outstanding shares of the AXA Rosenberg Value
Market Neutral Fund as of July , 2000. Those persons who beneficially own more
than 25% of a particular class of shares may be deemed to control such class. As
a result, it may not be possible for matters subject to a vote of a majority of
the outstanding voting securities of the Fund to be approved without the
affirmative vote of such shareholder, and it may be possible for such matters to
be approved by such shareholder without the affirmative vote of any other
shareholder.
INVESTOR SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
Charles Schwab & Co Inc .................................... 918,404.451 43.31%
The Exclusive Use of our Customers
101 Montgomery St.
San Francisco, CA 94104
National Investor Services Corp ............................ 254,192.134 11.99%
55 Water St 32nd Floor
NY, NY 10041
</TABLE>
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
Charles Schwab & Co Inc .................................... 3,643,993.970 26.85%
The Exclusive Use of our Customers
101 Montgomery St.
San Francisco, CA 94104
Custodial Trust Co as Pldg of Barr ......................... 940,977.440 6.93%
Rosenberg Double Alpha Market Fund
101 Carnegie Ctr
Princeton, NJ 08540
Rosenberg Alpha LP ......................................... 3,214,925.079 23.68%
4 Orinda Way Bldg E
Orinda, CA 94563
Lehman Brothers Special Finl Inc ........................... 3,026,634.383 22.30%
3 World Financial Center 6th Fl
NY, NY 10285
</TABLE>
35
<PAGE>
The following charts set forth the names, addresses and percentage ownership
of those shareholders owning beneficially and of record (except as otherwise
indicated) 5% or more of the outstanding shares of the AXA Rosenberg Double
Alpha Market Fund as of July , 2000. Those persons who beneficially own more
than 25% of a particular class of shares may be deemed to control such class. As
a result, it may not be possible for matters subject to a vote of a majority of
the outstanding voting securities of the Fund to be approved without the
affirmative vote of such shareholder, and it may be possible for such matters to
be approved by such shareholder without the affirmative vote of any other
shareholder.
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
Charles Schwab & Co Inc .................................... 423,306.719 49.69%
The Exclusive Use of our Customers
101 Montgomery St.
San Francisco, CA 94104
US Bank National Assoc ..................................... 393,185.410 46.15%
The Saint Paul Chamber
PO Box 64010
St Paul, MN 55164-0010
</TABLE>
INVESTOR SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
Arthur Wiener .............................................. 2,576.226 21.22%
102 Coleridge St
Brooklyn, NY 11235
Jimmy T Hua ................................................ 830.461 6.84%
810 Polhemus Rd Apt 61
San Mateo, CA 94402
Susan L Duval .............................................. 609.699 5.02%
11460 Zion Rd
Bloomington, MN 55437
Matthew W Buurma ........................................... 2,795.839 23.03%
Deborah S Buurma
67 Valley View Ave
Summit, NJ 07901
</TABLE>
36
<PAGE>
The following charts set forth the names, addresses and percentage ownership
of those shareholders owning beneficially and of record (except as otherwise
indicated) 5% or more of the outstanding shares of the AXA Rosenberg Select
Sectors Market Neutral Fund as of July , 2000. Those persons who beneficially
own more than 25% of a particular class of shares may be deemed to control such
class. As a result, it may not be possible for matters subject to a vote of a
majority of the outstanding voting securities of the Fund to be approved without
the affirmative vote of such shareholder, and it may be possible for such
matters to be approved by such shareholder without the affirmative vote of any
other shareholder.
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
Rosenberg Alpha LP ......................................... 1,412,429.379 64.29%
4 Orinda Way Bldg E
Orinda, CA 94563
Charles Schwab & Co Inc .................................... 356,180.813 16.21%
The Exclusive Use of Our Customers
101 Montgomery St
San Francisco, CA 94104
</TABLE>
INVESTOR SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNERSHIP PERCENTAGE
---------------- ---------------- --------------------
<S> <C> <C>
Resources Trust Co ......................................... 57,751.754 47.97%
P O Box 3865
Englewood, CO 80155
Charles Schwab & Co Inc .................................... 28,148.190 23.38%
The Exclusive Use of Our Customers
101 Montgomery St
San Francisco, CA 94104
FTC and Co ................................................. 6,026.032 5.00%
P O Box 173736
Denver, CO 80217
Webster Mrak & Blumberg .................................... 9,718.173 8.07%
1325 4th Ave Ste 600
Seattle, WA 98101
</TABLE>
Except as follows, the officers and Trustees of the Trust, as a group, owned
less than 1% of any class of outstanding shares of the Trust as of July ,
2000. AXA Rosenberg Japan Fund, Institutional Shares: as of July 2, 2000,
Richard L. Saalfeld held 1862.197 shares and William F. Sharpe held 1582.278
shares, for a total between them of 1.80% of the outstanding shares of that
class; AXA Rosenberg International Small Capitalization Fund, Institutional
Shares: as of July 2, 2000, William F. Sharpe held 1027.905 shares,
37
<PAGE>
Dwight M. Jaffee held 564.972 shares and Barr Rosenberg held 37,870.614 shares,
for a total between them of 1.07% of the outstanding shares of that class. [To
be updated.]
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 and statement of additional information for the
Trust's U.S. Small Capitalization Fund, International Small Capitalization Fund
and Japan Fund.
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 New Year's Day, Martin Luther King's Day,
President's Day, Good Friday, Memorial Day, Independence Day (observed), Labor
Day, Thanksgiving Day and Christmas 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.
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.
38
<PAGE>
FINANCIAL STATEMENTS
The Report of Independent Accountants, financial highlights and financial
statements of the Funds included in the Trust's Annual Report for the period
ended March 31, 2000 (the "Annual Report") are incorporated herein by reference
to such Annual Report. Copies of such Annual Report are available without charge
upon request by writing to Barr Rosenberg Series Trust, 3435 Stelzer Road,
Columbus, Ohio 43219 or telephoning 1-800-447-3332.
The financial statements incorporated by reference into this Statement of
Additional Information have been audited by LLP, independent
accountants, and have been so included and incorporated by reference in reliance
upon the report of said firm, which report is given upon their authority as
experts in auditing and accounting.
39
<PAGE>
PART C
OTHER INFORMATION -
THE AXA ROSENBERG U.S. SMALL CAPITALIZATION FUND,
THE AXA ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND,
THE AXA ROSENBERG JAPAN FUND,
THE AXA ROSENBERG VALUE MARKET NEUTRALFUND,
THE AXA ROSENBERG DOUBLE ALPHA MARKET FUND,
THE AXA ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND
THE AXA ROSENBERG ENHANCED 500 FUND,
THE AXA ROSENBERG INTERNATIONAL EQUITY FUND, AND
THE AXA ROSENBERG MULTI-STRATEGY MARKET NEUTRAL FUND
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 U.S.
SMALL CAPITALIZATION FUND AND AXA ROSENBERG INVESTMENT MANAGEMENT
LLC -- FILED HEREWITH;
(2) MANAGEMENT CONTRACT BETWEEN THE REGISTRANT ON BEHALF OF ITS AXA
ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND AND AXA
ROSENBERG INVESTMENT MANAGEMENT LLC -- FILED HEREWITH;
(3) MANAGEMENT CONTRACT BETWEEN THE REGISTRANT ON BEHALF OF ITS JAPAN
FUND AND AXA ROSENBERG INVESTMENT MANAGEMENT LLC -- FILED
HEREWITH;
(4) MANAGEMENT CONTRACT BETWEEN THE REGISTRANT ON BEHALF OF ITS BARR
ROSENBERG VALUE MARKET NEUTRALFUND AND AXA ROSENBERG INVESTMENT
MANAGEMENT LLC -- FILED HEREWITH;
(5) MANAGEMENT CONTRACT BETWEEN THE REGISTRANT ON BEHALF OF ITS BARR
ROSENBERG DOUBLE ALPHA MARKET FUND AND AXA ROSENBERG INVESTMENT
MANAGEMENT LLC -- FILED HEREWITH;
(6) MANAGEMENT CONTRACT BETWEEN THE REGISTRANT ON BEHALF OF ITS BARR
ROSENBERG SELECT SECTORS MARKET NEUTRAL FUND AND AXA ROSENBERG
INVESTMENT MANAGEMENT LLC -- FILED HEREWITH;
(7) Management Contract between the Registrant on behalf of its AXA
Rosenberg Enhanced 500 Fund and AXA Rosenberg Investment
Management LLC - filed herewith;
(8) Management Contract between the Registrant on behalf of its AXA
Rosenberg International Equity Fund and AXA Rosenberg Investment
Management LLC -- filed herewith;
<PAGE>
(9) Management Contract between the Registrant on behalf of its AXA
Rosenberg Multi-Strategy Market Neutral Fund and AXA Rosenberg
Investment Management LLC -- filed herewith;
(e) Amended and Restated Distributor's Contract between the Registrant and
Barr Rosenberg Funds Distributor, Inc. -- incorporated by reference to
Post-Effective Amendment No. 19 to the Registration Statement filed on
July 29, 1998;
(f) None;
(g) (1) Custody Agreement between the Registrant and Custodial Trust
Company -- incorporated by reference to Post-Effective Amendment
No. 19 to the Registration Statement filed on July 29, 1998;
(2) Form of Custody Agreement between the Registrant on behalf of its
Small Capitalization Series (renamed U.S. Small Capitalization
Fund) and State Street Bank and Trust Company -- incorporated by
reference to Pre-Effective Amendment No. 2 to the Registration
Statement filed on August 18, 1988;
(3) Form of Custody Agreement between the Registrant on behalf of its
AXA Rosenberg Japan Fund and State Street Bank and Trust Company
-- incorporated by reference to Post-Effective Amendment No. 2 to
the Registration Statement filed on January 4, 1989;
(4) Form of Custody Agreement between the Registrant on behalf of its
AXA Rosenberg International Equity Fund and State Street Bank and
Trust Company -- filed herewith;
(5) Form of Special Custody Account Agreement among the Registrant on
behalf of its AXA Rosenberg International Equity Fund, Custodial
Trust Company and Bear, Stearns Securities Corp. -- filed
herewith;
(6) 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 among the Registrant, BISYS Fund
Services, Inc. and BISYS Fund Services Ohio, Inc. --
incorporated by reference to Post-Effective Amendment No. 15 to
the Registration Statement filed on July 18, 1997;
(2) Amendment to Transfer Agency Agreement among the Registrant,
BISYS Fund Services, Inc. and BISYS Fund Services Ohio, Inc. --
filed herewith;
(3) Expense Limitation Agreement between AXA Rosenberg Investment
Management LLC and the Registrant on behalf of the Funds -- filed
herewith;
(4) 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;
<PAGE>
(5) Amendment to Administration Agreement among the Registrant,
BISYS Fund Services, Inc. and BISYS Fund Services Ohio, Inc. --
filed herewith;
(6) Form of Second Amendment to Administration Agreement between the
Registrant and BISYS Fund Services Ohio, Inc. -- filed herewith;
(7) 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;
(8) Amendment to Fund Accounting Agreement among the Registrant, BISYS
Fund Services, Inc and BISYS Fund Services Ohio, Inc. -- filed
herewith;
(9) Second Amendment to Fund Accounting Agreement between the
Registrant and BISYS Fund Services Ohio, Inc. -- filed herewith;
(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 -- incorporated by reference to Post-Effective
Amendment No. 24 filed on May 28,1999.;
(2) Distribution and Service Plan for Class A Shares -- filed
herewith;
(3) Distribution and Service Plan for Class B Shares -- filed
herewith;
(4) Distribution and Service Plan for Class C Shares -- filed
herewith;
(n) Further Amended and Restated Multi-Class Plan -- filed herewith;
(p) (1) Code of Ethics of the Registrant -- filed herewith;
(2) Code of Ethics of AXA Rosenberg Investment Management LLC,
investment adviser to the Funds -- filed herewith;
(3) Code of Ethics of BISYS Fund Services Ohio, Inc., principal
underwriter to the funds -- filed herewith;
<PAGE>
(q) (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 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
<PAGE>
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 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
<PAGE>
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 Adviser provides investment advisory services to a substantial number
of institutional investors, to the U.S. Small Capitalization Fund, the AXA
Rosenberg International Small Capitalization Fund, the AXA Rosenberg Japan Fund,
the AXA Rosenberg Value Market NeutralFund, the Barr Rosenberg Double Alpha
Market Fund and the Barr Rosenberg Select Sectors Market Neutral Fund (the other
series of the Trust), and to the series of Barr Rosenberg Variable Insurance
Trust, an open-end management investment company.
Set forth below are the substantial business engagements during at least
the past two fiscal years of each director or officer of the Adviser:
Name and Position with Adviser Business and Other Connections
Barr M. Rosenberg General Partner, Rosenberg Alpha L.P.
Director of Research (formerly RBR Partners (limited
partner of Manager)), 12 El Sueno,
Orinda, California, December 1984 to
present; Chairman of the Board,
Rosenberg Management Company S.A., 2
Place WinstonChurchill, L-1340
Luxembourg, April 1989 to present;
Chairman of the Board, Rosenberg U.S.
Japan Management Company S.A., 2 Place
Winston Churchill, L-1340 Luxembourg,
July 1989 to present. Chairman of the
Board, Rosenberg Global Management
Company, S.A., 2 Place Winston
Churchill, L-1340 Luxemburg, April 1990
to present; Director and Chairman of
the Board, Rosenberg Nomura Asset
Management Company, Ltd., Dai-Ichi
Edobashi Bldg., 1-11-1 Nihonbashi
Chuo-Ku, Tokyo 103, Japan; Chairman of
the Board and Director of Barr
Rosenberg Investment Management, Inc.,
4 Orinda Way, Orinda, California,
February 1990 to present. Chairman,
Barr Rosenberg European Management,
Ltd., 9A Devonshire Square, London EC2M
4LY, United Kingdom, March 1990 to
present. Chairman, AXA Rosenberg Group
LLC, January 1999 to present; Director,
Barr Rosenberg Research Center LLC,
January 1999 to present; Managing
General Partner and Chief Investment
Officer, Rosenberg Institutional Equity
Management, January 1985 to December
1998.
<PAGE>
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 Class, Investor Class,
Adviser Class, Class A, Class B and Class C shares. The Distributor does
not act as principal underwriter, depositor or investment adviser for any
other investment company.
(b) Information with respect to the Distributor's directors and officers is
as follows:
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ --------------------- ---------------------
Irimga McKay President None
Lynn J. Mangum Director None
Kevin J. Dell Vice President, Secretary None
Olu T. Lawal Financial Officer None
Gregory A. Trichtinger Vice President None
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
<PAGE>
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)
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the has duly caused this Post-Effective
Amendment No. 32 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 31st day of May, 2000.
BARR ROSENBERG SERIES TRUST
By: RICHARD L. SAALFELD
-------------------------
Richard L. Saalfeld
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 31st day of May, 2000.
SIGNATURE TITLE DATE
--------- ----- ----
RICHARD L. SAALFELD President (Principal May 31, 2000
------------------- Executive Officer)
Richard L. Saalfeld
KENNETH REID Trustee May 31, 2000
------------
Kenneth Reid
Po-Len Hew* Treasurer (principal May 31, 2000
---------- financial and accounting
Po-Len Hew officer)
William F. Sharpe* Trustee May 31, 2000
-----------------
William F. Sharpe
Nils H. Hakansson* Trustee May 31, 2000
-----------------
Nils H. Hakansson
Dwight M. Jaffee* Trustee May 31, 2000
----------------
Dwight M. Jaffee
*By: KENNETH REID
------------
Kenneth Reid
Attorney-in-Fact
Date: May 31, 2000
