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THE GLENMEDE FUND, INC.
One South Street, Baltimore, Maryland 21202
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800-442-8299
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Prospectus -- September 16, 1997
INVESTMENT OBJECTIVES
The Glenmede Fund, Inc., a Maryland corporation ("Glenmede Fund"), is an
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 one of these series of shares, the Global Equity
Portfolio.
Global Equity Portfolio. The objective of the Global Equity Portfolio is to
provide maximum long-term total return consistent with reasonable risk to
principal. The Global Equity Portfolio (the "Portfolio") seeks to achieve its
objective by investing primarily in equity securities and securities
convertible into equity securities of companies located inside and 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 September 16, 1997, as amended or supplemented from time to time, is
incorporated by reference into this Prospectus. A copy of the SAI 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
Below is information regarding the shareholder transaction expenses
charged by the Portfolio and the operating expenses which the Portfolio expects
to incur during the current fiscal year. An example based on this information
is also provided.
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)
Global
Equity
Portfolio
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Investment Advisory Fees ................................ .70%
Administration Fees ...................................... .04%
Other Expenses ......................................... .13%
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Total Operating Expenses ................................ .87%
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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.
The purpose of the above table is to assist an investor in understanding
the various estimated costs and expenses that an investor in the 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.
1 Year 3 Years
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Global Equity Portfolio ............................ $9 $28
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.
PERFORMANCE CALCULATIONS
The Global Equity 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"), the MSCI World Index 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
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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 OBJECTIVE AND POLICIES
The investment objective of the Global Equity 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 equity securities and
securities convertible into equity securities of companies located inside and
outside the United States. The Portfolio is expected to diversify its
investments across companies located in a number of countries, which may
include, but are not limited to, the United States, Japan, the United Kingdom,
Germany, France, Switzerland, the Netherlands, Sweden, Australia, Hong Kong and
Singapore. Under normal circumstances, at least 65% of the Portfolio's total
assets will be invested in equity securities and securities convertible into
equity securities.
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 and securities convertible into equity securities. 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, 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.
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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.
Reverse Repurchase Agreements. The Portfolio may enter into reverse
repurchase agreements. In a reverse repurchase agreement, the Portfolio sells a
security and simultaneously commits to repurchase that security at a future
date from the buyer. In effect, the Portfolio is temporarily borrowing funds at
an agreed upon interest rate from the purchaser of the security, and the sale
of the security represents collateral for the loan. The Portfolio retains
record ownership of the security and the right to receive interest and
principal payments on the security. At an agreed upon future date, the
Portfolio repurchases the security by remitting the proceeds previously
received, plus interest. In certain types of agreements, there is no agreed
upon repurchase date and interest payments are calculated daily, often based on
the prevailing overnight repurchase rate. These agreements, which are treated
as if reestablished each day, are expected to provide the Portfolio with a
flexible borrowing tool. Reverse repurchase agreements are considered to be
borrowings by the Portfolio under the 1940 Act.
The Portfolio's investment of the proceeds of a reverse repurchase
agreement is the speculative factor known as leverage. The Portfolio may enter
into a reverse repurchase agreement only if the interest income from investment
of the proceeds is greater than the interest expense of the transaction and the
proceeds are invested for a period no longer than the term of the agreement.
The Portfolio will maintain with the custodian a separate account with a
segregated portfolio of liquid securities at least equal to its purchase
obligations under these agreements. The Advisor will consider the
creditworthiness of the other party in determining whether the Portfolio will
enter into a reverse repurchase agreement.
The use of reverse repurchase agreements involves certain risks. For
example, the other party to the agreement may default on its obligation or
become insolvent and unable to deliver the securities to the Portfolio at a
time when the value of the securities has increased. Reverse repurchase
agreements also involve the risk that the Portfolio may not be able to
substantiate its interest in the underlying securities.
The Portfolio is permitted to invest up to one-third of its total assets
in reverse repurchase agreements and securities lending transactions.
Investments in reverse repurchase agreements and securities lending
transactions will be aggregated for purposes of this investment limitation.
Lending of Securities. Subject to the limitation above under "Reverse
Repurchase Agreements," 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.
Investment Company Securities. The Portfolio may invest in securities
issued by other open-end investment companies with investment objectives and
policies that are consistent with those of the Portfolio. The Portfolio will
limit its investments so that, as determined immediately after a securities
purchase is made: (a) not more than 5% of the value of its total assets will be
invested in the securities of any one investment company; (b) not more than 10%
of the value of its total assets will be invested in the aggregate in the
securities of investment companies as a group; and (c) not more than 3% of the
outstanding voting stock of any one investment company will be owned by the
Portfolio. As a shareholder of another investment company, the Portfolio would
bear its pro rata portion of the other investment company's advisory fees and
other expenses, in addition to the expenses the Portfolio bears directly in
connection with its own operations.
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, EDRs and GDRs (collectively, "Depositary Receipts"). 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. EDRs and
GDRs are depositary receipts typically issued by foreign banks or trust
companies, although they also may be issued by U.S. banks or trust companies,
and evidence ownership of underlying securities issued by either a foreign or a
United States 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 15% of net
assets in securities that are illiquid.
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.
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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
portfolio 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.
These risks are often heightened for investments in developing or emerging
markets, including certain Eastern European countries where the risks include
the possibility that such countries may revert to a centrally planned economy.
Developing countries may also impose restrictions on the Portfolio's ability to
repatriate investment income or capital. Even where there is no outright
restriction on repatriation of investment income or capital, the mechanics of
repatriation may affect certain aspects of the operations of the Portfolio.
Some of the currencies in emerging markets have experienced devaluations
relative to the U.S. dollar, and major adjustments have been made periodically
in certain of such currencies. Certain developing countries face serious
exchange constraints.
Governments of some developing countries exercise substantial influence
over many aspects of the private sector. In some countries, the government owns
or controls many companies, including the largest in the country. As such,
government actions in the future could have a significant effect on economic
conditions in developing countries in these regions, which could affect private
sector companies, the Portfolio and the value of its securities. Furthermore,
certain developing countries are among the largest debtors to commercial banks
and foreign governments. Trading in debt obligations issued or guaranteed by
such governments or their agencies and instrumentalities involves a high degree
of risk.
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 these and other 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.
In many emerging markets, there is less government supervision and
regulation of business and industry practices, stock exchanges, brokers and
listed companies than in the United States. The foreign securities markets of
many of the countries in which the Portfolio may invest may also be smaller,
less liquid, and subject to greater price volatility than those in the United
States.
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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, in proper order, 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 and Institutions' responsibility to transmit their
clients' 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 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 "SEC"). 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 SEC. 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.
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VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the total
market value of its investments and other assets, less any of its liabilities,
by the total outstanding shares of the Portfolio. The Portfolio's net asset
value per share 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 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).
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.
8
<PAGE>
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
identification 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 March 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.
9
<PAGE>
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
.70% 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.
Andrew Williams, Senior Vice President of the Advisor, is the portfolio
manager for the Portfolio, and has been primarily responsible for its
management since the 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.
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);
(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 15% 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.
10
<PAGE>
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 33 1/3% 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 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 shares 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 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 Glenmede Fund. To the extent required by the undertaking,
Glenmede Fund will assist shareholder communication in such matters.
At September 16, 1997, the Advisor was the record owner of all of the
outstanding shares of the Portfolio.
DISTRIBUTOR
ICC Distributors, Inc. ("ICC Distributors"), located at 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 One 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.
11
<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; First 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 Place 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
One 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
One 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.
12
<PAGE>
THE GLENMEDE FUND, INC.
One South Street, Baltimore, Maryland 21202
===============================================================================
- -------------------------------------------------------------------------------
Prospectus
Dated September 16, 1997
Investment Advisor Administrator and Transfer Agent
The Glenmede Trust Company Investment Company Capital Corp.
One Liberty Place One 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
<TABLE>
<CAPTION>
Page Page
----- -----
<S> <C> <S> <C>
Expenses of the Portfolios ............... 2 Valuation of Shares ..................... 8
Performance Calculations ............... 2 Dividends, Capital Gains Distributions
Investment Objective and Policies ....... 3 and Taxes .............................. 8
Investment Techniques .................. 3 Investment Advisor ..................... 9
Risk Factors ........................... 6 Administrative, Transfer Agency and
Purchase of Shares ..................... 7 Dividend Paying Services ............ 10
Redemption of Shares ..................... 7 Investment Limitations .................. 10
Additional Information on the Purchase and General Information ..................... 11
Redemption of Shares .................. 7 Board Members and Officers ............... 12
</TABLE>
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.
<PAGE>
THE GLENMEDE FUND, INC.
(800) 442-8299
STATEMENT OF ADDITIONAL INFORMATION
GLOBAL EQUITY PORTFOLIO
September 16, 1997
This Statement of Additional Information is not a prospectus but should
be read in conjunction with The Glenmede Fund, Inc.'s ("Glenmede Fund")
Prospectus for the Global Equity Portfolio (the "Prospectus") dated September
16, 1997. To obtain the Prospectus, please call Glenmede Fund at the above
telephone number.
Capitalized terms used in this Statement of Additional Information and
not otherwise defined have the same meanings given to them in Glenmede Fund's
Prospectus.
Table of Contents
Page
----
INVESTMENT OBJECTIVE AND POLICIES.................................... 2
PURCHASE OF SHARES................................................... 3
REDEMPTION OF SHARES................................................. 3
SHAREHOLDER SERVICES................................................. 4
PORTFOLIO TURNOVER................................................... 4
INVESTMENT LIMITATIONS............................................... 4
MANAGEMENT OF GLENMEDE FUND.......................................... 7
INVESTMENT ADVISORY AND OTHER SERVICES............................... 8
DISTRIBUTOR.......................................................... 8
PORTFOLIO TRANSACTIONS............................................... 8
ADDITIONAL INFORMATION CONCERNING TAXES.............................. 9
PERFORMANCE CALCULATIONS............................................. 16
GENERAL INFORMATION.................................................. 17
EXPENSES............................................................. 17
OTHER INFORMATION.................................................... 18
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS.................... A-1
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the investment objectives and
policies set forth in Glenmede Fund's Prospectus:
Repurchase Agreements
Repurchase agreements that do not provide for payment to a Portfolio
within seven days after notice without taking a reduced price are considered
illiquid securities.
Forward Foreign Exchange Contracts
The Portfolio may enter into forward foreign exchange contracts. A
forward foreign currency exchange contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract as agreed by the parties, at a price set at the
time of the contract. In the case of a cancelable forward contract, the holder
has the unilateral right to cancel the contract at maturity by paying a
specified fee. The contracts are traded in the interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for trades. A foreign currency futures
contract is a standardized contract for the future delivery of a specified
amount of a foreign currency at a future date at a price set at the time of the
contract. Foreign currency futures contracts traded in the United States are
designed by and traded on exchanges regulated by the Commodity Futures Trading
Commission ("CFTC") such as the New York Mercantile Exchange. The Portfolio
would enter into foreign currency futures contracts solely for hedging or other
appropriate investment purposes as defined in CFTC regulations.
Forward foreign currency exchange contracts differ from foreign
currency futures contracts in certain respects. For example, the maturity date
of a forward contract may be any fixed number of days from the date of the
contract agreed upon by the parties, rather than a predetermined date in any
given month. Forward contracts may be in any amounts agreed upon by the parties
rather than predetermined amounts. Also, forward foreign exchange contracts are
traded directly between currency traders so that no intermediary is required. A
forward contract generally requires no margin or other deposit.
At the maturity of a forward contract, the Portfolio may either accept
or make delivery of the currency specified in the contract, or at or prior to
maturity enter into a closing transaction involving the purchase or sale of an
offsetting contract. Closing transactions with respect to forward contracts
<PAGE>
are usually effected with the currency trader who is a party to the original
forward contract.
Securities Lending
The Portfolio may lend its investment securities to qualified
institutional investors who need to borrow securities in order to complete
certain transactions, such as covering short sales, avoiding failures to deliver
securities or completing arbitrage operations. By lending its investment
securities, the Portfolio attempts to increase its income through the receipt of
interest on the loan. Any gain or loss in the market price of the securities
loaned that might occur during the term of the loan would be for the account of
the Portfolio. The Portfolio may lend its investment securities to qualified
brokers, dealers, domestic and foreign banks or other financial institutions, so
long as the terms, the structure and the aggregate amount of such loans are not
inconsistent with the Investment Company Act of 1940 (the "1940 Act") or the
rules and regulations or interpretations of the Securities and Exchange
Commission (the "SEC") thereunder. All relevant facts and circumstances,
including the creditworthiness of the broker, dealer or institution, will be
considered by the Advisor in making decisions with respect to the lending of
securities, subject to review by Glenmede Fund's Board.
PURCHASE OF SHARES
The purchase price of shares of each Portfolio is the net asset value
next determined after receipt of the purchase order by the Portfolio.
The Portfolio reserves the right in its sole discretion (i) to suspend
the offering of its shares, (ii) to reject purchase orders when in the judgment
of management such rejection is in the best interest of the Portfolio, and (iii)
to reduce or waive the minimum for initial and subsequent investments from time
to time.
At the discretion of Glenmede Fund, investors may be permitted to
purchase Portfolio shares by transferring securities to the Portfolio that meet
the Portfolio's investment objectives and policies.
REDEMPTION OF SHARES
The Portfolio may suspend redemption privileges or postpone the date of
payment (i) during any period that the New York Stock Exchange (the "Exchange")
is closed, or trading on the Exchange is restricted as determined by the SEC,
(ii) during any period when an emergency exists as defined by the rules of the
SEC as a result of which it is not reasonably practicable for the Portfolio to
-3-
<PAGE>
dispose of securities owned by it, or fairly to determine the value of its
assets, and (iii) for such other periods as the SEC may permit.
No charge is made by the Portfolio for redemptions. Any redemption may
be more or less than the shareholder's initial cost depending on the market
value of the securities held by the Portfolio.
SHAREHOLDER SERVICES
Transfer of Shares. Shareholders may transfer shares of the Portfolio
to another person. An investor wishing to transfer shares should contact the
Advisor.
PORTFOLIO TURNOVER
A high portfolio turnover rate can result in corresponding increases in
brokerage commissions; however, the Advisor will not consider portfolio turnover
rate a limiting factor in making investment decisions consistent with the
Portfolio's investment objectives and policies.
INVESTMENT LIMITATIONS
The Portfolio is subject to the following restrictions which are
fundamental policies and may not be changed without the approval of the lesser
of: (1) 67% of the voting securities of the Portfolio present at a meeting if
the holders of more than 50% of the outstanding voting securities of the
Portfolio are present or represented by proxy, or (2) more than 50% of the
outstanding voting securities of the Portfolio. The Portfolio will not:
(1) invest in commodities or commodity contracts, except
that the Portfolio may invest in futures contracts and
options;
(2) purchase or sell real estate, although it may purchase and
sell securities of companies which deal in real estate and may
purchase and sell securities which are secured by interests in
real estate;
(3) make loans, except (i) by purchasing bonds, debentures
or similar obligations (including repurchase
agreements, subject to the limitation described in
investment limitation (10) below, and money market
instruments, including bankers acceptances and
commercial paper, and selling securities on a when
issued, delayed settlement or forward delivery basis)
which are publicly or privately distributed, and (ii)
by lending its portfolio securities to banks, brokers,
dealers and other financial institutions so long as
-4-
<PAGE>
such loans are not inconsistent with the 1940 Act or
the rules and regulations or interpretations of the SEC
thereunder;
(4) purchase on margin or sell short, except as specified above in
investment limitation (1);
(5) purchase more than 10% of any class of the outstanding voting
securities of any issuer;
(6) 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);
(7) issue senior securities, except that the Portfolio may borrow
money in accordance with investment limitation (8) below,
purchase securities on a when issued, delayed settlement or
forward delivery basis and enter into reverse repurchase
agreements;
(8) 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
the 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);
(9) pledge, mortgage, or hypothecate any of its assets to
an extent greater than 15% of its total assets at fair
market value, except as described in the Prospectus and
this 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;
(10) underwrite the securities of other issuers;
(11) invest for the purpose of exercising control over
management of any company;
-5-
<PAGE>
(12) invest its assets in securities of any investment company,
except in connection with mergers, acquisitions of assets or
consolidations and except as may otherwise be permitted by the
1940 Act;
(13) acquire any securities of companies within one industry if, as
a result of such acquisition, more than 25% of the value of
the Portfolio's 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, or instruments issued by
U.S. banks; and
(14) write or acquire options or interests in oil, gas or other
mineral exploration or development programs.
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 or assets
will not constitute a violation of such restriction.
With regard to limitations (8) and (9), the Portfolio may borrow money
as a temporary measure for extraordinary or emergency purposes, enter into
reverse repurchase agreements and purchase securities on a when-issued, delayed
settlement or forward delivery basis, which activities may involve a borrowing,
provided that the aggregate of such borrowings shall not exceed 33 1/3% of the
value of the Portfolio's total assets (including the amount borrowed) less
liabilities (other than borrowings) and may pledge up to 33 1/3% of the value of
its total assets to secure borrowings.
With respect to investment limitation (13), (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.
With regard to limitation (14), the purchase of securities of a
corporation, a subsidiary of which has an interest in oil, gas or other mineral
exploration or development programs, shall not be deemed to be prohibited by the
limitation.
-6-
<PAGE>
MANAGEMENT OF GLENMEDE FUND
Glenmede Fund's officers, under the supervision of the Board, manage
the day-to-day operations of Glenmede Fund. The Board members set broad policies
for Glenmede Fund and choose its officers. A list of the Board members and
officers and a brief statement of their current positions and principal
occupations during the past five years is set forth in the Prospectus.
Remuneration of Board Members
Effective June 12, 1996, Glenmede Fund pays each Board member, other
than Officers of the Advisor, an annual fee of $8,000 plus $1,250 for each Board
meeting attended and each Board Valuation Committee meeting attended (unless
such meeting was held in conjunction with a Board meeting) and out-of-pocket
expenses incurred in attending Board meetings. Prior to June 12, 1996, Glenmede
Fund paid each Board member, other than Officers of the Advisor, an annual fee
of $6,000 plus $1,250 for each Board meeting attended and out-of-pocket expenses
incurred in attending Board meetings. Officers of Glenmede Fund receive no
compensation as officers from Glenmede Fund.
Set forth in the table below is the compensation received by each Board
member for the fiscal year ended October 31, 1996.
<TABLE>
<CAPTION>
===================================================================================================================================
Pension or
Retirement Total
Benefits Compensation from
Aggregate accrued as Estimated Glenmede Fund
Compensation part of Annual and Fund Complex(1)
Name of from Glenmede Fund's Benefits paid to
Person, Position Glenmede Fund expenses Upon Retirement Directors
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dr. H. Franklin Allen, Ph.D., $14,441 None None $15,500
Director
- -----------------------------------------------------------------------------------------------------------------------------------
Willard S. Boothby, Jr., $11,941 None None $13,000
Director
- -----------------------------------------------------------------------------------------------------------------------------------
John W. Church, Jr. None None None None
Director
- -----------------------------------------------------------------------------------------------------------------------------------
Francis J. Palamara, $11,941 None None $13,000
Director
- -----------------------------------------------------------------------------------------------------------------------------------
G. Thompson Pew, Jr., $14,441 None None $15,500
Director
===================================================================================================================================
</TABLE>
- ------------------
(1) Includes total compensation from Glenmede Fund and The Glenmede Portfolios,
both of which are advised by the Advisor.
-7-
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
The Advisor, The Glenmede Trust Company, is the wholly-owned subsidiary
of The Glenmede Corporation (the "Corporation") whose shares are closely held by
74 shareholders. The Corporation has a nine person Board of Directors which, at
June 30, 1997, collectively, owned 98.67% of the Corporation's voting shares and
37.88% of the Corporation's total outstanding shares. The members of the Board
and their respective interests in the Corporation at June 30, 1997 are as
follows:
<TABLE>
<CAPTION>
The Glenmede Corporation Percent of Percent of
Board of Directors Voting Shares Total Shares
- ------------------------ ------------- ------------
<S> <C> <C>
Susan W. Catherwood.................................. 10.83% 1.21%
Richard F. Pew....................................... 10.83% 1.07%
Thomas W. Langfitt, M.D.............................. 11.07% 8.70%
Arthur E. Pew III.................................... 10.83% 1.07%
J. Howard Pew, II.................................... 10.83% 1.42%
J. N. Pew, III....................................... 11.07% 5.45%
J. N. Pew, IV........................................ 11.07% 1.42%
R. Anderson Pew...................................... 11.07% 6.04%
Ethel Benson Wister.................................. 11.07% 11.50%
------ ------
98.67% 37.88%
</TABLE>
The Advisor is entitled to receive a fee from the Portfolio for its
services, calculated daily and payable monthly, at the annual rate of .70% of
the Portfolio's average daily net assets.
Administrative transfer agency and dividend paying services have been
provided to Glenmede Fund by ICC pursuant to a Master Services Agreement. See
"Administrative, Transfer Agency and Dividend Paying Services" in the Prospectus
for information concerning the substantive provisions of the Master Services
Agreement.
Custody services are provided to the Portfolio by The Chase Manhattan
Bank, N.A., Brooklyn, New York.
DISTRIBUTOR
Shares of Glenmede Fund are distributed continuously and are offered
without a sales load by ICC Distributors, pursuant to a Distribution Agreement
between Glenmede Fund and ICC Distributors. ICC Distributors receives no fee
from Glenmede Fund for its distribution services.
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreement authorizes the Advisor to select the
brokers or dealers that will execute the purchases and sales of investment
-8-
<PAGE>
securities for the Portfolio and direct the Advisor to use its best efforts to
obtain the best available price and most favorable execution with respect to all
transactions for the Portfolio. The Advisor may, however, consistent with the
interests of the Portfolio, select brokers on the basis of the research,
statistical and pricing services they provide to the Portfolio. Information and
research received from such brokers will be in addition to, and not in lieu of,
the services required to be performed by the Advisor under the Investment
Advisory Agreement. A commission paid to such brokers may be higher than that
which another qualified broker would have charged for effecting the same
transaction, provided that such commissions are paid in compliance with the
Securities Exchange Act of 1934, as amended, and that the Advisor determines in
good faith that such commission is reasonable in terms either of the transaction
or the overall responsibility of the Advisor to the Portfolio and the Advisor's
other clients.
Because shares of the Portfolios are not marketed through intermediary
brokers or dealers, it is not Glenmede Fund's practice to allocate brokerage or
effect principal transactions with dealers on the basis of sales of shares which
may be made through such firms. However, the Advisor may place portfolio orders
with qualified broker-dealers who refer clients to the Advisor and the other
Institutions.
Some securities considered for investment by the Portfolio may also be
appropriate for other clients served by the Advisor. If purchase or sale of
securities is consistent with the investment policies of the Portfolio and one
or more of these other clients served by the Advisor and is considered at or
about the same time, transactions in such securities will be allocated among the
Portfolio and clients in a manner deemed fair and reasonable by the Advisor.
While in some cases this practice could have a detrimental effect on the price,
value or quantity of the security as far as the Portfolio is concerned, in other
cases it is believed to be beneficial to the Portfolio.
ADDITIONAL INFORMATION CONCERNING TAXES
General. The following summarizes certain additional tax considerations
generally affecting the Portfolio and its shareholders that are not described in
the Prospectus. No attempt is made to present a detailed explanation of the tax
treatment of the Portfolio or its shareholders, and the discussion here and in
the Prospectus is not intended as a substitute for careful tax planning.
Potential investors should consult their tax advisers with specific reference to
their own tax situation.
The Portfolio is treated as a separate corporate entity under the
Internal Revenue Code of 1986, as amended (the "Code"), and intends to qualify
-9-
<PAGE>
as a regulated investment company. Qualification as a regulated investment
company under the Code requires, among other things, that the Portfolio
distribute to its shareholders an amount equal to at least the sum of 90% of its
investment company taxable income and 90% of its tax-exempt income (if any) net
of certain deductions for a taxable year. In addition, the Portfolio must
satisfy certain requirements with respect to the source of its income during a
taxable year. At least 90% of the gross income of the Portfolio must be derived
from dividends, interest, payments with respect to securities loans, gains from
the sale or other disposition of stock, securities or foreign currencies, and
other income (including, but not limited to, gains from options, futures, or
forward contracts) derived with respect to the Portfolio's business of investing
in such stock, securities or currencies. The Treasury Department may by
regulation exclude from qualifying income foreign currency gains which are not
directly related to a Portfolio's principal business of investing in stock or
securities, or options and futures with respect to stock or securities. Any
income derived by the Portfolio from a partnership or trust is treated for this
purpose as derived with respect to the Portfolio's business of investing in
stock, securities or currencies only to the extent that such income is
attributable to items of income which would have been qualifying income if
realized by the Portfolio in the same manner as by the partnership or trust.
-10-
<PAGE>
Any distribution of the excess of net long-term capital gain over net
short-term capital loss is taxable to shareholders as long-term capital gain,
regardless of how long the shareholder has held the Portfolio's shares and
whether such distribution is received in cash or additional Portfolio shares.
The Portfolio will designate such distributions as capital gain dividends in a
written notice mailed to shareholders within 60 days after the close of Glenmede
Fund's taxable year. Shareholders should note that, upon the sale of Portfolio
shares, if the shareholder has not held such shares for more than six months,
any loss on the sale of those shares will be treated as long-term capital loss
to the extent of the capital gain dividends received with respect to the shares.
Ordinary income of individuals is taxable at a maximum marginal rate of
39.6%, but because of limitations on itemized deductions otherwise allowable and
the phase-out of personal exemptions, the maximum effective marginal rate of tax
for some taxpayers may be higher. Pursuant to the Tax Relief Act of 1997, for
capital gains on securities recognized after July 28, 1997, the maximum rate for
individuals is 20% if the property was held more than 18 months; for property
held more than 12 months, but no longer than 18 months, the maximum rate
continues to be 28%. For corporations, long-term capital gains and ordinary
income are both taxable at a maximum nominal rate of 35% (although surtax
provisions apply at certain income levels to result in marginal rates as high as
39%).
If the Portfolio retains net capital gains for reinvestment, the
Portfolio may elect to treat such amounts as having been distributed to
shareholders. As a result, the shareholders would be subject to tax on
undistributed net capital gains, would be able to claim their proportionate
share of the Federal income taxes paid by the Portfolio on such gains as a
credit against their own Federal income tax liabilities, and would be entitled
to an increase in their basis in their Portfolio shares.
If for any taxable year the Portfolio does not qualify for the special
Federal income tax treatment afforded regulated investment companies, all of its
taxable income will be subject to Federal income tax at regular corporate rates
(without any deduction for distributions to its shareholders). In such event,
dividend distributions would be taxable as ordinary income to shareholders to
the extent of the Portfolio's current and accumulated earnings and profits and
would be eligible for the dividends received deduction for corporations.
Foreign Taxes. Income received from sources within foreign countries may
be subject to withholding and other income or similar taxes imposed by such
countries. If more than 50% of the value of the Portfolio's total assets at the
close of its taxable year consists of stock or securities of foreign
corporations, the Portfolio will be eligible and intends to elect to
-11-
<PAGE>
"pass-through" to its shareholders the amount of foreign taxes paid by it.
Pursuant to this election, each shareholder will be required to include in gross
income (in addition to taxable dividends actually received) his pro rata share
of the foreign taxes paid by the Portfolio, and will be entitled either to
deduct (as an itemized deduction) his pro rata share of foreign taxes in
computing his taxable income or to use it as a foreign tax credit against his
U.S. Federal income tax liability, subject to limitations. No deduction for
foreign taxes may be claimed by a shareholder who does not itemize deductions,
but such a shareholder may be eligible to claim the foreign tax credit (see
below). Each shareholder will be notified within 60 days after the close of the
Portfolio's taxable year whether the foreign taxes paid by the Portfolio will
"pass-through" for that year.
Generally, a credit for foreign taxes is subject to the limitation that
it may not exceed the shareholder's U.S. tax attributable to his or her foreign
source taxable income. For this purpose, if the pass-through election is made,
the source of the Portfolio's income flows through to its shareholders with
respect to the Portfolio. Gains from the sale of securities will be treated as
derived from U.S. sources and certain currency fluctuation gains, including
fluctuation gains from foreign currency denominated debt securities, receivables
and payables, will be treated as ordinary income derived from U.S. sources. The
limitation on the foreign tax credit is applied separately to foreign source
passive income (as defined for purposes of the foreign tax credit), including
the foreign source passive income passed through by the Portfolio. Shareholders
may be unable to claim a credit for the full amount of their proportionate share
of the foreign taxes paid by the Portfolio. Foreign taxes may not be deducted in
computing alternative minimum taxable income and the foreign tax credit can be
used to offset only 90% of the alternative minimum tax (as computed under the
Code for purposes of this limitation) imposed on corporations and individuals.
If the Portfolio is not eligible to make the election to "pass through" to its
shareholders its foreign taxes, the foreign taxes it pays will reduce investment
company taxable income and the distributions by the Portfolio will be treated as
United States source income.
Federal Taxation of Certain Financial Instruments. Generally, futures
contracts held by the Portfolio at the close of its taxable year will be treated
for Federal income tax purposes as sold for their fair market value on the last
business day of such year, a process known as "mark-to-market." Forty percent of
any gain or loss resulting from such constructive sale will be treated as
short-term capital gain or loss and sixty percent of such gain or loss will be
treated as long-term capital gain or loss without regard to the length of time
the Portfolio holds the futures contract ("the 40-60 rule"). The amount of any
capital gain or loss actually realized by the Portfolio in a subsequent sale or
-12-
<PAGE>
other disposition of those futures contracts will be adjusted to reflect any
capital gain or loss taken into account by the Portfolio in a prior year as a
result of the constructive sale of the contracts. With respect to futures
contracts to sell, which will be regarded as parts of a "mixed straddle" because
their values fluctuate inversely to the values of specific securities held by
the Portfolio, losses as to such contracts to sell will be subject to certain
loss deferral rules which limit the amount of loss currently deductible on
either part of the straddle to the amount thereof which exceeds the unrecognized
gain, if any, with respect to the other part of the straddle, and to certain
wash sales regulations. Under short sales rules, which also will be applicable,
the holding period of the securities forming part of the straddle will (if they
have not been held for the long term holding period) be deemed not to begin
prior to termination of the straddle. With respect to certain futures contracts,
deductions for interest and carrying charges will not be allowed.
Notwithstanding the rules described above, with respect to futures contracts to
sell which are properly identified as such, the Portfolio may make an election
which will exempt (in whole or in part) those identified futures contracts from
being treated for Federal income tax purposes as sold on the last business day
of its taxable year, but gains and losses will be subject to such short sales,
wash sales and loss deferral rules and the requirement to capitalize interest
and carrying charges. Under Temporary Regulations, the Portfolio would be
allowed (in lieu of the foregoing) to elect either (1) to offset gains or losses
from portions which are part of a mixed straddle by separately identifying each
mixed straddle to which such treatment applies, or (2) to establish a mixed
straddle account for which gains and losses would be recognized and offset on a
periodic basis during the taxable year. Under either election, the 40-60 rule
will apply to the net gain or loss attributable to the futures contracts, but in
the case of a mixed straddle account election, no more than 50% of any net gain
may be treated as long term and no more than 40% of any net loss may be treated
as short term. Options on futures contracts generally receive Federal tax
treatment similar to that described above.
Certain foreign currency contracts entered into by the Portfolios may be
subject to the "mark-to-market" process and the 40-60 rule in a manner similar
to that described in the preceding paragraph for futures contracts. To receive
such Federal income tax treatment, a foreign currency contract must meet the
following conditions: (1) the contract must require delivery of a foreign
currency of a type in which regulated futures contracts are traded or upon which
the settlement value of the contract depends; (2) the contract must be entered
into at arm's length at a price determined by reference to the price in the
interbank market; and (3) the contract must be traded in the interbank market.
The Treasury has broad authority to issue regulations under the provisions
-13-
<PAGE>
respecting foreign currency contracts. As of the date of this Statement of
Additional Information, the Treasury has not issued any such regulations. Other
foreign currency contracts entered into by the Portfolio may result in the
creation of one or more straddles for Federal income tax purposes, in which case
certain loss deferral, short sales, and wash sales rules and the requirement to
capitalize interest and carrying charges may apply.
Other Tax Matters. Special rules govern the Federal income tax treatment
of certain transactions denominated in terms of a currency other than the U.S.
dollar or determined by reference to the value of one or more currencies other
than the U.S. dollar. The types of transactions covered by the special rules
include the following: (i) the acquisition of, or becoming the obligor under, a
bond or other debt instrument (including, to the extent provided in Treasury
regulations, preferred stock); (ii) the accruing of certain trade receivables
and payables; and (iii) the entering into or acquisition of any forward
contract, futures contract, option and similar financial instrument if such
instrument is not marked to market. The disposition of a currency other than the
U.S. dollar by a U.S. taxpayer also is treated as a transaction subject to the
special currency rules. However, foreign currency-related regulated futures
contracts and nonequity options generally are not subject to the special
currency rules if they are or would be treated as sold for their fair market
value at year-end under the mark-to-market rules, unless an election is made to
have such currency rules apply. With respect to transactions covered by the
special rules, foreign currency gain or loss is calculated separately from any
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<PAGE>
gain or loss on the underlying transaction and is normally taxable as ordinary
gain or loss. A taxpayer may elect to treat as capital gain or loss foreign
currency gain or loss arising from certain identified forward contracts, futures
contracts and options that are capital assets in the hands of the taxpayer and
which are not part of a straddle. In accordance with Treasury regulations under
which certain transactions that are part of a "section 988 hedging transaction"
(as defined in the Code and the Treasury regulations) will be integrated and
treated as a single transaction or otherwise treated consistently for purposes
of the Code. Any gain or loss attributable to the foreign currency component of
a transaction engaged in by the Portfolio which is not subject to the special
currency rules (such as foreign equity investments other than certain preferred
stocks) will be treated as capital gain or loss and will not be segregated from
the gain or loss on the underlying transaction. It is anticipated that some of
the non-U.S. dollar denominated investments and foreign currency contracts a
Portfolio may make or enter into will be subject to the special currency rules
described above.
The Portfolio may recognize income currently for Federal income tax
purposes in the amount of the unpaid, accrued interest with respect to bonds
structured as zero coupon bonds or pay-in-kind securities, even though it
receives no cash interest until the security's maturity or payment date. As
discussed above, in order to qualify for beneficial tax treatment, the Portfolio
must distribute substantially all of its income to shareholders. Thus, the
Portfolio may have to dispose of its portfolio securities under disadvantageous
circumstances to generate cash or leverage itself by borrowing cash, in order to
satisfy the distribution requirement.
Some of the debt securities may be purchased by the Portfolio at a
discount which exceeds the original issue discount on such debt securities, if
any. This additional discount represents market discount for Federal income tax
purposes. The gain realized on the disposition of any taxable debt security
having market discount will be treated as ordinary income to the extent it does
not exceed the accrued market discount on such debt security. Generally, market
discount accrues on a daily basis for each day the debt security is held by the
Portfolio at a constant rate over the time remaining to the debt security's
maturity or, at the election of the Portfolio, at a constant yield to maturity
which takes into account the semi-annual compounding of interest.
Exchange control regulations that may restrict repatriation of
investment income, capital, or the proceeds of securities sales by foreign
investors may limit the Portfolio's ability to make sufficient distributions to
satisfy the 90% and calendar year distribution requirements.
-15-
<PAGE>
PERFORMANCE CALCULATIONS
The Portfolio computes its average annual total return by determining
the average annual compounded rates of return during specified periods that
equate the initial amount invested to the ending redeemable value of such
investment. This is done by dividing the ending redeemable value of a
hypothetical $1,000 initial payment by $1,000 and raising the quotient to a
power equal to one divided by the number of years (or fractional portion
thereof) covered by the computation and subtracting one from the result. This
calculation can be expressed as follows:
1/n
T = [( ERV ) - 1]
---
P
Where: T = average annual total return.
ERV = ending redeemable value at the end of the period
covered by the computation of a hypothetical
$1,000 payment made at the beginning of the
period.
P = hypothetical initial payment of $1,000.
n = period covered by the computation, expressed in
terms of years.
The Portfolio computes its aggregate total return by determining the
aggregate rates of return during specified periods that likewise equate the
initial amount invested to the ending redeemable value of such investment. The
formula for calculating aggregate total return is as follows:
T = [( ERV ) - 1]
---
P
The calculations of average annual total return and aggregate total
return assume the reinvestment of all dividends and capital gain distributions.
The ending redeemable value (variable "ERV" in each formula) is determined by
assuming complete redemption of the hypothetical investment and the deduction of
all nonrecurring charges at the end of the period covered by the computations.
The Portfolio's average annual total return and aggregate total return do not
reflect any fees charged by Institutions to their clients.
-16-
<PAGE>
GENERAL INFORMATION
Dividends and Capital Gains Distributions
The Portfolio's policy is to distribute substantially all of its net
investment income, if any, together with any net realized capital gains in the
amount and at the times that will avoid both income (including capital gains)
taxes on it and the imposition of the Federal excise tax on undistributed income
and gains (see discussion under "Dividends, Capital Gains Distributions and
Taxes" in the Prospectus). As set forth in the Prospectus, 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 by the Portfolio, the Portfolio normally distributes such gains at
least once a year. The amounts of any income dividends or capital gains
distributions for the Portfolio cannot be predicted.
Any dividend or distribution paid shortly after the purchase of shares of
the Portfolio by an investor may have the effect of reducing the per share net
asset value of the Portfolio by the per share amount of the dividend or
distribution. Furthermore, such dividends or distributions, although in effect a
return of capital, are subject to income taxes as set forth in the Prospectus.
Certain Record Holders
As of September 16, 1997, the Advisor held of record all of the
outstanding shares of the Portfolio. For more information about the Advisor, see
"Investment Advisor" in the Prospectus. As of September 16, 1997, the directors
and officers of Glenmede Fund collectively owned less than 1% of the outstanding
shares of the Portfolio.
EXPENSES
Glenmede Fund bears its own expenses incurred in its operations
including: taxes; interest; miscellaneous fees (including fees paid to Board
members); SEC fees; costs of preparing and printing prospectuses for regulatory
purposes and for distribution to existing shareholders; administration fees;
charges of the custodian, dividend agent fees; certain insurance premiums;
outside auditing and legal expenses; costs of shareholders' reports and
meetings; and any extraordinary expenses. The Portfolio also pays for brokerage
fees and commissions, if any, in connection with the purchase and sale of its
portfolio securities.
-17-
<PAGE>
OTHER INFORMATION
The Prospectus and this Statement of Additional Information do not
contain all the information included in the Registration Statement filed with
the SEC under the Securities Act of 1933 with respect to the securities offered
by the Prospectus. Certain portions of the Registration Statement have been
omitted from the Prospectus and this Statement of Additional Information
pursuant to the rules and regulations of the SEC. The Registration Statement,
including the exhibits filed therewith, may be examined at the office of the SEC
in Washington, D.C.
Statements contained in the Prospectus or in this Statement of Additional
Information as to the contents of any contract or other documents referred to
are not necessarily complete, and in each instance reference is made to the copy
of such contract or other document filed as an exhibit to the Registration
Statement of which the Prospectus and this Statement of Additional Information
form a part, each such statement being qualified in all respects by such
reference.
-18-
<PAGE>
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS
I. Description of Commercial Paper Ratings
Description of Moody's highest commercial paper rating:
Prime-1 ("P-1") --judged to be of the best quality. Issuers rated P-1 (or
related supporting institutions) are considered to have a superior
capacity for repayment of short-term promissory obligations.
Description of S&P highest commercial paper ratings:
A-1+ -- this designation indicates the degree of safety regarding timely
payment is overwhelming. A-1 -- this designation indicates the degree of
safety regarding timely payment is either overwhelming or very strong.
Description of Bond Ratings
The following summarizes the ratings used by S&P for corporate and
municipal debt:
AAA - Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A - 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.
BBB - 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.
Plus (+) or Minus (-): The ratings from AA to BBB may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
The following summarizes the ratings used by Moody's for corporate and
municipal long-term debt:
A-1
<PAGE>
Aaa - Bonds that are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred
to as "gilt edged." Interest payments are protected by a large or by 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.
Aa - Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group 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.
A - Bonds that are rated A possess many favorable investment attributes
and are to be considered 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.
Baa - Bonds that are rated Baa are considered 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.
Moody's applies numerical modifiers (1, 2 and 3) with respect to
corporate bonds rated Aa, A and Baa. The modifier 1 indicates that the bond
being rated ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates that the bond
ranks in the lower end of its generic rating category. Those bonds in the Aa, A
and Baa categories which Moody's believes possess the strongest investment
attributes, within those categories are designated by the symbols Aa1, A1 and
Baa1, respectively.
II. Description of U.S. Government Securities and Certain Other Securities
The term "U.S. Government securities" refers to a variety of securities
which are issued or guaranteed by the United States Government, and by various
instrumentalities which have been established or sponsored by the United States
Government.
A-2
<PAGE>
U.S. Treasury securities are backed by the "full faith and credit" of the
United States Government. Securities issued or guaranteed by Federal agencies
and U.S. Government sponsored enterprises or instrumentalities may or may not be
backed by the full faith and credit of the United States. In the case of
securities not backed by the full faith and credit of the United States, an
investor must look principally to the agency, enterprise or instrumentality
issuing or guaranteeing the obligation for ultimate repayment, and may not be
able to assert a claim against the United States itself in the event the agency,
enterprise or instrumentality does not meet its commitment. Agencies which are
backed by the full faith and credit of the United States include the Export
Import Bank, Farmers Home Administration, Federal Financing Bank and others.
Certain agencies, enterprises and instrumentalities, such as the Government
National Mortgage Association are, in effect, backed by the full faith and
credit of the United States through provisions in their charters that they may
make "indefinite and unlimited" drawings on the Treasury, if needed, to service
its debt. Debt from certain other agencies, enterprises and instrumentalities,
including the Federal Home Loan Bank and Federal National Mortgage Association,
are not guaranteed by the United States, but those institutions are protected by
the discretionary authority for the U.S. Treasury to purchase certain amounts of
their securities to assist the institution in meeting its debt obligations.
Finally, other agencies, enterprises and instrumentalities, such as the Farm
Credit System and the Federal Home Loan Mortgage Corporation, are federally
chartered institutions under Government supervision, but their debt securities
are backed only by the creditworthiness of those institutions, not the U.S.
Government.
Some of the U.S. Government agencies that issue or guarantee securities
include the Export-Import Bank of the United States, Farmers Home
Administration, Federal Housing Administration, Maritime Administration, Small
Business Administration and The Tennessee Valley Authority.
An instrumentality of the U.S. Government is a Government agency
organized under Federal charter with Government supervision. Instrumentalities
issuing or guaranteeing securities include, among others, Overseas Private
Investment Corporation, Federal Home Loan Banks, the Federal Land Banks, Central
Bank for Cooperatives, Federal Intermediate Credit Banks and the Federal
National Mortgage Association.
III. Foreign Investments
Investors should recognize that investing in foreign companies involves
certain special considerations which are not typically associated with investing
A-3
<PAGE>
in U.S. companies. Because the stocks of foreign companies are frequently
denominated in foreign currencies, and because the Portfolio may temporarily
hold uninvested reserves in bank deposits in foreign currencies, the Portfolio
may be affected favorably or unfavorably by changes in currency rates and in
exchange control regulations, and may incur costs in connection with conversions
between various currencies. The investment policies of the Portfolio permit the
Portfolio to enter into forward foreign currency exchange contracts in order to
hedge the Portfolio's holdings and commitments against changes in the level of
future currency rates. Such contracts involve an obligation to purchase or sell
a specific currency at a future date at a price set at the time of the contract.
As foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards and they may have policies that are
not comparable to those of domestic companies, there may be less information
available about certain foreign companies than about domestic companies.
Securities of some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is generally less
government supervision and regulation of stock exchanges, brokers and listed
companies than in the U.S. In addition, there is the possibility of
expropriation or confiscatory taxation, political or social instability, or
diplomatic developments which could affect U.S. investments in foreign
countries.
Although the Portfolio will endeavor to achieve most favorable execution
costs in its portfolio transactions, fixed commissions on many foreign stock
exchanges are generally higher than negotiated commissions on U.S. exchanges.
Certain foreign governments levy withholding taxes on dividend and
interest income. Although in some countries a portion of these taxes are
recoverable, the non-recovered portion of foreign withholding taxes will reduce
the income received from the foreign companies comprising the Portfolio.
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