<PAGE>
As filed with the Securities and Exchange Commission on December 4, 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. 35 / X /
----
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / X /
----
Amendment No. 38 / X /
----
BARR ROSENBERG SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
3435 Stelzer Road
Columbus, Ohio 43219-8021
(Address of Principal Executive Offices) (Zip code)
800-447-3332
(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) /X/ On December 4, 2000
pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1) / / On (date)
pursuant to paragraph (a)(1)
<PAGE>
/ / 75 days after filing pursuant to (a)(2) / / On (date)
pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
NOTE: THIS AMENDMENT RELATES SOLELY TO SHARES OF BENEFICIAL INTEREST IN THE AXA
ROSENBERG U.S. DISCOVERY FUND, INFORMATION CONTAINED IN THE TRUST'S REGISTRATION
STATEMENT RELATING TO THE OTHER SERIES OF THE TRUST IS NEITHER AMENDED NOR
SUPERSEDED HEREBY.
<PAGE>
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BARR ROSENBERG SERIES Trust
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-- AXA Rosenberg U.S. Discovery Fund
December 4, 2000
Barr Rosenberg Series Trust is an open-end management investment company
offering ten diversified portfolios with different investment objectives
and strategies, including the AXA Rosenberg U.S. Discovery Fund. The
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.
------------------------------------------------------------------------------
Shareholder Services
1.800.555.5737 Institutional Shares 1.800.447.3332 Investor Shares
------------------------------------------------------------------------------
[LOGO]
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
RISK/RETURN SUMMARY......................................... 3
AXA ROSENBERG U.S. DISCOVERY FUND......................... 3
FEES AND EXPENSES........................................... 5
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES.... 6
PRINCIPAL RISKS............................................. 7
CERTAIN ADDITIONAL INVESTMENT TECHNIQUES AND RELATED
RISKS..................................................... 7
PERFORMANCE INFORMATION FROM THE ADVISER'S OTHER MID/SMALL
CAPITALIZATION ACCOUNTS................................... 10
THE ADVISER'S GENERAL INVESTMENT PHILOSOPHY................. 11
MANAGEMENT OF THE TRUST..................................... 14
MULTIPLE CLASSES............................................ 17
PURCHASING SHARES........................................... 19
IRA ACCOUNTS................................................ 21
REDEMPTION OF SHARES........................................ 21
EXCHANGING SHARES........................................... 22
HOW THE TRUST PRICES SHARES OF THE FUND..................... 23
DISTRIBUTIONS............................................... 24
TAXES....................................................... 24
OTHER INFORMATION........................................... 25
</TABLE>
2
<PAGE>
RISK/RETURN SUMMARY
The following is a summary of certain key information about the AXA
Rosenberg U.S. Discovery Fund (the "Fund"). You will find additional information
about the Fund, including a detailed description of the risks of an investment
in the Fund, after this Summary. This Summary identifies the Fund's investment
objective, principal investment strategies and principal risks. The principal
risks of the Fund are more fully discussed beginning on page 7. You can find a
more detailed description of the Fund 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 Fund.
- An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
AXA ROSENBERG U.S. DISCOVERY FUND
INVESTMENT OBJECTIVE
The Fund seeks a return greater than that of the Russell 2500 Index.
SUMMARY OF PRINCIPAL INVESTMENT STRATEGIES
The Fund invests primarily in the common stocks of Mid/Small Capitalization
Companies (as defined on page 6) 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 Mid/Small Capitalization Companies. The Fund will place
relatively greater emphasis on capital appreciation than on current income.
The Adviser uses fundamental and 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 lower price-to-earnings and price-to-book ratios (as compared
to companies in the same industry) as attractive for purchase. While the Fund's
portfolio has a modest value bias, there are other factors beyond value/growth
exposures that affect the Fund's performance, such as industry exposures and
risks associated with specific individual stock selections.
3
<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. The value of Fund shares may change depending on external
conditions affecting the Fund's portfolio. These conditions depend upon market,
economic, political, regulatory and other factors.
SMALLER COMPANY RISK. Market risk is particularly pronounced for the 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.
PORTFOLIO TURNOVER. The Fund's portfolio turnover may exceed 100%. Higher
portfolio turnover may result in increased transaction costs, which in turn may
reduce the Fund's return. A high portfolio turnover rate may also result in
negative tax consequences to shareholders.
MANAGEMENT RISK. Any actively managed investment portfolio is subject to
the risk that its investment adviser will make poor stock selections. The Fund's
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.
For a more detailed description of these and other risks associated with an
investment in the Fund, turn to page 7.
PERFORMANCE INFORMATION
The Fund does not have performance information because it has not yet been
operational for a full calendar year.
4
<PAGE>
FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND
HOLD SHARES OF THE FUND.
<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 (as a percentage of offering
price)................................... 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>
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR A B C
------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES (expenses that
are deducted from Fund assets)
Management Fees................................ 0.90% 0.90% 0.90% 0.90% 0.90%
Distribution and Shareholder Service
(12b-1) Fees................................. None 0.25% 0.50% 1.00% 1.00%
Other Expenses (d)............................. 1.03% 1.18%(e) 1.03% 1.03% 1.03%
---- ---- ---- ---- ----
Total Annual Fund Operating Expenses........... 1.93% 2.33% 2.43% 2.93% 2.93%
Fee Waiver and/or Expense Reimbursement (f).... 0.78% 0.78% 0.78% 0.78% 0.78%
---- ---- ---- ---- ----
Net Expenses................................... 1.15% 1.55% 1.65% 2.15% 2.15%
==== ==== ==== ==== ====
</TABLE>
------------------------
(a) Class A Shares may be sold at net asset value without payment of any sales
charge to the following entities:
(i) Pension and profit sharing plans, pension funds and other
company-sponsored benefit plans; and
(ii) "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 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
annualized 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 contractually 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). Any amounts waived or reimbursed in a particular fiscal year
will be subject to repayment by the Fund to the Adviser to the extent that
from time to time through the next
5
<PAGE>
two fiscal years the repayment will not cause the Fund's expenses to exceed
the stated limit during the respective year.
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......................................... $117 $ 530
Investor.............................................. $158 $ 653
A..................................................... $635 $1,126
B..................................................... $718 $1,133
C..................................................... $416 $ 925
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
CLASS 1 YEAR 3 YEARS
----- -------- --------
<S> <C> <C>
B..................................................... $218 $833
C..................................................... $316 $925
</TABLE>
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
The investment objective and policies of the Fund may be changed without
shareholder approval.
AXA ROSENBERG U.S. DISCOVERY FUND
The investment objective of the AXA Rosenberg U.S. Discovery Fund is to seek
total return greater than that of the Russell 2500 Index through investment
primarily in common stocks of mid/small capitalization companies (i.e., -
companies that have market capitalizations of up to $4 billion, which
corresponds with the market capitalization of the largest company in the Russell
2500 after the reconstitution of the Index on May 31, 1999) that are traded
principally in the markets of the United States ("Mid/ Small Capitalization
Companies"). The definition of Mid/Small Capitalization Companies may change
from time to time to correspond with the market capitalization of the largest
company in the Russell 2500. The Russell 2500 Index consists of the smallest
2500 securities in the Russell 3000 Index. The Russell 2500 Index represents
approximately 16% of the Russell 3000 Index total market capitalization. Total
return is a combination of capital appreciation and current income (dividend or
interest). Because the companies in which the Fund invests typically do not
distribute significant amounts of company earnings to shareholders, the Fund's
investment strategy will place relatively greater emphasis on capital
appreciation than on current income.
It is currently expected that, under normal circumstances, most of the
Fund's assets will be invested in Mid/Small Capitalization Companies.
Investments in small capitalization 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."
6
<PAGE>
PRINCIPAL RISKS
The value of your investment in the 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 the Fund's investments as a whole. The Fund
could be subject to additional risks because the types of investments made by
the Fund can change over time.
INVESTMENT RISKS. An investment in the Fund involves risks similar to those
of investing in common stocks directly. Just as with common stocks, the value of
Fund shares may change depending on market, economic, political, regulatory and
other conditions affecting the Fund's portfolio. Investment in shares of the
Fund is, like investment in common stocks, more volatile and risky than some
other forms of investment.
SMALLER COMPANY RISK. Companies with relatively small market
capitalizations may be dependent upon a single proprietary product or market
niche, may have limited product lines, markets or financial resources, or may
depend on a relatively small 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 relatively small market capitalizations may be greater than those
of larger, more established companies.
PORTFOLIO TURNOVER. The consideration of portfolio turnover will not
constrain the Adviser's investment decisions. The Fund is actively managed, and
the 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 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. The Fund is subject to management risk because it is an
actively managed investment portfolio. Management risk is the risk that the
Adviser will make poor investment decisions. The Adviser will apply its
investment techniques and risk analyses in making investment decisions for the
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 the Fund.
CERTAIN ADDITIONAL INVESTMENT TECHNIQUES AND RELATED RISKS
The Fund has the flexibility to invest, within limits, in a variety of
instruments designed to enhance its 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 Fund's Statement of
Additional Information ("SAI").
LIQUID INSTRUMENTS. To meet redemption requests or for investment purposes,
the Fund 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.
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
7
<PAGE>
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. The 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 its investment in common stocks, the Fund may invest in
Index Futures while the Adviser seeks favorable terms from brokers to effect
transactions in common stocks selected for purchase. The 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, the 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 the 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 the Fund.
The 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
the 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 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."
The 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.
The Fund's use of Index Futures involves risk. 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 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 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. The futures market may also attract more
speculators than does the securities market, because deposit requirements in the
futures market are less onerous than margin requirements in the securities
market. Increased participation by speculators in the futures market may also
cause price distortions. In addition, the price of Index Futures may not
correlate perfectly with movement in the underlying index due to certain market
disturbances.
The 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
8
<PAGE>
deposits, when the Fund purchases an Index Future, it is required to maintain,
at all times while an Index Future is held by the Fund, cash, U.S. government
securities or other high grade liquid securities in a segregated account with
its Custodian in an amount which, together with the initial margin deposit on
the futures contract, is equal to the current value of the futures contract.
Further, the ability to establish and close out positions in options on
future contracts will be subject to the development and maintenance of a liquid
secondary market. It is not certain that such a market will develop. There is no
assurance that a liquid secondary market will exist for any particular option or
at any particular time.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements, by
which the 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
the 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 Fund would attempt to
exercise rights with respect to the underlying security, including possible
disposition in the market. However, the 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 the Fund seeks to enforce its rights
thereto and (b) inability to enforce rights and the expenses involved in
attempted enforcement.
LOANS OF PORTFOLIO SECURITIES. The 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
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, the 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. The Fund may also call loans in order to
sell the securities involved. The risks in lending portfolio securities, as with
other extensions of credit, include possible delay in recovery of the securities
or possible loss of rights in the collateral should the borrower fail
financially. However, such loans will be made only to broker-dealers that are
believed by the Adviser to be of relatively high credit standing.
FOREIGN INVESTMENTS. Although it invests primarily in securities
principally traded in U.S. markets, the Fund may occasionally invest in stocks
of foreign companies that trade on U.S. markets. Investments in securities of
foreign issuers involve certain risks that are less significant for investments
in securities of U.S. issuers. These include risks of adverse changes in foreign
economic, political, regulatory and other conditions, changes in currency
exchange rates or exchange control regulations (including currency blockage).
The Fund may be unable to obtain and enforce judgments against foreign entities,
and issuers of foreign securities are subject to different, and often less
comprehensive, accounting, reporting and disclosure requirements than domestic
issuers. Also, the securities of some foreign companies may be less liquid and
at times more volatile than securities of comparable U.S. companies.
ILLIQUID SECURITIES. The 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
9
<PAGE>
the 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.
PERFORMANCE INFORMATION FROM
THE ADVISER'S OTHER MID/SMALL CAPITALIZATION ACCOUNTS
The Adviser also serves as adviser to other mid/small capitalization
accounts (the "Other Accounts") that have investment objectives, policies and
strategies that are substantially similar to those of the Fund. THE INFORMATION
BELOW DOES NOT REPRESENT THE HISTORICAL PERFORMANCE OF THE FUND AND SHOULD NOT
BE CONSIDERED A PREDICTION OF ITS FUTURE PERFORMANCE. The performance of the
Fund may be higher or lower than the performance of the Other Accounts. The
performance information shown below is based on a composite of all of the
accounts of the Adviser and its predecessor with substantially similar
investment objectives, policies and strategies as the Fund and has been adjusted
to give effect to the estimated annualized expenses (without giving effect to
any expense waivers or reimbursements) of the Fund during its first fiscal year.
As noted below, the returns in the bar chart reflect adjustments for the fees
and expenses of Institutional Shares. The other classes of the Fund have higher
expense ratios than the Institutional Class, and therefore if the returns of the
Other Accounts were adjusted for the fees and expenses of those classes, they
would be lower than those shown in the bar chart. None of the Other Accounts has
been registered under the 1940 Act and therefore they are not subject to certain
investment restrictions imposed by the 1940 Act. If the Other Accounts had been
registered under the 1940 Act, their performance and the composite performance
might have been adversely affected. In addition, the Other Accounts were not
subject to Subchapter M of the Internal Revenue Code. If the Other Accounts had
been subject to Subchapter M, their performance might have been adversely
affected.
YEARLY PERFORMANCE (%) -- OTHER ACCOUNTS
(ADJUSTED FOR FEES AND EXPENSES OF INSTITUTIONAL SHARES)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
YEARLY PERFORMANCE
<TABLE>
<CAPTION>
ANNUAL RETURN (%)
<S> <C>
1997 31.96%
1998 0.27%
1999 20.37%
</TABLE>
CALENDAR YEAR END
During all periods shown in the bar graph, the Other Accounts' highest
quarterly return was 18.91%, for the quarter ended 12/31/99, and their lowest
quarterly return was -19.09%, for the quarter ended 9/30/98.
10
<PAGE>
PERFORMANCE TABLE
This table shows how the Other Accounts' performance compares with the
returns of a broad based securities market index.
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 1999)
<TABLE>
<CAPTION>
SINCE
PAST ONE INCEPTION
YEAR (2/1/96)
-------- ---------------
<S> <C> <C>
Other Accounts (adjusted for the fees and expenses of
Institutional Shares)..................................... 20.37% 18.51%
Other Accounts (adjusted for the fees and expenses of
Investor Shares).......................................... 19.91% 18.05%
Russell 2500 Index*......................................... 24.15% 16.71%
</TABLE>
------------------------
* The Russell 2500 Index consists of the smallest 2500 securities in the
Russell 3000 Index. (The Russell 3000 Index represents approximately 98% of
the investable U.S. equity market.) The Russell 2500 Index represents
approximately 16% of the Russell 3000 Index total market capitalization.
For the period January 1, 2000 through September 30, 2000, the aggregate
(non-annualized) total returns of the Other Accounts were 13.13% (based on fees
and expenses of Institutional Shares) and 12.80% (based on fees and expenses of
Investor Shares). The Russell 2500 Index return for that period was 8.23%.
There has been one modification to the Adviser's mid/small capitalization
accounts strategy since its inception in 1996. In October 1998, the Adviser's
predecessor combined the Earnings Change Model and the Investor Sentiment Model
into the Near-Term Prospects Model. See "The Adviser's General Investment
Philosophy -- Stock Selection." Despite this enhancement to the Adviser's
mid/small capitalization strategy, the Fund has investment objectives and
strategies substantially similar to those of the Other Accounts.
AVERAGE ANNUAL RETURNS (FOR PERIODS ENDING MARCH 31, 2000)
<TABLE>
<CAPTION>
SINCE
PAST ONE INCEPTION
YEAR (2/1/96)
-------- -----------
<S> <C> <C>
Other Accounts (adjusted for the fees and expenses of
Institutional Shares)..................................... 42.45% 20.14%
Other Accounts (adjusted for the fees and expenses of
Investor Shares).......................................... 41.91% 19.68%
Russell 2500 Index*......................................... 43.48% 18.34%
</TABLE>
------------------------
* The Russell 2500 Index consists of the smallest 2500 securities in the
Russell 3000 Index. (The Russell 3000 Index represents approximately 98% of
the investable U.S. equity market.) The Russell 2500 Index represents
approximately 16% of the Russell 3000 Index total market capitalization.
THE ADVISER'S GENERAL INVESTMENT PHILOSOPHY
The Adviser attempts to add value relative to a benchmark through a
quantitative stock selection process, and seeks to diversify investment risk
across the Fund's holdings. In seeking to outperform the Fund's designated
benchmark, the Adviser also attempts to control risk in the Fund's portfolio
relative to the securities constituting that benchmark. Since the Fund is
substantially invested in equities at all times, the Adviser does not earn the
extraordinary return, or "alpha," by timing the market. The Adviser seeks to
avoid constructing a portfolio that differs significantly from the benchmark
with respect to characteristics such as market capitalization, historic
volatility or "beta," and industry weightings. The Fund seeks to have exposure
to these factors similar to that of the designated benchmark.
11
<PAGE>
INVESTMENT PHILOSOPHY
The Adviser's investment strategy is based on the belief that stock prices
imperfectly reflect the present value of the expected future earnings of
companies, their "fundamental value." The Adviser believes that market prices
will converge towards fundamental value over time, and that therefore, if the
Adviser can accurately determine fundamental value, and can apply a disciplined
investment process to select those stocks that are currently undervalued (i.e.,
their current price is cheaper than their fundamental value), the Adviser will
outperform the 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 those stocks that have become 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 the 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 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 with correct data, the recommendations made by the system will be
sound.
STOCK SELECTION
Fundamental valuation of stocks is key to the Adviser's investment process,
and the heart of the valuation process lies in the Adviser's proprietary
Appraisal Model. Analysis of companies in the United States and Canada is
conducted in a single unified model. The Appraisal Model discriminates where the
two markets are substantially different, while simultaneously comparing
companies in the two markets according to their degrees of similarity. European
companies and Asian companies (other than Japanese companies) are analyzed in a
nearly global model, which includes the United States and Canada as a further
basis for comparative valuation, but which excludes Japan. Japanese companies
are analyzed in an independent national model. The Appraisal Model incorporates
the various accounting standards that apply in different markets and makes
adjustments to ensure meaningful comparisons.
An important feature of the Appraisal Model is the classification of
companies into one or more of 170 groups of "similar" businesses. Each company
is broken down into its individual business segments. 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,
12
<PAGE>
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 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 the
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
Adviser's objective in using this match system is to execute most trades on the
Adviser's side of the bid/ask spread so as to minimize market impact.
Package trades further allow the Adviser to trade large lists of orders
simultaneously using state of the art tools such as the Instinet Real-Time
System, Instinet Order Matching System and Lattice Trading System. Those tools
provide order entry, negotiation and execution capabilities either directly to
other institutions or electronically to the floor of the exchange. The
advantages of using such systems include speed of execution, low commissions,
anonymity and very low market impact.
The Adviser continuously monitors trading costs to determine the impact of
commissions and price disturbances on the Fund's portfolio.
13
<PAGE>
MANAGEMENT OF THE TRUST
The Trust's Trustees oversee the general conduct of the Fund's 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 Fund and managing the Fund's other affairs and business, subject to the
supervision of the Board of Trustees. The Adviser provides investment advisory
services to a number of institutional investors as well as the other portfolios
of the Trust and the portfolio of Barr Rosenberg Variable Insurance Trust. The
Fund will pay the Adviser a management fee for these services, on a monthly
basis, totaling 0.90% of its average daily net assets each year. The Adviser has
entered into a contractual undertaking to reduce its management fee and bear
certain expenses until March 31, 2001 to limit the Fund's total annual operating
expenses. Any amounts waived or reimbursed in a particular fiscal year will be
subject to repayment by the Fund to the Adviser to the extent that from time to
time through the next two fiscal years the repayment will not cause the Fund's
expenses to exceed the stated limit during the respective year.
PORTFOLIO MANAGERS
Management of the Fund's portfolio 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 the Fund's characteristic performance against its benchmark and for
monitoring cash balances.
Dr. Barr Rosenberg, Dr. Kenneth Reid and Robert Bell, the portfolio manager,
are responsible for the day-to-day management of the Fund's portfolio.
Dr. Rosenberg and Dr. Reid both have been employed by the Adviser or its
predecessor since 1985. Mr. Bell has been a portfolio manager for the Adviser or
its predecessor since 1999. From 1995 to 1998, he was a senior research
associate for the Adviser's predecessor. He received a B.S. (1982) and M.S.
(1983) from the University of Waterloo, Ontario, Canada and an M.B.A. from the
University of California, Berkeley in 1995.
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 Fund 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
14
<PAGE>
founder and Managing General Partner of Rosenberg Institutional Equity
Management, the predecessor company to the Adviser.
KENNETH REID. Dr. Reid is the Chief Executive Officer of the Adviser. His
work is focused on the design and estimation of the Adviser's valuation models
and he has primary responsibility for analyzing the empirical evidence that
validates and supports the day-to-day recommendations of the Adviser's
securities valuation models. Patterns of short-term price behavior discussed by
Dr. Reid as part of his Ph.D. dissertation have been refined and incorporated
into the Adviser's proprietary valuation and trading systems.
Dr. Reid earned both a B.A. degree (1973) and an M.D.S. (1975) from Georgia
State University, Atlanta. In 1982, he earned a Ph.D. from the University of
California, Berkeley, where he was awarded the American Bankers Association
Fellowship. From 1981 until June 1986, Dr. Reid worked as a consultant at BARRA
in Berkeley, California. His responsibilities included estimating
multiple-factor risk models, designing and evaluating active management
strategies, and serving as an internal consultant on econometric matters in
finance. From 1986 to 1998, Dr. Reid was a general partner of Rosenberg
Institutional Equity Management, the predecessor company to the Adviser.
WILLIAM RICKS. Dr. Ricks is the Chief Investment Officer of the Adviser.
His primary responsibilities are the various aspects of the investment process:
trading, operations, portfolio engineering, and portfolio construction. He is
responsible for the implementation of the investment strategies that are
designed by the Barr Rosenberg 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, the predecessor company to the
Adviser.
INDEPENDENT TRUSTEES
William F. Sharpe, Nils H. Hakansson and Dwight M. Jaffee are the Trustees
of the Trust who are not "interested persons" (as defined in the 1940 Act) of
the Trust or the Adviser.
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 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
15
<PAGE>
a Certified Public Accountant and spent three years with Arthur Young & Company
prior to receiving his Ph.D. from UCLA in 1966. He has twice been a Visiting
Scholar at Bell Laboratories in New Jersey and was, in 1975, the Hoover Fellow
at the University of New South Wales in Sydney and, in 1982, the Chevron Fellow
at Simon Fraser University in British Columbia. In 1984, Professor Hakansson was
a Special Visiting Professor at the Stockholm School of Economics, where he was
also awarded an honorary doctorate in economics. He is a past president of the
Western Finance Association (1983-1984). Professor Hakansson has published a
number of articles in academic journals and in professional volumes. Many of his
papers address various aspects of asset allocation procedures as well as topics
in securities innovation, information economics and financial reporting. He has
served on the editorial boards of several professional journals and been a
consultant to the RAND Corporation and a number of investment organizations.
Professor Hakansson is a member of the board of two foundations and a past board
member of SuperShare Services Corporation and of Theatrix Interactive, Inc. He
is also a Fellow of the Accounting Researchers International Association and a
member of the Financial Economists Roundtable.
Professor Jaffee is the Willis H. Booth Professor of Banking and Finance at
the Haas School of Business, University of California, Berkeley. He was
previously a Professor of Economics at Princeton University for many years,
where he served as the Vice Chairman of the faculty. At Berkeley, he serves on a
continuing basis as the Co-chairman of the Fisher Center for Real Estate and
Urban Economics and as the Director of the UC Berkeley-St. Petersburg University
(Russia) School of Management Program. He has been a Visiting Professor at many
universities around the world, most recently at the University of Aix/ Marseille
in France and at the European University in Florence, Italy. Professor Jaffee
has authored five books and numerous articles in academic and professional
journals. His research has focused on three key financial markets: business
lending, real estate finance, and catastrophe insurance. His current research is
focused on methods for securitizing real estate finance and catastrophe
insurance risks, and on the impact of international trade on the U.S. computer
industry. He has served on the editorial boards of numerous academic journals,
and has been a consultant to a number of U.S. government agencies and to the
World Bank. In the past, Professor Jaffee has been a member of the Board of
Directors of various financial institutions, including the Federal Home Loan
Bank of New York. He is currently a Visiting Scholar at the Federal Reserve Bank
of San Francisco.
DISTRIBUTOR
Investor Shares, Institutional Shares, Class A, Class B and Class C Shares
of the Fund are sold on a continuous basis by the Trust'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.
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 Fund, as noted below,
the Fund pays no fees to the Distributor for such shares. Under the Distribution
and Shareholder Service Plans, the various classes of the Fund 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>
None 0.25% 0.50% 1.00% 1.00%
</TABLE>
16
<PAGE>
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.
MULTIPLE CLASSES
As indicated previously, the Fund offers five classes of shares to
investors, with eligibility for purchase depending on the amount invested in the
Fund. The five classes of shares are Institutional Shares, Investor Shares,
Class A Shares, Class B Shares and Class C Shares. The following table sets
forth basic investment and fee information for each class.
<TABLE>
<CAPTION>
ANNUAL
DISTRIBUTION
AND
MINIMUM FUND SUBSEQUENT SHAREHOLDER
NAME OF CLASS INVESTMENT* INVESTMENT* SERVICE FEE
------------- ------------ ----------- ------------
<S> <C> <C> <C>
Institutional........................................... $1 million $10,000 None
Investor................................................ $ 2,500 $ 500 0.25%
Class A................................................. $ 1,000 $ 100 0.50%
Class B................................................. $ 1,000 $ 100 1.00%
Class C................................................. $ 1,000 $ 100 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, plus any applicable front-end sales
load. See "Purchasing Shares," "How the Trust Prices Shares of the Fund --
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 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 the Adviser
and their spouses. Institutional Shares are sold without any initial or deferred
sales charges and are not subject to any ongoing Distribution and Shareholder
Service Fee.
INVESTOR SHARES
Investor Shares may be purchased by institutions, certain individual
retirement accounts and individuals. In order to be eligible to purchase
Investor Shares, an investor must make an initial investment of at
17
<PAGE>
least $2,500 in the 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 the
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 Fund's
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 of the Fund at net asset value with an
initial sales charge as follows:
<TABLE>
<CAPTION>
INITIAL SALES CHARGE
---------------------------------------
COMMISSION TO
AS % OF NET AS % OF DEALER/AGENT
AMOUNT OFFERING AS % OF
AMOUNT PURCHASED INVESTED PRICE OFFERING 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. The Adviser may pay the dealer
or agent a fee of up to 1% of the dollar amount purchased.
CLASS B SHARES -- DEFERRED SALES CHARGE ALTERNATIVE
You can purchase Class B Shares at net asset value without an initial sales
charge. The 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>
CDSC
(AS A % OF
YEARS SINCE PURCHASE AMOUNT INVESTED)
-------------------- ----------------
<S> <C>
First....................................................... 5.00%
Second...................................................... 4.00%
Third....................................................... 3.00%
Fourth...................................................... 2.00%
Fifth....................................................... 1.00%
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.
18
<PAGE>
CLASS C SHARES -- ASSET-BASED SALES CHARGE ALTERNATIVE
Initial Sales Charge on purchases of up $1,000,000:
<TABLE>
<CAPTION>
AS % OF AMOUNT INVESTED AS % OF OFFERING PRICE
----------------------- ----------------------
<S> <C>
1.01% 1.00%
</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 of 1.00% (of
the amount invested) 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 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.
GENERAL
Shares of the Fund 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 Fund 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 the Fund is the net asset value per share
next determined after receipt of a purchase order, plus any applicable front-end
sales load. See "How the Trust Prices Shares of the Fund -- Determination of Net
Asset Value." Investors may be charged an additional fee by their broker or
agent if they effect transactions through such persons.
INITIAL CASH INVESTMENTS BY WIRE
Subject to acceptance by the Trust, shares of the Fund may be purchased by
wiring federal funds. Please first contact the Trust at 1-800-447-3332 for
complete wiring instructions. Notification must be given to the Trust at
1-800-447-3332 prior to 4:00 p.m., New York time, of the wire date. Federal
funds purchases will be accepted only on a day on which the Trust, the
Distributor and the Custodian are all open for business. A completed Account
Application must be overnighted to the Trust at Barr Rosenberg Series Trust c/o
BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219-8021. Please
note the minimum initial investment requirements for each class as set forth
above under "Multiple Classes."
INITIAL CASH INVESTMENTS BY MAIL
Subject to acceptance by the Trust, an account may be opened by completing
and signing an Account Application and mailing it to Barr Rosenberg
Series Trust, P.O. Box 182495, Columbus, Ohio 43218-2495.
The Fund should be specified on the Account Application. In all cases,
subject to acceptance by the Trust, payment for the purchase of shares received
by mail will be credited to a shareholder's account at the net asset value per
share of the Fund next determined after receipt, even though the check may not
yet have been converted into federal funds. Please note the minimum initial
investment requirements for each class as set forth above under "Multiple
Classes."
19
<PAGE>
ADDITIONAL CASH INVESTMENTS
Additional cash investments may be made at any time by mailing a check to
the Trust at the address noted under "-- Initial Cash Investments by Mail"
(payable to Barr Rosenberg Series Trust) or by wiring monies as noted under
"--Initial Cash Investments by Wire." Notification must be given at
1-800-447-3332 or to the appropriate broker-dealer prior to 4:00 p.m., New York
time, of the wire date. Please note the minimum additional investment
requirements for each class 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 the 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 Fund -- 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 the Fund through the use of electronic funds
transfers. Investors may commence their participation in this program with a
minimum initial investment of $2,500 and may elect to make subsequent
investments by transfers of a minimum of $50 into their established Fund
account. You may contact the Trust for more information about the Barr Rosenberg
Automatic Investment Program.
For purposes of calculating the purchase price of Fund shares, a purchase
order is received by the Trust on the day that it is in "good order" unless it
is rejected by the Distributor. For a cash purchase order of Fund shares to be
in "good order" on a particular day, a check or money wire must be received on
or before 4:00 p.m., New York time, of that day. 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 the 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 the Fund. The Fund does 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.
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Purchases of Fund shares may be made in full or in fractional shares
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
Fund 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 Fund may be redeemed by mail, or, if authorized by an investor
in an Account Application, by telephone. The value of shares redeemed may be
more or less than the original cost of those shares, depending on the market
value of the investment securities held by the 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 Fund -- Determination of Net Asset Value." Requests should be addressed
to Barr Rosenberg Series Trust, P.O. Box 182495, Columbus, Ohio 43218-2495.
Requests in "good order" must include the following documentation:
(a) a letter of instruction specifying the number of shares or dollar
amount to be redeemed, signed by all registered owners of the shares in the
exact names in which they are registered;
(b) any required signature guarantees; and
(c) other supporting legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pension and
profit sharing plans and other organizations.
SIGNATURE GUARANTEES
To protect shareholder accounts, the Trust and the Transfer Agent from
fraud, signature guarantees may be required to enable the Trust to verify the
identity of the person who has authorized a redemption from an account.
Signature guarantees are required for (1) redemptions where the proceeds are to
be sent to someone other than the registered shareholder(s) at the registered
address, and (2) 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 Trust 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
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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 the Fund may elect to have periodic
redemptions made from the investor's account to be paid on a monthly, quarterly,
semiannual or annual basis. The maximum payment per year is 12% of the account
value at the time of the election. The Trust will normally redeem a sufficient
number of shares to make the scheduled redemption payments on a date selected by
the shareholder. Depending on the size of the payment requested and fluctuation
in the net asset value, if any, of the shares redeemed, redemptions for the
purpose of making such payments may reduce or even exhaust the account. A
shareholder may request that these payments be sent to a predesignated bank or
other designated party. Capital gains and dividend distributions paid to the
account will automatically be reinvested at net asset value on the distribution
payment date.
FURTHER REDEMPTION INFORMATION
The Trust will not make payment on redemptions of shares purchased by check
until payment of the purchase price has been collected, which may take up to
fifteen days after purchase. Shareholders can avoid this delay by utilizing the
wire purchase option.
If the Adviser determines, in its sole discretion, that it would not be in
the best interests of the remaining shareholders of the Fund to make a
redemption payment to an Institutional Shareholder wholly or partly in cash, the
Fund may pay the redemption price of Institutional Shares in whole or in part by
a distribution in kind of readily marketable securities held by the Fund in lieu
of cash. Securities used to redeem Fund shares in kind will be valued in
accordance with the Fund's procedures for valuation described under "How the
Trust Prices Shares of the Fund -- Determination of Net Asset Value." Securities
distributed by the Fund in kind will be selected by the Adviser in light of the
Fund's objective and will not generally represent a pro rata distribution of
each security held in the Fund's portfolio. Investors may incur brokerage
charges on the sale of any such securities so received in payment of
redemptions.
The Trust may suspend the right of redemption and may postpone payment for
more than seven days when the New York Stock Exchange is closed for other than
weekends or holidays, or if permitted by the rules of the Securities and
Exchange Commission, during periods when trading on the Exchange is restricted
or during an emergency which makes it impracticable for the Fund to dispose of
its securities or to fairly determine the value of its net assets, or during any
other period permitted by the Securities and Exchange Commission for the
protection of investors.
EXCHANGING SHARES
The Trust offers two convenient ways to exchange shares of one fund of the
Trust for those of another. Shares of a particular class of a fund may be
exchanged only for shares of the same class in another fund. Before engaging in
an exchange transaction, a shareholder should read carefully the information in
the prospectus that relates to 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
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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 Trust containing the information indicated below.
EXCHANGE BY MAIL
To exchange Fund shares by mail, shareholders should simply send a letter of
instruction to the Trust. The letter of instruction must include: (a) the
investor's account number; (b) the class of shares to be exchanged; (c) the fund
from and the fund into which the exchange is to be made; (d) the dollar or share
amount to be exchanged; and (e) the signatures of all registered owners or
authorized parties.
EXCHANGE BY TELEPHONE
To exchange Fund shares by telephone or to ask questions about the exchange
privilege, shareholders may call the Trust at 1-800-447-3332. If you wish to
exchange shares, please be prepared to give the telephone representative the
following information: (a) the account number, social security number and
account registration; (b) the class of shares to be exchanged; (c) the name of
the fund from which and the fund into which the exchange is to be made; and
(d) the dollar or share amount to be exchanged. Telephone exchanges are
available only if the shareholder so indicates by checking the "yes" box on the
Account Application. The Trust employs procedures, including recording telephone
calls, testing a caller's identity, and written confirmation of telephone
transactions, designed to give reasonable assurance that instructions
communicated by telephone are genuine, and to discourage fraud. To the extent
that the Fund does not follow such procedures, it may be liable for losses due
to unauthorized or fraudulent telephone instructions. The Fund will not be
liable for acting upon instructions communicated by telephone that it reasonably
believes to be genuine. The Trust reserves the right to suspend or terminate the
privilege of exchanging by mail or by telephone at any time. The telephone
exchange privilege will be suspended for a period of 10 business days following
a telephonic address change.
HOW THE TRUST PRICES SHARES OF THE FUND
The price of the 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 the Fund or to reject purchase orders when the Adviser
believes that suspension or rejection would be in the best interests of the
Trust.
Purchases of Fund shares may be made in full or fractional shares calculated
to three decimal places. In the interest of economy and convenience, the Trust
will not issue certificates for shares.
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DETERMINATION OF NET ASSET VALUE
The net asset value of each class of shares of the Fund 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 on which the New York Stock
Exchange is closed for trading. The net asset value per share of each class of
the 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, the 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. Price information on listed securities is generally taken from the
closing price on the exchange where the security is primarily traded. Unlisted
securities for which market quotations are readily available are valued at the
most recent quoted bid price, except that debt obligations with sixty days or
less remaining until maturity may be valued at their amortized cost.
Exchange-traded options, futures and options on futures are valued at the
settlement price as determined by the appropriate clearing corporation. Other
assets and securities for which no quotations are readily available are valued
at fair value as determined in good faith by the Trustees of the Trust or by
persons acting at their direction.
DISTRIBUTIONS
The 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). The 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. The Fund's policy is to
declare and pay distributions of its dividends and interest annually although it
may do so more frequently as determined by the Trustees of the Trust. The 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 Fund at net asset value unless the shareholder elects
to receive cash. Shareholders may make this election by marking the appropriate
box on the Account Application or by writing to the Administrator.
If you elect to receive distributions in cash and checks (i) are returned
and marked as "undeliverable" or (ii) remain uncashed for six months, your cash
election will be changed automatically and your future dividend and capital
gains distributions will be reinvested in the Fund at the per share net asset
value determined as of the date of payment of the distribution. In addition, any
undeliverable checks or checks that remain uncashed for six months will be
canceled and will be reinvested in the Fund at the per share net asset value
determined as of the date of cancellation.
TAXES
The 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
the 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,
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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 the 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. The Fund will provide federal tax information annually,
including information about dividends and distributions paid during the
preceding year.
The foregoing is a general summary of the federal income tax consequences of
investing in the 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 Fund in light of each shareholder's
particular tax situation. Shareholders should also consult their own tax
advisers about consequences under foreign, state, local or other applicable tax
laws.
OTHER INFORMATION
The Fund's investment performance may from time to time be included in
advertisements about the Fund. Total return for the Fund is measured by
comparing the value of an investment in the Fund at the beginning of the
relevant period to the redemption value of the investment in the Fund at the end
of such period (assuming immediate reinvestment of any dividends or capital
gains distributions). All data are based on the 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 the
Fund's portfolio and operating expenses. Investment performance also often
reflects the risks associated with the Fund's investment objective and policies.
These factors should be considered when comparing the Fund's investment results
with those of other mutual funds and other investment vehicles. Quotations of
investment performance for any period when an expense limitation was in effect
will be greater than if the limitation had not been in effect.
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<PAGE>
For more information about the Fund:
Statement of Additional Information (SAI):
The SAI provides more detailed information about the Fund. It is
incorporated by reference into this prospectus and is legally considered a
part of this prospectus.
You may obtain a text-only copy, for a fee, by writing to the Public
Reference Section of the Commission, Washington D.C. 20549-0102, or by
electronic request via e-mail at the following address: [email protected].,
or for free from the Edgar database on the Commission's website at
http://www.sec.gov. You may review and copy the SAI at the Commission's
public reference room. You may obtain information concerning the hours and
operation of the Commission's public reference room by calling
1-202-942-8090. You can get a free copy of the SAI, request other information
about the Fund or make shareholder inquiries by contacting the Fund at:
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Barr Rosenberg Series Trust
3435 Stelzer Road
Columbus, Ohio 43219-8021
1.800.555.5737 (Institutional Shares)
1.800.447.3332 (Investor, Class A, Class B and Class C Shares)
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Adviser
AXA Rosenberg Investment Management LLC
Four Orinda Way, Building E
Orinda, California 94563
Administrator, Transfer Agent and Dividend Paying Agent
BISYS Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, Ohio 43219
Custodian of Assets
State Street Bank and Trust Company
Mutual Funds Division
Boston, MA 02102
Independent Accountants
Pricewaterhouse Coopers LLP
333 Market Street
San Francisco, California 94104
Legal Counsel
Ropes & Gray
One International Place
Boston, MA 02110
Investment Company Act File No. 811-05547
BRG-0056
<PAGE>
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BARR ROSENBERG SERIES TRUST
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AXA ROSENBERG U.S. DISCOVERY FUND
STATEMENT OF ADDITIONAL INFORMATION
December 4, 2000
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the prospectus dated December 4,
2000 of the AXA Rosenberg U. S. Discovery 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.
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TABLE OF CONTENTS
PAGE
----
INVESTMENT OBJECTIVES AND POLICIES .......................................... 3
MISCELLANEOUS INVESTMENT PRACTICES .......................................... 3
INVESTMENT RESTRICTIONS ..................................................... 4
INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS .............................. 5
MANAGEMENT OF THE TRUST ..................................................... 7
INVESTMENT ADVISORY AND OTHER SERVICES ......................................11
PORTFOLIO TRANSACTIONS ......................................................14
TOTAL RETURN CALCULATIONS ...................................................15
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES ............................17
DETERMINATION OF NET ASSET VALUE ............................................19
PURCHASE AND REDEMPTION OF SHARES ...........................................19
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INVESTMENT OBJECTIVES AND POLICIES
The investment objective and policies of the AXA Rosenberg U.S. Discovery
Fund (the "Fund") 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 "Investment Objective and Principal
Investment Strategies" and "Principal Risks."
The following is an additional description of certain investments of the
Fund.
INDEX FUTURES. 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. The 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, the 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 the 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 the 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.
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.
MISCELLANEOUS INVESTMENT PRACTICES
PORTFOLIO TURNOVER. A change in securities held by the Fund is known as
"portfolio turnover" and almost always involves the payment by the Fund of
brokerage commissions or dealer markup and other transaction costs on the sale
of securities as well as on the reinvestment of the proceeds in other
securities. Portfolio turnover is not a limiting factor with respect to
investment decisions. As disclosed in the Prospectus, high portfolio turnover
involves correspondingly greater brokerage commissions and other transaction
costs, which would be borne directly by the Fund, and could involve
realization of capital gains that would be taxable when distributed to
shareholders of the 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.
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<PAGE>
NOTICE ON SHAREHOLDER APPROVAL. Unless otherwise indicated in the
Prospectus or this Statement of Additional Information, the investment objective
and policies of the Fund 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.
(2) Pledge, hypothecate, mortgage or otherwise encumber 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 the Fund's net assets would
be (i) deposited as collateral for the obligation to replace securities borrowed
to effect short sales, and (ii) allocated to segregated accounts in connection
with short sales. Short sales "against the box" are not subject to this
limitation.
(5) Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under federal securities laws.
(6) Purchase or sell real estate, although it may purchase securities
of issuers which deal in real estate, including securities of real estate
investment trusts, and may purchase securities which are secured by interests in
real estate.
(7) Concentrate more than 25% of the value of its total assets in any
one industry.
(8) Invest in securities of other investment companies, except to the
extent permitted by the Investment Company Act of 1940, as amended (the "1940
Act"), or by an exemptive order issued by the Securities and Exchange
Commission.
(9) Purchase or sell commodities or commodity contracts, except that
the Fund may purchase and sell stock index and other financial futures contracts
and options thereon.
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<PAGE>
(10) Make loans, except by purchase of debt obligations or by entering
into repurchase agreements or through the lending of the Fund's portfolio
securities.
(11) Issue senior securities. (For the purpose of this restriction none
of the following is deemed to be a senior security: any pledge or other
encumbrance of assets permitted by restriction (2) above; any borrowing
permitted by restriction (1) above; short sales permitted by restriction (4)
above; any collateral arrangements with respect to short sales, swaps, options,
future contracts and options on future contracts and with respect to initial and
variation margin; and the purchase or sale of options, future contracts or
options on future contracts.)
Notwithstanding the latitude permitted by Restriction 9 above, the Fund
has no current intention of purchasing interest rate futures.
It is contrary to the present policy of the Fund, 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 the Fund as a part of a unit or attached to securities at the time
of purchase).
(b) Write, purchase or sell options on particular securities (as
opposed to market indices).
(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
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 the Fund or the Trust, as the case may be, or (2) 67%
or more of the shares of the 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 Fund and the distributions which it may make are
summarized in the Prospectus under the headings "Distributions" and "Taxes."
The Fund intends 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
5
<PAGE>
investment company" and to qualify for the special tax treatment accorded
regulated investment companies and their shareholders, the 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 the 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 the Fund qualifies for treatment as a
regulated investment company, the Fund will not be subject to federal income tax
on income paid to its shareholders in the form of dividends or capital gain
distributions.
As described in the Prospectus under the heading "Distributions," the
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, the 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 the
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 the 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 the 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 the Fund. Each
organization or entity should review its own circumstances and the federal tax
treatment of its income.
The 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
6
<PAGE>
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 the
Fund with an appropriate certificate.
The Internal Revenue Service recently revised its regulations affecting
the application to foreign investors of the back-up withholding and withholding
tax rules described above. The new regulations generally will become effective
for payments made after December 31, 2000. In some circumstances, the new rules
will increase the certification and filing requirements imposed on foreign
investors in order to qualify for exemption from the 31% back-up withholding tax
and for reduced withholding tax rates under income tax treaties. Foreign
investors in the Fund should consult their tax advisors with respect to the
potential application of these new regulations.
To the extent such investments are permissible for the Fund, its
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 Fund 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 a stock or debt
instrument at a time when the 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 the 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 FUND, INCLUDING THE EFFECT AND APPLICABILITY OF STATE, LOCAL, FOREIGN, AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
THIS DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX PLANNING.
MANAGEMENT OF THE TRUST
The Trust's trustees oversee the general conduct of the Fund's 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
------------------------------------------------------------------------------------------------------------------------------
7
<PAGE>
------------------------------------------------------------------------------------------------------------------------------
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.
------------------------------------------------------------------------------------------------------------------------------
William F. Sharpe (66) Trustee STANCO 25 Professor of Finance Emeritus,
Stanford University, 1999 to present;
STANCO 25 Professor of Finance, Stanford
University, September 1995 to 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,
------------------------------------------------------------------------------------------------------------------------------
8
<PAGE>
------------------------------------------------------------------------------------------------------------------------------
California (electronic 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.
------------------------------------------------------------------------------------------------------------------------------
Richard L. Saalfeld (56) President President and Chief Executive Officer,
AXA Rosenberg Mutual Funds, a division
of AXA Rosenberg Investment
------------------------------------------------------------------------------------------------------------------------------
9
<PAGE>
------------------------------------------------------------------------------------------------------------------------------
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>
-------------------------------------------------------------------------------------------------------------------------
Name of Aggregate Pension or Estimated Total
Person, Compensation Retirement Annual Compensation
Position from Benefits Benefits upon from
Registrant Accrued as Retirement Registrant
Part of Fund and Fund
Expenses Complex* Paid
to Directors
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nils H.
Hakansson Trustee $70,290** $0 $0 $81,180**
-------------------------------------------------------------------------------------------------------------------------
William F.
Sharpe Trustee $70,290** $0 $0 $81,180**
-------------------------------------------------------------------------------------------------------------------------
Dwight M.
Jaffee $70,290** $0 $0 $81,180**
Trustee
-------------------------------------------------------------------------------------------------------------------------
Kenneth Reid
Trustee $0 $0 $0 $0
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
* The Fund Complex consists of eleven 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
Neutral Fund, the AXA Rosenberg Enhanced 500 Fund, the AXA Rosenberg
International Equity Fund, the AXA Rosenberg Multi-Strategy Market Neutral Fund,
the AXA Rosenberg U.S. Discovery Fund and the Barr Rosenberg VIT Market Neutral
Fund.
** 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 CONTRACT. As disclosed in the Prospectus under the
heading "Management of the Trust," under a management contract ( the
"Management Contract") between the Trust, on behalf of the 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 the Fund and
will make investment decisions on behalf of the 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.
The Fund has agreed to pay the Adviser a monthly management fee at the
annual percentage rate of the Fund's average daily net assets as 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 Contract and, if necessary,
will bear certain expenses of the Fund until further notice (but in any event
at least through 3/31/01) so that the Fund's total annual operating expenses
(exclusive of nonrecurring account fees and extraordinary expenses) applicable
to each class will not exceed the percentage of the Fund's average daily net
assets attributable to that class as set forth in the Prospectus. In addition,
the Adviser's compensation under the Management Contract is subject to
reduction to the extent that in any year the expenses of the 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 the 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.
The 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.
11
<PAGE>
The Management Contract will continue in effect for a period no more
than one year from the date of its execution, and renewals thereof must be
approved by (i) vote, cast in person at a meeting called for that purpose, of
a majority of those Trustees who are not "interested persons" of the Adviser
or the Trust, and by (ii) the majority vote of either the full Board of
Trustees or the vote of a majority of the outstanding shares of the Fund. The
Management Contract automatically terminates on assignment and is terminable
on not more than 60 days' notice by the Trust to the Adviser. In addition,
the 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.
As noted in the Prospectus, the Fund will pay the Adviser a management
fee, on a monthly basis, totaling 0.90% of its average daily net assets each
year.
ADMINISTRATIVE SERVICES. The Trust has entered into 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 Fund's operations, including: (i) general supervision of the
operation of the Fund, including coordination of the services performed by the
Fund's 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 Fund; (ii) general supervision relative to the
compilation of data required for the preparation of periodic reports distributed
to the Fund's officers and Board of Trustees; and (iii) furnishing office space
and certain facilities required for conducting the business of the Fund. The
Trust's principal underwriter is an affiliate of the Administrator. For these
services, the Administrator is entitled to receive a fee, payable monthly, at
the annual rate of 0.15% of the average daily net assets of the Trust.
The Trust has also entered into a Fund Accounting Agreement with BISYS
Fund Services, Inc. (the "Fund Accountant") pursuant to which the Fund
Accountant provides certain accounting services necessary for the Fund's
operations. For these services, the Fund Accountant is currently entitled to
receive an annual fee of $50,000 from the Fund. If the Fund offers additional
classes in the future, this fee will increase by $10,000 for each class
actually being offered.
12
<PAGE>
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 the 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. 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 Fund pays no fees in connection with the distribution of
Institutional Shares.
Each of the Plans may be terminated with respect to Investor Shares,
Class A Shares, Class B Shares or Class C Shares by vote of a majority of the
Trustees of the Trust who are not interested persons of the Trust and who have
no direct or indirect financial interest in the operation of the Plans or the
Distributor's Contract (the "Independent Trustees"), or by vote of a majority of
the outstanding voting securities of the relevant class. Any change in the Plans
that would materially increase the cost to Investor Shares, Class A Shares,
Class B Shares or Class C Shares requires approval by holders of the relevant
class of shares. The Trustees of the Trust review quarterly a written report of
such costs and the purposes for which such costs have been incurred. Except as
described above, the Plans may be amended by vote of the Trustees of the Trust,
including a majority of the Independent Trustees, cast in person at a meeting
called for the purpose. For so long as the Plans are in effect, selection and
nomination of those Trustees of the Trust who are not interested persons of the
Trust shall be committed to the discretion of such disinterested persons.
The Distributor's Contract may be terminated with respect to the 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 the 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 the 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
13
<PAGE>
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 benefits the Trust by reducing Fund expense ratios and/or by
affording greater flexibility to the Trust.
Each 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 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 paying other types of sales
charges.
CUSTODIAL ARRANGEMENTS. State Street Bank and Trust Company, Boston,
Massachusetts 02102, is the Fund's custodian ("Custodian"). As such, the
Custodian holds in safekeeping certificated securities and cash belonging to the
Fund and, in such capacity, is the registered owner of securities in book-entry
form belonging to the Fund. Upon instruction, the Custodian receives and
delivers cash and securities of the Fund in connection with Fund transactions
and collects all dividends and other distributions made with respect to Fund
portfolio securities.
INDEPENDENT ACCOUNTANTS. The Trust's independent accountants are
PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP conducts an annual audit
of the Trust's financial statements, assists in the preparation of the Trust's
federal and state income tax returns and the Trust's filings with the Securities
and Exchange Commission, and consults with the Trust as to matters of accounting
and federal and state income taxation.
PORTFOLIO TRANSACTIONS
INVESTMENT DECISIONS. The purchase and sale of portfolio securities for
the Fund 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 the 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
14
<PAGE>
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
the 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 the Fund,
the Adviser will receive such services from brokers who are expected to handle a
substantial amount of the Fund's portfolio transactions. Research services
may include a wide variety of analyses, reviews and reports on such matters as
economic and political developments, industries, companies, securities and
portfolio strategy. The Adviser uses such research in servicing other clients as
well as the Trust.
As permitted by Section 28(e) of the Securities Exchange Act of 1934, as
amended, and subject to such policies as the Trustees of the Trust may
determine, the Adviser may pay an unaffiliated broker or dealer that provides
"brokerage and research services" (as defined in the Act) to the Adviser an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction.
The Fund 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.
TOTAL RETURN CALCULATIONS
The Fund computes its average annual total return separately for its
share classes by determining the average annual compounded rates of return
during specified periods that would equate the initial amount invested in a
particular share class to the ending redeemable value of such investment in such
class, according to the following formula:
n
P(1 + T) = ERV
Where:
T = Average annual total return
ERV = Ending redeemable value of a hypothetical $1,000
investment made at the beginning of a period at the end
of such period
15
<PAGE>
P = A hypothetical initial investment of $1,000
n = Number of years
The Fund computes its cumulative total return separately for its share
classes by determining the cumulative rates of return during specified periods
that would equate the initial amount invested in a particular share class to the
ending redeemable value of such investment in such class, according to the
following formula:
T = ERV-1,000
---------
1,000
Where:
T = Cumulative rate of return
ERV = Ending redeemable value of a hypothetical $1,000
investment made at the beginning of a period at the end
of such period.
The calculations of average annual total return and cumulative total
return assume that any dividends and distributions are reinvested immediately,
rather than paid to the investor in cash. The ending redeemable value (variable
"ERV" in each formula) is determined by assuming complete redemption of the
hypothetical investment and the deduction of all nonrecurring charges at the end
of the period covered by the computations.
Unlike bank deposits or other investments that pay a fixed yield or
return for a stated period of time, the return for the 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 the Fund's portfolio
and its 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.
PERFORMANCE COMPARISONS. Investors may judge the performance of the
Fund by comparing it 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 Fund that appears in a publication such as those mentioned above may be
included in advertisements, sales literature and reports to shareholders. The
Fund 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
16
<PAGE>
supplement such discussions; (4) descriptions of past or anticipated portfolio
holdings for the Fund; (5) descriptions of investment strategies for the Fund;
(6) descriptions or comparisons of various investment products, which may or may
not include the Fund; (7) comparisons of investment products (including the
Fund) with relevant market or industry indices or other appropriate benchmarks;
(8) discussions of fund rankings or ratings by recognized rating organizations;
and (9) testimonials describing the experience of persons that have invested in
the 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 the 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 ten series, the AXA Rosenberg U. S. Discovery Fund, 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, the AXA Rosenberg Double Alpha Market Fund, the AXA Rosenberg
Select Sectors Market Neutral Fund, the AXA Rosenberg U.S. Small Capitalization
Fund, the AXA Rosenberg International Small Capitalization Fund and the 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.
Each series of the Trust is further divided into multiple classes of
shares. As noted in the Prospectus, each of the AXA Rosenberg International
Small Capitalization Fund, 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, the AXA Rosenberg
International Equity Fund, the AXA Rosenberg Multi-Strategy Market Neutral
Fund and the AXA Rosenberg U. S. Discovery Fund is divided into five
classes of shares: Institutional Shares, Investor Shares, Class A Shares,
Class B Shares and Class C Shares. The AXA Rosenberg U.S. Small
Capitalization Fund is divided into three classes of shares: Institutional
Shares, Adviser Shares and Investor Shares. The AXA Rosenberg Japan Fund is
divided into two classes of shares: Institutional Shares and Investor Shares.
Each class of shares of the 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.
17
<PAGE>
VOTING RIGHTS. Shareholders are entitled to one vote for each full share
held (with fractional votes for fractional shares held) and will vote (to the
extent provided herein) in the election of Trustees and the termination of the
Trust and on other matters submitted to the vote of shareholders. Shareholders
will vote by individual series on all matters except (i) when required by the
1940 Act, shares shall be voted in the aggregate and not by individual series,
and (ii) when the Trustees have determined that the matter affects only the
interests of one or more series, then only shareholders of such series shall be
entitled to vote thereon. Shareholders of one series shall not be entitled to
vote on matters exclusively affecting another series, such matters including,
without limitation, the adoption of or change in any fundamental policies or
restrictions of the other series and the approval of the investment advisory
contracts of the other series.
Each class of shares of the 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 the 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
18
<PAGE>
is inoperative and the series of which he is or was a shareholder would be
unable to meet its obligations.
The Declaration of Trust further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, nothing in
the Declaration of Trust protects a Trustee against any liability to which the
Trustee would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office. The Declaration of Trust also provides for indemnification by the
Trust of the Trustees and the officers of the Trust against liabilities and
expenses reasonably incurred in connection with litigation in which they may be
involved because of their offices with the Trust, except if it is determined in
the manner specified in the Declaration of Trust that such Trustees are liable
to the Trust or its shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties. In addition, the
Adviser has agreed to indemnify each Trustee who is not "an interested person"
of the Trust to the maximum extent permitted by the 1940 Act against any
liabilities arising by reason of such Trustee's status as a Trustee of the
Trust.
The officers and Trustees of the Trust, as a group, own less than 1% of
any class of outstanding shares of the 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. Price information on listed securities is generally taken
from the closing price on the exchange where the security is primarily traded.
Unlisted securities for which market quotations are readily available are valued
at the most recent quoted bid price, except that debt obligations with
sixty days or less remaining until maturity may be valued at their amortized
cost. Exchange-traded options 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 the Fund 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 the Fund are described in the Prospectus.
19
<PAGE>
The Fund has authorized one or more brokers to accept on its behalf
purchase and redemption orders. Such brokers are authorized to designate
other intermediaries to accept purchase and redemption orders on the Fund's
behalf. The Fund 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 Fund's net
asset value per share next determined after such orders are received by an
authorized broker or the broker's authorized designee.
20
<PAGE>
PART C
OTHER INFORMATION
AXA ROSENBERG U. S. DISCOVERY 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;
(4) Amendment No. 3 to the Second Amended and Restated Agreement and
Declaration of Trust of the Registrant -- incorporated by
reference to Post-Effective Amendment No. 33 to the Registration
Statement filed on July 31, 2000;
(5) Amendment No. 4 to the Second Amended and Restated Agreement and
Declaration of Trust of the Registrant - filed herewith;
(b) By-Laws of the Registrant -- incorporated by reference to Post-Effective
Amendment No. 17 to the Registration Statement filed on December 9, 1997;
(c) Not applicable;
(d) Management Contract between the Registrant on behalf of its AXA
Rosenberg U. S. Discovery Fund and AXA Rosenberg Investment
Management LLC - filed herewith;
(e) Further Amended and Restated Distributor's Contract between the
Registrant and Barr Rosenberg Funds Distributor, Inc. - filed herewith;
(f) None;
(g) (1) Form of Custody Agreement between the Registrant on behalf of its
Japan Series (renamed the 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 August 18, 1988;
(2) Form of Amendment to Custody Agreement between the Registrant and
State Street Bank and Trust Company adding the Fund to such
Agreement -- filed herewith.
(h) (1) Transfer Agency Agreement between the Registrant and BISYS Fund
Services Ohio, Inc. -- filed herewith;
1
<PAGE>
(2) Expense Limitation Agreement between AXA Rosenberg Investment
Management LLC and the Registrant on behalf of the Fund - filed
herewith;
(3) Administration Agreement between the Registrant and BISYS Fund
Services Ohio, Inc. -- filed herewith;
(4) Fund Accounting Agreement between the Registrant and BISYS Fund
Services Ohio, Inc. -- filed herewith;
(i) Consent of Ropes & Gray - filed herewith;
(j) Consent of PricewaterhouseCoopers LLP -- filed herewith;
(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 Shareholder Service Plan for Class A Shares -
filed herewith;
(3) Distribution and Shareholder Service Plan for Class B Shares --
filed herewith;
2
<PAGE>
(4) Distribution and Shareholder 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 -- incorporated by reference to
Post-Effective Amendment No. 31 filed on May 1, 2000;
(2) Code of Ethics of AXA Rosenberg Investment Management LLC,
investment adviser to the Fund -- incorporated by reference to
Post-Effective Amendment No. 31 filed on May 1, 2000;
(3) Code of Ethics of BISYS Fund Services Ohio, Inc., principal
underwriter to the Fund -- incorporated by reference to
Post-Effective Amendment No. 31 filed on May 1, 2000;
(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
3
<PAGE>
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
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
4
<PAGE>
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
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 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 Neutral Fund, the AXA Rosenberg Enhanced 500 Fund, the AXA
Rosenberg International Equity Fund, the AXA Rosenberg Multi-Strategy Market
Neutral Fund and the AXA Rosenberg U. S. Discovery Fund and to the series of B
arr Rosenberg Variable Insurance Trust, an open-end management
investment company.
Set forth below are the substantial business engagements during at least
5
<PAGE>
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.
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.
6
<PAGE>
ITEM 27. PRINCIPAL UNDERWRITERS:
(a) Barr Rosenberg Funds Distributor, Inc. (the "Distributor") is the
principal underwriter of the Trust's Institutional 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:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ --------------------- ---------------------
<S> <C> <C>
Irimga McKay President None
Lynn J. Mangum Director None
Kevin J. Dell Vice President, Secretary None
Olu T. Lawal Chief Financial Officer None
Gregory A. Trichtinger Vice President None
</TABLE>
The business address of all directors and officers of the Distributor is 90 Park
Avenue, New York, NY 10016.
(c) None
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940, as amended, and the rules
thereunder will be maintained at the offices of:
1. Barr Rosenberg Series Trust
3435 Stelzer Road
Columbus, Ohio 43219
Rule 31a-1 (b)(1),(2),(3), (4), (5), (6), (7), (8), (9), (10), (11)
Rule 31a-2 (a)
2. AXA Rosenberg Investment Management LLC
Four Orinda Way
Building E
Orinda, CA 94563
Rule 31a-1 (f)
Rule 31a-2 (e)
3. Barr Rosenberg Funds Distributor, Inc.
90 Park Avenue
New York, NY 10016
Rule 31a-1 (d)
Rule 31a-2 (c)
7
<PAGE>
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.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for the effectiveness of this registration statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 35 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 1st day of December, 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 1st day of December, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
RICHARD L. SAALFELD President (Principal December 1, 2000
------------------- Executive Officer)
Richard L. Saalfeld
KENNETH REID Trustee December 1, 2000
------------
Kenneth Reid
Po-Len Hew* Treasurer (principal December 1, 2000
---------- financial and accounting
Po-Len Hew officer)
William F. Sharpe* Trustee December 1, 2000
-----------------
William F. Sharpe
Nils H. Hakansson* Trustee December 1, 2000
-----------------
Nils H. Hakansson
Dwight M. Jaffee* Trustee December 1, 2000
----------------
Dwight M. Jaffee
*By: KENNETH REID
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Kenneth Reid
Attorney-in-Fact
</TABLE>
Date: December 1, 2000
9
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
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23(a)(5) Amendment No. 4 to the Second Amended and Restated
Agreement and Declaration of Trust of the
Registrant
23(d) Management Contract between the Registrant on
behalf of its AXA Rosenberg U.S. Discovery Fund
and AXA Rosenberg Investment Management LLC
23(e) Further Amended and Restated Distributors Contract
between the Registrant and Barr Rosenberg Funds
Distributor, Inc.
23(g)(2) Form of Amendment to Custody Agreement between the
Registrant and State Street Bank and Trust Company
adding the Fund to such Agreement
23(h)(1) Transfer Agency Agreement between the Registrant
and BISYS Fund Services Ohio, Inc.
23(h)(2) Expense Limitation Agreement between AXA Rosenberg
Investment Management LLC and the Registrant on
behalf of the Fund
23(h)(3) Administration Agreement between the Registrant
and BISYS Fund Services Ohio, Inc.
23(h)(4) Fund Accounting Agreement between the Registrant
and BISYS Fund Services Ohio, Inc.
23(i) Consent of Ropes & Gray
23(j) Consent of PricewaterhouseCoopers LLP
23(m)(2) Distribution and Shareholder Service Plan for
Class A Shares
23(m)(3) Distribution and Shareholder Service Plan for
Class B Shares
23(m)(4) Distribution and Shareholder Service Plan for
Class C Shares
23(n) Further Amended and Restated Multi-Class Plan
