<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 23, 1997
FILE NO. 33-22821
FILE NO. 811-5601
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 23 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 24 /X/
------------------------
SEI INTERNATIONAL TRUST
(Exact name of registrant as specified in charter)
C/O CT CORPORATION
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (800) 342-5734
DAVID G. LEE
c/o SEI Investments Company
Oaks, Pennsylvania 19456
(Name and Address of Agent for Service)
COPIES TO:
<TABLE>
<S> <C>
Richard W. Grant, Esquire John H. Grady, Jr.
Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP
2000 One Logan Square 1800 M Street, N.W.
Philadelphia, PA 19103 Washington, D.C. 20036
</TABLE>
------------------------
It is proposed that this filing become effective (check appropriate box)
<TABLE>
<C> <S>
/X/ immediately upon filing pursuant to paragraph (b)
/ / on [date] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (b)
/ / 75 days after filing pursuant to paragraph (a)
/ / on [date] pursuant to paragraph (a) of Rule 485.
</TABLE>
Registrant has elected to register an indefinite number of securities
pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended.
Registrant has filed a Rule 24f-2 Notice on April 29, 1997 for its fiscal year
ended February 28, 1997.
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- --------------------------------------------------------------------------------
<PAGE>
SEI INTERNATIONAL TRUST
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- -------------------------------------------------
<S> <C> <C>
PART A--INTERNATIONAL EQUITY, EMERGING MARKETS EQUITY, INTERNATIONAL FIXED INCOME AND EMERGING MARKETS DEBT
PORTFOLIOS
PORTFOLIOS--CLASS A
Item 1. Cover page....................................... Cover Page
Item 2. Synopsis......................................... Annual Operating Expenses
Item 3. Condensed Financial Information.................. Financial Highlights; Performance
Item 4. General Description of Registrant................ The Trust; Investment Objectives and Policies;
Investment Policies and Risk Factors;
Description of Permitted Investments and Risk
Factors; Investment Limitations
Item 5. Management of the Fund........................... General Information--Trustees of the Trust; The
Manager; The Advisers; The Sub-Advisers
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... General Information--Voting Rights, Shareholder
Inquiries; Dividends; Taxes
Item 7. Purchase of Securities Being Offered............. Purchase and Redemption of Shares; Distribution
and Shareholder Servicing
Item 8. Redemption or Repurchase......................... Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
PART A--INTERNATIONAL EQUITY PORTFOLIO--CLASS D
Item 1. Cover page....................................... Cover Page
Item 2. Synopsis......................................... Shareholder Transaction Expenses; Annual
Operating Expenses
Item 3. Condensed Financial Information.................. Financial Highlights
Item 4. General Description of Registrant................ The Trust; Investment Objective; Investment
Policies; Description of Permitted Investments
and Risk Factors; Investment Limitations
Item 5. Management of the Fund........................... General Information--Trustees of the Trust, The
Manager; The Adviser; The Sub-Advisers
Item 5A. Management's Discussion of Fund Performance...... **
Item 6. Capital Stock and Other Securities............... General Information--Voting Rights, Shareholder
Inquiries; Dividends; Taxes
Item 7. Purchase of Securities Being Offered............. Purchase of Shares; Distribution
Item 8. Redemption or Repurchase......................... Redemption of Shares
Item 9. Pending Legal Proceedings........................ *
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
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<S> <C> <C>
PART B--ALL PORTFOLIOS
Item 10. Cover Page....................................... Cover Page
Item 11. Table of Contents................................ Table of Contents
Item 12. General Information and History.................. The Trust
Item 13. Investment Objectives and Policies............... Description of Permitted Investments; Investment
Limitations
Item 14. Management of the Registrant..................... Trustees and Officers of the Trust; The Manager;
The Advisers and Sub-Advisers
Item 15. Control Persons and Principal Holders of
Securities..................................... 5% Shareholders; Trustees and Officers of the
Trust
Item 16. Investment Advisory and Other Services........... The Advisers; The Manager; Distribution and
Shareholder Servicing; Experts
Item 17. Brokerage Allocation............................. Portfolio Transactions
Item 18. Capital Stock and Other Securities............... Description of Shares
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered.................................. Purchase and Redemption of Shares (Prospectus)
Item 20. Tax Status....................................... Taxes (Prospectus); Tax
Item 21. Underwriters..................................... Distribution and Shareholder Servicing
Item 22. Calculation of Performance Data.................. Performance
Item 23. Financial Statements............................. Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of this Registration Statement.
- ------------------------
* Not Applicable
** Information required by Item 5A is contained in the Annual Report for the
fiscal year ending February 28, 1997.
(ii)
<PAGE>
SEI INTERNATIONAL TRUST
JUNE 30, 1997
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INTERNATIONAL EQUITY PORTFOLIO
EMERGING MARKETS EQUITY PORTFOLIO
INTERNATIONAL FIXED INCOME PORTFOLIO
EMERGING MARKETS DEBT PORTFOLIO
- --------------------------------------------------------------------------------
This Prospectus concisely sets forth information about the above-referenced
Portfolios that an investor needs to know before investing. Please read this
Prospectus carefully, and keep it on file for future reference.
A Statement of Additional Information dated June 30, 1997, has been filed with
the Securities and Exchange Commission (the "SEC") and is available upon request
and without charge by writing the Distributor, SEI Investments Distribution Co.,
Oaks, Pennsylvania 19456, or by calling 1-800-342-5734. The Statement of
Additional Information is incorporated by reference into this Prospectus.
SEI International Trust (the "Trust") is an open-end management investment
company, certain classes of which offer financial institutions a convenient
means of investing their own funds, or funds for which they act in a fiduciary,
agency or custodial capacity, in professionally managed diversified and
non-diversified portfolios of securities. A portfolio may offer separate classes
of shares that differ from each other primarily in the allocation of certain
distribution expenses and minimum investments. This Prospectus offers the Class
A shares of each of the Trust's equity and fixed income portfolios listed above.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THE TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING EMERGING
INTERNATIONAL MARKETS INTERNATIONAL MARKETS
EQUITY EQUITY FIXED INCOME DEBT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------- ------------ ---------
<S> <C> <C> <C> <C>
Management/Advisory Fees (AFTER FEE WAIVER AND REIMBURSEMENT) (1) .86% 1.37% .85% .81%
12b-1 Fees none none none none
Total Other Expenses .42% .58% .15% .54%
Shareholder Servicing Fees (AFTER FEE WAIVER) (2) .25% .17% .00% .00%
- --------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (AFTER FEE WAIVERS AND REIMBURSEMENT) (3) 1.28% 1.95% 1.00% 1.35%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) SEI FUND MANAGEMENT ("SEI MANAGEMENT"), IN ITS CAPACITY AS MANAGER FOR EACH
PORTFOLIO, AND CERTAIN OF THE ADVISERS, HAVE WAIVED, ON A VOLUNTARY BASIS, A
PORTION OF THEIR FEE, AND THE MANAGEMENT/ADVISORY FEES SHOWN REFLECT THESE
VOLUNTARY WAIVERS. EACH OF SEI MANAGEMENT AND THE ADVISERS RESERVES THE
RIGHT TO TERMINATE ITS WAIVER AT ANY TIME IN ITS SOLE DISCRETION. ABSENT
SUCH FEE WAIVERS, MANAGEMENT/ADVISORY FEES WOULD BE .96% FOR THE
INTERNATIONAL EQUITY PORTFOLIO, 1.70% FOR THE EMERGING MARKETS EQUITY
PORTFOLIO, .90% FOR THE INTERNATIONAL FIXED INCOME PORTFOLIO AND 1.50% FOR
THE EMERGING MARKETS DEBT PORTFOLIO. MANAGEMENT/ADVISORY FEES HAVE BEEN
RESTATED TO REFLECT CURRENT EXPENSES.
(2) IN CERTAIN CLASSES, THE DISTRIBUTOR HAS WAIVED, ON A VOLUNTARY BASIS, ALL OR
A PORTION OF ITS SHAREHOLDER SERVICING FEE, AND THE SHAREHOLDER SERVICING
FEES SHOWN REFLECT THIS WAIVER. THE DISTRIBUTOR RESERVES THE RIGHT TO
TERMINATE ITS WAIVER AT ANY TIME IN ITS SOLE DISCRETION. ABSENT SUCH WAIVER,
SHAREHOLDER SERVICING FEES WOULD BE .25% FOR EACH OF THE PORTFOLIOS.
(3) ABSENT THESE FEE WAIVERS AND EXPENSE REIMBURSEMENTS, TOTAL OPERATING
EXPENSES WOULD BE 1.38% FOR THE INTERNATIONAL EQUITY PORTFOLIO, 2.36% FOR
THE EMERGING MARKETS EQUITY PORTFOLIO AND 1.30% FOR THE INTERNATIONAL FIXED
INCOME PORTFOLIO, AND ARE ESTIMATED TO BE 2.29% FOR THE EMERGING MARKETS
DEBT PORTFOLIO. ADDITIONAL INFORMATION MAY BE FOUND UNDER "THE ADVISERS,"
"THE SUB-ADVISERS" AND "THE MANAGER."
EXAMPLE
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<TABLE>
<CAPTION>
1 YR. 3 YRS. 5 YRS. 10 YRS.
----- ------ ------ -------
<S> <C> <C> <C> <C>
An investor in a Portfolio would pay the following
expenses on a $1,000 investment assuming (1) a 5%
annual return and (2) redemption at the end of
each time period:
International Equity $13 $41 $ 70 $155
Emerging Markets Equity $20 $61 $105 $227
International Fixed Income $10 $32 $ 55 $122
Emerging Markets Debt $14 $43 -- --
- -------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
THE PURPOSE OF THE EXPENSE TABLE AND EXAMPLE IS TO ASSIST THE INVESTOR IN
UNDERSTANDING THE VARIOUS COSTS AND EXPENSES THAT MAY BE DIRECTLY OR INDIRECTLY
BORNE BY INVESTORS IN CLASS A SHARES OF THE PORTFOLIOS. THE INTERNATIONAL EQUITY
PORTFOLIO ALSO OFFERS CLASS D SHARES, WHICH ARE SUBJECT TO THE SAME EXPENSES,
EXCEPT THAT CLASS D SHARES BEAR SALES CHARGES, DIFFERENT DISTRIBUTION COSTS AND
ADDITIONAL TRANSFER AGENT COSTS. A PERSON WHO PURCHASES SHARES THROUGH A
FINANCIAL INSTITUTION MAY BE CHARGED SEPARATE FEES BY THAT INSTITUTION.
ADDITIONAL INFORMATION MAY BE FOUND UNDER "THE MANAGER," "THE ADVISERS," "THE
SUB-ADVISERS" AND "DISTRIBUTION AND SHAREHOLDER SERVICING."
2
<PAGE>
FINANCIAL HIGHLIGHTS
______________________________________________________________
The following information has been audited by Price Waterhouse LLP, the Trust's
independent accountants, as indicated in their report dated April 9, 1997 on the
Trust's financial statements as of February 28, 1997, incorporated by reference
into the Trust's Statement of Additional Information. The Trust's financial
statements and additional performance information are set forth in the 1997
Annual Report to Shareholders, which is available upon request and without
charge by calling 1-800-342-5734. This table should be read in conjunction with
the Trust's financial statements and notes thereto. The Emerging Markets Debt
Portfolio had not commenced operations as of the date of this Prospectus.
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE PERIODS ENDED FEBRUARY 28,
<TABLE>
<CAPTION>
NET
REALIZED
NET ASSET NET AND DISTRIBUTIONS NET NET ASSETS
VALUE INVESTMENT UNREALIZED FROM NET DISTRIBUTIONS RETURN ASSETS END OF
BEGINNING INCOME/ GAINS/ INVESTMENT FROM REALIZED OF VALUE END TOTAL PERIOD
OF PERIOD (LOSS) (LOSSES) INCOME(4) CAPITAL GAINS CAPITAL OF PERIOD RETURN (000)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------
INTERNATIONAL
EQUITY PORTFOLIO
- ------------------
CLASS A
1997 $10.00 $ 0.09 $ 0.47 $(0.07) $(0.82) $ -- $ 9.67 5.70% $ 524,062
1996 9.59 0.14 1.45 (0.19) (0.99) -- 10.00 17.30 347,646
1995 11.00 0.15 (0.97) -- (0.59) -- 9.59 (7.67) 328,503
1994 8.93 0.13 2.05 (0.11) -- -- 11.00 24.44 503,498
1993 9.09 0.16 0.04 (0.36) -- -- 8.93 2.17 178,287
1992 9.56 0.19 (0.36) (0.30) -- -- 9.09 (1.63) 92,456
1991 9.62 0.18 (0.14) -- (0.01) (0.09) 9.56 0.36 35,829
1990(1) 10.00 0.04 (0.42) -- -- -- 9.62 (3.70) 8,661
- ------------------
EMERGING MARKETS
EQUITY PORTFOLIO
- ------------------
CLASS A
1997 $10.93 $ 0.01 $ 1.96 $(0.02) $(0.01) $ -- $12.87 18.02% $ 221,474
1996 10.27 (0.02) 0.72 -- (0.04) -- 10.93 6.83 67,181
1995(2) 10.00 0.01 0.26 -- -- -- 10.27 2.70 5,300
- ------------------
INTERNATIONAL
FIXED INCOME
PORTFOLIO
- ------------------
CLASS A
1997 $10.77 $ 0.71 $(0.49) $(0.38) $(0.08) $ -- $10.53 1.85% $ 204,219
1996 10.42 0.58 0.89 (1.02) (0.10) -- 10.77 13.96 84,318
1995 10.23 0.43 0.40 (0.62) (0.02) -- 10.42 8.43 42,580
1994(3) 10.00 0.14 0.18 (0.09) -- -- 10.23 6.41 23,678
<CAPTION>
RATIO OF
EXPENSES INVESTMENT EXPENSES (LOSS) TO
TO INCOME/ TO AVERAGE AVERAGE NET
AVERAGE (LOSS) TO NET ASSETS ASSETS PORTFOLIO AVERAGE
NET AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION
ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE+
<S> <C> <C> <C> <C> <C> <C>
- ------------------
- ------------------
INTERNATIONAL
EQUITY PORTFOLIO
- ------------------
CLASS A
1997 1.28% 1.11% 1.42% 0.97% 117% $0.0172
1996 1.25 1.29 1.29 1.25 102 --
1995 1.19 1.30 1.21 1.28 64 --
1994 1.10 1.46 1.24 1.32 19 --
1993 1.10 1.80 1.53 1.37 23 --
1992 1.10 2.07 1.52 1.65 79 --
1991 1.10 3.52 1.64 2.98 14 --
1990(1) 1.10 3.13 5.67 (1.44) -- --
- ------------------
EMERGING MARKETS
EQUITY PORTFOLIO
- ------------------
CLASS A
1997 1.95% (0.04)% 2.55% (0.64)% 100% $0.0004
1996 1.95 (0.23) 2.72 (1.00) 104 --
1995(2) 1.95 1.79 4.98 (1.24) -- --
- ------------------
INTERNATIONAL
FIXED INCOME
PORTFOLIO
- ------------------
CLASS A
1997 1.00% 3.99% 1.39% 3.60% 352% n/a
1996 1.00 4.70 1.27 4.43 269 --
1995 1.00 4.68 1.30 4.38 303 --
1994(3) 1.00 3.81 1.61 3.20 126 --
</TABLE>
(1) INTERNATIONAL EQUITY CLASS A SHARES WERE OFFERED BEGINNING DECEMBER 20,
1989. ALL RATIOS FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(2) EMERGING MARKETS EQUITY CLASS A SHARES WERE OFFERED BEGINNING JANUARY 17,
1995. ALL RATIOS FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(3) INTERNATIONAL FIXED INCOME CLASS A SHARES WERE OFFERED BEGINNING SEPTEMBER
1, 1993. ALL RATIOS FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(4) DISTRIBUTIONS FROM NET INVESTMENT INCOME INCLUDE DISTRIBUTIONS OF CERTAIN
FOREIGN CURRENCY GAINS AND LOSSES.
+ AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES
DURING THE PERIOD. PRESENTATION OF THE RATE IS REQUIRED FOR FISCAL YEARS
BEGINNING AFTER SEPTEMBER 1, 1995. GENERALLY, NON-U.S. COMMISSIONS ARE LOWER
THAN U.S. COMMISSIONS WHEN EXPRESSED AS CENTS PER SHARE, BUT HIGHER WHEN
EXPRESSED AS A PERCENTAGE OF TRANSACTIONS BECAUSE OF THE LOWER PER-SHARE
PRICES OF MANY NON-U.S. SECURITIES.
3
<PAGE>
THE TRUST
__________________________________________________________________________
SEI INTERNATIONAL TRUST (the "Trust") is an open-end management investment
company that offers units of beneficial interest ("shares") in separate
diversified and non-diversified investment portfolios. This Prospectus offers
Class A shares of the Trust's International Equity, Emerging Markets Equity,
International Fixed Income and Emerging Markets Debt Portfolios (each a
"Portfolio" and, together, the "Portfolios"). The International Equity Portfolio
has two separate classes of shares, Class A and Class D, which provide for
variations in distribution, shareholder servicing and transfer agent costs,
sales charges, voting rights and dividends. The investment advisers and
sub-advisers to the Portfolios are referred to collectively as the "advisers."
Additional information pertaining to the Trust may be obtained by writing to SEI
Investments Distribution Co., Oaks, Pennsylvania 19456, or by calling
1-800-342-5734.
INVESTMENT OBJECTIVES
AND POLICIES
___________________________________________________________________________
INTERNATIONAL EQUITY
The International Equity Portfolio seeks to provide
long-term capital appreciation by investing primarily in a
diversified portfolio of equity securities of non-U.S.
issuers.
Under normal circumstances, at least 65% of the
International Equity Portfolio's assets will be invested in
equity securities of non-U.S. issuers located in at least
three countries other than the United States.
Securities of non-U.S. issuers purchased by the
Portfolio will typically be listed on recognized foreign
exchanges, but also may be purchased in over-the-counter
markets, on U.S. registered exchanges, or in the form of
sponsored or unsponsored American Depositary Receipts
("ADRs") traded on registered exchanges or NASDAQ, or
sponsored or unsponsored European Depositary Receipts
("EDRs"), Continental Depositary Receipts ("CDRs") or
Global Depositary Receipts ("GDRs"). The Portfolio expects
its investments to emphasize both large, intermediate and
small capitalization companies.
The Portfolio expects to be fully invested in its
primary investments, described above, but may invest up to
35% of its total assets in U.S. or non-U.S. cash reserves;
money market instruments; swaps; options on securities and
non-U.S. indices; futures contracts, including stock index
futures contracts; and options on futures contracts. The
Portfolio is permitted to acquire floating and variable
rate securities, purchase securities on a when-issued or
delayed delivery basis, and invest up to 15% of its total
assets in illiquid securities. Although permitted to do so,
the Portfolio does not currently intend to invest in
securities issued by passive foreign investment companies
or to engage in securities lending.
In addition to the policy on Temporary Defensive
Investments set forth in the "General Investment Policies"
section, for temporary defensive purposes when the advisers
determine that market conditions warrant, the Portfolio may
invest up to 50% of its assets in U.S. and non-U.S. money
market instruments and in other U.S. and non-U.S. long- and
short-term debt instruments which are rated BBB or higher
by S&P or Baa or higher by Moody's at the time of purchase,
or which are determined by the advisers to be of
4
<PAGE>
comparable quality; maintain a portion of such assets in
cash; and invest such assets in obligations of
supranational entities which are rated A or higher by S&P
or Moody's at the time of purchase or which are determined
by the advisers to be of comparable quality.
EMERGING MARKETS EQUITY
The Emerging Markets Equity Portfolio seeks to provide
capital appreciation by investing primarily in a
diversified portfolio of equity securities of emerging
market issuers.
Under normal circumstances, at least 65% of the
Emerging Markets Equity Portfolio's assets will be invested
in equity securities of emerging market issuers. Under
normal conditions, the Portfolio maintains investments in
at least six emerging market countries and does not invest
more than 35% of its total assets in any one emerging
market country. The Portfolio defines an emerging market
country as any country the economy and market of which the
World Bank or the United Nations considers to be emerging
or developing. The Portfolio's advisers consider emerging
market issuers to include companies the securities of which
are principally traded in the capital markets of emerging
market countries; that derive at least 50% of their total
revenue from either goods produced or services rendered in
emerging market countries, regardless of where the
securities of such companies are principally traded; or
that are organized under the laws of and have a principal
office in an emerging market country.
The Portfolio expects to be fully invested in its
primary investments described above, but may invest up to
35% of its total assets in debt securities, including up to
5% of its total assets in debt securities rated below
investment grade. These debt securities will include debt
securities of governmental and private issuers in emerging
market countries. Bonds rated below investment grade are
often referred to as "junk bonds." Such securities involve
greater risk of default or price volatility than investment
grade securities. The Portfolio may invest in certain debt
securities issued by the governments of emerging market
countries that are or may be eligible for conversion into
investments in emerging market companies under debt
conversion programs sponsored by such governments.
The Portfolio may invest up to 15% of its total
assets in illiquid securities. The Portfolio's advisers
believe that carefully selected investments in joint
ventures, cooperatives, partnerships, private placements,
unlisted securities and other similar situations
(collectively, "special situations") could enhance the
Portfolio's capital appreciation potential. Investments in
special situations may be liquid, as determined by the
Portfolio's advisers based on criteria approved by the
Board of Trustees. To the extent these investments are
deemed illiquid, the Portfolio's investment in them will be
subject to its 15% restriction on investment in illiquid
securities.
The Portfolio may invest up to 10% of its total
assets in shares of other investment companies. The
Portfolio may invest in futures contracts and purchase
securities on a when-issued or delayed delivery basis. The
Portfolio may also purchase and write options to buy or
sell futures contracts.
5
<PAGE>
In addition to the policy on Temporary Defensive
Investments in the "General Investment Policies" section,
for temporary defensive purposes when the advisers
determine that market conditions warrant, the Portfolio may
invest up to 20% of its total assets in the equity
securities of companies included in the Morgan Stanley
Capital International Europe, Australia, Far East Index
(the "EAFE Index"). These companies typically have larger
average market capitalizations than the emerging market
companies in which the Portfolio generally invests.
INTERNATIONAL FIXED INCOME
The International Fixed Income Portfolio seeks to provide
capital appreciation and current income through investment
primarily in high quality, non-U.S. dollar denominated
government and corporate fixed income securities.
Under normal circumstances, at least 65% of the
International Fixed Income Portfolio's assets will be
invested in investment grade foreign government and foreign
corporate fixed income securities of issuers located in at
least three countries other than the United States.
The International Fixed Income Portfolio will invest
primarily in: (i) fixed income securities issued or
guaranteed by a foreign government or one of its agencies,
authorities, instrumentalities or political subdivisions;
(ii) fixed income securities issued or guaranteed by
supranational entities; (iii) fixed income securities
issued by foreign corporations; (iv) convertible securities
issued by foreign corporations; and (v) fixed income
securities issued by foreign banks or bank holding
companies. All such investments will be in investment grade
securities denominated in various currencies, including the
European Currency Unit. Investment grade securities are
rated in one of the highest four rating categories by a
nationally recognized statistical rating agency ("NRSRO")
or determined by the adviser to be of comparable quality at
the time of purchase.
The Portfolio expects to be fully invested in its
primary investments described above, but may invest in
obligations issued or guaranteed as to principal and
interest by the United States Government, its agencies or
instrumentalities ("U.S. Government securities"), swaps,
options and futures. The Portfolio may also purchase and
write options to buy or sell futures contracts, purchase
securities on a when-issued or delayed delivery basis and
engage in short selling. The Portfolio may invest up to 10%
of its total assets in illiquid securities. Furthermore,
although the Portfolio will concentrate its investments in
relatively developed countries, the Portfolio may invest up
to 5% of its assets in fixed income securities of issuers
in, or denominated in the currencies of, developing
countries and that are determined by the advisers to be of
comparable quality to such securities and debt obligations
at the time of purchase.
Under normal circumstances, the portfolio turnover
rate for this Portfolio is expected to exceed 200% per
year. Short-term gains realized from portfolio transactions
are taxable to shareholders as ordinary income. In
addition, higher portfolio turnover rates can result in
corresponding increases in portfolio transaction costs. The
Portfolio will not
6
<PAGE>
consider portfolio turnover a limiting factor in
implementing investment decisions which are consistent with
the Portfolio's objectives and policies.
EMERGING MARKETS DEBT
The investment objective of the Emerging Markets Debt
Portfolio is to maximize total return.
Under normal circumstances, at least 80% of the
Emerging Markets Debt Portfolio's total assets will be
invested in debt securities of government, government-
related and corporate issuers in emerging market countries
and of entities organized to restructure outstanding debt
of such issuers. The Portfolio defines an emerging market
country as any country the economy and market of which the
World Bank or the United Nations considers to be emerging
or developing. The Portfolio's advisers consider emerging
market issuers to be companies the securities of which are
principally traded in the capital markets of emerging
market countries; that derive at least 50% of their total
revenue from either goods produced or services rendered in
emerging market countries, regardless of where the
securities of such companies are principally traded; or
that are organized under the laws of and have a principal
office in an emerging market country, or that are
government issuers located in an emerging markets country.
Emerging market country debt securities in which the
Emerging Markets Debt Portfolio may invest are U.S.
dollar-denominated and non-U.S. dollar-denominated
corporate and government debt securities, including bonds,
notes, bills, debentures, convertible securities, warrants,
bank debt obligations, short-term paper, mortgage and other
asset-backed securities, preferred stock, loan
participations and assignments and interests issued by
entities organized and operated for the purpose of
restructuring the investment characteristics of instruments
issued by emerging market country issuers. The Portfolio
may invest in Brady Bonds, which are debt securities issued
by debtor nations to restructure their outstanding external
indebtedness, and which comprise a significant portion of
the emerging debt market.
The Portfolio's investments in government,
government-related and restructured debt securities will
consist of (i) debt securities or obligations issued or
guaranteed by governments, governmental agencies or
instrumentalities and political subdivisions located in
emerging market countries (including participations in
loans between governments and financial institutions), (ii)
debt securities or obligations issued by government-owned,
controlled or sponsored entities located in emerging market
countries (including participations in loans between
governments and financial institutions), and (iii)
interests in structured securities of issuers organized and
operated for the purpose of restructuring the investment
characteristics of instruments issued by any of the
entities described above (collectively, "High Yield Foreign
Sovereign Debt Securities"). Even though many of these
securities are issued by governmental issuers, they may
still be considered junk bonds on account of the
governmental issuer's poor credit rating.
The Portfolio's investments in debt securities of
corporate issuers in emerging market countries may include
high yield or investment grade debt securities or other
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obligations issued by (i) banks located in emerging market
countries or by branches of emerging market country banks
located in other emerging market countries, or (ii)
companies organized under the laws of an emerging market
country.
The Portfolio expects to be fully invested in its
primary investments described above, but may invest up to
10% of its total assets in common stock, convertible
securities, warrants or other equity securities when
consistent with the Portfolio's objective. The Portfolio
will generally hold such equity investments as a result of
purchases of unit offerings of fixed-income securities
which include such securities or in connection with an
actual or proposed conversion or exchange of fixed income
securities. The Portfolio may also enter into repurchase
agreements and reverse repurchase agreements, may purchase
when-issued and delayed-delivery securities, lend portfolio
securities and invest in shares of other investment
companies. The Portfolio may purchase restricted securities
and may invest up to 15% of the value of its total assets
in illiquid securities. The Portfolio may invest in options
and futures for hedging purposes, and may enter into swaps
or related transactions. The Portfolio may invest in
receipts, zero coupon securities, pay-in-kind bonds,
Eurobonds, dollar rolls, and deferred payment securities.
The securities in which the Portfolio will invest
will not be required to meet a minimum rating standard and
may not be rated for creditworthiness by any
internationally recognized credit rating organization.
Generally, the Portfolio's investments are expected to be
in the lower and lowest rating categories established by
internationally recognized credit rating organizations or
determined to be of comparable quality. Such securities,
commonly known as "junk bonds," involve significantly
greater risks, including price volatility and risk of
default of payment of interest and principal than higher
rated securities.
There is no limit on the percentage of the
Portfolio's assets that may be invested in non-U.S. dollar
denominated securities. However, it is expected that the
majority of the Portfolio's assets will be denominated in
U.S. dollars.
There can be no assurance that the Portfolios will
achieve their respective objectives.
GENERAL INVESTMENT
POLICIES AND RISK
FACTORS
____________________________________________________________________________
EQUITY SECURITIES
Equity securities represent ownership interests in a
company or corporation and include common stock, preferred
stock and warrants and other rights to acquire such
instruments. Changes in the value of portfolio securities
will not necessarily affect cash income derived from these
securities, but will affect a Portfolio's net asset value.
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<PAGE>
FIXED INCOME SECURITIES
Fixed income securities consist primarily of debt
obligations issued by governments, corporations,
municipalities and other borrowers, but may also include
structured securities that provide for participation
interests in debt obligations. The market value of fixed
income investments will generally change in response to
interest rate changes and other factors. During periods of
falling interest rates, the values of outstanding fixed
income securities generally rise. Conversely, during
periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities
with longer maturities tend to produce higher yields, the
prices of longer maturity securities are also subject to
greater market fluctuations as a result of changes in
interest rates. Changes by recognized agencies in the
rating of any fixed income security and in the ability of
an issuer to make payments of interest and principal also
affect the value of these investments. Changes in the value
of these securities will not affect cash income derived
from these securities, but will affect a Portfolio's net
asset value.
There are no restrictions on the average maturity of
the International Fixed Income or the Emerging Markets Debt
Portfolios or the maturity of any single instrument held by
any Portfolio. Maturities may vary widely depending on the
adviser's assessment of interest rate trends and other
economic and market factors. In the event a security owned
by a Portfolio is downgraded, the adviser will review the
situation and take appropriate action with regard to the
security. Fixed income securities rated BBB or Baa lack
outstanding investment characteristics, and have
speculative characteristics as well. Fixed income
securities rated below investment grade are often referred
to as "junk bonds." Such securities involve greater risk of
default or price declines than investment grade securities.
FOREIGN CURRENCY TRANSACTIONS
The Portfolios may enter into forward foreign currency
contracts to manage its foreign currency exposure and as a
hedge against possible variations in foreign exchange
rates. The Portfolios may enter into forward foreign
currency contracts to hedge a specific security transaction
or to hedge a portfolio position. These contracts may be
bought or sold to protect the Portfolios, to some degree,
against possible losses resulting from an adverse change in
the relationship between foreign currencies and the U.S.
dollar. The Portfolios also may invest in foreign currency
futures and in options on currencies.
NON-DIVERSIFICATION
The International Fixed Income and Emerging Markets Debt
Portfolios are non-diversified investment companies, as
defined in the Investment Company Act of 1940, as amended
(the "1940 Act"), which means that a relatively high
percentage of assets of the Portfolios may be invested in
the obligations of a limited number of issuers. Although
the advisers do not intend to invest more than 5% of each
Portfolio's assets in any single issuer with the exception
of securities which are issued or guaranteed by a national
government, the value of shares of the Portfolios may be
more susceptible to any single economic, political or
regulatory occurrence than the shares of a diversified
investment company would be. The Portfolios intend to
satisfy the diversification requirements necessary to
qualify as a regulated investment company under the
Internal Revenue Code of 1986, as amended (the
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<PAGE>
"Code"), which requires that the Portfolios be diversified
(I.E., not invest more than 5% of their assets in the
securities in any one issuer) as to 50% of their assets.
SECURITIES OF FOREIGN AND EMERGING MARKET ISSUERS
There are certain risks connected with investing in foreign
securities. These include risks of adverse political and
economic developments (including possible governmental
seizure or nationalization of assets), the possible
imposition of exchange or currency controls or other
governmental restrictions, less uniformity in accounting
and reporting requirements, the possibility that there will
be less information on such securities and their issuers
available to the public, the difficulty of obtaining or
enforcing court judgments abroad, restrictions on foreign
investments in other jurisdictions, difficulties in
effecting repatriation of capital invested abroad and
difficulties in transaction settlements and the effect of
delay on shareholder equity. Foreign securities may be
subject to foreign taxes, and may be less marketable than
comparable U.S. securities. The value of a Portfolio's
investments denominated in foreign currencies will depend
on the relative strengths of those currencies and the U.S.
dollar, and a Portfolio may be affected favorably or
unfavorably by changes in the exchange rates or exchange or
currency control regulations between foreign currencies and
the U.S. dollar. Changes in foreign currency exchange rates
also may affect the value of dividends and interest earned,
gains and losses realized on the sale of securities and net
investment income and gains if any, to be distributed to
shareholders by a Portfolio.
A Portfolio's investments in emerging markets can be
considered speculative, and therefore may offer higher
potential for gains and losses than investments in
developed markets of the world. With respect to any
emerging country, there may be a greater potential for
nationalization, expropriation or confiscatory taxation,
political changes, government regulation, social
instability or diplomatic developments (including war)
which could affect adversely the economies of such
countries or investments in such countries. The economies
of developing countries generally are heavily dependent
upon international trade and, accordingly, have been and
may continue to be adversely affected by trade barriers,
exchange or currency controls, managed adjustments in
relative currency values and other protectionist measures
imposed or negotiated by the countries with which they
trade.
In addition to the risks of investing in emerging
market country debt securities, a Portfolio's investment in
government, government-related and restructured debt
instruments are subject to special risks, including the
inability or unwillingness to repay principal and interest,
requests to reschedule or restructure outstanding debt, and
requests to extend additional loan amounts. A Portfolio may
have limited recourse in the event of default on such debt
instruments.
TEMPORARY DEFENSIVE INVESTMENTS
For temporary defensive purposes, when the advisers
determine that market conditions warrant, the Portfolios
may invest up to 100% of their assets in U.S.
dollar-denominated fixed income securities or debt
obligations and the following domestic and foreign money
market instruments: government obligations, certificates of
deposit, bankers' acceptances,
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<PAGE>
time deposits, commercial paper, short-term corporate debt
issues and repurchase agreements, and may hold a portion of
their assets in cash for liquidity purposes.
For additional information regarding the Portfolios'
permitted investments see "Description of Permitted
Investments and Risk Factors" in this Prospectus and
"Description of Permitted Investments" in the Statement of
Additional Information. For a description of the above
ratings see the Statement of Additional Information.
INVESTMENT LIMITATIONS
________________________________________________________________________
The investment objective and certain of the investment
limitations (including those listed below) are fundamental
policies of the Portfolios. Fundamental policies cannot be
changed with respect to the Trust or a Portfolio without
the consent of the holders of a majority of the Trust's or
that Portfolio's outstanding shares.
EACH OF THE INTERNATIONAL EQUITY, EMERGING MARKETS EQUITY
AND EMERGING MARKETS DEBT PORTFOLIOS MAY NOT (EXCEPT AS
NOTED BELOW):
1. With respect to 75% of its total assets, (i) purchase
securities of any issuer (except securities issued or
guaranteed by the United States Government, its agencies
or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in the securities of
such issuer; or (ii) acquire more than 10% of the
outstanding voting securities of any one issuer. This
limitation does not apply to the Emerging Markets Debt
Portfolio.
2. Purchase any securities which would cause more than 25%
of its total assets to be invested in the securities of
one or more issuers conducting their principal business
activities in the same industry, provided that this
limitation does not apply to investments in securities
issued or guaranteed by the United States Government, its
agencies or instrumentalities.
3. Borrow money in an amount exceeding 33 1/3% of the value
of its total assets, provided that, for purposes of this
limitation, investment strategies which either obligate a
Portfolio to purchase securities or require a Portfolio
to segregate assets are not considered to be borrowings.
To the extent that its borrowings exceed 5% of its
assets, (i) all borrowings will be repaid before making
additional investments and any interest paid on such
borrowings will reduce income, and (ii) asset coverage of
at least 300% is required.
THE INTERNATIONAL FIXED INCOME PORTFOLIO MAY NOT:
1. Purchase any securities which would cause more than 25%
of the total assets of the Portfolio to be invested in
the securities of one or more issuers conducting their
principal business activities in the same industry,
provided that this limitation does not apply to
investments in obligations issued or guaranteed by the
United States Government or its agencies and
instrumentalities.
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<PAGE>
2. Borrow money except for temporary or emergency purposes
and then only in an amount not exceeding 10% of the value
of the total assets of the Portfolio. This borrowing
provision is included solely to facilitate the orderly
sale of portfolio securities to accommodate substantial
redemption requests if they should occur and is not for
investment purposes. All borrowings will be repaid before
making additional investments for the Portfolio and any
interest paid on such borrowings will reduce the income
of the Portfolio.
For purposes of the industry concentration
limitations discussed above, these definitions apply to
each Portfolio, and for purposes of the International Fixed
Income Portfolio, these limitations form part of the
fundamental limitation: (i) utility companies will be
divided according to their services, for example, gas, gas
transmission, electric and telephone will each be
considered a separate industry; (ii) financial service
companies will be classified according to end users of
their services, for example, automobile finance, bank
finance and diversified finance will each be considered a
separate industry; (iii) supranational agencies will be
deemed to be issuers conducting their principal business
activities in the same industry; and (iv) governmental
issuers within a particular country will be deemed to be
conducting their principal business in the same industry.
The foregoing percentage limitations (except the
limitation on borrowing) will apply at the time of the
purchase of a security. Additional fundamental and
non-fundamental investment limitations are set forth in the
Statement of Additional Information.
THE MANAGER
______________________________________________________________________
SEI Fund Management ("SEI Management") provides the Trust
with overall management services, regulatory reporting, all
necessary office space, equipment, personnel and
facilities, and acts as dividend disbursing agent. SEI
Management also serves as transfer agent (the "Transfer
Agent") to the Trust's Class A shares.
For its management services, SEI Management is
entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .45% of the average daily net
assets of the International Equity Portfolio, .65% of the
average daily net assets of the Emerging Markets Equity and
Emerging Markets Debt Portfolios and .60% of the average
daily net assets of the International Fixed Income
Portfolio. SEI Management has voluntarily agreed to waive
all or a portion of its fees, and if necessary, reimburse
other operating expenses, in order to limit the total
operating expenses of each Portfolio. SEI Management
reserves the right to terminate these voluntary fee waivers
at any time in its sole discretion.
For the fiscal year ended February 28, 1997, the
International Equity, Emerging Markets Equity and
International Fixed Income Portfolios paid management fees
of .45%, .65% and .60%, respectively, of their average
daily net assets. The Emerging Markets Debt Portfolio had
not commenced operations as of February 28, 1997.
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<PAGE>
THE ADVISERS
______________________________________________________________________
Under advisory agreements with the Trust (the "Advisory
Agreements"), SEI Financial Management Corporation ("SFM")
serves as the investment adviser for the International
Equity, Emerging Markets Equity and Emerging Markets Debt
Portfolios. Strategic Fixed Income L.P. serves as the
investment adviser for the International Fixed Income
Portfolio. Under the Advisory Agreements, the investment
advisers are authorized to make investment decisions for
the assets of the Portfolios, and to continuously review,
supervise and administer the Portfolios' investment
program.
SEI FINANCIAL MANAGEMENT CORPORATION
SFM serves as the investment adviser for the International
Equity, Emerging Markets Equity and Emerging Markets Debt
Portfolios. SFM is a wholly-owned subsidiary of SEI
Investments Company ("SEI"), a financial services company.
The principal business address of SEI and SFM is Oaks,
Pennsylvania 19456. SEI was founded in 1968, and is a
leading provider of investment solutions to banks,
institutional investors, investment advisers and insurance
companies. Affiliates of SFM have provided consulting
advice to institutional investors for more than 20 years,
including advice regarding selection and evaluation of
investment advisers. SFM currently serves as manager or
administrator to more than 43 investment companies,
including more than 325 portfolios, which investment
companies had more than $93.9 billion in assets as of May
31, 1997.
In its role as the investment adviser to the
International Equity, Emerging Markets Equity and Emerging
Markets Debt Portfolios, SFM operates as a "manager of
managers." As adviser, SFM oversees the investment advisory
services provided to the International Equity, Emerging
Markets Equity and Emerging Markets Debt Portfolios and
manages the cash portion of the International Equity and
Emerging Markets Equity Portfolios' assets. Pursuant to
separate sub-advisory agreements with SFM, and under the
supervision of SFM and the Board of Trustees, the
sub-advisers are responsible for the day-to-day investment
management of all or a discrete portion of the assets of
the International Equity, Emerging Markets Equity and
Emerging Markets Debt Portfolios. The sub-advisers are
selected based primarily upon the research and
recommendations of SFM, which evaluates quantitatively and
qualitatively each sub-adviser's skills and investment
results in managing assets for specific asset classes,
investment styles and strategies. Subject to Board review,
SFM allocates and, when appropriate, reallocates the
Portfolios' assets among sub-advisers, monitors and
evaluates sub-adviser performance, and oversees sub-adviser
compliance with the Portfolios' investment objectives,
policies and restrictions. SFM HAS THE ULTIMATE
RESPONSIBILITY FOR THE INVESTMENT PERFORMANCE OF THE
INTERNATIONAL EQUITY, EMERGING MARKETS EQUITY AND EMERGING
MARKETS DEBT PORTFOLIOS DUE TO ITS RESPONSIBILITY TO
OVERSEE SUB-ADVISERS AND RECOMMEND THEIR HIRING,
TERMINATION AND REPLACEMENT.
For these advisory services, SFM is entitled to a
fee, which is calculated daily and paid monthly, at an
annual rate of .505% of the International Equity
Portfolio's average
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<PAGE>
daily net assets, 1.05% of the Emerging Markets Equity
Portfolio's average daily net assets, and .85% of the
Emerging Markets Debt Portfolio's average daily net assets.
SFM pays the sub-advisers a fee out of its advisory fee,
which fee is based on a percentage of the average monthly
market value of the assets managed by each sub-adviser.
For the fiscal year ended February 28, 1997, the
International Equity and Emerging Markets Equity Portfolios
paid advisory fees, after fee waivers, of .41% and .72%,
respectively, of their average daily net assets. The
Emerging Markets Debt Portfolio had not commenced
operations as of February 28, 1997.
SFM has obtained an exemptive order from the
Securities and Exchange Commission (the "SEC") that permits
SFM, with the approval of the Trust's Board of Trustees, to
retain sub-advisers unaffiliated with SFM for the
Portfolios without submitting the sub-advisory agreements
to a vote of the Portfolios' shareholders. The exemptive
relief permits the disclosure of only the aggregate amount
payable by SFM under all such sub-advisory agreements for
each Portfolio. The Portfolios will notify shareholders in
the event of any addition or change in the identity of its
sub-advisers.
STRATEGIC FIXED INCOME L.P.
Strategic Fixed Income L.P. ("SFI") serves as the
investment adviser to the International Fixed Income
Portfolio. SFI is a limited partnership formed in 1991
under the laws of the State of Delaware to manage
multi-currency fixed income portfolios. The general partner
of the firm is Gobi Investment Inc., of which Kenneth
Windheim is the sole shareholder, and the limited partner
is Strategic Investment Management ("SIM"). As of March 31,
1997, SFI managed $5.8 billion of client assets. The
principal address of SFI is 1001 Nineteenth Street North,
17th Floor, Arlington, Virginia 22209.
Kenneth Windheim, President of SFI, has been the
portfolio manager of the Portfolio since its inception in
1993. Mr. Windheim is assisted by Gregory Barnett and David
Jallits, Directors of SFI and portfolio managers of the
Portfolio since April 1994. Prior to forming SFI, Kenneth
Windheim was the Chief Investment Officer and Managing
Director of the group which managed global fixed income
portfolios at Prudential Asset Management. Prior to joining
SFI, Gregory Barnett was portfolio manager for the Pilgrim
Multi-Market Income Fund. Prior to that he was vice
president and senior fixed income portfolio manager at
Lexington Management. Prior to joining SFI, David Jallits
was Senior Portfolio Manager for a hedge fund at Teton
Partners. From 1982 to 1994, he was Vice President and
Global Fixed Income Portfolio Manager at The Putnam
Companies.
SFI is entitled to a fee which is calculated daily
and paid monthly by the Portfolio, at an annual rate of
.30% of the average daily net assets of the International
Fixed Income Portfolio. For the fiscal year ended February
28, 1997, SFI received an advisory fee (after fee waivers)
from the Portfolio of .25% of its average daily net assets.
THE SUB-ADVISERS
_________________________________________________________________
ACADIAN ASSET MANAGEMENT, INC.
Acadian Asset Management, Inc. ("Acadian") serves as a
sub-adviser for a portion of the assets of the
International Equity Portfolio. Acadian, a wholly-owned
subsidiary of United
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<PAGE>
Asset Management Corporation ("UAM"), was founded in 1977
and manages approximately $4 billion in assets invested
globally as of March 31, 1997. Acadian's business address
is Two International Place, 26th floor, Boston,
Massachusetts 02110.
An investment committee has been responsible for
managing the Portfolio's assets allocated to Acadian since
the Portfolio's inception.
CORONATION ASSET MANAGEMENT (PROPRIETARY) LIMITED
Coronation Asset Management (Proprietary) Limited
("Coronation") serves as a sub-adviser for a portion of the
assets of the Emerging Markets Equity Portfolio.
Coronation, a registered investment adviser organized under
the laws of the Republic of South Africa, was founded in
1993, and as of July 31, 1996, managed $2.5 billion in
assets. The principal business address of Coronation is 80
Strand Street, Cape Town, South Africa, 8001.
Investment decisions for Coronation's portion of the
Portfolio are made by Anthony Gibson and Louis Stassen.
Prior to joining Coronation in 1993, Mr. Gibson, the head
of Coronation's Investment Committee, and Mr. Stassen, the
head of Coronation's research department, worked at Syfrets
Managed Assets for seven years and one year, respectively.
Prior to joining Syfrets Managed Assets, Mr. Stassen worked
as an Investment Analyst for Allan Gray Investment Counsel.
FARRELL WAKO GLOBAL INVESTMENT MANAGEMENT, INC.
Farrell Wako Global Investment Management, Inc. ("Farrell
Wako") serves as a sub-adviser for a portion of the assets
of the International Equity Portfolio. Farrell Wako, a
Delaware corporation and a wholly-owned subsidiary of Wako
Securities, was founded in 1991 and is a registered
investment advisor in the U.S. and Japan. Farrell Wako
currently manages over $325 million. The principal address
of Farrell Wako is 780 Third Avenue, New York, New York
10017.
James L. Farrell, the chairman of Farrell Wako,
manages its portion of the assets of the International
Equity Portfolio. Mr. Farrell has 31 years of experience in
investment management and applied financial research and
was responsible for management of over $1 billion in equity
assets as Chairman of MPT Associates prior to his
association with Farrell Wako.
LAZARD LONDON INTERNATIONAL INVESTMENT MANAGEMENT LIMITED
Lazard London International Investment Management Limited
("Lazard") serves as a sub-adviser for a portion of the
assets of the International Equity Portfolio. Lazard is a
registered investment adviser with its principal business
address at 21 Moorfields, London, England EC2P 2HT. Lazard
was founded in 1980. Lazard is a wholly-owned subsidiary of
Lazard Asset Management Holdings Limited, which is a
holding company controlled by Lazard Freres & Co., LLC, an
investment bank whose principal business address is 30
Rockefeller Plaza, New York, N.Y. 10020-2102. Lazard offers
international investment services to clients of Lazard
Brothers Asset Management Limited ("LBAM"), which is also
wholly-owned by Lazard Asset Management Holdings Limited.
Lazard and LBAM manage domestic (UK) portfolios and
international portfolios for institutions and private
clients,
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<PAGE>
including insurance funds, pension funds, charities and
mutual funds. As of March 31, 1997, Lazard and LBAM had
approximately $5.6 billion in assets under management.
Mr. Dino Fuschillo, Director of Lazard, has primary
responsibility for the day-to-day management of the portion
of the Portfolio's assets managed by Lazard. Mr. Fuschillo,
a dual employee of Lazard and LBAM, joined LBAM in 1989,
and has specialized in European equity management ever
since.
MONTGOMERY ASSET MANAGEMENT, LLC
Montgomery Asset Management, LLC ("MAM") serves as a
sub-adviser for a portion of the assets of the Emerging
Markets Equity Portfolio. MAM is currently an independent
affiliate of Montgomery Securities, a San Francisco based
investment banking firm. It is anticipated that on or about
July 31, 1997, MAM will be purchased by Commerzbank A.G., a
German financial institution headquartered in Frankfurt,
Germany. As of March 31, 1997, MAM had approximately $8
billion in assets under management. MAM has over six years
experience providing investment management services. The
principal address of MAM is 101 California Street, San
Francisco, California 94111.
Josephine S. Jimenez, Bryan L. Sudweeks and Jesus
Duarte share primary responsibility for the Emerging
Markets Equity Portfolio. Ms. Jimenez and Dr. Sudweeks have
fifteen and eight years experience, respectively, in
emerging markets investment. Both joined MAM in 1991. Mr.
Duarte, Senior Portfolio Manager and Regional Head of Latin
American Investing, joined MAM in 1994. Prior to joining
MAM, he was a Director and Vice President of Latinvest.
PARAMETRIC PORTFOLIO ASSOCIATES
Parametric Portfolio Associates ("Parametric") serves as a
sub-adviser for a portion of the assets of the Emerging
Markets Equity Portfolio. Parametric is a general
partnership whose general partners are PIMCO Advisors L.P.
("PIMCO"), the supervisory general partner, and Parametric
Management, Inc., the managing general partner (a
wholly-owned subsidiary of PIMCO). Parametric's predecessor
was founded in 1987, and as of March 31, 1997, Parametric
managed approximately $1.5 billion in client assets.
Parametric's business address is 701 Fifth Avenue, Suite
7310, Seattle, WA 98104. PIMCO's address is 800 Newport
Center Drive, Newport Beach, California 92660.
Clifford Quisenberry, CFA, Senior Investment Manager
and Research Manager, is responsible for managing the
portion of the Portfolio's assets allocated to Parametric.
Prior to joining Parametric, Mr. Quisenberry was a
Portfolio Manager with Cutler & Company.
SALOMON BROTHERS ASSET MANAGEMENT INC
Salomon Brothers Asset Management Inc ("SBAM") serves as
the sub-adviser for the assets of the Emerging Markets Debt
Portfolio. SBAM, an indirect wholly-owned subsidiary of
Salomon Inc, is a Delaware corporation that was founded in
1987. SBAM is a registered investment adviser that
currently manages approximately $20.8 billion in client
assets. SBAM's principal business address is 7 World Trade
Center, New York, New York 10048.
SBAM employs a team approach in managing the
Portfolio; however, Peter J. Wilby has the primary
day-to-day responsibility for the Portfolio. Mr. Wilby, a
Managing Director,
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<PAGE>
joined SBAM in 1989 and is responsible for SBAM's
investment company and institutional portfolios which
invest in high yield non-U.S. and U.S. corporate debt
securities and high yield foreign sovereign debt
securities.
SELIGMAN HENDERSON CO.
Seligman Henderson Co. serves as a sub-adviser for a
portion of the assets of the International Equity
Portfolio. Seligman Henderson Co. is a New York general
partnership and is structured as an equal partnership
between J.&W. Seligman & Co. Incorporated and Henderson
International Inc., a controlled affiliate of Henderson
plc. Seligman Henderson Co. was established in 1991 and
manages over $3.4 billion in global and international
equity portfolios for U.S. institutional and retail
clients. The principal address of Seligman Henderson Co. is
100 Park Avenue, New York, New York 10017.
Mr. William Garnett is primarily responsible for the
day-to-day management and investment decisions with respect
to the International Equity Portfolio's assets allocated to
Seligman Henderson Co. Mr. Garnett has more than 11 years'
experience in managing Japanese small cap equity
securities. Mr. Iain Clark, Seligman Henderson Co.'s chief
investment officer, has ultimate responsibility for
portfolio management. Mr. Clark has more than 25 years
experience, including 12 with Henderson plc.
YAMAICHI CAPITAL MANAGEMENT, INC. AND YAMAICHI CAPITAL MANAGEMENT (SINGAPORE)
LIMITED
Yamaichi Capital Management, Inc. ("Yamaichi") and Yamaichi
Capital Management (Singapore) Limited ("YCMS") jointly
serve as sub-adviser for a portion of the assets of the
International Equity Portfolio and for a portion of the
assets of the Emerging Markets Equity Portfolio. Yamaichi
is a New York Corporation established in 1981 and YCMS is a
Singapore corporation established in 1979, and each is a
wholly-owned subsidiary of Yamaichi International Capital
Management Co., Ltd. ("YICM"). Yamaichi, YCMS and YICM are
controlled by Yamaichi Securities Co., Ltd., which is
located in Tokyo, Japan. YCMS and its affiliates manage
approximately $24 billion worldwide. The principal address
of Yamaichi is 2 World Trade Center, Suite 9828, New York,
New York 10048. The principal address of YCMS is 138
Robinson Road, #13-01/05, Hong Leong Centre, Singapore
068906.
Mr. Marco Wong leads the management team for the
assets of the International Equity and Emerging Markets
Equity Portfolios allocated to Yamaichi and YCMS. Mr. Wong
has been with YCMS since 1986.
DISTRIBUTION AND
SHAREHOLDER SERVICING
__________________________________________________________________________
SEI Investments Distribution Co. (the "Distributor"), a
wholly-owned subsidiary of SEI, serves as each Portfolio's
distributor pursuant to a distribution agreement (the
"Distribution Agreement") with the Trust.
The Portfolios have adopted a shareholder service
plan for Class A shares (the "Class A Service Plan") under
which firms, including the Distributor, that provide
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<PAGE>
shareholder and administrative services may receive
compensation therefor. Under the Class A Service Plan, the
Distributor may provide those services itself, or may enter
into arrangements under which third parties provide such
services and are compensated by the Distributor. Under such
arrangements, the Distributor may retain as profit any
difference between the fee it receives and the amount it
pays such third parties. In addition, the Portfolios may
enter into such arrangements directly. Under the Class A
Service Plan, a Portfolio may pay the Distributor a fee at
a negotiated annual rate of up to .25% of the average daily
net assets of such Portfolio attributable to Class A shares
that are subject to the arrangement in return for provision
of a broad range of shareholder and administrative
services, including: maintaining client accounts; arranging
for bank wires; responding to client inquiries concerning
services provided for investments; changing dividend
options; account designations and addresses; providing
sub-accounting; providing information on share positions to
clients; forwarding shareholder communications to clients;
processing purchase, exchange and redemption orders; and
processing dividend payments.
In addition, the International Equity Portfolio has
adopted a distribution plan for its Class D shares (the
"Class D Plan") pursuant to Rule 12b-1 under the 1940 Act.
It is possible that an institution may offer
different classes of shares to its customers and thus
receive different compensation with respect to different
classes. These financial institutions may also charge
separate fees to their customers.
The Trust may execute brokerage or other agency
transactions through the Distributor, for which the
Distributor may receive compensation.
The Distributor may, from time to time and at its own
expense, provide promotional incentives, in the form of
cash or other compensation, to certain financial
institutions whose representatives have sold or are
expected to sell significant amounts of the Portfolios'
shares.
PURCHASE AND
REDEMPTION OF SHARES
____________________________________________________________________________
Financial institutions may acquire Class A shares of the
Portfolios for their own account, or as a record owner on
behalf of fiduciary, agency or custody accounts, by placing
orders with the Transfer Agent. Institutions that use
certain SEI proprietary systems may place orders
electronically through those systems. Financial
institutions may impose an earlier cut-off time for receipt
of purchase orders directed through them to allow for
processing and transmittal of these orders to the Transfer
Agent for effectiveness on the same day. Financial
institutions which purchase shares for the accounts of
their customers may impose separate charges on these
customers for account services.
Shares of each Portfolio may be purchased or redeemed
on days on which the New York Stock Exchange is open for
business ("Business Days"). The minimum initial
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investment in a Portfolio is $100,000; however, the minimum
investment may be waived at the Distributor's discretion.
All subsequent purchases must be at least $1,000.
Shareholders who desire to purchase shares for cash
must place their orders with the Transfer Agent (or its
authorized agent) prior to 4:00 p.m. Eastern time on any
Business Day for the order to be accepted on that Business
Day. Generally, cash investments must be transmitted or
delivered in federal funds to the wire agent on the next
Business Day following the day the order is placed. The
Trust reserves the right to reject a purchase order when
the Distributor determines that it is not in the best
interest of the Trust or its shareholders to accept such
purchase order. In addition, because excessive trading
(including short-term "market timing" trading) can hurt a
Portfolio's performance, each Portfolio may refuse purchase
orders from any shareholder account if the accountholder
has been advised that previous purchase and redemption
transactions were considered excessive in number or amount.
Accounts under common control or ownership, including those
with the same taxpayer identification number and those
administered so as to redeem or purchase shares based upon
certain predetermined market indicators, will be considered
one account for this purpose.
Purchases will be made in full and fractional shares
of the Portfolios calculated to three decimal places. The
Trust will send shareholders a statement of shares owned
after each transaction. The purchase price of shares is the
net asset value next determined after a purchase order is
received and accepted by the Trust. The net asset value per
share of each Portfolio is determined by dividing the total
market value of a Portfolio's investment and other assets,
less any liabilities, by the total number of outstanding
shares of that Portfolio. Net asset value per share is
determined daily as of the close of business of the New
York Stock Exchange (currently, 4:00 p.m. Eastern time) on
any Business Day.
Information about the market value of each portfolio
security may be obtained by SEI Management from an
independent pricing service. Securities having maturities
of 60 days or less at the time of purchase will be valued
using the amortized cost method (described in the Statement
of Additional Information), which approximates the
securities' market value. The pricing service may use a
matrix system to determine valuations of equity and fixed
income securities. This system considers such factors as
security prices, yields, maturities, call features, ratings
and developments relating to specific securities in
arriving at valuations. The pricing service may also
provide market quotations. The procedures used by the
pricing service and its valuations are reviewed by the
officers of the Trust under the general supervision of the
Trustees. Portfolio securities 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 recently quoted bid price.
Shareholders who desire to redeem shares of the
Portfolios must place their redemption orders with the
Transfer Agent (or its authorized agent) prior to 4:00 p.m.
Eastern time on any Business Day. The redemption price is
the net asset value per share of the Portfolio next
determined after receipt by the Transfer Agent of the
redemption order.
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Payment on redemption will be made as promptly as possible
and, in any event, within seven days after the redemption
order is received.
The Trust intends to generally make redemptions in
cash. The Trust may, however, make redemptions in whole or
in part by a distribution in kind of readily marketable
securities in lieu of cash. Shareholders may incur
brokerage costs on the sale of any such securities so
received in payment of redemptions.
Purchase and redemption orders may be placed by
telephone. Neither the Trust nor the Transfer Agent will be
responsible for any loss, liability, cost or expense for
acting upon wire instructions or upon telephone
instructions that it reasonably believes to be genuine. The
Trust and the Transfer Agent will each employ reasonable
procedures to confirm that instructions communicated by
telephone are genuine, including requiring a form of
personal identification prior to acting upon instructions
received by telephone and recording telephone instructions.
If market conditions are extraordinarily active, or
other extraordinary circumstances exist, shareholders may
experience difficulties placing redemption orders by
telephone, and may wish to consider placing orders by other
means.
PERFORMANCE
______________________________________________________________________
From time to time, each Portfolio may advertise the yield
and total return. These figures will be based on historical
earnings and are not intended to indicate future
performance. No representation can be made concerning
actual yields or future returns. The yield of a Portfolio
refers to the income generated by a hypothetical
investment, net of any sales charge imposed in the case of
some of the Class D shares, in such Portfolio over a thirty
day period. This income is then "annualized" (I.E., the
income over thirty days is assumed to be generated over one
year and is shown as a percentage of the investment).
The total return of a Portfolio refers to the average
compounded rate of return on a hypothetical investment for
designated time periods, assuming that the entire
investment is redeemed at the end of each period and
assuming the reinvestment of all dividend and capital gain
distributions.
The performance of Class A shares will normally be
higher than for Class D shares because of the additional
distribution expenses, transfer agency expenses and sales
charge (when applicable) charged to Class D shares.
A Portfolio may periodically compare its performance
to that of: (i) other mutual funds tracked by mutual fund
rating services (such as Lipper Analytical), financial and
business publications and periodicals; (ii) broad groups of
comparable mutual funds; (iii) unmanaged indices which may
assume investment of dividends but generally do not reflect
deductions for administrative and management costs; or (iv)
other investment alternatives. A Portfolio may quote
Morningstar, Inc., a service that ranks mutual funds on the
basis of risk-adjusted performance. A Portfolio may use
long-term performance of these capital markets to
demonstrate general long-term risk versus reward scenarios
and
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could include the value of a hypothetical investment in any
of the capital markets. A Portfolio may also quote
financial and business publications and periodicals as they
relate to fund management, investment philosophy and
investment techniques.
A Portfolio may quote various measures of volatility
and benchmark correlation in advertising and may compare
these measures to those of other funds. Measures of
volatility attempt to compare historical share price
fluctuations or total returns to a benchmark while measures
of benchmark correlation indicate how valid a comparative
benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot
be calculated precisely.
TAXES
______________________________________________________________________________
The following summary of federal income tax consequences is
based on current tax laws and regulations, which may be
changed by legislative, judicial or administrative action.
No attempt has been made to present a detailed explanation
of the federal, state or local tax treatment of the
Portfolios or their shareholders. In addition, state and
local tax consequences of an investment in a Portfolio may
differ from the federal income tax consequences described
below. Accordingly, shareholders are urged to consult their
tax advisers regarding specific questions as to federal,
state and local taxes. Additional information concerning
taxes is set forth in the Statement of Additional
Information.
TAX STATUS OF THE PORTFOLIOS
Each Portfolio is treated as a separate entity for federal
income tax purposes and is not combined with the Trust's
other portfolios. The Portfolios intend to qualify for the
special tax treatment afforded regulated investment
companies ("RICs") under Subchapter M of the Code, so as to
be relieved of federal income tax on net investment income
and net capital gains (the excess of net long-term capital
gain over net short-term capital losses) distributed to
shareholders.
TAX STATUS OF DISTRIBUTIONS
Each Portfolio distributes substantially all of its net
investment income (including net short-term capital gains)
to shareholders. Dividends from a Portfolio's net
investment income are taxable to its shareholders as
ordinary income (whether received in cash or in additional
shares) and generally will not qualify for the corporate
dividends-received deduction unless derived from dividends
received by a Portfolio from domestic (U.S.) corporations.
Distributions of net capital gains are taxable to
shareholders as long-term capital gains regardless of how
long the shareholders have held shares. The Portfolios
provide annual reports to shareholders of the federal
income tax status of all distributions.
Dividends declared by a Portfolio in October,
November or December of any year and payable to
shareholders of record on a date in such a month will be
deemed to have been paid by the Portfolio and received by
the Shareholders on December 31 of the year declared if
paid by the Portfolio at any time during the following
January.
Each Portfolio intends to make sufficient
distributions to avoid liability for the federal excise tax
applicable to RICs.
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Investment income received by the Portfolios from
sources within foreign countries may be subject to foreign
income taxes withheld at the source. To the extent that a
Portfolio is liable for foreign income taxes so withheld,
the Portfolio intends to operate so as to meet the
requirements of the Code to pass through to the
shareholders credit for foreign income taxes paid. Although
the Portfolios intend to meet Code requirements to pass
through credit for such taxes, there can be no assurance
that the Portfolios will be able to do so.
Each sale, exchange or redemption of Portfolio shares
is a taxable transaction to the shareholder.
GENERAL INFORMATION
______________________________________________________________
THE TRUST
The Trust was organized as a Massachusetts business trust
under a Declaration of Trust dated June 30, 1988. The
Declaration of Trust permits the Trust to offer separate
series of shares and different classes of each portfolio.
All consideration received by the Trust for shares of any
class of any portfolio and all assets of such portfolio or
class belong to that portfolio or class, respectively, and
would be subject to the liabilities related thereto.
The Trust pays its expenses, including fees of its
service providers, audit and legal expenses, expenses of
preparing prospectuses, proxy solicitation materials and
reports to shareholders, costs of custodial services and
registering the shares under federal and state securities
laws, pricing, insurance expenses, litigation and other
extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses.
Certain shareholders in one or more of the Portfolios
may obtain asset allocation services from the Adviser and
other financial intermediaries with respect to their
investments in such Portfolios. If a sufficient amount of a
Portfolio's assets are subject to such asset allocation
services, the Portfolio may incur higher transaction costs
and a higher portfolio turnover rate than would otherwise
be anticipated as a result of redemptions and purchases of
Portfolio shares pursuant to such services. Further, to the
extent that the Adviser is providing asset allocation
services and providing investment advice to the Portfolios,
it may face conflicts of interest in fulfilling its
responsibilities because of the possible differences
between the interests of its asset allocation clients and
the interest of the Portfolios.
TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by
the Trustees under the laws of the Commonwealth of
Massachusetts. The Trustees have approved contracts under
which, as described above, certain companies provide
essential management services to the Trust.
VOTING RIGHTS
Each share held entitles the shareholder of record to one
vote. Shareholders of each Portfolio or class will vote
separately on matters pertaining solely to that Portfolio
or class, such as any distribution plan. As a Massachusetts
business trust, the Trust is not required to hold annual
meetings of shareholders, but approval will be sought for
certain changes in the operation of the Trust and for the
election of Trustees under certain circumstances. In
addition, a Trustee may be removed by the remaining
Trustees or by shareholders at a
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special meeting called upon written request of shareholders
owning at least 10% of the outstanding shares of the Trust.
In the event that such a meeting is requested, the Trust
will provide appropriate assistance and information to the
shareholders requesting the meeting.
REPORTING
The Trust issues an unaudited report semi-annually and
audited financial statements annually. The Trust furnishes
proxy statements and other reports to shareholders of
record.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Manager,
SEI Fund Management, Oaks, Pennsylvania 19456.
DIVIDENDS
Substantially all of the net investment income (exclusive
of capital gains) of each Portfolio is periodically
declared and paid as a dividend. Currently, net capital
gains (the excess of net long-term capital gain over net
short-term capital loss) realized, if any, will be
distributed at least annually.
Shareholders automatically receive all income
dividends and capital gain distributions in additional
shares at the net asset value next determined following the
record date, unless the shareholder has elected to take
such payment in cash.
Shareholders may change their election by providing written
notice to SEI Management at least 15 days prior to the
distribution.
Dividends and capital gains of each Portfolio are
paid on a per-share basis. The value of each share will be
reduced by the amount of any such payment. If shares are
purchased shortly before the record date for a dividend or
capital gains distributions, a shareholder will pay the
full price for the share and receive some portion of the
price back as a taxable dividend or distribution.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
Price Waterhouse LLP serves as the independent accountants
of the Trust.
CUSTODIAN AND WIRE AGENT
State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110, acts as Custodian for the
assets of the International Equity, Emerging Markets
Equity, International Fixed Income and Emerging Markets
Debt Portfolios (the "Custodian"). The Custodian holds
cash, securities and other assets of the Trust as required
by the 1940 Act. CoreStates Bank, N.A., Broad and Chestnut
Streets, P.O. Box 7618, Philadelphia, Pennsylvania 19101,
acts as wire agent of the Trust's assets.
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DESCRIPTION OF
PERMITTED INVESTMENTS
AND RISK FACTORS
____________________________________________________________________________
The following is a description of certain of the permitted
investment practices for the Portfolios, and the associated
risk factors:
AMERICAN DEPOSITARY RECEIPTS ("ADRS"),
CONTINENTAL DEPOSITARY RECEIPTS ("CDRS"),
EUROPEAN DEPOSITARY RECEIPTS ("EDRS") AND
GLOBAL DEPOSITARY RECEIPTS ("GDRS")
ADRs are securities, typically issued by a U.S. financial
institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a
foreign issuer and deposited with the depositary. EDRs,
which are sometimes referred to as Continental Depositary
Receipts ("CDRs"), are securities, typically issued by a
non-U.S. financial institution, that evidence ownership
interests in a security or a pool of securities issued by
either a U.S. or foreign issuer. GDRs are issued globally
and evidence a similar ownership arrangement. Generally,
ADRs are designed for trading in the U.S. securities
market, EDRs are designed for trading in European
Securities Markets and GDRs are designed for trading in
non-U.S. Securities Markets. ADRs, EDRs, CDRs and GDRs may
be available for investment through "sponsored" or
"unsponsored" facilities. A sponsored facility is
established jointly by the issuer of the security
underlying the receipt and a depositary, whereas an
unsponsored facility may be established by a depositary
without participation by the issuer of the receipt's
underlying security.
BRADY BONDS
Certain debt obligations, customarily referred to as "Brady
Bonds," are created through the exchange of existing
commercial bank loans to foreign entities for new
obligations in connection with debt restructuring under a
plan introduced by former U.S. Secretary of the Treasury,
Nicholas F. Brady (the "Brady Plan"). Brady Bonds have only
been issued since 1989, and, accordingly, do not have a
long payment history. In addition, they are issued by
governments that may have previously defaulted on the loans
being restricted by the Brady Bonds, so are subject to the
risk of default by the issuer. They may be fully or
partially collateralized or uncollateralized and issued in
various currencies (although most are U.S. dollar
denominated) and they are actively traded in the
over-the-counter secondary market. U.S. dollar-denominated,
collateralized Brady Bonds, which may be fixed rate par
bonds or floating rate discount bonds, are generally
collateralized in full as to principal due at maturity by
U.S. Treasury zero coupon obligations which have the same
maturity as the Brady Bonds. Certain interest payments on
these Brady Bonds may be collateralized by cash or
securities in an amount that, in the case of fixed rate
bonds, is typically equal to between 12 and 18 months of
rolling interest payments or, in the case of floating rate
bonds, initially is typically equal to between 12 and 18
months rolling interest payments based on the applicable
interest rate at that time and is adjusted at regular
intervals thereafter with the balance of interest accruals
in each case being uncollateralized. Payment of interest
and (except in the case of principal collateralized Brady
Bonds) principal on Brady Bonds with no or limited
collateral depends on the willingness and ability of the
foreign government to make
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payment. In the event of a default on collateralized Brady
Bonds for which obligations are accelerated, the collateral
for the payment of principal will not be distributed to
investors, nor will such obligations be sold and the
proceeds distributed. The collateral will be held by the
collateral agent to the scheduled maturity of the defaulted
Brady Bonds, which will continue to be outstanding, at
which time the face amount of the collateral will equal the
principal payments which would have then been due on the
Brady Bonds in the normal course.
CONVERTIBLE SECURITIES
Convertible securities are securities that are exchangeable
for a set number of another security at a prestated price.
Convertible securities typically have characteristics
similar to both fixed income and equity securities. Because
of the conversion feature, the market value of a
convertible security tends to move with the market value of
the underlying stock. The value of a convertible security
is also affected by prevailing interest rates, the credit
quality of the issuer, and any call provisions.
DERIVATIVES
Derivatives are securities that derive their value from
other securities, assets or indices. The following are
considered derivative securities: options on futures,
futures, options (E.G., puts and calls), swap agreements,
mortgage-backed securities (E.G., CMOs, REMICs, IOs and
POs), when-issued securities and forward commitments,
floating and variable rate securities, convertible
securities, "stripped" U.S. Treasury securities (E.G.,
Receipts and STRIPs), privately issued stripped securities
(E.G., TGRs, TRs and CATS). See elsewhere in this
"Description of Permitted Investments and Risk Factors" for
discussions of certain of these instruments.
DOLLAR ROLLS
"Dollar rolls" are transactions in which securities are
sold for delivery in the current month and the seller
simultaneously contracts to repurchase substantially
similar securities on a specified future date. The
difference between the sale price and the purchase price
(plus any interest earned on the cash proceeds of the sale)
is netted against the interest income foregone on the
securities sold to arrive at an implied borrowing rate.
Alternatively, the sale and purchase transactions can be
executed at the same price, with the Portfolio being paid a
fee as consideration for entering into the commitment to
purchase.
EUROBONDS
A Eurobond is a bond denominated in U.S. dollars or another
currency and sold to investors outside of the country whose
currency is used. Eurobonds may be issued by government or
corporate issuers, and are typically underwritten by banks
and brokerage firms from numerous countries. While
Eurobonds typically pay principal and interest in
Eurodollars, U.S. dollars held in banks outside of the
United States, they may pay principal and interest in other
currencies.
FORWARD FOREIGN CURRENCY CONTRACTS
A forward contract involves an obligation to purchase or
sell a specific currency amount at a future date, agreed
upon by the parties, at a price set at the time of the
contract. A Portfolio may also enter into a contract to
sell, for a fixed amount of U.S. dollars or other
appropriate currency, the amount of foreign currency
approximating the value of some or all of the Portfolio's
securities denominated in such foreign currency.
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At the maturity of a forward contract, the Portfolio
may either sell a portfolio security and make delivery of
the foreign currency, or it may retain the security and
terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the
same currency trader, obligating it to purchase, on the
same maturity date, the same amount of the foreign
currency. The Portfolio may realize a gain or loss from
currency transactions.
FUTURES AND OPTIONS ON FUTURES
Futures contracts provide for the future sale by one party
and purchase by another party of a specified amount of a
specific security at a specified future time and at a
specified price. An option on a futures contract gives the
purchaser the right, in exchange for a premium, to assume a
position in a futures contract at a specified exercise
price during the term of the option. A Portfolio may use
futures contracts and related options for bona fide hedging
purposes, to offset changes in the value of securities held
or expected to be acquired or be disposed of, to minimize
fluctuations in foreign currencies, or to gain exposure to
a particular market or instrument. A Portfolio will
minimize the risk that it will be unable to close out a
futures contract by only entering into futures contracts
which are traded on national futures exchanges.
An index futures contract is a bilateral agreement
pursuant to which two parties agree to take or make
delivery of an amount of cash equal to a specified dollar
amount times the difference between the index value at the
close of trading of the contract and the price at which the
futures contract is originally struck. No physical delivery
of the securities comprising the Index is made; generally
contracts are closed out prior to the expiration date of
the contract.
In order to avoid leveraging and related risks, when
a Portfolio purchases futures contracts, it will
collateralize its position by depositing an amount of cash
or liquid securities equal to the market value of the
futures positions held, less margin deposits, in a
segregated account with the Trust's custodian. Collateral
equal to the current market value of the futures position
will be marked to market on a daily basis.
A Portfolio may enter into futures contracts and
options on futures contracts traded on an exchange
regulated by the Commodities Futures Trading Commission
("CFTC"), as long as, to the extent that such transactions
are not for "bona fide hedging purposes," the aggregate
initial margin and premiums on such positions (excluding
the amount by which such options are in the money) do not
exceed 5% of a Portfolio's net assets.
There are risks associated with these activities,
including the following: (1) the success of a hedging
strategy may depend on an ability to predict movements in
the prices of individual securities, fluctuations in
markets and movements in interest rates; (2) there may be
an imperfect or no correlation between the changes in
market value of the securities held by the Portfolio and
the prices of futures and options on futures; (3) there may
not be a liquid secondary market for a futures contract or
option; (4) trading
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restrictions or limitations may be imposed by an exchange;
and (5) government regulations may restrict trading in
futures contracts and futures options.
HIGH YIELD FOREIGN SOVEREIGN DEBT SECURITIES
Investing in fixed and floating rate high yield foreign
sovereign debt securities will expose a Portfolio to the
direct or indirect consequences of political, social or
economic changes in the countries that issue the
securities. The ability and willingness of sovereign
obligors in developing and emerging market countries or the
governmental authorities that control repayment of their
external debt to pay principal and interest on such debt
when due may depend on general economic and political
conditions within the relevant country. Countries such as
those in which a Portfolio may invest have historically
experienced, and may continue to experience, high rates of
inflation, high interest rates, exchange rate or trade
difficulties and extreme poverty and unemployment. Many of
these countries are also characterized by political
uncertainty or instability. Additional factors which may
influence the ability or willingness to service debt
include, but are not limited to, a country's cash flow
situation, the availability of sufficient foreign exchange
on the date a payment is due, the relative size of its debt
service burden to the economy as a whole, and its
government's policy towards the International Monetary
Fund, the World Bank and other international agencies.
The ability of a foreign sovereign obligor to make
timely payments on its external debt obligations will also
be strongly influenced by the obligor's balance of
payments, including export performance, its access to
international credits and investments, fluctuations in
interest rates and the extent of its foreign reserves. A
country whose exports are concentrated in a few commodities
or whose economy depends on certain strategic imports could
be vulnerable to fluctuations in international prices of
these commodities or imports. To the extent that a country
receives payment for its exports in currencies other than
dollars, its ability to make debt payments denominated in
dollars could be adversely affected. If a foreign sovereign
obligor cannot generate sufficient earnings from foreign
trade to service its external debt, it may need to depend
on continuing loans and aid from foreign governments,
commercial banks and multilateral organizations, and
inflows of foreign investment. The commitment on the part
of these foreign governments, multilateral organizations
and others to make such disbursements may be conditioned on
the government's implementation of economic reforms and/or
economic performance and the timely service of its
obligations. Failure to implement such reforms, achieve
such levels of economic performance or repay principal or
interest when due may result in the cancellation of such
third parties' commitments to lend funds, which may further
impair the obligor's ability or willingness to timely
service its debts.
ILLIQUID SECURITIES
Illiquid securities are securities that cannot be disposed
of within seven business days at approximately the price at
which they are being carried on a Portfolio's books.
Illiquid securities include demand instruments with demand
notice periods exceeding seven days, securities for which
there is no active secondary market, and repurchase
agreements with
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maturities or durations over seven days in length. The
Portfolios may invest in securities that are neither listed
on a stock exchange nor traded over-the-counter, including
privately placed securities. Investing in such unlisted
emerging country equity securities, including investments
in new and early stage companies, may involve a high degree
of business and financial risk that can result in
substantial losses. As a result of the absence of a public
trading market for these securities, they may be less
liquid than publicly traded securities. Although these
securities may be resold in privately negotiated
transactions, the prices realized from these sales could be
less than those originally paid by the Portfolio, or less
than what may be considered the fair value of such
securities. Further, companies whose securities are not
publicly traded may not be subject to the disclosure and
other investor protection requirements which might be
applicable if their securities were publicly traded. If
such securities are required to be registered under the
securities laws of one or more jurisdictions before being
resold, the Portfolio may be required to bear the expenses
of registration.
In addition, the Emerging Markets Equity Portfolio
believes that carefully selected investments in joint
ventures, cooperatives, partnerships, private placements,
unlisted securities and other similar situations
(collectively, "special situations") could enhance the
Portfolio's capital appreciation potential. To the extent
these investments are deemed illiquid, the Emerging Markets
Equity Portfolio's investment in them will be consistent
with its 15% restriction on investment in illiquid
securities. Investments in special situations and certain
other instruments may be liquid, as determined by the
Portfolio's advisers based on criteria approved by the
Board of Trustees.
INVESTMENT COMPANIES
Because of restrictions on direct investment by U.S.
entities in certain countries, investment in other
investment companies may be the most practical or only
manner in which an international and global fund can invest
in the securities markets of those countries. A Portfolio
does not intend to invest in other investment companies
unless, in the judgment of its advisers, the potential
benefits of such investments exceed the associated costs
(which includes any investment advisory fees charged by the
investment companies) relative to the benefits and costs
associated with direct investments in the underlying
securities.
Investments in closed-end investment companies may
involve the payment of substantial premiums above the net
asset value of such issuer's portfolio securities and are
subject to limitations under the 1940 Act. A Portfolio also
may incur tax liability to the extent it invests in the
stock of a foreign issuer that constitutes a "passive
foreign investment company."
JUNK BONDS
Bonds rated below investment grade are often referred to as
"junk bonds." Such securities involve greater risk of
default or price declines than investment grade securities
due to changes in the issuer's creditworthiness and the
outlook for economic growth. The market for these
securities may be less active, causing market price
volatility and limited
28
<PAGE>
liquidity in the secondary market. This may limit a
Portfolio's ability to sell such securities at their market
value. In addition, the market for these securities may
also be adversely affected by legislative and regulatory
developments. Credit quality in the junk bond market can
change suddenly and unexpectedly, and even recently issued
credit ratings may not fully reflect the actual risks
imposed by a particular security.
LOAN PARTICIPATIONS AND ASSIGNMENTS
Loan participations are interests in loans to corporations
or governments which are administered by the lending bank
or agent for a syndicate of lending banks, and sold by the
lending bank, financial institution or syndicate member
("intermediary bank"). In a loan participation, the
borrower will be deemed to be the issuer of the
participation interest, except to the extent the Portfolio
derives its rights from the intermediary bank. Because the
intermediary bank does not guarantee a loan participation
in any way, a loan participation is subject to the credit
risks generally associated with the underlying borrower. In
the event of the bankruptcy or insolvency of the borrower,
a loan participation may be subject to certain defenses
that can be asserted by such borrower as a result of
improper conduct by the intermediary bank. In addition, in
the event the underlying borrower fails to pay principal
and interest when due, the Portfolio may be subject to
delays, expenses and risks that are greater than those that
would have been involved if the Portfolio had purchased a
direct obligation of such borrower. Under the terms of a
loan participation, the Portfolio may be regarded as a
creditor of the intermediary bank, (rather than of the
underlying borrower), so that the Portfolio may also be
subject to the risk that the intermediary bank may become
insolvent.
Loan assignments are investments in assignments of
all or a portion of certain loans from third parties. When
a Portfolio purchases assignments from lenders it will
acquire direct rights against the borrower on the loan.
Since assignments are arranged through private negotiations
between potential assignees and assignors, however, the
rights and obligations acquired by the Portfolio may differ
from, and be more limited than, those held by the assigning
lender. Loan participations and assignments may be
considered liquid, as determined by the Portfolios'
advisers based on criteria approved by the Board of
Trustees.
MONEY MARKET INSTRUMENTS
Money market securities are high-quality, dollar and non
dollar-denominated, short-term debt instruments. They
consist of: (i) bankers' acceptances, certificates of
deposits, notes and time deposits of highly-rated U.S.
banks and U.S. branches of foreign banks; (ii) U.S.
Treasury obligations and obligations of agencies and
instrumentalities of the U.S. Government; (iii)
high-quality commercial paper issued by U.S. and foreign
corporations; (iv) debt obligations with a maturity of one
year or less issued by corporations and governments that
issue high-quality commercial paper or similar securities;
and (v) repurchase agreements involving any of the
foregoing obligations entered into with highly-rated banks
and broker-dealers.
29
<PAGE>
OBLIGATIONS OF SUPRANATIONAL ENTITIES
Supranational entities are entities established through the
joint participation of several governments, including the
Asian Development Bank, the Inter-American Development
Bank, International Bank for Reconstruction and Development
(World Bank), African Development Bank, European Economic
Community, European Investment Bank and the Nordic
Investment Bank. The governmental members, or "stock
holders," usually make initial capital contributions to the
supranational entity and, in many cases, are committed to
make additional capital contributions if the supranational
entity is unable to repay its borrowings.
OPTIONS
A Portfolio may purchase and write put and call options on
indices or securities and enter into related closing
transactions. A put option on a security gives the
purchaser of the option the right to sell, and the writer
of the option the obligation to buy, the underlying
security at any time during the option period. A call
option on a security gives the purchaser of the option the
right to buy, and the writer of the option the obligation
to sell, the underlying security at any time during the
option period. The premium paid to the writer is the
consideration for undertaking the obligations under the
option contract.
Put and call options on indices are similar to
options on securities except that options on an index give
the holder the right to receive, upon exercise of the
option, an amount of cash if the closing level of the
underlying index is greater than (or less than, in the case
of puts) the exercise price of the option. This amount of
cash is equal to the difference between the closing price
of the index and the exercise price of the option,
expressed in dollars multiplied by a specified number.
Thus, unlike options on individual securities, all
settlements are in cash, and gain or loss depends on price
movements in the particular market represented by the index
generally, rather than the price movements in individual
securities.
A Portfolio may purchase and write put and call
options on foreign currencies (traded on U.S. and foreign
exchanges or over-the-counter markets), to manage its
exposure to exchange rates. Call options on foreign
currency written by a Portfolio will be "covered," which
means that the Portfolio will own an equal amount of the
underlying foreign currency. With respect to put options on
foreign currency written by a Portfolio, the Portfolio will
establish a segregated account with its custodian
consisting of cash or liquid securities in an amount equal
to the amount the Portfolio would be required to pay upon
exercise of the put.
All options written on indices or securities must be
covered. When a Portfolio writes an option on an index or
security, it will establish a segregated account containing
cash or liquid securities with its custodian in an amount
at least equal to the market value of the option and will
maintain the account while the option is open, or will
otherwise cover the transaction.
RISK FACTORS: Risks associated with options
transactions include: (1) the success of a hedging strategy
may depend on an ability to predict movements in the prices
of individual securities, fluctuations in markets and
movements in interest rates; (2) there
30
<PAGE>
may be an imperfect correlation between the movement in
prices of options and the securities underlying them; (3)
there may not be a liquid secondary market for options; and
(4) while a Portfolio will receive a premium when it writes
covered call options, it may not participate fully in a
rise in the market value of the underlying security.
PRIVATIZATIONS
Privatizations are foreign government programs for selling
all or part of the interests in government owned or
controlled enterprises. The ability of a U.S. entity to
participate in privatizations in certain foreign countries
may be limited by local law, or the terms on which a
Portfolio may be permitted to participate may be less
advantageous than those applicable for local investors.
There can be no assurance that foreign governments will
continue to sell their interests in companies currently
owned or controlled by them or that privatization programs
will be successful.
RECEIPTS
Receipts are sold as zero coupon securities, which means
that they are sold at a substantial discount and redeemed
at face value at their maturity date without interim cash
payments of interest or principal. This discount is
accreted over the life of the security, and such accretion
will constitute the income earned on the security for both
accounting and tax purposes. Because of these features,
such securities may be subject to greater interest rate
volatility than interest paying investments.
REPURCHASE AGREEMENTS
Repurchase agreements are agreements by which a Portfolio
obtains a security and simultaneously commits to return the
security to the seller at an agreed upon price (including
principal and interest) on an agreed upon date within a
number of days from the date of purchase. Repurchase
agreements are considered loans under the 1940 Act.
REVERSE REPURCHASE AGREEMENTS
Certain Portfolios may borrow funds for temporary purposes
by entering into reverse repurchase agreements. Pursuant to
such agreements, a Portfolio would sell portfolio
securities to financial institutions such as banks and
broker-dealers, and agree to repurchase them at a mutually
agreed-upon date and price. A Portfolio enters into reverse
repurchase agreements only to avoid otherwise selling
securities during unfavorable market conditions to meet
redemptions. At the time the Portfolio enters into a
reverse repurchase agreement, it places in a segregated
custodial account liquid assets such as U.S. Government
securities or other liquid securities having a value equal
to the repurchase price (including accrued interest), and
will subsequently monitor the account to ensure that such
equivalent value is maintained. Reverse repurchase
agreements involve the risk that the market value of the
securities sold by a Portfolio may decline below the price
at which it is obligated to repurchase the securities.
Reverse repurchase agreements are considered to be
borrowings by a Portfolio under the 1940 Act.
SECURITIES LENDING
In order to generate additional income, a Portfolio may
lend securities which it owns pursuant to agreements
requiring that the loan be continuously secured by
collateral consisting of cash or securities of the U.S.
Government or its agencies equal to at least 100% of the
market value of the loaned securities. A Portfolio
continues to receive interest
31
<PAGE>
on the loaned securities while simultaneously earning
interest on the investment of cash collateral. Collateral
is marked to market daily. There may be risks of delay in
recovery of the securities or even loss of rights in the
collateral should the borrower of the securities fail
financially or become insolvent.
SHORT SALES
A Portfolio may only sell securities short "against the
box." A short sale is "against the box" if at all times
during which the short position is open, the Portfolio owns
at least an equal amount of the securities or securities
convertible into, or exchangeable without further
consideration for, securities of the same issue as the
securities that are sold short.
STRUCTURED SECURITIES
The Emerging Markets Debt Portfolio may invest a portion of
its assets in entities organized and operated solely for
the purpose of restructuring the investment characteristics
of sovereign debt obligations of emerging market issuers.
This type of restructuring involves the deposit with, or
purchase by, an entity, such as a corporation or trust, of
specified instruments (such as commercial bank loans or
Brady Bonds) and the issuance by that entity of one or more
classes of securities ("Structured Securities") backed by,
or representing interests in, the underlying instruments.
The cash flow on the underlying instruments may be
apportioned among the newly issued Structured Securities to
create securities with different investment
characteristics, such as varying maturities, payment
priorities and interest rate provisions, and the extent of
the payments made with respect to Structured Securities is
dependent on the extent of the cash flow on the underlying
instruments. Because Structured Securities of the type in
which the Portfolio anticipates it will invest typically
involve no credit enhancement, their credit risk generally
will be equivalent to that of the underlying instruments.
The Portfolio is permitted to invest in a class of
Structured Securities that is either subordinated or
unsubordinated to the right of payment of another class.
Subordinated Structured Securities typically have higher
yields and present greater risks than unsubordinated
Structured Securities. Structured Securities are typically
sold in private placement transactions, and there currently
is no active trading market for Structured Securities.
Certain issuers of such structured securities may be deemed
to be "investment companies" as defined in the 1940 Act. As
a result, the Portfolio's investment in such securities may
be limited by certain investment restrictions contained in
the 1940 Act.
SWAPS, CAPS, FLOORS AND COLLARS
Interest rate swaps, mortgage swaps, currency swaps and
other types of swap agreements such as caps, floors and
collars are designed to permit the purchaser to preserve a
return or spread on a particular investment or portion of
its portfolio, and to protect against any increase in the
price of securities a Portfolio anticipates purchasing at a
later date.
Swap agreements will tend to shift a Portfolio's
investment exposure from one type of investment to another.
Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a
Portfolio's investment and their share price and yield.
32
<PAGE>
U.S. GOVERNMENT AGENCY SECURITIES
Obligations issued or guaranteed by agencies of the U.S.
Government, including, among others, the Federal Farm
Credit Bank, the Federal Housing Administration and the
Small Business Administration and obligations issued or
guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage
Corporation, the Federal Land Banks and the U.S. Postal
Service. Some of these securities are supported by the full
faith and credit of the U.S. Treasury (E.G., Government
National Mortgage Association Securities), and others are
supported by the right of the issuer to borrow from the
Treasury (E.G., Federal Farm Credit Bank Securities), while
still others are supported only by the credit of the
instrumentality (E.G., Fannie Mae Securities).
U.S. TREASURY OBLIGATIONS
U.S. Treasury obligations consist of bills, notes and bonds
issued by the U.S. Treasury, as well as separately traded
interest and principal component parts of such obligations,
known as Separately Traded Registered Interest and
Principal Securities ("STRIPS"), that are transferable
through the Federal book-entry system.
U.S. TREASURY RECEIPTS
U.S. Treasury receipts are interests in separately traded
interest and principal component parts of U.S. Treasury
obligations that are issued by banks or brokerage firms and
are created by depositing U.S. Treasury notes and
obligations into a special account at a custodian bank. The
custodian holds the interest and principal payments for the
benefit of the registered owners of the certificates of
receipts. The custodian arranges for the issuance of the
certificates or receipts evidencing ownership and maintains
the register.
VARIABLE AND FLOATING RATE INSTRUMENTS
Certain obligations may carry variable or floating rates of
interest and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates
which are not fixed, but which vary with changes in
specified market rates or indices. The interest rates on
these securities may be reset daily, weekly, quarterly or
at some other interval, and may have a floor or ceiling on
interest rate changes.
WARRANTS
Warrants are instruments giving holders the right, but not
the obligation, to buy equity or fixed-income securities of
a company at a given price during a specified period.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
When-issued or delayed delivery transactions involve the
purchase of an instrument with payment and delivery taking
place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the
purchase commitment. A Portfolio will maintain with its
Custodian a separate account with liquid securities or cash
in an amount at least equal to these commitments. The
interest rate realized on these securities is fixed as of
the purchase date, and no interest accrues to a Portfolio
before settlement.
ZERO COUPON, PAY IN-KIND AND DEFERRED PAYMENT SECURITIES
Zero coupon securities are securities that are sold at a
discount to par value and securities on which interest
payments are not made during the life of the security. Upon
maturity, the holder is entitled to receive the par value
of the security. While interest payments are not made on
such securities, holders of such securities are deemed to
have received
33
<PAGE>
"phantom income" annually. Because a Portfolio will
distribute its "phantom income" to shareholders, to the
extent that shareholders elect to receive dividends in cash
rather than reinvesting such dividends in additional
shares, a Portfolio will have fewer assets with which to
purchase income producing securities. Zero coupon,
pay-in-kind and deferred payment securities may be subject
to greater fluctuation in value and lesser liquidity in the
event of adverse market conditions than comparably rated
securities paying cash interest at regular interest payment
periods.
Additional information on other permitted investments can
be found in the Statement of Additional Information.
34
<PAGE>
TABLE OF CONTENTS
_________________________________________________________________
<TABLE>
<S> <C>
Annual Operating Expenses........................ 2
Financial Highlights............................. 3
The Trust........................................ 4
Investment Objectives and Policies............... 4
General Investment Policies and Risk Factors..... 8
Investment Limitations........................... 11
The Manager...................................... 12
The Advisers..................................... 13
The Sub-Advisers................................. 14
Distribution and Shareholder Servicing........... 17
Purchase and Redemption of Shares................ 18
Performance...................................... 20
Taxes............................................ 21
General Information.............................. 22
Description of Permitted Investments and Risk
Factors......................................... 24
</TABLE>
<PAGE>
PROSPECTUS
JUNE 30, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
Please read this Prospectus carefully before investing, and keep it on file for
future reference. It concisely sets forth information that can help you decide
if the Portfolio's investment goals match your own.
A Statement of Additional Information (SAI) dated June 30, 1997, has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request and without charge by writing the Distributor, SEI Investments
Distribution Co., Oaks, Pennsylvania 19456, or by calling 1-800-437-6016. The
Statement of Additional Information is incorporated by reference into this
Prospectus.
SEI International Trust (the "Trust") is an open-end management investment
company that offers shareholders a convenient means of investing their funds in
one or more professionally managed diversified and non-diversified portfolios of
securities. The International Equity Portfolio, an investment portfolio of the
Trust, offers two classes of shares, Class A shares and Class D shares. Class D
shares differ from Class A shares primarily in the imposition of sales charges
and the allocation of certain distribution expenses and transfer agent fees.
Class D shares are available through SEI Investments Distribution Co. (the
Trust's distributor) and through participating broker-dealers, financial
institutions and other organizations. This Prospectus relates to the Class D
shares of the International Equity Portfolio (the "Portfolio").
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THE TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
HOW TO READ THIS PROSPECTUS ____________________________________________________
This Prospectus gives you information that you should know about the Portfolio
before investing. Brief descriptions are also provided throughout the Prospectus
to better explain certain key points. To find these helpful guides, look for
this symbol.
FUND HIGHLIGHTS
___________________________________________________________________
The following summary provides basic information about the Class D shares of the
Trust's International Equity Portfolio. This summary is qualified in its
entirety by reference to the more detailed information provided elsewhere in
this Prospectus and in the Statement of Additional Information.
INVESTMENT OBJECTIVE AND POLICIES
Below is the investment objective and policies for the
Portfolio. For more information, see "Investment Objective
and Policies," "General Investment Policies" and
"Description of Permitted Investments and Risk Factors."
INTERNATIONAL EQUITY PORTFOLIO
The International Equity
Portfolio seeks to provide
long-term capital appreciation
by investing primarily in a
diversified portfolio of equity
securities of non-U.S. issuers.
UNDERSTANDING RISK
Shares of the Portfolio, like
shares of any mutual fund, will
fluctuate in value, and when you
sell your shares, they may be
worth more or less than what you
paid for them. The Portfolio may
invest in equity securities that
are affected by market and
economic factors, and in fixed
income securities that tend to
vary inversely with interest
rates and may be affected by
other market and economic
factors as well, which may cause
these securities to fluctuate in
value. Investing in the
securities of foreign companies
involves special risks and
considerations not typically
associated with investing in
U.S. companies. In addition,
there can be no assurance that
any Portfolio will achieve its
investment objective. See
"Investment Objectives and
Policies" and "Description of
Permitted Investments and Risk
Factors."
<TABLE>
<S> <C>
FUND HIGHLIGHTS................................... 2
TABLE OF
CONTENTS
PORTFOLIO EXPENSES................................ 4
FINANCIAL HIGHLIGHTS.............................. 5
YOUR ACCOUNT AND DOING BUSINESS WITH US........... 6
INVESTMENT OBJECTIVE AND POLICIES................. 9
GENERAL INVESTMENT POLICIES AND RISK FACTORS...... 10
INVESTMENT LIMITATIONS............................ 11
THE MANAGER AND SHAREHOLDER SERVICING AGENT....... 12
THE ADVISER....................................... 12
THE SUB-ADVISERS.................................. 13
DISTRIBUTION...................................... 15
PERFORMANCE....................................... 16
TAXES............................................. 17
ADDITIONAL INFORMATION ABOUT DOING BUSINESS WITH
US........................................... 18
GENERAL INFORMATION............................... 23
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK
FACTORS...................................... 25
</TABLE>
2
<PAGE>
MANAGEMENT PROFILE
SEI FINANCIAL MANAGEMENT
CORPORATION ("SFM") serves as
the investment adviser for the
International Equity Portfolio.
ACADIAN ASSET MANAGEMENT, INC.,
FARRELL WAKO GLOBAL INVESTMENT,
INC., LAZARD LONDON
INTERNATIONAL INVESTMENT
MANAGEMENT LIMITED, SELIGMAN
HENDERSON CO. and YAMAICHI
CAPITAL MANAGEMENT, INC. and
YAMAICHI CAPITAL MANAGEMENT
(SINGAPORE) LIMITED each serve
as an investment sub-adviser for
a portion of the assets of the
International Equity Portfolio.
SEI Fund Management serves as
the manager and shareholder servicing agent of the Trust.
DST Systems, Inc. acts as the transfer agent (the "Transfer
Agent") of the Class D shares of the Trust. SEI Investments
Distribution Co. acts as distributor ("Distributor") of the
Trust's shares. See "The Manager and Shareholder Servicing
Agent," "The Adviser," "The Sub-Advisers" and
INVESTMENT "Distribution."
PHILOSOPHY
BELIEVING THAT NO SINGLE INVESTMENT ADVISER CAN DELIVER OUTSTANDING PERFORMANCE
IN EVERY INVESTMENT CATEGORY, ONLY THOSE ADVISERS WHO HAVE DISTINGUISHED
THEMSELVES WITHIN THEIR AREAS OF SPECIALIZATION ARE SELECTED TO ADVISE OUR
MUTUAL FUNDS.
YOUR ACCOUNT AND DOING BUSINESS WITH US
You may open an account with just $1,000 and make
additional investments with as little as $100. Class D
shares of the Portfolio are offered at net asset value per
share plus a maximum sales charge at the time of purchase
of 5.00%. Shareholders who purchase higher amounts may
qualify for a reduced sales charge. Redemptions of the
Portfolio's shares are made at net asset value per share.
See "Your Account and Doing Business with Us" and
"Additional Information About Doing Business With Us."
DIVIDENDS
Substantially all of the net investment income (exclusive
of capital gains) of the Portfolio is periodically declared
and paid as a dividend. Any realized net capital gain is
distributed at least annually. Distributions are paid in
additional shares unless you elect to take the payment in
cash. See "Dividends."
INFORMATION/SERVICE CONTACTS
For more information about Class D shares call
1-800-437-6016.
3
<PAGE>
PORTFOLIO EXPENSES
_______________________________________________________________
The purpose of the following table is to help you understand the various costs
and expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in the Class D shares.
SHAREHOLDER TRANSACTION EXPENSES (AS A PERCENTAGE OF OFFERING PRICE)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
EQUITY PORTFOLIO
----------------
<S> <C>
Maximum Sales Charge Imposed on Purchases 5.00%
Maximum Sales Charge Imposed on Reinvested
Dividends None
Redemption Fees (1) None
</TABLE>
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Management/Advisory Fees (AFTER FEE WAIVER)
(2) .86%
12b-1 Fees (AFTER FEE WAIVER)(3) .25%
Other Expenses .32%
- ---------------------------------------------------------
Total Operating Expenses (AFTER FEE WAIVERS)
(4) 1.43%
- ---------------------------------------------------------
</TABLE>
(1) A CHARGE, CURRENTLY $10.00, IS IMPOSED ON WIRES OF REDEMPTION PROCEEDS OF
THE PORTFOLIO'S CLASS D SHARES.
(2) SEI FUND MANAGEMENT ("SEI MANAGEMENT") AND THE ADVISER HAVE WAIVED, ON A
VOLUNTARY BASIS, A PORTION OF THEIR FEE, AND MANAGEMENT/ADVISORY FEES SHOWN
REFLECT THESE WAIVERS. SEI MANAGEMENT AND THE ADVISER EACH RESERVE THE RIGHT
TO TERMINATE ITS WAIVER AT ANY TIME IN ITS SOLE DISCRETION. ABSENT SUCH FEE
WAIVER, MANAGEMENT/ADVISORY FEES FOR THE PORTFOLIO WOULD BE .96%.
MANAGEMENT/ADVISORY FEES HAVE BEEN RESTATED TO REFLECT CURRENT EXPENSES.
(3) THE 12B-1 FEES SHOWN REFLECT THE DISTRIBUTOR'S VOLUNTARY WAIVER OF A PORTION
OF ITS COMPENSATORY FEE. THE DISTRIBUTOR RESERVES THE RIGHT TO TERMINATE ITS
WAIVER AT ANY TIME IN ITS SOLE DISCRETION. THE MAXIMUM 12B-1 FEE PAYABLE BY
THE CLASS D SHARES OF THE PORTFOLIO IS .30%.
(4) ABSENT THE VOLUNTARY FEE WAIVERS DESCRIBED ABOVE, THE TOTAL OPERATING
EXPENSES WOULD BE 1.58% FOR THE INTERNATIONAL EQUITY PORTFOLIO. ADDITIONAL
INFORMATION MAY BE FOUND UNDER "THE ADVISER," "THE SUB-ADVISERS" AND "THE
MANAGER AND SHAREHOLDER SERVICING AGENT."
EXAMPLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YR. 3 YRS. 5 YRS. 10 YRS.
------- ------- ------- --------
<S> <C> <C> <C> <C>
An investor in the Portfolio would pay the
following expenses on a $1000 investment
assuming (1) imposition of the maximum sales
charge, (2) a 5% annual return and (3)
redemption at the end of each time period:
International Equity $ 64 $ 93 $ 124 $ 213
- -------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
THE PURPOSE OF THE EXPENSE TABLE AND EXAMPLE IS TO ASSIST THE INVESTOR IN
UNDERSTANDING THE VARIOUS COSTS AND EXPENSES THAT MAY BE DIRECTLY OR INDIRECTLY
BORNE BY INVESTORS IN CLASS D SHARES OF THE PORTFOLIO. THE PORTFOLIO ALSO OFFERS
CLASS A SHARES, WHICH ARE SUBJECT TO THE SAME EXPENSES, EXCEPT THAT THERE ARE NO
SALES CHARGES, DIFFERENT DISTRIBUTION COSTS AND NO TRANSFER AGENT COSTS.
ADDITIONAL INFORMATION MAY BE FOUND UNDER "THE MANAGER AND SHAREHOLDER SERVICING
AGENT," "THE ADVISER," "THE SUB-ADVISERS" AND "DISTRIBUTION."
THE RULES OF THE SECURITIES AND EXCHANGE COMMISSION REQUIRE THAT THE MAXIMUM
SALES CHARGE BE REFLECTED IN THE ABOVE TABLE. HOWEVER, CERTAIN INVESTORS MAY
QUALIFY FOR REDUCED SALES CHARGES. SEE "PURCHASE OF SHARES." LONG-TERM
SHAREHOLDERS MAY PAY MORE THAN THE ECONOMIC EQUIVALENT OF THE MAXIMUM FRONT-END
SALES CHARGES OTHERWISE PERMITTED BY THE CONDUCT RULES OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC.
4
<PAGE>
FINANCIAL HIGHLIGHTS
______________________________________________________________
The following information has been audited by Price Waterhouse LLP, the Trust's
independent accountants, as indicated in their report dated April 9, 1997 on the
Trust's financial statements as of February 28, 1997, incorporated into the
Trust's Statement of Additional Information. The Trust's financial statements
and additional performance information are set forth in the 1997 Annual Report
to Shareholders, which is available upon request and without charge by calling
1-800-437-6016. This table should be read in conjunction with the Trust's
financial statements and notes thereto.
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE PERIODS ENDED FEBRUARY 28,
<TABLE>
<CAPTION>
NET ASSET NET DISTRIBUTIONS NET
VALUE INVESTMENT NET REALIZED AND FROM NET DISTRIBUTIONS ASSETS
BEGINNING INCOME/ UNREALIZED INVESTMENT FROM RETAINED RETURN OF END OF TOTAL
OF PERIOD (LOSS) GAINS/(LOSSES) INCOME(2) CAPITAL GAINS CAPITAL PERIOD RETURN
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
- ------------------
INTERNATIONAL
EQUITY PORTFOLIO
- ------------------
CLASS D
1997 $ 9.93 $0.05 $ 0.47 $(0.05) $(0.82) -- $ 9.58 5.39%
1996 9.56 0.04 1.50 (0.18) (0.99) -- 9.93 16.77
1995 (1) 10.81 0.01 (0.67) -- (0.59) -- 9.56 (6.33)
<CAPTION>
RATIO OF
END OF EXPENSES TO (LOSS) TO NET ASSETS ASSETS PORTFOLIO AVERAGE
PERIOD AVERAGE NET AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION
(000) ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE+
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------
- ------------------
INTERNATIONAL
EQUITY PORTFOLIO
- ------------------
CLASS D
1997 $ 177 1.55% 0.71% 1.65% 0.61% 117% $0.0172
1996 199 1.65 0.58 1.90 0.33 102 n/a
1995 (1) 51 1.47 0.42 1.48 0.41 64 n/a
</TABLE>
(1) INTERNATIONAL EQUITY CLASS D SHARES WERE OFFERED BEGINNING MAY 1, 1994. ALL
RATIOS FOR THAT PERIOD HAVE BEEN ANNUALIZED.
(2) DISTRIBUTIONS FROM NET INVESTMENT INCOME INCLUDE DISTRIBUTIONS OF CERTAIN
FOREIGN CURRENCY GAINS AND LOSSES.
+ AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES
DURING THE PERIOD. PRESENTATION OF THE RATE IS REQUIRED FOR FISCAL YEARS
BEGINNING AFTER SEPTEMBER 1, 1995. GENERALLY, NON-U.S. COMMISSIONS ARE LOWER
THAN U.S. COMMISSIONS WHEN EXPRESSED AS CENTS PER SHARE, BUT HIGHER WHEN
EXPRESSED AS A PERCENTAGE OF TRANSACTIONS BECAUSE OF THE LOWER PER-SHARE
PRICES OF MANY NON-U.S. SECURITIES.
5
<PAGE>
YOUR ACCOUNT AND DOING BUSINESS WITH US ______________________________________
Class D shares of the Portfolio are sold on a continuous basis and may be
purchased directly from the Trust's Transfer Agent, DST Systems, Inc. Shares may
also be purchased through financial institutions, broker-dealers, or other
organizations ("Intermediaries") which have established a dealer agreement or
other arrangement with SEI Investments Distribution Co. For more information
about the following topics, see "Additional Information About Doing Business
with Us."
- --------------------------------------------------------------------------------
HOW TO BUY, SELL AND EXCHANGE SHARES THROUGH INTERMEDIARIES
Class D shares of the Portfolio may be purchased through
Intermediaries which provide various levels of shareholder
services to their customers. Contact your Intermediary for
information about the services
available to you and for
specific instructions on how to
buy, sell and exchange shares.
To allow for processing and
transmittal of orders to the
Transfer Agent (or its
authorized agent) on the same
day, Intermediaries may impose
earlier cut-off times for
receipt of purchase orders.
Certain Intermediaries may
charge customer account fees.
Information concerning
shareholder services and any
charges will be provided to the
WHAT IS AN customer by the Intermediary.
INTERMEDIARY?
ANY ENTITY, SUCH AS A BANK, BROKER-DEALER, OTHER FINANCIAL INSTITUTION,
ASSOCIATION OR ORGANIZATION THAT HAS ENTERED INTO AN AGREEMENT WITH THE
DISTRIBUTOR TO SELL CLASS D SHARES OF THE PORTFOLIO TO THEIR CUSTOMERS.
The shares you purchase through an Intermediary may
be held "of record" by that Intermediary. If you want to
transfer the registration of shares beneficially owned by
you, but held "of record" by an Intermediary, you should
call the Intermediary to request this change.
HOW TO BUY SHARES FROM THE TRANSFER AGENT
Account Application forms can be obtained by calling
1-800-437-6016.
OPENING AN ACCOUNT BY CHECK
You may buy Class D shares by mailing a completed
application and a check (or other negotiable bank
instrument or money order) to the Transfer Agent. All
purchases made by check should be in U.S. dollars and made
payable to "Class D shares (Portfolio Name)." Third party
checks, credit cards, credit card checks and cash will not
be accepted. When purchases are made by check, redemption
proceeds will not be forwarded until the investment being
redeemed has been in the account for 15 days. If you send a
check that does not clear, the purchase will be canceled
and you could be liable for any losses or fees incurred.
BY FED WIRE
To buy shares by Fed Wire, call toll-free at
1-800-437-6016.
AUTOMATIC INVESTMENT PLAN ("AIP")
You may systematically buy Class D shares through
deductions from your checking or savings accounts, provided
these accounts are maintained through banks which are part
of the Automated Clearing House ("ACH") system. You may
purchase shares on a fixed schedule (semi-monthly or
monthly) with amounts as low as $25, or as high as
$100,000.
6
<PAGE>
Upon notice, the amount you commit to the AIP may be
changed or canceled at any time. The AIP is subject to
account minimum initial purchase amounts and minimum
maintained balance requirements.
OTHER INFORMATION ABOUT BUYING SHARES SALES CHARGES
Your purchase is subject to a sales charge which varies
depending on the size of your purchase. The following table
shows the regular sales charges on Class D shares of the
Portfolio to a "single purchaser," together with the
reallowance paid to dealers and the agency commission paid
to brokers (collectively the "commission"):
INTERNATIONAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
SALES CHARGE AS REALLOWANCE AND
SALES CHARGE AS APPROPRIATE BROKERAGE COMMISSION
A PERCENTAGE OF PERCENTAGE OF NET AS PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
- ---------------------------------------------------------------------------------------
< $50,000 5.00% 5.26% 4.50%
$50,000 but < $100,000 4.50% 4.71% 4.00%
$100,000 but < $250,000 3.50% 3.63% 3.00%
$250,000 but < $500,000 2.50% 2.56% 2.00%
$500,000 but < $1,000,000 2.00% 2.04% 1.75%
$1,000,000 but < $2,000,000 1.00% 1.01% 1.00%
$2,000,000 but < $4,000,000 .50% .50% .50%
Over $4,000,000 none none none
- -----------------------------------------------------------------------------
</TABLE>
The commissions shown in the table above apply to
sales through Intermediaries. Under certain circumstances,
commissions up to the amount of the entire sales charge may
be re-allowed to certain Intermediaries, who might then be
deemed to be "underwriters" under the Securities Act of
1933.
RIGHT OF ACCUMULATION
A Right of Accumulation allows you, under certain
circumstances, to combine your current purchase with the
current market value of previously purchased shares of the
Portfolio and Class D shares of other portfolios in order
to obtain a reduced sales charge.
LETTER OF INTENT
A Letter of Intent allows you, under certain circumstances,
to aggregate anticipated purchases over a 13-month period
to obtain a reduced sales charge.
SALES CHARGE WAIVER
Certain shareholders may qualify for a sales charge waiver.
To determine whether or not you qualify for a sales charge
waiver see "Additional Information About Doing Business
with Us." Shareholders who qualify for a sales charge
waiver must notify the Transfer Agent before purchasing
shares.
7
<PAGE>
EXCHANGING SHARES_______________________________________________________________
WHEN CAN YOU EXCHANGE SHARES?
Once good payment for your shares has been received and
accepted (I.E., an account has been established), you may
exchange some or all of your shares for Class D shares of
SEI Tax Exempt Trust, SEI Liquid Asset Trust and SEI
Institutional Managed Trust ("SEI Funds"). Exchanges are
made at net asset value plus any applicable sales charge.
WHEN DO SALES CHARGES APPLY TO AN EXCHANGE?
Portfolios that are not money market portfolios currently
impose a sales charge on Class D shares. If you exchange
into one of these "non-money market" portfolios, you will
have to pay a sales charge on
any portion of your exchanged
Class D shares for which you
have not previously paid a sales
charge.
If you previously paid a
sales charge on your Class D
shares, no additional sales
charge will be assessed when you
exchange those Class D shares
for other Class D shares.
If you buy Class D shares
of a "non-money market" fund and
you receive a sales charge
waiver, you will be deemed to
have paid the sales charge for
purposes of this exchange
privilege. In calculating any
sales charge payable on your
exchange, the Trust will assume
that the first shares you
exchange are those on which you have already paid a sales
charge. Sales charge waivers may also be available under
certain circumstances described in the SEI Funds'
HOW DOES AN prospectuses.
EXCHANGE TAKE
PLACE?
WHEN MAKING AN EXCHANGE, YOU AUTHORIZE THE SALE OF YOUR SHARES OF THE PORTFOLIO
IN ORDER TO PURCHASE THE SHARES OF ANOTHER PORTFOLIO. IN OTHER WORDS, YOU ARE
EXECUTING A SELL ORDER AND THEN A BUY ORDER. THIS SALE OF YOUR SHARES IS A
TAXABLE EVENT WHICH COULD RESULT IN A TAXABLE GAIN OR LOSS.
The Trust reserves the right to change the terms and
conditions of the exchange privilege discussed herein, or
to terminate the exchange privilege, upon 60 days' notice.
The Trust also reserves the right to deny an exchange
request made within 60 days of the purchase of a non-money
market portfolio.
REQUESTING AN EXCHANGE OF SHARES
To request an exchange, you must provide proper
instructions in writing to the Transfer Agent. Telephone
exchanges will also be accepted if you previously elected
this option on your account application.
In the case of shares held "of record" by an
Intermediary but beneficially owned by you, you should
contact the Intermediary who will contact the Transfer
Agent and effect the exchange on your behalf.
HOW TO SELL SHARES THROUGH THE TRANSFER AGENT
To sell your shares, a written request for redemption in
good order must be received by the Transfer Agent. Valid
written redemption requests will be effective on receipt.
All shareholders of record must sign the redemption
request.
BY MAIL
For information about the proper form of redemption
requests, call 1-800-437-6016. You may also have the
proceeds mailed to an address of record or mailed (or sent
by ACH) to
8
<PAGE>
a commercial bank account previously designated on the
Account Application or specified by written instruction to
the Transfer Agent. There is no charge for having
redemption requests mailed to a designated bank account.
BY TELEPHONE
You may sell your shares by telephone if you previously
elected that option on the Account Application. You may
have the proceeds mailed to the address of record, wired or
sent by ACH to a commercial bank
account previously designated on
the Account Application. Under
most circumstances, payments
will be transmitted on the next
Business Day following receipt
of a valid telephone request for
redemption. Wire redemption
requests may be made by calling
the Transfer Agent at
1-800-437-6016, who will
subtract a wire redemption
charge (presently $10.00) from
the amount of the redemption.
SYSTEMATIC WITHDRAWAL PLAN ("SWP")
You may establish a systematic
withdrawal plan for an account
with a $10,000 minimum balance.
Under the plan, redemptions can
be automatically processed from accounts (monthly,
quarterly, semi-annually or annually) by check or by ACH
WHAT IS A with a minimum redemption amount of $50.
SIGNATURE
GUARANTEE?
A SIGNATURE GUARANTEE VERIFIES THE AUTHENTICITY OF YOUR SIGNATURE AND MAY BE
OBTAINED FROM ANY OF THE FOLLOWING: BANKS, BROKERS, DEALERS, CERTAIN CREDIT
UNIONS, SECURITIES EXCHANGE OR ASSOCIATION, CLEARING AGENCY OR SAVINGS
ASSOCIATION. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE GUARANTEE.
INVESTMENT OBJECTIVE
AND POLICIES
_______________________________________________________________________
INTERNATIONAL EQUITY PORTFOLIO
The International Equity
Portfolio seeks to provide
long-term capital appreciation
by investing primarily in a
diversified portfolio of equity
securities of non-U.S. issuers.
Under normal
circumstances, at least 65% of
the International Equity
Portfolio's assets will be
invested in equity securities of
non-U.S. issuers located in at
least three countries other than
the United States.
There can be no assurance
that the Portfolio will achieve
WHAT ARE its objective.
INVESTMENT
OBJECTIVES AND
POLICIES?
THE PORTFOLIO'S INVESTMENT OBJECTIVE IS A STATEMENT OF WHAT IT SEEKS TO ACHIEVE.
IT IS IMPORTANT TO MAKE SURE THAT THE INVESTMENT OBJECTIVE MATCHES YOUR OWN
FINANCIAL NEEDS AND CIRCUMSTANCES. THE INVESTMENT POLICIES SECTION SPELLS OUT
THE TYPES OF SECURITIES IN WHICH THE PORTFOLIO INVESTS.
9
<PAGE>
GENERAL INVESTMENT
POLICIES AND
RISK FACTORS
______________________________________________________________________
INTERNATIONAL EQUITY PORTFOLIO
Securities of non-U.S. issuers purchased by the Portfolio
will typically be listed on recognized foreign exchanges,
but also may be purchased in over-the-counter markets, on
U.S. registered exchanges, or in the form of sponsored or
unsponsored American Depositary Receipts ("ADRs") traded on
registered exchanges or NASDAQ, or sponsored or unsponsored
European Depositary Receipts ("EDRs"), Continental
Depositary Receipts ("CDRs") or Global Depositary Receipts
("GDRs"). The Portfolio expects its investments to
emphasize both large and intermediate capitalization
companies.
The International Equity Portfolio may enter into
forward foreign currency contracts as a hedge against
possible variations in foreign exchange rates. The
Portfolio may enter into forward foreign currency contracts
to hedge a specific security transaction or to hedge a
portfolio position. These contracts may be bought or sold
to protect the Portfolio, to some degree, against a
possible loss resulting from an adverse change in the
relationship between foreign currencies and the U.S.
dollar. The Portfolio may also invest in foreign currency
futures and in options on currencies. The Portfolio expects
to be fully invested in its primary investments described
above, but may invest up to 35% of its total assets in U.S.
or non-U.S. cash reserves; money market instruments; swaps;
options on securities and non-U.S. indices; futures
contracts, including stock index futures contracts; and
options on futures contracts.
The Portfolio is permitted to acquire floating and
variable rate securities, purchase securities on a
when-issued or delayed delivery basis, and invest up to 15%
of its total assets in illiquid securities. Although
permitted to do so, the Portfolio does not currently intend
to invest in securities issued by passive foreign
investment companies or to engage in securities lending.
For temporary defensive purposes, when the advisers
determine that market conditions warrant, the Portfolio may
invest up to 50% of its assets in the U.S. and non-U.S.
money market instruments described above and in other U.S.
and non-U.S. long- and short-term debt instruments which
are rated BBB or higher by S&P or Baa or higher by Moody's
at the time of purchase, or which are determined by the
advisers to be of comparable quality; maintain a portion of
its assets in cash; and invest in obligations of
supranational entities which are rated A or higher by S&P
or Moody's at the time of purchase or which are determined
by the advisers to be of comparable quality. Fixed income
securities rated BBB or Baa lack outstanding investment
characteristics, and have speculative characteristics as
well.
In addition, for temporary defensive purposes, when
the advisers determine that market conditions warrant, the
Portfolio may invest up to 100% of its assets in U.S.
dollar-denominated fixed income securities or debt
obligations and the following domestic and
10
<PAGE>
foreign money market instruments: government obligations,
certificates of deposit, bankers' acceptances, time
deposits, commercial paper, short-term corporate debt
issues and repurchase agreements, and may hold a portion of
their assets in cash for liquidity purposes.
For additional information regarding the permitted
investments of the Portfolio, see the "Description of
Permitted Investments and Risk Factors" in this Prospectus
and "Description of Permitted Investments" in the Statement
of Additional Information. For a description of the above
ratings, see the Statement of Additional Information.
INVESTMENT
LIMITATIONS
________________________________________________________________________
The investment objective and certain of the investment
limitations (including those listed below) are fundamental
policies of the Portfolio. Fundamental policies cannot be
changed with respect to the Trust or the Portfolio without
the consent of the holders of a majority of the Trust's or
the Portfolio's outstanding shares.
THE INTERNATIONAL EQUITY PORTFOLIO MAY NOT:
1. With respect to 75% of its total assets, (i) purchase
securities of any issuer (except securities issued or
guaranteed by the United States Government, its agencies
or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in the securities of
such issuer; or (ii) acquire more than 10% of the
outstanding voting securities of any one issuer.
2. Purchase any securities which would cause more than 25%
of its total assets to be invested in the securities of
one or more issuers conducting their principal business
activities in the same industry, provided that this
limitation does not apply to investments in securities
issued or guaranteed by the United States Government, its
agencies or instrumentalities.
3. Borrow money in an amount exceeding 33 1/3% of the value
of its total assets, provided that, for purposes of this
limitation, investment strategies which either obligate
the Portfolio to purchase securities or require the
Portfolio to segregate assets are not considered to be
borrowings. To the extent that its borrowings exceed 5%
of its assets, (i) all borrowings will be repaid before
making additional investments and any interest paid on
such borrowings will reduce income, and (ii) asset
coverage of at least 300% is required.
The foregoing percentage limitations (except the limitation
on borrowing) will apply at the time of the purchase of a
security. Additional fundamental and non-fundamental
investment limitations are set forth in the Statement of
Additional Information.
11
<PAGE>
THE MANAGER AND
SHAREHOLDER SERVICING
AGENT ___________________________________________________________________
SEI Fund Management ("SEI Management") provides the Trust
with overall management services, regulatory reporting, all
necessary office space, equipment, personnel, and
facilities, and acts as shareholder servicing agent.
For its management services, SEI Management is
entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .45% of the average daily net
assets of the International Equity Portfolio. SEI
Management has voluntarily agreed to waive all or a portion
of its fees and, if necessary, reimburse other operating
expenses in order to limit the total operating expenses of
the Portfolio. SEI Management reserves the right to
terminate this voluntary fee waivers and expense
reimbursement at any time in its sole discretion.
For the fiscal year ended February 28, 1997, the
International Equity Portfolio paid a management fee of
.45% of its average daily net assets.
The Trust and DST Systems, Inc., 1004 Baltimore
Street, Kansas City, Missouri, 64105 ("DST") have entered
into a separate transfer agent agreement with respect to
the Class D shares of the Portfolio. Under this agreement,
DST acts as the transfer agent (the "Transfer Agent") and
dividend disbursing agent for the Class D Shares of the
Trust.
THE ADVISER
_______________________________________________________________________
SEI FINANCIAL MANAGEMENT CORPORATION
SEI Financial Management Corporation ("SFM") is a
wholly-owned subsidiary of SEI Investments Company ("SEI"),
a financial services company. The principal business
address of SEI and SFM is Oaks, Pennsylvania 19456. SEI was
founded in 1968, and is a leading provider of investment
solutions to banks, institutional investors, investment
advisers and insurance companies. Affiliates of SFM have
provided consulting advice to institutional investors for
more than 20 years, including advice regarding selection
and evaluation of investment advisers. SFM currently serves
as manager or administrator to more than 43 investment
companies, including more than 325 portfolios, which
investment companies had more than $93.9 billion in assets
as of May 31, 1997.
In its role as the adviser to the Portfolio, SFM
operates as a "manager of managers." As adviser, SFM
oversees the investment advisory services provided to the
Portfolio and manages the cash portion of the Portfolio's
assets. Pursuant to separate sub-advisory agreements with
SFM, and under the supervision of SFM and the Board of
Trustees, the sub-advisers are responsible for the
day-to-day investment management of all or a discrete
portion of the assets of the Portfolio. The sub-advisers
are selected based primarily upon the research and
recommendations of SFM, which evaluates quantitatively and
qualitatively each sub-adviser's skills and investment
results in managing assets for specific asset classes,
investment styles and strategies. Subject to Board review,
SFM
12
<PAGE>
allocates and, when appropriate, reallocates the
Portfolio's assets among sub-advisers, monitors and
evaluates sub-adviser performance, and oversees sub-adviser
compliance with the Portfolio's investment objectives,
policies and restrictions. SFM HAS THE ULTIMATE
RESPONSIBILITY FOR THE INVESTMENT PERFORMANCE OF THE
PORTFOLIO DUE TO ITS RESPONSIBILITY TO OVERSEE SUB-ADVISERS
AND RECOMMEND THEIR HIRING, TERMINATION AND REPLACEMENT.
For these advisory services, SFM is entitled to a
fee, which is calculated daily and paid monthly, at an
annual rate of .505% of the International Equity
Portfolio's average daily net assets. SFM pays the
sub-advisers a fee out of its advisory fee, which fee is
based on a percentage of the average monthly market value
of the assets managed by each sub-adviser.
For the fiscal year ended
February 28, 1997, the
International Equity Portfolio
paid an advisory fee, after fee
waivers, of .41% of its average
daily net assets.
SFM has obtained an
exemptive order from the
Securities and Exchange
Commission (the "SEC") that
permits SFM, with the approval
of the Trust's Board of
Trustees, to retain sub-advisers
unaffiliated with SFM for the
Portfolio without submitting the
sub-advisory agreements to a
vote of the Portfolio's
shareholders. The exemptive
relief permits the disclosure of
only the aggregate amount
payable by SFM under all such
sub-advisory agreements. The
Portfolio will notify
shareholders in the event of any
addition or change in the
INVESTMENT identity of its sub-advisers.
ADVISER
A PORTFOLIO'S INVESTMENT ADVISER MANAGES THE INVESTMENT ACTIVITIES AND IS
RESPONSIBLE FOR THE PERFORMANCE OF THE PORTFOLIO. THE ADVISER CONDUCTS
INVESTMENT RESEARCH, EXECUTES INVESTMENT STRATEGIES BASED ON AN ASSESSMENT OF
ECONOMIC AND MARKET CONDITIONS, AND DETERMINES WHICH SECURITIES TO BUY, HOLD OR
SELL.
THE SUB-ADVISERS
_________________________________________________________________
ACADIAN ASSET MANAGEMENT, INC.
Acadian Asset Management, Inc. ("Acadian") serves as a
sub-adviser for a portion of the assets of the
International Equity Portfolio. Acadian, a wholly-owned
subsidiary of United Asset Management Corporation ("UAM"),
was founded in 1977 and manages approximately $4 billion in
assets invested globally as of March 31, 1997. Acadian's
business address is Two International Place, 26th floor,
Boston, Massachusetts 02110.
An investment committee has been responsible for
managing the Portfolio's assets allocated to Acadian since
the Portfolio's inception.
FARRELL WAKO GLOBAL INVESTMENT MANAGEMENT, INC.
Farrell Wako Global Investment Management, Inc. ("Farrell
Wako") serves as a sub-adviser for a portion of the assets
of the International Equity Portfolio. Farrell Wako, a
Delaware corporation and a wholly-owned subsidiary of Wako
Securities, was founded in 1991 and is a registered
investment advisor in the U.S. and Japan. Farrell Wako
currently manages
13
<PAGE>
over $325 million. The principal address of Farrell Wako is
780 Third Avenue, New York, New York 10017.
James L. Farrell, the chairman of Farrell Wako,
manages its portion of the assets of the International
Equity Portfolio. Mr. Farrell has 31 years of experience in
investment management and applied financial research and
was responsible for management of over $1 billion in equity
assets as Chairman of MPT Associates prior to his
association with Farrell Wako.
LAZARD LONDON INTERNATIONAL INVESTMENT MANAGEMENT LIMITED
Lazard London International Investment Management Limited
("Lazard") serves as a sub-adviser for a portion of the
assets of the International Equity Portfolio. Lazard is a
registered investment adviser with its principal business
address at 21 Moorfields, London, England EC2P 2HT. Lazard
was founded in 1980. Lazard is a wholly-owned subsidiary of
Lazard Asset Management Holdings Limited, which is a
holding company controlled by Lazard Freres & Co.,LLC, an
investment bank whose principal business address is 30
Rockefeller Plaza, New York, N.Y. 10020-2102. Lazard offers
international investment services to clients of Lazard
Asset Management Holdings Limited. Lazard and LBAM manage
domestic (UK) portfolios and international portfolios for
institutions and private clients, including insurance
funds, pension funds, charities and mutual funds. As of
March 31, 1997, Lazard and LBAM had approximately $5.6
billion in assets under management.
Mr. Dino Fuschillo, Director of Lazard, has primary
responsibility for the day-to-day management of the portion
of the Portfolio's assets managed by Lazard. Mr. Fuschillo,
a dual employee of Lazard and LBAM, joined LBAM in 1989,
and has specialized in European equity management ever
since.
SELIGMAN HENDERSON CO.
Seligman Henderson Co. serves as a sub-adviser for a
portion of the assets of the International Equity
Portfolio. Seligman Henderson Co. is a New York general
partnership and is structured as an equal partnership
between J.&W. Seligman & Co. Incorporated and Henderson
International Inc., a controlled affiliate of Henderson
plc. Seligman Henderson Co. was established in 1991 and
manages over $3.4 billion in global and international
equity portfolios for U.S. institutional and retail
clients. The principal address of Seligman Henderson Co. is
100 Park Avenue, New York, New York 10017.
Mr. William Garnett is primarily responsible for the
day-to-day management and investment decisions with respect
to the International Equity Portfolio's assets allocated to
Seligman Henderson Co. Mr. Garnett has more than 11 years'
experience in managing Japanese small cap equity
securities. Mr. Iain Clark, Seligman Henderson Co.'s chief
investment officer, has ultimate responsibility for
portfolio management. Mr. Clark has more than 25 years
experience, including 12 with Henderson plc.
14
<PAGE>
YAMAICHI CAPITAL MANAGEMENT, INC. AND YAMAICHI CAPITAL MANAGEMENT (SINGAPORE)
LIMITED
Yamaichi Capital Management, Inc. ("Yamaichi") and Yamaichi
Capital Management (Singapore) Limited ("YCMS") jointly
serve as sub-adviser for a portion of the assets of the
International Equity Portfolio. Yamaichi is a New York
Corporation established in 1981 and YCMS is a Singapore
corporation established in 1979, and each is a wholly-owned
subsidiary of Yamaichi International Capital Management
Co., Ltd. ("YICM"). Yamaichi, YCMS and YICM are controlled
by Yamaichi Securities Co., Ltd., which is located in
Tokyo, Japan. YCMS and its affiliates manage approximately
$24 billion worldwide. The principal address of Yamaichi is
2 World Trade Center, Suite 9828, New York, New York 10048.
The principal address of YCMS is 138 Robinson Road,
#13-01/05, Hong Leong Centre, Singapore 068906.
Mr. Marco Wong leads the management team for the
assets of the International Equity Portfolio allocated to
Yamaichi and YCMS. Mr. Wong has been with YCMS since 1986.
DISTRIBUTION
_______________________________________________________________________
SEI Investments Distribution Co. (the "Distributor"), a
wholly-owned subsidiary of SEI, serves as each Portfolio's
distributor pursuant to a distribution agreement (the
"Distribution Agreement") with the Trust. The Portfolio has
adopted a distribution plan (the "Class D Plan") pursuant
to Rule 12b-1 under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Portfolio has adopted a
shareholder servicing plan for its Class A shares (the
"Class A Service Plan").
The Class D Plan provides for payments to the
Distributor at an annual rate of .30% of the Portfolio's
average daily net assets attributable to Class D shares.
These payments are characterized as "compensation," and are
not directly tied to expenses incurred by the Distributor;
the payments the Distributor receives during any year may,
therefore, be higher or lower than its actual expenses.
These payments may be used to compensate the Distributor
for its services in connection with distribution assistance
or provision of shareholder services, and some or all of it
may be used to pay financial institutions and
intermediaries such as banks, savings and loan
associations, insurance companies, and investment
counselors, broker-dealers and the Distributor's affiliates
and subsidiaries for services or reimbursement of expenses
incurred in connection with distribution assistance or
provision of shareholder services. If the Distributor's
expenses are less than its fees under the Class D Plan, the
Trust will still pay the full fee and the Distributor will
realize a profit, but the Trust will not be obligated to
pay in excess of the full fee, even if the Distributor's
actual expenses are higher.
It is possible that a financial institution may offer
different classes of shares to its customers and thus
receive different compensation with respect to different
classes. These financial institutions may also charge
separate fees to their customers.
The Trust may execute brokerage or other agency
transactions through the Distributor, for which the
Distributor may receive the compensation.
15
<PAGE>
The Distributor may, from time to time and at its own
expense, provide promotional incentives, in the form of
cash or other compensation, to certain financial
institutions whose representatives have sold or are
expected to sell significant amounts of the Portfolio's
shares.
PERFORMANCE
______________________________________________________________________
From time to time, the Portfolio may advertise yield and
total return. These figures are based on historical
earnings and are not intended to indicate future
performance. No representation can be made concerning
actual yield or future returns. The yield of the Portfolio
refers to the income generated by a hypothetical
investment, net of any sales charge imposed in the case of
some Class D shares, in the Portfolio over a thirty day
period. This income is then "annualized" (i.e., the income
over thirty days is assumed to be generated over one year
and is shown as a percentage of the investment). The total
return of the Portfolio refers to the average compounded
rate of return on a hypothetical investment for designated
time periods (including, but not limited to, the period
from which the Portfolio commenced operations through the
specified date), assuming that the entire investment is
redeemed at the end of each period and assuming the
reinvestment of all dividend and capital gain
distributions.
The performance of the Class D shares of the
Portfolio will normally be lower than that of Class A
shares of the Portfolio because of the additional
distribution expenses, transfer agent expenses and sales
charges (when applicable) charged to Class D shares.
The Portfolio may periodically compare its
performance to that of: (i) other mutual funds tracked by
mutual fund rating services (such as Lipper Analytical),
financial and business publications and periodicals; (ii)
broad groups of comparable mutual funds; (iii) unmanaged
indices which may assume investment of dividends but
generally do not reflect deductions for administrative and
management costs; or (iv) other investment alternatives.
The Portfolio may quote Morningstar, Inc., a service that
ranks mutual funds on the basis of risk-adjusted
performance. A Portfolio may use long-term performance of
these capital markets to demonstrate general long-term risk
versus reward scenarios and could include the value of a
hypothetical investment in any of the capital markets. The
Portfolio may also quote financial and business
publications and periodicals as they relate to fund
management, investment philosophy and investment
techniques.
The Portfolio may quote various measures of
volatility and benchmark correlation in advertising and may
compare these measures to those of other funds. Measures of
volatility attempt to compare historical share price
fluctuations or total returns to a benchmark while measures
of benchmark correlation indicate how valid a comparative
benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot
be calculated precisely.
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<PAGE>
TAXES
______________________________________________________________________________
The following summary of federal income tax consequences is
based on current tax laws and regulations, which may be
changed by legislative, judicial, or administrative action.
No attempt has been made to present a detailed explanation
of the federal, state, or local tax treatment of the
Portfolios or its shareholders. In addition, state and
local tax consequences of an investment in the Portfolio
may differ from the federal income tax consequences
described below. Accordingly, shareholders are urged to
consult their tax advisers regarding specific questions as
to federal, state, and local taxes. Additional information
concerning taxes is set forth in the Statement of
Additional Information.
TAX STATUS
OF THE PORTFOLIO
The Portfolio is treated as a
separate entity for federal
income tax purposes and is not
combined with the Trust's other
portfolios. The Portfolio
intends to continue to qualify
for the special tax treatment
afforded regulated investment
companies ("RICs") under
Subchapter M of the Internal
Revenue Code of 1986, as amended
(the "Code"), so as to be
relieved of federal income tax
on net investment income and net capital gains (the excess
of net long-term capital gain over net short-term capital
TAXES losses) distributed to shareholders.
YOU MUST PAY TAXES ON THE PORTFOLIO'S EARNINGS WHETHER YOU TAKE YOUR PAYMENTS IN
CASH OR ADDITIONAL SHARES.
TAX STATUS
OF DISTRIBUTIONS
The Portfolio will distribute
substantially all of its net
investment income (including net
short-term capital gains) and
net capital gain to
shareholders. Dividends from the
Portfolio's net investment
income will be taxable to its
shareholders as ordinary income,
whether received in cash or in
additional shares, to the extent
of the Portfolio's earnings and
profits and generally do not
qualify for the corporate
dividends-received deduction
unless derived from dividends
received by the Portfolio from
domestic (U.S.) corporations.
Distributions of net capital
gains are taxable to shareholders as long-term capital
gains regardless of how long the shareholders have held
shares. The Portfolio will provide annual reports to
shareholders of the federal income tax status of all
distributions. The Portfolio intends to make sufficient
distributions to avoid liability for the federal excise tax
applicable to RICs. Dividends declared by the Portfolio in
October, November or December of any year and payable to
shareholders of record on a date in such a month will be
deemed to have been paid by the Portfolio and received by
the shareholders on December 31 of that year if paid by the
DISTRIBUTIONS Portfolio at any time during the following January.
THE PORTFOLIO DISTRIBUTES INCOME DIVIDENDS AND CAPITAL GAINS. INCOME DIVIDENDS
REPRESENT THE EARNINGS FROM THE PORTFOLIO'S INVESTMENTS; CAPITAL GAINS
DISTRIBUTIONS OCCUR WHEN INVESTMENTS IN THE PORTFOLIO ARE SOLD FOR MORE THAN THE
ORIGINAL PURCHASE PRICE.
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<PAGE>
Investment income received by the Portfolio from
sources within foreign countries may be subject to foreign
income taxes withheld at the source. To the extent that the
Portfolio is liable for foreign income taxes so withheld,
the Portfolio intends to operate so as to meet the
requirement of the Code to pass through to the shareholders
credit for foreign income taxes paid. Although the
Portfolio intends to meet Code requirements to pass through
credit for such taxes, there can be no assurance that the
Portfolio will be able to do so.
Each sale, exchange, or redemption of the Portfolio's
shares is a taxable transaction to the shareholder.
ADDITIONAL
INFORMATION ABOUT
DOING BUSINESS
WITH US
____________________________________________________________________________
BUSINESS DAYS
You may buy, sell or exchange
shares on days on which the New
York Stock Exchange is open for
business (a "Business Day"). All
purchase, exchange and
redemption requests received in
"good order" will be effective
as of the Business Day received
by the Transfer Agent (or its
authorized agent) as long as the
Transfer Agent (or its
authorized agent) receives the
order and, in the case of a
purchase request, payment,
before 4:00 p.m. Eastern time.
Otherwise the purchase will be
effective when payment is
received. Broker-dealers may
have separate arrangements with
Class D shares of the Portfolio.
If an exchange request is
for shares of a portfolio whose
net asset value is calculated as
of a time earlier than 4:00 p.m.
Eastern time, the exchange request will not be effective
until the next Business Day. Anyone who wishes to make an
exchange must have received a current prospectus of the
portfolio into which the exchange is being made before the
BUY, EXCHANGE AND exchange will be effected.
SELL REQUESTS ARE IN
"GOOD ORDER" WHEN:
- - THE ACCOUNT NUMBER AND PORTFOLIO NAME ARE SHOWN
- THE AMOUNT OF THE TRANSACTION IS SPECIFIED IN DOLLARS OR SHARES
- SIGNATURES OF ALL OWNERS APPEAR EXACTLY AS THEY ARE REGISTERED ON THE
ACCOUNT
- ANY REQUIRED SIGNATURE GUARANTEES (IF APPLICABLE) ARE INCLUDED
- OTHER SUPPORTING LEGAL DOCUMENTS (AS NECESSARY) ARE PRESENT
MINIMUM INVESTMENTS
The minimum initial investment in the Portfolio's Class D
shares is $1,000; however, the minimum investment may be
waived at the Distributor's discretion. All subsequent
purchases must be at least $100 ($25 for payroll deductions
authorized pursuant to preapproved payroll deduction
plans). The Trust reserves the right to reject a purchase
order when the Distributor determines that it is not in the
best interest of the Trust or its shareholders to accept
such order. In addition, because excessive trading
(including short-term "market timing" trading) can hurt the
Portfolio's performance, the Portfolio may
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<PAGE>
refuse purchase orders from any shareholder account if the
accountholder has been advised that previous purchase and
redemption transactions were considered excessive in number
or amount.
Accounts under common control or ownership, including
those with the same taxpayer identification number and
those administered so as to redeem or purchase shares based
upon certain predetermined market indicators, will be
considered one account for this purpose.
MAINTAINING A MINIMUM
ACCOUNT BALANCE
Due to the relatively high cost of handling small
investments, the Portfolio reserves the right to redeem, at
net asset value, the shares of any shareholder if, because
of redemptions of shares by or on behalf of the
shareholder, the account of such shareholder in the
Portfolio has a value of less than $1,000, the minimum
initial purchase amount. Accordingly, an investor
purchasing shares of the Portfolio in only the minimum
investment amount may be subject to such involuntary
redemption if he or she thereafter redeems any of these
shares. Before the Portfolio exercises its right to redeem
such shares and to send the proceeds to the shareholder,
the shareholder will be given notice that the value of the
shares in his or her account is less than the minimum
amount and will be allowed 60 days to make an additional
investment in the Portfolio in an amount that will increase
the value of the account to at least $1,000. See "Purchase
and Redemption of Shares" in the Statement of Additional
Information for examples of when the right of redemption
may be suspended.
At various times, the Portfolio may be requested to
redeem shares for which it has not yet received good
payment. In such circumstances, redemption proceeds will be
forwarded upon collection of payment for the shares;
collection of payment may take up to 15 days. The Portfolio
intends to pay cash for all shares redeemed, but under
abnormal conditions that make payment in cash unwise,
payment may be made wholly or partly in portfolio
securities with a market value equal to the redemption
price. In such cases, an investor may incur brokerage costs
in converting such securities to cash.
NET ASSET VALUE
An order to buy shares will be executed at a per share
price equal to the net asset value next determined after
the receipt of the purchase order by the Transfer Agent
plus any applicable sales charge (the "offering price"). No
certificates representing shares will be issued. An order
to sell shares will be executed at the net asset value per
share next determined after receipt and effectiveness of a
request for redemption in good order. Net asset value per
share is determined daily as of the close of business of
the New York Stock Exchange (currently, 4:00 p.m. Eastern
time) on any Business Day. Payment to shareholders for
shares redeemed will be made within 7 days after receipt by
the Transfer Agent of the redemption order.
HOW THE
NET ASSET VALUE
IS DETERMINED
The net asset value per share of the Portfolio is
determined by dividing the total market value of its
investments and other assets, less any liabilities, by the
total number of outstanding shares of the Portfolio. The
Portfolio may use a pricing service to obtain the
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<PAGE>
last sale price of each equity or fixed income security
held by the Portfolio. In addition, portfolio securities
are valued at the last quoted sales price for such
securities, or, if there is no such reported sales price on
the valuation date, at the most recent quoted bid price.
Unlisted securities for which market quotations are readily
available are valued at the most recent quoted bid price.
Net asset value per share is determined daily as of the
close of business of the New York Stock Exchange
(currently, 4:00 p.m. Eastern time) on each Business Day.
Purchases will be made in full and fractional shares of the
Portfolio calculated to three decimal places. Although the
methodology and procedures for determining net asset value
per share are identical for both classes of the Portfolio,
the net asset value per share of one class may differ from
that of another class because of the different distribution
and/or shareholder servicing fees charged to each class and
the incremental transfer agent fees charged to Class D
shares.
RIGHTS OF ACCUMULATION
In calculating the sales charge rates applicable to current
purchases of the Portfolio's shares, a "single purchaser"
(defined below) is entitled to combine current purchases
with the current market value of previously purchased
shares of the Portfolio and Class D shares of other
portfolios ("Eligible Portfolios") which are sold subject
to a comparable sales charge.
The term "single purchaser" refers to (i) an
individual, (ii) an individual and spouse purchasing shares
of a Portfolio for their own account or for trust or
custodial accounts of their minor children, or (iii) a
fiduciary purchasing for any one trust, estate or fiduciary
account, including employee benefit plans created under
Sections 401 or 457 of the Code, including related plans of
the same employer. Furthermore, under this provision,
purchases by a single purchaser shall include purchases by
an individual for his/her own account in combination with
(i) purchases of that individual and spouse for their joint
accounts or for trust and custodial accounts for their
minor children and (ii) purchases of that individual's
spouse for his/her own account. To be entitled to a reduced
sales charge based upon shares already owned, the investor
must ask the Transfer Agent for such reduction at the time
of purchase and provide the account number(s) of the
investor, the investor and spouse, and their children
(under age 21). The Portfolio may amend or terminate this
right of accumulation at any time as to subsequent
purchases.
LETTER OF INTENT
By submitting a Letter of Intent (the "Letter") to the
Transfer Agent, a single purchaser may purchase shares of
the Portfolio and the other Eligible Portfolios during a
13-month period at the reduced sales charge rates applying
to the aggregate amount of the intended purchases stated in
the Letter. The Letter may apply to purchases made up to 90
days before the date of the Letter. It is the shareholder's
responsibility to notify the Transfer Agent at the time the
Letter is submitted that there are prior purchases that may
apply.
Five percent (5%) of the total amount intended to be
purchased will be held in escrow by the Transfer Agent
until such purchase is completed within the 13-month
period. The 13-month period begins on the date of the
earliest purchase. If the intended
20
<PAGE>
investment is not completed, the Transfer Agent will
surrender an appropriate number of the escrowed shares for
redemption in order to realize the difference between the
sales charge on the shares purchased at the reduced rate
and the sales charge otherwise applicable to the total
shares purchased. Such purchasers may include the value of
all their shares of the Portfolio and of any of the other
Eligible Portfolios in the Trust towards the completion of
such Letter.
SALES CHARGE WAIVERS
No sales charge is imposed on shares of the Portfolio: (i)
issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Trust is a
party; (ii) sold to dealers or brokers that have a sales
agreement with the Distributor ("participating
broker-dealers"), for their own account or for retirement
plans for employees or sold to present employees of dealers
or brokers that certify to the Distributor at the time of
purchase that such purchase is for their own account; (iii)
sold to present employees of SEI or one of its affiliates,
or of any entity which is a current service provider to the
Trust; (iv) sold to tax-exempt organizations enumerated in
Section 501(c) of the Code or qualified employee benefit
plans created under Sections 401, 403(b)(7) or 457 of the
Code (but not IRAs or SEPs); (v) sold to fee-based clients
of banks, financial planners and investment advisers; (vi)
sold to clients of trust companies and bank trust
departments; (vii) sold to trustees and officers of the
Trust; (viii) purchased with proceeds from the recent
redemption of Class D shares of another Portfolio of the
Trust or another class of shares of a portfolio of the
Trust, SEI Tax Exempt Trust, SEI Institutional Managed
Trust, or SEI Liquid Asset Trust; (ix) purchased with the
proceeds from the recent redemption of shares of a mutual
fund with similar investment objectives and policies (other
than Class D shares of the Trust listed in (viii) above)
for which a front-end sales charge was paid (this offer
will be extended, to cover shares on which a deferred sales
charge was paid, if permitted under regulatory authorities'
interpretation of applicable law); (x) sold to participants
or members of certain affinity groups, such as trade
associations or membership organizations, which have
entered into arrangements with the Distributor; or (xi)
sold to persons participating in certain financial services
programs offered by the bank affiliates of First Security
Corporation.
An investor relying upon any of the categories of
waivers of the sales charge must qualify such waiver in
advance of the purchase with the Distributor or the
financial institution or intermediary through which shares
are purchased by the investor.
The waiver of the sales charge under circumstances
(viii) and (ix) above applies only if the following
conditions are met: the purchase must be made within 60
days of the redemption; the Transfer Agent must be notified
in writing by the investor, or his or her agent, at the
time a purchase is made; and a copy of the investor's
account statement showing such redemption must accompany
such notice. The waiver policy with respect to the purchase
of shares through the use of proceeds from a recent
redemption as described in clauses (viii) and (ix) above
will not be continued indefinitely and may be discontinued
at any time without notice. Investors should call the
Distributor at
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<PAGE>
1-800-437-6016 to confirm availability prior to initiating
the procedures described in clauses (viii) and (ix) above.
Members of affinity groups such as trade associations
or membership organizations which have entered into
arrangements relating to waivers of sales charges with the
Distributor should contact the Distributor at
1-800-437-6016 for more information.
The Distributor has also entered into arrangements
with certain affinity groups and broker dealers wherein
their members or clients are entitled to percentage-based
discounts from the otherwise applicable sales charge for
purchase of Class D shares. Currently, the percentage-based
discount is either 10% or 50%.
SIGNATURE GUARANTEES
The Transfer Agent may require that the signatures on the
written request be guaranteed. You should be able to obtain
a signature guarantee from a bank, broker, dealer, certain
credit unions, securities exchange or association, clearing
agency or savings association. Notaries public cannot
guarantee signatures. The signature guarantee requirement
will be waived if all of the following conditions apply:
(1) the redemption is for not more than $5,000 worth of
shares, (2) the redemption check is payable to the
shareholder(s) of record, and (3) the redemption check is
mailed to the shareholder(s) at his or her address of
record. The Trust and the Transfer Agent reserve the right
to amend these requirements without notice.
TELEPHONE/WIRE INSTRUCTIONS
Redemption orders may be placed by telephone. Neither the
Trust nor the Transfer Agent will be responsible for any
loss, liability, cost or expense for acting upon wire
instructions or upon telephone instructions that it
reasonably believes to be genuine. The Trust and the
Trust's Transfer Agent will each employ reasonable
procedures to confirm that instructions communicated by
telephone are genuine, including requiring a form of
personal identification prior to acting upon instructions
received by telephone and recording telephone instructions.
If market conditions are extraordinarily active, or other
extraordinary circumstances exist, and you experience
difficulties placing redemption orders by telephone, you
may wish to consider placing your order by other means.
SYSTEMATIC
WITHDRAWAL
PLAN ("SWP")
Please note that if withdrawals exceed income dividends,
your invested principal in the account will be depleted.
Thus, depending upon the frequency and amounts of the
withdrawal payments and/or any fluctuations in the net
asset value per share, your original investment could be
exhausted entirely. To participate in the SWP, you must
have your dividends automatically reinvested. You may
change or cancel the SWP at any time, upon written notice
to the Transfer Agent.
HOW TO
CLOSE YOUR ACCOUNT
An account may be closed by providing written notice to the
Transfer Agent. You may also close your account by
telephone if you have previously elected telephone options
on your account application.
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<PAGE>
GENERAL INFORMATION
______________________________________________________________
THE TRUST
The Trust was organized as a Massachusetts business trust
under a Declaration of Trust dated June 30, 1988. The
Declaration of Trust permits the Trust to offer separate
portfolios of shares and different classes of each
portfolio. Shareholders may purchase shares in the
International Equity Portfolio through two separate
classes: Class A and Class D, which provide for variations
in distribution, shareholder servicing and transfer agent
costs, voting rights, dividends, and the imposition of a
sales charge on Class D Shares. This Prospectus offers the
Class D shares of the Trust's International Equity
Portfolio. Additional information pertaining to the Trust
may be obtained by writing to SEI Fund Management, Oaks,
Pennsylvania 19456, or by calling 1-800-437-6016. All
consideration received by the Trust for shares of any
portfolio and all assets of such portfolio belong to that
portfolio and would be subject to liabilities related
thereto.
The Trust pays its expenses, including fees of its
service providers, audit and legal expenses, expenses of
preparing prospectuses, proxy solicitation materials and
reports to shareholders, costs of custodial services and
registering the shares under federal and state securities
laws, pricing, insurance expenses, including litigation and
other extraordinary expenses, brokerage costs, interest
charges, taxes and organization expenses.
Certain shareholders of the Portfolio may obtain
asset allocation services from the Adviser and other
financial intermediaries with respect to their investments
in the Portfolio. If a sufficient amount of the Portfolio's
assets are subject to such asset allocation services, the
Portfolio may incur higher transaction costs and a higher
portfolio turnover rate than would otherwise be anticipated
as a result of redemptions and purchases of Portfolio
shares pursuant to such services. Further, to the extent
that the Adviser is providing asset allocation services and
providing investment advice to the Portfolio, it may face
conflicts of interest in fulfilling its responsibilities
because of the possible differences between the interests
of its asset allocation clients and the interest of the
Portfolio.
TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by
the Trustees under the laws of the Commonwealth of
Massachusetts. The Trustees have approved contracts under
which, as described above, certain companies provide
essential management services to the Trust.
VOTING RIGHTS
Each share held entitles the shareholder of record to one
vote. Each portfolio of the Trust will vote separately on
matters relating solely to that portfolio. Shareholders of
each class will vote separately on matters pertaining to
its distribution plan. As a Massachusetts business trust,
the Trust is not required to hold annual meetings of
shareholders, but approval will be sought for certain
changes in the operation of the Trust and for the election
of Trustees under certain circumstances. In addition, a
Trustee may be removed by the remaining Trustees or by
shareholders at a special meeting called upon written
request of shareholders owning at least 10% of the
outstanding shares of the Trust. In the event that such a
meeting is requested, the Trust will provide appropriate
assistance and information to the shareholders requesting
the meeting.
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<PAGE>
REPORTING
The Trust issues an unaudited report semiannually and
audited financial statements annually. The Trust furnishes
proxy statements and other reports to shareholders of
record.
SHAREHOLDER INQUIRIES
Shareholder inquires should be directed to the SEI
International Portfolio, P.O. Box 419448, Kansas City,
Missouri 64141-6448.
DIVIDENDS
Substantially all of the net investment income (exclusive
of capital gains) of the Portfolio is periodically declared
and paid as a dividend. Currently, capital gains, if any,
are distributed at least annually.
Shareholders automatically receive all income
dividends and capital gain distributions in additional
shares at the net asset value next determined following the
record date, unless the shareholder has elected to take
such payment in cash. Shareholders may change their
election by providing written notice to SFM at least 15
days prior to the distribution.
Dividends and capital gains of the Portfolio are paid
on a per-share basis. The value of each share will be
reduced by the amount of any such payment. If shares are
purchased shortly before the record date for dividend or
capital gains distributions, a shareholder will pay the
full price for the shares and receive some portion of the
price back as a taxable dividend or distribution.
The dividends on Class D shares will normally be
lower than those on Class A shares of the Portfolio because
of the additional distribution and transfer agent expenses
charged to Class D shares.
COUNSEL AND INDEPENDENT
ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
Price Waterhouse LLP serves as the independent accountants
of the Trust.
CUSTODIAN AND WIRE AGENT
State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110, serves as Custodian for the
assets of International Equity Portfolio (the "Custodian").
The Custodian holds cash, securities and other assets of
the Trust as required by the 1940 Act. CoreStates Bank,
N.A., Broad and Chestnut Streets, P.O. Box 7618,
Philadelphia, Pennsylvania 19101, acts as wire agent of the
Trust's assets.
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<PAGE>
DESCRIPTION
OF PERMITTED
INVESTMENTS AND
RISK FACTORS
______________________________________________________________________
The following is a description of certain of the permitted
investment practices for the Portfolio, and the associated
risk factors:
AMERICAN DEPOSITARY
RECEIPTS ("ADRS"),
CONTINENTAL DEPOSITARY
RECEIPTS ("CDRS"),
EUROPEAN DEPOSITARY
RECEIPTS ("EDRS") AND
GLOBAL DEPOSITARY RECEIPTS
("GDRS")
ADRs are securities, typically issued by a U.S. financial
institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a
foreign issuer and deposited with the depositary. EDRs,
which are sometimes referred to as Continental Depositary
Receipts ("CDRs"), are securities, typically issued by a
non-U.S. financial institution, that evidence ownership
interests in a security or a pool of securities issued by
either a U.S. or foreign issuer. GDRs are issued globally
and evidence similar ownership management. Generally, ADRs
are designed for trading in the U.S. securities market,
EDRs are designed for trading in European securities
markets and GDRs are designed for trading in non-U.S.
securities markets. ADRs, EDRs, CDRs and GDRs may be
available for investment through "sponsored" or
"unsponsored" facilities. A sponsored facility is
established jointly by the issuer of the security
underlying the receipt and a depositary, whereas an
unsponsored facility may be established by a depositary
without participation by the issuer of the receipt's
underlying security.
CONVERTIBLE SECURITIES
Convertible securities are securities that are exchangeable
for a set number of another security at a prestated price.
Convertible securities typically have characteristics
similar to both fixed income and equity securities. Because
of the conversion feature, the market value of a
convertible security tends to move with the market value of
the underlying stock. The value of a convertible security
is also affected by prevailing interest rates, the credit
quality of the issuer, and any call provisions.
DERIVATIVES
Derivatives are securities that derive their value from
other securities assets, or indices. The following are
considered derivative securities: options on futures,
futures, options (e.g., puts and calls), swap agreements,
mortgage-backed securities (e.g., CMOs, REMICs, IOs and
POs), when-issued securities and forward commitments,
floating and variable rate securities, convertible
securities, "stripped" U.S. Treasury securities (e.g.,
Receipts and STRIPs), privately issued stripped securities
(e.g., TGRs, TRs and CATS). See elsewhere in this
"Description of Permitted Investments and Risk Factors" for
discussions of certain of these instruments.
EQUITY SECURITIES
Equity securities represent ownership interests in a
company or corporation and consist of common stock,
preferred stock and warrants and other rights to acquire
such instruments. Changes in the value of Portfolio
securities will not necessarily affect cash income derived
from these securities, but will affect a Portfolio's net
asset value.
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<PAGE>
FIXED INCOME SECURITIES
Fixed income securities are debt obligations issued by
governments, corporations, municipalities and other
borrowers. The market value of fixed income investments
will generally change in response to interest rate changes
and other factors. During periods of falling interest
rates, the values of outstanding fixed income securities
generally rise. Conversely, during periods of rising
interest rates, the values of such securities generally
decline. Moreover, while securities with longer maturities
tend to produce higher yields, the prices of longer
maturity securities are also subject to greater market
fluctuations as a result of changes in interest rates.
Changes by recognized agencies in the rating of any fixed
income security and in the ability of an issuer to make
payments of interest and principal will also affect the
value of these investments. Changes in the value of
portfolio securities will not affect cash income derived
from these securities, but will affect a Portfolio's net
asset value.
FORWARD FOREIGN CURRENCY CONTRACTS
A forward contract involves an obligation to purchase or
sell a specific currency amount at a future date, agreed
upon by the parties, at a price set at the time of the
contract. A Portfolio may also enter into a contract to
sell, for a fixed amount of U.S. dollars or other
appropriate currency, the amount of foreign currency
approximating the value of some or all of the Portfolio's
securities denominated in such foreign currency.
At the maturity of a forward contract, the Portfolio
may either sell a portfolio security and make delivery of
the foreign currency, or it may retain the security and
terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the
same currency trader, obligating it to purchase, on the
same maturity date, the same amount of the foreign
currency. The Portfolio may realize a gain or loss from
currency transactions.
FUTURES AND OPTIONS ON
FUTURES
Futures contracts provide for the future sale by one party
and purchase by another party of a specified amount of a
specific security at a specified future time and at a
specified price. An option on a futures contract gives the
purchaser the right, in exchange for a premium, to assume a
position in a futures contract at a specified exercise
price during the term of the option. A Portfolio may use
futures contracts and related options for bona fide hedging
purposes, to offset changes in the value of securities held
or expected to be acquired or be disposed of, to minimize
fluctuations in foreign currencies, or to gain exposure to
a particular market or instrument. A Portfolio will
minimize the risk that it will be unable to close out a
futures contract by only entering into futures contracts
which are traded on national futures exchanges. In
addition, a Portfolio will only sell covered futures
contracts and options on futures contracts.
An index futures contract is a bilateral agreement
pursuant to which two parties agree to take or make
delivery of an amount of cash equal to a specified dollar
amount times the difference between the index value at the
close of trading of the contract and the price at which the
futures contract is originally struck. No physical delivery
of the
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securities comprising the Index is made; generally
contracts are closed out prior to the expiration date of
the contract.
In order to avoid leveraging and related risks, when
a Portfolio purchases futures contracts, it will
collateralize its position by depositing an amount of cash
or liquid securities, equal to the market value of the
futures positions held, less margin deposits, in a
segregated account with the Trust's custodian. Collateral
equal to the current market value of the futures position
will be marked to market on a daily basis.
A Portfolio may enter into futures contracts and
options on futures contracts traded on an exchange
regulated by the Commodities Futures Trading Commission
("CFTC"), as long as, to the extent that such transactions
are not for "bona fide hedging purposes," the aggregate
initial margin and premiums on such positions (excluding
the amount by which such options are in the money) do not
exceed 5% of a Portfolio's net assets.
There are risks associated with these activities,
including the following: (1) the success of a hedging
strategy may depend on an ability to predict movements in
the prices of individual securities, fluctuations in
markets and movements in interest rates; (2) there may be
an imperfect or no correlation between the changes in
market value of the securities held by the Portfolio and
the prices of futures and options on futures; (3) there may
not be a liquid secondary market for a futures contract or
option; (4) trading restrictions or limitations may be
imposed by an exchange; and (5) government regulations may
restrict trading in futures contracts and futures options.
ILLIQUID SECURITIES
Illiquid securities are securities that cannot be disposed
of within seven business days at approximately the price at
which they are being carried on the Portfolio's books.
Illiquid securities include demand instruments with demand
notice periods exceeding seven days, securities for which
there is no active secondary market, and repurchase
agreements with maturities or durations over seven days in
length.
INVESTMENT COMPANIES
Because of restrictions on direct investment by U.S.
entities in certain countries, investment in other
investment companies may be the most practical or only
manner in which an international and global fund can invest
in the securities markets of those countries. A Portfolio
does not intend to invest in other investment companies
unless, in the judgment of its advisers, the potential
benefits of such investments exceed the associated costs
(which includes any investment advisory fees charged by the
investment companies) relative to the benefits and costs
associated with direct investments in the underlying
securities.
Investments in closed-end investment companies may
involve the payment of substantial premiums above the net
asset value of such issuer's portfolio securities, and are
subject to limitations under the 1940 Act. A Portfolio may
also incur tax liability to the extent it invests in the
stock of a foreign issuer that constitutes a "passive
foreign investment company."
27
<PAGE>
MONEY MARKET
INSTRUMENTS
Money market securities are high-quality, dollar and
non-dollar denominated, short-term debt instruments. They
consist of: (i) bankers' acceptances, certificates of
deposits, notes and time deposits of highly-rated U.S.
banks and U.S. branches of foreign banks; (ii) U.S.
Treasury obligations and obligations of agencies and
instrumentalities of the U.S. Government; (iii)
high-quality commercial paper issued by U.S. and foreign
corporations; (iv) debt obligations with a maturity of one
year or less issued by corporations and governments that
issue high-quality commercial paper or similar securities;
and (v) repurchase agreements involving any of the
foregoing obligations entered into with highly-rated banks
and broker-dealers.
OBLIGATIONS OF
SUPRANATIONAL ENTITIES
Supranational entities are entities established through the
joint participation of several governments, including the
Asian Development Bank, the Inter-American Development
Bank, International Bank for Reconstruction and Development
(World Bank), African Development Bank, European Economic
Community, European Investment Bank and the Nordic
Investment Bank. The governmental members, or "stock
holders," usually make initial capital contributions to the
supranational entity and, in many cases, are committed to
make additional capital contributions if the supranational
entity is unable to repay its borrowings.
OPTIONS
A Portfolio may purchase and write put and call options on
indices and enter into related closing transactions. A put
option on a security gives the purchaser of the option the
right to sell, and the writer of the option the obligation
to buy, the underlying security at any time during the
option period. A call option on a security gives the
purchaser of the option the right to buy, and the writer of
the option the obligation to sell, the underlying security
at any time during the option period. The premium paid to
the writer is the consideration for undertaking the
obligations under the option contract.
Put and call options on indices are similar to
options on securities except that options on an index give
the holder the right to receive, upon exercise of the
option, an amount of cash if the closing level of the
underlying index is greater than (or less than, in the case
of puts) the exercise price of the option. This amount of
cash is equal to the difference between the closing price
of the index and the exercise price of the option,
expressed in dollars multiplied by a specified number.
Thus, unlike options on individual securities, all
settlements are in cash, and gain or loss depends on price
movements in the particular market represented by the index
generally, rather than the price movements in individual
securities.
A Portfolio may purchase and write put and call
options on foreign currencies (traded on U.S. and foreign
exchanges or over-the-counter markets) to manage its
exposure to exchange rates. Call options on foreign
currency written by a Portfolio will be "covered," which
means that the Portfolio will own an equal amount of the
underlying foreign currency. With respect to put options on
foreign currency written by a Portfolio, the Portfolio will
establish a segregated account with its custodian
consisting of cash or
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<PAGE>
liquid securities in an amount equal to the amount the
Portfolio would be required to pay upon exercise of the
put.
All options written on indices or securities must be
covered. When a Portfolio writes an option on an index or
security, it will establish a segregated account containing
cash or liquid securities with its custodian in an amount
at least equal to the market value of the option and will
maintain the account while the option is open, or will
otherwise cover the transaction.
RISK FACTORS: Risks associated with options
transactions include: (1) the success of a hedging strategy
may depend on an ability to predict movements in the prices
of individual securities, fluctuations in markets and
movements in interest rates; (2) there may be an imperfect
correlation between the movement in prices of options and
the securities underlying them; (3) there may not be a
liquid secondary market for options; and (4) while a
Portfolio will receive a premium when it writes covered
call options, it may not participate fully in a rise in the
market value of the underlying security.
REPURCHASE AGREEMENTS
Repurchase agreements are agreements by which a Portfolio
obtains a security and simultaneously commits to return the
security to the seller at an agreed upon price (including
principal and interest) on an agreed upon date within a
number of days from the date of purchase. Repurchase
agreements are considered loans under the 1940 Act.
SECURITIES OF FOREIGN ISSUERS
There are certain risks connected with investing in foreign
securities. These include risks of adverse political and
economic developments (including possible governmental
seizure or nationalization of assets), the possible
imposition of exchange controls or other governmental
restrictions, less uniformity in accounting and reporting
requirements, the possibility that there will be less
information on such securities and their issuers available
to the public, the difficulty of obtaining or enforcing
court judgments abroad, restrictions on foreign investments
in other jurisdictions, difficulties in effecting
repatriation of capital invested abroad and difficulties in
transaction settlements and the effect of delay on
shareholder equity. Foreign securities may be subject to
foreign taxes, and may be less marketable than comparable
U.S. securities. The value of a Portfolio's investments
denominated in foreign currencies will depend on the
relative strengths of those currencies and the U.S.
dollars, and a Portfolio may be affected favorably or
unfavorably by changes in the exchange rates or exchange
control regulations between foreign currencies and the U.S.
dollar. Changes in foreign currency exchange rates also may
affect the value of dividends and interest earned, gains
and losses realized on the sale of securities and net
investment income and gains if any, to be distributed to
shareholders by a Portfolio. Furthermore, emerging market
countries may have less stable political environments than
more developed countries.
SWAPS, CAPS, FLOORS AND COLLARS
Interest rate swaps, mortgage swaps, currency swaps and
other types of swap agreements such as caps, floors and
collars are designed to permit the purchaser to preserve a
return
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<PAGE>
or spread on a particular investment or portion of its
portfolio, and to protect against any increase in the price
of securities a Portfolio anticipates purchasing at a later
date.
Swap agreements will tend to shift a Portfolio's
investment exposure from one type of investment to another.
Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a
Portfolio's investment and their share price and yield.
U.S. GOVERNMENT AGENCY SECURITIES
Obligations issued or guaranteed by agencies of the U.S.
Government, including, among others, the Federal Farm
Credit Bank, the Federal Housing Administration and the
Small Business Administration and obligations issued or
guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage
Corporation, the Federal Land Banks and the U.S. Postal
Service. Some of these securities are supported by the full
faith and credit of the U.S. Treasury (e.g., Government
National Mortgage Association Securities), and others are
supported by the right of the issuer to borrow from the
Treasury (e.g., Federal Farm Credit Bank Securities), while
still others are supported only by the credit of the
instrumentality (e.g., Fannie Mae Securities)
U.S. TREASURY OBLIGATIONS
U.S. Treasury obligations consist of bills, notes and bonds
issued by the U.S. Treasury, as well as separately traded
interest and principal component parts of such obligations,
known as Separately Traded Registered Interest and
Principal Securities ("STRIPS") that are transferable
through the Federal book-entry system.
VARIABLE AND FLOATING RATE INSTRUMENTS
Certain obligations may carry variable or floating rates of
interest and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates
which are not fixed, but which vary with changes in
specified market rates or indices. The interest rates on
these securities may be reset daily, weekly, quarterly or
at some other interval, and may have a floor or ceiling on
interest rate changes.
WARRANTS
Warrants are instruments giving holders the right, but not
the obligation, to buy equity or fixed income securities of
a company at a given price during a specified period.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
When-issued or delayed delivery transactions involve the
purchase of an instrument with payment and delivery taking
place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the
purchase commitment. A Portfolio will maintain with its
Custodian a separate account with liquid securities or cash
in an amount at least equal to these commitments. The
interest rate realized on these securities is fixed as of
the purchase date and, no interest accrues to a Portfolio
before settlement.
Additional information on other permitted investments can
be found in the Statement of Additional Information.
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<PAGE>
SEI INTERNATIONAL TRUST
Manager:
SEI Fund Management
Distributor:
SEI Investments Distribution Co.
Investment Advisers and Sub-Advisers:
SEI Financial Management Corporation
Acadian Asset Management, Inc.
Coronation Asset Management
(Proprietary) Limited
Farrell Wako Global Investment
Management, Inc.
Lazard London International Investment
Management Limited
Montgomery Asset Management, LLC
Parametric Portfolio Associates
Salomon Brothers Asset Management Inc
Seligman Henderson Co.
Strategic Fixed Income L.P.
Yamaichi Capital Management, Inc.
and Yamaichi Capital Management
(Singapore) Limited
This STATEMENT OF ADDITIONAL INFORMATION is not a Prospectus. It is intended
to provide additional information regarding the activities and operations of SEI
International Trust (the "Trust"), and should be read in conjunction with the
Trust's Prospectuses dated June 30, 1997. Prospectuses may be obtained without
charge by writing the Trust's distributor, SEI Investments Distribution Co.,
Oaks, Pennsylvania 19456, or by calling 1-800-342-5734.
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Trust............................................................................. S-2
Description of Permitted Investments.................................................. S-2
Description of Ratings................................................................ S-9
Investment Limitations................................................................ S-12
Non-Fundamental Policies.............................................................. S-14
The Manager........................................................................... S-14
The Advisers and Sub-Advisers......................................................... S-16
Distribution and Shareholder Servicing................................................ S-17
Trustees and Officers of the Trust.................................................... S-18
Performance........................................................................... S-20
Purchase and Redemption of Shares..................................................... S-22
Shareholder Services (Class D shares)................................................. S-23
Taxes................................................................................. S-24
Portfolio Transactions................................................................ S-26
Description of Shares................................................................. S-29
Limitation of Trustees' Liability..................................................... S-29
Voting................................................................................ S-29
Shareholder Liability................................................................. S-29
Control Persons and Principal Holders of Securities................................... S-30
Experts............................................................................... S-30
Financial Statements.................................................................. S-30
June 30, 1997
</TABLE>
<PAGE>
THE TRUST
SEI International Trust (the "Trust") is an open-end management investment
company established as a Massachusetts business trust pursuant to a Declaration
of Trust dated June 30, 1988, and which has diversified and non-diversified
portfolios. The Declaration of Trust permits the Trust to offer separate series
("portfolios") of units of beneficial interest ("shares") and separate classes
of portfolios. Except for differences between a Portfolio's Class A shares and
Class D shares pertaining to distribution and shareholder servicing plans,
voting rights, dividends and transfer agent expenses, each share of each
portfolio represents an equal proportionate interest in that portfolio with each
other share of that portfolio.
This Statement of Additional Information relates to the following
portfolios: International Equity, Emerging Markets Equity, International Fixed
Income and Emerging Markets Debt Portfolios (each a "Portfolio" and, together,
the "Portfolios"), and any different classes of the Portfolios.
DESCRIPTION OF PERMITTED INVESTMENTS
AMERICAN DEPOSITORY RECEIPTS ("ADRS")--Holders of an unsponsored depositary
receipt generally bear all the costs of the unsponsored facility. The depositary
of an unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited security or
to pass through to the holders of the receipts voting rights with respect to the
deposited securities.
ASSET-BACKED SECURITIES--Certain Portfolios may invest in securities backed
by automobile, credit-card or other types of receivables in securities backed by
other types of assets. Credit support for asset-backed securities may be based
on the underlying assets and/or provided by a third party through credit
enhancements. Credit enhancements techniques include letters of credit,
insurance bonds, limited guarantees (which are generally provided by the
issuer), senior-subordinated structures and overcollateralization.
Asset-backed securities are not issued or guaranteed by the United States
Government or its agencies or instrumentalities; however, the payment of
principal and interest on such obligations may be guaranteed up to certain
amounts for a certain period by a letter of credit issued by a financial
institution (such as a bank or insurance company) unaffiliated with the issuers
of such securities. The purchase of asset-backed securities raises risk
considerations peculiar to the financing of the instruments underlying such
securities. For example, there is a risk that another party could acquire an
interest in the obligations superior to that of the holders of the asset-backed
securities. There also is the possibility that recoveries on repossessed
securities entail prepayment risk, which may vary depending on the type of
asset, but is generally less than the prepayment risk associated with
mortgage-backed securities. In addition, credit card receivables are unsecured
obligations of the card holders.
The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be a limited secondary market for such
securities.
BANK OBLIGATIONS--Bank obligations of United States and foreign commercial
banks or savings and loan institutions which the Portfolios may buy include
certificates of deposit, time deposits and bankers' acceptances. A certificate
of deposit is an interest-bearing instrument with a specific maturity issued by
a bank or savings and loan institution in exchange for the deposit of funds that
normally can be traded in the secondary market prior to maturity. A time deposit
is an account containing a currency balance pledged to remain at a particular
bank for a specified period in return for payment of interest. A bankers'
acceptance is a bill of exchange guaranteed by a bank or trust company for
payment within one to six months. Bankers' acceptances are used to provide
manufacturers and exporters with capital to operate between the time of
manufacture or export and payment by the purchaser.
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BRADY BONDS--Based upon current market conditions, a Portfolio would not
intend to purchase Brady Bonds which, at the time of investment, are in default
as to payment. However, in light of the residual risk of Brady Bonds and, among
other factors, the history of default with respect to commercial bank loans by
public and private entities of countries issuing Brady Bonds, investments in
Brady Bonds are to be viewed as speculative. A substantial portion of the Brady
Bonds and other sovereign debt securities in which the Emerging Markets Debt
Portfolio invests are likely to be acquired at a discount, which involves
certain additional considerations.
Sovereign obligors in developing and emerging market countries are among the
world's largest debtors to commercial banks, other governments, international
financial organizations and other financial institutions. These obligors have in
the past experienced substantial difficulties in servicing their external debt
obligations, which led to defaults on certain obligations and the restructuring
of certain indebtedness. Restructuring arrangements have included, among other
things, reducing and rescheduling interest and principal payments by negotiating
new or amended credit agreements or converting outstanding principal and unpaid
interest to Brady Bonds, and obtaining new credit to finance interest payments.
Holders of certain foreign sovereign debt securities may be requested to
participate in the restructuring of such obligations and to extend further loans
to their issuers. There can be no assurance that the Brady Bonds and other
foreign sovereign debt securities in which the Portfolios may invest will not be
subject to similar restructuring arrangements or to requests for new credit
which may adversely affect a Portfolio's holdings. Furthermore, certain
participants in the secondary market for such debt may be directly involved in
negotiating the terms of these arrangements and may therefore have access to
information not available to other market participants.
CERTIFICATES OF DEPOSIT--A certificate of deposit is a negotiable,
interest-bearing instrument with a specific maturity. Certificates of deposit
are issued by banks and savings and loan institutions in exchange for the
deposit of funds, and normally can be traded in the secondary market prior to
maturity. Certificates of deposit have penalties for early withdrawal.
COMMERCIAL PAPER--Commercial paper which the Portfolios may purchase
includes variable amount master demand notes, which may or may not be backed by
bank letters of credit. These notes permit the investment of fluctuating amounts
at varying market rates of interest pursuant to direct arrangements between a
Portfolio, as lender, and the borrower. Such notes provide that the interest
rate on the amount outstanding varies on a daily, weekly or monthly basis
depending upon a stated short-term interest rate index. There is no secondary
market for the notes.
CONVERTIBLE SECURITIES--Convertible securities have characteristics similar
to both fixed income and equity securities. Because of the conversion feature,
the market value of convertible securities tends to move together with the
market value of the underlying stock. As a result, a Portfolio's selection of
convertible securities is based, to a great extent, on the potential for capital
appreciation that may exist in the underlying stock.
FORWARD FOREIGN CURRENCY CONTRACTS--Forward foreign currency contracts
involve an obligation to purchase or sell a specified currency at a future date
at a price set at the time of the contract. Forward currency contracts do not
eliminate fluctuations in the values of portfolio securities but rather allow a
Portfolio to establish a rate of exchange for a future point in time.
When entering into a contract for the purchase or sale of a security in a
foreign currency, a Portfolio may enter into a forward foreign currency contract
for the amount of the purchase or sale price to protect against variations,
between the date the security is purchased or sold and the date on which payment
is made or received, in the value of the foreign currency relative to the United
States dollar or other foreign currency.
Also, when an adviser anticipates that a particular foreign currency may
decline substantially relative to the United States dollar or other leading
currencies, in order to reduce risk, a Portfolio may enter into a
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forward contract to sell, for a fixed amount, the amount of foreign currency
approximating the value of its securities denominated in such foreign currency.
With respect to any such forward foreign currency contract, it will not
generally be possible to match precisely the amount covered by that contract and
the value of the securities involved due to changes in the values of such
securities resulting from market movements between the date the forward contract
is entered into and the date it matures. In addition, while forward currency
contracts may offer protection from losses resulting from declines in value of a
particular foreign currency, they also limit potential gains which might result
from increases in the value of such currency. A Portfolio will also incur costs
in connection with forward foreign currency contracts and conversions of foreign
currencies into United States dollars.
FUTURES AND OPTIONS OF FUTURES--A Portfolio may buy and sell futures
contracts and related options to manage its exposure to changing interest rates
and securities prices. Some strategies reduce a Portfolio's exposure to price
fluctuations, while others tend to increase its market exposure. Futures and
options on futures can be volatile instruments and involve certain risks that
could negatively impact a Portfolio's return. No price is paid upon entering
into futures contracts. Instead, a Portfolio would be required to deposit an
amount of cash or U.S. Treasury securities known as "initial margin." Subsequent
payments, called "variation margin," to and from the broker, would be made on a
daily basis as the value of the futures position varies (a process known as
"market to market"). The margin is in the nature of a performance bond or
good-faith deposit on a futures contract.
INVESTMENT COMPANIES--As a shareholder in an investment company, a Portfolio
would bear its ratable share of that investment company's expenses, including
its advisory and administration fees. The Portfolio continues to pay its own
management fees and other expenses with respect to their investments in shares
of closed-end investment companies.
LOWER RATED SECURITIES--Certain Portfolios may invest in lower-rated bonds
commonly referred to as "junk bonds" or high-yield/high-risk securities. Lower
rated securities are defined as securities rated below the fourth highest rating
category by a nationally recognized statistical rating organization ("NRSRO").
Such obligations are speculative and may be in default. There may be no bottom
limit on the ratings of high-yield securities that may be purchased or held by a
Portfolio. In addition, a Portfolio may invest in unrated securities subject to
the restrictions stated in the Prospectus.
GROWTH OF HIGH-YIELD, HIGH-RISK BOND MARKET. The widespread expansion of
government, consumer and corporate debt within the U.S. economy has made the
corporate sector more vulnerable to economic downturns or increased interest
rates. Further, an economic downturn could severly disrupt the market for lower
rated bonds and adversely affect the value of outstanding bonds and the ability
of the issuers to repay principal and interest. The market for lower-rated
securities may be less active, causing market price volatility and limited
liquidity in the secondary market. This may limit the Portfolios' ability to
sell such securities at their market value. In addition, the market for these
securities may be adversely affected by legislative and regulatory developments.
Credit quality in the junk bond market can change suddenly and unexpectedly, and
even recently issued credit ratings may not fully reflect the actual risks
imposed by a particular security.
SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES. Lower rated bonds are
very sensitive to adverse economic changes and corporate developments. During an
economic down turn or substantial period of rising interest rates, highly
leveraged issuers may experience financial stress that would aversely affect
their ability to service their principal and interest payment obligations, to
meet projected business goals, and to obtain additional financing. If the issuer
of a bond defaulted on its obligations to pay interest or principal or entered
into bankruptcy proceedings, the Portfolio may incur losses or expenses in
seeking recovery of amounts owed to it. In addition, periods of economic
uncertainty and change can be expected to result in increased volatility of
market prices of high-yield, high-risk bonds and the Portfolio's net asset
value.
S-4
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PAYMENT EXPECTATIONS. High-yield, high-risk bonds may contain redemption or
call provisions. If an issuer exercised these provisions in a declining interest
rate market, the Portfolio would have to replace the security with a lower
yielding security, resulting in a decreased return for investors. Conversely, a
high-yield, high-risk bond's value will decrease in a rising interest rate
market, as will the value of the Portfolio's assets. If the Portfolio
experiences significant unexpected net redemptions, this may force it to sell
high-yield, high-risk bonds without regard to their investment merits, thereby
decreasing the asset base upon which expenses can be spread and possibly
reducing the Portfolio's rate of return.
LIQUIDITY AND VALUATION. There may be little trading in the secondary
market for particular bonds, which may affect adversely the Portfolio's ability
to value accurately or dispose of such bonds. Adverse publicity and investor
perception, whether or not based on fundamental analysis, may decrease the
values and liquidity of high-yield, high-risk bonds, especially in a thin
market.
LEGISLATION. Federal laws require the divestiture by federally insured
savings and loan associations of their investments in lower rated bonds and
limit the deductibility of interest by certain corporate issuers of high yield
bonds. These laws could adversely affect the Portfolio's net asset value and
investment practices, the secondary market for high-yield securities, the
financial condition of issuers of these securities and the value of outstanding
high-yield securities.
TAXES. The Portfolio may purchase debt securities (such as zero-coupon or
pay-in-kind securities) that contain original issue discount. Original issue
discount that accrues in a taxable year is treated as earned by a Portfolio and
therefore is subject to the distribution requirements of the tax code even
though the Portfolio has not received any interest payments on such obligations
during that period. Because the original issue discount earned by the Portfolio
in a taxable year may not be represented by cash income, the Portfolio may have
to dispose of other securities and use the proceeds to make distributions to
shareholders.
MORTGAGE-BACKED SECURITIES--Mortgage-backed securities in which a Portfolio
may invest represent pools of mortgage loans assembled for sale to investors by
various governmental agencies such as the Government National Mortgage
Association ("GNMA") and government-related organizations such as Fannie Mae and
the Federal Home Loan Mortgage Corporation ("FHLMC"), as well as by non-
governmental issuers such as commercial banks, savings and loan institutions,
mortgage bankers, and private mortgage insurance companies. Although certain
mortgage-backed securities are guaranteed by a third-party or otherwise
similarly secured, the market value of the security, which may fluctuate, is not
so secured. If a Portfolio purchases a mortgage-backed security at a premium,
that portion may be lost if there is a decline in the market value of the
security whether resulting from changes in interest rates or prepayments in the
underlying mortgage collateral. As with other interest-bearing securities, the
prices of such securities are inversely affected by changes in interest rates.
However, though the value of a mortgage-backed security may decline when
interest rates rise, the converse is not necessarily true since in periods of
declining interest rates the mortgages underlying the securities are prone to
prepayment. When the mortgage-backed securities held by a Portfolio are prepaid,
the Portfolio must reinvest the proceeds in securities the yield of which
reflects prevailing interest rates, which may be lower than the prepaid
security. For this and other reasons, a mortgage-backed security's stated
maturity may be shortened by unscheduled prepayments of the underlying mortgages
and, therefore, it is not possible to predict accurately the security's return
to a Portfolio. In addition, regular payments received in respect to
mortgage-backed securities include both interest and principal. No assurance can
be given as to the return a Portfolio will receive when these amounts are
reinvested.
A Portfolio may also invest in mortgage-backed securities that are
collateralized mortgage obligations structured on pools of mortgage pass-through
certificates or mortgage loans. For purposes of determining the average maturity
of a mortgage-backed security in its investment portfolio, a Portfolio will
utilize the expected average life of the security, as estimated in good faith by
the Portfolio's advisers. Unlike most single family residential mortgages,
commercial real estate property loans often contain provisions which
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substantially reduce the likelihood that such securities will be prepaid. The
provisions generally impose significant prepayment penalties on loans and, in
some cases there may be prohibitions on principal prepayments for several years
following origination.
OPTIONS--A Portfolio may purchase put and call options on securities to
protect against a decline in the market value of the securities in its portfolio
or to anticipate an increase in the market value of securities that the
Portfolio may seek to purchase in the future. A Portfolio purchasing put and
call options pays a premium therefor. If price movements in the underlying
securities are such that exercise of the options would not be profitable for the
Portfolio, loss of the premium paid may be offset by an increase in the value of
the Portfolio's securities or by a decrease in the cost of acquisition of
securities by the Portfolio.
A Portfolio may write call options as a means of increasing the yield on its
portfolio and as a means of providing limited protection against decreases in
its market value. A Portfolio will write only "covered" call options. When a
Portfolio sells an option, if the underlying securities do not increase or
decrease to a price level that would make the exercise of the option profitable
to the holder thereof, the option generally will expire without being exercised
and the Portfolio will realize as profit the premium received for such option.
When a call option of which a Portfolio is the writer is exercised, the
Portfolio will be required to sell the underlying securities to the option
holder at the strike price, and will not participate in any increase in the
price of such securities above the strike price. When a put option of which a
Portfolio is the writer is exercised, the Portfolio will be required to purchase
the underlying securities at the strike price, which may be in excess of the
market value of such securities.
The initial purchase (sale) of an option contract is an "opening
transaction." In order to close out an option position, a Portfolio may enter
into a "closing transaction," which is simply the sale (purchase) of an option
contract on the same security with the same exercise price and expiration date
as the option contract originally opened. The ability of a Portfolio to enter
into closing transactions depends upon the existence of a liquid secondary
market for such transactions.
A Portfolio may purchase and write options on an exchange or
over-the-counter. Over-the-counter options ("OTC options") differ from
exchange-traded options in several respects. They are transacted directly with
dealers and not with a clearing corporation, and therefore entail the risk of
non-performance by the dealer. OTC options are available for a greater variety
of securities and for a wider range of expiration dates and exercise prices than
are available for exchange-traded options. Because OTC options are not traded on
an exchange, pricing is done normally by reference to information from a market
maker. It is the position of the Securities and Exchange Commission (the "SEC")
that OTC options are generally illiquid.
PAY-IN-KIND-BONDS--Pay-in-kind bonds are securities which, at the issuer's
option, pay interest in either cash or additional securities for a specified
period. Pay-in-kind bonds, like zero coupon bonds, are designed to give an
issuer flexibility in managing cash flow. Pay-in-kind bonds are expected to
reflect the market value of the underlying debt plus an amount representing
accrued interest since the last payment. Pay-in-kind bonds are usually less
volatile than zero coupon bonds, but more volatile than cash pay securities.
RECEIPTS--Receipts are interests in separately traded interest and principal
component parts of U.S. Government obligations that are issued by banks or
brokerage firms and are created by depositing U.S. Government obligations into a
special account at a custodian bank. The custodian holds the interest and
principal payments for the benefit of the registered owners of the certificates
or receipts. The custodian arranges for the issuance of the certificates or
receipts evidencing ownership and maintains the register. Receipts include
"Treasury Receipts" ("TRs"), "Treasury Investment Receipts" ("TIGRs"), "Liquid
Yield Option Notes" ("LYONs") and "Certificates of Accrual on Treasury
Securities" ("CATS"). LYONs, TIGRs and CATS are interests in private proprietary
accounts while TRs and STRIPS (See "U.S.
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Treasury Obligations") are interests in accounts sponsored by the U.S. Treasury.
Receipts are sold as zero coupon securities; see "Zero Coupon Securities."
REPURCHASE AGREEMENTS--Repurchase agreements are agreements under which
securities are acquired from a securities dealer or bank subject to resale on an
agreed upon date and at an agreed upon price which includes principal and
interest. A Portfolio involved bears a risk of loss in the event that the other
party to a repurchase agreement defaults on its obligations and the Portfolio is
delayed or prevented from exercising its rights to dispose of the collateral or
if the Portfolio realizes a loss on the sale of the collateral. The Adviser and
Sub-Advisers (collectively, the "Advisers") enter into repurchase agreements
only with financial institutions which they deem to present minimal risk of
bankruptcy during the term of the agreement based on guidelines which are
periodically reviewed by the Board of Trustees. These guidelines currently
permit the Portfolios to enter into repurchase agreements only with approved
primary securities dealers, as recognized by the Federal Reserve Bank of New
York, which have minimum net capital of $100 million, or with a member bank of
the Federal Reserve System. Repurchase agreements are considered to be loans
collateralized by the underlying security. A Portfolio will have actual or
constructive possession of the security or collateral for the repurchase
agreement. Repurchase agreements entered into by the Portfolios will provide
that the underlying security at all times shall have a value at least equal to
102% of the price stated in the agreement. The underlying security will be
marked to market daily. The Advisers monitor compliance with this requirement.
Under all repurchase agreements entered into by a Portfolio, the Custodian or
its agent must take possession of the underlying collateral. However, if the
seller defaults, the Portfolio could realize a loss on the sale of the
underlying security to the extent that the proceeds of sale are less than the
resale price. In addition, even though the Bankruptcy Code provides protection
for most repurchase agreements, if the seller should be involved in bankruptcy
or insolvency proceedings, a Portfolio may incur delay and costs in selling the
security and may suffer a loss of principal and interest if the Portfolio is
treated as an unsecured creditor.
RESTRICTED SECURITIES--Restricted securities are securities that may not be
sold freely to the public absent registration under the Securities Act of 1933,
as amended (the "1933 Act"), or an exemption from registration. Section 4(2)
commercial paper is issued in reliance on an exemption from registration under
Section 4(2) of the 1933 Act, and is generally sold to institutional investors
who purchase for investment. Any resale of such commercial paper must be in an
exempt transaction, usually to an institutional investor through the issuer or
investment dealers who make a market on such commercial paper. Rule 144A
securities are securities re-sold in reliance on an exemption from registration
provided by Rule 144A under the 1933 Act.
SECURITIES LENDING--Loans are made only to borrowers deemed by the advisers
to be in good standing and when, in the judgment of the advisers, the
consideration that can be earned currently from such loaned securities justifies
the attendant risk. Any loan may be terminated by either party upon reasonable
notice to the other party. Each of the Portfolios may use the Distributor as a
broker in these transactions.
SOVEREIGN DEBT--The cost of servicing external debt will also generally be
adversely affected by rising international interest rates, because many external
debt obligations bear interest at rates which are adjusted based upon
international interest rates. The ability to service external debt will also
depend on the level of the relevant government's international currency reserves
and its access to foreign exchange. Currency devaluations may affect the ability
of a sovereign obligor to obtain sufficient foreign exchange to service its
external debt.
As a result of the foregoing or other factors, a governmental obligor may
default on its obligations. If such an event occurs, a Portfolio may have
limited legal recourse against the issuer and/or guarantor. Remedies must, in
some cases, be pursued in the courts of the defaulting party itself, and the
ability of the holder of foreign sovereign debt securities to obtain recourse
may be subject to the political climate in the relevant country. In addition, no
assurance can be given that the holders of commercial bank debt will not
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contest payments to the holders of other foreign sovereign debt obligations in
the event of default under their commercial bank loan agreements.
SWAP, CAPS, FLOORS AND COLLARS--In a typical interest rate swap, one party
agrees to make regular payments equal to a floating interest rate times a
"notional principal amount," in return for payments equal to a fixed rate times
the same amount, for a specific period of time. Swaps may also depend on other
prices or rates, such as the value of an index or mortgage prepayment rates. In
a typical cap or floor agreement, one party agrees to make payments only under
specified circumstances, usually in return for payment of a fee by the other
party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specific interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.
Swap agreements are sophisticated hedging instruments that typically involve
a small investment of cash relative to the magnitude of risk assumed. As a
result, swaps can be highly volatile and have a considerable impact on a
Portfolio's performance. Swap agreements are subject to risks related to the
counterparty's ability to perform, and may decline in value if the
counterparty's creditworthiness deteriorates. A Portfolio may also suffer losses
if it is unable to terminate outstanding swap agreements or reduce its exposure
through offsetting transactions. Any obligation a Portfolio may have under these
types of arrangements will covered by setting aside cash or liquid securities in
a segregated account. A Portfolio will enter into swaps only with counterparties
believed to be creditworthy.
TIME DEPOSITS--Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits with a withdrawal penalty or that
mature in more than 7 days, are considered to be illiquid.
U.S. GOVERNMENT AGENCY SECURITIES--Guarantees of principal by agencies or
instrumentalities of the United States Government may be a guarantee of payment
at the maturity of the obligation so that in the event of a default prior to
maturity there might not be a market and thus no means of realizing on the
market obligation prior to maturity. Guarantees as to the timely payment of
principal and interest do not extend to the value or yield of these securities
nor to the value of the Portfolio's shares.
VARIABLE AND FLOATING RATE INSTRUMENTS--There is a risk that the current
interest rate on such obligations may not accurately reflect existing market
interest rates. A demand instrument with a demand notice exceeding seven days
may be considered illiquid if there is no secondary market for such security.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES--These securities are subject to
market fluctuation due to changes in market interest rates, and it is possible
that the market value at the time of settlement could be higher or lower than
the purchase price if the general level of interest rates has changed. Although
a Portfolio generally purchases securities on a when-issued or forward
commitment basis with the intention of actually acquiring securities, a
Portfolio may dispose of a when-issued security on a forward commitment prior to
settlement if the Adviser deems it appropriate to do so. When investing in
when-issued securities, a Portfolio will not accrue income until delivery of the
securities and will invest in such securities only for purposes of actually
acquiring the securities and not for purposes of leveraging.
ZERO COUPON SECURITIES--STRIPS and Receipts (TRs, TIGRs, LYONS and CATS) are
sold as zero coupon securities, that is, fixed income securities that have been
stripped of their unmatured interest coupons. Zero coupon securities are sold at
a (usually substantial) discount and redeemed at face value at their maturity
date without interim cash payments of interest or principal. The amount of this
discount is accreted over the life of the security, and the accretion
constitutes the income earned on the security for both accounting and tax
purposes. Because of these features, the market prices of zero coupon securities
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are generally more volatile than the market prices of securities that have
similar maturity but that pay interest periodically. Zero coupon securities are
likely to respond to a greater degree to interest rate changes that are non-zero
coupon securities with similar maturity and credit qualities. The Portfolio may
have to dispose of its portfolio securities under disadvantageous circumstances
to generate cash, or may have to leverage itself by borrowing cash to satisfy
income distribution requirements. A Portfolio accrues income with respect to the
securities prior to the receipt of cash payments. Pay-in-kind securities are
securities that have interest payable by delivery of additional securities.
Deferred payment securities are securities that remain zero coupon securities
until a predetermined date, at which time the stated coupon rate becomes
effective and interest becomes payable at regular intervals.
CORPORATE ZERO COUPON SECURITIES--Corporate zero coupon securities are:
(i) notes or debentures which do not pay current interest and are issued at
substantial discounts from par value, or (ii) notes or debentures that pay no
current interest until a stated date one or more years into the future, after
which date the issuer is obligated to pay interest until maturity, usually at a
higher rate than if interest were payable from the date of issuance, and may
also make interest payments in kind (E.G., with identical zero coupon
securities). Such corporate zero coupon securities, in addition to the risks
identified above, are subject to the risk of the issuer's failure to pay
interest and repay principal in accordance with the terms of the obligation.
DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
Commercial paper rated A by Standard and Poor's Corporation ("S&P") is
regarded by S&P as having the greatest capacity for timely payment. Issues rated
A are further refined by use of the numbers 1+, 1 and 2, to indicate the
relative degree of safety. Issues rated A-1+ are those with an "overwhelming
degree" of credit protection. Those rated A-1, the highest rating category,
reflect a "very strong" degree of safety regarding timely payment. Those rated
A-2, the second highest rating category, reflect a "satisfactory" degree of
safety regarding timely payment.
Commercial paper issues rated Prime-1 or Prime-2 by Moody's Investor's
Service, Inc. ("Moody's") are judged by Moody's to be of the "superior" quality
and "strong" quality, respectively, on the basis of relative repayment capacity.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned
by Fitch Investors Services, Inc. ("Fitch"). Paper rated Fitch-1 is regarded as
having the strongest degree of assurance for timely payment. The rating Fitch-2
(Very Good Grade) is the second highest commercial paper rating assigned by
Fitch which reflects an assurance of timely payment only slightly less in degree
than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff
and Phelps, Inc. ("Duff"). Paper rated Duff-1 is regarded as having very high
certainty of timely payment with excellent liquidity factors which are supported
by ample asset protection. Risk factors are minor. Paper rated Duff-2 is
regarded as having good certainty of timely payment, good access to capital
markets and sound liquidity factors and company fundamentals. Risk factors are
small.
The designation A1, the highest rating category established by IBCA Limited
("IBCA"), indicates that the obligation is supported by a very strong capacity
for timely repayment. Those obligations rated A1+ are supported by the highest
capacity for timely repayment are supported by a strong capacity for timely
repayment, although such capacity may be susceptible to adverse changes in
business, economic or financial conditions.
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The rating TBW-1 by Thomson BankWatch ("Thomson") indicates a very high
likelihood that principal and interest will be paid on a timely basis.
DESCRIPTION OF CORPORATE BOND RATINGS
Bonds rated AAA have the highest rating S&P assigns to a debt obligation.
Such a rating indicates an extremely strong capacity to pay principal and
interest. Bonds rated AA also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree. Debt rated A has a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories. Debt rated BBB is regarded as
having an adequate capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rated
categories. Debt rated BB and B is regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal. BB
indicates the least degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions. Debt rated BB has less near-term vulnerability
to default than other speculative grade debt. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or economic conditions
that could lead to inadequate capacity to meet timely interest and principal
payments. The BB rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied BBB- rating. Debt rated B has greater
vulnerability to default but presently has the capacity to meet interest
payments and principal repayments. Adverse business, financial, or economic
conditions would likely impair capacity or willingness to pay interest and repay
principal. The B rating category also is used for debt subordinated to senior
debt that is assigned an actual or implied BB or BB- rating.
Bonds which are rated Aaa by Moody's are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities. Bonds which
are rated A possess many favorable investment attributes and are to be
considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Bonds which are rated Baa are considered as medium-grade obligations (I.E.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. Bonds which are rated Ba are
judged to have speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate and thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes bonds in this class.
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Moody's bond ratings, where specified, are applied to senior bank
obligations and insurance company senior policyholder and claims obligations
with an original maturity in excess of one year. Obligations
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relying upon support mechanisms such as letters-of-credit and bonds of indemnity
are excluded unless explicitly rated.
Obligations of a branch of a bank are considered to be domiciled in the
country in which the branch is located. Unless noted as an exception, Moody's
rating on a bank's ability to repay senior obligations extends only to branches
located in countries which carry a Moody's sovereign rating. Such branch
obligations are rated at the lower of the bank's rating or Moody's sovereign
rating for the bank deposits for the country in which the branch is located.
When the currency in which an obligation is denominated is not the same as
the currency of the country in which the obligation is domiciled, Moody's
ratings do not incorporate an opinion as to whether payment of the obligation
will be affected by the actions of the government controlling the currency of
denomination. In addition, risk associated with bilateral conflicts between an
investor's home country and either the issuer's home country or the country
where an issuer branch is located are not incorporated into Moody's ratings.
Moody's makes no representation that rated bank obligations or insurance
company obligations are exempt from registration under the U.S. Securities Act
of 1933 or issued in conformity with any other applicable law or regulation. Nor
does Moody's represent that any specific bank or insurance company obligation is
legally enforceable or is a valid senior obligation of a rated issuer.
Moody's ratings are opinions, not recommendations to buy or sell, and their
accuracy is not guaranteed. A rating should be weighed solely as one factor in
an investment decision and you should make your own study and evaluation of any
issuer whose securities or debt obligations you consider buying or selling.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high grade,
broadly marketable, suitable for investment by trustees and fiduciary
institutions liable to slight market fluctuation other than through changes in
the money rate. The prime feature of an AAA bond is a showing of earnings
several times or many times interest requirements, with such stability of
applicable earnings that safety is beyond reasonable question whatever changes
occur in conditions. Bonds rated AA by Fitch are judged by Fitch to be of safety
virtually beyond question and are readily salable, whose merits are not unlike
those of the AAA class, but whose margin of safety is less strikingly broad. The
issue may be the obligation of a small company, strongly secured but influenced
as to rating by the lesser financial power of the enterprise and more local type
market.
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is considered
to be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
Bonds rated BBB are considered to be investment grade and of satisfactory
credit quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these bonds,
and therefore impair timely payment. The likelihood that the ratings of these
bonds will fall below investment grade is higher than for bonds with higher
ratings. Bonds rated BB are considered speculative. The obligor's ability to pay
interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirements. Bonds
rated B are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.
Bonds rated Duff-1 are judged by Duff to be of the highest credit quality
with negligible risk factors; only slightly more than U.S. Treasury debt. Bonds
rated Duff-2, 3 and 4 are judged by Duff to be of high credit quality with
strong protection factors. Risk is modest but may vary slightly from time to
time because
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of economic conditions. Bonds rated BBB+, BBB, or BBB- are considered below
average protection factors but still considered sufficient for prudent
investment. Considerable BBB variability in risk during economic cycles. Bonds
rated BB+, BB or BB- are considered below investment grade but deemed likely to
meet obligations when due. Present or prospective financial protection factors
fluctuate according to industry conditions or company fortunes. Overall quality
may move up or down frequently within this category.
Bonds rated B+, B or B- are considered below investment grade and possessing
risk that obligations will not be met when due. Financial protection factors
will fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in the rating within
this category or into a higher or lower rating grade.
Obligations rated AAA by IBCA have the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is substantial,
such that adverse changes in business, economic or financial conditions are
unlikely to increase investment risk significantly. Obligations for which there
is a very low expectation of investment risk are rated AA by IBCA. Capacity for
timely repayment of principal and interest is substantial. Adverse changes in
business, economic or financial conditions may increase investment risk albeit
not very significantly. Bonds rated A are obligations for which there is a low
expectation of investment risk. Capacity for timely repayment of principal and
interest is strong, although adverse changes in business, economic or financial
conditions may lead to increased investment risk.
Bonds rated BBB are obligations for which there is currently a low
expectation of investment risk. Capacity for timely repayment of principal and
interest is adequate, although adverse changes in business, economic or
financial conditions are more likely to lead to increased investment risk than
for obligations in other categories. Bonds rated BB are obligations for which
there is a possibility of investment risk developing. Capacity for timely
repayment of principal and interest exists, but is susceptible over time to
adverse changes in business, economic or financial conditions. Bonds rated B are
obligations for which investment risk exists. Timely repayment of principal and
interest is not sufficiently protected against adverse changes in business,
economic or financial conditions.
Bonds rated AAA by Thomson BankWatch indicate that the ability to repay
principal and interest on a timely basis is very high. Bonds rated AA indicate a
superior ability to repay principal and interest on a timely basis, with limited
incremental risk compared to issues rated in the highest category. Bonds rated A
indicate the ability to repay principal and interest is strong. Issues rated A
could be more vulnerable to adverse developments (both internal and external)
than obligations with higher ratings.
Bonds rated BBB indicate an acceptable capacity to repay principal and
interest. Issues rated "BBB" are, however, more vulnerable to adverse
developments (both internal and external) than obligations with higher ratings.
While not investment grade, the BB rating suggests that the likelihood of
default is considerably less than for lower-rated issues. However, there are
significant uncertainties that could affect the ability to adequately service
debt obligations. Issues rated B show a higher degree of uncertainty and
therefore greater likelihood of default than higher-rated issues. Adverse
developments could well negatively affect the payment of interest and principal
on a timely basis.
INVESTMENT LIMITATIONS
The International Equity, Emerging Markets Equity and Emerging Markets Debt
Portfolios may not:
1. Make loans if, as a result, more than 33 1/3% of its total assets would be
lent to other parties, except that each Portfolio may (i) purchase or hold
debt instruments in accordance with its investment objective and policies;
(ii) enter into repurchase agreements; and (iii) lend its securities.
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2. Purchase or sell real estate, physical commodities, or commodities
contracts, except that each Portfolio may purchase (i) marketable securities
issued by companies which own or invest in real estate (including real
estate investment trusts), commodities, or commodities contracts, and (ii)
commodities contracts relating to financial instruments, such as financial
futures contracts and options on such contracts.
3. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
4. Issue senior securities (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act"), except as permitted by rule, regulation or
order of the SEC.
5. Invest in interests in oil, gas or other mineral exploration or development
programs and oil, gas or mineral leases.
The International Fixed Income Portfolio may not:
1. Pledge, mortgage or hypothecate assets except to secure temporary borrowings
as described in the Prospectuses in aggregate amounts not to exceed 10% of
the net assets of such Portfolio taken at current value at the time of the
incurrence of such loan.
2. Make loans, except that the Portfolio may (i) purchase or hold debt
securities in accordance with its investment objectives and policies; (ii)
engage in securities lending as described in this Prospectus and in the
Statement of Additional Information; and (iii) enter into repurchase
agreements, provided that repurchase agreements and time deposits maturing
in more than seven days, and other illiquid securities, including securities
which are not readily marketable or are restricted, are not to exceed, in
the aggregate, 10% of the total assets of the International Fixed Income
Portfolio.
3. Invest in companies for the purpose of exercising control.
4. Acquire more than 10% of the voting securities of any one issuer.
5. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts. However, subject to its permitted
investments, the Portfolio may purchase obligations issued by companies
which invest in real estate, commodities or commodities contracts.
6. Make short sales of securities, maintain a short position or purchase
securities on margin, except as described in the Prospectus and except that
the Trust may obtain short-term credits as necessary for the clearance of
security transactions.
7. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
8. Purchase securities of other investment companies except as permitted by the
1940 Act and the rules and regulations thereunder and may only purchase
securities of money market funds. Under these rules and regulations, the
Portfolio is prohibited from acquiring the securities of other investment
companies if, as a result of such acquisition, the Portfolio owns more then
3% of the total voting stock of the company; securities issued by any one
investment company represent more than 5% of the total Portfolio assets; or
securities (other than treasury stock) issued by all investment companies
represent more than 10% of the total assets of the Portfolio. A Portfolio's
purchase of such investment company securities results in the bearing of
expenses such that shareholders would indirectly bear a proportionate share
of the operating expenses of such investment companies, including advisory
fees.
9. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowing as described in the Prospectuses and this Statement
of Additional Information or as permitted by rule, regulation or order of
the SEC.
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10. Purchase or retain securities of an issuer if, to the knowledge of the
Trust, an officer, trustee, partner or director of the Trust or any
investment adviser of the Trust owns beneficially more than 1/2 of 1% of the
shares or securities of such issuer and all such officers, trustees,
partners and directors owning more than 1/2 of 1% of such shares or
securities together own more than 5% of such shares or securities.
11. Purchase securities of any company which has (with predecessors) a record of
less than three years continuing operations if, as a result, more than 5% of
the total assets (taken at current value) would be invested in such
securities.
12. Invest in interests in oil, gas or other mineral exploration or development
programs and oil, gas or mineral leases.
13. Purchase restricted securities (securities which must be registered under
the Securities Act of 1933, as amended (the "1933 Act"), before they may be
offered or sold to the public) or other illiquid securities except as
described in the Prospectuses and this Statement of Additional Information.
The foregoing percentages will apply at the time of the purchase of a
security and shall not be violated unless an excess or deficiency occurs,
immediately after or as a result of a purchase of such security. These
investment limitations and the investment limitations in the Prospectuses are
fundamental policies of the Trust and may not be changed without shareholder
approval.
NON-FUNDAMENTAL POLICIES
The following investment limitations are non-fundamental policies and may be
changed without shareholder approval.
The International Equity, Emerging Markets Equity and Emerging Market Debt
Portfolios may not:
1. Pledge, mortgage or hypothecate assets except to secure borrowings permitted
by the Portfolio's fundamental limitation on borrowing.
2. Invest in companies for the purpose of exercising control.
3. Purchase securities on margin or effect short sales, except that each
Portfolio may (i) obtain short-term credits as necessary for the clearance
of security transactions, (ii) provide initial and variation margin payments
in connection with transactions involving futures contracts and options on
such contracts, and (iii) make short sales "against the box" or in
compliance with the SEC's position regarding the asset segregation
requirements of Section 18 of the 1940 Act.
4. Purchase securities which are not readily marketable if, in the aggregate,
more than 15% of its total assets would be invested in such securities.
5. Purchase or hold illiquid securities, I.E., securities that cannot be
disposed of for their approximate carrying value in seven days or less
(which term includes repurchase agreements and time deposits maturing in
more than seven days) if, in the aggregate, more than 15% of its total
assets would be invested in illiquid securities.
6. Invest its assets in securities of any investment company, except as
permitted by the 1940 Act.
The foregoing percentages will apply at the time of the purchase of a
security and shall not be violated unless an excess or deficiency occurs,
immediately after or as a result of a purchase of such security.
THE MANAGER
The Trust and SEI Fund Management ("SEI Management" or the "Manager") have
entered into a Management Agreement (the "Management Agreement"). Formerly, SEI
Financial Management Corporation ("SFM") served as the manager to the Trust. The
Management Agreement provides that the
S-14
<PAGE>
Manager shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Trust in connection with the matters to which the
Management Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of the Manager in the performance of
its duties or from reckless disregard of its duties and obligations thereunder.
The continuance of the Management Agreement must be specifically approved at
least annually (i) by the vote of a majority of the Trustees or by the vote of a
majority of the outstanding voting securities of the Portfolios, and (ii) by the
vote of a majority of the Trustees of the Trust who are not parties to the
Management Agreement or an "interested person" (as that term is defined in the
1940 Act) of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. The Management Agreement is terminable at
any time without penalty by the Trustees of the Trust, by a vote of a majority
of the outstanding shares of the Portfolios or by the Manager on not less than
30 days' nor more than 60 days' written notice. This Agreement shall not be
assignable by either party without the written consent of the other party.
SEI Management, a Delaware business trust, has its principal business
offices at Oaks, Pennsylvania 19456. SFM, a wholly-owned subsidiary of SEI
Investments Company ("SEI"), is the owner of all beneficial interest in SEI
Management. Alfred P. West, Jr., Carmen V. Romeo, and Henry H. Greer constitute
the Board of Directors of SFM, the Investment Adviser to the Portfolios. Mr.
West serves as Chairman of the Board of Directors and Chief Executive Officer of
SFM and SEI, Mr. Greer serves as President and Chief Operating Officer of SFM
and SEI, and Chief Financial Officer of SEI, and Mr. Romeo serves as Executive
Vice President and Treasurer of SEI. SEI and its subsidiaries and affiliates,
including SEI Management, are leading providers of funds evaluation services,
trust accounting systems, and brokerage and information services to financial
institutions, institutional investors, and money managers. SEI Management and
its affiliates also serve as administrator to the following other mutual funds:
The Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund,
ARK Funds, Bishop Street Funds, CoreFunds, Inc., CrestFunds, Inc., CUFUND, The
Expedition Funds, FMB Funds, Inc., First American Funds, Inc., First American
Investment Funds, Inc., First American Strategy Funds, Inc., HighMark Funds,
Marquis Funds-Registered Trademark-, Monitor Funds, Morgan Grenfell Investment
Trust, The PBHG Funds, Inc., The Pillar Funds, Profit Funds Investment Trust,
Rembrandt Funds-Registered Trademark-, Santa Barbara Group of Mutual Funds,
Inc., Boston 1784 Funds-Registered Trademark-, SEI Asset Allocation Trust, SEI
Daily Income Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI
Classic Funds, STI Classic Variable Trust, and TIP Funds.
If operating expenses of any Portfolio exceed applicable limitations, the
Manager will pay such excess. The Manager will not be required to bear expenses
of any Portfolio to an extent which would result in the Portfolio's inability to
qualify as a regulated investment company under provisions of the Internal
Revenue Code of 1986, as amended (the "Code"). The term "expenses" is defined in
such laws or regulations, and generally excludes brokerage commissions,
distribution expenses, taxes, interest and extraordinary expenses.
For the fiscal years ended February 28, 1995, February 29, 1996, and
February 28, 1997, the Portfolios paid fees to the Manager as follows:
<TABLE>
<CAPTION>
MANAGEMENT FEES PAID MANAGEMENT FEES
(REIMBURSED) (000) WAIVED (000)
---------------------- ------------------
PORTFOLIO 1995 1996 1997 1995 1996 1997
- ------------------------------------------ ------ ------ ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
International Equity Portfolio............ $2,653 $1,312 $2,046 $77 $119 $ 41
Emerging Markets Equity Portfolio......... $ (9) $ (29) $ 725 $11 $230 $ 249
International Fixed Income Portfolio...... $ 122 $ 231 $ 714 $84 $140 $ 161
Emerging Markets Debt Portfolio........... * * * * * *
</TABLE>
- ------------------------
* Not in operation during such period.
S-15
<PAGE>
THE ADVISERS AND SUB-ADVISERS
The Advisory Agreements and certain of the Sub-Advisory Agreements provide
that SEI Financial Management Corporation ("SFM" or the "Adviser") (or any
Sub-Adviser) shall not be protected against any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties, or from reckless disregard of its
obligations or duties thereunder. In addition, certain of the Sub-Advisory
Agreements provide that the Sub-Adviser shall not be protected against any
liability to the Trust or its shareholders by reason of willful misfeasance, bad
faith or negligence on its part in the performance of its duties, or from
reckless disregard of its obligations or duties thereunder.
The continuance of each Advisory and Sub-Advisory Agreement must be
specifically approved at least annually (i) by the vote of a majority of the
outstanding shares of that Portfolio or by the Trustees, and (ii) by the vote of
a majority of the Trustees who are not parties to such Advisory or Sub-Advisory
Agreement or "interested persons" of any party thereto, cast in person at a
meeting called for the purpose of voting on such approval. Each Advisory and
Sub-Advisory Agreement will terminate automatically in the event of its
assignment, and is terminable at any time without penalty by the Trustees of the
Trust or, with respect to a Portfolio, by a majority of the outstanding shares
of that Portfolio, on not less than 30 days' nor more than 60 days' written
notice to the Adviser or Sub-Adviser, or by the Adviser or Sub-Adviser on 90
days' written notice to the Trust.
SFM has obtained an exemptive order from the SEC that permits SFM, with the
approval of the Trust's Board of Trustees, to retain unaffiliated sub-advisers
for a Portfolio without submitting the sub-advisory agreement to a vote of the
Portfolio's shareholders. The exemptive relief permits the non-disclosure of
amounts payable by SFM under such sub-advisory agreements. The Trust will notify
shareholders in the event of any change in the identity of the sub-adviser for a
Portfolio.
For the fiscal years ended February 28, 1995, February 29, 1996, and
February 28, 1997, the Portfolios paid advisory fees as follows:
<TABLE>
<CAPTION>
FEES PAID (000) FEE WAIVERS (000)
---------------------- ------------------
PORTFOLIO 1995 1996 1997 1995 1996 1997
- -------------------------------------------------- ------ ------ ------ ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
International Equity Portfolio.................... $1,516 $1,524(1) $2,113 $ 0 $ 0(1) $223
Emerging Markets Equity Portfolio................. $ 4 $297 (1) $1,262 $ 0 $ 0(1) $309
International Fixed Income........................ $ 86 $155 $ 362 $17 $31 $ 72
Emerging Markets Debt Portfolio................... * * * * * *
</TABLE>
- ------------------------
* Not in operation during such period.
(1) Includes amounts paid to the Portfolios' Sub-Advisers under the former
investment advisory agreements.
For the fiscal years ended February 28, 1995, February 29, 1996, and
February 28, 1997, SFM paid sub-advisory fees as follows:
<TABLE>
<CAPTION>
SUB-ADVISORY FEES SUB-ADVISORY FEES
PAID (000) WAIVED (000)
---------------------- ------------------
PORTFOLIO 1995 1996 1997 1995 1996 1997
- -------------------------------------------------- ------ ------ ------ ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
International Equity Portfolio.................... + $1,389 + $ 0
Emerging Markets Equity Portfolio................. + $ 949 + $ 0
Emerging Markets Debt Portfolio................... * * * * * *
</TABLE>
- ------------------------
* Not in operation during such period.
+ Not applicable during such period.
S-16
<PAGE>
DISTRIBUTION AND SHAREHOLDER SERVICING
The Trust has adopted a Distribution Agreement for the Portfolios. The Trust
has also adopted a Distribution Plan (the "Class D Plan") for the shares of the
Class D shares of the International Equity Portfolio in accordance with the
provisions of Rule 12b-1 under the 1940 Act, which regulates circumstances under
which an investment company may directly or indirectly bear expenses relating to
the distribution of its shares. In this connection, the Board of Trustees has
determined that the Plan and Distribution Agreement are in the best interests of
the shareholders. Continuance of the Plan must be approved annually by a
majority of the Trustees of the Trust and by a majority of the Qualified
Trustees, as defined in the Plan. The Plan requires that quarterly written
reports of amounts spent under the Plan and the purposes of such expenditures be
furnished and reviewed by the Trustees. The Plan may not be amended to increase
materially the amount which may be spent thereunder without approval by a
majority of the outstanding shares of the Portfolio or class affected. All
material amendments of the Plan will require approval by a majority of the
Trustees of the Trust and of the Qualified Trustees.
The Class D Plan provides that the Trust will pay a fee of up to .30% of the
average daily net assets of the International Equity Portfolio's Class D shares
that the Distributor can use to compensate broker-dealers and service providers,
including SEI Investments Distribution Co. and its affiliates, which provide
distribution-related services to the International Equity Portfolio's Class D
shareholders or their customers who beneficially own Class D shares. The Class D
Plan provides that, if there are more than one series of Trust securities having
a Class D class, expenses incurred pursuant to the Class D Plan will be
allocated among such several series of the Trust on the basis of their relative
net asset values, unless otherwise determined by a majority of the Qualified
Trustees. See "Distribution" in the Class D Prospectus.
The distribution related services that may be provided under the Plan
include establishing and maintaining customer accounts and records; aggregating
and processing purchase and redemption requests from customers; and placing net
purchase and redemption orders with the Distributor; and automatically investing
customer account cash balances.
Except to the extent that the Manager and Adviser benefitted through
increased fees from an increase in the net assets of the Trust which may have
resulted in part from the expenditures, no interested person of the Trust nor
any Trustee of the Trust who is not an interested person of the Trust had a
direct or indirect financial interest in the operation of the Class D Plan or
related agreements.
The Portfolios have also adopted a shareholder servicing plan for their
Class A shares (the "Service Plan"). Under the Service Plan, the Distributor may
perform, or may compensate other service providers for performing, the following
shareholder services: maintaining client accounts; arranging for bank wires;
responding to client inquiries concerning services provided on investments;
assisting clients in changing dividend options, account designations and
addresses; sub-accounting; providing information on share positions to clients;
forwarding shareholder communications to clients; processing purchase, exchange
and redemption orders; and processing dividend payments. Under the Service Plan,
the Distributor may retain as a profit any difference between the fee it
receives and the amount it pays to third parties.
Although banking laws and regulations prohibit banks from distributing
shares of open-end investment companies such as the Trust, according to an
opinion issued to the staff of the Securities and Exchange Commission ("SEC") by
the Office of the Comptroller of the Currency, financial institutions are not
prohibited from acting in other capacities for investment companies, such as
providing shareholder services. Should future legislative, judicial or
administrative action prohibit or restrict the activities of financial
institutions in connection with providing shareholder services, the Trust may be
required to alter materially or discontinue its arrangements with such financial
institutions.
S-17
<PAGE>
For the fiscal year ended February 28, 1997, the International Equity
Portfolio incurred the following distribution expenses:
<TABLE>
<CAPTION>
AMOUNT PAID TO
3RD PARTIES BY
TOTAL DIST. SIDCO FOR
TOTAL DIST. EXPENSES AS DISTRIBUTOR
EXPENSES A % OF NET RELATED SALES PRINTING OTHER
PORTFOLIO CLASS (000) ASSETS SERVICES EXPENSES COSTS COSTS*
- ------------------------------ ------ ----------- ----------- -------------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
International Equity
Portfolio................... D $1,305 .25% $0 $0 $0 $0
</TABLE>
- ------------------------
* Costs of complying with securities laws pertaining to the distribution of
shares.
TRUSTEES AND OFFICERS OF THE TRUST
The Trustees and Executive Officers of the Trust, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with the named companies during that
period. Unless otherwise noted, the business address of each Trustee and each
Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain
officers of the Trust also serve as officers of some or all of the following:
The Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund,
ARK Funds, Bishop Street Funds, CoreFunds, Inc., CrestFunds, Inc., CUFUND, The
Expedition Funds, FMB Funds, Inc., First American Funds, Inc., First American
Investment Funds, Inc., First American Strategy Funds, Inc., HighMark Funds,
Marquis Funds-Registered Trademark-, Monitor Funds, Morgan Grenfell Investment
Trust, The PBHG Funds, Inc., The Pillar Funds, Profit Funds Investment Trust,
Rembrandt Funds-Registered Trademark-, Santa Barbara Group of Mutual Funds,
Inc., Boston 1784 Funds-Registered Trademark-, SEI Asset Allocation Trust, SEI
Daily Income Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI
Classic Funds, STI Classic Variable Trust and TIP Funds, each of which is an
open-end management investment company managed by SEI Fund Management or its
affiliates and, except for Profit Funds Investment Trust, Rembrandt
Funds-Registered Trademark-, and Santa Barbara Group of Mutual Funds, Inc., are
distributed by SEI Investments Distribution Co.
ROBERT A. NESHER (DOB 08/17/46)--Chairman of the Board of Trustees*--Retired
since 1994. Executive Vice President of SEI, 1986-1994. Director and Executive
Vice President of the Adviser, Manager and the Distributor, 1981-1994. Trustee
of the Arbor Fund, Marquis Funds-Registered Trademark-, The Advisors' Inner
Circle Fund, The Expedition Funds, SEI Liquid Asset Trust, SEI Daily Income
Trust, SEI Tax Exempt Trust, SEI Index Funds, SEI Asset Allocation Trust, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, Boston 1784
Funds-Registered Trademark-, Pillar Funds, and Rembrandt
Funds-Registered Trademark-.
WILLIAM M. DORAN (DOB 05/26/40)--Trustee*--2000 One Logan Square,
Philadelphia, PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm), counsel
to the Trust, Manager and Distributor, Director and Secretary of SEI and
Secretary of the Adviser, Manager and Distributor. Trustee of The Arbor Fund,
Marquis Funds-Registered Trademark-, The Advisors' Inner Circle Fund, The
Expedition Funds, SEI Liquid Asset Trust, SEI Daily Income Trust, SEI Tax Exempt
Trust, SEI Index Funds, SEI Asset Allocation Trust, SEI Institutional
Investments Trust, and SEI Institutional Managed Trust.
F. WENDELL GOOCH (DOB 12/03/32)--Trustee**--P.O. Box 190, Paoli, IN 47454.
President, Orange County Publishing Co., Inc. since October 1981. Retired;
Publisher of the Paoli News and the Paoli Republican and Editor of the Paoli
Republican from January 1981 to 1997. President, H&W Distribution, Inc., since
July 1984. Executive Vice President, Trust Department, Harris Trust and Savings
Bank and Chairman of the Board of Directors of The Harris Trust Company of
Arizona before January 1981. Trustee of STI Classic Funds, STI Classic Variable
Trust, SEI Liquid Asset Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI
Index Funds, SEI Asset Allocation Trust, SEI Institutional Managed Trust and SEI
Institutional Investments Trust.
S-18
<PAGE>
FRANK E. MORRIS (DOB 12/30/23)--Trustee**--105 Walpole Street, Dover, MA
02030. Retired since 1990. Peter Drucker Professor of Management, Boston
College, 1989-1990. President, Federal Reserve Bank of Boston, 1968-1988.
Trustee of The Arbor Fund, Marquis Funds-Registered Trademark-, The Advisors'
Inner Circle Fund, The Expedition Funds, SEI Liquid Asset Trust, SEI Daily
Income Trust, SEI Tax Exempt Trust, SEI Index Funds, SEI Asset Allocation Trust,
SEI Institutional Managed Trust and SEI Institutional Investments Trust.
JAMES M. STOREY (DOB 04/12/31)--Trustee**--Retired; Partner, Dechert Price &
Rhoads, from September 1987-December 1993; Trustee of The Arbor Fund, Marquis
Funds-Registered Trademark-, The Advisors' Inner Circle Fund, The Expedition
Funds, SEI Liquid Asset Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI
Index Funds, SEI Asset Allocation Trust, SEI Institutional Investments Trust,
and SEI Institutional Managed Trust.
GEORGE J. SULLIVAN, JR. (DOB 11/13/42)--Trustee**--General Partner, Teton
Partners, L.P., since 1991; Chief Financial Officer, Noble Partners, L.P., since
1991; Treasurer and Clerk, Peak Asset Management, Inc., since 1991; Trustee,
Navigator Securities Lending Trust, since 1995. Trustee of SEI Liquid Asset
Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, SEI Index Funds, SEI Asset
Allocation Trust, SEI Institutional Investments Trust, and SEI Institutional
Managed Trust.
DAVID G. LEE (DOB 04/16/52)--President and Chief Executive Officer--Senior
Vice President of the Manager and Distributor since 1993. Vice President of the
Adviser, Manager and Distributor, 1991-1993. President, GW Sierra Trust Funds
before 1991.
SANDRA K. ORLOW (DOB 10/18/53)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of the Adviser, Manager and Distributor since
1988.
KEVIN P. ROBINS (DOB 04/15/61)--Vice President and Assistant
Secretary--Senior Vice President, General Counsel and Assistant Secretary of
SEI, Senior Vice President, General Counsel and Secretary of the Adviser, the
Manager and Distributor since 1994. Vice President and Assistant Secretary of
SEI, the Adviser, Manager and Distributor, 1992-1994. Associate, Morgan, Lewis &
Bockius LLP (law firm), 1988-1992.
RICHARD W. GRANT (DOB 10/25/45)--Secretary--2000 One Logan Square,
Philadelphia, PA 19103, Partner, Morgan, Lewis & Bockius LLP (law firm), counsel
to the Trust, SEI, the Adviser, Manager and Distributor.
KATHRYN L. STANTON (DOB 11/19/58)--Vice President and Assistant
Secretary--Vice President, Deputy General Counsel, Vice President and Assistant
Secretary of SEI, the Adviser, Manager and Distributor since 1994. General
Counsel, Investment Systems and Services, since 1997. Associate, Morgan, Lewis &
Bockius LLP (law firm), 1989-1994.
MARK E. NAGLE (DOB 10/20/59)--Controller and Chief Financial Officer--Vice
President of Fund Accounting and Administration for SEI Fund Resources and the
Manager since 1996. Vice President of Fund Accounting, BISYS Fund Services
1995-1996. Senior Vice President and Site Manager, Fidelity Investments
(1981-1995).
TODD CIPPERMAN (DOB 02/14/66)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI, the Adviser, Manager and the
Distributor since 1995. Associate, Dewey Ballantine (law firm) (1994-1995).
Associate, Winston & Strawn (law firm) (1991-1994).
BARBARA A. NUGENT (DOB 06/18/56)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of SEI, the Adviser, Manager
and Distributor since 1996. Associate, Drinker, Biddle & Reath (law firm).
Assistant Vice President/Administration, Delaware Service Company, Inc.
(1992-1993), Assistant Vice President--Operations, Delaware Service Company,
Inc. (1988-1992).
MARC H. CAHN (DOB 06/19/57)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI, the Adviser, Manager and Distributor
since 1996. Associate General Counsel,
S-19
<PAGE>
Barclays Bank PLC (1995-1996). ERISA counsel, First Fidelity Bancorporation
(1994-1995), Associate, Morgan, Lewis & Bockius LLP (1989-1994).
- ------------------------
*Messrs. Nesher and Doran are Trustees who may be deemed to be "interested
persons" of the Trust as the term is defined in the 1940 Act.
**Messrs. Gooch, Storey, Morris and Sullivan serve as members of the Audit
Committee of the Trust.
The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust.
Compensation of officers and affiliated Trustees of the Trust is paid by the
Manager. The Trust pays the fees for unaffiliated Trustees. For the fiscal year
ended February 28, 1997, the Trust paid the following amounts to the Trustees.
<TABLE>
<CAPTION>
AGGREGATE PENSION OR
COMPENSATION FROM RETIREMENT BENEFITS ESTIMATED ANNUAL TOTAL COMPENSATION FROM REGISTRANT
REGISTRANT FOR FYE ACCRUED AS PART OF BENEFITS UPON AND FUND COMPLEX PAID TO DIRECTORS
NAME OF PERSON AND POSITION 2/28/97 FUND EXPENSES RETIREMENT FOR FYE 2/28/97
- --------------------------------- ------------------ ------------------- ---------------- -----------------------------------
<S> <C> <C> <C> <C>
Robert A. Nesher, Trustee........ $ 0 $0 $0 $0 for services on 8 boards
William M. Doran, Trustee........ $ 0 $0 $0 $0 for services on 8 boards
Richard F. Blanchard,
Trustee(1)..................... $ 4,554 $0 $0 $22,500 for services on 8 boards
F. Wendell Gooch, Trustee........ $18,479 $0 $0 $92,250 for services on 8 boards
Frank E. Morris, Trustee......... $18,479 $0 $0 $92,250 for services on 8 boards
James M. Storey, Trustee(2)...... $18,479 $0 $0 $92,250 for services on 8 boards
George J. Sullivan, Trustee...... $ 8,818 $0 $0 $69,750 for services on 8 boards
</TABLE>
- ------------------------
(1) Deceased May 7, 1996
(2) Mr. Storey received a portion of such amount as compensation for service as
an Honorary Trustee for the Trust prior to being elected as a Trustee on
August 14, 1996.
PERFORMANCE
From time to time, the Trust may advertise yield and/or total return for one
or more of the Portfolios. These figures will be based on historical earnings
and are not intended to indicate future performance.
The total return of a Portfolio refers to the average compounded rate of
return to a hypothetical investment for designated time periods (including, but
not limited to, the period from which the Portfolio commenced operations through
the specified date), assuming that the entire investment is redeemed at the end
of each period. In particular, total return will be calculated according to the
following formula: P(1 + T)n = ERV, where P = a hypothetical initial payment of
$1,000; T = average annual total return; n = number of years; and ERV = ending
redeemable value of a hypothetical $1,000 payment made at the beginning of the
designated time period as of the end of such period.
S-20
<PAGE>
Based on the foregoing, the average annual total return for the Portfolios
from inception through February 28, 1997, and for the one, five and ten year
periods ended February 28, 1997 were as follows:
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
-------------------------------------------------
SINCE
PORTFOLIO CLASS ONE YEAR FIVE YEAR TEN YEAR INCEPTION
- ----------------------------------------- ------------------------------- ----------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C>
International Equity Portfolio A.............................. 5.70% 7.79% * 4.62%
D (with load).................. 0.15% * * 3.32%
D (without load)............... 5.39% * * 5.22%
Emerging Markets Equity Portfolio A.............................. 18.02% * * 12.99%
International Fixed Income Portfolio A.............................. 1.85% * * 7.77%
Emerging Markets Debt Portfolio A.............................. * * * *
</TABLE>
- ------------------------
* Not in operation during such period.
From time to time, the Trust may advertise the yield of the International
Fixed Income Portfolio. The yield of the Portfolio refers to the annualized
income generated by an investment in the Portfolio over a specified 30-day
period. The yield is calculated by assuming that the income generated by the
investment during that period is generated for each like period over one year
and is shown as a percentage of the investment. In particular, yield will be
calculated according to the following formula:
Yield = 2([[(a-b)/cd + 1]to the power of 6] - 1)
where a = dividends and interest earning during the period; b = expenses accrued
for the period (net of reimbursement); c = the current daily number of shares
outstanding during the period that were entitled to receive dividends; and d =
the maximum offering price per share on the last day of the period.
Actual yields will depend on such variables as asset quality, average asset
maturity, the type of instruments a Portfolio invests in, changes in interest
rates on money market instruments, changes in the expenses of a Portfolio and
other factors.
Yields are one basis upon which investors may compare a Portfolio with other
mutual funds; however, yields of other mutual funds and other investment
vehicles may not be comparable because of the factors set forth above and
differences in the methods used in valuing portfolio instruments.
For the 30-day period ended February 28, 1997, the yield for the
International Fixed Income Portfolio was 3.62%.
The Portfolios may, from time to time, compare their performance to other
mutual funds tracked by mutual fund rating services, to broad groups of
comparable mutual funds or to unmanaged indices which may assume investment of
dividends but generally do not reflect deductions for administrative and
management costs.
S-21
<PAGE>
PURCHASE AND REDEMPTION OF SHARES
The purchase and redemption price of shares is the net asset value of each
share. A Portfolio's securities are valued by SEI Management pursuant to
valuations provided by an independent pricing service (generally the last quoted
sale price). 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 (defined as days on which the New York Stock Exchange is open for
business ("Business Day")) or, if there is no such reported sale, at the most
recently quoted bid price. Unlisted securities for which market quotations are
readily available are valued at the most recently quoted bid price. The pricing
service may also use a matrix system to determine valuations. This system
considers such factors as security prices, yields, maturities, call features,
ratings and developments relating to specific securities in arriving at
valuations. The procedures of the pricing service and its valuations are
reviewed by the officers of the Trust under the general supervision of the
Trustees.
Shares of a Portfolio may be purchased in exchange for securities included
in the Portfolio subject to SEI Management's determination that the securities
are acceptable. Securities accepted in an exchange will be valued at the market
value. All accrued interest and subscription of other rights which are reflected
in the market price of accepted securities at the time of valuation become the
property of the Trust and must be delivered by the Shareholder to the Trust upon
receipt from the issuer.
SEI Management will not accept securities for a Portfolio unless: (1) such
securities are appropriate in the Portfolio at the time of the exchange; (2)
such securities are acquired for investment and not for resale; (3) the
Shareholder represents and agrees that all securities offered to the Trust for
the Portfolio are not subject to any restrictions upon their sale by the
Portfolio under the Securities Act of 1933, or otherwise; (4) such securities
are traded on the American Stock Exchange, the New York Stock Exchange or on
NASDAQ in an unrelated transaction with a quoted sales price on the same day the
exchange valuation is made or,if not listed on such exchanges or on NASDAQ, have
prices available from an independent pricing service approved by the Trust's
Board of Trustees; and (5) the securities may be acquired under the investment
restrictions applicable to the Portfolio.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period during which trading
on the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or evaluation of the portfolio securities is not reasonably
practicable, or for such other periods as the SEC may by order permit. The Trust
also reserves the right to suspend sales of shares of the Portfolios for any
period during which the New York Stock Exchange, the Manager, the Advisers, the
Distributor and/or the Custodians are not open for business. Currently, the
following holidays are observed by the Trust: New Year's Day, Martin Luther King
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
It is currently the Trust's policy to pay for all redemptions in cash. The
Trust retains the right, however, to alter this policy to provide for
redemptions in whole or in part by a distribution in kind of securities held by
a Portfolio in lieu of cash. Shareholders may incur brokerage charges in
connection with the sale of such securities. However, a shareholder will at all
times be entitled to aggregate cash redemptions from a Portfolio of the Trust
during any 90-day period of up to the lesser of $250,000 or 1% of the Trust's
net assets in cash. A gain or loss for federal income tax purposes would be
realized by a shareholder subject to taxation upon an in-kind redemption
depending upon the shareholder's basis in the shares of the Portfolio redeemed.
Portfolio securities may be traded on foreign markets on days other than
Business Days or the net asset value of a Portfolio may be computed on days when
such foreign markets are closed. In addition, foreign markets may close at times
other than 4:00 p.m. Eastern time. As a consequence, the net asset value of a
share of a Portfolio may not reflect all events that may affect the value of the
Portfolio's foreign
S-22
<PAGE>
securities unless the Adviser determines that such events materially affect net
asset value in which case net asset value will be determined by consideration of
other factors.
REDUCTIONS IN SALES CHARGES
In calculating the sales charge rates applicable to current purchases of
Class D shares, members of the following affinity groups and clients of the
following broker-dealers, each of which has entered into an agreement with the
Distributor, are entitled to the following percentage-based discounts from the
otherwise applicable sales charge:
<TABLE>
<CAPTION>
PERCENTAGE DATE OFFER DATE OFFER
NAME OF GROUP DISCOUNT STARTS TERMINATES
- --------------------------------------------------------- --------------- ---------- ----------
<S> <C> <C> <C>
BHC Securities, Inc. .................................... 10% 12/29/94 N/A
First Security Investor Services, Inc. .................. 10% 12/29/94 N/A
</TABLE>
Those members or clients who take advantage of a percentage-based reduction
in the sales charge during the offering period noted above may continue to
purchase shares at the reduced sales charge rate after the offering period
relating to each such purchaser's affinity group or broker-dealer relationship
has terminated.
Please contact the Distributor at 1-800-437-6016 for more information.
SHAREHOLDER SERVICES (CLASS D SHARES)
The following is a description of plans and privileges by which the sale
charges imposed on the Class D shares of the International Equity Portfolio may
be reduced.
RIGHT OF ACCUMULATION: A shareholder qualifies for cumulative quantity
discounts when his or her new investment, together with the current offering
price value of all holdings of that shareholder in certain eligible portfolios,
reaches a discount level. See "Purchase and Redemption of Shares" in the
Prospectus for the sales charge on quantity purchases.
LETTER OF INTENT: The reduced sales charges are also applicable to the
aggregate amount of purchases made by a purchaser within a 13-month period
pursuant to a written Letter of Intent provided to the Distributor that (i) does
not legally bind the signer to purchase any set number of shares and (ii)
provides for the holding in escrow by the Administrator of 5% of the amount
purchased until such purchase is completed within the 13-month period. A Letter
of Intent may be dated to include shares purchased up to 90 days prior to the
date the Letter is signed. The 13-month period begins on the date of the
earliest purchase. If the intended investment is not completed, the
Administrator will surrender an appropriate number of the escrowed shares for
redemption in order to recover the difference between the sales charge imposed
under the Letter of Intent and the sales charge that would have otherwise been
imposed.
DISTRIBUTION INVESTMENT OPTION: Distributions of dividends and capital
gains made by a Portfolio may be automatically invested in shares of another
Portfolio if shares of that Portfolio are available for sale. Such investments
will be subject to initial investment minimums, as well as additional purchase
minimums. A shareholder considering the Distribution Investment Option should
obtain and read the prospectus of the other Portfolios and consider the
differences in objectives and policies before making any investment.
REINSTATEMENT PRIVILEGE: A shareholder who has redeemed shares of the
Portfolio has a one-time right to reinvest the redemption proceeds in shares of
a Portfolio at their net asset value as of the time of reinvestment. Such a
reinvestment must be made within 30 days of the redemption and is limited to the
amount of the redemption proceeds. Although redemptions and repurchases of
shares are taxable events, a reinvestment within such 30-day period in the same
fund is considered a "wash sale" and results in the inability to recognize
currently all or a portion of a loss realized on the original redemption for
federal
S-23
<PAGE>
income tax purposes. The investor must notify the Transfer Agent at the time the
trade is placed that the transaction is a reinvestment.
EXCHANGE PRIVILEGE: Some or all of the Portfolio's Class D shares for which
payment has been received (I.E., an established account), may be exchanged for
Class D shares of other portfolios of SEI Liquid Asset Trust, SEI Tax Exempt
Trust, and SEI Institutional Managed Trust ("SEI Funds"). Exchanges are made at
net asset value plus any applicable sales charge. SEI Funds' portfolios that are
not money market portfolios currently impose a sales charge on Class D shares. A
shareholder who exchanges into one of these "non-money market" portfolios will
have to pay a sales charge on any portion of the exchanged Class D shares for
which he or she has not previously paid a sales charge. If a shareholder has
paid a sales charge on Class D shares, no additional sales charge will be
assessed when he or she exchanges those Class D shares for other Class D shares.
If a shareholder buys Class D shares of a "non-money market" fund and receives a
sales load waiver, he or she will be deemed to have paid the sales load for
purposes of this exchange privilege. In calculating any sales charge payable on
an exchange transaction, the SEI Funds will assume that the first shares a
shareholder exchanges are those on which he or she has already paid a sales
charge. Sales charge waivers may also be available under certain circumstances,
as described in the Prospectuses. The Trust reserves the right to change the
terms and conditions of the exchange privilege discussed herein, or to terminate
the exchange privilege, upon sixty days' notice. Exchanges will be made only
after proper instructions in writing or by telephone (an "Exchange Request") are
received for an established account by the Distributor.
A shareholder may exchange the shares of the Portfolio's Class D shares, for
which good payment has been received, in his or her account at any time,
regardless of how long he or she has held his or her shares.
Each Exchange Request must be in proper form (I.E., if in writing, signed by
the record owner(s) exactly as the shares are registered; if by telephone,
proper account identification is given by the dealer or shareholder of record),
and each exchange must involve either shares having an aggregate value of at
least $1,000 or all the shares in the account. Each exchange involves the
redemption of the shares of the Portfolio (the "Old Portfolio") to be exchanged
and the purchase at net asset value (I.E., without a sales charge) of the shares
of the other portfolios (the "New Portfolios"). Any gain or loss on the
redemption of the shares exchanged is reportable on the shareholder's federal
income tax return, unless such shares were held in a tax-deferred retirement
plan or other tax-exempt account. If the Exchange Request is received by the
Distributor in writing or by telephone on any business day prior to the
redemption cut-off time specified in each Prospectus, the exchange usually will
occur on that day if all the restrictions set forth above have been complied
with at that time. However, payment of the redemption proceeds by the Old
Portfolios, and thus the purchase of shares of the New Portfolios, may be
delayed for up to seven days if the Portfolio determines that such delay would
be in the best interest of all of its shareholders. Investment dealers which
have satisfied criteria established by the Portfolios may also communicate a
shareholder's Exchange Request to the Portfolio subject to the restrictions set
forth above. No more than five exchange requests may be made in any one
telephone Exchange Request.
TAXES
QUALIFICATION AS A RIC
The following discussion of federal income tax consequences is based on the
Code and the regulations issued thereunder as in effect on the date of this
Statement. New legislation, as well as administrative or court decisions, may
significantly change the conclusions expressed herein and may have a retroactive
effect with respect to the transactions contemplated herein.
In order to qualify for treatment as a regulated investment company ("RIC")
under the Code, a Portfolio must distribute annually to its shareholders at
least the sum of 90% of its net interest income excludable from gross income
plus 90% of its investment company taxable income (generally, net investment
income, including net short-term capital gain) ("Distribution Requirement") and
must meet
S-24
<PAGE>
several additional requirements. Among these requirements are the following: (i)
at least 90% of a Portfolio's gross income each taxable year must be derived
from dividends, interest, payments with respect to securities loans and gains
from the sale or other disposition of stocks or securities or foreign currencies
or other income (including gains from forward contracts) derived with respect to
its business of investing in stocks or securities or those currencies ("Income
Requirement"); (ii) a Portfolio must derive less than 30% of its gross income
each taxable year from the sale or other disposition of any of the following
that were held for less than three months: stocks or securities, options,
futures, or forward contracts, or foreign currencies (or options, futures, or
forward contracts thereon) that are not directly related to a Portfolio's
principal business of investing in stocks or securities ("Short-Short
Limitation"); (iii) at the close of each quarter of a Portfolio's taxable year,
at least 50% of the value of its total assets must be represented by cash and
cash items, United States Government securities, securities of other RICs and
other securities, with such other securities limited, in respect of any one
issuer, to an amount that does not exceed 5% of the value of a Portfolio's total
assets and that does not represent more than 10% of the outstanding voting
securities of the issuer; and (iv) at the close of each quarter of a Portfolio's
taxable year, not more than 25% of the value of its total assets may be invested
in securities (other than United States Government securities or the securities
of other RICs) of any one issuer or of two or more issuers of which the
Portfolio owns at least 20% of the voting power and which are engaged in the
same, similar, or related trades or businesses.
Notwithstanding the Distribution Requirement described above, which only
requires a Portfolio to distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital
gain, a Portfolio will be subject to a nondeductible 4% federal excise tax to
the extent it fails to distribute by the end of any calendar year at least 98%
of its ordinary income for that year and 90% of its capital gain net income for
the one-year period ending on October 31, of that year, plus certain other
amounts. Each Portfolio intends to make sufficient distributions to avoid
liability for the federal excise tax applicable to RICs.
The use of hedging strategies, such as entering into forward foreign
currency contracts, involves complex rules that will determine for income tax
purposes the character and timing of recognition of the income received in
connection therewith by the Portfolio. Income from foreign currencies, and
income from transactions in forward contracts that are directly related to a
Portfolio's business of investing in securities or foreign currencies, will
qualify as permissible income under the Income Requirement. Income from the
disposition of foreign currencies, and forward foreign currency contracts on
foreign currencies, that are not directly related to a Portfolio's principal
business of investing in securities will be subject to the Short-Short
Limitation if they are held for less than three months and may by regulation be
excluded from qualifying income.
Any increase in value on a position that is part of a "designated hedge"
will be offset by any decrease in value (whether realized or not) of the
offsetting hedging position during the period of the hedge for purposes of
determining whether a Portfolio satisfies the Short-Short Limitation. Thus, only
the net gain (if any) from the designated hedge will be included in gross income
for purposes of that Limitation.
If a Portfolio fails to qualify as a RIC for any year, all of its income
will be subject to tax at corporate rates, and its distributions (including
capital gains distributions) will be taxable as ordinary income dividends to its
shareholders, subject to the dividends received deduction for corporate
shareholders.
A gain or loss realized by a shareholder on the sale or exchange of shares
of a Portfolio held as a capital asset will be long-term capital gain or loss if
the holding period for the shares exceeds one year, and otherwise will be
short-term gain or loss. Any loss realized on a sale or exchange of shares of a
Portfolio will be disallowed to the extent the shares disposed of are replaced
within the 61-day period beginning 30 days before and ending 30 days after the
shares are disposed of. Any loss realized by a shareholder on the disposition of
shares held six months or less is treated as a long-term capital loss to the
extent of any
S-25
<PAGE>
distributions of net long-term capital gains received by the shareholder with
respect to such shares or any inclusion or undistributed capital gain with
respect to such shares.
A Portfolio will be required in certain cases to withhold and remit to the
United States Treasury 31% of amounts payable to any shareholder who (1) has
provided the Portfolio either an incorrect tax identification number or no
number at all, (2) who is subject to backup withholding by the Internal Revenue
Service for failure to properly report payments of interest or dividends, or (3)
who has failed to certify to the Portfolio that such shareholder is not subject
to backup withholding.
With respect to investments in STRIPS, TR's, TIGR's, LYONs, CATS and other
Zero Coupon securities which are sold at original issue discount and thus do not
make periodic cash interest payments, a Portfolio will be required to include as
part of its current income the imputed interest on such obligations even though
the Portfolio has not received any interest payments on such obligations during
that period. Because each Portfolio distributes all of its net investment income
to its shareholders, a Portfolio may have to sell Portfolio securities to
distribute such imputed income which may occur at a time when the advisers would
not have chosen to sell such securities and which may result in taxable gain or
loss.
STATE TAXES
A Portfolio is not liable for any income or franchise tax in Massachusetts
if it qualifies as a RIC for federal income tax purposes. Distributions by a
Portfolio to shareholders and the ownership of shares may be subject to state
and local taxes. Shareholders should consult their tax advisors regarding the
state and local tax consequences of investments in a Portfolio.
FOREIGN TAXES
Dividends and interest received by a Portfolio may be subject to income,
withholding or other taxes imposed by foreign countries and United States
possessions that would reduce the yield on a Portfolio's securities. Tax
conventions between certain countries and the United States may reduce or
eliminate these taxes. Foreign countries generally do not impose taxes on
capital gains with respect to investments by foreign investors. If more than 50%
of the value of a Portfolio's total assets at the close of its taxable year
consists of stock or securities of foreign corporations, a Portfolio will be
eligible to, and will, file an election with the Internal Revenue Service that
will enable shareholders, in effect, to receive the benefit of the foreign tax
credit with respect to any foreign and United States possessions income taxes
paid by a Portfolio. Pursuant to the election, a Portfolio will treat those
taxes as dividends paid to its shareholders. Each shareholder will be required
to include a proportionate share of those taxes in gross income as income
received from a foreign source and must treat the amount so included as if the
shareholder had paid the foreign tax directly. The shareholder may then either
deduct the taxes deemed paid by him or her in computing his or her taxable
income or, alternatively, use the foregoing information in calculating the
foreign tax credit (subject to significant limitations) against the
shareholder's federal income tax. If a Portfolio makes the election, it will
report annually to its shareholders the respective amounts per share of the
Portfolio's income from sources within, and taxes paid to, foreign countries and
United States possessions.
PORTFOLIO TRANSACTIONS
The Trust has no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to policies
established by the Trustees, the Advisers are responsible for placing orders to
execute Portfolio transactions. In placing orders, it is the Trust's policy to
seek to obtain the best net results taking into account such factors as price
(including the applicable dealer spread), size, type and difficulty of the
transaction involved, the firm's general execution and operational facilities,
and the firm's risk in positioning the securities involved. While the Advisers
generally seek reasonably competitive spreads or commissions, the Trust will not
necessarily be paying the lowest spread or
S-26
<PAGE>
commission available. The Trust will not purchase portfolio securities from any
affiliated person acting as principal except in conformity with the regulations
of the SEC.
The Trust does not expect to use one particular dealer, but, subject to the
Trust's policy of seeking the best net results, dealers who provide supplemental
investment research to the Adviser or sub-advisers may receive orders for
transactions by the Trust. Information so received will be in addition to and
not in lieu of the services required to be performed by the Advisers or
sub-advisers under the Advisory Agreement and Sub-Advisory Agreements, and the
expenses of the Advisers and sub-advisers will not necessarily be reduced as a
result of the receipt of such supplemental information. These research services
include advice, either directly or through publications or writings, as to the
value of securities, the advisability of investing in, purchasing or selling
securities, and the availability of securities or purchasers or sellers of
securities; furnishing of analyses and reports concerning issuers, securities or
industries; providing information on economic factors and trends, assisting in
determining portfolio performance evaluation and technical market analyses. Such
services are used by the Advisers or sub-advisers in connection with their
investment decision-making process with respect to one or more funds and
accounts managed by them, and may not be used exclusively with respect to the
fund or account generating the brokerage.
The money market securities in which a Portfolio invests are traded
primarily in the over-the-counter market. Bonds and debentures are usually
traded over-the-counter, but may be traded on an exchange. Where possible, each
Adviser will deal directly with the dealers who make a market in the securities
involved except in those circumstances where better prices and execution are
available elsewhere. Such dealers usually are acting as principal for their own
account. On occasion, securities may be purchased directly from the issuer.
Money market securities are generally traded on a net basis and do not normally
involve either brokerage commissions or transfer taxes. The cost of executing
portfolio securities transactions of a Portfolio will primarily consist of
dealer spreads and underwriting commissions.
It is expected that the Portfolios may execute brokerage or other agency
transactions through the Distributor, a registered broker-dealer, for a
commission, in conformity with the 1940 Act, the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder. Under these
provisions, the Distributor is permitted to receive and retain compensation for
effecting portfolio transactions for a Portfolio on an exchange if a written
contract is in effect between the Distributor and the Trust expressly permitting
the Distributor to receive and retain such compensation. These provisions
further require that commissions paid to the Distributor by the Trust for
exchange 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 renumeration
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 the Distributor and will
review these procedures periodically.
In addition, SFM has adopted a policy respecting the receipt of research and
related products and services in connection with transactions effected for
Portfolios operating within the "Manager of Managers" structure. Under this
policy, SFM and the various firms that serve as sub-advisers to certain
Portfolios of the Trust, in the exercise of joint investment discretion over the
assets of a Portfolio, will direct a substantial portion of a Portfolio's
brokerage to the Distributor in consideration of the Distributor's provision of
research and related products to SFM for use in performing its advisory
responsibilities. All such transactions directed to the Distributor must be
accomplished in a manner that is consistent with the Trust's policy to achieve
best net results, and must comply with the Trust's procedures regarding the
execution of transactions through affiliated brokers.
S-27
<PAGE>
For the fiscal year ended February 28, 1997, the Portfolios paid the
following brokerage fees:
<TABLE>
<CAPTION>
% TOTAL TOTAL $
TOTAL $ AMOUNT % OF TOTAL BROKERED TOTAL $ AMOUNT OF
TOTAL $ AMOUNT OF BROKERAGE BROKERAGE TRANSACTIONS AMOUNT OF BROKERAGE
OF BROKERAGE COMMISSIONS COMMISSIONS EFFECTED BROKERED COMMISSIONS
COMMISSION PAID TO PAID TO THROUGH TRANSACTIONS PAID FOR
PAID IN 1997 AFFILIATES IN AFFILIATES AFFILIATES FOR RESEARCH RESEARCH IN
PORTFOLIO (000) 1997 (000) IN 1997 IN 1997 IN 1997 1997
- ----------------------------------- -------------- -------------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
International Equity Portfolio..... $ 2,320 $ 383 16.51% 34.17% $487,052,633 $479,553
Emerging Markets Equity
Portfolio........................ $ 1,812 $ 86 4.75% 5.49% $32,270,510 $124,333
International Fixed Income
Portfolio........................ $ 0 $ 0 0% 0% $ 0 $ 0
Emerging Markets Debt
Portfolio........................ * * * * * *
</TABLE>
- ------------------------
* Not in operation during such period.
For the fiscal years ended February 28, 1995 and February 29, 1996, the
Portfolios paid the following brokerage fees:
<TABLE>
<CAPTION>
TOTAL $ AMOUNT TOTAL $ AMOUNT
TOTAL $ AMOUNT TOTAL $ AMOUNT OF BROKERAGE OF BROKERAGE
OF BROKERAGE OF BROKERAGE COMMISSIONS COMMISSIONS
COMMISSIONS COMMISSIONS PAID TO PAID TO
PAID IN 1995 PAID IN 1996 AFFILIATES IN AFFILIATES IN
PORTFOLIO (000) (000) 1995 (000) 1996 (000)
- ----------------------------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
International Equity Portfolio..... $ 1,482 $ 1,604 $ 171 $ 577
Emerging Markets Equity
Portfolio........................ $ 26 $ 487 $ 0 $ 0
International Fixed Income
Portfolio........................ $ 0 $ 0 * $ 0
Emerging Markets Debt Portfolio.... * * * *
</TABLE>
- ------------------------
* Not in operation during such period.
The principal reason for the increase in brokerage commissions paid by the
International Equity Portfolio in the last three fiscal years was the growth of
the assets in the International Equity Portfolio.
For the fiscal years ended February 28, 1995, February 29, 1996, and
February 28, 1997, Class D Shareholders paid the following sales charges:
<TABLE>
<CAPTION>
DOLLAR AMOUNT OF CHARGES
DOLLAR AMOUNT OF CHARGES
RETAINED BY SIDCO
------------------------------- -----------------------------
PORTFOLIO 1995 1996 1997 1995 1996 1997
- --------------------------------------------- ----- ----- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
International Equity Portfolio--Class D...... $ 0 $ 0 $ 3,103 $ 0 $ 0 $ 342
</TABLE>
Since the Trust does not market its shares through intermediary brokers or
dealers, it is not the Trust's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. However, the Advisers may place Portfolio orders with qualified
broker-dealers who recommend the Trust to clients, and may, when a number of
brokers and dealers can provide best price and execution on a particular
transaction, consider such recommendations by a broker or dealer in selecting
among broker-dealers.
S-28
<PAGE>
The portfolio turnover rate for each Portfolio for the fiscal years ended
February 29, 1996 and February 28, 1997 was as follows:
<TABLE>
<CAPTION>
TURNOVER RATE
------------------------
PORTFOLIO 1996 1997
- ------------------------------------------------------------------------------------------------ ----------- -----------
<S> <C> <C>
International Equity Portfolio.................................................................. 102% 117%
Emerging Markets Equity Portfolio............................................................... 104% 100%
International Fixed Income Portfolio............................................................ 269% 352%
Emerging Markets Debt Portfolio................................................................. * *
</TABLE>
- ------------------------
* Not in operation during such period.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of each Portfolio, each of which represents an equal proportionate
interest in that Portfolio. Each share upon liquidation entitles a shareholder
to a pro rata share in the net assets of that Portfolio. Shareholders have no
preemptive rights. The Declaration of Trust provides that the Trustees of the
Trust may create additional portfolios of shares or classes of portfolios. Share
certificates representing the shares will not be issued.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for
his own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or administrators, shall not be liable
for any neglect or wrongdoing of any such person. The Declaration of Trust also
provides that the Trust will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with actual or threatened
litigation in which they may be involved because of their offices with the Trust
unless it is determined in the manner provided in the Declaration of Trust that
they have not acted in good faith in the reasonable belief that their actions
were in the best interests of the Trust. However, nothing in the Declaration of
Trust shall protect or indemnify a Trustee against any liability for his wilful
misfeasance, bad faith, gross negligence or reckless disregard of his duties.
VOTING
Where the Prospectuses for the Portfolios or Statement of Additional
Information state that an investment limitation or a fundamental policy may not
be changed without shareholder approval, such approval means the vote of (i) 67%
or more of a Portfolio's shares present at a meeting if the holders of more than
50% of the outstanding shares of the Portfolio are present or represented by
Proxy, or (ii) more than 50% of a Portfolio's outstanding shares, whichever is
less.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a Trust could,
under certain circumstances, be held personally liable as partners for the
obligations of the Trust. Even if, however, the Trust were held to be a
partnership, the possibility of the shareholders' incurring financial loss for
that reason appears remote because the Trust's Declaration of Trust contains an
express disclaimer of shareholder liability for obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by or on behalf of the Trust or the
Trustees, and because the Declaration of Trust provides for indemnification out
of the Trust property for any shareholders held personally liable for the
obligations of the Trust.
S-29
<PAGE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of June 1, 1997, the following persons were the only persons who were
record owners (or to the knowledge of the Trust, beneficial owners) of 5% or
more of the shares of the Portfolios. The Trust believes that most of the shares
referred to below were held by the below persons in accounts for their
fiduciary, agency or custodial customers.
INTERNATIONAL EQUITY PORTFOLIO:
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUNDS
- ----------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
SEI Trust Company ........................................................... 40,067,128.9950 66.68%
Attn: Jacqueline Esposito
Oaks, PA 19456
</TABLE>
INTERNATIONAL FIXED INCOME:
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUNDS
- ----------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
Mutual Fund Special Cust. Acct. ............................................. 1,180,555.2120 5.06%
For EXCL Benefit of Customers
of Montgomery Securities
600 Montgomery St., 4th Fl.
San Francisco, CA 94111-2703
SEI Trust Company ........................................................... 16,103,989.4140 69.04%
Attn: Jacqueline Esposito
Oaks, PA 19456
</TABLE>
EMERGING MARKETS EQUITY:
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUNDS
- ----------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
SEI Trust Company ........................................................... 15,837,015.1470 75.33%
Attn: Jacqueline Esposito
Oaks, PA 19456
Patterson & Co. ............................................................. 1,087,122.9930 5.17%
c/o Corestates Bank NA
P.O. Box 7829
Philadelphia, PA 19101-7829
</TABLE>
EXPERTS
The financial statements incorporated by reference into this Statement of
Additional Information have been incorporated by reference in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
The Trust's financial statements for the fiscal year ended February 28,
1997, including notes thereto and the report of Price Waterhouse LLP thereon,
are herein incorporated by reference from the Trust's 1997 Annual Report. A copy
of the 1997 Annual Report must accompany the delivery of this Statement of
Additional Information.
S-30
<PAGE>
PART C: OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS:
(a) Financial Statements:
Part A--Financial Highlights
Part B--The following audited Financial Statements for the fiscal year
ended February 28, 1997 and Report of Independent Accountants dated April
9, 1997 are incorporated by reference to the Statement of Additional
Information from Form N-30D filed on April 23, 1997 with Accession Number
0000935069-97-000049.
Statement of Net Assets
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
(b) Additional Exhibits:
<TABLE>
<S> <C>
(1) Agreement and Declaration of Trust dated June 28, 1988 as originally filed
with Registrant's Registration Statement on Form N-1A (File No. 33-22821)
filed with the Securities and Exchange Commission ("SEC") on June 30,
1988, is filed herewith.
(2) By-Laws as originally filed with Registrant's Registration Statement on Form
N-1A (File No. 33-22821) filed with the SEC on June 30, 1988, are
incorporated herein by reference to Post-Effective Amendment No. 22, filed
with the SEC on April 8, 1997.
(2)(a) Amended By-Laws are incorporated herein by reference to Post-Effective
Amendment No. 22 to Registrant's Registration Statement on Form N-1A (File
No. 33-22821), filed with the SEC on April 8, 1997.
(3) Not Applicable
(4) Not Applicable
(5)(a) Investment Advisory Agreement between Registrant and Brinson Partners, Inc.
dated June 5, 1991 as originally filed as Exhibit (5)(b) to Post-Effective
Amendment No. 6 to Registrant's Registration Statement on Form N-1A (File
No. 33-22821), filed with the SEC on May 16, 1991, is incorporated herein
by reference to Post-Effective Amendment No. 22, filed with the SEC on
April 8, 1997.
(5)(b) Investment Advisory Agreement between Registrant and Strategic Fixed Income
L.P. dated June 15, 1993 as originally filed as Exhibit (5)(c) to
Post-Effective Amendment No. 9 to Registrant's Registration Statement on
Form N-1A (File No. 33-22821), filed with the SEC on March 31, 1993, is
filed herewith.
(5)(c) Investment Advisory Agreement between Registrant and Morgan Grenfell
Investment Services Ltd. dated April 25, 1994 as originally filed as
Exhibit (5)(e) to Post-Effective Amendment No. 16 to Registrant's
Registration Statement on Form N-1A (File No. 33-22821), filed with the
SEC on May 2, 1994, is incorporated herein by reference to Post-Effective
Amendment No. 22, filed with the SEC on April 8, 1997.
(5)(d) Investment Advisory Agreement between Registrant and Schroder Capital
Management International Limited dated April 25, 1994 as originally filed
as Exhibit (5)(f) to Post-Effective Amendment No. 16 to Registrant's
Registration Statement on Form N-1A (File No. 33-22821), filed with the
SEC on May 2, 1994, is incorporated herein by reference to Post-Effective
Amendment No. 22, filed with the SEC on April 8, 1997.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(5)(e) Investment Advisory Agreement between Registrant and SEI Financial
Management Corporation dated December 16, 1994 incorporated herein by
reference as Exhibit (5)(g) to Post-Effective Amendment No. 19 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821),
filed with the SEC on April 28, 1995.
(5)(f) Investment Advisory Agreement between Registrant and Strategic Fixed Income
L.P. dated April 25, 1994, as previously filed as Exhibit (5)(h) to
Post-Effective Amendment No. 19 to Registrant's Registration Statement on
Form N-1A (File No. 33-22821), filed with the SEC on April 28, 1995, is
incorporated herein by reference to Post-Effective Amendment No. 22, filed
with the SEC on April 8, 1997.
(5)(g) Investment Sub-Advisory Agreement between Registrant and Morgan Grenfell
Investment Services Ltd. dated March 25, 1996, previously filed as Exhibit
(5)(i) to Post-Effective Amendment No. 19 to Registrant's Registration
Statement on Form N-1A (File No. 33-22821), filed with the SEC on April
28, 1995, is incorporated herein by reference to Post-Effective Amendment
No. 22, filed with the SEC on April 8, 1997.
(5)(h) Investment Sub-Advisory Agreement between Registrant and Schroder Capital
Management International Limited dated December 14, 1995 previously filed
as Exhibit (5)(j) to Post-Effective Amendment No. 19 to Registrant's
Registration Statement on Form N-1A (File No. 33-22821), filed with the
SEC on April 28, 1995, is incorporated herein by reference to
Post-Effective Amendment No. 22, filed with the SEC on April 8, 1997.
(5)(i) Investment Sub-Advisory Agreement between Registrant and Montgomery Asset
Management L.P. dated December 21, 1994 incorporated herein by reference
as Exhibit (5)(k) to Post-Effective Amendment No. 19 to Registrant's
Registration Statement on Form N-1A (File No. 33-22821), filed with the
SEC on April 28, 1995.
(5)(j) Investment Sub-Advisory Agreement between Registrant and Acadian Asset
Management, Inc. dated December 16, 1994 incorporated herein by reference
as Exhibit (5)(l) to Post-Effective Amendment No. 19 to Registrant's
Registration Statement on Form N-1A (File No. 33-22821), filed with the
SEC on April 28, 1995.
(5)(k) Investment Sub-Advisory Agreement between Registrant and WorldInvest Limited
dated December 16, 1994 incorporated herein by reference as Exhibit (5)(m)
to Post-Effective Amendment No. 19 to Registrant's Registration Statement
on Form N-1A (File No. 33-22821), filed with the SEC on April 28, 1995.
(5)(l) Investment Sub-Advisory Agreement between SEI Financial Management
Corporation and Schroder Capital Management International Limited
incorporated herein by reference as Exhibit (5)(n) to Registrant's
Registration Statement on Form N-1A (File No. 33-22821), filed with the
SEC on April 25, 1996.
(5)(m) Investment Sub-Advisory Agreement between SEI Financial Management
Corporation and Morgan Grenfell Investment Services Limited incorporated
herein by reference as Exhibit (5)(o) to Registrant's Registration
Statement on Form N-1A (File No. 33-22821), filed with the SEC on April
25, 1996.
(5)(n) Investment Sub-Advisory Agreement between SEI Financial Management
Corporation and Coronation Asset Management (Proprietary) Limited dated
September 30, 1996 is incorporated herein by reference to Post-Effective
Amendment No. 22 to Registrant's Registration Statement on Form N-1A (File
No. 33-22821), filed with the SEC on April 8, 1997.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(5)(o) Investment Sub-Advisory Agreement between SEI Financial Management
Corporation and Parametric Portfolio Associates dated September 11, 1996
is incorporated herein by reference to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821),
filed with the SEC on April 8, 1997.
(5)(p) Investment Sub-Advisory Agreement between SEI Financial Management
Corporation and Farrell Wako Global Investment Management, Inc. dated June
14, 1996 is incorporated herein by reference to Post-Effective Amendment
No. 22 to Registrant's Registration Statement on Form N-1A (File No.
33-22821), filed with the SEC on April 8, 1997.
(5)(q) Investment Sub-Advisory Agreement between SEI Financial Management
Corporation and Lazard London International Investment Management Limited
dated December 30, 1996 is incorporated herein by reference to
Post-Effective Amendment No. 22 to Registrant's Registration Statement on
Form N-1A (File No. 33-22821), filed with the SEC on April 8, 1997.
(5)(r) Investment Sub-Advisory Agreement between SEI Financial Management
Corporation and Seligman Henderson Co. dated June 14, 1996 is incorporated
herein by reference to Post-Effective Amendment No. 22 to Registrant's
Registration Statement on Form N-1A (File No. 33-22821), filed with the
SEC on April 8, 1997.
(5)(s) Investment Sub-Advisory Agreement between SEI Financial Management
Corporation and Yamaichi Capital Management/Yamaichi Capital Management
(Singapore) Limited dated June 14, 1996 is incorporated herein by
reference to Post-Effective Amendment No. 22 to Registrant's Registration
Statement on Form N-1A (File No. 33-22821), filed with the SEC on April 8,
1997.
(5)(t) Investment Advisory Agreement between Registrant and Acadian Asset
Management, Inc. dated November 7, 1994 is incorporated herein by
reference to Post-Effective Amendment No. 22 to Registrant's Registration
Statement on Form N-1A (File No. 33-22821), filed with the SEC on April 8,
1997.
(5)(u) Investment Advisory Agreement between Registrant and World Invest Limited
dated November 7, 1994 is incorporated herein by reference to
Post-Effective Amendment No. 22 to Registrant's Registration Statement on
Form N-1A (File No. 33-22821), filed with the SEC on April 8, 1997.
(6) Distribution Agreement between Registrant and SEI Financial Services Company
as originally filed with Pre-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A (File No. 33-22821), filed with the
SEC on August 30, 1988, is filed herewith.
(7) Not Applicable
(8)(a) Custodian Agreement between Registrant and State Street Bank and Trust
Company as originally filed as Exhibit (8) to Post-Effective Amendment No.
1 to Registrant's Registration Statement on Form N-1A (File No. 33-22821),
filed with the SEC on September 16, 1988, is filed herewith.
(8)(b) Custodian Agreement between Registrant and The Chase Manhattan Bank, N.A. as
originally filed as Exhibit (8)(c) to Post-Effective Amendment No. 9 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821),
filed with the SEC on March 31, 1993, is filed herewith.
(9)(a) Management Agreement between Registrant and SEI Financial Management Company
as originally filed as Exhibit (5)(a) to Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821),
filed with the SEC on August 30, 1988, is filed herewith.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
(9)(b) Schedule C to Management Agreement between Registrant and SEI Financial
Management Company adding the International Fixed Income Portfolio as
originally filed as Exhibit (5)(d) to Post-Effective Amendment No. 10 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821),
filed with the SEC on June 28, 1993, is incorporated herein by reference
to Post-Effective Amendment No. 22 filed with the SEC on April 8, 1997.
(9)(c) Consent to Assignment and Assumption Agreement between SFM and SEI Fund
Management dated May 31, 1996 is incorporated herein by reference to Post-
Effective Amendment No. 22 to Registrant's Registration Statement on Form
N-1A (File No. 33-22821), filed with the SEC on April 8, 1997.
(10) Opinion and Consent of Counsel as originally filed with Pre-Effective
Amendment No. 1 to Registrant's Registration Statement on Form N-1A (File
No. 33-22821), filed with the SEC on August 30, 1988, is incorporated
herein by reference to Post-Effective Amendment No. 22 filed with the SEC
on April 8, 1997.
(11) Consent of Independent Accountants is filed herewith.
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15)(a) Distribution Plan (Class D) as originally filed with Post-Effective
Amendment No. 10 to Registrant's Registration Statement on Form N-1A (File
No. 33-22821), filed with the SEC on June 28, 1993, is incorporated herein
by reference to Post-Effective Amendment No. 22 filed with the SEC on
April 8, 1997.
(15)(b) Distribution Plan (Core International Equity Portfolio Class A) as
originally filed with Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A (File No. 33-22821), filed with the
SEC on June 29, 1993, is filed herewith.
(15)(c) Distribution Plan (International Fixed Income Portfolio) as originally filed
with Post-Effective Amendment No. 11 to Registrant's Registration
Statement on Form N-1A (File No. 33-22821), filed with the SEC on June 29,
1993, is filed herewith.
(15)(d) Amended and Restated Distribution Plan is incorporated herein by reference
to Post-Effective Amendment No. 22 to Registrant's Registration Statement
on Form N-1A (File No. 33-22821), filed with the SEC on April 8, 1997.
(15)(e) Shareholder Service Plan and Agreement with respect to the Class A shares is
incorporated herein by reference to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821),
filed with the SEC on April 8, 1997.
(16) Performance Quotation Computation as originally filed with Post-Effective
Amendment No. 7 to Registrant's Registration Statement on Form N-1A (File
No. 33-22821), filed with the SEC on June 30, 1992, is incorporated herein
by reference to Post-Effective Amendment No. 22 filed with the SEC on
April 8, 1997.
(17) Financial Data Schedules for the Class A International Equity, Class D
International Equity, Class A International Fixed Income and the Class A
Emerging Markets Equity Portfolios are filed herewith.
(18)(a) Rule 18f-3 Multiple Class Plan as originally filed as Exhibit (15)(d) to
Registrant's Registration Statement on Form N-14 (File No. 33-65361),
filed with the SEC on December 22, 1995, is incorporated herein by
reference to Post-Effective Amendment No. 22 filed with the SEC on April
8, 1997.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
(18)(b) Amendment No. 1 to Rule 18f-3 Plan relating to Class A and Class D shares is
incorporated herein by reference to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821),
filed with the SEC on April 8, 1997.
(24) Powers of Attorney for Robert A. Nesher, William M. Doran, Mark E. Nagle, F.
Wendell Gooch, George J. Sullivan, Jr., James M. Storey, David G. Lee and
Frank E. Morris are incorporated herein by reference to Post-Effective
Amendment No. 22 to Registrant's Registration Statement on Form N-1A (File
No. 33-22821), filed with the SEC on April 8, 1997.
</TABLE>
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
See the Prospectus and Statement of Additional Information regarding the
Trust's control relationships. The Manager is a subsidiary of SEI Investments
Company which also controls the distributor of the Registrant (SEI Investments
Distribution Co.) and other corporations engaged in providing various financial
and record keeping services, primarily to bank trust departments, pension plan
sponsors and investment managers.
Item 26. NUMBER OF HOLDERS OF SECURITIES:
As of June 1, 1997:
<TABLE>
<CAPTION>
NUMBER OF
RECORD
TITLE OF CLASS HOLDERS
- ---------------------------------------------------------------------------------- -------------
<S> <C>
Units of beneficial interest, without par value--
International Equity Portfolio
Class A......................................................................... 276
International Equity Portfolio
Class D......................................................................... 38
International Fixed Income Portfolio
Class A......................................................................... 161
Emerging Markets Equity Portfolio
Class A......................................................................... 126
Emerging Markets Debt Portfolio
Class A......................................................................... 0
</TABLE>
Item 27. INDEMNIFICATION:
Article VIII of the Agreement and Declaration of Trust filed as Exhibit 1 to
the Registration Statement is incorporated by reference. Insofar as
indemnification for liabilities arising under the Securities Act of 1933, as
amended (the "Act"), may be permitted to trustees, directors, officers and
controlling persons of the Registrant by the Registrant pursuant to the
Registrant's Agreement and Declaration of Trust or otherwise, the Registrant is
aware that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and, therefore,
is unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by trustees, directors, officers or controlling persons of the Registrant
in connection with the successful defense of any act, suit or proceeding) is
asserted by such trustees, directors, officers or controlling persons in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
5
<PAGE>
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER:
ACADIAN ASSET MANAGEMENT, INC.
Acadian Asset Management, Inc. ("Acadian") is a sub-adviser for the
Registrant's International Equity Portfolio. The principal address of Acadian is
Two International Place, 26th Floor, Boston, Massachusetts 02110. Acadian is an
investment adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Acadian,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Acadian pursuant to the Advisers Act (SEC File No. 801-28078).
CORONATION ASSET MANAGEMENT (PROPRIETARY) LIMITED
Coronation Asset Management (Proprietary) Limited ("Coronation") is a
sub-adviser for the Registrant's Emerging Markets Equity Portfolio. The
principal business address of Coronation is 80 Strand Street, Cape Town, South
Africa 8001. Coronation is a sub-adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Coronation,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Coronation pursuant to the Advisers Act (SEC File No.
801-52830).
FARRELL WAKO GLOBAL INVESTMENT MANAGEMENT COMPANY, INC.
Farrell Wako Global Investment Management Company, Inc. ("Farrell Wako") is
a sub-adviser for the Registrant's International Equity Portfolio. The principal
business address of Farrell Wako is 780 Third Avenue, New York, New York 10017.
Farrell Wako is a sub-adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Farrell Wako,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Farrell Wako pursuant to the Advisers Act (SEC File No.
801-41830).
LAZARD LONDON INTERNATIONAL INVESTMENT MANAGEMENT LIMITED
Lazard London International Investment Management Limited ("Lazard") is a
sub-adviser for the Registrant's International Equity Portfolio. The principal
business address of Lazard is 21 Moorfields London, England, EC2P 2HT. Lazard is
a sub-adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Lazard,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Lazard pursuant to the Advisers Act (SEC File No. 801-15430).
PARAMETRIC PORTFOLIO ASSOCIATES
Parametric Portfolio Associates ("Parametric") is a sub-adviser for the
Registrant's Emerging Markets Equity Portfolio. The principal business address
of Parametric is 701 Fifth Avenue, Suite 7310, Seattle, WA 98104. Parametric is
a sub-adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Parametric,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Parametric pursuant to the Advisers Act (SEC File No.
801-48184).
6
<PAGE>
MONTGOMERY ASSET MANAGEMENT, L.P.
Montgomery Asset Management, L.P. ("MAM") is a sub-adviser for the
Registrant's Emerging Markets Equity Portfolio. The principal address of MAM is
101 California Street, San Francisco, California 94111. MAM is an investment
adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of MAM, together
with information as to any other business, profession, vocation or employment of
a substantial nature engaged in by such officers and directors during the past
two years, is incorporated by reference to Schedules A and D of Form ADV filed
by MAM pursuant to the Advisers Act (SEC File No. 801-36790).
SALOMON BROTHERS ASSET MANAGEMENT INC.
Salomon Brothers Asset Management Inc. ("SBAM") is the sub-adviser for the
Registrant's Emerging Markets Debt Portfolio. The principal address of SBAM is 7
World Trade Center, New York, New York 10048. SBAM is an investment adviser
registered under the Advisers Act.
The list required by this Item 28 of officers and directors of SBAM,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by SBAM pursuant to the Advisers Act (SEC File No. 801-32046).
SEI FINANCIAL MANAGEMENT CORPORATION
SEI Financial Management Corporation ("SFM") is the adviser for the
Registrant's International Equity, Emerging Markets Equity and Emerging Markets
Debt Portfolios. The principal address of SFM is Oaks, Pennsylvania 19456. SFM
is an investment adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of SFM, together
with information as to any other business, profession, vocation or employment of
a substantial nature engaged in by such officers and directors during the past
two years, is incorporated by reference to Schedules A and D of Form ADV filed
by SFM pursuant to the Advisers Act (SEC File No. 801-24593).
SELIGMAN HENDERSON CO.
Seligman Henderson Co. is a sub-adviser for the Registrant's International
Equity Portfolio. The principal business address of Seligman Henderson Co. is
100 Park Avenue, New York, New York 10017. Seligman Henderson Co. is a
sub-adviser registered under the Advisers Act.
The list required by this Item 28 of officers and directors of Seligman
Henderson Co., together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to Schedules A
and D of Form ADV filed by Seligman Henderson Co. pursuant to the Advisers Act
(SEC File No. 801-40670).
STRATEGIC FIXED INCOME L.P.
Strategic Fixed Income L.P. ("Strategic") is the adviser for the
Registrant's International Fixed Income Portfolio. The principal business
address of Strategic is 1001 Nineteenth Street North, 16th Floor, Arlington,
Virginia 22209. Strategic is an investment adviser registered under the Advisers
Act.
The list required by this Item 28 of officers and directors of Strategic,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Strategic pursuant to the Advisers Act (SEC File No.
801-38734).
7
<PAGE>
YAMAICHI CAPITAL MANAGEMENT, INC. AND YAMAICHI CAPITAL MANAGEMENT (SINGAPORE)
LIMITED
Yamaichi Capital Management, Inc. ("Yamaichi") is a sub-adviser for the
Registrant's International Equity and Emerging Markets Equity Portfolios. The
principal business address of Yamaichi is 2 World Trade Center, Suite 9828, New
York, New York 10048. Yamaichi is an investment adviser registered under the
Advisers Act.
The list required by this Item 28 of officers and directors of Yamaichi,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by Yamaichi pursuant to the Advisers Act (SEC File No.
801-15955).
YAMAICHI CAPITAL MANAGEMENT (SINGAPORE) LIMITED
Yamaichi Capital Management (Singapore) Limited ("YCMS") is a sub-adviser
for the Registrant's International Equity and Emerging Markets Equity
Portfolios. The principal address of YCMS is 138 Robinson Road #13-01/05, Hong
Leong Center, Singapore, 068906. YCMS is an investment adviser registered under
the Advisers Act.
The list required by this Item 28 of officers and directors of YCMS,
together with information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by YCMS pursuant to the Advisers Act (SEC File No. 801-44118).
Item 29. PRINCIPAL UNDERWRITERS:
(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing the securities of
the Registrant also acts as a principal underwriter, distributor or investment
adviser.
8
<PAGE>
Registrant's distributor, SEI Investments Distribution Co. ("SIDCO"), acts
as distributor for:
<TABLE>
<S> <C>
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc November 1, 1992
The Arbor Fund January 28, 1993
Boston 1784 Funds-Registered Trademark- June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis Funds-Registered Trademark- August 17, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
FMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
The Expedition Funds June 9, 1997
</TABLE>
SIDCO provides numerous financial services to investment managers, pension
plan sponsors, and bank trust departments. These services include portfolio
evaluation, performance measurement and consulting services ("Funds
Evaluation") and automated execution, clearing and settlement of securities
transactions ("MarketLink").
(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in the
answer to Item 21 of Part B. Unless otherwise noted, the business address of
each director or officer is Oaks, PA 19456.
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------- ------------------------------------------------------ ------------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief Executive Officer --
Henry H. Greer Director, President & Chief Operating Officer --
Carmen V. Romeo Director, Executive Vice President & President- --
Investment Advisory Group
Gilbert L. Beebower Executive Vice President --
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------- ------------------------------------------------------ ------------------------
<S> <C> <C>
Richard B. Lieb Executive Vice President, President-Investment --
Services Division
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
David G. Lee Senior Vice President President & Chief
Executive Officer
Jack May Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Executive Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
Kevin P. Robins Senior Vice President, General Counsel & Secretary Vice President &
Assistant Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Robert Aller Vice President --
Marc H. Cahn Vice President & Assistant Secretary Vice President &
Assistant Secretary
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President &
Assistant Secretary
Robert Crudup Vice President & Managing Director --
Barbara Doyne Vice President --
Jeff Drennen Vice President --
Vic Galef Vice President & Managing Director --
Kathy Heilig Vice President & Treasurer --
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
Donald H. Korytowski Vice President --
John Krzeminski Vice President & Managing Director --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Joanne Nelson Vice President --
Barbara A. Nugent Vice President & Assistant Secretary Assistant Secretary
Sandra K. Orlow Vice President & Assistant Secretary Assistant Secretary
Donald Pepin Vice President & Managing Director --
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------- ------------------------------------------------------ ------------------------
<S> <C> <C>
Kim Rainey Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Deputy General Counsel, Vice President & Assistant Vice President &
Secretary Assistant Secretary
Wayne M. Withrow Vice President & Managing Director --
James Dougherty Director of Brokerage Services --
</TABLE>
Item 30. LOCATION OF ACCOUNTS AND RECORDS:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules
promulgated thereunder, are maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3);
(6); (8); (12); and 31a-1(d), the required books and records are maintained
at the offices of the Portfolios' Custodians:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1), (4);
(2)(C) and (D); (4); (5); (6); (8); (9); (10); (11); and
31a-1(f), the required books and records are maintained at the
offices of Registrant's Manager:
SEI Fund Management
Oaks, PA 19456
(d) With respect to Rules 31a-(b)(5); (6), (9) and (10) and 31a-1(f),
the required books and records are maintained at the offices of Registrant's
Advisers:
SEI Financial Management Corporation
Oaks, PA 19456
Acadian Asset Management, Inc.
Two International Place, 26th Floor
Boston, MA 02110
Coronation Asset Management (Proprietary) Limited
80 Strand Street
Cape Town, South Africa, 8001
Farrell Wako Investment Management
780 Third Avenue
New York, New York 10017
Lazard London International Investment Management Limited
21 Moorfields
London, England EC2P 2HT
11
<PAGE>
Montgomery Asset Management, L.P.
101 California Street
San Francisco, CA 94111
Parametric Portfolio Associates
701 Fifth Avenue, Suite 7310
Seattle, WA 98104
Salomon Brothers Asset Management, Inc.
7 World Trade Center
New York, New York 10048
Seligman Henderson Co.
100 Park Avenue
New York, New York 10017
Strategic Fixed Income L.P.
1001 Nineteenth Street North, 17th Floor
Arlington, VA 22209
Yamaichi Capital Management, Inc.
2 World trade Center
Suite 9828
New York, New York 10048
Yamaichi Capital Management (Singapore) Limited
138 Robinson Road, #13-01/05
Hong Leong Centre
Singapore, 068906
Item 31. MANAGEMENT SERVICES:
None.
Item 32. UNDERTAKINGS:
Registrant hereby undertakes that whenever shareholders meeting the
requirements of Section 16(c) of the 1940 Act inform the Board of Trustees of
their desire to communicate with shareholders of the Trust, the Trustees will
inform such shareholders as to the approximate number of shareholders of record
and the approximate costs of mailing or afford said shareholders access to a
list of shareholders.
Registrant hereby undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a Trustee(s) when requested in
writing to do so by the holders of at least 10% of Registrant's outstanding
shares and in connection with such meetings to comply with the provisions of
Section 16(c) of the 1940 Act relating to shareholder communications.
Registrant hereby undertakes to furnish, upon request and without charge, to
each person to whom a prospectus is delivered, a copy of the Registrant's latest
annual report to Shareholders, when such annual report is issued containing
information called for by Item 5A of Form N-1A.
Registrant hereby undertakes to file a post-effective amendment, using
financial statements with respect to the Emerging Markets Debt Portfolio which
need not be certified, within four to six months from the effective date of this
Post-Effective Amendment No. 22.
NOTICE
A copy of the Agreement and Declaration of Trust of SEI International Trust
is on file with the Secretary of State of the Commonwealth of Massachusetts and
notice is hereby given that this Registration Statement has been executed on
behalf of the Trust by an officer of the Trust as an officer and by its Trustees
as trustees and not individually and the obligations of or arising out of this
Registration Statement are not binding upon any of the Trustees, officers, or
shareholders individually but are binding only upon the assets and property of
the Trust.
12
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for 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. 23 to Registration Statement No. 33-22821 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
city of Oaks, Commonwealth of Pennsylvania on the 22nd day of June, 1997.
SEI INTERNATIONAL TRUST
By /s/ DAVID G. LEE
-----------------------------------------
David G. Lee,
PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacity on the dates indicated.
*
- ------------------------------ Trustee June 22, 1997
William M. Doran
*
- ------------------------------ Trustee June 22, 1997
F. Wendell Gooch
*
- ------------------------------ Trustee June 22, 1997
Frank E. Morris
*
- ------------------------------ Trustee June 22, 1997
Robert A. Nesher
*
- ------------------------------ Trustee June 22, 1997
James M. Storey
*
- ------------------------------ Trustee June 22, 1997
George J. Sullivan, Jr.
/s/ DAVID G. LEE
- ------------------------------ President & Chief June 22, 1997
David G. Lee Executive Officer
/s/ MARK NAGLE
- ------------------------------ Controller & Chief June 22, 1997
Mark Nagle Financial Officer
*By /s/ DAVID G. LEE
-------------------------
David G. Lee
ATTORNEY-IN-FACT
13
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EXHIBIT INDEX
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EX-99.B(1) Agreement and Declaration of Trust dated June 28, 1988 as originally filed with
Registrant's Registration Statement on Form N-1A (File No. 33-22821) filed with
the Securities and Exchange Commission ("SEC") on June 30, 1988, is filed
herewith.
EX-99.B(2) By-Laws as originally filed with Registrant's Registration Statement on Form N-1A
(File No. 33-22821) filed with the SEC on June 30, 1988, are incorporated herein
by reference to Post-Effective Amendment
No. 22, filed with the SEC on April 8, 1997.
EX-99.B(2)(a) Amended By-Laws are incorporated herein by reference to Post-Effective Amendment
No. 22 to Registrant's Registration Statement on
Form N-1A (File No. 33-22821), filed with the SEC on April 8, 1997.
EX-99.B(3) Not Applicable
EX-99.B(4) Not Applicable
EX-99.B(5)(a) Investment Advisory Agreement between Registrant and Brinson Partners, Inc. dated
June 5, 1991 as originally filed as Exhibit (5)(b) to Post-Effective Amendment
No. 6 to Registrant's Registration Statement on Form N-1A (File No. 33-22821),
filed with the SEC on May 16, 1991, is incorporated herein by reference to
Post-Effective Amendment No. 22, filed with the SEC on April 8, 1997.
EX-99.B(5)(b) Investment Advisory Agreement between Registrant and Strategic Fixed Income L.P.
dated June 15, 1993 as originally filed as Exhibit (5)(c) to Post-Effective
Amendment No. 9 to Registrant's Registration Statement on Form N-1A (File No.
33-22821), filed with the SEC on March 31, 1993, is filed herewith.
EX-99.B(5)(c) Investment Advisory Agreement between Registrant and Morgan Grenfell Investment
Services Ltd. dated April 25, 1994 as originally filed as Exhibit (5)(e) to
Post-Effective Amendment No. 16 to Registrant's Registration Statement on Form
N-1A (File No. 33-22821), filed with the SEC on May 2, 1994, is incorporated
herein by reference to Post-Effective Amendment No. 22, filed with the SEC on
April 8, 1997.
EX-99.B(5)(d) Investment Advisory Agreement between Registrant and Schroder Capital Management
International Limited dated April 25, 1994 as originally filed as Exhibit (5)(f)
to Post-Effective Amendment No. 16 to Registrant's Registration Statement on Form
N-1A (File No. 33-22821), filed with the SEC on May 2, 1994, is incorporated
herein by reference to Post-Effective Amendment No. 22, filed with the SEC on
April 8, 1997.
EX-99.B(5)(e) Investment Advisory Agreement between Registrant and SEI Financial Management
Corporation dated December 16, 1994 incorporated herein by reference as Exhibit
(5)(g) to Post-Effective Amendment No. 19 to Registrant's Registration Statement
on Form N-1A (File No. 33-22821), filed with the SEC on April 28, 1995.
EX-99.B(5)(f) Investment Advisory Agreement between Registrant and Strategic Fixed Income L.P.
dated April 25, 1994, previously filed as Exhibit (5)(h) to Post-Effective
Amendment No. 19 to Registrant's Registration Statement on Form N-1A (File No.
33-22821), filed with the SEC on April 28, 1995, is incorporated herein by
reference to Post-Effective Amendment No. 22, filed with the SEC on April 8,
1997.
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EX-99.B(5)(g) Investment Sub-Advisory Agreement between Registrant and Morgan Grenfell Investment
Services Ltd. dated March 25, 1996, previously filed as Exhibit (5)(i) to
Post-Effective Amendment No. 19 to Registrant's Registration Statement on Form
N-1A (File No. 33-22821), filed with the SEC on April 28, 1995, is incorporated
herein by reference to Post-Effective Amendment No. 22, filed with the SEC on
April 8, 1997.
EX-99.B(5)(h) Investment Sub-Advisory Agreement between Registrant and Schroder Capital
Management International Limited dated December 14, 1995, previously filed as
Exhibit (5) (j) to Post-Effective Amendment No. 19 to Registrant's Registration
Statement on Form N-1A (File No. 33-22821), filed with the SEC on April 28, 1995,
is incorporated herein by reference to Post-Effective Amendment No. 22, filed
with the SEC on April 8, 1997.
EX-99.B(5)(i) Investment Sub-Advisory Agreement between Registrant and Montgomery Asset
Management L.P. dated December 21, 1994 incorporated herein by reference as
Exhibit (5)(k) to Post-Effective Amendment No. 19 to Registrant's Registration
Statement on Form N-1A (File No. 33-22821), filed with the SEC on April 28, 1995.
EX-99.B(5)(j) Investment Sub-Advisory Agreement between Registrant and Acadian Asset Management,
Inc. dated December 16, 1994 incorporated herein by reference as Exhibit (5)(l)
to Post-Effective Amendment No. 19 to Registrant's Registration Statement on Form
N-1A (File No. 33-22821), filed with the SEC on April 28, 1995.
EX-99.B(5)(k) Investment Sub-Advisory Agreement between Registrant and WorldInvest Limited dated
December 16, 1994 incorporated herein by reference as Exhibit (5)(m) to
Post-Effective Amendment No. 19 to Registrant's Registration Statement on Form
N-1A (File No. 33-22821), filed with the SEC on April 28, 1995.
EX-99.B(5)(l) Investment Sub-Advisory Agreement between SEI Financial Management Corporation and
Schroder Capital Management International Limited incorporated herein by
reference as Exhibit (5)(n) to Registrant's Registration Statement on Form N-1A
(File No. 33-22821), filed with the SEC on April 25, 1996.
EX-99.B(5)(m) Investment Sub-Advisory Agreement between SEI Financial Management Corporation and
Morgan Grenfell Investment Services Limited incorporated herein by reference as
Exhibit (5)(o) to Registrant's Registration Statement on Form N-1A (File No.
33-22821), filed with the SEC on April 25, 1996.
EX-99.B(5)(n) Investment Sub-Advisory Agreement between SEI Financial Management Corporation and
Coronation Asset Management (Proprietary) Limited dated September 30, 1996 is
incorporated herein by reference to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with
the SEC on April 8, 1997.
EX-99.B(5)(o) Investment Sub-Advisory Agreement between SEI Financial Management Corporation and
Parametric Portfolio Associates dated September 11, 1996 is incorporated herein
by reference to Post-Effective Amendment No. 22 to Registrant's Registration
Statement on Form N-1A
(File No. 33-22821), filed with the SEC on April 8, 1997.
EX-99.B(5)(p) Investment Sub-Advisory Agreement between SEI Financial Management Corporation and
Farrell Wako Global Investment Management, Inc. dated June 14, 1996 is
incorporated herein by reference to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with
the SEC on April 8, 1997.
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EX-99.B(5)(q) Investment Sub-Advisory Agreement between SEI Financial Management Corporation and
Lazard London International Investment Management Limited dated December 30, 1996
is incorporated herein by reference to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with
the SEC on April 8, 1997.
EX-99.B(5)(r) Investment Sub-Advisory Agreement between SEI Financial Management Corporation and
Seligman Henderson Co. dated June 14, 1996 is incorporated herein by reference to
Post-Effective Amendment No. 22 to Registrant's Registration Statement on Form
N-1A (File No. 33-22821), filed with the SEC on April 8, 1997.
EX-99.B(5)(s) Investment Sub-Advisory Agreement between SEI Financial Management Corporation and
Yamaichi Capital Management/Yamaichi Capital Management (Singapore) Limited dated
June 14, 1996 is incorporated herein by reference to Post-Effective Amendment No.
22 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed
with the SEC on April 8, 1997.
EX-99.B(5)(t) Investment Advisory Agreement between Registrant and Acadian Asset Management, Inc.
dated November 7, 1994 is incorporated herein by reference to Post-Effective
Amendment No. 22 to Registrant's Registration Statement on Form N-1A (File No.
33-22821), filed with the SEC on April 8, 1997.
EX-99.B(5)(u) Investment Advisory Agreement between Registrant and WorldInvest Limited dated
November 7, 1994 is incorporated herein by reference to Post-Effective Amendment
No. 22 to Registrant's Registration Statement on Form N-1A (File No. 33-22821),
filed with the SEC on April 8, 1997.
EX-99.B(6) Distribution Agreement between Registrant and SEI Financial Services Company as
originally filed with Pre-Effective Amendment No. 1 to Registrant's Registration
Statement on Form N-1A (File No. 33-22821), filed with the SEC on August 30,
1988, is filed herewith.
EX-99.B(7) Not Applicable
EX-99.B(8)(a) Custodian Agreement between Registrant and State Street Bank and Trust Company as
originally filed as Exhibit (8) to Post-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A (File No. 33-22821), filed with the SEC on
September 16, 1988, is filed herewith.
EX-99.B(8)(b) Custodian Agreement between Registrant and The Chase Manhattan Bank, N.A. as
originally filed as Exhibit (8)(c) to Post-Effective Amendment No. 9 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with
the SEC on March 31, 1993, is filed herewith.
EX-99.B(9)(a) Management Agreement between Registrant and SEI Financial Management Company as
originally filed as Exhibit (5)(a) to Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with
the SEC on August 30, 1988, is filed herewith.
EX-99.B(9)(b) Schedule C to Management Agreement between Registrant and SEI Financial Management
Company adding the International Fixed Income Portfolio as originally filed as
Exhibit (5)(d) to Post-Effective Amendment No. 10 to Registrant's Registration
Statement on Form N-1A (File No. 33-22821), filed with the SEC on June 28, 1993,
is incorporated herein by reference to Post-Effective Amendment No. 22, filed
with the SEC on April 8, 1997.
</TABLE>
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EX-99.B(9)(c) Consent to Assignment and Assumption Agreement between SFM and SEI Fund Management
dated May 31, 1996 is incorporated herein by reference to Post-Effective
Amendment No. 22 to Registrant's Registration Statement on Form N-1A (File No.
33-22821), filed with the SEC on April 8, 1997.
EX-99.B(10) Opinion and Consent of Counsel as originally filed with Pre-Effective Amendment No.
1 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed
with the SEC on August 30, 1988, is incorporated herein by reference to
Post-Effective Amendment No. 22, filed with the SEC on April 8, 1997.
EX-99.B(11) Consent of Independent Accountants is filed herewith.
EX-99.B(12) Not Applicable
EX-99.B(13) Not Applicable
EX-99.B(14) Not Applicable
EX-99.B(15)(a) Distribution Plan (Class D) as originally filed with Post-Effective Amendment No.
10 to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed
with the SEC on June 28, 1993, is incorporated herein by reference to
Post-Effective Amendment No. 22, filed with the SEC on April 8, 1997.
EX-99.B(15)(b) Distribution Plan (Core International Equity Portfolio Class A) as originally filed
with Post-Effective Amendment No. 11 to Registrant's Registration Statement on
Form N-1A (File No. 33-22821), filed with the SEC on June 29, 1993, is filed
herewith.
EX-99.B(15)(c) Distribution Plan (International Fixed Income Portfolio) as originally filed with
Post-Effective Amendment No. 11 to Registrant's Registration Statement on Form
N-1A (File No. 33-22821), filed with the SEC on June 29, 1993, is filed herewith.
EX-99.B(15)(d) Amended and Restated Distribution Plan is incorporated herein by reference to
Post-Effective Amendment No. 22 to Registrant's Registration Statement on Form
N-1A (File No. 33-22821), filed with the SEC on April 8, 1997.
EX-99.B(15)(e) Shareholder Service Plan and Agreement with respect to the Class A shares is
incorporated herein by reference to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with
the SEC on April 8, 1997.
EX-99.B(16) Performance Quotation Computation as originally filed with Post-Effective Amendment
No. 7 to Registrant's Registration Statement on Form N-1A (File No. 33-22821),
filed with the SEC on June 30, 1992, is incorporated herein by reference to
Post-Effective Amendment No. 22, filed with the SEC on April 8, 1997.
EX-99.B(18)(a) Rule 18f-3 Multiple Class Plan as originally filed as Exhibit (15)(d) to
Registrant's Registration Statement on Form N-14 (File No. 33-65361), filed with
the SEC on December 22, 1995, is incorporated herein by reference to
Post-Effective Amendment No. 22, filed with the SEC on April 8, 1997.
EX-99.B(18)(b) Amendment No. 1 to Rule 18f-3 Plan relating to Class A and Class D shares is
incorporated herein by reference to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed with
the SEC on April 8, 1997.
</TABLE>
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EX-99.B(24) Powers of Attorney for Robert A. Nesher, William M. Doran, Mark E. Nagle, F.
Wendell Gooch, George J. Sullivan, Jr., James M. Storey, David G. Lee and Frank
E. Morris are incorporated herein by reference to Post-Effective Amendment No. 22
to Registrant's Registration Statement on Form N-1A (File No. 33-22821), filed
with the SEC on April 8, 1997.
EX-27.1 Financial Data Schedules for the Class A International Equity Portfolio.
EX-27.2 Financial Data Schedules for the Class D International Equity Portfolio.
EX-27.3 Financial Data Schedules for the Class A International Fixed Income Portfolio.
EX-27.4 Financial Data Schedules for the Class A Emerging Markets Equity Portfolio.
</TABLE>
<PAGE>
SEI WEALTH MANAGEMENT TRUST
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST dated the 28th day of June, 1988,
by the Trustees hereunder, and by the holders of Shares of beneficial interest
to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of a Massachusetts voluntary association with
transferable Shares in accordance with the provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets, which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the pro rata benefit of the holders from
time to time of Shares in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1. This Trust shall be known as the "SEI Wealth Management
Trust," and the Trustees shall conduct the business of the Trust under that name
or any other name as they may from time to time determine.
DEFINITIONS
SECTION 2. Whenever used herein, unless otherwise required by the
context or specifically provided:
(a) The "Trust" refers to the Massachusetts voluntary
association established by this Agreement and Declaration of Trust, as
amended from time to time;
(b) "Trustees" refers to the Trustees of the Trust named herein
or elected in accordance with Article IV and then in office;
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<PAGE>
(c) The term "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest in the Trust
shall be divided from time to time or, if more than one series of
Shares is authorized by the Trustees, the equal proportionate
transferable units into which each series of Shares shall be divided
from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The terms "Affiliated Person," "Assignment," "Commission,"
"Interested Person," "Principal Underwriter" and "Majority Shareholder
Vote" (the 67% or 50% requirement of the third sentence of Section
2(a)(42) of the Investment Company Act of 1940 and the rules and
Regulations thereunder, all as amended from time to time, whichever
may be applicable) shall have the meanings given them in the Act;
(f) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to time; and
(g) "By-Laws" shall mean the By-Laws of the Trust as amended
from time to time.
(h) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from time to
time.
ARTICLE II
PURPOSE
The purpose of the Trust is to provide investors with one or more
investment portfolios consisting primarily of securities, including debt
instruments or obligations.
ARTICLE III
SHARES
DIVISION OF BENEFICIAL INTEREST
SECTION 1. The Shares of the Trust shall be issued in one or more
series as the Trustees may, without shareholder approval, authorize. Each series
shall be preferred over all other series in respect of the assets allocated to
that series. The beneficial interest in each series shall at all times be
divided into Shares, without par value, each of which shall represent an equal
proportionate interest in the series with each other Share of the same series,
none having priority or preference over another. Each series shall be
represented by one or more classes of Shares, with each class possessing such
rights (including, notwithstanding any
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contrary provision herein, voting rights) as the Trustees may, without
shareholder approval, authorize. The number of Shares authorized shall be
unlimited, and the Shares so authorized may be represented in part by fractional
Shares. The Trustees may from time to time divide or combine the Shares of any
series into a greater or lesser number without thereby changing the
proportionate beneficial interests in the series.
OWNERSHIP OF SHARES
SECTION 2. The ownership of Shares shall be recorded on the books of
the Trust or its transfer or similar agent. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they
consider appropriate for the issuance of Share certificates, the transfer of
Shares and similar matters. The record books of the Trust as kept by the
Trust or any transfer or similar agent of the Trust, as the case may be,
shall be conclusive as to who are the Shareholders of each series and as to
the number of Shares of each series held from time to time by each
Shareholder.
INVESTMENTS IN THE TRUST; ASSETS OF THE SERIES
SECTION 3. The Trustees may accept investments in the Trust from such
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they may from time to time authorize.
All consideration received by the Trust for the issue or sale of
Shares of each series, together with all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any funds or payments derived from any reinvestment
of such proceeds in whatever form the same may be, shall irrevocably belong
to the series of Shares with respect to which the same were received by the
Trust for all purposes, subject only to the rights of creditors, and shall be
so recorded upon the books of account of the Trust and are herein referred to
as "assets of" such series. In addition, any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular series shall be allocated by the
Trustees between and among one or more of the series in such manner as they,
in their sole discretion, deem fair and equitable. Each such allocation shall
be conclusive and binding upon the Shareholders of all series for all
purposes, and shall be referred to as assets belonging to that series.
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NO PREEMPTIVE RIGHTS
SECTION 4. Shareholders shall have no preemptive or other right to
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
SECTION 5. Shares shall be deemed to be personal property giving only
the rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms of this Declaration of Trust and to have become a party thereto. The death
of a Shareholder during the continuance of the Trust shall not operate to
terminate the same nor entitle the representative of any deceased Shareholder to
an accounting or to take any action in court
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or elsewhere against the Trust or the Trustees, but only to the rights of said
decendent under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust property or
right to call for a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders partners. Neither the
Trust nor the Trustees, nor any officer, employee or agent of the Trust shall
have any power to bind personally any Shareholder, nor, except as specifically
provided herein, to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at any
time personally agree to pay.
TRUSTEE AND OFFICERS AS SHAREHOLDERS
SECTION 6. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares of the Trust to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may issue and sell or cause to
be issued and sold Shares to and buy such Shares from any such person of any
firm or company in which he is interested, subject only to the general
limitations herein contained as to the sale and purchase of such Shares; and all
subject to any restrictions which may be contained in the By-Laws.
ARTICLE IV
THE TRUSTEES
ELECTION
SECTION 1. The number of Trustees shall be fixed by the Trustees,
except that, commencing with the first shareholders meeting at which Trustees
are elected, there shall be not less than three nor more than fifteen Trustees,
each of whom shall hold office during the lifetime of this Trust or until the
election and qualification of his or her successor, or until he or she sooner
dies, resigns or is removed. The number of Trustees so fixed may be increased
either by the Shareholders or by the Trustees by vote of a majority of the
Trustees then in Office. The number of Trustees so fixed may be decreased
either by the Shareholders or by the Trustees by a vote of a majority of the
Trustees then in office, but only to eliminate vacancies existing by reason of
the death, resignation or removal of one or more Trustees. The initial
Trustees, each of whom shall serve until the first meeting of Shareholders at
which Trustees are elected and until his or her successor is elected and
qualified, or until he or she sooner dies, resigns or is removed, shall be
William M. Doran and such other persons as the Trustee or Trustees then in
office shall, prior to any sale of Shares pursuant to public offering, appoint.
By vote of the Shareholders holding a majority of the shares entitled to vote,
the Shareholders may remove a Trustee with or without cause. By vote of a
majority of the Trustees then in office, the Trustees may remove a Trustee for
cause. Any Trustee may, but need not, be a Shareholder.
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In case of the declination, death, resignation, retirement, removal,
incapacity, or inability of any of the Trustees, or in case a vacancy shall
exist by reason of an increase in number, or for any other reason, the remaining
Trustees shall fill such vacancy by appointing such other person as they in
their discretion shall see fit consistent with the limitations under the 1940
Act. Such appointment shall be evidenced by a written instrument signed by a
majority of the Trustees in office or by recording in the records of the Trust,
whereupon the appointment shall take effect. An appointment of a Trustee may be
made by the Trustees then in office in anticipation of a vacancy to occur by
reason of retirement, resignation or increase in number of Trustees effective at
a later date, provided that said appointment shall become effective only at or
after the effective date of said retirement, resignation or increase in number
of Trustees. As soon as any Trustee so appointed shall have accepted this
trust, the trust estate shall vest in the new Trustee or Trustees, together with
the continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. The power of appointment is subject to the
provisions of Section 16(a) of the 1940 Act. In the event that at any time
after the commencement of public sales of Trust Shares less than a majority of
the Trustees then holding office were elected to such office by the
Shareholders, the Trustees or the Trust's President promptly shall call a
meeting of Shareholders for the purpose of electing Trustees. Each Trustee
elected by the Shareholders or by the Trustees shall serve until the election or
qualification of his or her successor, or until he or she sooner dies, resigns
or is removed.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
SECTION 2. The death, declination, resignation, retirement, removal,
or incapacity of the Trustees, or any one of them, shall not operate to annul
the Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
POWERS
SECTION 3. Subject to the provisions of this Declaration of Trust,
the business of the Trust shall be managed by the Trustees, and they shall have
all powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt By-Laws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the Trust
and may amend and repeal them to the extent that such By-Laws do not reserve
that right to the Shareholders; they may fill vacancies in their number,
including vacancies resulting from increases in their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; they may appoint from their own number, and terminate, any one or
more committees consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session, exercise some or
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all of the powers and authority of the Trustees as the Trustees may determine;
they may appoint an advisory board, the members of which shall not be Trustees
and need not be Shareholders; they may employ one or more investment advisers or
managers as provided in Section 7 of this Article IV; they may employ one or
more custodians of the assets of the trust and may authorize such custodians to
employ subcustodians and to deposit all or any part of such assets in a system
or systems for the central handling of securities, retain a transfer agent or a
Shareholder servicing agent, or both, provide for the distribution of Shares by
the Trust, through one or more principal underwriters or otherwise, set record
dates for the determination of Shareholders with respect to various matters, and
in general delegate such authority as they consider desirable to any officer of
the Trust, to any committee of the Trustees and to any agent or employee of the
Trust or to any such custodian or underwriter; and they may elect and remove
such officers and appoint and terminate such agents as they consider
appropriate.
Without limiting the foregoing, Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;
(d) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in the name
of the Trustees or of the Trust or in the name of a custodian, subcustodian or
other depositary or a nominee or nominees or otherwise;
(f) To establish separate and distinct series of shares with
separately defined investment objectives, policies and purposes, and to allocate
assets, liabilities and expenses of the Trust to a particular series of Shares
or to apportion the same among two or more series, provided that any liability
or expense incurred by a particular series of Shares shall be payable solely out
of the assets of that series and to establish separate classes of shares of each
series;
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(g) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or property
of which is or was held in the Trust; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or issuer, and to pay
calls or subscriptions with respect to any security held in the Trust;
(h) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depositary or trustee as the
Trustees shall deem proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(j) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(k) To borrow funds from a bank for temporary or emergency purposes
and not for investment purposes;
(l) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge the
Trust property or any part thereof to secure any or all of such obligations;
(m) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers or managers, principal
underwriters, or independent contractors of the Trust individually against all
claims and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such person as Shareholder, Trustee, officer,
employee, agent, investment adviser or manager, principal underwriter, or
independent contractor, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have the
power to indemnify such person against such liability;
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(n) To pay pensions for faithful service, as deemed appropriate by
the Trustees, and to adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust; and
(o) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any Shareholders
whose investment is less than such minimum upon giving notice to such
Shareholder.
The Trustees shall not in any way be bound or limited by any
present or future law or custom in regard to investments by Trustees. Except
as otherwise provided herein or from time to time in the By-Laws, any action
to be taken by the Trustees may be taken by a majority of the Trustees
present at a meeting of Trustees (if a quorum be present), within or without
Massachusetts, including any meeting held by means of a conference telephone
or other communications equipment by which all persons participating in the
meeting can communicate with each other simultaneously and participation by
such means shall constitute presence in person at a meeting, or by written
consent of a majority of the Trustees then in office.
PAYMENT OF EXPENSES BY THE TRUST
SECTION 4. The Trustees are authorized to pay or to cause to be paid
out of the principal or income of the Trust, or partly out of principal and
partly out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser or manager, principal underwriter,
auditor, counsel, custodian, transfer agent, Shareholder servicing agent, and
such other agents or independent contractors and such other expenses and charges
as the Trustees may deem necessary or proper to incur, provided, however, that
all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with a particular series of Shares as determined by the Trustees,
shall be payable solely out of the assets of that Series. Any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular series shall be allocated
and charged by the Trustees between or among any one or more of the series in
such manner as the Trustees in their sole discretion deem fair and equitable.
Each such allocation shall be conclusive and binding
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upon the Shareholders of all series for all purposes. Any creditor of any series
may look only to the assets of that series to satisfy such creditor's debt.
SECTION 5. The Trustees shall have the power, as frequently as they
may determine, to cause each Shareholder to pay directly, in advance or arrears,
for any and all expenses of the Trust, an amount fixed from time to time by the
Trustees, by setting off such charges due from such Shareholder from declared
but unpaid dividends owed such Shareholder and/or by reducing the number of
Shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from such Shareholder.
OWNERSHIP OF ASSETS OF THE TRUST
SECTION 6. Title to all of the assets of each series of Shares and the
Trust shall at all times be considered as vested in the Trustees.
ADVISORY, MANAGEMENT AND DISTRIBUTION
SECTION 7. The Trustees may, at any time and from time to time,
contract with respect to the Trust or any series thereof for exclusive or
nonexclusive advisory and/or management services with SEI Financial Management
Corporation, a Delaware corporation, and/or any other corporation, trust,
association or other organization, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine, including, without
limitation, authority to determine from time to time what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets of
the Trust shall be held uninvested and to make changes in the Trust's
investments. Any contract for advisory services shall be subject to such
Shareholder approval as is required by the 1940 Act. The Trustees may also, at
any time and from time to time, contract with SEI Financial Services Company, a
Pennsylvania corporation, and/or any other corporation, trust, association or
other organization, appointing it exclusive or nonexclusive distributor or
principal underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws, and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter, or distributor or agent of or
for any
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corporation, trust, association, or other organization, or of or for
any parent or affiliate of any organization, with which an advisory or
management or principal underwriter's or distributor's contract, or
transfer, Shareholder servicing or other agency contract may have been
or may hereafter be made, or that any such organization, or any parent
or affiliate thereof, is a Shareholder or has an interest in the
Trust, or that
(ii) any corporation, trust, association or other organization
with which an advisory or management or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract may have been or may hereafter be made also has an
advisory or management contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract with one or more other corporations, trusts,
associations, or other organizations, or has other businesses or
interests shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or
accountability to the Trust or its Shareholders.
ACTION BY THE TRUSTEES
SECTION 8. The Trustees shall act by majority vote at a meeting duly
called or by unanimous written consent without a meeting or by telephone consent
provided a quorum of Trustees participates in any such telephonic meeting,
unless the 1940 Act requires that a particular action be taken only at a meeting
in person of the Trustees.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 1. The Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1, (ii) with
respect to any investment adviser as provided in Article IV, Section 7, (iii)
with respect to any termination of the Trust or any series to the extent and as
provided in Article IX, Section 4, (iv) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Article IX, Section 7, (v)
to the same extent as the stockholders of a Massachusetts business corporation
as to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (vi) with respect to such additional matters relating
to the Trust as may be required by law, by this Declaration of Trust, by the By-
Laws or by any registration of the Trust with the Securities and Exchange
Commission or any state, or as the Trustees may consider necessary or desirable.
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Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. Notwithstanding any other provisions of this
Declaration of Trust, or any matter submitted to a vote of Shareholders, all
Shares of the Trust then entitled to vote shall be voted by individual series,
except (1) when required by the 1940 Act, Shares shall be voted in the aggregate
and not by individual series, and (2) 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. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by proxy.
A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to the exercise
of the proxy the Trust receives a specific written notice to the contrary from
any one of them. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise
and the burden of proving invalidity shall rest on the challenger.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration of Trust
or the By-Laws to be taken by Shareholders.
VOTING POWER AND MEETINGS
SECTION 2. Meetings of Shareholders of the Trust or of any series or
class may be called by the Trustees, or such other person or persons as may be
specified in the By-Laws, and held from time to time for the purpose of taking
action upon any matter requiring the vote or the authority of the Shareholders
of the Trust or any series or class as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Meetings of Shareholders of
the Trust or of any series or class shall be called by the Trustees or such
other person or persons as may be specified in the By-Laws upon written
application requesting that a meeting be called for a purpose requiring action
by the Shareholders as provided herein or in the By-Laws by Shareholders holding
at least 10% of the outstanding Shares of the Trust if Shareholders of all
series are required hereunder to vote in the aggregate and not by individual
series at such meeting, or Shareholders holding at least 10% of the outstanding
shares of a series or class if Shareholders of such series or class are entitled
hereunder to vote by individual series or class at such meeting. The
Shareholders shall be entitled to at least seven days' written notice of any
meeting of the Shareholders.
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QUORUM AND REQUIRED VOTE
SECTION 3. A majority of the Shares entitled to vote shall be a
quorum for the transaction of business at a Shareholders' meeting, except
that where any provision of law or of this Declaration of Trust permits or
requires that holders of any series or class shall vote as a series or class,
then a majority of the aggregate number of Shares of that series or class
entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that series or class. Any lesser number, however,
shall be sufficient for adjournments. Any adjourned session or sessions may
be held within a reasonable time after the date set for the original meeting
without the necessity of further notice.
Except when a larger vote is required by any provisions of this
Declaration of Trust or the By-Laws, a majority of the Shares voted on any
matter shall decide such matter and a plurality shall elect a Trustee,
provided that where any provision of law or of this Declaration of Trust
permits or requires that the holders of any series or class shall vote as a
series or class, then a majority of the Shares of that series or class voted
on the matter shall decide that matter insofar as that series or class is
concerned.
ACTION BY WRITTEN CONSENT
SECTION 4. Any action taken by Shareholders may be taken without a
meeting if a majority of Shareholders entitled to vote on the matter (or such
larger vote as shall be required by any provision of this Declaration of Trust
or the By-Laws) consent to the action in writing and such written consents are
filed with the records of the meetings of Shareholders. Such consent shall be
treated for all purposes as a vote taken at a meeting of Shareholders.
ADDITIONAL PROVISIONS
SECTION 5. The By-Laws may include further provisions for
Shareholders' votes and meetings and related matters.
ARTICLE VI
DISTRIBUTIONS, REDEMPTIONS, REPURCHASES
AND DETERMINATION OF NET ASSET VALUE
DISTRIBUTIONS
SECTION 1. The Trustees may, but need not, distribute each year to
the Shareholders of each series such income and gains, accrued or realized,
as the Trustees may determine, after providing for actual and accrued
expenses and liabilities (including such reserves as the Trustees may
establish) determined in accordance with good accounting practices. The
Trustees shall have full discretion to determine which items shall be treated
as income and which items as capital and their determination shall be binding
upon the
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Shareholders. Distributions of each year's income of each series, if any be
made, may be made in one or more payments, which shall be in Shares, in cash
or otherwise and on a date or dates determined by the Trustees. At any time
and from time to time in their discretion, the Trustees may distribute to the
Shareholders of any one or more series as of a record date or dates
determined by the Trustees, in shares, in cash or otherwise, all or part of
any gains realized on the sale or disposition of property of the series or
otherwise, or all or part of any other principal of the Trust attributable to
the series. Each distribution pursuant to this Section 1 shall be made
ratably according to the number of Shares of the series or class held by the
several Shareholders on the applicable record date thereof, provided that no
distributions need be made on Shares purchased pursuant to orders received,
or for which payment is made, after such time or times as the Trustees may
determine. Any such distribution paid in Shares will be paid at the net asset
value thereof as determined in accordance with this Declaration of Trust.
REDEMPTIONS AND REPURCHASES
SECTION 2. Any holder of Shares of the Trust may by presentation
of a written request, together with his certificates, if any, for such
Shares, in proper form for transfer, at the office of the Trust, the adviser,
the underwriter or the distributors, or at a principal office of a transfer
or Shareholder services agent appointed by the Trust (as the Trustees may
determine), redeem his Shares for the net asset value thereof determined and
computed in accordance with the provisions of this Section 2 and the
provisions of Section 5 of Article VI of this Declaration of Trust, less any
redemption charge which the Trustees may establish. Upon receipt of such
written request for redemption of Shares by the Trust, the adviser, the
underwriter or the distributor, or the Trust's transfer or Shareholder
services agent, such Shares shall be redeemed at the net asset value per
share of the particular series next determined after such Shares are tendered
in proper form for transfer to the Trust or determined as of such other time
fixed by the Trustees, as may be permitted or required by the 1940 Act,
provided that no such tender shall be required in the case of Shares for
which a certificate or certificates have not been issued, and in such case
such Shares shall be redeemed at the net asset value per share of the
particular series next determined after such demand has been received or
determined at such other time fixed by the Trustees, as may be permitted or
required by the 1940 Act.
The obligation of the Trust to redeem its Shares of each series as
set forth above in this Section 2 shall be subject to the condition that,
during any time of emergency, as hereinafter defined, such obligation may be
suspended by the Trust by or under authority of the Trustees for such period
or periods during such time of emergency as shall be determined by or under
authority of the Trustees. If there is such a suspension, any Shareholder may
withdraw any demand for redemption and any tender of Shares which has been
received by the Trust during any such period and any tender of Shares the
applicable net asset value of which would but for such
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suspension be calculated as of a time during such period. Upon such
withdrawal, the trust shall return to the Shareholder the certificates
therefor, if any. For the purposes of any such suspension "time of emergency"
shall mean, either with respect to all Shares or any series of Shares, any
period during which:
(a) the New York Stock Exchange is closed other than for
customary weekend and holiday closings; or
(b) the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and regulations or
orders of the Commission, either that trading on the New York Stock
Exchange is restricted, or that an emergency exists as a result of
which (i) disposal by the Trust of securities owned by it is not
reasonably practicable or (ii) it is not reasonably practicable for
the Trust fairly to determine the current value of its net assets; or
(c) the suspension or postponement of such obligations is
permitted by order of the Commission.
The Trust may also purchase, repurchase or redeem Shares in accordance
with such other methods, upon such other terms and subject to such other
conditions as the Trustees may from time to time authorize at a price not
exceeding the net asset value of such Shares in effect when the purchase or
repurchase or any contract to purchase or repurchase is made.
PAYMENT IN KIND
SECTION 3. Subject to any generally applicable limitation imposed
by the Trustees, any payment on redemption, purchase or repurchase by the
Trust of Shares may, if authorized by the Trustees, be made wholly or partly
in kind, instead of in cash. Such payment in kind shall be made by
distributing securities or other property, constituting, in the opinion of
the Trustees, a fair representation of the various types of securities and
other property then held by the series of Shares being redeemed, purchased or
repurchased (but not necessarily involving a portion of each of the series'
holdings) and taken at their value used in determining the net asset value of
the Shares in respect of which payment is made.
ADDITIONAL PROVISIONS RELATING TO REDEMPTIONS AND REPURCHASES
SECTION 4. The completion of redemption, purchase or repurchase of
Shares shall constitute a full discharge of the Trust and the Trustees with
respect to such Shares and the Trustees may require that any certificate or
certificates issued by the Trust to evidence the ownership of such Shares shall
be surrendered to the Trustees for cancellation or notation.
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DETERMINATION OF NET ASSET VALUE
SECTION 5. The term "net asset value" of the Shares of each series
shall mean: (i) the value of all the assets of such series; (ii) less total
liabilities of such series; (iii) divided by the number of Shares of such series
outstanding, in each case at the time of each determination. The "number of
Shares of such series outstanding" for the purpose of such computation shall be
exclusive of any Shares of such series to be redeemed, purchased or repurchased
by the Trust and not then redeemed, purchased or repurchased as to which the
price has been determined, but shall include Shares of such series presented for
redemption, purchase or repurchase by the Trust and not then redeemed, purchased
or repurchased as to which the price has not been determined and Shares of such
series the sale of which has been confirmed. Any fractions involved in the
computation of net asset value per share shall be adjusted to the nearer cent
unless the Trustees shall determine to adjust such fractions to a fraction of a
cent.
The Trustees or any officer, officers or agent of the Trust
designated for the purpose by the Trustees shall determine the net asset
value of the Shares of each series, and the Trustees shall fix the times as
of which the net asset value of the Shares of each series shall be determined
and shall fix the periods during which any such net asset value shall be
effective as to sales, redemptions and repurchases of, and other transactions
in, the Shares of such series, except as such times and periods for any such
transaction may be fixed by other provisions of this Declaration of Trust or
the By-Laws. In valuing the portfolio investments of any series for
determination of net asset value per Share of such series, securities for
which market quotations are readily available shall be valued at prices
which, in the opinion of the Trustees any officer, officers or agent of the
Trust designated for the purpose by the Trustees, most nearly represent the
market value of such securities, which may, but need not, be the most recent
bid price obtained from one or more of the market makers for such securities;
other securities and assets shall be valued at fair value as determined by or
pursuant to the direction of the Trustees. Notwithstanding the foregoing,
short-term debt obligations, commercial paper, and repurchase agreements may
be, but need not be, valued on the basis of quoted yields for securities of
comparable maturity, quality and type, or on the basis of amortized cost. In
the determination of net asset value of any series, dividends receivable and
accounts receivable for investments sold and for Shares sold shall be stated
at the amounts to be received therefor; and income receivable accrued daily
on bonds and notes owned shall be stated at the amount to be received. Any
other assets shall be stated at fair value as determined by the Trustees or
such officer, officers or agent pursuant to the Trustees' authority, except
that no value shall be assigned to good will, furniture, lists, reports,
statistics or other noncurrent assets other than real estate. Liabilities of
any series for accounts payable, for investments purchased and for Shares
tendered for redemption, purchase or repurchase by the Trust and not then
redeemed, purchased or repurchased as to which the price has been determined
shall be
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stated at the amounts payable therefor. In determining net asset value of any
series, the person or persons making such determination on behalf of the Trust
may include in liabilities such reserves, estimated accrued expenses and
contingencies as such person or persons may in its, his or their best judgment
deem fail and reasonable under the circumstances. Any income dividends and
gains distributions payable by the Trust shall be deducted as of such time or
times on the record date therefor as the Trustees shall determine.
The manner of determining the net assets of any series or of
determining the net asset value of the Shares of any series may from time to
time be altered as necessary or desirable in the judgment of the Trustees to
conform to any other method prescribed or permitted by any applicable law or
regulation or generally accepted accounting practice.
Determinations in accordance with Section t made in good faith shall
be binding on all parties concerned.
REDEMPTIONS AT THE OPTION OF THE TRUST
SECTION 6. The Trust shall have the right at its option and at any
time to redeem Shares at the net asset value thereof (i) if such Shares are not
held in an account of a customer of SEI Corporation or any of its affiliated
companies or in such other account as the Trustee may determine from time to
time; (ii) if at such time such Shareholder owns fewer Shares than, or Shares
having an aggregate net asset value of less than, an amount determined from time
to time by the Trustees; (iii) to the extent that such shareholder owns Shares
of a particular series of Shares equal to or in excess of a percentage of the
outstanding Shares of that series determined from time to time by the Trustees;
or (iv) to the extent that such Shareholder owns Shares of the Trust
representing a percentage equal to or in excess of such percentage of the
aggregate number of outstanding Shares of the Trust or the aggregate net asset
value of the Trust determined from time to time by the Trustees.
DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES
SECTION 7. No dividend or distribution (including, without
limitation, any distribution paid upon termination of the Trust or of any
series) with respect to, nor any redemption or repurchase of, the Shares of any
series shall be effected by the Trust other than from the assets of such series.
ARTICLE VII
COMPENSATION AND LIMITATION
OF LIABILITY OF TRUSTEES
COMPENSATION
SECTION 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the
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employment of any Trustee for advisory, management, legal, accounting,
investment banking or other services and payment for the same by the Trust.
LIMITATION OF LIABILITY
SECTION 2. The Trustees shall not be responsible or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, investment
adviser or manager, principal underwriter or custodian, nor shall any Trustee be
responsible for the act or omission of any other Trustee, but nothing herein
contained shall protect any Trustee against any liability to which he or she
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 or
her office.
Every note, bond, contract, instrument, certificate, Share or
undertaking and every other act or thing whatsoever executed or done by or on
behalf of the Trust or the Trustees or any of them in connection with the Trust
shall be conclusively deemed to have been executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.
ARTICLE VIII
INDEMNIFICATION
Subject to the exceptions and limitations contained in this Article,
every person who is, or has been, a Trustee or officer of the Trust shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Trustee or
officer:
(a) against any liability to the Trust or its Shareholders by
reason of a final adjudication by the court or other body before which
the proceeding was brought that he engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office;
(b) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interests of the Trust;
(c) in the event of a settlement or other disposition not
involving a final adjudication (as provided in
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paragraph (a) or (b)) and resulting in a payment by a Trustee or
officer, unless there has been either a determination that such
Trustee or officer did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his office by the court or other body approving the
settlement or other disposition or a reasonable determination, based
on a review of readily available facts (as opposed to a full trial-
type inquiry) that he did not engage in such conduct:
(i) by a vote of a majority of the Disinterested
Trustees acting ont he matter (provided that a majority of
the Disinterested Trustees then in office act on the
matter); or
(ii) by written opinion of independent legal counsel.
The rights of indemnification hereinafter provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
affect any other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel other than Trustees and
officers may be entitled by contract or otherwise under law.
Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in the next to the last
paragraph of this Article shall be advanced by the Trust prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Article, provided that either:
(a) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses
arising out of any such advances; or
(b) 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 determine, based upon a review of the readily available facts
(as opposed to a full trial-type inquiry), that there is reason to
believe that the recipient ultimately will be found entitled to
indemnification.
As used in this Article, a "Disinterested Trustee" is one (i) who is
not an "interested person of the Trust (as defined by the 1940 Act) (including
anyone who has been exempted from being an "interested person:" by any rule,
regulation or order of the Securities and Exchange Commission), and (ii) against
whom none of such
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<PAGE>
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or has been pending.
As used in this Article, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include without limitation, attorney's fees,
judgments, amounts paid in settlement, fines, penalties and other liabilities.
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 expenses 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.
ARTICLE IX
MISCELLANEOUS
TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE
SECTION 1. All persons extending credit to, contracting with or
having any claim against the Trust or a particular series of shares shall look
only to the assets of the Trust or the assets of that particular series of
Shares for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of the Trust's officers, employees or
agents, whether past, present or future, shall be personally liable therefor.
Nothing in this Declaration of Trust shall protect any Trustee against any
liability to which such 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 the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking
made or issued by the Trustees or by any officers or officer shall give notice
that this Declaration of Trust is on file with the Secretary of the Commonwealth
of Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer of Shareholders or
Shareholder individually.
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<PAGE>
TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE; NO BOND OR SURETY
SECTION 2. The exercise by the Trustees of their powers and
discretions hereunder shall be binding upon everyone interested. A Trustee shall
be liable for his or her own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee, and for nothing else, and shall not be liable for errors of judgment or
mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust,
and shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. The Trustees shall not be required
to give any bond as such, nor any surety if a bond is required.
LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES
SECTION 3. No person dealing with the Trustees shall be bound to make
any inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
DURATION AND TERMINATION OF TRUST
SECTION 4. Unless terminated as provided herein, the Trust shall
continue without limitation of time. The Trust may be terminated at any time by
vote of Shareholders holding at least a majority of the Shares entitled to vote
or by the Trustees by written notice to the Shareholders. Any series of Shares
may be terminated at any time by vote of Shareholders holding at least a
majority of the Shares of such series entitled to vote or by the Trustees by
written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of Shares,
after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated, of the Trust or of the
particular series as may be determined by the Trustees, the Trust shall, in
accordance with such procedures as the Trustees consider appropriate, reduce
the remaining assets to distributable form in cash or Shares or other
securities, or any combination thereof, and distribute the proceeds to the
Shareholders of the series involved, ratably according to the number of
Shares of such series held by the several Shareholders of such series on the
date of termination.
SECTION 5. The original or a copy of this instrument and of each
amendment hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. A copy of this instrument and of each amendment
hereto shall be filed by the Trust with the Secretary of the Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any other governmental
office where such filing may from time to time be required. Anyone dealing with
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<PAGE>
the Trust may rely on certificate by an officer of the Trust as to whether or
not any such amendments have been made and as to any matters in connection with
the Trust hereunder; and, with the same effect as if it were the original, may
rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in such amendment,
references to this instrument, and the expression "herein," "hereof," and
"hereunder," shall be deemed to refer to this instrument as amended from time to
time. Headings are placed herein for convenience of reference only and shall not
be taken as part hereof or control or affect the meaning, construction or effect
of this instrument. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
APPLICABLE LAW
SECTION 6. The Trust shall be of the type commonly called a
Massachusetts business trust, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by such a trust.
This Declaration of Trust is to be governed by and construed and administered
according to the laws of said Commonwealth.
AMENDMENTS
SECTION 7. This Declaration of Trust may be amended at any time by
an instrument in writing signed by a majority of the then Trustees when
authorized to do so by a vote of Shareholders holding a majority of the
Shares entitled to vote, except that an amendment which shall affect the
holders of one or more series or classes of Shares but not the holders of all
outstanding series or classes shall be authorized by vote of the Shareholders
holding a majority of the Shares entitled to vote of each series or classes
affected and no vote of Shareholders of a series or classes not affected
shall be required. Amendments having the purpose of changing the name of the
Trust or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any defective or inconsistent provision contained
herein shall not require authorization by Shareholder vote.
IN WITNESS WHEREOF, the undersigned being the sole initial Trustee of
the Trust has executed this document this 28th day of June, 1988.
/s/ William M. Doran
---------------------
William M. Doran
200 One Logan Square
Philadelphia, PA 19103
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<PAGE>
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF PHILADELPHIA
I, the undersigned authority, hereby certify that the foregoing is a
true and correct copy of the instrument presented to me by William M. Doran as
the original of such instrument.
WITNESS my hand and official seal, this 28th day of June, 1988.
/s/ Rochelle D. McCrae
------------------------
Notary Public
ROCHELLE D. MCCRAE
Notary Public, Wayne, Chester Co.
My Commission Expires April 22, 1991
My commission expires: ______________
Resident Agent:
James E. Howard, Esquire
Kirkpatrick & Lockhart
Exchange Place, 53 State Street
Boston, MA 02109
(617) 277-6000
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<PAGE>
SEI WEALTH MANAGEMENT TRUST
WRITTEN INSTRUMENT AMENDING THE DECLARATION OF TRUST
The undersigned, being all of the Trustees of SEI Wealth Management Trust,
a business trust organized under the laws of the Commonwealth of Massachusetts
pursuant to a Declaration of Trust dated June 30, 1988, do hereby amend,
effective upon the fling of this instrument in the office of the Secretary of
State of The Commonwealth of Massachusetts, the Declaration of Trust by changing
the name of the Trust from "SEI Wealth Management Trust" to "SEI International
Trust".
This instrument may be executed in several counterparts, each of which
shall be deemed an original, but all taken together shall constitute one
instrument.
IN WITNESS WHEREOF, the undersigned have signed these presents on the
dates indicated.
/s/ Alfred P. West, Jr. August 9, 1989
- ------------------------------
Alfred P. West, Jr.
/s/ William M. Doran August 9, 1989
- ------------------------------
William M. Doran
/s/ Edward W. Binshadler August 9, 1989
- ------------------------------
Edward W. Binshadler
/s/ Richard F. Blanchard August 9, 1989
- ------------------------------
Richard F. Blanchard
/s/ F. Wendell Gooch August 9, 1989
- ------------------------------
F. Wendell Gooch
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 15th day of June, 1993, by and between SEI
International Trust, a Massachusetts business trust (the "Trust"), and Strategic
Fixed Income L.P. (the "Adviser").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), consisting of several series of shares, each having its own
investment policies; and
WHEREAS, the Trust has retained SEI Financial Management Corporation (the
"Administrator") to provide administration of the Trust's operations, subject to
the control of the Board of Trustees; and
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its International Fixed Income Portfolio and
such other portfolios as the Trust and the Adviser may agree upon (the
"Portfolios"), and the Adviser is willing to render such services;
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF THE ADVISER. The Trust employs the Adviser to manage the
investment and reinvestment of the assets, and to continuously review,
supervise, and administer the investment program of the Portfolios, to
determine in its discretion the securities to be purchased or sold, to
provide the Administrator and the Trust with records concerning the
Adviser's activities which the Trust is required to maintain, and to
render regular reports to the Administrator and to the Trust's
officers and Trustees concerning the Adviser's discharge of the
foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities subject to
the control of the Board of Trustees of the Trust and in compliance
with such policies as the Trustees may from time to time establish,
and in compliance with the objectives, policies, and limitations for
each such Portfolio set forth in the Trust's prospectuses and
statement of additional information as amended from time to time, and
applicable laws and regulations.
The Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and
equipment and the personnel required by it to perform the services on
the terms and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of
portfolio securities for the Portfolios and is directed to use its
best efforts to obtain the best net
<PAGE>
results as described in the Trust's prospectuses and statement of
additional information from time to time. The Adviser will promptly
communicate to the Administrator and to the officers and the Trustees
of the Trust such information relating to portfolio transactions as
they may reasonably request.
It is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or be in
breach of any obligation owing to the Trust under this Agreement, or
otherwise, solely by reason of its having directed a securities
transaction on behalf of the Trust to a broker-dealer in compliance
with the provisions of Section 28(e) of the Securities Exchange Act of
1934.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Sections 1 and 2 of this Agreement, the Trust
shall pay to the Adviser compensation at the rate specified in the
Schedule(s) which are attached hereto and made a part of this
Agreement. Such compensation shall be paid to the Adviser at the end
of each month, and calculated by applying a daily rate, based on the
annual percentage rates as specified in the attached Schedule(s), to
the assets. The fee shall be based on the average daily net assets
for the month involved.
All rights of compensation under this Agreement for services
performed as of the termination date shall survive the termination of
this Agreement.
4. EXCESS EXPENSES. If the expenses for any Portfolio for any fiscal
year (including fees and other amounts payable to the Adviser, but
excluding interest, taxes, brokerage costs, litigation, and other
extraordinary costs) as calculated every business day would exceed the
expense limitations imposed on investment companies by any applicable
statute or regulatory authority of any jurisdiction in which Shares
are qualified for offer and sale, the Adviser shall bear such excess
cost.
However, the Adviser will not bear expenses of the Trust or any
Portfolio which would result in the Trust's inability to qualify as
a regulated investment company under provisions of the Internal
Revenue Code of 1986, as amended. Payment of expenses by the
Adviser pursuant to this Section 4 shall be settled on a monthly
basis (subject to fiscal year end reconciliation) by a reduction in
the fee payable to the Adviser for such month pursuant to Section 3
and, if such reduction shall be insufficient to offset such
expenses, by reimbursing the Trust.
5. REPORTS. The Trust and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to
shareholders,
2
<PAGE>
certified copies of their financial statements, and such other
information with regard to their affairs as each may reasonably
request.
6. STATUS OF THE ADVISER. The services of the Adviser to the Trust are
not to be deemed exclusive, and the Adviser shall be free to render
similar services to others so long as its services to the Trust are
not impaired thereby. The Adviser shall be deemed to be an
independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.
7. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act which are prepared or maintained by the Adviser on
behalf of the Trust are the property of the Trust and will be
surrendered promptly to the Trust on request.
8. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the Adviser
shall be confined to those expressly set forth herein, and no implied
duties are assumed by or may be asserted against the Adviser
hereunder. The Adviser shall not be liable for any error of judgment
or mistake of law or for any loss arising out of any investment or for
any act or omission in carrying out its duties hereunder, except a
loss resulting from willful misfeasance, bad faith or gross negligence
in the performance of its duties, or by reason of reckless disregard
of its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable state law which cannot be
waived or modified hereby. (As used in this Paragraph 8, the term
"Adviser" shall include directors, officers, employees and other
corporate agents of the Adviser as well as that corporation itself).
9. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of the
Trust are or may be interested in the Adviser (or any successor
thereof) as directors, partners, officers, or shareholders, or
otherwise; directors, partners, officers, agents, and shareholders
of the Adviser are or may be interested in the Trust as Trustees,
shareholders or otherwise; and the Adviser (or any successor) is or
may be interested in the Trust as a shareholder or otherwise. In
addition, brokerage transactions for the Trust may be effected
through affiliates of the Adviser if approved by the Board of
Trustees, subject to the rules and regulations of the Securities
and Exchange Commission.
10. DURATION AND TERMINATION. This Agreement, unless sooner terminated
as provided herein, shall remain in effect for two years from date of
execution, and thereafter, for periods of one year so long as such
continuance
3
<PAGE>
thereafter is specifically approved at least annually (a) by the vote
of a majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such approval, and
(b) by the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of each Portfolio; provided, however,
that if the shareholders of any Portfolio fail to approve the
Agreement as provided herein, the Adviser may continue to serve
hereunder in the manner and to the extent permitted by the 1940 Act
and rules and regulations thereunder. The foregoing requirement that
continuance of this Agreement be "specifically approved at least
annually" shall be construed in a manner consistent with the 1940 Act
and the rules and regulations thereunder.
This Agreement may be terminated as to any Portfolio at any time,
without the payment of any penalty by vote of a majority of the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Portfolio on not less than 30 days nor
more than 60 days written notice to the Adviser, or by the Adviser
at any time without the payment of any penalty, on 90 days written
notice to the Trust. This Agreement will automatically and
immediately terminate in the event of its assignment. Any notice
under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at any office of
such party.
As used in this Section 10, the terms "assignment", "interested
persons", and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940
Act and the rules and regulations thereunder; subject to such
exemptions as may be granted by the Securities and Exchange Commission
under said Act.
11. NOTICE. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice
to the other party at the last address furnished by the other party
to the party giving notice: if to the Trust, at 680 East Swedesford
Road, Wayne, PA and if to the Adviser at 1001 Nineteenth Street North,
16th Floor, Arlington, VA.
12. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
A copy of the Agreement and Declaration of Trust of the Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Trustees of the Trust as
Trustees, and are not binding upon any of the Trustees, officers, or
shareholders of the Trust individually but binding only
4
<PAGE>
upon the assets and property of the Trust.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
SEI INTERNATIONAL TRUST STRATEGIC FIXED INCOME L.P.
By: Signature appears here By: Signature appears here
---------------------------- ---------------------------
Attest: Signature appears here Attest: Signature appears here
------------------------- -------------------------
5
<PAGE>
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI INTERNATIONAL TRUST
AND
STRATEGIC FIXED INCOME L.P.
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an annual
rate as follows:
PORTFOLIO FEE (IN BASIS POINTS)
International Fixed Income Portfolio .30%
<PAGE>
DISTRIBUTION AGREEMENT
SEI WEALTH MANAGEMENT TRUST
THIS AGREEMENT made this 30th day of August, 1988 between SEI Wealth
Management Trust, (the "Trust") a Massachusetts business trust , and SEI
Financial Services Company (the "Distributor") a Pennsylvania corporation.
WHEREAS, the Trust is registered as an investment company with the
Securities and Exchange Commission ("SEC") under the Investment Company Act of
1940, as amended ("1940 Act"), and its Units are registered with the SEC under
the Securities Act of 1933, as amended ("1933 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities and Exchange Act of 1934, as amended.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the Trust and Distributor hereby agree as follows:
ARTICLE 1. SALE OF UNITS. The Trust grants to the Distributor the
right to sell units of the Trust at the net asset value per Unit, as agent and
on behalf of the Trust, during the term of this Agreement and subject to the
registration requirements of the Securities Act of 1933, the rules and
regulations of the SEC and the laws governing the sale of securities in the
various states ("Blue Sky laws").
ARTICLE 2. SOLICITATION OF SALES. In consideration of these rights
granted to the Distributor, the Distributor agrees to use all reasonable
efforts, consistent with its other business, to obtain purchasers for Units of
the Trust, provided, however, that the Distributor shall not be prevented from
entering into like arrangements with other issuers. The provisions of this
paragraph do not obligate the Distributor to register as a broker or dealer
under the Blue Sky laws of any jurisdiction when it determines it would be
uneconomical for it to do so or to maintain its registration in any jurisdiction
in which it is now registered.
ARTICLE 3. AUTHORIZED REPRESENTATIONS. The Distributor is not
authorized by the Trust to give any information or to make any representations
other than those contained in the current registration statements or
prospectuses of the Trust filed with the SEC or contained in unitholder reports
or other material that may be prepared by or on behalf of the Trust for the
Distributor's use. The Distributor may prepare and distribute sales literature
and other material as it may deem appropriate, provided that such literature and
materials have been approved by the Trust prior to their use.
ARTICLE 4. REGISTRATION OF UNITS. The Trust agrees that it will take
all action necessary to register Units under the federal and state securities
laws so that there will be available for sale the number of units the
Distributor may reasonably be expected to sell. The Trust shall make available
to the Distributor such number of copies of its currently effective prospectus
and statement of addi-
<PAGE>
tional information as the Distributor may reasonably request. The Trust shall
furnish to the Distributor copies of all information, financial statements and
other papers which the Distributor may reasonably request for use in connection
with the distribution of units of the Trust.
ARTICLE 5. INDEMNIFICATION OF DISTRIBUTOR. The Trust agrees to
indemnify and hold harmless the Distributor and each of its directors and
officers and each person, if any, who controls the Distributor within the
meaning of Section 15 of the 1933 Act against any loss, liability, claim,
damages or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages, or expense and reasonable counsel
fees incurred in connection therewith), arising by reason of any person
acquiring any Units, based upon the ground that the registration statement,
prospectus, Unitholder reports or other information filed or made public by the
Trust (as from time to time amended), included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements made not misleading. However, the Trust does not
agree to indemnify the Distributor or hold it harmless to the extent that the
statement or omission was made in reliance upon, and in conformity with,
information furnished to the Trust by or on behalf of the Distributor.
In no case (i) is the indemnity of the Trust to be deemed to protect the
Distributor or any person against any liability to the Trust or its Unitholders
to which the Distributor or such person would otherwise be subject by reason of
wilful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under this Agreement, or (ii) is the Trust to be liable to the Distributor under
its indemnity agreement contained in this paragraph with respect to any claim
made against the Distributor or any person indemnified unless the Distributor or
any person shall have notified the Trust in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or any person (or after the Distributor or the person shall have
received notice of service on any designated agent). However, failure to notify
the Trust of any claim shall not relieve the Trust from any liability which it
may have to the Distributor or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph.
The Trust shall be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Trust elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by it and satisfactory to the indemnified defendants in the suit whose
approval shall not be unreasonably withheld. In the event the Trust elects to
assume the defense of any suit and retain counsel, the indemnified defendants
shall bear the fees and expenses of any additional counsel retained by them. If
the Trust does not elect to assume the defense of any suit, it will reimburse
the indemnified defendants for the reasonable fees and expenses of any counsel
retained by the indemnified defendants.
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<PAGE>
The Trust agrees to notify the Distributor promptly of any commencement of
any litigation or proceedings against it or any of its officers or Trustees in
connection with the issuance or sale of any of its Units.
ARTICLE 6. INDEMNIFICATION OF TRUST. The Distributor covenants and
agrees that it will indemnify and hold harmless the Trust and each of its
Trustees and officers and each person, if any, who controls the Trust within the
meaning of Section 15 of the Act, against any loss, liability, damages, claim or
expense (including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees incurred
in connection therewith) based upon the 1933 Act or any other statute or common
law and arising by reason of any person acquiring any Units, and alleging a
wrongful act of the Distributor or any of its employees or alleging that the
registration statement, prospectus, Unitholder reports or other information
filed or made public by the Trust (as from time to time-amended), included an
untrue statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon and in conformity
with information furnished to the Trust by or on behalf of the Distributor.
In no case (i) is the indemnity of the Distributor in favor of the Trust or
any person indemnified to be deemed to protect the Trust or any person against
any liability to which the Trust or such person would otherwise be subject by
reason of wilful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement, or (ii) is the Distributor to be liable under its
indemnity agreement contained in this paragraph with respect to any claim made
against the Trust or any person indemnified unless the Trust or person, as the
case may be, shall have notified the Distributor in writing of the claim within
a reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the Trust or
upon any person (or after the Trust or such person shall have received notice of
service on any designated agent). However, failure to notify the Distributor of
any claim shall not relieve the Distributor from any liability which it may have
to the Trust or any person against whom the action is brought otherwise than on
account of its indemnity agreement contained in this paragraph.
The Distributor shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonable withheld.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any suit, it will reimburse the indemnified defendants for
the reasonable fees and expenses of any counsel retained by them.
The Distributor agrees to notify the Trust promptly of the commencement of
any litigation or proceedings against it in connection with the issue and sale
of any of the Trusts' Units.
-3-
<PAGE>
ARTICLE 7. EFFECTIVE DATE. This Agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force for one
year from the effective date and thereafter from year to year, provided that
such annual continuance is approved by (i) either the vote of a majority of the
Trustees of the Trust, or vote of a majority of the outstanding voting
securities of the Trust, and (ii) the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or interested persons of any
party, ("Qualified Trustees"), cast in person at a meeting called for the
purpose of voting on the approval. This Agreement shall automatically
terminate, in the event of its assignment. As used in this paragraph the terms
"vote of a majority of the outstanding voting securities," "assignment," and
"interested person," shall have the respective meanings specified in the 1940
Act. In addition this Agreement may at any time be terminated without penalty
by SFS, by a vote of a majority of Qualified Trustees or by vote of a majority
of the outstanding voting securities of the Trust upon not less than sixty days
prior written notice to the other party.
ARTICLE 8. NOTICES. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Trust, at 28 State Street, Boston, Massachusetts, and if to
the Distributor, at 680 E. Swedesford Road, Wayne, Pennsylvania 19087.
ARTICLE 9. LIMITATION OF LIABILITY. A copy of the Declaration of Trust
of the Trust is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed in
behalf of the Trustees of the Trust as Trustees, and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or unitholders of the Trust individually but binding only upon the
assets and property of the Trust.
ARTICLE 10. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.
ARTICLE 11. MULTIPLE ORIGINALS. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
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<PAGE>
IN WITNESS, the Trust and Distributor have each duly executed this
Agreement, as of the day and year above written.
SEI WEALTH MANAGEMENT TRUST
By: /s/ Susan L. Schelpf
-----------------------------
SEI FINANCIAL SERVICES COMPANY
By: /s/ Sandy M. Kraus
-----------------------------
-5-
<PAGE>
Amendment to SEI International Trust's (the "Trust") (formerly SEI Wealth
Management Trust's) Distribution Agreement (the "Agreement") dated August 30,
1988.
ARTICLE 12. COMPENSATION.
AS COMPENSATION FOR THE SERVICES PERFORMED AND THE EXPENSES ASSUMED BY THE
DISTRIBUTOR UNDER THIS AGREEMENT, AND TO THE EXTENT PROVIDED IN THE TRUST'S
DISTRIBUTION PLAN ADOPTED IN ACCORDANCE WITH RULE 12b-1 UNDER THE
INVESTMENT COMPANY ACT OF 1940 ACT, THE TRUST SHALL REIMBURSE THE
DISTRIBUTOR FOR (i) THE COST OF PROSPECTUSES AND STATEMENTS OF ADDITIONAL
INFORMATION, REPORTS TO UNITHOLDERS, SALES LITERATURE AND OTHER MATERIALS
FOR POTENTIAL INVESTORS, (ii) THE COSTS OF COMPLYING WITH THE FEDERAL AND
STATE SECURITIES LAWS PERTAINING TO THE DISTRIBUTION OF UNITS,
(iii) ADVERTISING, AND (iv) EXPENSES INCURRED IN PROMOTING AND SELLING
UNITS, INCLUDING EXPENSES FOR TRAVEL, COMMUNICATION, AND COMPENSATION AND
BENEFITS OF SALES PERSONNEL. SEPARATE AND APART FROM THE SERVICES AND
COMPENSATION PROVIDED FOR UNDER THIS AGREEMENT, THE DISTRIBUTOR MAY RETAIN
ADDITIONAL COMPENSATION THAT IT RECEIVES FROM THE TRUST ON PORTFOLIO
TRANSACTIONS THAT IT EFFECTS FOR THE TRUST IN ACCORDANCE WITH APPLICABLE
RULES OF THE SECURITIES AND EXCHANGE COMMISSION.
-6-
<PAGE>
CUSTODIAN CONTRACT
Between
SEI WEALTH MANAGEMENT TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
----
1. Employment of Custodian and Property to be Held By It . . . . . . .1
2. Duties of the Custodian with Respect to Property of
the Fund Held by the Custodian in the United States . . . . . . . .2
2.1 Holding Securities. . . . . . . . . . . . . . . . . . . .2
2.2 Delivery of Securities. . . . . . . . . . . . . . . . . .3
2.3 Registration of Securities. . . . . . . . . . . . . . . .8
2.4 Bank Accounts . . . . . . . . . . . . . . . . . . . . . .8
2.5 Availability of Federal Funds . . . . . . . . . . . . . .9
2.6 Collection of Income. . . . . . . . . . . . . . . . . . .9
2.7 Payment of Fund Monies. . . . . . . . . . . . . . . . . 10
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased . . . . . . . . . . . . 13
2.9 Appointment of Agents . . . . . . . . . . . . . . . . . 13
2.10 Deposit of Securities in Securities System. . . . . . . 14
2.10A Fund Assets Held in the Custodian's Direct
Paper System. . . . . . . . . . . . . . . . . . . . . . 17
2.11 Segregated Account. . . . . . . . . . . . . . . . . . . 18
2.12 Ownership Certificates for Tax Purposes . . . . . . . . 19
2.13 Proxies . . . . . . . . . . . . . . . . . . . . . . . . 20
2.14 Communications Relating to Fund
Portfolio Securities. . . . . . . . . . . . . . . . . . 20
2.15 Reports to Fund by Independent Public
Accountants . . . . . . . . . . . . . . . . . . . . . . 21
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States. . . . . . . . . . . . 21
3.1 Appointment of Foreign Sub-Custodians . . . . . . . . . 21
3.2 Assets to be Held . . . . . . . . . . . . . . . . . . . 22
3.3 Foreign Securities Depositories . . . . . . . . . . . . 22
3.4 Segregation of Securities . . . . . . . . . . . . . . . 23
3.5 Agreements with Foreign Banking Institutions. . . . . . 23
3.6 Access of Independent Accountants of the Fund . . . . . 24
3.7 Reports by Custodian. . . . . . . . . . . . . . . . . . 24
3.8 Transactions in Foreign Custody Account . . . . . . . . 25
3.9 Liability of Foreign Sub-Custodians . . . . . . . . . . 25
3.10 Liability of Custodian. . . . . . . . . . . . . . . . . 26
3.11 Reimbursement for Advances. . . . . . . . . . . . . . . 27
3.12 Monitoring Responsibilities . . . . . . . . . . . . . . 28
3.13 Branches of U.S. Banks. . . . . . . . . . . . . . . . . 28
4. Payments for Repurchases or Redemptions and Sales
of Shares of the Fund . . . . . . . . . . . . . . . . . . . . . . 29
5. Proper Instructions . . . . . . . . . . . . . . . . . . . . . . . 30
6. Actions Permitted Without Express Authority . . . . . . . . . . . 31
7. Evidence of Authority . . . . . . . . . . . . . . . . . . . . . . 31
<PAGE>
8. Duties of Custodian with Respect to the Books of
Account and Calculations of Net Asset Value and
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9. Records.... . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10. Opinion of Fund's Independent Accountant. . . . . . . . . . . . . 33
11. Compensation of Custodian . . . . . . . . . . . . . . . . . . . . 33
12. Responsibility of Custodian . . . . . . . . . . . . . . . . . . . 33
13. Effective Period, Termination and Amendment . . . . . . . . . . . 36
14. Successor Custodian . . . . . . . . . . . . . . . . . . . . . . . 37
15. Interpretive and Additional Provisions. . . . . . . . . . . . . . 38
16. Massachusetts Law to Apply. . . . . . . . . . . . . . . . . . . . 39
17. Prior Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 39
<PAGE>
CUSTODIAN CONTRACT
This Contract between SEI Wealth Management Trust, a Massachusetts
Business Trust, having its principal place of business at 680 E. Swedesford
Road, Wayne, Pennsylvania 19087-1658, and State Street Bank and Trust Company,
a Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
SEI Wealth Management Trust hereby employs the Custodian as the
custodian of the assets of the International Portfolio and such
other portfolios as the parties may hereinafter agree on (the
"Fund"), including securities it desires to be held in places
within the United States ("domestic securities") and securities it
desires to be held outside the United States ("foreign
securities"). The Fund agrees to deliver to the Custodian all
securities and cash owned by it, and all payments of income,
payments of principal or capital distributions received by it with
respect to all securities owned by the Fund from time to time, and
the cash consideration received by it for new units of beneficial
interest, ("Shares") of the Fund as may be issued or sold from time
to time. The Custodian shall not be responsible for any property
of the Fund held or received by the
<PAGE>
Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of
Article 5), the Custodian shall from time to time employ one or more
sub-custodians located in the United States, but only in accordance with an
applicable vote by the Board of Trustees of the Fund, and provided that the
Custodian shall have no more or less responsibility or liability to the Fund on
account of any actions or omissions of any sub-custodian so employed than any
such sub-custodian has to the Custodian. The Custodian may employ as
sub-custodians for the Fund's securities and other assets the foreign banking
institutions and foreign securities depositories designated in Schedule "A"
hereto but only in accordance with the provisions of Article 3.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY
THE CUSTODIAN IN THE UNITED STATES
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of the Fund all non-cash property, to be held by it in
the United States, including all domestic securities owned by the
Fund, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S. Department
of the Treasury, collectively referred to herein as "Securities
System" and (b) commercial paper of an issuer for which State Street
Bank and Trust Company acts as issuing and paying agent ("Direct
Paper") which is deposited and/or
-2-
<PAGE>
maintained in the Direct Paper System of the Custodian pursuant to
Section 2.10A.
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
domestic securities owned by the Fund held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's
Direct Paper book entry system account ("Direct Paper System Account")
only upon receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, and only in the
following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered into
by the Fund;
3) In the case of a sale effected through a Securities System,
in accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
-3-
<PAGE>
6) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee or nominees
of the Custodian or into the name or nominee name of any
agent appointed pursuant to Section 2.9 or into the name or
nominee name of any sub-custodian appointed pursuant to
Article 1; or for exchange for a different number of bonds,
certificates or other evidence representing the same
aggregate face amount or number of units; PROVIDED that, in
any such case, the new securities are to be delivered to the
Custodian;
7) Upon the sale of such securities for the account of the
Fund, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise
from the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation,
-4-
<PAGE>
recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any
such case, the new securities and cash, if any, are to be
delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts
or temporary securities for definitive securities; provided
that, in any such case, the new securities and cash, if any,
are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Fund, BUT ONLY against receipt of adequate collateral
as agreed upon from time to time by the Custodian and the
Fund, which may be in the form of cash or obligations issued
by the United States government, its agencies or
instrumentalities, except that in connection with any loans
for which collateral is to be credited to the Custodian's
account in the book-entry system authorized by the U.S.
-5-
<PAGE>
Department of the Treasury, the Custodian will not be held
liable or responsible for the delivery of securities owned
by the Fund prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings
by the Fund requiring a pledge of assets by the Fund, BUT
ONLY as permitted by the Investment Company Act of 1940 and
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 (the
"Exchange Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance
with the rules of The Options Clearing Corporation and of
any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the
Fund;
13) For delivery in accordance with the provisions of
any agreement among the Fund, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the
-6-
<PAGE>
rules of the Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or
organizations, regarding account deposits in connection
with transactions by the Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such
Transfer Agent or to the holders of shares in connection
with distributions in kind, as may be described from time to
time in the Fund's currently effective prospectus and
statement of additional information ("prospectus"), in
satisfaction of requests by holders of Shares for repurchase
or redemption; and
15) For any other proper corporate purpose, BUT ONLY upon
receipt of, in addition to Proper Instructions, a certified
copy of a resolution of the Board of Trustees or of the
Executive Committee signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary,
specifying the securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring
such purpose to be a proper corporate purpose, and naming
the person or persons to whom delivery of such securities
shall be made.
-7-
<PAGE>
2.3 REGISTRATION OF SECURITIES. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Fund or in the name of any nominee of the Fund or of any nominee of
the Custodian which nominee shall be assigned exclusively to
the Fund, UNLESS the Fund has authorized in writing the appointment of
a nominee to be used in commmon with other registered investment
companies having the same invesment adviser as the Fund, or in the
name or nominee name of any agent appointed pursuant to Section 2.9
or in the name or nominee name of any sub-custodian appointed
pursuant to Article 1. All securities accepted by the Custodian
on behalf of the Fund under the terms of this Contract shall be in
"street name" or other good delivery form.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of the Fund,
subject only to draft or order by the Custodian acting pursuant to the
terms of this Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or for
the account of the Fund, other than cash maintained by the Fund in a
bank account established and used in accordance with Rule 17f-3 under
the Investment Company Act of 1940. Funds held by the Custodian for
the Fund may be deposited by it to its credit as Custodian in the
Banking Department of the Custodian or in such other banks or trust
companies as it may in its discretion deem
-8-
<PAGE>
necessary or desirable; PROVIDED, however, that every such bank or
trust company shall be qualified to act as a custodian under the
Investment Company Act of 1940 and that each such bank or trust
company and the funds to be deposited with each such bank or trust
company shall be approved by vote of a majority of the Board of
Trustees of the Fund. Such funds shall be deposited by the Custodian
in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
2.5 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Fund
and the Custodian, the Custodian shall, upon the receipt of Proper
Instructions, make federal funds available to the Fund as of specified
times agreed upon from time to time by the Fund and the Custodian in
the amount of checks received in payment for Shares of the Fund
which are deposited into the Fund's account.
2.6 COLLECTION OF INCOME. The Custodian shall collect on a timely basis
all income and other payments with respect to United States registered
securities held hereunder to which the Fund shall be entitled either
by law or pursuant to custom in the securities business, and shall
collect on a timely basis all income and other payments with respect
to United States bearer securities if, on the date of payment by the
issuer, such securities are held by the Custodian or its agent thereof
and shall credit such income, as collected, to the Fund's custodian
account. Without limiting the generality of the
-9-
<PAGE>
foregoing, the Custodian shall detach and present for payment all
coupons and other income items requiring presentation as and when they
become due and shall collect interest when due on securities held
hereunder. Income due the Fund on United States securities loaned
pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Fund
with such information or data as may be necessary to assist the Fund
in arranging for the timely delivery to the Custodian of the income to
which the Fund is properly entitled.
2.7 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions, which
may be continuing instructions when deemed appropriate by the parties,
the Custodian shall pay out monies of the Fund in the following cases
only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Fund but only (a) against the delivery of such
securities, or evidence of title to such options, futures
contracts or options on futures contracts, to the Custodian
(or any bank, banking firm or trust company doing business
in the United States or abroad which is qualified under the
Investment Company Act of 1940, as amended, to act as a
custodian
-10-
<PAGE>
and has been designated by the Custodian as its agent for
this purpose) registered in the name of the Fund or in the
name of a nominee of the Custodian referred to in Section
2.3 hereof or in proper form for transfer; (b) in the case
of a purchase effected through a Securities System, in
accordance with the conditions set forth in Section 2.10
hereof; (c) in the case of a purchase involving the Direct
Paper System, in accordance with the conditions set forth
in Section 2.10A; (d) in the case of repurchase agreements
entered into between the Fund and the Custodian, or another
bank, or a broker-dealer which is a member of NASD, (i)
against delivery of the securities either in certificate
form or through an entry crediting the Custodian's account
at the Federal Reserve Bank with such securities or (ii)
against delivery of the receipt evidencing purchase by the
Fund of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase
such securities from the Fund or (e) for the transfer to a
time deposit account of the Fund in any bank, whether
domestic or foreign; such transfer may be effected prior to
receipt of a
-11-
<PAGE>
confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions from the Fund as defined in
Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued by the
Fund as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments
for the account of the Fund: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be
in whole or part capitalized or treated as deferred
expenses;
5) For the payment of any dividends declared pursuant to the
governing documents of the Fund;
6) For payment of the amount of dividends received in respect
of securities sold short;
7) For any other proper purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions, a certified copy of a
-12-
<PAGE>
resolution of the Board of Trustees or of the Executive
Committee of the Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or
persons to whom such payment is to be made.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of the Fund is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written
instructions from the Fund to so pay in advance, the Custodian shall
be absolutely liable to the Fund for such securities to the same extent
as if the securities had been received by the Custodian.
2.9 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the Investment Company
Act of 1940, as amended, to act as a custodian, as its agent to carry
out such of the provisions of this Article 2 as the Custodian may from
time to time direct; PROVIDED, however, that the appointment of any
agent shall not relieve the Custodian of its responsibilities or
liabilities hereunder.
-13-
<PAGE>
2.10 DEPOSIT OF SECURITIES IN SECURITIES SYSTEMS. The Custodian may
deposit and/or maintain domestic securities owned by the Fund in a
clearing agency registered with the Securities and Exchange Commission
under Section 17A of the Securities Exchange Act of 1934, which acts
as a securities depository, or in the book-entry system authorized by
the U.S. Department of the Treasury and certain federal agencies,
collectively referred to herein as "Securities System" in accordance
with applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and subject to the following
provisions:
1) The Custodian may keep domestic securities of the Fund in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in
the Securities System which shall not include any assets of
the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
2) The records of the Custodian with respect to domestic
securities of the Fund which are maintained in a Securities
System shall identify by book-entry those securities
belonging to the Fund;
3) The Custodian shall pay for domestic securities purchased
for the account of the
-14-
<PAGE>
Fund upon (i) receipt of advice from the Securities System
that such securities have been transferred to the Account,
and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer domestic
securities sold for the account of the Fund upon (i) receipt
of advice from the Securities System that payment for such
securities has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the
Fund. Copies of all advices from the Securities System of
transfers of domestic securities for the account of the Fund
shall identify the Fund, be maintained for the Fund by the
Custodian and be provided to the Fund at its request. Upon
request, the Custodian shall furnish the Fund confirmation
of each transfer to or from the account of the Fund in the
form of a written advice or notice and shall furnish to the
Fund copies of daily transaction sheets reflecting each
day's transactions in the Securities System for the account
of the Fund.
4) The Custodian shall provide the Fund with any
-15-
<PAGE>
report obtained by the Custodian on the Securities System's
accounting system, internal accounting control and
procedures for safeguarding domestic securities deposited in
the Securities System;
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 13
hereof;
6) Anything to the contrary in this Contract notwithstanding,
the Custodian shall be liable to the Fund for any loss or
damage to the Fund resulting from use of the Securities
System by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or of any
of its or their employees or from failure of the Custodian
or any such agent to enforce effectively such rights as it
may have against the Securities System; at the election of
the Fund, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim against
the Securities System or any other person which the
Custodian may have as a consequence of any such loss or
damage if and to the extent that the Fund has not been made
whole for any such loss or damage.
-16-
<PAGE>
2.10A FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. The
Custodian may deposit and/or maintain securities owned by the Fund in
the Direct Paper System of the Custodian subject to the following
provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper
Instructions;
2) The Custodian may keep securities of the Fund in the Direct
Paper System only if such securities are represented in an
account ("Account") of the Custodian in the Direct Paper
System which shall not include any assets of the Custodian
other than assets held as a fiduciary, custodian or
otherwise for customers;
3) The records of the Custodian with respect to securities of
the Fund which are maintained in the Direct Paper System
shall identify by book-entry those securities belonging to
the Fund;
4) The Custodian shall pay for securities purchased for the
account of the Fund upon the making of an entry on the
records of the Custodian to reflect such payment and
transfer of securities to the account of the Fund. The
Custodian shall transfer securities sold for the account of
the Fund
-17-
<PAGE>
upon the making of an entry on the records of the Custodian
to reflect such transfer and receipt of payment for the
account of the Fund;
5) The Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund, in the form of
a written advice or notice, of Direct Paper on the next
business day following such transfer and shall furnish to
the Fund copies of daily transaction sheets reflecting each
day's transaction in the Securities System for the account
of the Fund;
6) The Custodian shall provide the Fund with any report on its
system of internal accounting control as the Fund may
reasonably request from time to time;"
2.11 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts
for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the Fund, the
Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered
under the Commodity
-18-
<PAGE>
Exchange Act), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading Commission
or any registered contract market), or of any similar
organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund, (ii)
for purposes of segregating cash or government securities in
connection with options purchased, sold or written by the Fund or
commodity futures contracts or options thereon purchased or sold
by the Fund, (iii) for the purposes of compliance by the Fund
with the procedures required by Investment Company Act Release
No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv)
for other proper corporate purposes, BUT ONLY, in the case of
clause (iv), upon receipt of, in addition to Proper Instructions,
a certified copy of a resolution of the Board of Trustees or of
the Executive Committee signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary, setting
forth the purpose or purposes of such segregated account and
declaring such purposes to be proper corporate purposes.
2.12 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in
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connection with receipt of income or other payments with respect
to domestic securities of the Fund held by it and in
connection with transfers of such securities.
2.13 PROXIES. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than in
the name of the Fund or a nominee of the Fund, all proxies, without
indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Fund such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.14 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. The Custodian
shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of
domestic securities and expirations of rights in connection therewith
and notices of exercise of call and put options written by the Fund
and the maturity of futures contracts purchased or sold by the Fund)
received by the Custodian from issuers of the domestic securities
being held for the Fund. With respect to tender or exchange offers,
the Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of the domestic
securities whose tender or exchange is sought and from the party (or
his agents) making the tender or exchange offer. If the Fund desires
to take action with
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respect to any tender offer, exchange offer or any other similar
transaction, the Fund shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take
such action.
2.15 REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS. The Custodian
shall provide the Fund, at such times as the Fund may reasonably
require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for
safeguarding securities, futures contracts and options on futures
contracts, including domestic securities deposited and/or maintained
in a Securities System, relating to the services provided by the
Custodian under this Contract; such reports shall be of sufficient
scope and in sufficient detail, as may reasonably be required by the
Fund to provide reasonable assurance that any material inadequacies
would be disclosed by such examination, and, if there are no such
inadequacies, the reports shall so state.
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD
OUTSIDE OF THE UNITED STATES.
3.1 APPOINTMENT OF FOREIGN SUB-CUSTODIANS. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Fund's
securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories
designated on Schedule A hereto ("foreign
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sub-custodians"). Upon receipt of "Proper Instructions", as defined
in Section 5 of this Contract, together with a certified resolution of
the Fund's Board of Trustees, the Custodian and the Fund may agree to
amend Schedule A hereto from time to time to designate additional
foreign banking institutions and foreign securities depositories to
act as sub-custodian. Upon receipt of Proper Instructions, the Fund
may instruct the Custodian to cease the employment of any one or more
such sub-custodians for maintaining custody of the Fund's assets.
3.2 ASSETS TO BE HELD. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to:
(a) "foreign securities", as defined in paragraph (c)(1) of Rule 17f-5
under the Investment Company Act of 1940, and (b) cash and cash
equivalents in such amounts as the Custodian or the Fund may determine
to be reasonably necessary to effect the Fund's foreign securities
transactions.
3.3 FOREIGN SECURITIES DEPOSITORIES. Except as may otherwise be agreed
upon in writing by the Custodian and the Fund, assets of the Fund
shall be maintained in foreign securities depositories only through
arrangements implemented by the foreign banking institutions serving
as sub-custodians pursuant to the terms hereof. Where possible, such
arrangements shall include entry into agreements containing the
provisions set forth in Section 3.5 hereof.
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3.4 SEGREGATION OF SECURITIES
The Custodian shall identify on its books as belonging to the Fund,
the foreign securities of the Fund held by each foreign sub-custodian.
Each agreement pursuant to which the Custodian employs a foreign
banking institution shall require that such institution establish a
custody account for the Custodian on behalf of the Fund and physically
segregate in that account, securities and other assets of the Fund,
and, in the event that such institution deposits the Fund's securities
in a foreign securities depository, that it shall identify on its
books as belonging to the Custodian, as agent for the Fund, the
securities so deposited.
3.5 AGREEMENTS WITH FOREIGN BANKING INSTITUTIONS. Each agreement with a
foreign banking institution shall be substantially in the form set
forth in Exhibit 1 hereto and shall provide that: (a) the Fund's
assets will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution
or its creditors or agent, except a claim of payment for their safe
custody or administration; (b) beneficial ownership of the Fund's
assets will be freely transferable without the payment of money or
value other than for custody or administration; (c) adequate records
will be maintained identifying the assets as belonging to the Fund;
(d) officers of or auditors employed by, or other representatives of
the Custodian, including to the
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extent permitted under applicable law the independent public
accountants for the Fund, will be given access to the books and
records of the foreign banking institution relating to its actions
under its agreement with the Custodian; and (e) assets of the Fund
held by the foreign sub-custodian will be subject only to the
instructions of the Custodian or its agents.
3.6 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUND. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books
and records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the
performance of such foreign banking institution under its agreement
with the Custodian.
3.7 REPORTS BY CUSTODIAN. The Custodian will supply to the Fund from time
to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Fund held by foreign sub-
custodians, including but not limited to an identification of entities
having possession of the Fund's securities and other assets and
advices or notifications of any transfers of securities to or from
each custodial account maintained by a foreign banking institution for
the Custodian on behalf of the Fund indicating, as to securities
acquired for the Fund, the identity of the entity having physical
possession of such securities.
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3.8 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
(a) Except as otherwise provided in paragraph (b) of this Section 3.8,
the provision of Sections 2.2 and 2.7 of this Contract shall apply,
MUTATIS MUTANDIS to the foreign securities of the Fund held outside
the United States by foreign sub-custodians.
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of the
Fund and delivery of securities maintained for the account of the Fund
may be effected in accordance with the customary established
securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs,
including, without limitation, delivering securities to the purchaser
thereof or to a dealer therefor (or an agent for such purchaser or
dealer) against a receipt with the expectation of receiving later
payment for such securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian
may be maintained in the name of such entity's nominee to the same
extent as set forth in Section 2.3 of this Contract, and the Fund
agrees to hold any such nominee harmless from any liability as a
holder of record of such securities.
3.9 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign sub-
custodian shall require the
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institution to exercise reasonable care in the performance of its
duties and to indemnify, and hold harmless, the Custodian and each
Fund from and against any loss, damage, cost, expense, liability or
claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it
shall be entitled to be subrogated to the rights of the Custodian with
respect to any claims against a foreign banking institution as a
consequence of any such loss, damage, cost, expense, liability or
claim if and to the extent that the Fund has not been made whole for
any such loss, damage, cost, expense, liability or claim.
3.10 LIABILITY OF CUSTODIAN. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a
foreign banking institution, a foreign securities depository or a
branch of a U.S. bank as contemplated by paragraph 3.13 hereof, the
Custodian shall not be liable for any loss, damage, cost, expense,
liability or claim resulting from nationalization, expropriation,
currency restrictions, or acts of war or terrorism or any loss where
the sub-custodian has otherwise exercised reasonable care.
Notwithstanding the foregoing provisions of this paragraph 3.10, in
delegating custody duties to State Street London Ltd.,
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the Custodian shall not be relieved of any responsibility to the Fund
for any loss due to such delegation, except such loss as may result
from (a) political risk (including, but not limited to, exchange
control restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities) or (b) other losses
(excluding a bankruptcy or insolvency of State Street London Ltd. not
caused by political risk) due to Acts of God, nuclear incident or
other losses under circumstances where the Custodian and State Street
London Ltd. have exercised reasonable care.
3.11 REIMBURSEMENT FOR ADVANCES. If the Fund requires the Custodian to
advance cash or securities for any purpose including the purchase or
sale of foreign exchange or of contracts for foreign exchange, or in
the event that the Custodian or its nominee shall incur or be assessed
any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as may
arise from its or its nominee's own negligent action, negligent
failure to act or willful misconduct, any property at any time held
for the account of the Fund shall be security therefor and should the
Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of the Fund assets
to the extent necessary to obtain reimbursement, but only to the
extent permitted by the Investment Company Act of 1940.
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3.12 MONITORING RESPONSIBILITIES. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the
Custodian will promptly inform the Fund in the event that the
Custodian learns of a material adverse change in the financial
condition of a foreign sub-custodian or any material loss of the
assets of the Fund or in the case of any foreign sub-custodian not the
subject of an exemptive order from the Securities and Exchange
Commission is notified by such foreign sub-custodian that there
appears to be a substantial likelihood that its shareholders' equity
will decline below $200 million (U.S. dollars or the equivalent
thereof) or that its shareholders' equity has declined below $200
million (in each case computed in accordance with generally accepted
U.S. accounting principles).
3.13 BRANCHES OF U.S. BANKS.
(a) Except as otherwise set forth in this Contract, the provisions
hereof shall not apply where the custody of the Fund assets are
maintained in a foreign branch of a banking institution which is a
"bank" as defined by Section 2(a)(5) of the Investment Company Act of
1940 meeting the qualification set forth in Section 26(a) of said Act.
The appointment of any such branch as a
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sub-custodian shall be governed by paragraph 1 of this Contract.
(b) Cash held for the Fund in the United Kingdom shall be maintained
in an interest bearing account established for the Fund with the
Custodian's London branch, which account shall be subject to the
direction of the Custodian, State Street London Ltd. or both.
4. PAYMENTS FOR REPURCHASES OR REDEMPTIONS AND SALES OF SHARES OF THE FUND
From such funds as may be available for the purpose but subject to the
limitations of the Declaration of Trust and any applicable votes of the Board of
Trustees of the Fund pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of Shares of the Fund, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the
redemption or repurchase of Shares of the Fund, the Custodian shall honor checks
drawn on the Custodian by a holder of Shares, which checks have been
furnished by the Fund to the holder of Shares, when presented to the Custodian
in accordance with such procedures and controls as are mutually agreed upon from
time to time between the Fund and the Custodian.
The Custodian shall receive from the distributor for the
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Fund's Shares or from the Transfer Agent of the Fund and deposit into the Fund's
account such payments as are received for Shares of the Fund issued or sold from
time to time by the Fund. The Custodian will provide timely notification to the
Fund and the Transfer Agent of any receipt by it of payments for Shares of the
Fund.
5. PROPER INSTRUCTIONS
Proper Instructions as used herein means a writing signed or
initialled by one or more person or persons as the Board of Trustees shall have
from time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved, including a specific statement of
the purpose for which such action is requested. Oral instructions will be
considered Proper Instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with respect to the
transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary as to the authorization by the Board of Trustees of the Fund
accompanied by a detailed description of procedures approved by the Board of
Trustees, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Trustees and the Custodian are satisfied that such procedures afford adequate
safeguards for the Fund's assets. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian pursuant to
any
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three-party agreement which requires a segregated asset account in accordance
with Section 2.11.
6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the
Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Contract,
PROVIDED that all such payments shall be accounted for to the Fund;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other dealings with the
securities and property of the Fund except as otherwise directed by the Board
of Trustees of the Fund.
7. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Trustees of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Trustees pursuant
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to the Declaration of Trust as described in such vote, and such vote may be
considered as in full force and effect until receipt by the Custodian of written
notice to the contrary.
8. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION OF
NET ASSET VALUE AND NET INCOME
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Trustees of the Fund to keep the
books of account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do so by the Fund,
shall itself keep such books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also calculate daily the net income
of the Fund as described in the Fund's currently effective prospectus and shall
advise the Fund and the Transfer Agent daily of the total amounts of such net
income and, if instructed in writing by an officer of the Fund to do so, shall
advise the Transfer Agent periodically of the division of such net income among
its various components. The calculations of the net asset value per share and
the daily income of the Fund shall be made at the time or times described from
time to time in the Fund's currently effective prospectus.
9. RECORDS
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet
the obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder,
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applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All such records shall be
the property of the Fund and shall at all times during the regular business
hours of the Custodian be open for inspection by duly authorized officers,
employees or agents of the Fund and employees and agents of the Securities and
Exchange Commission. The Custodian shall, at the Fund's request, supply the
Fund with a tabulation of securities owned by the Fund and held by the Custodian
and shall, when requested to do so by the Fund and for such compensation as
shall be agreed upon between the Fund and the Custodian, include certificate
numbers in such tabulations.
10. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Fund may from time
to time request, to obtain from year to year favorable opinions from the
Fund's independent accountants with respect to its activities hereunder in
connection with the preparation of the Fund's Form N-1A, and Form N-SAR or
other annual reports to the Securities and Exchange Commission and with
respect to any other requirements of such Commission.
11. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its services
and expenses as Custodian, as agreed upon from time to time between SEI
Financial Management Corporation and the Custodian, as reflected in a letter
agreement dated _____ between the parties.
12. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for
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the title, validity or genuineness of any property or evidence of title
thereto received by it or delivered by it pursuant to this Contract and shall
be held harmless in acting upon any notice, request, consent, certificate or
other instrument reasonably believed by it to be genuine and to be signed by
the proper party or parties, including any futures commission merchant acting
pursuant to the terms of a three-party futures or options agreement. The
Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Contract, but shall be kept indemnified by and shall
be without liability to the Fund for any action taken or omitted by it in
good faith without negligence. It shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted
pursuant to such advice. Notwithstanding the foregoing, the responsibility
of the Custodian with respect to redemptions effected by check shall be in
accordance with a separate Agreement entered into between the Custodian and
the Fund.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article 1 hereof with respect to sub-custodians
located in the United States and, regardless of whether assets are maintained
in the custody of a foreign banking institution, a foreign securities depository
or a branch of a U.S. bank as contemplated by paragraph 3.11 hereof, the
Custodian shall not be liable for
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any loss, damage, cost, expense, liability or claim resulting from, or caused
by, the direction of or authorization by the Fund to maintain custody or any
securities or cash of the Fund in a foreign country including, but not limited
to, losses resulting from nationalization, expropriation, currency restrictions,
or acts of war or terrorism.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian to advance cash or securities for any
purpose or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Fund shall be
security therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of the Fund
assets to the extent necessary to obtain reimbursement, but only to the extent
permitted by the Investment Company Act of 1940.
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13. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided,
may be amended at any time by mutual agreement of the parties hereto and may
be terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take effect
not sooner than thirty (30) days after the date of such delivery or mailing;
PROVIDED, however that the Custodian shall not act under Section 2.10 hereof
in the absence of receipt of an initial certificate of the Secretary or an
Assistant Secretary that the Board of Trustees of the Fund has approved the
initial use of a particular Securities System and the receipt of an annual
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees has reviewed the use by the Fund of such Securities System, as
required in each case by Rule 17f-4 under the Investment Company Act of 1940,
as amended and that the Custodian shall not act under Section 2.10A hereof in
the absence of receipt of an initial certificate of the Secretary or an
Assistant Secretary that the Board of Trustees has approved the initial use
of the Direct Paper System and the receipt of an annual certificate of the
Secretary or an Assistant Secretary that the Board of Trustees has reviewed
the use by the Fund of the Direct Paper System; PROVIDED FURTHER, however,
that the Fund shall not amend or terminate this Contract in contravention of
any applicable federal or state regulations, or any provision of the
Declaration of Trust, and further provided, that the Fund may
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at any time by action of its Board of Trustees (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian by the Comptroller
of the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the
Custodian such compensation as may be due as of the date of such termination
and shall likewise reimburse the Custodian for its costs, expenses and
disbursements.
14. SUCCESSOR CUSTODIAN
If a successor custodian shall be appointed by the Board of Trustees
of the Fund, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities then held by it hereunder and shall transfer to an
account of the successor custodian all of the Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote of the
Board of Trustees of the Fund, deliver at the office of the Custodian and
transfer such securities, funds and other properties in accordance with such
vote.
In the event that no written order designating a successor custodian
or certified copy of a vote of the Board of
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Directors shall have been delivered to the Custodian on or before the date when
such termination shall become effective, then the Custodian shall have the right
to deliver to a bank or trust company, which is a "bank" as defined in the
Investment Company Act of 1940, doing business in Boston, Massachusetts, of its
own selection, having an aggregate capital, surplus, and undivided profits, as
shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Custodian and all instruments
held by the Custodian relative thereto and all other property held by it under
this Contract and to transfer to an account of such successor custodian all of
the Fund's securities held in any Securities System. Thereafter, such bank or
trust company shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in
the possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or
of the Board of Trustees to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services during such period as
the Custodian retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force and effect.
15. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian
and the Fund may from time to time agree on such
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provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, PROVIDED that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of Trust of the Fund. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Contract.
16. MASSACHUSETTS LAW TO APPLY
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.
17. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund and the Custodian relating to the custody of
the Fund's assets.
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IN WITNESS WHEREOF, each of the parties has caused this instrument
to be executed in its name and behalf by its duly authorized representative
and its seal to be hereunder affixed as of the 17th day of October, 1988.
ATTEST SEI WEALTH MANAGEMENT TRUST
/s/ Signature appears here By /s/ Signature appears here
- ----------------------------- ---------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ Signature appears here By /s/ Signature appears here
- ----------------------------- ---------------------------------
Assistant Secretary Vice President
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Exhibit 99.B8(b)
CUSTODIAN AGREEMENT
This Agreement, dated as of the 15th day of June, 1993 by and between
SEI International Trust (the "Trust"), a business trust operating as an
open-end investment company, duly organized under the laws of the
Commonwealth of Massachusetts and The Chase Manhatten Bank, N.A.;
WITNESSETH:
WHEREAS, the Trust desires to deposit cash and securities with The Chase
Manhatten Bank, N.A. as custodian; and
WHEREAS, The Chase Manhatten Bank N.A. is qualified and authorized to act
as custodian for the cash and securities of an open-end investment company and
is willing to act in such capacity upon the terms and conditions herein set
forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
do hereby agree as follows:
SECTION 1. The terms as defined in this Section wherever used in this
Agreement, or in any amendment or supplement hereto, shall have meanings herein
specified unless the context otherwise requires.
CUSTODIAN: The term Custodian shall mean The Chase Manhatten Bank, N.A. in its
capacity as Custodian for the International Bond Portfolio and such other
Portfolios as may be determined by the Trust from time to time under this
Agreement.
PROPER INSTRUCTIONS: For purposes of this Agreement the Custodian shall be
deemed to have received Proper Instructions upon receipt of written (including
instructions received by means of computer terminals), telephone or telegraphic
instructions from a person or persons authorized from time to time by the
Trustees of the Trust to give the particular class of instructions. Telephone
or telegraphic instructions shall be confirmed in writing by such person or
persons as said Trustees or said Board of Directors shall have from time to time
authorized to give the particular class of instructions in question. The
Custodian may act upon telephone or telegraphic instructions without awaiting
receipt of written confirmation, and shall not be liable for the Trust's or such
investment adviser's failure to confirm such instructions in writing.
SHAREHOLDERS: The term Shareholders shall mean the registered owners from time
to time of the Shares of the Trust in accordance with the registry records
maintained by the Trust or agents on its behalf.
SHARES: The term Shares of the Trust shall mean the units of beneficial
interest of the
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Trust.
SECTION 2. The Trust shall from time to time file with the Custodian a
certified copy of each resolution of its Board of Trustees authorizing the
person or persons to give Proper Instructions (as defined in Section 1) and
specifying the class of instructions that may be given by each person to the
Custodian under this Agreement, together with certified signatures of such
persons authorized to sign, which shall constitute conclusive evidence of the
authority of the officers and signatories designated therein to act, and
shall be considered in full force and effect with the Custodian fully
protected in acting in reliance thereon until it receives written notice to
the contrary; provided, however, that if the certifying officer is authorized
to give Proper Instructions, the certification shall be also signed by a
second officer of the Trust.
SECTION 3. The Trust hereby appoints the Custodian as custodian of cash and
securities from time to time on deposit hereunder, to be held by the
Custodian and applied as provided in this Agreement. The Custodian hereby
accepts such appointment subject to the terms and conditions hereinafter
provided. Such cash and securities shall, however, be segregated from the
assets of others and shall be and remain the sole property of the Trust and
the Custodian shall have only the bare custody thereof.
The Custodian may perform some or all of its duties hereunder through a
subcustodian.
The Custodian may deposit the Trust's portfolio securities with a U.S.
securities depository or in U.S. Federal book-entry systems pursuant to rules
and regulations of the Securities and Exchange Commission.
SECTION 4. The Trust will make an initial deposit of cash to be held and
applied by the Custodian hereunder. Thereafter the Trust will cause to be
deposited with the Custodian hereunder the applicable net asset value of Shares
sold from time to time whether representing initial issue, other stock or
reinvestments of dividends and/or distributions payable to Shareholders.
SECTION 5. The Custodian is hereby authorized and directed to disburse cash
from time to time upon receipt of and in accordance with Proper Instructions.
SECTION 6. The Custodian's compensation shall be as set forth in Schedule A
hereto attached, or as shall be set forth in amendments to such schedule
approved by the Trust and the Custodian.
SECTION 7. In connection with its functions under this Agreement, the Custodian
shall:
(a) render to the Trust a daily report of all monies received or paid on
behalf of the Trust.
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(b) create, maintain and retain all records relating to its activities and
obligations under this Agreement in such manner as will meet the
obligations of the Trust with respect to said Custodian's activities
in accordance with generally accepted accounting principles. All
records maintained by the Custodian in connection with the performance
of its duties under this Agreement will remain the property of the
Trust and in the event of termination of this Agreement will be
relinquished to the Trust.
SECTION 8. No liability of any kind shall be attached to or incurred by the
Custodian by reason of its custody of the assets held by it from time to time
under this Agreement, or otherwise by reason of its position as Custodian
hereunder except only for its own negligence, bad faith, or willful misconduct
in the performance of its duties as specifically set forth in the Agreement.
Without limiting the generality of the foregoing sentence, the Custodian:
(a) may rely upon the advice of counsel, who may be counsel for the Trust
or for the Custodian, and upon statements of accountants, brokers and
other persons believed by it in good faith to be expert in the matters
upon which they are consulted; and for any action taken or suffered in
good faith based upon such advice or statements the Custodian shall
not be liable to anyone;
(b) shall not be liable for anything done or suffered to be done in good
faith in accordance with any request or advice of, or based upon
information furnished by, the Trust or its authorized officers or
agents;
(c) is authorized to accept a certificate of the Secretary or Assistant
Secretary of the Trust, or Proper Instructions, to the effect that a
resolution in the form submitted has been duly adopted by its Board of
Trustees or by the Shareholders, as conclusive evidence that such
resolution has been duly adopted and is in full force and effect;
(d) may rely and shall be protected in acting upon any signature, written
(including telegraph or other mechanical) instructions, request,
letter of transmittal, certificate, opinion of counsel, statement,
instrument, report, notice, consent, order, or other paper or document
reasonably believed by it to be genuine and to have been signed,
forwarded or presented by the purchaser, Trust or other proper party
or parties.
SECTION 9. The Trust, its successors and assigns hereby indemnify and hold
harmless the Custodian, its successors and assigns, of and from any and all
liability whatsoever arising out of or in connection with the Custodian's
status, acts, or omissions under this Agreement, except only for liability
arising out of the Custodian's own negligence, bad faith, or willful misconduct
in the performance of its duties specifically set forth in this Agreement.
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<PAGE>
Without limiting the generality of the foregoing, the Trust, its successors and
assigns do hereby fully indemnify and hold harmless the Custodian its successors
and assigns, from any and all loss, liability, claims, demand, actions, suits
and expenses of any nature as the same may arise from the failure of the Trust
to comply with any law, rule, regulation or order of the United States, any
state or any other jurisdiction, governmental authority, body, or board relating
to the sale, registration, qualification of units of beneficial interest in the
Trust, or from the failure of the Trust to perform any duty or obligation under
this Agreement.
Upon written request of the Custodian, the Trust shall assume the entire defense
of any claim subject to the foregoing indemnity, or the joint defense with the
Custodian of such claim, as the Custodian shall request. The indemnities and
defense provisions of this Section 9 shall indefinitely survive termination of
this Agreement.
SECTION 10. This Agreement may be amended from time to time without notice to
or approval of the Shareholders by a supplemental agreement executed by the
Trust and the Custodian and amending and supplementing this Agreement in the
manner mutually agreed.
SECTION 11. Either the Trust or the Custodian may give one hundred twenty (120)
days written notice to the other of the termination of this Agreement, such
termination to take effect at the time specified in the notice. In case such
notice of termination is given either by the Trust or by the Custodian, the
Trustees of the Trust shall, by resolution duly adopted, promptly appoint a
Successor Custodian which Successor Custodian shall be a bank, trust company, or
a bank and trust company in good standing, with legal capacity to accept custody
of the cash and securities of a mutual fund.
Upon receipt of written notice from the Trust of the appointment of such
successor and upon receipt of Proper Instructions, the Custodian shall deliver
such cash and securities as it may then be holding hereunder directly and only
to the Successor Custodian. Unless or until a Successor Custodian has been
appointed as above provided, the Custodian then acting shall continue to act as
Custodian under this Agreement.
Every Successor Custodian appointed hereunder shall execute and deliver an
appropriate written acceptance of its appointment and shall thereupon become
vested with the rights, powers, obligations and custody of its predecessor
Custodian. The Custodian ceasing to act shall nevertheless, upon request of
the Trust and the Successor Custodian and upon payment of its charges and
disbursements, execute an instrument in form approved by its counsel
transferring to the Successor Custodian all the predecessor Custodian's
rights, duties, obligations and custody.
In case the Custodian shall consolidate with or merge into any other
corporation, the corporation remaining after or resulting from such
consolidation or merger shall ipso facto without the execution or filing of any
papers or other documents, succeed to and be
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substituted for the Custodian with like effect as though originally named as
such.
SECTION 12. This Agreement shall take effect when assets of the Trust are first
delivered to the Custodian.
SECTION 13. This Agreement may be executed in two or more counterparts, each of
which when so executed shall be deemed to an original, but such counterparts
shall together constitute but one and the same instrument.
SECTION 14. A copy of the Declaration of Trust of the Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust
as Trustees and not individually and that the obligations of this instrument
are not binding upon any of the Trustees, officers or Shareholders of the
Trust individually, but binding only upon the assets and property of the
Trust.
SECTION 15. The Custodian shall create and maintain all records relating to
its activities and obligations under this Agreement in such manner as will
meet the obligations of the Trust under the Investment Company Act of 1940,
with particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder, applicable Federal and state tax laws and any other law or
administrative rules or procedures which may be applicable to the Trust.
Subject to security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as to the conduct of such monitors as may be reasonably imposed by
the Custodian after prior consultation with an officer of the Trust the books
and records of the Custodian pertaining to its actions under this Agreement
shall be open to inspection and audit at any reasonable times by officers of,
attorneys for, and auditors employed by, the Trust.
SECTION 16. Nothing contained in this Agreement is intended to or shall
require the Custodian in any capacity hereunder to perform any functions or
duties on any holiday or other day of special observance on which the
Custodian is closed. Functions or duties normally scheduled to be performed
on such days shall be performed on, and as of, the next business day the
Custodian is open.
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<PAGE>
SECTION 17. This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Trust without the
written consent of the Custodian, or by the Custodian without the written
consent of the Trust, authorized or approved by a resolution of its Board of
Trustees.
IN WITNESS WHEREOF, the Trust and the Custodian have caused this Agreement to be
signed by their respective officers as of the day and year first above written.
SEI International Trust
By: /s/ Theresa M. Messina
-----------------------------------
Attest:
-------------------------------
The Chase Manhattan Bank, N.A.
By:
-----------------------------------
Attest:
-------------------------------
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<PAGE>
SCHEDULE A
CHASE GLOBAL SECURITIES SERVICES
[LOGO] FEE SCHEDULE
FOR
SEI
I. PORTFOLIO BASIS POINT FEE (BASED ON MARKET VALUE)
$0 to $50 million 5.0 basis points
$50 to $100 million 3.5 basis points
$100 to $200 million 2.5 basis points
$200 to $500 million 1.5 basis points
Over $500 million 1.0 basis point
II. COUNTRY BAND FEES (see below)
Band A 3.0 basis points $ 30.00 per transaction
Band B 3.5 basis points $ 40.00 per transaction
Band C 4.5 basis points $ 50.00 per transaction
Band D 5.0 basis points $ 90.00 per transaction
Band E 13.0 basis points $100.00 per transaction
Band F 24.0 basis points $100.00 per transaction
Band G 28.0 basis points $120.00 per transaction
II. OUT OF POCKET EXPENSES WILL BE BILLED AS INCURRED.
Scrip fees, stamp duty etc...
COUNTRY BANDS
BAND A BAND B BAND C BAND D BAND E
- ------ ------ ------ ------ ------
Cedel/Euroclear Canada Australia Austria Indonesia
Japan Germany Belgium Finland Korea
United States Netherlands Denmark Hong Kong Mexico
Switzerland France Italy Philippines
New Zealand Luxembourg Thailand
Norway Malaysia
Sweden Singapore
United Kingdom Turkey
BAND F BAND G
- ------ ------
Argentina Greece
Brazil Jordan
Chile Pakistan
Spain* Portugal
Venezuela Sri Lanka
Taiwan
* Country band fee for Spain to be reviewed within six (6), months of
agreement date.
<PAGE>
[LOGO]
THE REPORTS AND SERVICES THAT ARE INCLUDED IN THE GLOBAL CUSTODY SERVICE ARE AS
FOLLOWS:
INTERNATIONAL CUSTODY
- - Safekeeping
- - Processing of Security Transactions
- - AutoCredit of Income
- - Effecting Corporate Action Notification
- - Tax Reclamation
- - AutoSettle
CASH MANAGEMENT
- - Daily communication with investment Advisor
- - Currency conversion
TRANSFER TO SUCCESSOR CUSTODIANS
- - See Country Band fees
THIS FEE AGREEMENT WILL BE IN EFFECT FOR A ONE YEAR PERIOD FROM JUNE 1, 1992
THROUGH JUNE 1, 1993
THE CHASE MANHATTAN BANK, N.A.
BY: /s/ Lorraine G. Mann Date: March 27, 1992
------------------------------- ---------------------------------
Lorraine G. Mann, V.P.
SEI
BY: /s/ Theresa M. Messina Date: 3-5-92
------------------------------- ---------------------------------
<PAGE>
MANAGEMENT AGREEMENT
SEI WEALTH MANAGEMENT TRUST
THIS AGREEMENT, made this 30th day of August, 1988 by and between SEI
Wealth Management Trust, a Massachusetts business trust (the "Trust"), and SEI
Financial Management Corporation, a Delaware Corporation, (the "Manager").
WHEREAS, the Trust is a diversified open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Manager is willing to provide (or oversee the performance of
others who will provide) management, administrative, transfer agent and
unitholder servicing services to the Trust's Value Portfolio, Government
Portfolio, Fixed Income Portfolio, International Portfolio, and such other
portfolios as the Trust and the Manager may agree on (collectively,
"Portfolios"), on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the Trust and the Manager hereby agree as follows:
ARTICLE 1. RETENTION OF THE MANAGER. The Trust hereby retains the
Manager to act as the Manager and Unitholder Servicing Agent of the
Portfolios and to furnish the Portfolios with the management, administrative,
transfer agent and unitholder servicing services as set forth below. The
Manager hereby accepts such employment to perform the duties set forth below.
The Manager shall, for all purposes herein, be deemed to be an independent
contractor and, unless otherwise expressly provided or authorized, shall have
no authority to act for or represent the Trust in any way and shall not be
deemed an agent of the Trust. All of the Manager's duties shall be subject
always to the objectives, policies and restrictions contained in the Trust's
current registration statement under the 1940 Act, to the Trust's Declaration
of Trust and By-Laws, to the provisions of the 1940 Act, and to any other
guidelines that may be established by the Trust's Trustees. The Manager
shall calculate the daily net asset value of the Portfolios in accordance
with the procedures prescribed in the Trust's Registration Statement and such
other procedures as may be established by the Trustees of the Trust.
ARTICLE 2. EVALUATION SERVICES. The Manager shall oversee and monitor
the performance of the Portfolios' investment adviser and shall furnish to
the Trust such information, evaluations, analyses and opinions regarding said
performance as the Trustees may, from time to time, reasonably request;
provided, however, that the Manager shall have no authority to make and shall
not make investment decisions for the Portfolios nor furnish any advice with
respect to the desirability of making such investment decisions.
ARTICLE 3. TRANSFER AGENT SERVICES. The Manager will act as Transfer
Agent for the Portfolios and, as such will record in an account (the
"Account") the total number of units of beneficial interest ("Units") of each
Portfolio issued and outstanding from time to time and will maintain Unit
transfer records in which it will note the names and registered addresses of
Unitholders, and the number of Units from time to time owned by each of them.
Each Manager is authorized to set up
<PAGE>
accounts and record transactions in the accounts on the basis of instructions
received from Unitholders when accompanied by remittance in appropriate amount
as provided in the Trust's then current prospectus. The Trust will not issue
certificates representing its Units. Whenever Units are purchased or issued,
the Manager shall credit the Account with the appropriate Units issued, and
credit the proper number of Units to the appropriate Unitholder. Likewise,
whenever the Manager has occasion to redeem Units owned by a Unitholder, the
Trust authorizes the Manager to process the transaction by making appropriate
entries in its Unit transfer records and debits the Account.
Upon receipt by the Trust's Wire Agent (currently the United States
National Bank of Oregon) on behalf of the Manager of funds through the Federal
Reserve wire system or conversion into Federal funds of funds transmitted by
other means, for the purchase of Units in accordance with the Trust's then
current prospectus, the Manager shall notify the Trust of such deposits on a
daily basis. The Manager shall credit the Unitholder's account with the number
of units purchased according to the price of the Units in effect for such
purchases determined in the manner set forth in the Trust's then current
prospectus. The Manager shall process each order for the redemption of Units
from or on behalf of a Unitholder, and shall cause cash proceeds to be wired in
Federal funds. The requirements as to instruments of transfer and other
documentation, the applicable redemption price and the time of payment shall be
as provided in the then current prospectus, subject to such supplemental
requirements consistent with such prospectus as may be established by mutual
agreement between the Trust and Manager. If the Manager or the Trust determines
that a request for redemption does not comply with the requirements for
redemption, the Manager shall promptly so notify the unitholder, together with
the reason therefore, and shall effect such redemption at the price next
determined after receipt of documents complying with said standards. On each
day that the Trust's custodian banks and the New Stock Exchange are open for
business ("Business Day"), the Manager shall notify the Custodian of the amount
of cash or other assets required to meet payments made pursuant to the
provisions of this paragraph, and the Trust shall instruct the Custodian to make
available from time to time sufficient funds or other assets therefor. The
authority of the Manager to perform its responsibilities under this paragraph
shall be suspended upon receipt by it of notification from the Securities and
Exchange Commission or the Trustees of the suspension of the determination of
the Trust's net asset value.
In registering transfers, the Manager may rely upon the opinion of counsel
in not requiring complete documentation, in registering transfers without
inquiry into adverse claims, in delaying registration for purposes of such
inquiry, or in refusing registration where in its judgment an adverse claim
requires such refusal.
The Trust warrants that it has or shall deliver to the Manager, as transfer
agent:
(a) a copy of the Declaration of Trust of the Trust, incorporating all
amendments thereto, certified by the Secretary or Assistant Secretary of the
Trust;
(b) an opinion of counsel to the Trust with respect to (i) the legality
and continuing existence of the Trust, (ii) the legality of its outstanding
Units of beneficial interest, and (iii) the number
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<PAGE>
of Units authorized for issuance and that upon issuance they will be validly
issued and nonassessable; and
(c) the Trust's Secretary's or Assistant Secretary's certificate as to the
authorized outstanding Units of the Trust, its address to which notices may be
sent, the names and specimen signatures of its officers who are authorized to
sign instructions or requests to the Manager on behalf of the Trust. In the
event of any future amendment or change in respect of any of the foregoing,
prompt written notification of such change shall be given by the Trust to the
Manager, together with copies of all relevant resolutions, instruments or other
documents, specimen signatures, certificates, opinions or the like as the
Manager may deem necessary or appropriate.
ARTICLE 4. DIVIDEND DISBURSING AGENT. The Manager shall act as Dividend
Disbursing Agent for the Trust and, as such, in accordance with the
provisions of the Trust's Declaration of Trust and then current prospectus,
shall prepare and wire or credit income and capital gains distributions to
Unitholders. The Trust agrees that it shall promptly inform the Manager of
the declaration of any dividend or distribution of its Units, and that on or
before the payment date of a distribution, it shall instruct the Custodian to
make available, at the instruction of the Dividend Disbursing Agent,
sufficient funds for the cash amount to be paid out. If a Unitholder is
entitled to receive additional Units by virtue of any such distribution or
dividend, appropriate credits will be made to the Unitholder's account.
ARTICLE 5. OTHER ADMINISTRATIVE SERVICES. In addition to the services
described above, the Manager shall perform, or supervise the performance by
others, of other administrative services in connection with the operations of
the Portfolios, and, on behalf of the Trust, will investigate, assist in the
selection of and conduct relations with custodians, depositories,
accountants, underwriters, brokers and dealers, corporate fiduciaries,
insurers, banks and persons in any other capacity deemed to be necessary or
desirable for the Portfolios' operation. The Manager shall provide the Trust
with regulatory reporting and related bookkeeping services, all necessary
office space, equipment, personnel compensation and facilities (including
facilities for Unitholders' and Trustees' meetings) for handling the affairs
of the Portfolios and such other services as the Manager shall, from time to
time, determine to be necessary to perform its obligations under this
Agreement. The Manager shall make reports to the Trust's Trustees concerning
the performance of its obligations hereunder; furnish advice and
recommendations with respect to other aspects of the business and affairs of
the Portfolios as the Trust shall determine desirable; and shall provide the
Portfolios' Unitholders with the reports described in the Trust's current
prospectus. Also, the Manager will perform other services for the Trust as
agreed to from time to time, including, but not limited to, preparation and
mailing of appropriate federal income tax forms; mailing the annual reports
of the Trust; preparing an annual list of Unitholders; furnishing the Trust
with such reports regarding the sale and redemption of Units as may be
required in order to comply with federal and state securities laws; and
mailing notices of Unitholders' meetings, proxies and proxy statements, for
all of which the Trust will pay the Manager's out-of-pocket expenses.
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<PAGE>
ARTICLE 6. ALLOCATION OF CHARGES AND EXPENSES.
(A) THE MANAGER. The Manager shall furnish at its own expense the
executive, supervisory and clerical personnel necessary to perform its
obligations under this Agreement. The Manager shall also provide the items
which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Trust as well as all Trustees of the
Trust who are affiliated persons of the Manger or any affiliated corporation;
provided, however, that unless otherwise specifically provided, the Manager
shall not be obligated to pay the compensation of any employee of the Manager
retained by the Trustees of the Trust to perform services on behalf of the
Trust. The Manager shall pay the costs of custodial services.
(B) THE TRUST. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust not otherwise allocated herein, including, without
limitation, taxes, expenses for legal and auditing services, the expenses of
preparing (including typesetting), printing and mailing reports, prospectuses,
statements of additional information proxy solicitation material and notices to
existing Unitholders, all expenses incurred in connection with the issuing and
redeeming Trust Units, the cost of initial and ongoing registration of the
Trust's Units under federal and state securities laws, fees and out-of-pocket
expenses of Trustees who are not affiliated persons of the Manger or any
affiliated corporation, insurance, interest, brokerage costs, litigation and
other extraordinary or nonrecurring expenses, and all fees and charges of
investment advisers to the Trust.
ARTICLE 7. COMPENSATION OF THE MANAGER.
(A) MANAGEMENT FEE. For the services to be rendered, the facilities
furnished and the expenses assumed by the Manager pursuant to this Agreement,
the Trust shall pay to the Manager compensation at an annual rate specified in
the Schedules which are attached hereto and made a part of this Agreement
("Schedules"). Such compensation shall be calculated and accrued daily, and
paid to the Manager monthly (subject to any expenses to be borne by the Manager
under Article 7(B) herein). If this Agreement becomes effective subsequent to
the first day of a month or terminates before the last day of a month, the
Manager's compensation for that part of the month in which this Agreement is in
effect shall be prorated in a manner consistent with the calculation of the fees
as set forth above. Payment of the Manager's compensation for the preceding
month shall be made promptly after completion of the computations by
paragraph (B) of this Article 7.
(B) EXCESS EXPENSES. If the expenses of any Portfolio for any fiscal year
(including fees and other amounts payable to the Manager, but excluding
interest, taxes, brokerage costs, litigation and other extraordinary costs) as
calculated every business day would exceed the expense limitations imposed on
investment companies by any applicable statute or regulatory authority of any
jurisdiction in which Units are qualified for offer and sale, the Manager shall
bear such excess cost. However, the Manager will not bear expenses of the Trust
or any Portfolio thereof to an extent which would result in the Trust's
inability to qualify as a regulated investment company under provisions of the
Internal Revenue Code. Payment of expenses by the Manager pursuant to this
Article 7(B) shall be settled on a monthly basis (subject to fiscal year end
reconciliation) by a reduction in the fee payable
-4-
<PAGE>
to Manager for such month pursuant to Article 7(A) above and, if such reduction
shall be insufficient to offset such expenses, by reimbursing the Trust.
(C) COMPENSATION FROM TRANSACTIONS. The Trust hereby authorizes any
entity or person associated with the Manager which is a member of a national
securities exchange to effect any transaction on the exchange for the account of
the Trust which is permitted by Section 11(a) of the Securities Exchange Act of
1934 and Rule 11a2-2(T) thereunder, and the Trust hereby consents to the
retention of compensation for such transactions in accordance with
Rule 11a2-2(T)(a)(2)(iv).
(D) SURVIVAL OF COMPENSATION RATES. All rights of compensation under this
Agreement shall survive the termination of this Agreement.
ARTICLE 8. LIMITATION OF LIABILITY OF THE MANAGER. The duties of the
Manager shall be confined to those expressly set forth herein, and no implied
duties are assumed by or may be asserted against the Manager hereunder. The
Manager shall not be liable for any error of judgment or mistake of law or
for any loss arising out of any investment or for any act or omission in
willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, except as may otherwise be provided under provisions of
applicable state law which cannot be waived or modified hereby. (As used in
this Article 8, the term "Manager" shall include directors, officers and
employees and other corporate agents of the Manger as well as that
corporation itself.) So long as the Manger acts in good faith and with due
diligence and without gross negligence, the Trust assumes full responsibility
and shall indemnify the Manager and hold it harmless from and against any and
all actions, suits and claims, whether groundless or otherwise, and from and
against any and all losses, damages, costs, charges, reasonable counsel fees,
and disbursements, payments, expenses, and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of said management
and transfer, dividend disbursing and unitholder servicing agency
relationship to the Trust or any other service rendered to the Trust
hereunder. The indemnity and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement. The rights hereunder
shall include the right to reasonable advances of defense expenses in the
event of any pending or threatened litigation with respect to which
indemnification hereunder may ultimately be merited. In order that the
indemnification provision contained herein shall apply, however, it is
understood that if in any cast eh Trust may be asked to indemnify or hold the
Manager harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Manger will use all reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Trust, but failure to do so in good faith shall not affect the rights
thereunder.
The Manager may apply to the Trust at any time for instructions and may
consult counsel for the Trust or its own counsel and with accountants and other
experts with respect to any matter arising in connection with the Manager's
duties, and the Manager shall not be liable or accountable for any action taken
or omitted by it in good faith in accordance with such instruction or with the
opinion of such counsel, accountants or other experts. Also, the Manager shall
be protected in acting upon any document which it reasonably believes to be
genuine and to have been signed by the proper person
-5-
<PAGE>
or persons. Nor shall the Manager be held to have notice of any change of
authority of any officer, employee or agent of the Trust until receipt of
written notice thereof from the Trust.
ARTICLE 9. ACTIVITIES OF THE MANAGER. The services of the Manager
rendered to the Trust are not to be deemed to be exclusive. The Manager is
free to render such services to others and to have other businesses and
interests. It is understood that Trustees, officers, employees and
Unitholders of the Trust are or may be or become interested in the Manager,
as directors, officers, employees and shareholders or otherwise, and that
directors, officers, employees and shareholders of the Manager and its
counsel are or may be or become similarly interested in the Trust, and that
the Manager may be or become interested in the Trust as a Unitholder or
otherwise.
ARTICLE 10. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement,
unless terminated sooner as provided herein, shall remain in effect for two
years after the date of the Agreement and shall continue in effect for
successive periods of one year if such continuance is specifically approved
at least annually (i) by the Trustees of the Trust and (ii) by the vote of a
majority of the Trustees of the Trust who are not parties to this Agreement
or interested persons of any such party, cast in person at a Board of
Trustees meeting called for the purpose of voting on such approval. This
Agreement may be terminated at any time and without penalty by the Trustees
of the Trust or by the Manager on not less than thirty (30) days nor more
than sixty (60) days written notice to the other party hereto. Any notice
under this Agreement shall be given in writing, addressed and delivered, or
mailed postpaid, to the other party at the designated mailing address of such
party.
This Agreement shall not be assignable by either party without the written
consent of the other party.
ARTICLE 11. AMENDMENTS. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Trustees of the Trust, and (ii) by the vote of a majority of
the Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a Board of Trustees meeting
called for the purpose of voting on such approval. For special cases, the
parties hereto may amend such procedures set forth herein as may be
appropriate or practical under the circumstances, and the Manager may
conclusively assume that any special procedure which has been approved by the
Trust does not conflict with or violate any requirements of its Declaration
of Trust, By-Laws or prospectus, or any rule, regulation or requirement of
any regulatory body.
ARTICLE 12. TRUSTEES' LIABILITY. A copy of the Declaration of Trust of
the Trust is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of the Trust as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or Unitholders of the Trust Individually, but binding only upon the
assets and property of the Trust.
ARTICLE 13. CERTAIN RECORDS. The Manager shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and
-6-
<PAGE>
preserved pursuant to Rules 31a-1 and 31a-2 under the 1940 Act which are
prepared or maintained by the Manger on behalf of the Trust shall be prepared
and maintained at the expense of the Manager, but shall be the property of the
Trust and will be made available to or surrendered promptly to the Trust on
request. In case of any request or demand for the inspection of such records by
another party, the Manager shall notify the Trust and follow the Trust's
instructions as to permitting or refusing such inspection; provided that the
Manager may exhibit such records to any person in any case where it is advised
by its counsel that it may be held liable for failure to do so, unless (in cases
involving potential exposure only to civil liability) the Trust has agreed to
indemnify the manager against such liability.
ARTICLE 14. DEFINITIONS OF CERTAIN TERMS. The terms "interested person"
and "affiliated person", when used in this Agreement, shall have the
respective meanings specified in the 1940 Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the Securities
and Exchange Commission.
ARTICLE 15. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the
applicable provisions of the 1940 Act. To the extent that the applicable
laws of the Commonwealth of Massachusetts, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control.
ARTICLE 16. MULTIPLE ORIGINALS This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, SEI Wealth Management Trust and SEI Financial
Management Corporation have caused this Agreement to be executed and delivered
by each of their respective officers as of the day and year first above written.
SEI WEALTH MANAGEMENT TRUST
By: /s/ Susan L. Schelpf
-----------------------------
Vice President
SEI FINANCIAL MANAGEMENT CORPORATION
By: /s/ Sandy M. Kraus
-----------------------------
Vice President
-7-
<PAGE>
SCHEDULE A
TO THE MANAGEMENT AGREEMENT
DATED AUGUST 30, 1988
BETWEEN
SEI WEALTH MANAGEMENT TRUST,
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 7 Section A, the Trust shall pay the Manager compensation at
an annual rate as follows:
Value Portfolio: .15% of average daily net assets
Government Portfolio: .15% of average daily net assets
Fixed Income Portfolio: .15% of average daily net assets
<PAGE>
SCHEDULE C
TO THE MANAGEMENT AGREEMENT
DATED AUGUST 30, 1988
BETWEEN
SEI WEALTH MANAGEMENT TRUST,
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 7 Section A, the Trust shall pay the Manager compensation at
an annual rate as follows:
International Fixed Income Portfolio: .60% of average daily net assets
<PAGE>
SCHEDULE D
TO THE MANAGEMENT AGREEMENT
DATED AUGUST 30, 1988
BETWEEN
SEI INTERNATIONAL TRUST,
(FORMERLY SEI WEALTH MANAGEMENT TRUST)
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 7 Section A, the Trust shall pay the Manager compensation at
an annual rate as follows:
European Equity Portfolio: .80% of average daily net assets
Pacific Basin Equity Portfolio .80% of average daily net assets
<PAGE>
SCHEDULE E
TO THE MANAGEMENT AGREEMENT
DATED AUGUST 30, 1988
BETWEEN
SEI INTERNATIONAL TRUST
(FORMERLY SEI WEALTH MANAGEMENT TRUST)
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 7 Section A, the Trust shall pay the Manager compensation at
an annual rate as follows:
Emerging Markets Portfolio: .65% of average daily net assets
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 23 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated April 9, 1997, relating to the financial
statements and financial highlights of International Equity, Emerging Markets
Equity and International Fixed Income Portfolios (constituting SEI
International Trust, hereafter referred to as the "Trust") appearing in the
February 28, 1997 Annual Report to Shareholders of the Trust, which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the headings "Financial Highlights" and
"Independent Accountants" in the Prospectuses and under the headings "Experts"
and "Financial Statements" in the Statement of Additional Information.
PRICE WATERHOUSE LLP
Philadelphia, PA
June 18, 1997
<PAGE>
DISTRIBUTION PLAN
SEI INTERNATIONAL TRUST
WHEREAS, SEI International Trust (the "Trust") is engaged in business as a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following distribution plan will benefit the
Trust and the owners of units of beneficial interest ("Unitholders") of the
Trust.
NOW, THEREFORE, the Trustees of the Trust hereby adopt this distribution
plan pursuant to Rule 12b-1 under the 1940 Act.
SECTION 1. The Trust has adopted this distribution plan the ("Plan") to
enable the Trust to directly or indirectly bear expenses relating to the
distribution of securities of which the Trust is the issuer.
SECTION 2. The Trust may incur expenses for the items stipulated in
Section 3 of this Plan, provided that in no event shall the Trust incur expenses
that exceed an annual rate of .30% of the Trust's average daily net assets
during any fiscal year of the Trust. All expenditures pursuant to this Plan
shall be made only pursuant to authorization by the President, any Vice
President or the Treasurer of the Trust. If there should be more than one
series of Trust units, expenses incurred pursuant to this Plan shall be
allocated among the several series of the Trust on the basis of their relative
net asset values, unless otherwise determined by a majority of the Qualified
Trustees (hereinafter defined).
SECTION 3. Expenses permitted pursuant to this Plan shall include, and be
limited to, the following:
(a) the incremental printing costs incurred in producing for and
distributing to persons other than current Unitholders of the Trust,
the reports, prospectuses, notices and similar materials that are
prepared by the Trust for current Unitholders;
(b) the cost of complying with state and federal laws pertaining to the
distribution of the Trust's units;
(c) advertising;
(d) the costs of preparing, printing and distributing any literature used
in connection with the offering of the Trust's units and not covered
by Section 3(a) of this Plan; and
<PAGE>
(e) expenses incurred in connection with the promotion and sale of the
Trust's units including, without limitation, travel and communication
expenses and expenses for the compensation of and benefits for sales
personnel.
SECTION 4. This Plan shall not take effect until it has been approved
(a) by a vote of at least a majority of the Unitholders holding an outstanding
voting securities of the Trust; and (b) together with any related agreements, by
votes of the majority of both (i) the Trustees of the Trust and (ii) the
Qualified Trustees (hereinafter defined), cast in person at a Board of Trustees
meeting called for the specific purpose of voting on this Plan or such
agreement.
SECTION 5. This Plan shall continue in effect for a period of more than
one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in Part (b) of
Section 4 herein for the approval of this Plan.
SECTION 6. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
SECTION 7. This Plan may be terminated at any time by the vote of a
majority of the Qualified Trustees (hereinafter defined) or by vote of a
majority of the Trust's outstanding voting securities.
SECTION 8. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of the Qualified Trustees (hereinafter
defined) or by the vote of Unitholders holding a majority of the Trust's
outstanding voting securities, on not more than sixty (60) days written notice
to any other party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.
SECTION 9. This Plan may not be amended to increase materially the amount
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of Unitholders holding a majority of the outstanding voting securities
of the Trust, and all material amendments to this Plan shall be approved in the
manner provided in Part (b) of Section 4 herein for the approval of this Plan.
SECTION 10. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
SECTION 11. Nothing in this Plan shall operate or be construed to limit
the extent to which the Trust's Sponsor, Manager, Distributor, or Investment
Administrator or any other person, other than
-2-
<PAGE>
the Trust, may incur costs out of their own monies and bear expenses associated
with the distribution of securities of which the Trust is the issuer.
SECTION 12. While this Plan is in effect, the selection and nomination of
those Trustees who are not interested persons of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
SECTION 13. This Plan shall not obligate the Trust or any other party to
enter into an agreement with any particular person.
-3-
<PAGE>
DISTRIBUTION PLAN
SEI INTERNATIONAL TRUST
WHEREAS, SEI International Trust (the "Trust") is engaged in business as a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following distribution plan will benefit the
Trust and the owners of units of beneficial interest ("Unitholders") of the
Trust.
NOW, THEREFORE, the Trustees of the Trust hereby adopt this distribution
plan pursuant to Rule 12b-1 under the 1940 Act.
SECTION 1. The Trust has adopted this distribution plan the ("Plan") to
enable the Trust to directly or indirectly bear expenses relating to the
distribution of securities of which the Trust is the issuer.
SECTION 2. The Trust may incur expenses for the items stipulated in
Section 3 of this Plan, provided that in no event shall the Trust incur expenses
that exceed an annual rate of .30% of the Trust's average daily net assets
during any fiscal year of the Trust. All expenditures pursuant to this Plan
shall be made only pursuant to authorization by the President, any Vice
President or the Treasurer of the Trust. If there should be more than one
series of Trust units, expenses incurred pursuant to this Plan shall be
allocated among the several series of the Trust on the basis of their relative
net asset values, unless otherwise determined by a majority of the Qualified
Trustees (hereinafter defined).
SECTION 3. Expenses permitted pursuant to this Plan shall include, and be
limited to, the following:
(a) the incremental printing costs incurred in producing for and
distributing to persons other than current Unitholders of the Trust,
the reports, prospectuses, notices and similar materials that are
prepared by the Trust for current Unitholders;
(b) the cost of complying with state and federal laws pertaining to the
distribution of the Trust's units;
(c) advertising;
(d) the costs of preparing, printing and distributing any literature used
in connection with the offering of the Trust's units and not covered
by Section 3(a) of this Plan; and
<PAGE>
(e) expenses incurred in connection with the promotion and sale of the
Trust's units including, without limitation, travel and communication
expenses and expenses for the compensation of and benefits for sales
personnel.
SECTION 4. This Plan shall not take effect until it has been approved
(a) by a vote of at least a majority of the Unitholders holding an outstanding
voting securities of the Trust; and (b) together with any related agreements, by
votes of the majority of both (i) the Trustees of the Trust and (ii) the
Qualified Trustees (hereinafter defined), cast in person at a Board of Trustees
meeting called for the specific purpose of voting on this Plan or such
agreement.
SECTION 5. This Plan shall continue in effect for a period of more than
one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in Part (b) of
Section 4 herein for the approval of this Plan.
SECTION 6. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
SECTION 7. This Plan may be terminated at any time by the vote of a
majority of the Qualified Trustees (hereinafter defined) or by vote of a
majority of the Trust's outstanding voting securities.
SECTION 8. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of the Qualified Trustees (hereinafter
defined) or by the vote of Unitholders holding a majority of the Trust's
outstanding voting securities, on not more than sixty (60) days written notice
to any other party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.
SECTION 9. This Plan may not be amended to increase materially the amount
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of Unitholders holding a majority of the outstanding voting securities
of the Trust, and all material amendments to this Plan shall be approved in the
manner provided in Part (b) of Section 4 herein for the approval of this Plan.
SECTION 10. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
SECTION 11. Nothing in this Plan shall operate or be construed to limit
the extent to which the Trust's Sponsor, Manager, Distributor, or Investment
Administrator or any other person, other than
-2-
<PAGE>
the Trust, may incur costs out of their own monies and bear expenses associated
with the distribution of securities of which the Trust is the issuer.
SECTION 12. While this Plan is in effect, the selection and nomination of
those Trustees who are not interested persons of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
SECTION 13. This Plan shall not obligate the Trust or any other party to
enter into an agreement with any particular person.
-3-
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<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 1.96
<PER-SHARE-DIVIDEND> (.02)
<PER-SHARE-DISTRIBUTIONS> (.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.87
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
