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THE GLENMEDE FUND, INC.
1 South Street, Baltimore, Maryland 21202
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(800) 442-8299
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Prospectus -- February 27, 1997 (as revised October 1, 1997)
INVESTMENT OBJECTIVES
The Glenmede Fund, Inc., a Maryland corporation ("Glenmede Fund"), is a
no-load, open-end management investment company. Glenmede Fund consists of ten
series of shares, each of which has different investment objectives and
policies. The securities offered hereby are shares ("shares") of one class of
one of these series, the Institutional International Portfolio.
Institutional International Portfolio. The objective of the Institutional
International Portfolio is to provide maximum long-term total return consistent
with reasonable risk to principal. The Institutional International Portfolio
seeks to achieve its objective by investing primarily in common stocks and
other equity securities of companies located outside the United States. The net
asset value of this Portfolio will fluctuate.
Total return consists of income (dividend and/or interest income from
portfolio securities) and capital gains and losses, both realized and
unrealized, from portfolio securities.
Shares of the Portfolio are subject to investment risks, including the
possible loss of principal, are not bank deposits and are not endorsed by,
insured by, guaranteed by, obligations of or otherwise supported by the U.S.
Government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, The Glenmede Corporation or any of its affiliates or any other
governmental agency or bank.
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ABOUT THIS PROSPECTUS
This Prospectus, which should be retained for future reference, sets forth
certain information that you should know before you invest. A Statement of
Additional Information ("SAI") containing additional information about the
Portfolio has been filed with the Securities and Exchange Commission. The SAI
dated February 27, 1997, as amended or supplemented from time to time, is
incorporated by reference into this Prospectus. The 1996 Annual Report to
Shareholders contains additional investment and performance information about
the Portfolios. A copy of the SAI and the 1996 Annual Report may be obtained,
without charge, by writing to Glenmede Fund at the address shown above or by
calling Glenmede Fund at the telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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EXPENSES OF THE PORTFOLIOS
The following table illustrates the expenses and fees incurred by the
Institutional International Portfolio for the fiscal year ended October 31,
1996.
SHAREHOLDER TRANSACTION EXPENSES*
Sales Load Imposed on Purchases .................................... NONE
Sales Load Imposed on Reinvested Dividends ........................ NONE
Deferred Sales Load ................................................ NONE
Redemption Fees ................................................... NONE
Exchange Fees ...................................................... NONE
ANNUAL PORTFOLIO OPERATING EXPENSES
(as a percentage of average net assets)
Institutional
International
Portfolio
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Investment Advisory Fees .......................................... .75%(1)
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Administration Fees ................................................ .04%
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Other Expenses ................................................... .16%
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Total Operating Expenses .......................................... .95%
=======
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* A transaction charge may be imposed by broker-dealers or others that make
shares of the Portfolio available. There is no transaction charge for
shares purchased directly from the Portfolio.
(1) The Glenmede Trust Company (the "Advisor") has agreed to waive its fees to
the extent necessary to ensure that the Institutional International
Portfolio's annual total operating expenses do not exceed 1.00% of such
Portfolio's average net assets.
The purpose of the above table is to assist an investor in understanding
the various estimated costs and expenses that an investor in a Portfolio will
bear directly or indirectly. Actual expenses may be greater or lesser than such
estimates. For further information concerning the Portfolio's expenses see
"Investment Advisor," "Administrative, Transfer Agency and Dividend Paying
Services" and "Board Members and Officers."
The following example illustrates the estimated expenses that an investor
in the Portfolio would pay on a $1,000 investment over various time periods
assuming (i) a 5% annual rate of return and (ii) redemption at the end of each
time period. As noted in the above table, Glenmede Fund charges no redemption
fees of any kind.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
Institutional International Portfolio ...... $10 $30 $ 53 $117
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. THE ABOVE FIGURES ARE ESTIMATES ONLY. ACTUAL EXPENSES
MAY BE GREATER OR LESSER THAN THOSE SHOWN.
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FINANCIAL HIGHLIGHTS
The table below sets forth financial highlights of the Institutional
International Portfolio for the respective periods presented. The data
presented for the Portfolio is derived from the Portfolio's Financial
Statements included in Glenmede Fund's 1996 Annual Report to Shareholders,
which Financial Statements and the report thereon of Coopers & Lybrand L.L.P.,
Glenmede Fund's independent accountants, are incorporated by reference into the
SAI. The following information should be read in conjunction with those
Financial Statements.
<TABLE>
<CAPTION>
Institutional International Portfolio
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Year Ended Year Ended Year Ended Year Ended Period Ended
October 31, October 31, October 31, October 31, October 31,
1996 1995 1994 1993 1992+
------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ...... $ 12.34 $ 12.63 $ 12.00 $ 9.42 $ 10.00
-------- -------- -------- -------- -----------
Income from investment operations:
Net investment income# .................. 0.28 0.19 0.16 0.15 0.03
Net realized and unrealized gain/(loss)
on investments ........................ 1.50 (0.13) 1.49 2.88 (0.60)
-------- -------- -------- -------- -----------
Total from investment operations ...... 1.78 0.06 1.65 3.03 (0.57)
-------- -------- -------- -------- -----------
Less Distributions:
Distributions from net investment
income ................................. (0.25) (0.18) (0.13) (0.14) (0.01)
Distributions from net realized capital
gains ................................. (0.14) (0.17) (0.87) (0.31) --
Distributions in excess of net realized
gains ................................. (0.06) -- (0.02) -- --
-------- -------- -------- -------- -----------
Total Distributions ..................... (0.45) (0.35) (1.02) (0.45) (0.01)
-------- -------- -------- -------- -----------
Net asset value, end of year ............ $ 13.67 $ 12.34 $ 12.63 $ 12.00 $ 9.42
======== ======== ======== ======== ===========
Total return++ ........................... 14.46% 0.38% 13.85% 32.34% (5.60)%
======== ======== ======== ======== ===========
Ratios to average net assets/ Supplemental data:
Net assets, end of year (in 000's) ...... $ 58,390 $ 44,206 $ 17,076 $ 12,979 $ 9,416
Ratio of operating expenses to average
net assets** .............................. 0.95% 0.93% 1.00% 1.00% 1.00%*
Ratio of net investment income to
average net assets ..................... 2.06% 1.78% 1.29% 1.41% 1.28%*
Portfolio turnover rate .................. 10% 25% 39% 34% 10%
Average commissions per share## ............ $ 0.02 N/A N/A N/A N/A
</TABLE>
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+ The Portfolio commenced operations on August 1, 1992.
++ Total return represents aggregate total return for the period indicated.
* Annualized.
** Annualized expense ratio before waiver of fees and/or expenses reimbursed
by the investment advisor for the years ended October 31, 1996, 1995,
1994 and 1993 and the period ended October 31, 1992 were .95%, .93%,
01.01%, 1.08% and 1.08%, respectively.
# Net investment income before waiver of fees and/or expenses reimbursed by
the investment advisor for the years ended October 31, 1996, 1995, 1994 and
1993 and the period ended October 31, 1992 were $.28, $0.19, $0.16, $0.14
and $0.03, respectively.
## Represents Average Commission rate per share charged to the Portfolio on
purchases and sales of investment during the period. Such information is
only required for fiscal years beginning on or after September 1, 1995.
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PERFORMANCE CALCULATIONS
The Institutional International Portfolio may advertise or quote total
return data from time to time. Total return will be calculated on an average
annual total return basis, and may also be calculated on an aggregate total
return basis, for various periods. Average annual total return reflects the
average annual percentage change in value of an investment in the Portfolio
over the measuring period. Aggregate total return reflects the total percentage
change in value over the measuring period. Both methods of calculating total
return assume that dividends and capital gains distributions made by the
Portfolio during the period are reinvested in Portfolio shares.
The Portfolio may compare its total return to that of other investment
companies with similar investment objectives and to stock and other relevant
indices or to rankings prepared by independent services or other financial or
industry publications that monitor the performance of mutual funds. For
example, the total return of the Portfolio may be compared to data prepared by
Lipper Analytical Services, Inc. ("Lipper") and the Morgan Stanley Capital
International EAFE Index. Total return and other performance data as reported
in national financial publications such as Money Magazine, Forbes, Barron's,
The Wall Street Journal and The New York Times, or in publications of a local
or regional nature, may also be used in comparing the performances of the
Portfolio.
Performance quotations will represent the Portfolio's past performance,
and should not be considered as representative of future results. Since
performance will fluctuate, performance data for the Portfolio should not be
used to compare an investment in the Portfolio's shares with bank deposits,
savings accounts and similar investment alternatives which often provide an
agreed or guaranteed fixed yield/return for a stated period of time.
Shareholders should remember that performance is generally a function of the
kind and quality of the instruments held in the Portfolio, portfolio maturity,
operating expenses and market conditions. Any management fees charged by the
Advisor or institutions to their clients will not be included in the
Portfolio's calculations of total return.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Institutional International Portfolio is
not fundamental and may be changed by the Board members without shareholder
approval.
The objective of the Portfolio is to provide maximum, long-term total
return consistent with reasonable risk to principal. The Portfolio seeks to
achieve its objective by investing primarily in common stocks and other equity
securities of companies located outside the United States. The Portfolio is
expected to diversify its investments across companies located in a number of
foreign countries, which may include, but are not limited to, Japan, the United
Kingdom, Germany, France, Switzerland, the Netherlands, Sweden, Australia, Hong
Kong and Singapore. The Portfolio will invest an aggregate of at least 65% of
its total assets in the securities of companies (other than investment
companies) in at least three different countries, other than the United States.
The securities which the Portfolio may purchase include the following:
common stocks of companies located outside the U.S.; shares of closed-end
investment companies which invest chiefly in the shares of companies located
outside the U.S. (such shares will be purchased by the Portfolio within the
limits prescribed by the Investment Company Act of 1940 (the "1940 Act")); U.S.
or foreign securities convertible into foreign common stock; and American
Depositary Receipts ("ADRs") which are U.S. domestic securities representing
ownership rights in foreign companies.
The Portfolio also may enter into forward currency exchange contracts only
in order to hedge against uncertainty in the level of future foreign exchange
rates in the purchase and sale of investment securities; it may not enter into
such contracts for speculative purposes. See "Investment Techniques--Forward
Foreign Currency Exchange Contracts."
The Portfolio intends to remain, for the most part, fully invested in
equity securities of companies located outside of the United States. However,
the Portfolio may invest a portion of its assets (up to 20% under normal
circumstances) in the following fixed income and money market securities:
obligations of the U.S. Government and its guaranteed or sponsored agencies,
including shares of open-end or closed-end investment companies which invest in
such obligations (such shares will be purchased within the limits prescribed by
the 1940 Act and would subject a shareholder of the Portfolio to expenses of
the other investment company in addition to the expenses of the Portfolio);
short-term money market instruments issued in the U.S. or abroad, denominated
in dollars or any foreign currency, including short-term certificates of
deposit (including variable rate certificates of deposit), time deposits with a
maturity no greater than 180 days, bankers acceptances, commercial paper rated
A-1 by Standard & Poor's Ratings Group,
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Division of McGraw Hill ("S&P") or Prime-1 by Moody's Investors Service, Inc.
("Moody's"), or in equivalent money market securities; and high quality fixed
income securities denominated in U.S. dollars, any foreign currency, or a
multi-national currency unit such as the European Currency Unit.
INVESTMENT TECHNIQUES
Repurchase Agreements. The Portfolio may enter into repurchase agreements
with qualified brokers, dealers, banks and other financial institutions deemed
creditworthy by the Advisor. Under normal circumstances, however, the Portfolio
will not enter into repurchase agreements if entering into such agreements
would cause, at the time of entering into such agreements, more than 20% of the
value of its total assets to be subject to repurchase agreements. The Portfolio
would generally enter into repurchase transactions to invest cash reserves and
for temporary defensive purposes.
In a repurchase agreement, the Portfolio purchases a security and
simultaneously commits to resell that security at a future date to the seller
(a qualified bank or securities dealer) at an agreed upon price plus an agreed
upon market rate of interest (itself unrelated to the coupon rate or date of
maturity of the purchased security). The securities held subject to a
repurchase agreement may have stated maturities exceeding 13 months, but the
Advisor currently expects that repurchase agreements will mature in less than
13 months. The seller under a repurchase agreement will be required to maintain
the value of the securities subject to the agreement at not less than 101% of
the repurchase price including accrued interest. Glenmede Fund's administrator
and the Advisor will mark-to-market daily the value of the securities
purchased, and the Advisor will, if necessary, require the seller to deposit
additional securities to ensure that the value is in compliance with the 101%
requirement stated above. The Advisor will consider the creditworthiness of a
seller in determining whether the Portfolio should enter into a repurchase
agreement, and the Portfolio will only enter into repurchase agreements with
banks and dealers which are determined to present minimal credit risk by the
Advisor under procedures adopted by the Board of Directors.
In effect, by entering into a repurchase agreement, the Portfolio is
lending its funds to the seller at the agreed upon interest rate and receiving
securities as collateral for the loan. Such agreements can be entered into for
periods of one day (overnight repo) or for a fixed term (term repo). Repurchase
agreements are a common way to earn interest income on short-term funds.
The use of repurchase agreements involves certain risks. For example, if
the seller of a repurchase agreement defaults on its obligation to repurchase
the underlying securities at a time when the value of these securities has
declined, the Portfolio may incur a loss upon disposition of them. Default by
the seller would also expose the Portfolio to possible loss because of delays
in connection with the disposition of the underlying obligations. If the seller
of an agreement becomes insolvent and subject to liquidation or reorganization
under the Bankruptcy Code or other laws, a bankruptcy court may determine that
the underlying securities are collateral not within the control of the
Portfolio and therefore subject to sale by the trustee in bankruptcy. Further,
it is possible that the Portfolio may not be able to substantiate its interest
in the underlying securities.
Lending of Securities. The Portfolio may lend its portfolio securities
with a value up to one-third of its total assets to qualified brokers, dealers,
banks and other financial institutions for the purpose of realizing additional
net investment income through the receipt of interest on the loan. Such loans
would involve risks of delay in receiving additional collateral in the event
the value of the collateral decreased below the value of the securities loaned
or of delay in recovering the securities loaned or even loss of rights in the
collateral should the borrower of the securities fail financially. Loans will
be made only to borrowers deemed by the Advisor to be of good standing.
"When Issued," "Delayed Settlement," and "Forward Delivery" Securities.
The Portfolio may purchase and sell securities on a "when issued," "delayed
settlement" or "forward delivery" basis. "When issued" or "forward delivery"
refer to securities whose terms and indenture are available and for which a
market exists, but which are not available for immediate delivery. When issued
or forward delivery transactions may be expected to occur one month or more
before delivery is due. Delayed settlement is a term used to describe
settlement of a securities transaction in the secondary market which will occur
sometime in the future. No payment or delivery is made by the Portfolio in a
when issued, delayed settlement or forward delivery transaction until the
Portfolio receives payment or delivery from the other party to the transaction.
The Portfolio will maintain a separate account of cash, U.S. Government
securities or other high grade debt obligations at least equal to the value of
purchase commitments until payment is made. Such segregated securities will
either mature or, if necessary, be sold on or before the settlement date.
Although the Portfolio receives no income from the above described securities
prior to delivery, the market value of such securities is still subject to
change.
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The Portfolio will engage in when issued transactions to obtain what is
considered to be an advantageous price and yield at the time of the
transaction. When the Portfolio engages in when issued, delayed settlement or
forward delivery transactions, it will do so for the purpose of acquiring
securities consistent with its investment objective and policies and not for
the purposes of speculation. The Portfolio's when issued, delayed settlement
and forward delivery commitments are not expected to exceed 25% of its total
assets absent unusual market circumstances, and the Portfolio will only sell
securities on such a basis to offset securities purchased on such a basis.
Borrowing. As a temporary measure for extraordinary or emergency purposes,
the Portfolio may borrow money from banks. However, the Portfolio will not
borrow money for speculative purposes.
Forward Foreign Currency Exchange Contracts. The Portfolio may enter into
forward foreign currency exchange contracts in connection with the purchase and
sale of investment securities; such contracts may not be used for speculative
purposes. A forward foreign currency exchange contract involves an obligation
to purchase or sell a specific currency at a future date, which may be any
fixed number of days from the date of the contract agreed upon by the parties,
at a price set at the time of the contract. 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. It should be realized that this method of protecting the
value of the Portfolio's investment securities against a decline in the value
of a currency does not eliminate fluctuations in the underlying prices of the
securities. It simply establishes a rate of exchange at some future point in
time. Additionally, although such contracts tend to minimize the risk of loss
due to a decline in the value of the hedged currency, at the same time they
tend to limit any potential gain which might result should the value of such
currency increase.
Depositary Receipts. The Portfolio may purchase sponsored or unsponsored
ADRs. ADRs are depositary receipts typically issued by a U.S. bank or trust
company which evidence ownership of underlying securities issued by a foreign
corporation. Generally, depositary receipts in registered form are designed for
use in the U.S. securities market and depositary receipts in bearer form are
designed for use in securities markets outside the United States. Depositary
receipts may not necessarily be denominated in the same currency as the
underlying securities into which they may be converted. Depositary receipts may
be issued pursuant to sponsored or unsponsored programs. In sponsored programs,
an issuer has made arrangements to have its securities traded in the form of
depositary receipts. In unsponsored programs, the issuer may not be directly
involved in the creation of the program. Although regulatory requirements with
respect to sponsored and unsponsored programs are generally similar, in some
cases it may be easier to obtain financial information from an issuer that has
participated in the creation of a sponsored program. Accordingly, there may be
less information available regarding issuers of securities underlying
unsponsored programs and there may not be a correlation between such
information and the market value of the depositary receipts. Depositary
receipts also involve the risks of other investments in foreign securities, as
discussed below. For purposes of the Portfolio's investment policies, the
Portfolio's investments in Depositary receipts will be deemed to be investments
in the underlying securities.
Illiquid Securities. The Portfolio will not invest more than 10% of net
assets in securities that are illiquid. Illiquid securities are difficult to
sell promptly at an acceptable price.
Unless specified above and except as described under "Investment
Limitations," the foregoing investment policies are not fundamental and the
Board may change such policies without shareholder approval.
RISK FACTORS
Shareholders should understand that all investments involve risk and there
can be no guarantee against loss resulting from an investment in the Portfolio,
nor can there be any assurance that the Portfolio's investment objective will
be attained. As with any investment in securities, the value of, and income
from, an investment in the Portfolio can decrease as well as increase,
depending on a variety of factors which may affect the values and income
generated by the Portfolio's securities, including general economic conditions,
market factors and currency exchange rates. An investment in the Portfolio is
not intended as a complete investment program.
Foreign Securities. The Portfolio has the right to purchase securities in
any foreign country, developed or underdeveloped. Investors should consider
carefully the substantial risks involved in investing in securities issued by
companies and governments of foreign nations, which are in addition to the
usual risks inherent in domestic investments. Investors should recognize that
investing in the securities of foreign companies involve special risks and
considerations not typically associated with investing in U.S. companies. These
risks and considerations include differences in accounting, auditing and
financial reporting standards, generally higher commission rates on foreign
port-
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folio transactions, the possibility of expropriation or confiscatory taxation,
adverse changes in investment or exchange control regulations, political
instability which could affect U.S. investment in foreign countries, and
potential restrictions on the flow of international capital. Moreover, the
dividends payable on the Portfolio's foreign portfolio securities may be
subject to foreign withholding taxes, thus reducing the net amount of income
available for distribution to the Portfolio's shareholders. Further, foreign
securities often trade with less frequency and volume than domestic securities
and, therefore, may exhibit greater price volatility. Also, changes in foreign
exchange rates will affect, favorably or unfavorably, the value of those
securities in the Portfolio which are denominated or quoted in currencies other
than the U.S. dollar. In addition, in many countries there is less publicly
available information about issuers than is available in reports about
companies in the United States. Foreign companies are not generally subject to
uniform accounting, auditing and financial reporting standards, and auditing
practices and requirements may not be comparable to those applicable to U.S.
companies. Further, the Portfolio may encounter difficulties or be unable to
pursue legal remedies and obtain judgments in foreign courts.
Brokerage commissions, custodial services, and other costs relating to
investment in foreign securities markets are generally more expensive than in
the United States. Foreign securities markets also have different clearance and
settlement procedures, and in certain markets there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Delays in
settlement could result in temporary periods when assets of the Portfolio are
uninvested and no return is earned thereon. The inability of the Portfolio to
make intended security purchases due to settlement problems could cause the
Portfolio to miss attractive investment opportunities. Inability to dispose of
portfolio securities due to settlement problems could result either in losses
to the Portfolio due to subsequent declines in value of the portfolio security
or, if the Portfolio has entered into a contract to sell the security, could
result in possible liability to the purchaser.
There are further risk factors, including possible losses through the
holding of securities in domestic and foreign custodian banks and depositories.
PURCHASE OF SHARES
Shares of the Portfolio are sold without a sales commission on a
continuous basis to the Advisor acting on behalf of its clients ("Clients") and
to other institutions (the "Institutions"), at the net asset value per share
next determined after receipt of the purchase order by Glenmede Fund's transfer
agent. See "Valuation of Shares." The minimum initial investment for the
Portfolio is $25,000; the minimum for subsequent investments for the Portfolio
is $1,000. Glenmede Fund reserves the right to reduce or waive the minimum
initial and subsequent investment requirements from time to time. Beneficial
ownership of shares will be reflected on books maintained by the Advisor or the
Institutions. A prospective investor wishing to purchase shares in Glenmede
Fund should contact the Advisor or his or her Institution.
It is the Advisor's responsibility to transmit orders for share purchases
to Investment Company Capital Corp. ("ICC"), Glenmede Fund's transfer agent,
and deliver required funds to Glenmede Fund's custodian, on a timely basis.
Glenmede Fund reserves the right, in its sole discretion, to suspend the
offering of shares of the Portfolio or reject purchase orders when, in the
judgment of management, such suspension or rejection is in the best interests
of Glenmede Fund.
Purchases of the Portfolio's shares will be made in full and fractional
shares of the Portfolio calculated to three decimal places. In the interest of
economy and convenience, certificates for shares will not be issued except upon
the written request of the shareholder. Certificates for fractional shares,
however, will not be issued.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the
redemption request by the transfer agent. Generally, a properly signed written
request is all that is required. Any redemption may be more or less than the
purchase price of the shares depending on the market value of the investment
securities held by the Portfolio. An investor wishing to redeem shares should
contact the Advisor or his or her Institution. It is the responsibility of the
Advisor to transmit promptly redemption orders to the transfer agent.
Payment of the redemption proceeds will ordinarily be made within one
business day, but in no event more than seven days, after receipt of the order
in proper form by the transfer agent. Redemption orders are effected at net
asset value per share next determined after receipt of the order in proper form
by the transfer agent. Glenmede Fund may
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suspend the right of redemption or postpone the date of payment at times when
the New York Stock Exchange (the "Exchange") is closed, or under any emergency
circumstances as determined by the Securities and Exchange Commission (the
"Commission"). See "Valuation of Shares" for the days on which the Exchange is
closed.
If Glenmede Fund's Board determines that it would be detrimental to the
best interests of the remaining shareholders of the Portfolio to make payment
wholly or partly in cash, Glenmede Fund may pay the redemption proceeds in
whole or in part by a distribution in-kind of securities held by the Portfolio
in lieu of cash in conformity with applicable rules of the Commission.
Investors may incur brokerage charges on the sale of portfolio securities
received as a redemption in kind.
Glenmede Fund reserves the right, upon 30 days' written notice, to redeem
an account in the Portfolio if the net asset value of the account's shares
falls below $100 and is not increased to at least such amount within such
30-day period.
ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION OF SHARES
Glenmede Fund may, from time to time, in its sole discretion appoint one
or more entities, including the Advisor, as its agent to receive purchase and
redemption orders of shares of the Portfolio and cause these orders to be
transmitted, on a net basis, to Glenmede Fund's transfer agent. In these
instances, orders are effected at the net asset value per share next determined
after receipt of that order by the entity, if the order is actually received by
Glenmede Fund's transfer agent not later than the next business morning.
VALUATION OF SHARES
The net asset value per share of the Portfolio is determined by dividing
the total market value of its investments and other assets attributable to the
shares, less liabilities attributable to the shares, by the total outstanding
shares of the Portfolio. The net asset value per share of the Portfolio is
determined as of the close of regular trading hours of the Exchange on each day
that the Exchange is open for business and the Portfolio receives an order to
purchase or redeem its shares. Currently the Exchange is closed on weekends and
the customary national business holidays of New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day (or the days on which they are observed). One or more pricing
services may be used to provide securities valuations in connection with the
determination of the net asset value per share of the Portfolio.
Equity securities listed on a U.S. securities exchange for which market
quotations are available are valued at the last quoted sale price as of the
close of that exchange's regular trading hours on the day the valuation is
made. Securities listed on a foreign exchange and unlisted foreign securities
are valued at the latest quoted sales price available before the time when
assets are valued. Price information on listed securities is taken from the
exchange where the security is primarily traded. Unlisted U.S. equity
securities and listed securities not traded on the valuation date for which
market quotations are readily available are valued not in excess of the asked
prices or less than the bid prices. The value of securities for which no
quotations are readily available (including restricted securities) is
determined in good faith at fair value using methods determined by the Board.
Foreign currency amounts are translated into U.S. dollars at the bid prices of
such currencies against U.S. dollars last quoted by a major bank.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Portfolio normally distributes substantially all of its net investment
income to shareholders in the form of a quarterly dividend. If any net capital
gains are realized, the Portfolio normally distributes such gains at least once
a year. However, see "Dividends, Capital Gains Distributions and Taxes-Federal
Taxes-Miscellaneous," for a discussion of the Federal excise tax applicable to
certain regulated investment companies.
Undistributed net investment income is included in the Portfolio's net
assets for the purpose of calculating net asset value per share. Therefore, on
the Portfolio's "ex-dividend" date, the net asset value per share excludes the
dividend (i.e., is reduced by the per share amount of the dividend).
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FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended (the "Code"). Such qualification
generally relieves the Portfolio of liability for Federal income taxes to the
extent its earnings are distributed in accordance with the Code.
Qualification as a regulated investment company under the Code for a
taxable year requires, among other things, that the Portfolio distribute to its
shareholders an amount at least equal to 90% of its investment company taxable
income and 90% of its net exempt interest income, if any, for such taxable
year. In general, the Portfolio's investment company taxable income will be the
sum of its net investment income, including interest and dividends, subject to
certain adjustments, and net short-term capital gain over net long-term capital
loss, if any, for such year. The Portfolio intends to distribute as dividends
substantially all of its investment company taxable income each year. Such
dividends will be taxable as ordinary income to the Portfolio's shareholders
who are not currently exempt from Federal income taxes, whether such income or
gain is received in cash or reinvested in additional shares. The dividends
received deduction for corporations will apply to such ordinary income
distributions to the extent the total qualifying dividends received by the
Portfolio are from domestic corporations for the taxable year. It is
anticipated that only a small part, if any, of the dividends paid by the
Portfolio will be eligible for the dividends received deduction.
Substantially all of the Portfolio's net realized long-term capital gains,
if any, will be distributed at least annually to its shareholders. The
Portfolio generally will have no tax liability with respect to such gains and
the distributions will be taxable as long-term capital gains to the
shareholders who are not currently exempt from Federal income taxes, regardless
of how long the shareholders have held the shares and whether such gains are
received in cash or reinvested in additional shares.
A shareholder considering buying shares of the Portfolio on or just before
the record date of a dividend should be aware that the amount of the
forthcoming dividend payment, although in effect a return of capital, will be
taxable.
A taxable gain or loss may be realized by a shareholder upon his
redemption or transfer of shares of the Portfolio, depending upon the tax basis
of such shares and their price at the time of redemption or transfer.
It is expected that dividends and certain interest income earned by the
Portfolio from foreign securities will be subject to foreign withholding taxes
or other taxes. So long as more than 50% of the value of the Portfolio's total
assets at the close of any taxable year consists of stock or securities of
foreign corporations, the Portfolio may elect, for U.S. Federal income tax
purposes, to treat certain foreign taxes paid by it, including generally any
withholding taxes and other foreign income taxes, as paid by its shareholders.
If the Portfolio makes this election, the amount of such foreign taxes paid by
the Portfolio will be included in its shareholders' income pro rata (in
addition to taxable distributions actually received by them), and each
shareholder will be entitled (a) to credit his proportionate amount of such
taxes against his U.S. Federal income tax liabilities, or (b) if he itemizes
his deductions, to deduct such proportionate amount from his U.S. income,
should he so choose.
Miscellaneous. Dividends declared in October, November or December of any
year payable to shareholders of record on a specified date in such months will
be deemed to have been received by the shareholders and paid by the Portfolio
on December 31, in the event such dividends are paid during January of the
following year.
A 4% nondeductible excise tax is imposed on regulated investment companies
that fail to currently distribute specified percentages of their ordinary
taxable income and net capital gain (excess of capital gains over capital
losses). The Portfolio intends to make sufficient distributions or deemed
distributions of its ordinary taxable income and any net capital gain prior to
the end of each calendar year to avoid liability for this excise tax.
The foregoing summarizes some of the important tax considerations
generally affecting the Portfolio and its shareholders and is not intended as a
substitute for careful tax planning. Accordingly, potential investors in the
Portfolio should consult their tax advisers with specific reference to their
own tax situation.
The foregoing discussion of tax consequences is based on tax laws and
regulations in effect on the date of this Prospectus, which are subject to
change by legislative or administrative action.
Shareholders will be advised at least annually as to the federal income
tax consequences of distributions made each year.
The Portfolio will be required in certain cases to withhold and remit to
the United States Treasury 31% of taxable dividends or gross proceeds realized
upon sale paid to shareholders who have failed to provide a correct tax iden-
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<PAGE>
tification number in the manner required, who are subject to withholding by the
IRS for failure properly to include on their return payments of taxable
interest or dividends, or who have failed to certify to the Portfolio that they
are not subject to backup withholding when required to do so or that they are
"exempt recipients."
STATE AND LOCAL TAXES
Shareholders may also be subject to state and local taxes on distributions
from the Portfolio. A shareholder should consult with his tax adviser with
respect to the tax status of distributions from the Portfolio in a particular
state and locality.
The Portfolio has obtained a Certificate of Authority to do business as a
foreign corporation in Pennsylvania, and currently does business in that state.
Accordingly, the shares of the Portfolio will be exempt from Pennsylvania
Personal Property Taxes.
INVESTMENT ADVISOR
The Advisor, a limited purpose trust company chartered in 1956, provides
fiduciary and investment services to endowment funds, foundations, employee
benefit plans and other institutions and individuals. The Advisor is a
wholly-owned subsidiary of The Glenmede Corporation and is located at One
Liberty Place, 1650 Market Street, Suite 1200, Philadelphia, Pennsylvania
19103. At January 31, 1997, the Advisor had over $10.3 billion in assets in the
accounts for which it serves in various capacities including as executor,
trustee or investment advisor.
Under its Investment Advisory Agreement with Glenmede Fund with respect to
the Portfolio, the Advisor, subject to the control and supervision of Glenmede
Fund's Board and in conformance with the stated investment objective and
policies of the Portfolio, manages the investment and reinvestment of the
Portfolio's assets. It is the responsibility of the Advisor to make investment
decisions for the Portfolio and to place the Portfolio's purchase and sales
orders.
The Advisor is entitled to receive a fee from the Portfolio for its
investment services computed daily and payable monthly, at the annual rate of
.75% of the Portfolio's average daily net assets. Although the advisory fee
rate payable by the Portfolio is higher than the rates paid by most mutual
funds, Glenmede Fund's Board of Directors believes it is comparable to the
rates paid by other similar funds. The Advisor has agreed to waive its fees to
the extent necessary to ensure that the Portfolio's annual total operating
expenses do not exceed 1.00% of its average net assets. For the fiscal year
ended October 31, 1996, the Advisor received a fee of .75% (annualized) of the
Portfolio's average net assets.
Andrew Williams, Senior Vice President of the Advisor, is the portfolio
manager for the Portfolio, and has been primarily responsible for its
management since that Portfolio commenced operations. Mr. Williams has been
employed by the Advisor since May 1985.
ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING SERVICES
ICC serves as Glenmede Fund's administrator, transfer agent and dividend
paying agent pursuant to a Master Services Agreement and in those capacities
supervises all aspects of Glenmede Fund's day-to-day operations, other than the
management of Glenmede Fund's investments. ICC is an indirect subsidiary of
Bankers Trust New York Corporation. For its services as administrator, transfer
agent and dividend paying agent, ICC is entitled to receive fees from Glenmede
Fund equal to .12% of the first $100 million of the combined net assets of
Glenmede Fund and The Glenmede Portfolios, an investment company with the same
officers, Board and service providers as Glenmede Fund (collectively, the
"Funds"); .08% of the next $150 million of the combined net assets of the
Funds; .04% of the next $500 million of the combined net assets of the Funds;
and .03% of the combined net assets of the Funds over $750 million. For fiscal
year ended October 31, 1996, ICC received fees at the rate of .04% of the
Portfolio's average net assets.
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) With respect to 75% of its total assets, invest more than 5% of its
total assets at the time of purchase in the securities of any single
issuer (other than obligations issued or guaranteed by the U.S.
Government, its agencies, enterprises or instrumentalities);
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<PAGE>
(b) Purchase more than 10% of any class of the outstanding voting
securities of any issuer;
(c) Acquire any securities of companies within one industry if, as a result
of such acquisition, more than 25% of the value of its total assets
would be invested in securities of companies within such industry;
provided, however, that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government, its agencies,
enterprises or instrumentalities;
(d) Pledge, mortgage, or hypothecate any of its assets to an extent greater
than 10% of the Portfolio's total assets, at fair market value, except
as described in this Prospectus and the SAI and in connection with
entering into futures contracts, but the deposit of assets in a
segregated account in connection with the writing of covered put and
call options and the purchase of securities on a when issued, delayed
settlement or forward delivery basis and collateral arrangements with
respect to initial or variation margin for futures contracts will not be
deemed to be pledges of the Portfolio's assets or the purchase of any
securities on margin for purposes of this investment limitation;
(e) Issue senior securities, except that the Portfolio may borrow money in
accordance with investment limitation (f), purchase securities on a when
issued, delayed settlement or forward delivery basis and enter into
reverse repurchase agreements; and
(f) Borrow money, except that the Portfolio may borrow money as a temporary
measure for extraordinary or emergency purposes, and then not in excess
of 10% of its total assets at the time of borrowing (entering into
reverse repurchase agreements and purchasing securities on a when
issued, delayed settlement or forward delivery basis are not subject to
this investment limitation).
With respect to investment limitation (c), (a) there is no limitation with
respect to (i) instruments issued or guaranteed by the United States, any
state, territory or possession of the United States, the District of Columbia
or any of their authorities, agencies, instrumentalities or political
subdivisions, and (ii) repurchase agreements secured by the instruments
described in clause (i); (b) wholly-owned finance companies will be considered
to be in the industries of their parents if their activities are primarily
related to financing the activities of the parents; and (c) utilities will be
divided according to their services; for example, gas, gas transmission,
electric and gas, electric and telephone will each be considered a separate
industry.
If a percentage restriction is adhered to at the time an investment is
made, a later increase in percentage resulting from a change in value of assets
will not constitute a violation of such restriction. If the Portfolio's
borrowings are in excess of 5% (excluding overdrafts) of its total net assets,
additional portfolio purchases will not be made until the amount of such
borrowing is reduced to 5% or less. The Portfolio's borrowings including
reverse repurchase agreements and securities purchased on a when-issued,
delayed settlement or forward delivery basis may not exceed 331/3% of its total
net assets.
The investment limitations described here and in the SAI are fundamental
policies and may be changed only with the approval of the holders of a majority
of the outstanding shares (as defined in the 1940 Act) of the Portfolio.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
Glenmede Fund was organized as a Maryland corporation on June 30, 1988.
Glenmede Fund's Articles of Incorporation authorize the Board members to issue
2,500,000,000 shares of common stock, with a $.001 par value. The Board has the
power to designate one or more classes ("Portfolios") of shares of common stock
and to classify or reclassify any unissued shares with respect to such
Portfolios. Currently, Glenmede Fund is offering shares of ten Portfolios. The
Glenmede Fund has classified the shares offered by this prospectus and a
separate class, The Flag Investors Series Class A Shares, each of which
represents interests in the Portfolio. The Flag Investors Series Class A Shares
have different class expenses, which may affect performance. Inquiries and
requests for a prospectus regarding The Flag Investors Series Class A Shares,
which are offered with a sales charge, should be addressed to (800) 767-FLAG.
The shares of the Portfolio have no preference as to conversion, exchange,
dividends, retirement or other rights, and, when issued and paid for as
provided in this Prospectus, will be fully paid and non-assessable. The shares
of the Portfolio have no pre-emptive rights and do not have cumulative voting
rights, which means that the holders of more than 50% of the outstanding shares
of common stock of Glenmede Fund voting for the election of its Board members
can elect 100% of the Board of Glenmede Fund if they choose to do so. A
shareholder is entitled to one vote for
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<PAGE>
each full share held (and a fractional vote for each fractional share held),
then standing in his or her name on the books of Glenmede Fund. Glenmede Fund
will not hold annual meetings of shareholders except as required by the 1940
Act, the next sentence and other applicable law. Glenmede Fund has undertaken
that its Board will call a meeting of shareholders for the purpose of voting
upon the question of removal of a Board member or members if such a meeting is
requested in writing by the holders of not less than 10% of the outstanding
shares of common stock of Glenmede Fund. To the extent required by the
undertaking, Glenmede Fund will assist shareholder communication in such
matters.
At January 31, 1997, the Advisor was the record owner of substantially all
of the outstanding shares of the Portfolio.
DISTRIBUTOR
ICC Distributors, Inc., P.O. Box 7558, Portland, Maine, 04101, serves as
Glenmede Fund's distributor.
CUSTODIAN
The Chase Manhattan Bank, N.A., Brooklyn, New York, serves as the
custodian of Glenmede Fund's assets.
TRANSFER AGENT
ICC, located at 1 South Street, Baltimore, Maryland 21202, serves as
Glenmede Fund's transfer agent.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., Philadelphia, Pennsylvania serves as independent
accountants for Glenmede Fund and will audit its financial statements annually.
REPORTS
Shareholders receive unaudited semi-annual financial statements and
audited annual financial statements.
COUNSEL
Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania, serves as counsel
to Glenmede Fund.
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<PAGE>
BOARD MEMBERS AND OFFICERS
The business and affairs of Glenmede Fund are managed under the direction
of its Board. The following is a list of the Board members and officers of
Glenmede Fund and a brief statement of their principal occupations during the
past five years:
<TABLE>
<CAPTION>
Name and Address Age Principal Occupation During Past Five Years
- ------------------------------------- ----- ---------------------------------------------------------------------
<S> <C> <C>
H. Franklin Allen, Ph.D. 41 Director of Glenmede Fund; Trustee of The Glenmede Portfolios;
Finance Department Nippon Life Professor of Finance and Economics; Professor of
The Wharton School Finance and Economics from 1990- 1996; Vice Dean and Director of
University of Pennsylvania Wharton Doctoral Programs from 1990-1993. He has been employed
Philadelphia, PA 19104-6367 by The University of Pennsylvania since 1980.
Willard S. Boothby, Jr. 75 Director of Glenmede Fund; Trustee of The Glenmede Portfolios;
600 East Gravers Lane Director of Penn Engineering & Manufacturing Corp.; Former
Wyndmoor, PA 19118 Director of Georgia-Pacific Corp.; Former Managing Director of
Paine Webber, Inc.
John W. Church, Jr.* 64 Chairman, President and Director of Glenmede Fund; Chairman,
One Liberty Place President and Director of The Glenmede Portfolios; Executive Vice
1650 Market Street, Suite 1200 President and Chief Investment Officer of The Glenmede Trust
Philadelphia, PA 19103 Company. He has been employed by The Glenmede Trust Company
since 1979.
Francis J. Palamara 72 Director of Glenmede Fund; Trustee of The Glenmede Portfolios;
P.O. Box 44024 Trustee of Gintel Fund; Director of XTRA Corporation; Former
Phoenix, AZ 85064-4024 Executive Vice President--Finance of ARAMARK, Inc.
G. Thompson Pew, Jr.* 55 Director of Glenmede Fund; Trustee of The Glenmede Portfolios;
310 Caversham Road Director of The Glenmede Trust Company; Former Director of
Bryn Mawr, PA 19010 Brown & Glenmede Holdings, Inc.; Former Co-Director, Principal
and Officer of Philadelphia Investment Banking Co.; Former Director
and Officer of Valley Forge Administrative Services Company.
Mary Ann B. Wirts 46 Executive Vice President of Glenmede Fund; Vice President and
One Liberty Place Manager of The Fixed Income Division of The Glenmede Trust
1650 Market Street, Suite 1200 Company. She has been employed by The Glenmede Trust Company
Philadelphia, PA 19103 since 1982.
Kimberly C. Osborne 31 Vice President of Glenmede Fund; Vice President of The Glenmede
One Liberty Plaza Trust Company. She has been employed by The Glenmede Trust
1650 Market Street, Suite 1200 Company since 1993. From 1992-1993, she was a Client Service
Philadelphia, PA 19103 Manager with Mutual Funds Service Company and from 1987-1992,
she was a Client Administrator with The Vanguard Group, Inc.
Michael P. Malloy 38 Secretary of Glenmede Fund; Partner in the law firm of Drinker
Philadelphia National Bank Building Biddle & Reath LLP.
1345 Chestnut Street
Philadelphia, PA 19107-3496
Edward J. Veilleux 54 Assistant Secretary of Glenmede Fund; Principal, BT Alex. Brown
1 South Street Inc.; Executive Vice President of ICC.
Baltimore, MD 21202
Joseph A. Finelli 40 Treasurer of Glenmede Fund. He has been a Vice President of BT
1 South Street Alex. Brown Inc. since 1995. Prior thereto, he was Vice President
Baltimore, MD 21202 and Treasurer of The Delaware Group.
</TABLE>
- ------------
*Board members Church and Pew are "interested persons" of Glenmede Fund as that
term is defined in the 1940 Act.
For additional information concerning remuneration of Board members see
"Management of Glenmede Fund" in the SAI.
--------------------
Shareholder inquiries should be addressed to Glenmede Fund at the address
or telephone number stated on the cover page.
13
<PAGE>
THE GLENMEDE FUND, INC.
1 South Street, Baltimore, Maryland 21202
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Prospectus
Dated February 27, 1997 (as revised October 1, 1997)
Investment Advisor Administrator and Transfer Agent
The Glenmede Trust Company Investment Company Capital
Corp.
One Liberty Place 1 South Street
1650 Market Street, Suite 1200 Baltimore, Maryland 21202
Philadelphia, PA 19103
Distributor
ICC Distributors, Inc.
P.O. Box 7558
Portland, Maine 04101
- --------------------------------------------------------------------------------
Table of Contents
Page
------
Expenses of the Portfolios ............... 2
Financial Highlights ..................... 3
Performance Calculations ............... 4
Investment Objectives and Policies ...... 4
Investment Techniques .................. 5
Risk Factors ........................... 6
Purchase of Shares ..................... 7
Redemption of Shares ..................... 7
Additional Information on the Purchase and
Redemption of Shares .................. 8
Page
------
Valuation of Shares ..................... 8
Dividends, Capital Gains Distributions and
Taxes ................................. 8
Investment Advisor ..................... 10
Administrative, Transfer Agency and
Dividend Paying Services ............... 10
Investment Limitations .................. 10
General Information ..................... 11
Board Members and Officers ............... 13
No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in Glenmede Fund's
Statement of Additional Information, in connection with the offering made by
this Prospectus and, if given or made, such information or representations must
not be relied upon as having been authorized by Glenmede Fund or its
Distributor. This Prospectus does not constitute an offering by Glenmede Fund
or the Distributor in any jurisdiction in which such offering may not lawfully
be made.
