<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
-----
Pre-Effective Amendment No.
----- -----
Post-Effective Amendment No. 17 File No. 33-33980 X
-----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
-----
Amendment No. 18 File No. 811-6067 X
-----
DIMENSIONAL INVESTMENT GROUP INC.
----------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
1299 Ocean Avenue, 11th Floor, Santa Monica CA 90401
---------------------------------------------- -------
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code (310) 395-8005
--------------
Irene R. Diamant, 1299 Ocean Avenue, 11th Floor,
Santa Monica, California 90401
-----------------------------------------------
(Name and Address of Agent for Service)
Copies of communications to Stephen W. Kline, Esquire, Stradley, Ronon, Stevens
& Young, LLP, Great Valley Corporate Center, 30 Valley Stream Parkway, Malvern,
PA 19355, (215) 640-5801.
It is proposed that this filing will become effective
(check appropriate box):
/ / Immediately upon filing pursuant to paragraph (b)
/ / On (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/ / On (date) pursuant to paragraph (a)(2) of Rule 485
/ / 75 days after filing pursuant to paragraph (a)(2).
This Registrant has registered an indefinite number of shares of common stock
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. On January 29, 1997, the Registrant filed a Rule 24f-2
Notice for Registrant's most recent fiscal year, which ended November 30, 1996.
The Trustees and principal officers of The DFA Investment Trust Company also
have executed this registration statement.
<PAGE>
FORM N-1A
CROSS REFERENCE SHEET
(as required by Rule 404)
FORM N-1A PART A ITEM NO. PROSPECTUS LOCATION
- ------------------------- -------------------
Item 1. Cover Page. . . . . . . . . . . . . Cover Page
Item 2. Synopsis. . . . . . . . . . . . . . Highlights
Item 3. Condensed Financial Information . . Condensed Financial
Information
Item 4. General Description of Registrant . Cover Page; Highlights;
The Portfolio; Investment
Objective and Policies;
Securities Loans; Risk
Factors; General
Information
Item 5. Management of the Fund. . . . . . . Highlights; Management of
the Portfolios
Item 6. Capital Stock and Other Securities. Highlights; Dividends,
Capital Gains
Distributions and Taxes;
General Information
Item 7. Purchase of Securities Being
Offered . . . . . . . . . . . . . . Highlights; Purchase of
Shares; Valuation of
Shares; Distribution;
Exchange of Shares
Item 8. Redemption or Repurchase. . . . . . Highlights; Redemption of
Shares
Item 9. Pending Legal Proceedings . . . . . Not Applicable
<PAGE>
FORM N-1A PART B ITEM NO. LOCATION IN STATEMENT OF
- ------------------------- ADDITIONAL INFORMATION
------------------------
Item 10. Cover Page. . . . . . . . . . . . . Cover Page
Item 11. Table of Contents . . . . . . . . . Table of Contents
Item 12. General Information and History . . Other Information
Item 13. Investment Objectives and Policies. Investment Objective and
Policies; Investment
Limitations
Item 14. Management of the Fund. . . . . . . Management of the
Portfolios; Directors and
Officers
Item 15. Control Persons and Principal
Holders of Securities . . . . . . . Principal Holders of
Securities
Item 16. Investment Advisory and Other
Services. . . . . . . . . . . . . . Management of the
Portfolios
Item 17. Brokerage Allocation and Other
Practices . . . . . . . . . . . . . Brokerage Transactions
Item 18. Capital Stock and Other Securities. Other Information
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered . . . . Purchase of Shares;
Redemption of Shares
Item 20. Tax Status. . . . . . . . . . . . . Federal Tax Treatment of
Futures Contracts
Item 21. Underwriters. . . . . . . . . . . . Not Applicable
Item 22. Calculation of Performance Data . . Calculation of
Performance Data
Item 23. Financial Statements. . . . . . . . Financial Statements
<PAGE>
FORM N-1A PART C ITEM NO. LOCATION IN PART C
- ------------------------- ------------------
Item 24. Financial Statements and Exhibits. . Financial Statements and
Exhibits
Item 25. Persons Controlled by or Under
Common Control with Registrant . . . Persons Controlled by or
Under Common Control with
Registrant
Item 26. Number of Holders of Securities. . . Number of Holders of
Securities
Item 27. Indemnification. . . . . . . . . . . Indemnification
Item 28. Business and Other Connections of
Investment Advisor . . . . . . . . . Business and Other
Connections of Investment
Advisor
Item 29. Principal Underwriters . . . . . . . Principal Underwriters
Item 30. Location of Accounts and Records . . Location of Accounts and
Records
Item 31. Management Services. . . . . . . . . Management Services
Item 32. Undertakings . . . . . . . . . . . . Undertakings
<PAGE>
PROSPECTUS
NOVEMBER ___, 1997
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
----------------
This prospectus describes RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
and RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO (collectively, the "Fixed Income
Portfolios") and RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO (together with the
Fixed Income Portfolios, the "Portfolios"), each a series of shares issued by
Dimensional Investment Group Inc. (the "Fund"), 1299 Ocean Avenue, 11th floor,
Santa Monica, California 90401, (310) 395-8005. Each Portfolio is an open-end,
management investment company whose shares are offered, without a sales charge,
to clients of Reinhardt Werba Bowen Advisory Services ("RWBAS").
The Fund issues thirteen series of shares, each of which represents a
separate class of the Fund's common stock, having its own investment objective
and policies. This prospectus relates to three series of shares. The
investment objective of RWB/DFA U.S. High Book to Market Portfolio is to achieve
long-term capital appreciation. The investment objective of RWB/DFA Two-Year
Corporate Fixed Income Portfolio is to maximize total returns consistent with
the preservation of capital and the investment objective of RWB/DFA Two-Year
Government Portfolio is to maximize total returns available from the universe of
debt obligations of the U.S. government and U.S. government agency obligations
and consistent with preservation of capital.
THE RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO, UNLIKE MANY OTHER
INVESTMENT COMPANIES WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIO OF
SECURITIES, SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS
INVESTABLE ASSETS IN THE SHARES OF U.S. LARGE CAP VALUE SERIES ("U.S. LARGE CAP
VALUE SERIES") OF THE DFA INVESTMENT TRUST COMPANY (THE "TRUST"), AN OPEN-END,
MANAGEMENT INVESTMENT COMPANY. U.S. LARGE CAP VALUE SERIES HAS THE SAME
INVESTMENT OBJECTIVES, POLICIES AND LIMITATIONS AS THE RWB/DFA U.S. HIGH BOOK TO
MARKET PORTFOLIO. THE INVESTMENT EXPERIENCE OF THE PORTFOLIO WILL CORRESPOND
DIRECTLY WITH THE INVESTMENT EXPERIENCE OF U.S. LARGE CAP VALUE SERIES.
INVESTORS SHOULD CAREFULLY CONSIDER THIS INVESTMENT APPROACH. FOR ADDITIONAL
INFORMATION, SEE "SPECIAL INFORMATION ABOUT THE RWB/DFA U.S. HIGH BOOK TO MARKET
PORTFOLIO."
This prospectus sets forth information about the Portfolios that
prospective investors should know before investing and should be read carefully
and retained for future reference. A statement of additional information about
the Portfolios, dated November __, 1997, as amended from time to time, which is
incorporated herein by reference, has been filed with the Securities and
Exchange Commission and is available upon request, without charge, by writing or
calling the Fund at the above address or telephone number.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
<PAGE>
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
PAGE
HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CONDENSED FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 4
SPECIAL INFORMATION ABOUT THE RWB/DFA U.S. HIGH BOOK
TO MARKET PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO - INVESTMENT
OBJECTIVE AND POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Portfolio Characteristics and Policies . . . . . . . . . . . . . . . . . . . 9
Portfolio Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . .10
INVESTMENT OBJECTIVES AND POLICIES - FIXED INCOME PORTFOLIOS . . . . . . . .10
RWB/DFA Two-Year Corporate
Fixed Income Portfolio. . . . . . . . . . . . . . . . . . . . . . . . .10
RWB/DFA Two-Year Government Portfolio . . . . . . . . . . . . . . . . .11
Description of Investments . . . . . . . . . . . . . . . . . . . . . . .11
Investments in the Banking Industry. . . . . . . . . . . . . . . . . . .12
Portfolio Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECURITIES LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Foreign Securities . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Portfolio Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Futures Contracts and Options in Futures . . . . . . . . . . . . . . . .14
Banking Industry Concentration . . . . . . . . . . . . . . . . . . . . .14
Repurchase Agreements. . . . . . . . . . . . . . . . . . . . . . . . . .14
MANAGEMENT OF THE PORTFOLIOS . . . . . . . . . . . . . . . . . . . . . . . .15
Administrative Services. . . . . . . . . . . . . . . . . . . . . . . . .15
Client Service Agent . . . . . . . . . . . . . . . . . . . . . . . . . .16
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES . . . . . . . . . . . . . .16
PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
In Kind Purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . .18
VALUATION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
<PAGE>
HIGHLIGHTS
This prospectus relates to three separate Portfolios of the Fund. Each
Portfolio, in effect, represents a separate mutual fund with its own investment
objective and policies. The investment objective of each Portfolio is a
fundamental policy and may not be changed without the affirmative vote of a
majority of its outstanding securities. Clients of RWBAS may choose to invest
in one or more of the Portfolios. Proceeds from the sale of shares of a
Portfolio will be invested in accordance with that Portfolio's investment
objective and policies.
INVESTMENT OBJECTIVE - RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO PAGE 9
The investment objective of the Portfolio is to achieve long-term capital
appreciation. The Portfolio will invest all of its assets in the U.S. Large Cap
Value Series of the Trust, which in turn will invest in the common stocks of
U.S. companies that are value stocks, primarily because they have a high book
value in relation to their market value. The U.S. Large Cap Value Series will
purchase common stocks of companies whose market capitalizations equal or exceed
that of a company having the median market capitalization of companies whose
shares are listed on the New York Stock Exchange (the "NYSE"). (See "RWB/DFA
U.S. HIGH BOOK TO MARKET PORTFOLIO - INVESTMENT OBJECTIVE AND POLICIES.")
INVESTMENT OBJECTIVE - RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
PAGE 10
The investment objective of the Portfolio is to maximize total returns
consistent with the preservation of capital. Generally, the Portfolio will
acquire high quality obligations which mature within two years from the date of
settlement. In addition, the Portfolio intends to concentrate investments in
the banking industry under certain circumstances. (See "FIXED INCOME PORTFOLIOS
- - INVESTMENT OBJECTIVES AND POLICIES" and "Investments in the Banking
Industry.")
INVESTMENT OBJECTIVE - RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO PAGE 11
The investment objective of the Portfolio is to maximize total returns
available from the universe of debt obligations of the U.S. government and U.S.
government agencies and consistent with preservation of capital. Generally, the
Portfolio will acquire U.S. government obligations and U.S. government agency
obligations that mature within two years from the date of settlement and
repurchase agreements. (See "FIXED INCOME PORTFOLIOS -INVESTMENT OBJECTIVES AND
POLICIES.")
<PAGE>
RISK FACTORS PAGE 13
The RWB/DFA U.S. High Book to Market Portfolio (indirectly through its
investments in the U.S. Large Cap Value Series) and the Fixed Income Portfolios
may invest in financial futures contracts and options thereon. The RWB/DFA
Two-Year Corporate Fixed Income Portfolio is authorized to invest in
dollar-denominated obligations of U.S. subsidiaries and branches of foreign
banks and dollar-denominated obligations of foreign issuers traded in the U.S.
The RWB/DFA Two-Year Corporate Fixed Income Portfolio is authorized to
concentrate investments in the banking industry in certain circumstances. Each
Portfolio is authorized to invest in repurchase agreements. Those policies and
the policy of the RWB/DFA U.S. High Book to Market Portfolio to invest in the
shares of the U.S. Large Cap Value Series of the Trust involve certain risks.
(See "RISK FACTORS.")
MANAGEMENT AND ADMINISTRATIVE SERVICES PAGE 15
Dimensional Fund Advisors Inc. (the "Advisor") provides each Portfolio with
administrative services and also serves as investment advisor to the Fixed
Income Portfolios and the U.S. Large Cap Value Series of the Trust. RWBAS
serves as client service agent to each Portfolio. (See "MANAGEMENT OF THE
PORTFOLIOS.")
DIVIDEND POLICY PAGE 16
The RWB/DFA U.S. High Book to Market Portfolio and the Fixed Income
Portfolios distribute dividends from their net investment income quarterly.
Each of the Portfolios will make any distributions from realized net capital
gains on an annual basis. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND
TAXES.")
PURCHASE, VALUATION AND REDEMPTION OF SHARES PAGE 17
The shares of the Portfolios are offered at net asset value, which is
calculated as of the close of the NYSE on each day that the NYSE is open for
business. The value of the RWB/DFA U.S. High Book to Market Portfolio's shares
will fluctuate in relation to the investment experience of the U.S. Large Cap
Value Series. The redemption price of a share of each Portfolio is equal to its
net asset value. (See "PURCHASE OF SHARES" and "REDEMPTION OF SHARES.")
2
<PAGE>
SHAREHOLDER TRANSACTION EXPENSES
None*
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO(1)
Management Fee 0.10%
Administration Fee 0.01%
Other Expenses 0.29%
Total Operating Expenses 0.40%
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO(2)(3)
Management Fee 0.15%
Other Expenses 0.15%
Total Operating Expenses 0.30%
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO(2)(3)
Management Fee 0.15%
Other Expenses 0.15%
Total Operating Expenses 0.30%
*MOST SHARES OF THE PORTFOLIOS THAT WILL BE PURCHASED THROUGH OMNIBUS
ACCOUNTS MAINTAINED BY SECURITIES FIRMS MAY BE SUBJECT TO A SERVICE FEE OR
COMMISSION ON SUCH PURCHASES.
(1)The "Management Fee" is payable by the U.S. Large Cap Value Series and
the "Administration Fee" is payable by the RWB/DFA U.S. High Book to Market
Portfolio. The amount set forth in "Other Expenses" represents the aggregate
amount that is payable by both the Series and the Portfolio, and also includes a
client services fee of 0.09% payable by the RWB/DFA U.S. High Book to Market
Portfolio to RWBAS.
(2)A client services fee of 0.03% is payable by the Fixed Income Portfolios
to RWBAS; however, RWBAS waived its fee through December 31, 1996. Absent such
waiver by RWBAS, the estimated annualized ratio of expenses to average net
assets for the fiscal year ending November 30, 1997 is 0.30% for RWB/DFA
Two-Year Corporate Fixed Income Portfolio and 0.30% for RWB/DFA Two-Year
Government Portfolio.
(3)Prior to November __, 1997, the RWB/DFA Two-Year Corporate Fixed Income
Portfolio invested all of its assets in DFA Two-Year Corporate Fixed Income
Series of the Trust, and the RWB/DFA Two-Year Government Portfolio invested all
of its assets in DFA Two-Year Government Series of the Trust. The above figures
have been restated to reflect the estimated annualized operating expenses of the
Fixed Income Portfolios as though each Portfolio had invested its assets
directly in the underlying securities held by the Series during the fiscal year
ending November 30, 1997.
3
<PAGE>
EXAMPLE
You would pay the following transaction and annual operating expenses on a
$1,000 investment in each Portfolio, assuming a 5% annual return over each of
the following time periods and redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
RWB/DFA U.S. High Book to Market
Portfolio $4 $13 n/a n/a
RWB/DFA Two-Year Corporate
Fixed Income Portfolio $3 $10 n/a n/a
RWB/DFA Two-Year Government
Portfolio $3 $10 n/a n/a
The purpose of the above fee table and Example is to assist investors in
understanding the various costs and expenses that an investor in the Portfolios
will bear directly or indirectly. THE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESSER THAN THOSE SHOWN.
With respect to the RWB/DFA U.S. High Book to Market Portfolio, the table
summarizes the aggregate estimated annual operating expenses of both the
Portfolio and the U.S. Large Cap Value Series. (See "MANAGEMENT OF THE
PORTFOLIOS" for a description of Portfolio and Series expenses.) The Board of
Directors of the Fund has considered whether such expenses will be more or less
than they would be if such Portfolio were to invest directly in the securities
held by the U.S. Large Cap Value Series. The aggregate amount of expenses for
the Portfolio and its corresponding Series may be greater than it would be if
the Portfolio were to invest directly in the securities held by its
corresponding Series. However, the total expense ratios for the Portfolio and
its corresponding Series are expected to be less over time than such ratios
would be if the Portfolio were to invest directly in the underlying securities.
This is because this arrangement enables institutional investors, including the
Portfolio, to pool their assets, which may be expected to result in economies by
spreading certain fixed costs over a larger asset base. Each shareholder in the
U.S. Large Cap Value Series, including the RWB/DFA U.S. High Book to Market
Portfolio, will pay its proportionate share of the expenses of the Series.
The Portfolios are new and, therefore, their expenses included in the table
are the estimated annualized expenses that are expected to be incurred through
the fiscal period ending November 30, 1997; and the above example is based on
estimated expenses for the current and next two fiscal years and does not extend
those estimates over five and ten-year periods. The estimated expenses with
respect to the RWB/DFA U.S. High Book to Market Portfolio take into account the
actual expenses of the U.S. Large Cap Value Series for the fiscal year ended
November 30, 1996.
CONDENSED FINANCIAL INFORMATION
The following financial highlights are part of the audited financial
statements of each Portfolio for the period from June 7, 1996 (date of initial
investment of each Portfolio) through November 30, 1996. The information for
the six-month period ended May 31, 1997, has not been audited by independent
auditors. The financial statements, related notes and the report of the
independent accountants covering such financial information and financial
highlights relating to the Portfolios for the Fund's most recent fiscal period
ended November 30, 1996, are incorporated by reference into the Statement of
Additional Information. The financial statements, related notes and financial
highlights for the six-month period ended May 31, 1997, are incorporated by
reference into the Statement of Additional Information from the Fund's
Semi-Annual Report to shareholders for the six months ended May 31, 1997.
Further information about each Portfolio's performance
4
<PAGE>
is contained in the Fund's Annual Report to shareholders of such Portfolio for
the period June 7, 1996 (commencement of operations) to November 30, 1996, and
the Fund's Semi-Annual Report to shareholders for the six months ended May 31,
1997. A copy of each of the Annual Report and the Semi-Annual Report may be
obtained from the Fund upon request at no charge.
5
<PAGE>
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 7, TO
MAY 31, NOV. 30,
1997 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
Net Asset Value, Beginning of Period . . . . . . $ 10.23 $ 10.00
----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income. . . . . . . . . . . . . 0.27 0.26
Net Gains (Losses) on Securities
(Realized and Unrealized) . . . . . . . . . . (0.06) 0.10
----------- -----------
Total from Investment Operations . . . . . . 0.21 0.36
----------- -----------
LESS DISTRIBUTIONS . . . . . . . . . . . . . . .
Net Investment Income. . . . . . . . . . . . . (0.27) (0.13)
Net Realized Gains . . . . . . . . . . . . . . (0.05) --
----------- -----------
Total Distributions. . . . . . . . . . . . . . (0.32) (0.13)
----------- -----------
Net Asset Value, End of Period . . . . . . . . . $ 10.12 $ 10.23
----------- -----------
----------- -----------
Total Return . . . . . . . . . . . . . . . . . . 2.06%# 3.60%#
Net Assets, End of Period (thousands). . . . . . $ 111,808 $ 104,644
Ratio of Expenses to Average Net Assets (1). . . 0.37%*(a) 0.38%*(a)(b)
Ratio of Net Investment Income to Average
Net Assets. . . . . . . . . . . . . . . . . . . 5.43%*(a) 5.81%*(a)(b)
Portfolio Turnover Rate. . . . . . . . . . . . . N/A N/A
Turnover Rate of Master Fund Series. . . . . . . 152.18%* 200.59%*
</TABLE>
- ---------------
*Annualized
#Non-Annualized
(1) Represents the combined ratio for the Portfolio and its respective pro-rata
share of its Master Fund Series.
(a) Had certain waivers and reimbursements not been in effect, the ratio of
expenses to average net assets for the periods ended May 31, 1997 and
November 30, 1996, would have been 0.38% and 0.41%, respectively and the
ratios of net investment income to average net assets for the
6
<PAGE>
periods ended May 31, 1997 and November 30, 1996, would have been 5.42% and
5.78%, respectively.
(b) Because of commencement of operations and related preliminary transaction
costs, these ratios are not necessarily indicative of future ratios.
7
<PAGE>
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS
ENDED JUNE 7, TO
MAY 31, NOV. 30,
1997 1996
----------- -----------
(UNAUDITED)
Net Asset Value, Beginning of Period . . . . . . $ 10.24 $ 10.00
----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income. . . . . . . . . . . . . 0.15 0.26
Net Gains (Losses) on Securities (Realized
and Unrealized) . . . . . . . . . . . . . . . 0.09 0.11
----------- -----------
Total from Investment Operations . . . . . . 0.24 0.37
----------- -----------
LESS DISTRIBUTIONS
Net Investment Income. . . . . . . . . . . . . (0.28) (0.13)
Net Realized Gains . . . . . . . . . . . . . . (0.01) --
----------- -----------
Total Distributions. . . . . . . . . . . . . . (0.29) (0.13)
----------- -----------
Net Asset Value, End of Period . . . . . . . . . $ 10.19 $ 10.24
----------- -----------
----------- -----------
Total Return. . . . . . . . . . . . . . . . . . 2.47%# 3.69%#
Net Assets, End of Period (thousands). . . . . . $ 138,525 $ 122,807
Ratio of Expenses to Average Net Assets (1). . . 0.32%*(a) 0.31%*(a)
Ratio of Net Investment Income to Average Net
Assets. . . . . . . . . . . . . . . . . . . . . 3.00%*(a) 5.72%*(a)
Portfolio Turnover Rate. . . . . . . . . . . . . N/A N/A
Turnover Rate of Master Fund Series. . . . . . . 111.11%* 81.97%*
- ---------------
*Annualized
#Non-Annualized
(1) Represents the combined ratio for the Portfolio and its respective pro-rata
share of its Master Fund Series.
8
<PAGE>
(a) Had certain waivers and reimbursements not been in effect, the ratio of
expenses to average net assets for the periods ended May 31, 1997 and
November 30, 1996, would have been 0.33% and 0.34%, respectively and the
ratios of net investment income to average net assets for the periods ended
May 31, 1997 and November 30, 1996, would have been 2.99% and 5.69%,
respectively.
9
<PAGE>
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS
ENDED JUNE 7, TO
MAY 31, NOV. 30,
1997 1996
----------- -----------
(UNAUDITED)
Net Asset Value, Beginning of Period . . . . . . $ 10.77 $ 10.00
----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income. . . . . . . . . . . . . 0.05 0.08
Net Gains (Losses) on Securities (Realized
and Unrealized) . . . . . . . . . . . . . . . 1.12 0.72
----------- -----------
Total from Investment Operations . . . . . . 1.17 0.80
----------- -----------
LESS DISTRIBUTIONS
Net Investment Income. . . . . . . . . . . . . (0.10) (0.03)
Net Realized Gains . . . . . . . . . . . . . . (0.10) ---
----------- -----------
Total Distributions. . . . . . . . . . . . . . (0.20) (0.03)
----------- -----------
Net Asset Value, End of Period . . . . . . . . . $ 11.74 $ 10.77
----------- -----------
----------- -----------
Total Return. . . . . . . . . . . . . . . . . . 11.00%# 8.06%#
Net Assets, End of Period (thousands) . . . . . $ 79,116 $ 40,708
Ratio of Expenses to Average Net Assets (1) . . 0.39%* 0.71%*
Ratio of Net Investment Income to Average Net
Assets . . . . . . . . . . . . . . . . . . . . 0.84%* 2.70%*
Portfolio Turnover Rate . . . . . . . . . . . . N/A N/A
Average Commission Rate . . . . . . . . . . . . N/A N/A
Turnover Rate of Master Fund Series . . . . . . 17.76%* 20.12%(a)
Average Commission Rate of Master Fund Series . $ 0.0497 $ 0.0499(a)
- ---------------
*Annualized
#Non-Annualized
(1) Represents the combined ratio for the Portfolio and its respective pro-rata
share of its Master Fund Series.
10
<PAGE>
(a) Portfolio turnover and average commission calculated for the period
December 1, 1995 through November 30, 1996.
11
<PAGE>
SPECIAL INFORMATION ABOUT THE RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
The RWB/DFA U.S. High Book to Market Portfolio, unlike many other
investment companies which directly acquire and manage their own portfolio of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the U.S. Large Cap Value Series of the Trust, an open-end,
management investment company, registered under the Investment Company Act of
1940. The U.S. Large Cap Value Series has the same investment objective as the
Portfolio. The investment objective of the Portfolio may not be changed without
the affirmative vote of a majority of its outstanding securities, and the
investment objective of the U.S. Large Cap Value Series may not be changed
without the affirmative vote of a majority of its outstanding securities.
Shareholders of the Portfolio will receive written notice thirty days prior to
any change in the investment objective of the Series.
This prospectus describes the investment objective, policies and
restrictions of RWB/DFA U.S. High Book to Market Portfolio and its corresponding
Series. (See "RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO - INVESTMENT OBJECTIVE
AND POLICIES.") In addition, an investor should read "MANAGEMENT OF THE
PORTFOLIOS" for a description of the management and other expenses associated
with the Portfolio's investment in the Trust. Other institutional investors,
including other mutual funds, may invest in the U.S. Large Cap Value Series, and
the expenses of such other investors and, correspondingly, their returns may
differ from those of the Portfolio. Please contact the Trust at 1299 Ocean
Avenue, 11th Floor, Santa Monica, CA 90401, (310) 395-8005 for information about
the availability of investing in the U.S. Large Cap Value Series other than
through the Portfolio.
The shares of the U.S. Large Cap Value Series will be offered to
institutional investors for the purpose of increasing the funds available for
investment, to reduce expenses as a percentage of total assets and to achieve
other economies that might be available at higher asset levels. For example,
the Series might be able to place larger block trades at more advantageous
prices and to participate in securities transactions of larger denominations,
thereby reducing the relative amount of certain transaction costs in relation to
the total size of the transaction. Investment in the Series by other
institutional investors offers potential benefits to the Series and, through
their investment in the Series, also to the Portfolio. However, economies and
expense reductions might not be achieved and additional investment
opportunities, such as increased diversification, might not be available if
other institutions do not invest in the Series. Also, if an institutional
investor were to redeem its interest in the Series, the remaining investors in
the Series could experience higher pro rata operating expenses, thereby
producing lower returns, and the Series' security holdings may become less
diverse, resulting in increased risk. Institutional investors that have a
greater pro rata ownership interest in the Series than the RWB/DFA U.S. High
Book to Market Portfolio could have effective voting control over the operation
of the Series.
Further, if the U.S. Large Cap Value Series changes its investment
objective in a manner which is inconsistent with the investment objective of the
RWB/DFA U.S. High Book to Market Portfolio and the shareholders of the Portfolio
fail to approve a similar change in the investment objective of the Portfolio,
the Portfolio would be forced to withdraw its investment in the Series and
either seek to invest its assets in another registered investment company with
the same investment objective as the Portfolio, which might not be possible, or
retain an investment advisor to manage the Portfolio's assets in accordance with
its own investment objective, possibly at increased cost. A withdrawal by the
Portfolio of its investment in the U.S. Large Cap Value Series could result in a
distribution in kind of portfolio securities (as opposed to a cash distribution)
to the Portfolio. Should such a distribution occur, the Portfolio could incur
brokerage fees or other transaction costs in converting such securities to cash
in order to pay redemptions. In addition, a distribution in kind to the
Portfolio could result in a less diversified portfolio of investments and could
affect adversely the liquidity of the Portfolio.
12
<PAGE>
Moreover, a distribution in kind by the U.S. Large Cap Value Series to the
RWB/DFA U.S. High Book to Market Portfolio may constitute a taxable exchange for
federal income tax purposes resulting in gain or loss to the Portfolio. Any net
capital gains so realized will be distributed to the Portfolio's shareholders as
described below under "Dividends, Capital Gains Distributions and Taxes."
Finally, the Portfolio's investment in the shares of a registered
investment company such as the Trust is new and results in certain operational
and other complexities. However, management believes that the benefits to be
gained by shareholders outweigh the additional complexities and that the risks
attendant to such investment are not inherently different from the risks of
direct investment in securities of the type in which the U.S. Large Cap Value
Series invests.
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO -
INVESTMENT OBJECTIVE AND POLICIES
PORTFOLIO CHARACTERISTICS AND POLICIES
The investment objective of the RWB/DFA U.S. High Book to Market Portfolio
is to achieve long-term capital appreciation. The Portfolio pursues its
objective by investing all of its assets in the U.S. Large Cap Value Series,
which has the same investment objective and policies as the Portfolio. The U.S.
Large Cap Value Series seeks to achieve its objective by investing in common
stocks of large U.S. companies which the Advisor believes to be value stocks at
the time of purchase. Securities are considered value stocks primarily because
a company's shares have a high book value in relation to their market value (a
"book to market ratio"). Generally, a company's shares will be considered to
have a high book to market ratio if the ratio equals or exceeds the ratios of
any of the 30% of companies with the highest positive book to market ratios
whose shares are listed on the NYSE and, except as described below under
"Portfolio Structure," will be considered eligible for investment. In measuring
value, the Advisor may consider additional factors such as cash flow, economic
conditions and developments in the issuer's industry. A company will be
considered "large" if its market capitalization (i.e., the market price of its
common stock multiplied by the number of outstanding shares) equals or exceeds
that of the company having the median market capitalization of companies whose
shares are listed on the NYSE.
PORTFOLIO STRUCTURE
The U.S. Large Cap Value Series will operate as a "diversified" investment
company. Further, the U.S. Large Cap Value Series will not invest more than 25%
of its total assets in securities of companies in a single industry.
Ordinarily, at least 80% of the assets of the U.S. Large Cap Value Series will
be invested in a broad and diverse group of readily marketable common stocks of
large U.S. companies with high book to market ratios, as described above. The
U.S. Large Cap Value Series may invest a portion of its assets, ordinarily not
more than 20%, in high quality, highly liquid fixed income securities, such as
money market instruments, and short-term repurchase agreements. The U.S. Large
Cap Value Series may invest in futures contracts and options on futures
contracts. To the extent that the U.S. Large Cap Value Series invests in
futures contracts for other than bona fide hedging purposes, it will not
purchase futures contracts if more than 5% of its total assets are then invested
in initial margin deposits on such contracts or options. The U.S. Large Cap
Value Series will purchase securities that are listed on the principal U.S.
national securities exchanges and traded over-the-counter.
The U.S. Large Cap Value Series will be structured on a market
capitalization basis, generally by basing the amount of each security purchased
on the issuer's relative market capitalization, with a view to creating in the
U.S. Large Cap Value Series a reasonable reflection of the relative market
capitalizations of its portfolio companies. However, the Advisor may exclude
the securities of a company that otherwise meets the applicable criteria
described above if the Advisor determines, in its best judgment, that other
conditions exist that make the inclusion of such security inappropriate.
13
<PAGE>
Deviation from strict market capitalization weighting will also occur
because the U.S. Large Cap Value Series intends to purchase round lots only. In
order to retain sufficient liquidity, the relative amount of any security held
by the U.S. Large Cap Value Series may be reduced, from time to time, from the
level which adherence to market capitalization weighting would otherwise
require. A portion, but generally not in excess of 20%, of the U.S. Large Cap
Value Series' assets may be invested in interest-bearing obligations, as
described above, thereby causing further deviation from market capitalization
weighting. Such investments would be made on a temporary basis pending
investment in equity securities pursuant to the U.S. Large Cap Value Series'
investment objective. The U.S. Large Cap Value Series may make block purchases
of eligible securities at opportune prices even though such purchases exceed the
number of shares which, at the time of purchase, strict adherence to the policy
of market capitalization weighting would otherwise require. While such
transactions might cause a temporary deviation from market capitalization
weighting, they would ordinarily be made in anticipation of further growth of
the assets of the U.S. Large Cap Value Series.
Changes in the composition and relative ranking (in terms of market
capitalization and book to market ratio) of the stocks which are eligible for
purchase by the U.S. Large Cap Value Series take place with every trade when the
securities markets are open for trading due, primarily, to price fluctuations of
such securities. On not less than a semi-annual basis, the Advisor will prepare
a current list of large U.S. companies with high book to market ratios whose
stock is eligible for investment. Only common stocks whose market
capitalizations are not less than the minimum on such list will be purchased by
the U.S. Large Cap Value Series. Additional investments will not be made in
securities of issuers which have depreciated in value to such an extent that
they are not then considered by the Advisor to be large companies. This may
result in further deviation from market capitalization weighting and such
deviation could be substantial if a significant amount of the U.S. Large Cap
Value Series' holdings decrease in value sufficiently to be excluded from the
then current market capitalization requirement for eligible securities, but not
by a sufficient amount to warrant their sale.
It is management's belief that the value stocks of large U.S. companies
offer, over a long term, a prudent opportunity for capital appreciation but, at
the same time, selecting a limited number of such issues for inclusion in the
U.S. Large Cap Value Series involves greater risk than including a large number
of them. The Advisor does not anticipate that a significant number of
securities which meet the market capitalization criteria will be selectively
excluded from the U.S. Large Cap Value Series.
The U.S. Large Cap Value Series does not seek current income as an
investment objective and investments will not be based upon an issuer's dividend
payment policy or record. However, many of the companies whose securities will
be included in the U.S. Large Cap Value Series do pay dividends. It is
anticipated, therefore, that the U.S. Large Cap Value Series will receive
dividend income.
PORTFOLIO TRANSACTIONS
The U.S. Large Cap Value Series does not intend to purchase or sell
securities based on the prospects for the economy, the securities markets or the
individual issuers whose shares are eligible for purchase. As described under
"Portfolio Structure," investments will be made in virtually all eligible
securities on a market capitalization weighted basis. This is a passive
approach to investment management that does not entail taking steps to reduce
risk by replacing portfolio equity securities with other securities that appear
to have the potential to provide better investment performance.
Generally, securities will be purchased with the expectation that they will
be held for longer than one year. The U.S. Large Cap Value Series may sell
portfolio securities when the issuer's market capitalization falls substantially
below that of the issuer with the minimum market capitalization which is then
eligible for purchase by the U.S. Large Cap Value Series. In addition, the U.S.
Large Cap Value Series may sell portfolio securities when their book to market
ratio falls substantially below that of the security with the lowest such ratio
that is then eligible for purchase by the Series. However, securities may be
sold at any time when, in the Advisor's judgment, circumstances warrant their
sale. The annual portfolio turnover rate is not expected to exceed 25%. The
annual
14
<PAGE>
portfolio turnover rate of the Series for the fiscal years ended November 30,
1995 and 1996, respectively, was 29.41% and 20.12%.
INVESTMENT OBJECTIVES AND POLICIES - FIXED INCOME PORTFOLIOS
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
The investment objective of RWB/DFA Two-Year Corporate Fixed Income
Portfolio is to maximize total returns consistent with the preservation of
capital. This objective will be pursued by investing in U.S. government
obligations, U.S. government agency obligations, dollar-denominated obligations
of foreign issuers issued in the U.S., bank obligations, including U.S.
subsidiaries and branches of foreign banks, corporate obligations, commercial
paper, repurchase agreements and obligations of supranational organizations. It
is the RWB/DFA Two-Year Corporate Fixed Income Portfolio's policy to acquire
obligations which mature within two years from the date of settlement. The
RWB/DFA Two-Year Corporate Fixed Income Portfolio principally invests in
certificates of deposit, commercial paper, bankers' acceptances, notes and
bonds. The Portfolio will invest more than 25% of its total assets in
obligations of U.S. and/or foreign banks and bank holding companies when the
yield to maturity on these instruments exceeds the yield to maturity on all
other eligible portfolio investments of similar quality for a period of five
consecutive days when the NYSE is open for trading. (See "Investments in the
Banking Industry.") The RWB/DFA Two-Year Corporate Fixed Income Portfolio may
invest in futures contracts and options on futures contracts. To the extent
that the Portfolio invests in futures contracts and options thereon for other
than bona fide hedging purposes, it will not purchase futures contracts or
options if more than 5% of its total assets are then invested in initial margin
deposits on such contracts or premiums paid for options.
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
The investment objective of the RWB/DFA Two-Year Government Portfolio is to
maximize total returns available from the universe of debt obligations of the
U.S. government and U.S. government agencies and consistent with the
preservation of capital. Generally, this objective will be pursued by acquiring
U.S. government obligations and U.S. government agency obligations that mature
within two years from the date of settlement. The RWB/DFA Two-Year Government
Portfolio will also acquire repurchase agreements. The Portfolio may invest in
futures contracts and options on futures contracts. To the extent that the
Portfolio invests in futures contracts and options thereon for other than bona
fide hedging purposes, it will not purchase futures contracts or options if more
than 5% of its total assets are then invested in initial margin deposits on such
contracts or premiums paid for options.
DESCRIPTION OF INVESTMENTS
The following is a description of the categories of investments which may
be acquired by the Fixed Income Portfolios:
Permissible
Categories
-----------
RWB/DFA Two-Year Corporate Fixed Income Portfolio 1-7
RWB/DFA Two-Year Government Portfolio 1, 2, 6
15
<PAGE>
1. U.S. GOVERNMENT OBLIGATIONS - Debt securities issued by the U.S.
Treasury which are direct obligations of the U.S. government, including bills,
notes and bonds.
2. U.S. GOVERNMENT AGENCY OBLIGATIONS - Issued or guaranteed by U.S.
government-sponsored instrumentalities and federal agencies, including the
Federal National Mortgage Association, Federal Home Loan Bank and the Federal
Housing Administration.
3. CORPORATE DEBT OBLIGATIONS - Non-convertible corporate debt securities
(e.g., bonds and debentures) which are issued by companies whose commercial
paper is rated Prime-1 by Moody's Investors Services, Inc. ("Moody's") or A-1 by
Standard & Poor's Rating Group, a Division of The McGraw-Hill Companies ("S&P")
and dollar-denominated obligations of foreign issuers issued in the U.S. If the
issuer's commercial paper is unrated, then the debt security would have to be
rated at least AA by S&P or Aa2 by Moody's. If there is neither a commercial
paper rating nor a rating of the debt security, then the Advisor must determine
that the debt security is of comparable quality to equivalent issues of the same
issuer rated at least AA or Aa2.
4. BANK OBLIGATIONS - Obligations of U.S. banks and savings and loan
associations and dollar-denominated obligations of U.S. subsidiaries and
branches of foreign banks, such as certificates of deposit (including marketable
variable rate certificates of deposit) and bankers' acceptances. Bank
certificates of deposit will be acquired only if the bank has assets in excess
of $1,000,000,000.
5. COMMERCIAL PAPER - Rated, at the time of purchase, A-1 or better by
S&P or Prime-1 by Moody's, or, if not rated, issued by a corporation having an
outstanding unsecured debt issue rated Aaa by Moody's or AAA by S&P, and having
a maximum maturity of nine months.
6. REPURCHASE AGREEMENTS - Instruments through which the Series purchases
securities ("underlying securities") from a bank, or a registered U.S.
government securities dealer, with an agreement by the seller to repurchase the
security at an agreed price, plus interest at a specified rate. The underlying
securities will be limited to U.S. government and agency obligations described
in (1) and (2) above. The Series will not enter into a repurchase agreement
with a duration of more than seven days if, as a result, more than 10% of the
value of the Series' total assets would be so invested. The Series will also
only invest in repurchase agreements with a bank if the bank has at least
$1,000,000,000 in assets and is approved by the Investment Committee of the
Advisor. The Advisor will monitor the market value of the securities plus any
accrued interest thereon so that they will at least equal the repurchase price.
7. SUPRANATIONAL ORGANIZATION OBLIGATIONS - Debt securities of
supranational organizations such as the European Coal and Steel Community, the
European Economic Community and the World Bank, which are chartered to promote
economic development.
The categories of investments that may be acquired by the RWB/DFA Two-Year
Corporate Fixed Income and RWB/DFA Two-Year Government Portfolios may include
both fixed and floating rate securities. Floating rate securities bear interest
at rates that vary with prevailing market rates. Interest rate adjustments are
made periodically (e.g., every six months), usually based on a money market
index such as the London Interbank Offered Rate (LIBOR) or the Treasury bill
rate.
INVESTMENTS IN THE BANKING INDUSTRY
The RWB/DFA Two-Year Corporate Fixed Income Portfolio will invest more than
25% of its total assets in obligations of U.S. and/or foreign banks and bank
holding companies when the yield to maturity on these investments exceeds the
yield to maturity on all other eligible portfolio investments for a period of
five consecutive days when the NYSE is open for trading. For the purpose of
this policy, which is a fundamental policy of the RWB/DFA Two-Year Corporate
Fixed Income Portfolio, which can only be changed by a vote of the shareholders
of the Portfolio, banks and bank holding companies are considered to constitute
a single industry, the banking industry. When investment in such obligations
exceeds 25% of the total net assets
16
<PAGE>
of the RWB/DFA Two-Year Corporate Fixed Income Portfolio, the Portfolio will be
considered to be concentrating its investments in the banking industry. As of
the date of this prospectus, the RWB/DFA Two-Year Corporate Fixed Income
Portfolio is not concentrating its investments in the banking industry.
The types of bank and bank holding company obligations in which the RWB/DFA
Two-Year Corporate Fixed Income Portfolio may invest include:
dollar-denominated certificates of deposit, bankers' acceptances, commercial
paper and other debt obligations issued in the United States and which mature
within two years of the date of settlement, provided such obligations meet the
Portfolio's established credit rating criteria as stated under "Description of
Investments." In addition, the RWB/DFA Two-Year Corporate Fixed Income
Portfolio is authorized to invest more than 25% of its total assets in Treasury
bonds, bills and notes and obligations of federal agencies and
instrumentalities.
PORTFOLIO STRATEGY
The RWB/DFA Two-Year Corporate Fixed Income Portfolio will be managed with
a view to capturing credit risk premiums and term or maturity premiums. As used
herein, the term "credit risk premium" means the anticipated incremental return
on investment for holding obligations considered to have greater credit risk
than direct obligations of the U.S. Treasury and "maturity risk premium" means
the anticipated incremental return on investment for holding securities having
maturities of longer than one month compared to securities having a maturity of
one month. The Advisor believes that credit risk premiums are available largely
through investment in high grade commercial paper, certificates of deposit and
corporate obligations. The holding period for assets of the RWB/DFA Two-Year
Corporate Fixed Income Portfolio will be chosen with a view to maximizing
anticipated monthly returns, net of trading costs.
The Fixed Income Portfolios are expected to have high portfolio turnover
rates due to the relatively short maturities of the securities to be acquired.
The rate of portfolio turnover will depend upon market and other conditions; it
will not be a limiting factor when management believes that portfolio changes
are appropriate. It is anticipated that the annual turnover rate of the RWB/DFA
Two-Year Corporate Fixed Income Portfolio could be 0% to 200%, and the RWB/DFA
Two-Year Government Portfolio could be 100% to 500%. Prior to November __,
1997, the RWB/DFA Two-Year Corporate Fixed Income Portfolio invested all of its
assets in DFA Two-Year Corporate Fixed Income Series of the Trust, and the
RWB/DFA Two-Year Government Portfolio invested all of its assets in DFA Two-Year
Government Series of the Trust. The annual portfolio turnover rates of the DFA
Two-Year Corporate Fixed Income Portfolio and the DFA Two-Year Government Series
of the Trust for the fiscal period ended November 30, 1996 were 81.97% and
200.59%, respectively. While the Fixed Income Portfolios acquire securities in
principal transactions and, therefore, do not pay brokerage commissions, the
spread between the bid and asked prices of a security may be considered to be a
"cost" of trading. Such costs ordinarily increase with trading activity.
However, as stated above, securities ordinarily will be sold when, in the
Advisor's judgment, the monthly return of the RWB/DFA Two-Year Corporate Fixed
Income Portfolio or the RWB/DFA Two-Year Government Portfolio will be increased
as a result of portfolio transactions after taking in to account the cost of
trading. It is anticipated that securities will be acquired in the secondary
markets for short term instruments.
17
<PAGE>
SECURITIES LOANS
The Portfolios and the U.S. Large Cap Value Series of the Trust are
authorized to lend securities to qualified brokers, dealers, banks and other
financial institutions for the purpose of earning additional income. While the
Portfolios or the Series may earn additional income from lending securities,
such activity is incidental to the Portfolios' or the Series' investment
objective. The value of securities loaned may not exceed 33 1/3% of the value
of the Portfolios' or the Series' total assets. In connection with such loans,
the Portfolios or the Series will receive collateral consisting of cash or U.S.
Government securities, which will be maintained at all times in an amount equal
to at least 100% of the current market value of the loaned securities. In
addition, the Portfolios or the Series will be able to terminate the loan at any
time, will receive reasonable interest on the loan, as well as amounts equal to
any dividends, interest or other distributions on the loaned securities. In the
event of the bankruptcy of the borrower, the Portfolios or the Series could
experience delay in recovering the loaned securities. Management believes that
this risk can be controlled through careful monitoring procedures. Although the
RWB/DFA U.S. High Book to Market Portfolio is authorized to lend its portfolio
securities, as long as it holds only shares of the U.S. Large Cap Value Series,
it will not do so.
RISK FACTORS
FOREIGN SECURITIES
The RWB/DFA Two-Year Corporate Fixed Income Portfolio invests in foreign
issuers. Such investments involve risks that are not associated with
investments in U.S. public companies. Such risks may include legal, political
and or diplomatic actions of foreign governments, such as imposition of
withholding taxes on interest and dividend income payable on the securities
held, possible seizure or nationalization of foreign deposits, establishment of
exchange controls or the adoption of other foreign governmental restrictions
which might adversely affect the value of the assets held by the RWB/DFA
Two-Year Corporate Fixed Income Portfolio. Further, foreign issuers are not
generally subject to uniform accounting, auditing and financial reporting
standards comparable to those of U.S. public companies and there may be less
publicly available information about such companies than comparable U.S.
companies. The RWB/DFA Two-Year Corporate Fixed Income Portfolio may also
invest in obligations of supranational organizations. The value of the
obligations of these organizations may be adversely affected if one or more of
their supporting governments discontinue their support.
BORROWING
Each Portfolio and the U.S. Large Cap Value Series of the Trust has
reserved the right to borrow amounts not exceeding 33% of its net assets for the
purpose of making redemption payments. When advantageous opportunities to do so
exist, each Portfolio and the U.S. Large Cap Value Series may also purchase
securities when borrowings exceed 5% of the value of its net assets. Such
purchases can be considered to be "leveraging" and, in such circumstances, the
net asset value of the Series or Portfolio may increase or decrease at a greater
rate than would be the case if the Series or Portfolio had not leveraged. The
interest payable on the amount borrowed would increase the Series' or
Portfolios' expenses and, if the appreciation and income produced by the
investments purchased when the Series or Portfolios has borrowed are less than
the cost of borrowing, the investment performance of the Series or Portfolio
will be reduced as a result of leveraging.
PORTFOLIO STRATEGY
The method employed by the Advisor to manage the U.S. Large Cap Value
Series differs from the process employed by many other investment advisors in
that the Advisor will rely on fundamental analysis of the investment merits of
securities to a limited extent to eliminate potential acquisitions rather than
rely on this technique to select securities. Further, because securities
generally will be held long-term and will not be eliminated based
18
<PAGE>
on short-term price fluctuations, the Advisor generally will not act upon
general market movements or short-term price fluctuations of securities to as
great an extent as many other investment advisors.
FUTURES CONTRACTS AND OPTIONS ON FUTURES
Each Portfolio and the U.S. Large Cap Value Series also may invest in
futures contracts and options on futures. To the extent that a Portfolio or the
U.S. Large Cap Value Series invests in futures contracts and options thereon for
other than bona fide hedging purposes, neither the Portfolios nor the Series
will enter into such transactions if, immediately thereafter, the sum of the
amount of initial margin deposits and premiums paid for open futures options
would exceed 5% of the Portfolios' or the Series' total assets, after taking
into account unrealized profits and unrealized losses on such contracts it has
entered into; provided, however, that, in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded in
calculating the 5%.
These investments entail the risk that an imperfect correlation may exist
between changes in the market value of the stocks owned by the Portfolios or the
Series and the prices of such futures contracts and options and, at times, the
market for such contracts and options might lack liquidity, thereby inhibiting
the Portfolios' or the Series' ability to close a position in such investments.
Gains or losses on investments in options and futures depends on the direction
of securities prices, interest rates and other economic factors and the loss
from investing in futures transactions is potentially unlimited.
BANKING INDUSTRY CONCENTRATION
Concentrating in obligations of the banking industry may involve additional
risk by foregoing the safety of investing in a variety of industries. Changes
in the market's perception of the riskiness of banks relative to non-banks could
cause more fluctuations in the net asset value of the RWB/DFA Two-Year Corporate
Fixed Income Portfolio than might occur in a less concentrated portfolio.
REPURCHASE AGREEMENTS
Each Portfolio and the U.S. Large Cap Value Series may invest in repurchase
agreements. In the event of bankruptcy of the other party to a repurchase
agreement, the Fund or the Trust could experience delay in recovering the
securities underlying such agreement. Management believes that this risk can be
controlled through stringent security selection criteria and careful monitoring
procedures.
MANAGEMENT OF THE PORTFOLIOS
The Advisor serves as investment advisor to the Fixed Income Portfolios
and U.S. Large Cap Value Series and, as such, is responsible for the management
of their respective assets. Investment decisions for the Fixed Income
Portfolios and the U.S. Large Cap Value Series are made by the Investment
Committee of the Advisor, which meets on a regular basis and also as needed to
consider investment issues. The Investment Committee is composed of certain
officers and directors of the Advisor who are elected annually. The Advisor
provides the Fixed Income Portfolios and the U.S. Large Cap Value Series with a
trading department and selects brokers and dealers to effect securities
transactions.
Securities transactions are placed with a view to obtaining the best price
and execution of such transactions. The Advisor is authorized to pay a higher
commission to a broker, dealer or exchange member than another such organization
might charge if it determines, in good faith, that the commission paid is
reasonable in relation to the research or brokerage services provided by such
organization. For the fiscal year ended November 30, 1996, the U.S. Large Cap
Value Series, the Two-Year Corporate Fixed Income Series and the Two-Year
Government Series
19
<PAGE>
each paid an investment management fee to the Advisor equal to .10% , .15%
and .15%, respectively, of its average net assets on an annual basis.
Each Portfolio and the U.S. Large Cap Value Series bears all of its own
costs and expenses, including: services of its independent accountants, legal
counsel, brokerage commissions and transfer taxes in connection with the
acquisition and disposition of portfolio securities, taxes, insurance premiums,
costs incidental to meetings of its shareholders and directors or trustees, the
cost of filing its registration statements under federal securities laws and the
cost of any filings required under state securities laws, reports to
shareholders, and transfer and dividend disbursing agency, administrative
services and custodian fees. Expenses allocable to a particular Portfolio or
series of the Trust are so allocated. Expenses of the Fund which are not
allocable to a particular Portfolio are to be borne by each Portfolio on the
basis of its relative net assets. Similarly, the expenses of the Trust which
are not allocable to a particular series are to be borne by each series on the
basis of its relative net assets.
The Advisor was organized in May, 1981, and is engaged in the business of
providing investment management services to institutional investors. Assets
under management total approximately $25 billion. David G. Booth and Rex A.
Sinquefield (directors and officers of both the Fund and the Advisor, trustees
and officers of the Trust and shareholders of the Advisor) may be deemed
controlling persons of the Advisor.
The Board of Directors is responsible for establishing Portfolio policies
and for overseeing the management of the Portfolios. Each of the Directors and
officers of the Fund is also a Trustee and officer of the Trust. The Directors
of the Fund, including all of the disinterested Directors, have adopted written
procedures to monitor potential conflicts of interest that might develop between
the RWB/DFA U.S. High Book to Market Portfolio and the U.S. Large Cap Value
Series. The statement of additional information relating to the Portfolios
furnishes information about the Directors and officers of the Fund. (See
"DIRECTORS AND OFFICERS" in the statement of additional information.)
ADMINISTRATIVE SERVICES
The Fund has entered into an administration agreement with the Advisor on
behalf of RWB/DFA U.S. High Book to Market Portfolio. Pursuant to the
administration agreement, the Advisor will perform various services, including:
supervision of the services provided by the Portfolio's custodian and dividend
disbursing agent and others who provide services to the Fund for the benefit of
the Portfolio; assisting the Fund to comply with the provisions of federal,
state, local and foreign securities, tax and other laws applicable to the
Portfolio; providing shareholders of record with information about the Portfolio
and their investments as they or the Fund may request; assisting the Fund to
conduct meetings of shareholders; furnishing information as the Board of
Directors may require regarding the U.S. Large Cap Value Series; and any other
administrative services for the benefit of the Portfolio as the Board of
Directors may reasonably request. The Advisor also provides the Fund with
office space and personnel. For these administrative services, the RWB/DFA U.S.
High Book to Market Portfolio pays the Advisor a monthly fee which, on an annual
basis, equals .01% of the average daily net assets of the Portfolio.
PFPC Inc. ("PFPC") serves as the administrative and accounting services,
dividend disbursing and transfer agent for all the Portfolios and the U.S.
Large Cap Value Series. The services provided by PFPC are subject to
supervision by the executive officers and the Board of Directors of the Fund
and include administrative services such as day-to-day keeping and
maintenance of certain records, calculation of the offering price of the
shares, preparation of reports, liaison with its custodians, and transfer and
dividend disbursing agency services.
CLIENT SERVICE AGENT
20
<PAGE>
Pursuant to a Client Service Agent Agreement with each Portfolio, RWBAS
performs various services for the Portfolios, including establishment of a
toll-free telephone number for shareholders of each Portfolio to use to obtain
or receive up-to-date account information; providing to shareholders quarterly
and other reports with respect to the performance of each Portfolio; and
providing shareholders with such information regarding the operations and
affairs of each Portfolio, and their investment in its shares, as the
shareholders or the Board of Directors may reasonably request. For its
services, each Portfolio pays RWBAS a monthly fee which, on an annual basis,
equals .09% of the average daily net assets of the RWB/DFA U.S. High Book to
Market Portfolio and .03% of the other Portfolios. RWBAS agreed to waive its
client services fee for the Fixed Income Portfolios through December 31, 1996.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
Each Portfolio of the Fund intends to qualify each year as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"), so that it will not be liable for federal income taxes to the extent
that its net investment income and net realized capital gains are distributed.
The Portfolios distribute dividends from their net investment income quarterly.
The Portfolios will distribute any realized net capital gains annually after the
end of the Fund's fiscal year. Each Portfolio of the Fund is treated as a
separate corporation for federal tax purposes.
As noted above, the RWB/DFA U.S. High Book to Market Portfolio seeks to
achieve its investment objective by investing all of its investable assets in
the U.S. Large Cap Value Series of the Trust. The U.S. Large Cap Value Series
intends to qualify each year as a regulated investment company under the Code.
The RWB/DFA U.S. High Book to Market Portfolio receives income in the form
of income dividends paid by the U.S. Large Cap Value Series. This income, less
the expenses incurred in operations, is the Portfolio's net investment income
from which income dividends are distributed as described above. The Portfolio
also may receive capital gains distributions from the U.S. Large Cap Value
Series and may realize capital gains upon the redemption of the shares of the
U.S. Large Cap Value Series. Any net realized capital gains of the RWB/DFA U.S.
High Book to Market Portfolio will be distributed as described below.
Whether paid in cash or additional shares and regardless of the length of
time a Portfolio's shares have been owned by shareholders who are subject to
federal income taxes, distributions from long-term capital gains are taxable as
such. Dividends from net investment income or net short-term capital gains will
be taxable as ordinary income, whether received in cash or in additional shares.
For those investors subject to tax, if purchases of shares of a Portfolio are
made shortly before the record date for a dividend or capital gains
distribution, a portion of the investment will be returned as a taxable
distribution. Shareholders are notified annually by the Fund as to the federal
tax status of dividends and distributions paid by the Portfolio whose shares
they own.
Shareholders of each Portfolio will automatically receive all income
dividends and any capital gains distributions in additional shares of the
Portfolio whose shares they hold at net asset value (as of the business date
following the dividend record date), unless upon written notice to the transfer
agent the shareholder selects one of the following options:
21
<PAGE>
Income Option - to receive income dividends in cash and capital
gains distributions in additional shares at net
asset value.
Capital Gains Option - to receive capital gains distributions in cash and
income dividends in additional shares at net asset
value.
Cash Option - to receive both income dividends and capital gains
distributions in cash.
Dividends which are declared in October, November or December to
shareholders of record in such a month but which, for operational reasons, may
not be paid to the shareholder until the following January, will be treated for
tax purposes as if paid by the Portfolio and received by the shareholder on
December 31 of the calendar year in which they are declared.
The sale of shares of a Portfolio is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may
be realized from an ordinary redemption of shares or an exchange of shares
between two Portfolios of the Fund. Any loss incurred on sale or exchange of a
Portfolio's shares, held for six months or less, will be treated as a long-term
capital loss to the extent of capital gain dividends received with respect to
such shares.
Since virtually all of the net investment income from the Fixed Income
Portfolios is expected to arise from earned interest, it is not expected that
either of the Portfolios' distributions will be eligible for the dividends
received deduction for corporations. The portion of dividends paid by the
RWB/DFA U.S. High Book to Market Portfolio from net investment income that is
eligible for the corporate dividends received deduction depends on the
Portfolio's pro rata share of the aggregate qualifying dividend income received
by the U.S. Large Cap Value Series from domestic (U.S.) sources.
In addition to federal taxes, shareholders may be subject to state and
local taxes on distributions. Distributions of interest income and capital
gains realized from certain types of U.S. government securities may be exempt
from state personal income taxes.
A Portfolio is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied with
IRS taxpayer identification regulations. You may avoid this withholding
requirement by certifying on the account registration form your proper Taxpayer
Identification Number and by certifying that you are not subject to backup
withholding.
The tax discussion set forth above is included for general information
only. Prospective investors should consult their own tax advisers concerning
the federal, state, local or foreign tax consequences of an investment in a
Portfolio.
PURCHASE OF SHARES
Only clients of RWBAS are eligible to purchase shares of the Portfolios.
Investors should first contact RWBAS at (800) 366-7266, ext. 124, to notify
RWBAS of the proposed investment.
Most shares of the Portfolios that will be purchased or sold through
omnibus accounts maintained by securities firms may be subject to a service fee
or commission for such transactions. Clients of RWBAS may also be subject to
investment advisory fees under their own arrangements with RWBAS.
Purchases of shares will be made in full and fractional shares calculated
to three decimal places. In the interest of economy and convenience,
certificates for shares will not be issued except at the written request of
stockholders. Certificates for fractional shares, however, will not be issued.
22
<PAGE>
IN KIND PURCHASES
If accepted by the Fund, shares of a Portfolio may be purchased in exchange
for securities which are eligible for acquisition by such Portfolio or, with
respect to the RWB/DFA U.S. High Book to Market Portfolio, by the U.S. Large Cap
Value Series or otherwise represented in the Portfolio's or the Series'
portfolio as described in this prospectus. Securities to be exchanged which are
accepted by the Fund and Fund shares to be issued therefore will be valued as
set forth under "VALUATION OF SHARES" at the time of the next determination of
net asset value after such acceptance. All dividends, interests, subscription,
or other rights pertaining to such securities shall become the property of the
Portfolio whose shares are being acquired and must be delivered to the Fund by
the investor upon receipt from the issuer.
The Fund will not accept securities in exchange for shares of a Portfolio
unless: (1) such securities are, at the time of the exchange, eligible to be
included, or otherwise represented, in the Portfolio or the U.S. Large Cap Value
Series, as applicable, and current market quotations are readily available for
such securities; (2) the investor represents and agrees that all securities
offered to be exchanged are not subject to any restrictions upon their sale by
the Portfolio under the Securities Act of 1933 or under the laws of the country
in which the principal market for such securities exists or otherwise; and (3)
at the discretion of the Fund, the value of any such security (except U.S.
Government securities) being exchanged together with other securities of the
same issuer owned by the Portfolio or the U.S. Large Cap Value Series, as
applicable, may not exceed 5% of the net assets of the Portfolio or the Series
immediately after the transaction. The Fund will accept such securities for
investment and not for resale.
A gain or loss for federal income tax purposes will generally be realized
by investors who are subject to federal taxation upon the exchange depending
upon the cost of the securities. Investors interested in such exchanges should
contact the Advisor.
VALUATION OF SHARES
The net asset value per share of each Portfolio and the U.S. Large Cap
Value Series is calculated as of the close of the NYSE by dividing the total
market value of its investments and other assets, less any liabilities, by the
total outstanding shares of the stock of the Series or Portfolio. The value of
the RWB/DFA U.S. High Book to Market Portfolio's shares will fluctuate in
relation to the investment experience of the U.S. Large Cap Value Series.
Securities held by a Portfolio or the U.S. Large Cap Value Series which are
listed on a securities exchange and for which market quotations are available
are valued at the last quoted sale price of the day or, if there is no such
reported sale, the U.S. Large Cap Value Series values such securities at the
mean between the most recent quoted bid and asked prices. Price information on
listed securities is taken from the exchange where the security is primarily
traded. Unlisted securities for which market quotations are readily available
are valued at the mean between the most recent quoted bid and asked prices. The
value of other assets and securities for which no quotations are readily
available (including restricted securities) are determined in good faith at fair
value in accordance with procedures adopted by the Board of Directors of the
Fund or the Board of Trustees of the Trust, as applicable.
The value of the shares of the Fixed Income Portfolios will tend to
fluctuate with interest rates because, unlike money market funds, these
Portfolios do not seek to stabilize the value of their respective shares by use
of the "amortized cost" method of asset valuation. Net asset value includes
interest on fixed income securities which is accrued daily. Securities which
are traded over-the-counter and on a stock exchange will be valued according to
the broadest and most representative market, and it is expected that for bonds
and other fixed-income securities this ordinarily will be the over-the-counter
market. Securities held by the Fixed Income Portfolios may be valued on the
basis of prices provided by a pricing service when such prices are believed to
reflect the current market value of such securities. Other assets and
securities for which quotations
23
<PAGE>
are not readily available will be valued in good faith at fair value using
methods determined by the Board of Directors.
Provided that RWBAS has received the investor's investment instructions in
good order and the Custodian has received the investor's payment, shares of the
Portfolio selected will be priced at the net asset value calculated next after
receipt of the order by PFPC Inc., the transfer agent for the Portfolios. If an
order to purchase shares must be canceled due to non-payment, the purchaser will
be responsible for any loss incurred by the Fund arising out of such
cancellation. The Fund reserves the right to redeem shares owned by any
purchaser whose order is canceled to recover any resulting loss to the Fund and
may prohibit or restrict the manner in which such purchaser may place further
orders.
Management believes that any dilutive effect of the cost of investing the
proceeds of the sale of the shares of the Portfolios is minimal and, therefore,
the shares of the Portfolios are currently sold at net asset value, without
imposition of a fee that would be used to reimburse a Portfolio for such cost
("reimbursement fee"). Reimbursement fees may be charged prospectively from
time to time based upon the future experience of the Fixed Income Portfolios
and, with respect to the RWB/DFA U.S. High Book to Market Portfolio, the U.S.
Large Cap Value Series. Any such charges will be described in the prospectus.
DISTRIBUTION
The Fund acts as distributor of the Portfolios' shares. It has, however,
entered into an agreement with DFA Securities Inc., a wholly owned subsidiary of
DFA, pursuant to which DFA Securities Inc. is responsible for supervising the
sale of the Portfolios' shares. No compensation is paid by the Fund to DFA
Securities Inc. under this agreement.
EXCHANGE OF SHARES
An investor may exchange shares of one Portfolio for those of another
Portfolio described in this prospectus or a portfolio of DFA Investment
Dimensions Group Inc., an open-end, management investment company ("DFAIDG"), by
first contacting RWBAS and completing the documentation required by RWBAS.
Exchanges are accepted only into those portfolios of DFAIDG that are
eligible for the exchange privilege of DFAIDG. Investors should contact RWBAS
for a list of those portfolios of DFAIDG that accept exchanges.
The exchange privilege is not intended to afford shareholders a way to
speculate on short-term movements in the markets. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Portfolios or otherwise adversely affect the Fund or DFAIDG ,
any proposed exchange will be subject to the approval of the Advisor. Such
approval will depend on: (i) the size of the proposed exchange; (ii) the prior
number of exchanges by that shareholder; (iii) the nature of the underlying
securities and the cash position of the Portfolio and of the portfolio of DFAIDG
involved in the proposed exchange; (iv) the transaction costs involved in
processing the exchange; and (v) the total number of redemptions by exchange
already made out of the Portfolio.
The redemption and purchase prices of shares redeemed and purchased by
exchange, respectively, are the net asset values next determined after the
Advisor has received an Exchange Form in good order. "Good order" means a
completed Exchange Form specifying the dollar amount to be exchanged, signed by
all registered owners of the shares; and if the Fund does not have on file the
authorized signatures for the account, a guarantee of the signature of each
registered owner by an "eligible guarantor institution." Such institutions
generally include national or state banks, savings associations, savings and
loan associations, trust companies, savings banks, credit unions and members of
a recognized stock exchange. Exchanges will be accepted only if the
registrations of the two
24
<PAGE>
accounts are identical, stock certificates have not been issued and the Fund may
issue the shares of the portfolio being acquired in compliance with the
securities laws of the investor's state of residence.
There is no fee imposed on an exchange. However, the Fund reserves the
right to impose an administrative fee in order to cover the costs incurred in
processing an exchange. Any such fee will be disclosed in the prospectus. An
exchange is treated as a redemption and a purchase. Therefore, the investor
could realize a taxable gain or loss on the transaction. The Fund reserves the
right to revise or terminate the exchange privilege or limit the amount of or
reject any exchange, as deemed necessary, at any time.
REDEMPTION OF SHARES
An investor who desires to redeem shares of a Portfolio must furnish a
redemption request to RWBAS in the form required by RWBAS. The Portfolio will
redeem shares at the net asset value of such shares next determined after
receipt of a request for redemption in good order by PFPC Inc., the transfer
agent for the Portfolios.
Although the redemption payments will ordinarily be made within seven days
after receipt, payment to investors redeeming shares which were purchased by
check will not be made until the Fund can verify that the payments for the
purchase have been, or will be, collected, which may take up to fifteen days or
more. Investors may avoid this delay by submitting a certified check along with
the purchase order.
With respect to each Portfolio, the Fund reserves the right to redeem a
shareholder's account if the value of the shares in a specific portfolio is $500
or less, whether because of redemptions, a decline in the portfolio's net asset
value per share or any other reason. Before the Fund involuntarily redeems
shares from such an account and sends the proceeds to the stockholder, the Fund
will give written notice of the redemption to the stockholder at least sixty
days in advance of the redemption date. The stockholder will then have sixty
days from the date of the notice to make an additional investment in the Fund in
order to bring the value of the shares in the account for a specific portfolio
to more than $500 and avoid such involuntary redemption. The redemption price
to be paid to a stockholder for shares redeemed by the Fund under this right
will be the aggregate net asset value of the shares in the account at the close
of business on the redemption date.
GENERAL INFORMATION
The Portfolios and the U.S. Large Cap Value Series may disseminate reports
of their investment performance from time to time. Investment performance is
calculated on a total return basis; that is by including all net investment
income and any realized and unrealized net capital gains or losses during the
period for which investment performance is reported. If dividends or capital
gains distributions have been paid during the relevant period, the calculation
of investment performance will include such dividends and capital gains
distributions as though reinvested in shares of the Portfolio. Standard
quotations of total return are computed in accordance with SEC Guidelines and
are presented whenever any non-standard quotations are disseminated.
Non-standardized total return quotations may differ from the SEC Guideline
computations by covering different time periods and by linking the actual return
of a Portfolio with data for periods prior to the Portfolio's inception. In all
cases, disclosures are made when performance quotations differ from the SEC
Guidelines. Performance data is based on historical earnings and is not
intended to indicate future performance. Rates of return expressed on an annual
basis will usually not equal the sum of returns expressed for consecutive
interim periods due to the compounding of the interim yields. The Fund's Annual
Report to shareholders of the Portfolios for the period ended November 30, 1996,
and the Fund's Semi-Annual Report to shareholders of the Portfolios for the six
months ended May 31, 1997, contain additional performance information. A copy
of each of the Annual Report and the Semi-Annual Report is available upon
request and without charge.
The shares of each Portfolio, when issued and paid for in accordance with
the Portfolios' prospectus, will be fully paid and nonassessable shares, with
equal, non-cumulative voting rights and no preferences as to
25
<PAGE>
conversion, exchange, dividends, redemption or any other feature. With respect
to matters which require shareholder approval, shareholders are entitled to vote
only with respect to matters which affect the interest of the class of shares
(Portfolio) which they hold, except as otherwise required by applicable law. If
liquidation of the Fund should occur, shareholders would be entitled to receive
on a per class basis the assets of the particular Portfolio whose shares they
own, as well as a proportionate share of Fund assets not attributable to any
particular Portfolio. Ordinarily, the Fund does not intend to hold annual
meetings of shareholders, except as required by the Investment Company Act of
1940 (the "1940 Act") or other applicable law. The Fund's by-laws provide that
special meetings of shareholders shall be called at the written request of at
least 10% of the votes entitled to be cast at such meeting. Such meeting may be
called to consider any matter, including the removal of one or more directors.
Shareholders will receive shareholder communications with respect to such
matters as required by the 1940 Act, including semi-annual and annual financial
statements of the Fund, the latter being audited.
The Fund was incorporated under Maryland law on March 19, 1990. The DFA
Investment Trust Company was organized as a Delaware business trust on October
27, 1992. The Trust offers shares of its Series only to institutional investors
in private offerings. The Fund may withdraw the investment of the RWB/DFA U.S.
High Book to Market Portfolio in the U.S. Large Cap Value Series at any time, if
the Board of Directors of the Fund determines that it is in the best interests
of the Portfolio to do so. Upon any such withdrawal, the Board of Directors of
the Fund would consider what action might be taken, including the investment of
all of the assets of the Portfolio in another pooled investment entity having
the same investment objective as the Portfolio or the hiring of an investment
advisor to manage the Portfolio's assets in accordance with the investment
policies described above.
Whenever the RWB/DFA U.S. High Book to Market Portfolio, as an investor in
the U.S. Large Cap Value Series, is asked to vote on a shareholder proposal, the
Fund will solicit voting instructions from the Portfolio's shareholders with
respect to the proposal. The Directors of the Fund will then vote the
Portfolio's shares in the Series in accordance with the voting instructions
received from the Portfolio's shareholders. The Directors of the Fund will vote
shares of the Portfolio for which they receive no voting instructions in
accordance with their best judgment.
As of August 31, 1997, the following person owns more than 5% of the voting
securities of each Portfolio:
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
Charles Schwab & Co.-REIN*
101 Montgomery Street
San Francisco, CA 94104 83.22%
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
Charles Schwab & Co.-CASH*
101 Montgomery Street
San Francisco, CA 94104 88.18%
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
Charles Schwab & Co.-CASH*
101 Montgomery Street
San Francisco, CA 94104 92.55%
*Owners of Record Only
Shareholder inquiries may be made by writing or calling the Client Service
Agent at the address or telephone number appearing on the back cover of this
prospectus. Only those individuals whose signatures are on file for the account
in question may receive specific account information or make changes in the
account registration.
26
<PAGE>
DIMENSIONAL INVESTMENT GROUP INC.
1299 Ocean Avenue
11th floor
Santa Monica, CA 90401
Tel. No. (310) 395-8005
INVESTMENT ADVISOR
DIMENSIONAL FUND ADVISORS INC.
1299 Ocean Avenue
11th floor
Santa Monica, CA 90401
Tel. No. (310) 395-8005
CLIENT SERVICE AGENT
Reinhardt Werba Bowen Advisory Services
1190 Saratoga Avenue, Suite 200
San Jose, CA 95129
Tel. No. (800) 366-7266
CUSTODIAN
PNC BANK, N.A.
200 Stevens Drive, Airport Business Center
Lester, PA 19113
ACCOUNTING SERVICE AND DIVIDEND DISBURSING AGENT
PFPC INC.
400 Bellevue Parkway
Wilmington, DE 19809
LEGAL COUNSEL
STRADLEY, RONON, STEVENS & YOUNG, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
19th and Market Streets
Philadelphia, PA 19103
<PAGE>
DIMENSIONAL INVESTMENT GROUP INC.
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA 90401
TELEPHONE: (310) 395-8005
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER ___, 1997
This statement of additional information is not a prospectus but should be
read in conjunction with the prospectus of RWB/DFA U.S. High Book to Market
Portfolio, RWB/DFA Two-Year Corporate Fixed Income Portfolio and RWB/DFA
Two-Year Government Portfolio (collectively the "Portfolios") of Dimensional
Investment Group Inc. (the "Fund"), dated November ___, 1997, which can be
obtained from the Fund by writing to the Fund at the above address or by calling
the above telephone number.
TABLE OF CONTENTS
Page
INVESTMENT OBJECTIVE AND POLICIES . . . . . . . . . . . . . . . . . . . . 2
BROKERAGE TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT LIMITATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 3
FUTURES CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FEDERAL TAX TREATMENT OF FUTURES CONTRACTS. . . . . . . . . . . . . . . . 6
DIRECTORS AND OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . . 7
ADMINISTRATIVE SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . 9
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PRINCIPAL HOLDERS OF SECURITIES . . . . . . . . . . . . . . . . . . . . . 9
PURCHASE OF SHARESq . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
CALCULATION OF PERFORMANCE DATA . . . . . . . . . . . . . . . . . . . . . 11
FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The following information supplements the information set forth in the
prospectus under the caption "RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
- -INVESTMENT OBJECTIVE AND POLICIES" and applies to the DFA U.S. Large Cap Value
Series (the "U.S. Large Cap Value Series") of The DFA Investment Trust Company
(the "Trust").
Because the structure of the U.S. Large Cap Value Series is based on the
relative market capitalizations of eligible holdings, it is possible that the
U.S. Large Cap Value Series might include at least 5% of the outstanding voting
securities of one or more issuers. In such circumstances, the Fund and the
issuer would be deemed "affiliated persons" under the Investment Company Act of
1940 and certain requirements of the Act regulating dealings between affiliates
might become applicable. However, based on the present capitalizations of the
groups of companies eligible for inclusion in the U.S. Large Cap Value Series
and the anticipated amount of the Series' assets intended to be invested in such
securities, management does not anticipate that the U.S. Large Cap Value Series
will include as much as 5% of the voting securities of any issuer.
BROKERAGE TRANSACTIONS
The RWB/DFA Two-Year Corporate Fixed Income Portfolio and the RWB/DFA
Two-Year Government Portfolio (collectively, the "Fixed Income Portfolios")
acquire and sell securities on a net basis with dealers which are major market
makers in such securities. The Investment Committee of the Advisor selects
dealers on the basis of their size, market making and credit analysis ability.
When executing portfolio transactions for the Fixed Income Portfolios, the
Advisor seeks to obtain the most favorable price for the securities being traded
among the dealers with whom the Portfolios effect transactions.
Portfolio transactions will be placed with a view to receiving the best
price and execution. In addition, the Advisor will seek to acquire and dispose
of securities in a manner which would cause as little fluctuation in the market
prices of stocks being purchased or sold as possible in light of the size of the
transactions being effected. Brokers will be selected with these goals in view.
The Advisor monitors the performance of brokers which effect transactions for
the Fixed Income Portfolios, if any, and the U.S. Large Cap Value Series to
determine the effect that their trading has on the market prices of the
securities in which they invest. The Advisor also checks the rate of commission
being paid by the Fixed Income Portfolios, if any, and the U.S. Large Cap Value
Series to brokers to ascertain that such rates are competitive with those
charged by other brokers for similar services. For the fiscal years ended
November 30, 1996, 1995 and 1994, the U.S. Large Cap Value Series paid brokerage
commissions of $934,452, $410,503 and $367,810, respectively.
Transactions also may be placed with brokers who provide the Advisor with
investment research, such as reports concerning individual issuers, industries
and general economic and financial trends and other research services. The
Investment Advisory Agreement for the Fixed Income Portfolios and the Investment
Management Agreement for the U.S. Large Cap Value Series permit the Advisor
knowingly to pay commissions on these transactions which are greater than
another broker might charge if the Advisor, in good faith, determines that the
commissions paid are reasonable in relation to the research or brokerage
services provided by the broker or dealer when viewed in terms of either a
particular transaction or the Advisor's overall responsibilities to assets under
its management. During the fiscal year
2
<PAGE>
ended November 30, 1996, the U.S. Large Cap Value Series paid $313,601 in
commissions (on securities transactions totalling $211,163,255 in value) to
brokers which provided market price monitoring services, market studies and
research services to the Series.
The over-the-counter market ("OTC") companies eligible for purchase by the
U.S. Large Cap Value Series are thinly traded securities. Therefore, the
Advisor believes it needs maximum flexibility to effect OTC trades on a best
execution basis. To that end, the Advisor places buy and sell orders with
market makers, third market brokers, Instinet and with dealers on an agency
basis when the Advisor determines that the securities may not be available from
other sources at a more favorable price. Third market brokers enable the
Advisor to trade with other institutional holders directly on a net basis. This
allows the Advisor sometimes to trade larger blocks than would be possible by
going through a single market maker.
The Advisor places buy and sell orders on Instinet when the Advisor
determines that the securities may not be available from other sources at a more
favorable price. Instinet is an electronic information and communication
network whose subscribers include most market makers as well as many
institutions. Instinet charges a commission for each trade executed on its
system. On any given trade the U.S. Large Cap Value Series, by trading through
Instinet, would pay a spread to a dealer on the other side of the trade plus a
commission to Instinet. However, placing a buy (or sell) order on Instinet
communicates to many (potentially all) market makers and institutions at once.
This can create a more complete picture of the market and thus increase the
likelihood that the U.S. Large Cap Value Series can effect transactions at the
best available prices.
The RWB/DFA U.S. High Book to Market Portfolio will not incur any brokerage
or other costs in connection with its purchase or redemption of shares of the
U.S. Large Cap Value Series, except if the Portfolio receives securities from
the Series to satisfy the Portfolio's redemption request. (See "REDEMPTION OF
SHARES.")
INVESTMENT LIMITATIONS
Each of the Portfolios has adopted certain limitations which may not be
changed with respect to any Portfolio without the approval of the holders of a
majority of the outstanding voting securities of the Portfolio. A "majority" is
defined as the lesser of: (1) at least 67% of the voting securities of the
Portfolio (to be effected by the proposed change) 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 such Portfolio. The investment limitations of the U.S.
Large Cap Value Series are the same as those of the RWB/DFA U.S. High Book to
Market Portfolio.
The Portfolios will not:
(1) invest in commodities or real estate, including limited
partnership interests therein, although they may purchase and sell securities of
companies which deal in real estate and securities which are secured by
interests in real estate and may purchase or sell financial futures contracts
and options thereon;
(2) make loans of cash, except through the acquisition of repurchase
agreements and obligations customarily purchased by institutional investors;
(3) as to 75% of the total assets of a Portfolio, invest in the
securities of any issuer (except obligations of the U.S. Government and its
instrumentalities) if, as a result, more than 5% of the Portfolio's total
assets, at market, would be invested in the securities of such issuer;
3
<PAGE>
(4) purchase or retain securities of an issuer, if those officers and
directors of the Fund or the Advisor owning more than 1/2 of 1% of such
securities together own more than 5% of such securities;
(5) borrow, except from banks as a temporary measure for
extraordinary or emergency purposes and then, in no event, in excess of 33% of
its net assets , or pledge more than 33% of such assets to secure such loans;
(6) pledge, mortgage, or hypothecate any of its assets to an extent
greater than 10% of its total assets at fair market value, except as described
in (5) above;
(7) invest more than 15% of the value of the Portfolio's total assets
in illiquid securities, which include certain restricted securities, repurchase
agreements with maturities of greater than seven days, and other illiquid
investments;
(8) engage in the business of underwriting securities issued by
others;
(9) invest for the purpose of exercising control over management of
any company;
(10) invest its assets in securities of any investment company, except
in connection with a merger, acquisition of assets, consolidation or
reorganization;
(11) invest more than 5% of its total assets in securities of
companies which have (with predecessors) a record of less than three years'
continuous operation;
(12) 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, except
the RWB/DFA Two-Year Corporate Fixed Income Portfolio shall invest more than 25%
of its total assets in obligations of banks and bank holding companies in the
circumstances described in the prospectus under "Investments in the Banking
Industry" and as otherwise described under "Portfolio Strategy;"
(13) write or acquire options (except as described in (1) above) or
interests in oil, gas or other mineral exploration, leases or development
programs;
(14) purchase warrants, except that the RWB/DFA U.S. High Book to
Market Portfolio may acquire warrants as a result of corporate actions involving
its holdings of equity securities;
(15) purchase securities on margin or sell short; or
(16) acquire more than 10% of the voting securities of any issuer,
provided that this limitation applies only to 75% of the assets of the RWB/DFA
U.S. High Book to Market Portfolio.
The investment limitations described in (3), (4), (7), (9), (10), (11),
(12) and (16) above do not prohibit the RWB/DFA U.S. High Book to Market
Portfolio from investing all or substantially all of its assets in the shares of
another registered open-end investment company, such as the U.S. Large Cap Value
Series of the Trust.
The investment limitations described in (1) and (15) above do not prohibit
a Portfolio that may purchase or sell financial futures contracts and options
thereon from making margin deposits to the extent permitted under applicable
regulations.
4
<PAGE>
Although (2) above prohibits cash loans, the Portfolios are authorized to
lend portfolio securities. Inasmuch as the RWB/DFA U.S. High Book to Market
Portfolio will only hold shares of the U.S. Large Cap Value Series, such
Portfolio does not intend to lend those shares.
For the purposes of (12) above, utility companies will be divided according
to their services; e.g., gas, gas transmission, electric and gas, electric,
water and telephone will each be considered a separate industry.
The RWB/DFA Two-Year Corporate Fixed Income Portfolio may invest in
commercial paper that is exempt from the registration requirements of the
Securities Act of 1933 (the "1933 Act"), subject to the requirements regarding
credit ratings stated in the prospectus under "Description of Investments."
Further, pursuant to Rule 144A under the 1933 Act, the Portfolios may purchase
certain unregistered (i.e. restricted) securities upon a determination that a
liquid institutional market exists for the securities. If it is decided that a
liquid market does exist, the securities will not be subject to the 15%
limitation on holdings of illiquid securities described above. While
maintaining oversight, the Board of Directors has delegated the day-to-day
function of making liquidity determinations to the Advisor. For Rule 144A
securities to be considered liquid, there must be at least two dealers making a
market in such securities. After purchase, the Board of Directors and the
Advisor will continue to monitor the liquidity of Rule 144A securities.
While the Portfolios and the U.S. Large Cap Value Series have retained
authority to buy and sell financial futures contracts and options thereon, they
have no present intention to do so.
Unless otherwise indicated, all limitations applicable to the investments
of the Portfolios and the U.S. Large Cap Value Series apply only at the time
that a transaction is undertaken. Any subsequent change in a rating assigned by
any rating service to a security or change in the percentage of a Portfolio's or
the U.S. Large Cap Value Series' assets invested in certain securities or other
instruments resulting from market fluctuations or other changes in a Portfolio's
or the Series' total assets will not require a Portfolio or the Series to
dispose of an investment until the Advisor determines that it is practicable to
sell or closeout the investment without undue market or tax consequences. In
the event that ratings services assign different ratings to the same security,
the Advisor will determine which rating it believes best reflects the security's
quality and risk at that time, which may be the higher of the several assigned
ratings.
FUTURES CONTRACTS
Please note that while the following discussion relates to the policies of
a Portfolio with respect to futures contracts, it should be understood that with
respect to the RWB/DFA U.S. High Book to Market Portfolio, the discussion
applies to the U.S. Large Cap Value Series of the Trust in which such Portfolio
invests all of its assets.
The Portfolios and the U.S. Large Cap Value Series may enter into futures
contracts and options on futures contracts only for the purpose of remaining
fully invested and to maintain liquidity to pay redemptions. Futures contracts
provide for the future sale by one party and purchase by another party of a
specified amount of defined securities at a specified future time and at a
specified price. Futures contracts which are standardized as to maturity date
and underlying financial instrument are traded on national futures exchanges. A
Portfolio or the U.S. Large Cap Value Series will be required to make a margin
deposit in cash or government securities with a broker or custodian to initiate
and maintain positions in futures contracts. Minimal initial margin
requirements are established by the futures exchange and brokers may
5
<PAGE>
establish margin requirements which are higher than the exchange requirements.
After a futures contract position is opened, the value of the contract is marked
to market daily. If the futures contract price changes, to the extent that the
margin on deposit does not satisfy margin requirements, payment of additional
"variation" margin will be required. Conversely, reduction in the contract
value may reduce the required margin resulting in a repayment of excess margin
to a Portfolio or the U.S. Large Cap Value Series. Variation margin payments
are made to and from the futures broker for as long as the contract remains
open. The Portfolios and the U.S. Large Cap Value Series expect to earn income
on their margin deposits. To the extent that a Portfolio or the Series invests
in futures contracts and options thereon for other than bona fide hedging
purposes, no Portfolio or Series will enter into such transactions if,
immediately thereafter, the sum of the amount of initial margin deposits and
premiums paid for open futures options would exceed 5% of the Portfolio's or the
Series' total assets, after taking into account unrealized profits and
unrealized losses on such contracts it has entered into; provided, however,
that, in the case of an option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in calculating the 5%. Pursuant to
published positions of the Securities and Exchange Commission (the "SEC"), the
Portfolios or the Series may be required to maintain segregated accounts
consisting of liquid assets, such as cash or liquid securities (or, as permitted
under applicable regulation, enter into offsetting positions) in connection with
their futures contract transactions in order to cover their obligations with
respect to such contracts.
Positions in futures contracts may be closed out only on an exchange which
provides a secondary market. However, there can be no assurance that a liquid
secondary market will exist for any particular futures contract at any specific
time. Therefore, it might not be possible to close a futures position and, in
the event of adverse price movements, a Portfolio or the U.S. Large Cap Value
Series would continue to be required to make variation margin deposits. In such
circumstances, if a Portfolio or the U.S. Large Cap Value Series has
insufficient cash, it might have to sell portfolio securities to meet daily
margin requirements at a time when it might be disadvantageous to do so.
Management intends to minimize the possibility that it will be unable to close
out a futures contract by only entering into futures which are traded on
national futures exchanges and for which there appears to be a liquid secondary
market.
FEDERAL TAX TREATMENT OF FUTURES CONTRACTS
Except for transactions a Portfolio or the U.S. Large Cap Value Series has
identified as hedging transactions, the Portfolio or Series is required for
federal income tax purposes to recognize as income for each taxable year its net
unrealized gains and losses on certain futures contracts as of the end of the
year as well as those actually realized during the year. In most cases, any
gain or loss recognized with respect to a futures contract is considered to be
60% long-term gain or loss and 40% short-term capital gain or loss, without
regard to the holding period of the contract. Furthermore, sales of futures
contracts which are intended to hedge against a change in the value of
securities held by a Portfolio or the U.S. Large Cap Value Series may affect the
holding period of such securities and, consequently, the nature of the gain or
loss on such securities upon disposition.
In order for a Portfolio or the U.S. Large Cap Value Series to continue to
qualify for federal income tax treatment as a regulated investment company, at
least 90% of its gross income for a taxable year must be derived from qualifying
income; i.e., dividends, interest, income derived from loans of securities,
gains from the sale of securities and other income derived with respect to the
Portfolio's or the Series' business of investing in securities. In addition,
for the fiscal year ending November 30, 1997, gains realized on the sale or
other disposition of securities held for less than three months must be limited
to less than 30% of the Portfolio's or the Series' annual gross income. It is
anticipated that any net gain realized from closing futures contracts will be
considered gain from the sale of securities and, therefore, constitute
qualifying income for purposes of the 90% requirement. In order to avoid
realizing excessive gains on
6
<PAGE>
securities held less than three months, for the fiscal year ending November 30,
1997, a Portfolio or the U.S. Large Cap Value Series may be required to defer
the closing out of futures contracts beyond the time when it would otherwise be
advantageous to do so. It is anticipated that unrealized gains on futures
contracts which have been open for less than three months as of the end of a
Portfolio's or the Series' fiscal year and which are recognized for tax
purposes, will not be considered gains on sales of securities held less than
three months for the purpose of the 30% test. The Portfolios and the U.S. Large
Cap Value Series will not be subject to this requirement for their fiscal years
beginning on or after December 1, 1997. The Portfolios and the U.S. Large Cap
Value Series will distribute to shareholders annually any net capital gains
which have been recognized for federal income tax purposes (including unrealized
gains at the end of the Portfolio's or the Series' fiscal year) on futures
transactions. Such distributions will be combined with distributions of capital
gains realized on the Portfolio's or the Series' other investments.
DIRECTORS AND OFFICERS
The names, addresses and dates of birth of the directors and officers of
the Fund and a brief statement of their present positions and principal
occupations during the past five years is set forth below.
DIRECTORS
David G. Booth, Director*, (12/2/47), President and Chairman-Chief
Executive Officer, Santa Monica, CA. President, Chairman-Chief Executive
Officer and Director, of the following companies: Dimensional Fund Advisors
Inc., DFA Securities Inc., DFA Australia , Ltd., DFA Investment Dimensions Group
Inc. (registered investment company) and Dimensional Emerging Markets Fund Inc.
(registered investment company). Trustee, President and Chairman-Chief
Executive Officer of The DFA Investment Trust Company (registered investment
company). Chairman and Director, Dimensional Fund Advisors Ltd.
George M. Constantinides, (9/22/47), Director, Chicago, IL. Leo Melamed
Professor of Finance, Graduate School of Business, University of Chicago.
Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions
Group Inc. and Dimensional Emerging Markets Fund Inc.
John P. Gould, (1/19/39), Director, Chicago, IL. Steven G. Rothmeier
Distinguished Service Professor of Economics, Graduate School of Business,
University of Chicago. Trustee, The DFA Investment Trust Company and First
Prairie Funds (registered investment companies). Director, DFA Investment
Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Harbor
Investment Advisors. Executive Vice President, Lexecon Inc. (economics, law,
strategy and finance consulting).
Roger G. Ibbotson, (5/27/43), Director, New Haven, CT. Professor in
Practice of Finance, Yale School of Management. Trustee, The DFA Investment
Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional
Emerging Markets Fund Inc., Hospital Fund, Inc. (investment management services)
and BIRR Portfolio Analysis, Inc. (software products). Chairman and President,
Ibbotson Associates, Inc. (software, data, publishing and consulting).
Merton H. Miller, (5/16/23), Director, Chicago, IL. Robert R. McCormick
Distinguished Service Professor , Graduate School of Business, University of
Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment
Dimensions Group Inc. , Dimensional Emerging Markets Fund Inc. and Public
Director, Chicago Mercantile Exchange.
Myron S. Scholes, (7/1/42), Director, Greenwich, CT. Limited Partner,
Long-Term Capital Management L.P. (money manager). Frank E. Buck Professor
Emeritus of Finance, Graduate School of Business and Professor of Law, Law
School, Senior Research Fellow, Hoover Institution, (all) Stanford
7
<PAGE>
University (on leave). Trustee, The DFA Investment Trust Company. Director,
DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc.,
Benham Capital Management Group of Investment Companies and Smith Breedon Group
of Investment Companies.
Rex A. Sinquefield, (9/7/45), Director*, Chairman - Chief Investment
Officer, Santa Monica, CA. Chairman-Chief Investment Officer and Director,
Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Ltd., DFA
Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc.
Trustee, Chairman-Chief Investment Officer of The DFA Investment Trust Company.
Chairman, Chief Executive Officer and Director, Dimensional Fund Advisors Ltd.
*Interested Director of the Fund.
OFFICERS
Each of the officers listed below hold the same office in the following
entities: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia
Limited, DFA Investment Dimensions Group Inc., The DFA Investment Trust Company,
Dimensional Fund Advisors Ltd., and Dimensional Emerging Markets Fund Inc.
Arthur Barlow, (11/7/56), Vice President, Santa Monica, CA.
Truman Clark, (4/8/41), Vice President, Santa Monica, CA. Consultant until
October 1995 and Principal and Manager of Product Development, Wells Fargo Nikko
Investment Advisors, San Francisco, CA from 1990 -1994.
Maureen Connors, (11/17/37), Vice President, Santa Monica, CA.
Robert Deere, (10/8/58), Vice President, Santa Monica, CA.
Irene R. Diamant, (7/16/50), Vice President and Secretary, Santa Monica,
CA.
Eugene Fama, Jr., (1/21/61), Vice President, Santa Monica, CA.
Kamyab Hashemi-Nejad, (1/22/61), Vice President, Controller and Assistant
Treasurer, Santa Monica, CA.
Stephen P. Manus, (12/26/50), Vice President, Santa Monica, CA. Managing
Director, ANB Investment Management and Trust Company from 1985-1993; President,
ANB Investment Management and Trust Company from 1993-1997.
Karen McGinley, (3/10/66), Vice President, Santa Monica, CA.
Catherine L. Newell, (5/7/64), Vice President, Santa Monica, CA.
Associate, Morrison & Foerster, LLP from 1989 to 1996.
David Plecha, (10/26/62), Vice President, Santa Monica, CA.
George Sands, (2/8/56), Vice President, Santa Monica, CA.
8
<PAGE>
Michael T. Scardina, (10/12/56), Vice President, Chief Financial Officer,
Controller and Treasurer, Santa Monica, CA.
Jeanne C. Sinquefield, Ph.D., (12/2/47), Executive Vice President, Santa
Monica, CA.
Scott Thornton, (3/1/63), Vice President, Santa Monica, CA.
Weston Wellington, (3/1/51), Vice President, Santa Monica, CA.
Rex A. Sinquefield and Jeanne C. Sinquefield are husband and wife.
Set forth below is a table listing, for each director entitled to receive
compensation, the compensation received from the Fund during the fiscal year
ended November 30, 1996, and the total compensation received from all four
registered investment companies for which the Advisor serves as investment
advisor during that same fiscal year.
Aggregate Total Compensation from
Compensation Fund
Director from Fund and Fund Complex
- -------- ------------ -----------------------
George M. Constantinides $5,000 $30,000
John P. Gould $5,000 $30,000
Roger G. Ibbotson $5,000 $30,000
Merton H. Miller $5,000 $30,000
Myron S. Scholes $5,000 $30,000
Directors and officers as a group own less than 1% of each Portfolio's
outstanding stock.
ADMINISTRATIVE SERVICES
PFPC Inc. ("PFPC") serves as the accounting services, dividend disbursing
and transfer agent for the Portfolios and the U.S. Large Cap Value Series. The
services provided by PFPC are subject to supervision by the executive officers
and the Board of Directors of the Fund and include day-to-day keeping and
maintenance of certain records, calculation of the net asset value of the
shares, preparation of reports, liaison with the Portfolios' and the Series'
custodian, and dividend disbursing agency services.
For its services, the RWB/DFA U.S. High Book to Market Portfolio pays PFPC
a monthly fee of $1,000. The RWB/DFA Two-Year Corporate Fixed Income Portfolio
and the RWB/DFA Two-Year Government Portfolio each pay PFPC .0513% of the first
$100 million of net assets; .0308% of the next $100 million of net assets; and
.0205% of net assets over $200 million.
OTHER INFORMATION
The Fund was known as DFA U.S. Large Cap Inc. from February 1992, until the
Fund amended its Articles of Incorporation in April 1993, to change to its
present name. Prior to a February 1992, amendment to the Fund's Articles of
Incorporation, the Fund was known as DFA U.S. Large Cap Portfolio Inc. The Fund
commenced offering shares of the Portfolios in May 1996.
9
<PAGE>
PNC Bank, N.A. serves as the custodian for the Portfolios and the U.S.
Large Cap Value Series. The custodian maintains a separate account or accounts
for the Portfolios and the Series; receives, holds and releases portfolio
securities on account of the Portfolios and the Series; makes receipts and
disbursements of money on behalf of the Portfolios and the Series; and collects
and receives income and other payments and distributions on account of the
Portfolios' and the Series' portfolio securities.
Coopers & Lybrand L.L.P., the Fund's independent accountants, audits the
Fund's financial
statements on an annual basis.
PRINCIPAL HOLDERS OF SECURITIES
As of August 31, 1997, the following person/persons owns/own more than 5%
of the voting securities of each portfolio:
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
Charles Schwab & Co.-REIN* 83.22%
101 Montgomery Street
San Francisco, CA 94104
Donaldson, Lufkin & Jenrette Securities Corp.-
Pershing Division* 15.30%
P.O. Box 2052
Jersey City, NJ 07303
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
Charles Schwab & Co.-CASH* 88.18%
101 Montgomery Street
San Francisco, CA 94104
Donaldson, Lufkin & Jenrette Securities Corp.-
Pershing Division* 9.00%
P.O. Box 2052
Jersey City, NJ 07303
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
Charles Schwab & Co.-CASH* 92.55%
101 Montgomery Street
San Francisco, CA 94104
Donaldson, Lufkin & Jenrette Securities Corp.-
Pershing Division* 6.15%
P.O. Box 2052
Jersey City, NJ 07303
*Owner of record only.
PURCHASE OF SHARES
10
<PAGE>
The following information supplements the information set forth in the
prospectus under the caption "PURCHASE OF SHARES."
The Fund will accept purchase and redemption orders on each day that the
New York Stock Exchange ("NYSE") is open for business. On other days, the Fund
will generally be closed. The NYSE is scheduled to be open Monday through
Friday throughout the year except for days closed to recognize New Year's Day,
Martin Luther King, Jr.'s Birthday, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas Day. Orders for
redemptions and purchases will not be processed if the Fund is closed.
The Fund reserves the right, in its sole discretion, to suspend the
offering of shares of any or all Portfolios or reject purchase orders when, in
the judgment of management, such suspension or rejection is in the best interest
of the Fund or a Portfolio. Securities accepted in exchange for shares of a
Portfolio will be acquired for investment purposes and will be considered for
sale under the same circumstances as other securities in the Portfolio.
REDEMPTION OF SHARES
The following information supplements the information set forth in the
prospectus under the caption "REDEMPTION OF SHARES."
The Fund may suspend redemption privileges or postpone the date of payment:
(1) during any period when the NYSE is closed, or trading on the NYSE is
restricted as determined by the Securities and Exchange Commission (the "SEC"),
(2) 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 Fund to
dispose of securities owned by it, or fairly to determine the value of its
assets, and (3) for such other periods as the SEC may permit.
If the Board of Directors of the Fund determines that it would be
detrimental to the best interests of the remaining shareholders of a Portfolio
to make payment wholly or partly in cash, the Portfolio may pay the redemption
price by a distribution of readily marketable portfolio securities from the
Portfolio in lieu of cash. With respect to the RWB/DFA U.S. High Book to Market
Portfolio, upon such a determination by both the Board of Directors of the Fund
and Board of Trustees of the Trust, the Portfolio may pay the redemption price,
in lieu of cash, by a distribution of portfolio securities that the RWB/DFA U.S.
High Book to Market Portfolio receives from the U.S. Large Cap Value Series to
satisfy the Portfolio's redemption request. Any such redemption by a Portfolio
and/or the U.S. Large Cap Value Series would be in accordance with Rule 18f-1
under the 1940 Act. Investors may incur brokerage charges and other transaction
costs selling securities that were received in payment of redemptions.
Shareholders may transfer shares of any Portfolio to another person by
making a written request therefore to the Advisor who will transmit the request
to PFPC. The request should clearly identify the account and number of shares
to be transferred, and include the signature of all registered owners and all
stock certificates, if any, which are subject to the transfer. The signature on
the letter of request, the stock certificate or any stock power must be
guaranteed in the same manner as described in the prospectus under "REDEMPTION
OF SHARES." As with redemptions, the written request must be received in good
order before any transfer can be made.
CALCULATION OF PERFORMANCE DATA
Following are quotations of the annualized percentage total returns for
each Portfolio for the one-, five-, and ten-year periods ended May 31, 1997 (as
applicable) using the standardized method of calculation required by the SEC.
Since each Portfolio, as of May 31, 1997, had been in
11
<PAGE>
operation for less than one year, the time period during which each Portfolio
was in operation has been substituted for the period stated (which does not
extend prior to the effective date of the Portfolio's registration statement
with the SEC.)
One Five Ten
Year Years Years
---- ----- -----
RWB/DFA U.S. High Book to Market Portfolio 19.93% n/a n/a
RWB/DFA Two-Year Corporate Fixed Income Portfolio 11
months n/a n/a
6.27%
RWB/DFA Two-Year Government Portfolio 11
months n/a n/a
5.93%
As the following formula indicates, each Portfolio and the U.S. Large Cap
Value Series determines its annualized total return by finding the annualized
total return over the stated time period that would equate a hypothetical
initial purchase order of $1,000 to its redeemable value (including capital
appreciation/depreciation and dividends and distributions paid and reinvested
less any fees charged to a shareholder account) at the end of the stated time
period. The calculation assumes that all dividends and distributions are
reinvested at the public offering price on the reinvestment dates during the
period. The calculation also assumes the account was completely redeemed at the
end of each period and the deduction of all applicable charges and fees.
According to the SEC formula:
n
P(1 + T) = ERV
where:
P = a hypothetical initial payment of $1,000
T = annualized compounded rate of return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the one-, five- and ten-year periods at the end of the one-, five-
and ten-year periods (or fractional portion thereof).
In addition to the standardized method of calculating performance required
by the SEC, the Portfolios and the U.S. Large Cap Value Series may disseminate
other performance data. Non-standardized return data may be presented over time
periods which extend prior to when a Portfolio or the U.S. Large Cap Value
Series commenced investment operations by using simulated data consistent with
the investment policy of the Portfolio and the Series for that portion of the
period prior to the initial investment date. The simulated data would exclude
the deduction of Portfolio and Series expenses, as applicable, which would
otherwise reduce the returns quotations.
12
<PAGE>
The Portfolios may compare their investment performance to appropriate
market and mutual fund indices and investments for which reliable performance
data is available. Such indices are generally unmanaged and are prepared by
entities and organizations which track the performance of investment companies
or investment advisors. Unmanaged indices often do not reflect deductions for
administrative and management costs and expenses. The performance of the
Portfolios may also be compared in publications to averages, performance
rankings or other information prepared by recognized mutual fund statistical
services. Any performance information, whether related to the Portfolios or to
the Advisor, should be considered in light of a Portfolio's investment
objectives and policies, characteristics and the quality of the Portfolio and
market conditions during the time period indicated and should not be considered
to be representative of what may be achieved in the future.
FINANCIAL STATEMENTS
The audited financial statements and financial highlights of each Portfolio
for the Fund's fiscal period from June 7, 1996 (commencement of operations) to
November 30, 1996, as set forth in the Fund's annual report to shareholders of
each Portfolio, and the report thereon of Coopers & Lybrand L.L.P., independent
accountants, also appearing therein, are incorporated herein by reference.
The audited financial statements of the U.S. Large Cap Value Series, DFA
Two-Year Corporate Fixed Income Series and DFA Two-Year Government Series of the
Trust for the Trust's fiscal year ended November 30, 1996, as set forth in the
Trust's annual report to shareholders and the report thereon of Coopers &
Lybrand L.L.P., independent accountants, also appearing therein, are
incorporated herein by reference.
The unaudited financial statements and financial highlights of each
Portfolio for the six months ended May 31, 1997, as set forth in the Fund's
Semi-Annual Report to shareholders, are incorporated herein by reference. The
unaudited financial statements of the U.S. Large Cap Value Series, DFA Two-Year
Corporate Fixed Income Series and DFA Two-Year Government Series of the Trust
for the six months ended May 31, 1997, as set forth in the Trust's Semi-Annual
Report to shareholders, are incorporated herein by reference.
A shareholder may obtain a copy of the reports upon request and without
charge, by contacting the Fund at the address or telephone number appearing on
the cover of this Statement of Additional Information.
13
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS.
Audited financial statements dated November 30, 1996 for each
series of the Registrant were filed on January 24, 1997 via the
U.S. Securities and Exchange Commission's EDGAR System in the
Annual Report to shareholders of DIMENSIONAL INVESTMENT GROUP
INC. pursuant to Rule 30b2-1 under the Investment Company Act of
1940 ("1940 Act"). Such financial statements are incorporated
into the Statements of Additional Information of DIMENSIONAL
INVESTMENT GROUP INC. dated March 28, 1997 and November __, 1997.
Additionally, the unaudited financial statements, dated May 31,
1997, of RWB/DFA U.S. High Book to Market Portfolio, RWB/DFA
Two-Year Corporate Fixed Income Portfolio and RWB/DFA Two-Year
Government Portfolio (collectively, the "RWB/DFA Portfolios"),
which were filed on August 4, 1997 via EDGAR in Registrant's
Semi-Annual Report to shareholders, are incorporated by reference
into the RWB/DFA Portfolios' Statement of Additional Information
dated November __, 1997.
The audited financial statements of U.S. 6-10 Small Company
Series, U.S. Small Cap Value Series, U.S. Large Cap Value Series,
DFA One-Year Fixed Income Series, DFA International Value Series,
Emerging Markets Series, DFA Two-Year Corporate Fixed Income
Series and DFA Two-Year Government Series of The DFA Investment
Trust Company (the "Trust") for the fiscal year ended November
30, 1996, as set forth in the Trust's Annual Report to
shareholders, were filed with the SEC pursuant to Rule 30b2-1
under the 1940 Act and are incorporated by reference into
Registrant's Statements of Additional Information dated March 28,
1997 and November __, 1997. Additionally, the unaudited
financial statements for U.S. Large Cap Value Series, DFA
Two-Year Corporate Fixed Income Series and DFA Two-Year
Government Series of the Trust for the six months ended May 31,
1997, as set forth in the Trust's Semi-Annual Report to
shareholders, which were filed via EDGAR on August 4, 1997, are
incorporated by reference into the RWB/DFA Portfolios' Statement
of Additional Information dated November __, 1997. Financial
statements for DFA International Value
<PAGE>
Portfolio IV and Emerging Markets Portfolio II are not included
as such Portfolios had not commenced operations as of the date of
this Registration Statement.
(b) EXHIBITS.
(1) CHARTER, AS NOW IN EFFECT.
(a) Form of Articles of Restatement.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 11/12 to the
Registration Statement of the Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(b) Form of Articles Supplementary.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
16/17 to the Registration Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: June 20, 1997.
(2) BY-LAWS. To be filed by amendment.
(3) VOTING TRUST AGREEMENT.
None.
(4) INSTRUMENTS DEFINING RIGHTS OF HOLDERS OF SECURITIES BEING
REGISTERED.
(a) See Article Fifth of the Registrant's Articles of
Restatement
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 11/12 to the
Registration Statement of the Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(b) Specimen security on behalf of the:
(1) DFA 6-10 Institutional Portfolio**.
(2) DFA International Value Portfolio**.
(3) DFA International Value Portfolio II**.
(4) U.S. Small Cap Value Portfolio II**.
(5) U.S. Large Cap Value Portfolio II**.
C-2
<PAGE>
(6) DFA One-Year Fixed Income Portfolio II**.
(7) U.S. Large Cap Value Portfolio III**.
(8) DFA International Value Portfolio III**.
(9) RWB/DFA U.S. High-Book-to-Market Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 12/13 to the
Registration Statement of the Registrant on Form
N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(10) RWB/DFA Two-Year Corporate Fixed Income Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 12/13 to the
Registration Statement of the Registrant on Form
N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(11) RWB/DFA Two-Year Government Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 12/13 to the
Registration Statement of the Registrant on Form
N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(5) (a) INVESTMENT ADVISORY CONTRACTS:
(1) Form of Investment Advisory Agreement between
Registrant and DFA re: the RWB/DFA Two-Year
Corporate Fixed Income Portfolio is filed
herewith.
(2) Form of Investment Advisory Agreement between
Registrant and DFA re: the RWB/DFA Two-Year
Government Portfolio is filed herewith.
C-3
<PAGE>
(6) UNDERWRITING DISTRIBUTION CONTRACT BETWEEN THE REGISTRANT
AND A PRINCIPAL UNDERWRITER.
Distribution Agreement dated April 16, 1993 between the
Registrant and DFA Securities Inc.**.
(7) None.
(8) CUSTODY AGREEMENTS.
(a) Form of Custodian Agreement between the Registrant and
PNC Bank, N.A. (formerly Provident National Bank) (the
"Custody Agreement")**.
(1) Form of Amendment Number One to the Custody
Agreement**.
(2) Form of Amendment Number Two to the Custody
Agreement***.
(3) Form of Amendment Number Three to the Custody
Agreement***.
(4) Form of Amendment Number Four to the Custody
Agreement***.
(5) Form of Amendment Number Five to the Custody
Agreement***.
(6) Form of Amendment Number Six to the Custody
Agreement.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 12/13 to the
Registration Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(7) Form of Amendment Number Seven to the Custody
Agreement
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 16/17 to the
Registration Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: June 20, 1997.
(8) Form of Amendment Number Eight to the Custody
Agreement re: DFA International Value Portfolio IV
and Emerging Markets Portfolio II.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
C-4
<PAGE>
No. 16/17 to the Registration Statement
on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: June 20, 1997.
(9) (a) Form of Transfer Agency Agreement between the
Registrant and PFPC Inc. (formerly Provident
Financial Processing Corporation) (the
"Transfer Agency Agreement")**.
(1) Form of Amendment to the Transfer Agency
Agreement***.
(2) Form of Amendment Number One to the Transfer
Agency Agreement***.
(3) Form of Amendment Number Two to the Transfer
Agency Agreement***.
(4) Form of Amendment Number Three to the
Transfer Agency Agreement***.
(5) Form of Amendment Number Four to the Transfer
Agency Agreement***.
(6) Form of Amendment Number Five to the Transfer
Agency Agreement***.
(7) Form of Amendment Number Six dated March 1,
1996 to the Transfer Agency Agreement re: the
RWB/DFA U.S. High Book to Market Portfolio,
RWB/DFA Two-Year Corporate Fixed Income
Portfolio and RWB/DFA Two-Year Government
Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 12/13
to the Registration Statement of Registrant
on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
C-5
<PAGE>
(8) Form of Amendment Number Seven to the
Transfer Agency Agreement re: DFA
International Value Portfolio IV and Emerging
Markets Portfolio II.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 16/17
to the Registration Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: June 20, 1997.
(b) Form of Administration and Accounting Services
Agreement between the Registrant and PFPC Inc.
(formerly with Provident Financial Processing
Corporation) (the "Accounting Services
Agreement")**.
(1) Form of Amendment to the Accounting Services
Agreement**.
(2) Form of Amendment Number One to the
Accounting Services Agreement***.
(3) Form of Amendment Number Two to the
Accounting Services Agreement***.
(4) Form of Amendment Number Three to the
Accounting Services Agreement***.
(5) Form of Amendment Number Four to the
Accounting Services Agreement***.
(6) Form of Amendment Number Five to the
Accounting Services Agreement***.
(7) Form of Amendment Number Six dated March 1,
1996 to the Accounting Services Agreement re:
RWB/DFA U.S. High Book to Market Portfolio,
RWB/DFA Two-Year Corporate Fixed
C-6
<PAGE>
Income Portfolio and RWB/DFA Two-Year
Government Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 12/13
to the Registration Statement of Registrant
on Form N-1A
File Nos.: 33-33980 and 811-6067
Filing Date: December 15, 1995.
(8) Form of Amendment Number Seven to the
Accounting Services Agreement re: DFA
International Value Portfolio IV and Emerging
Markets Portfolio II.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 16/17
to the Registration Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: June 20, 1997.
(c) ADMINISTRATION AGREEMENTS.
(1) Form of between the Registrant and Dimensional
Fund Advisors Inc. ("DFA") dated May 3, 1993 re:
the DFA 6-10 Institutional Portfolio**.
(2) Form of between the Registrant and DFA dated
December 1, 1993 re: the DFA International Value
Portfolio**.
(3) Form of between the Registrant and DFA re: the DFA
International Value Portfolio II**.
(4) Form of between the Registrant and DFA dated
January 1, 1994 re: the U.S. Small Cap Value
Portfolio II**.
(5) Form of between the Registrant and DFA dated July
1, 1994 re: the U.S. Large Cap Value Portfolio
II**.
(6) Form of between the Registrant and DFA dated
September 30, 1994 re: the
C-7
<PAGE>
DFA One-Year Fixed Income Portfolio II**.
(7) Form of between the Registrant and DFA dated
December 20, 1994 re: the U.S. Large Cap Value
Portfolio III**.
(8) Form of between the Registrant and DFA dated
December 20, 1994 re: the DFA International Value
Portfolio III**.
(9) Form of between the Registrant and DFA dated March
1, 1996 re: the RWB/DFA U.S. High Book to Market
Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 12/13 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(10) Form of between the Registrant and DFA dated March
1, 1996 re: the RWB/DFA Two-Year Corporate Fixed
Income Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 12/13 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(11) Form of between the Registrant and DFA dated March
1, 1996 re: the RWB/DFA Two-Year Government
Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 12/13 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(12) Form of re: the DFA Five-Year Government Portfolio
II.**
C-8
<PAGE>
(13) Form of re: DFA International Value Portfolio IV.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 16/17 to the Registration
Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: June 20, 1997.
(14) Form of re: Emerging Markets Portfolio II.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 16/17 to the Registration
Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: June 20, 1997.
(d) CLIENT SERVICE AGREEMENTS.
(1) Form of re: the RWB/DFA Two-Year Corporate Fixed
Income Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 12/13 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(2) Form of re: the RWB/DFA Two-Year Government
Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 12/13 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(3) Form of Client Service Agent Agreement re: the
RWB/DFA U.S. High Book-to-Market Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 12/13 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(e) OTHER.
C-9
<PAGE>
(1) Form of Facility Agreement with Dimensional Fund
Advisors Inc.**.
(2) Form of Shareholders Agreement**.
(10) OPINION OF COUNSEL. Opinion of counsel was filed on January
24, 1997 with the Registrant's Rule 24f-2 Notice.
(11) CONSENTS. Consent of Coopers & Lybrand, L.L.P. is filed
herewith
(12) FINANCIAL STATEMENTS OMITTED FROM ITEM 23.
Not applicable.
(13) AGREEMENTS OF UNDERSTANDINGS MADE IN CONSIDERATION FOR
PROVIDING INITIAL CAPITAL.
(a) Form of Subscription Agreement under Section 14(a)(3)
of Investment Company Act of 1940**.
(14) MODEL PLAN USED IN THE ESTABLISHMENT OF ANY RETIREMENT PLAN.
None.
(15) (a) PLANS ENTERED INTO PURSUANT TO RULE 12B-1.
None.
(b) AGREEMENTS RELATING TO IMPLEMENTATION WITH PLAN.
None.
(16) PERFORMANCE CALCULATIONS.
(17) FINANCIAL DATA SCHEDULES.
Financial Data Schedules dated May 31, 1997 relating to the:
(1) DFA 6-10 Institutional Portfolio of the
Registrant.
(2) DFA International Value Portfolio of the
Registrant.
(3) DFA International Value Portfolio II of the
Registrant.
(4) U.S. Small Cap Value Portfolio II of the
Registrant.
C-10
<PAGE>
(5) U.S. Large Cap Value Portfolio II of the
Registrant.
(6) DFA One-Year Fixed Income Portfolio II of the
Registrant.
(7) U.S. Large Cap Value Portfolio III of the
Registrant.
(8) DFA International Value Portfolio III of the
Registrant.
(9) RWB/DFA U.S. High-Book-to-Market Portfolio of the
Registrant.
(10) RWB/DFA Two-Year Corporate Fixed Income Portfolio
of the Registrant.
(11) RWB/DFA Two-Year Government Portfolio of the
Registrant.
(18) PLANS PURSUANT TO RULE 18F-3.
Not applicable.
(19) POWERS-OF-ATTORNEY.
(a) Powers-of-Attorney on behalf of the Registrant
appointing David G. Booth, Rex A. Sinquefield, Michael
T. Scardina, Irene R. Diamant and Stephen W. Kline,
Esquire as attorneys in fact, and certified resolution
relating thereto.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 6/7 to the
Registration Statement of the Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: August 2, 1994.
(b) On behalf of the DFA Investment Trust Company
appointing David G. Booth, Rex A. Sinquefield, Michael
Scardina, Irene R. Diamant and Stephen W. Kline,
Esquire as attorneys in fact, and certified resolution
relating thereto.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 13/14 to the
Registration Statement of the Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 28, 1996.
C-11
<PAGE>
(c) On behalf of the Registrant, dated July 18, 1997,
appointing David G. Booth, Rex A. Sinquefield, Michael
T. Scardina, Irene R. Diamant, Catherine L. Newell and
Stephen W. Kline, Esquire as attorneys in fact and
certified resolution thereto is filed herewith.
(d) On behalf of DFA Investment Trust Company, dated July
18, 1997, appointing David G. Booth, Rex A.
Sinquefield, Michael T. Scardina, Irene R. Diamant,
Catherine L. Newell and Stephen W. Kline, Esquire as
attorneys in fact and certified resolution thereto is
filed herewith.
** Previously filed with this registration statement and incorporated
herein by reference.
*** To be filed by amendment.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
(1) (2)
Number of Record
Title of Class Holders as of
(Par Value $.01) August 31, 1997
---------------- ---------------
DFA 6-10 Institutional Portfolio 2
DFA International Value Portfolio 81
DFA International Value Portfolio II 1
U.S. Small Cap Value Portfolio II 1
U.S. Large Cap Value Portfolio II 1
DFA One-Year Fixed Income Portfolio II 6
DFA International Value Portfolio III 1
U.S. Large Cap Value Portfolio III 2
RWB/DFA U.S. High Book-to-Market
Portfolio 5
RWB/DFA Two-Year Corporate Fixed
Income Portfolio 5
RWB/DFA Two-Year Government
Portfolio 5
DFA International Value Portfolio IV 1
Emerging Markets Portfolio II 1
C-12
<PAGE>
ITEM 27. INDEMNIFICATION.
(a) Section 1 of Article Ten of the Registrant's By-Laws, as approved
through December 20, 1995, provides for indemnification, as set forth
below (with respect to the indemnification of the Officers and
Directors of the corporation):
(1) The Corporation shall indemnify each Officer and Director
made party to a proceeding, by reason of service in such
capacity, to the fullest extent, and in the manner provided
under Section 2-418 of the Maryland General Corporation Law:
(i) unless it is proved that the person seeking
indemnification did not meet the standard of conduct set
forth in subsection (b)(1) of such section; and (ii)
provided, that the Corporation shall not indemnify any
Officer or Director for any liability to the Corporation or
its security holders arising from the willful misfeasance,
bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such person's office.
(2) The provisions of clause (i) of paragraph (a) herein
notwithstanding, the Corporation shall indemnify each
Officer and Director against reasonable expenses incurred in
connection with the successful defense of any proceeding to
which such Officer or Director is a party by reason of
service in such capacity.
(3) The Corporation, in the manner and to the extent provided by
applicable law, shall advance to each Officer and Director
who is made party to a proceeding by reason of service in
such capacity the reasonable expenses incurred by such
person in connection therewith.
(b) Registrant's Articles of Incorporation provide the following
under Article Seventh:
(1) To the fullest extent that limitations on the liability of
directors and officers are permitted by the Maryland General
Corporation Law, as amended from time to time, no director
or officer of the Corporation shall have any liability to
the Corporation or its stockholders for money damages. This
limitation on liability applies to liabilities occurring for
acts or omissions occurring at the time a person serves as a
director or
C-13
<PAGE>
officer of the Corporation, whether or not such person is a
director or officer at the time of any proceeding in which
liability is asserted.
(2) Notwithstanding the foregoing, this Article SEVENTH shall
not operate to protect any director or officer of the
Corporation against any liability to the Corporation or its
stockholders to which such person would otherwise be subject
by reason or willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in
the conduct of such person's office.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR.
(a) Registrant's Investment Advisor, Dimensional Fund Advisors Inc.
(the "Advisor"), was organized in May, 1981. The principal place
of business of the Advisor is 1299 Ocean Avenue, 11th Floor,
Santa Monica, CA 90401. The Advisor is engaged in the business
of providing investment advice primarily to institutional
investors.
(b) Information as to any other business, vocation or employment of a
substantial nature in which each director or officer of the
Registrant has been engaged for his own account or in the
capacity of director, officer, employee, partner or trustee is as
follows:
(1) David G. Booth.
Chairman, Chief Executive Officer and Director of the
following:
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Investment Dimensions Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
(2) Rex A. Sinquefield.
Chairman, Chief Investment Officer and Director of the
following:
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Investment Dimensions Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
(3) Eugene Francis Fama.
Vice-President of the following:
C-14
<PAGE>
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Investment Dimensions Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
Other: Mr. Fama is the Robert R. McCormick Distinguished
Service Professor of Finance and has engaged in teaching and
research in finance and economics at the Graduate School of
Business, University of Chicago, Chicago, Illinois since
September, 1963.
(4) Arthur Barlow.
Vice-President of the following:
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Investment Dimensions Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
(5) Truman Clark.
Vice-President of the following:
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Investment Dimensions Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
Other: Mr. Clark was a Consultant until October 1995;
formerly thereto, he was a Principal and Manager of Product
Development, Wells Fargo Nikko Investment Advisors, San
Francisco, CA (1990-1994).
(6) Maureen Connors.
Vice-President of the following:
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Investment Dimensions Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
(7) Robert Deere.
Vice-President of the following:
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Investment Dimensions Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
(8) Irene R. Diamant.
Vice-President and Secretary of the following:
Registrant, DFA Securities Inc., DFAL, DFA Australia,
Investment Dimensions Group Inc., Dimensional Emerging
Markets Inc. and DFA Investment Trust Company.
C-15
<PAGE>
(9) Kamyab Hashemi-Nejad.
Vice-President, Controller and Assistant Treasurer of the
following: Registrant, DFA Securities Inc., DFAL, DFA
Australia, Investment Dimensions Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
(10) Karen McGinley.
Vice-President of the following:
Registrant, DFA Securities Inc., DFAL, DFA Australia,
Investment Dimensions Group Inc., Dimensional Emerging
Markets Inc. and DFA Investment Trust Company.
(11) Steve Manus.
Vice-President of the following:
Registrant, DFA Securities Inc., DFAL, DFA Australia,
Investment Dimensions Group Inc., Dimensional Emerging
Markets Inc. and DFA Investment Trust Company.
(12) Catherine Newell.
Vice-President of the following:
Registrant, DFA Securities Inc., DFAL, DFA Australia,
Investment Dimensions Group Inc., Dimensional Emerging
Markets Inc. and DFA Investment Trust Company.
(13) David Plecha.
Vice-President of the following:
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Investment Dimensions Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
(14) George Sands.
Vice-President of the following:
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Dimensional Investment Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
Other: Mr. Sands was a Managing Director of Asset Strategy
Consulting in Los Angeles, CA from March, 1991 to August,
1992; formerly thereto, he was a Vice President of Wilshire
Associates in Santa Monica, CA (1985 to February, 1991).
(15) Michael T. Scardina.
C-16
<PAGE>
Vice President, Chief Financial Officer, Controller and
Treasurer of the following:
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Investment Dimensions Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
(16) Jeanne C. Sinquefield.
Executive Vice President of the following:
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Investment Dimensions Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
(17) Scott Thornton.
Vice President of the following:
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Investment Dimensions Group Inc., Dimensional
Emerging Markets Inc. and DFA Investment Trust Company.
(18) Weston Wellington.
Vice President of the following:
Registrant, Advisor, DFA Securities Inc., DFAL, DFA
Australia, Dimensional Investment Group Inc., Dimensional
Emerging Markets Inc., and DFA Investment Trust Company.
(c) Information as to any other business, vocation or employment of a
substantial nature in which each director or officer of the
Advisor has been engaged for his own account or in the capacity
of director, officer, employee, partner or trustee is described
on Form ADV of Dimensional Fund Advisors Inc., currently on file
with the Securities and Exchange Commission in compliance with
the Investment Advisors Act of 1940.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) NAMES OF INVESTMENT COMPANIES FOR WHICH THE REGISTRANT'S
PRINCIPAL UNDERWRITER ALSO ACTS AS PRINCIPAL UNDERWRITER.
Not Applicable.
(b) Registrant distributes its own shares. It has entered into an
agreement with DFA Securities Inc. dated April 16, 1993 which
provides that DFA Securities Inc., 1299 Ocean Avenue, 11th Floor,
Santa Monica, CA 90401, will supervise the sale of Registrant's
shares. This agreement is subject to the requirements of Section
15(b) of the Investment Company Act of 1940.
C-17
<PAGE>
(c) COMMISSIONS AND OTHER COMPENSATION RECEIVED BY EACH PRINCIPAL
UNDERWRITER WHO IS NOT AN AFFILIATED PERSON OF THE REGISTRANT.
Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Most accounts and records are maintained by PFPC Inc., 400 Bellevue
Parkway, Wilmington, DE 19809. Other records are maintained by
Registrant at its business office at 1299 Ocean Avenue, 11th Floor,
Santa Monica, CA 90401.
ITEM 31. MANAGEMENT SERVICES.
NONE
ITEM 32. UNDERTAKINGS.
(a) Not applicable.
(b) The Registrant hereby undertakes to file a Post-Effective
Amendment, including financial statements of DFA International
Value Portfolio IV and Emerging Markets Portfolio II, which need
not be certified, within four to six months from the effective
date of this Registration Statement.
(c) The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
C-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post Effective
Amendment Nos. 17/18 to its Registration Statement to be signed on its behalf by
the undersigned, thereto duly authorized, in the City of Santa Monica and the
State of California on the 1st day of October, 1997.
DIMENSIONAL INVESTMENT GROUP INC.
By: David G. Booth*
---------------------------------
David G. Booth
President
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 17/18 to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
Director and
David G. Booth* Chairman-Chief October 1, 1997
- ------------------------- Executive Officer
David G. Booth
Director and
Rex A. Sinquefield* Chairman-Chief October 1, 1997
- ------------------------- Investment Officer
Rex A. Sinquefield
Chief Financial
Michael T. Scardina* Officer, Treasurer October 1, 1997
- ------------------------- and Vice President
Michael T. Scardina
George M. Constantinides* Director October 1, 1997
- -------------------------
George M. Constantinides
John P. Gould* Director October 1, 1997
- -------------------------
John P. Gould
Roger G. Ibbotson* Director October 1, 1997
- -------------------------
Roger G. Ibbotson
Merton H. Miller* Director October 1, 1997
- -------------------------
Merton H. Miller
Myron S. Scholes* Director October 1, 1997
- -------------------------
Myron S. Scholes
* By: Irene R. Diamant
----------------------------------
Irene R. Diamant, attorney-in-fact
(Pursuant to Power of Attorney filed herewith as Exhibit 24(b)(19)(c)
<PAGE>
SIGNATURES
The DFA Investment Trust Company consents to the filing of this Amendment
No. 17/18 to the Registration Statement of Dimensional Investment Group Inc.
which is signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Santa Monica and State of California on the
1st day of October, 1997.
THE DFA INVESTMENT TRUST COMPANY
By: David G. Booth*
--------------------------------
David G. Booth
President and
Chairman-Chief Executive Officer
The undersigned Trustees and Principal Officers of The DFA Investment Trust
Company consent to the filing of this Amendment No. 17/18 to the Registration
Statement of Dimensional Investment Group Inc. on the dates indicated.
Signature Title Date
- --------- ----- ----
Director and
David G. Booth* Chairman-Chief October 1, 1997
- ------------------------- Executive Officer
David G. Booth
Director and
Rex A. Sinquefield* Chairman-Chief October 1, 1997
- ------------------------- Investment Officer
Rex A. Sinquefield
Chief Financial
Michael T. Scardina* Officer, Treasurer October 1, 1997
- ------------------------- and Vice President
Michael T. Scardina
George M. Constantinides* Director October 1, 1997
- -------------------------
George M. Constantinides
John P. Gould* Director October 1, 1997
- -------------------------
John P. Gould
Roger G. Ibbotson* Director October 1, 1997
- -------------------------
Roger G. Ibbotson
Merton H. Miller* Director October 1, 1997
- -------------------------
Merton H. Miller
Myron S. Scholes* Director October 1, 1997
- -------------------------
Myron S. Scholes
* By: Irene R. Diamant
----------------------------------
Irene R. Diamant, attorney-in-fact
(Pursuant to Power of Attorney filed herewith as Exhibit 24(b)(19)(d)
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
- ----------- -------
99(b)(5)(a)(1) Form of Investment Advisory Agreement re: the RWB/DFA
Two-Year Corporate Fixed Income Portfolio
99(b)(5)(a)(2) Form of Investment Advisory Agreement re: the RWB/DFA
Two-Year Government Portfolio
99(b)(11) Consent of Coopers & Lybrand, L.L.P.
99(b)(17)(b) Financial Data Schedules dated May 31, 1997
99(b)(19)(c) Power of Attorney of the Registrant dated July 18, 1997
99(b)(19)(d) Power of Attorney of DFA Investment Trust Company dated
July 18, 1997
<PAGE>
Exhibit No. 99(b)(5)(a)(1)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this ___ day of _________, 1997, by and between
DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), and
DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Advisor").
1. DUTIES OF ADVISOR
The Fund hereby employs the Advisor to manage the investment and
reinvestment of the assets of RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
(the "Portfolio"), to continuously review, supervise and administer the
Portfolio's investment program, to determine in its discretion the securities to
be purchased or sold and the portion of the Portfolio's assets to be uninvested,
to provide the Fund with records concerning the Advisor's activities which the
Fund is required to maintain, and to render regular reports to the Fund's
officers and the Board of Directors of the Fund, all in compliance with the
objectives, policies and limitations set forth in the Fund's registration
statement and applicable laws and regulations. The Advisor accepts such
employment and agrees to provide, at its own expense, the office space,
furnishings and equipment and the personnel required by it to perform the
services described herein on the terms and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS
The Advisor is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Portfolio and is
directed to use its best efforts to obtain the best available price and most
favorable execution, except as prescribed herein. It is understood that the
Advisor will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Fund or in respect of the Portfolio, or be in breach of
any obligation owing to the Fund or in respect of the Portfolio under this
Agreement, or otherwise, solely by reason of its having caused the Portfolio to
pay a member of a securities exchange, a broker or a dealer a commission for
effecting a securities transaction for the Portfolio in excess of the amount of
commission another member of an exchange, broker or dealer would have charged if
the Advisor determines in good faith that the commission paid was reasonable in
relation to the brokerage or research services provided by such member, broker
or dealer, viewed in terms of that particular transaction or the Advisor's
overall responsibilities with respect to its accounts, including the Fund, as to
which it
<PAGE>
exercises investment discretion. The Advisor will promptly communicate to the
officers and directors of the Fund such information relating to transactions for
the Portfolio as they may reasonably request.
3. COMPENSATION OF THE ADVISOR
For the services to be rendered by the Advisor as provided in Section
1 of this Agreement, the Fund shall pay to the Advisor, at the end of each
month, a fee equal to one-twelfth of .15 percent of the net assets of the
Portfolio. In the event that this Agreement is terminated at other than a
month-end, the fee for such month shall be prorated.
4. OTHER SERVICES
At the request of the Fund, the Advisor, in its discretion, may make
available to the Fund office facilities, equipment, personnel and other
services. Such office facilities, equipment, personnel and service shall be
provided for or rendered by the Advisor and billed to the Fund at the Advisor's
cost and, where applicable, the cost thereof shall be apportioned among the
several Portfolios of the Fund proportionate to their respective utilization
thereof.
5. REPORTS
The Fund and the Advisor agree to furnish to each other information
with regard to their respective affairs as each may reasonably request.
6. STATUS OF THE ADVISOR
The services of the Advisor to the Fund or in respect of the
Portfolio, are not to be deemed exclusive, and the Advisor shall be free to
render similar services to others as long as its services to the Fund or in
respect of the Portfolio, are not impaired thereby. The Advisor shall be deemed
to be an independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
7. LIABILITY OF ADVISOR
No provision of this Agreement shall be deemed to protect the Advisor
against any liability to the Fund or its shareholders to which it might
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations under this Agreement.
-2-
<PAGE>
8. PERMISSIBLE INTERESTS
Subject to and in accordance with the charters of the Fund and the
Advisor, respectively, directors, officers, and shareholders of the Fund are or
may be interested in the Advisor (or any successor thereof) as directors,
officers or shareholders, or otherwise; directors, officers, agents and
shareholders of the Advisor are or may be interested in the Fund as directors,
officers, shareholders or otherwise; and the Advisor (or any successor) is or
may be interested in the Fund as a shareholder or otherwise and the effect of
any such interrelationships shall be governed by said charters and the
provisions of the Investment Company Act of 1940.
9. DURATION AND TERMINATION
This Agreement shall become effective on November 30, 1997 (the
"Effective Date") and shall continue in effect until December 31, 1998, and
thereafter, only if such continuance is approved at least annually by a vote of
the Fund's Board of Directors, including the vote of a majority of the directors
who are not parties to this Agreement or interested persons of any such party,
cast in person, at a meeting called for the purpose of voting such approval. In
addition, the question of continuance of this Agreement may be presented to the
shareholders of the Fund; in such event, such continuance shall be effected only
if approved by the affirmative vote of the holders of a majority of the
outstanding voting securities of the Portfolio.
This Agreement may at any time be terminated without payment of any
penalty either by vote of the Board of Directors of the Fund or by vote of the
holders of a majority of the outstanding voting securities of the Portfolio, on
sixty days written notice to the Advisor,
This Agreement shall automatically terminate in the event of its
assignment, and
This Agreement may be terminated by the Advisor after ninety days
written notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed
and delivered, or mailed postpaid, to the other party at any office of such
party.
As used in this section, the terms "assignment," "interested persons,"
and a "vote of the holders of a majority of the outstanding securities" shall
have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19),
Section 2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2
thereunder.
-3-
<PAGE>
10. SEVERABILITY
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed this ____ day of _________, 1997.
DIMENSIONAL FUND DIMENSIONAL
ADVISORS INC. INVESTMENT GROUP INC.
By: By:
---------------------- --------------------
Chairman-Chief President
Investment Officer
-4-
<PAGE>
Exhibit No. 99(b)(5)(a)(2)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this ___ day of _________, 1997, by and between
DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), and
DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Advisor").
1. DUTIES OF ADVISOR
The Fund hereby employs the Advisor to manage the investment and
reinvestment of the assets of RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO (the
"Portfolio"), to continuously review, supervise and administer the Portfolio's
investment program, to determine in its discretion the securities to be
purchased or sold and the portion of the Portfolio's assets to be uninvested, to
provide the Fund with records concerning the Advisor's activities which the Fund
is required to maintain, and to render regular reports to the Fund's officers
and the Board of Directors of the Fund, all in compliance with the objectives,
policies and limitations set forth in the Fund's registration statement and
applicable laws and regulations. The Advisor accepts such employment and agrees
to provide, at its own expense, the office space, furnishings and equipment and
the personnel required by it to perform the services described herein on the
terms and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS
The Advisor is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Portfolio and is
directed to use its best efforts to obtain the best available price and most
favorable execution, except as prescribed herein. It is understood that the
Advisor will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Fund or in respect of the Portfolio, or be in breach of
any obligation owing to the Fund or in respect of the Portfolio under this
Agreement, or otherwise, solely by reason of its having caused the Portfolio to
pay a member of a securities exchange, a broker or a dealer a commission for
effecting a securities transaction for the Portfolio in excess of the amount of
commission another member of an exchange, broker or dealer would have charged if
the Advisor determines in good faith that the commission paid was reasonable in
relation to the brokerage or research services provided by such member, broker
or dealer, viewed in terms of that particular transaction or the Advisor's
overall responsibilities with respect to its accounts, including the Fund, as to
which it
<PAGE>
exercises investment discretion. The Advisor will promptly communicate to the
officers and directors of the Fund such information relating to transactions for
the Portfolio as they may reasonably request.
3. COMPENSATION OF THE ADVISOR
For the services to be rendered by the Advisor as provided in Section
1 of this Agreement, the Fund shall pay to the Advisor, at the end of each
month, a fee equal to one-twelfth of .15 percent of the net assets of the
Portfolio. In the event that this Agreement is terminated at other than a
month-end, the fee for such month shall be prorated.
4. OTHER SERVICES
At the request of the Fund, the Advisor, in its discretion, may make
available to the Fund office facilities, equipment, personnel and other
services. Such office facilities, equipment, personnel and service shall be
provided for or rendered by the Advisor and billed to the Fund at the Advisor's
cost and, where applicable, the cost thereof shall be apportioned among the
several Portfolios of the Fund proportionate to their respective utilization
thereof.
5. REPORTS
The Fund and the Advisor agree to furnish to each other information
with regard to their respective affairs as each may reasonably request.
6. STATUS OF THE ADVISOR
The services of the Advisor to the Fund or in respect of the
Portfolio, are not to be deemed exclusive, and the Advisor shall be free to
render similar services to others as long as its services to the Fund or in
respect of the Portfolio, are not impaired thereby. The Advisor shall be deemed
to be an independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
7. LIABILITY OF ADVISOR
No provision of this Agreement shall be deemed to protect the Advisor
against any liability to the Fund or its shareholders to which it might
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations under this Agreement.
-2-
<PAGE>
8. PERMISSIBLE INTERESTS
Subject to and in accordance with the charters of the Fund and the
Advisor, respectively, directors, officers, and shareholders of the Fund are or
may be interested in the Advisor (or any successor thereof) as directors,
officers or shareholders, or otherwise; directors, officers, agents and
shareholders of the Advisor are or may be interested in the Fund as directors,
officers, shareholders or otherwise; and the Advisor (or any successor) is or
may be interested in the Fund as a shareholder or otherwise and the effect of
any such interrelationships shall be governed by said charters and the
provisions of the Investment Company Act of 1940.
9. DURATION AND TERMINATION
This Agreement shall become effective on November 30, 1997 (the
"Effective Date") and shall continue in effect until December 31, 1998, and
thereafter, only if such continuance is approved at least annually by a vote of
the Fund's Board of Directors, including the vote of a majority of the directors
who are not parties to this Agreement or interested persons of any such party,
cast in person, at a meeting called for the purpose of voting such approval. In
addition, the question of continuance of this Agreement may be presented to the
shareholders of the Fund; in such event, such continuance shall be effected only
if approved by the affirmative vote of the holders of a majority of the
outstanding voting securities of the Portfolio.
This Agreement may at any time be terminated without payment of any
penalty either by vote of the Board of Directors of the Fund or by vote of the
holders of a majority of the outstanding voting securities of the Portfolio, on
sixty days written notice to the Advisor,
This Agreement shall automatically terminate in the event of its
assignment, and
This Agreement may be terminated by the Advisor after ninety days
written notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed
and delivered, or mailed postpaid, to the other party at any office of such
party.
As used in this section, the terms "assignment," "interested persons,"
and a "vote of the holders of a majority of the outstanding securities" shall
have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19),
Section 2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2
thereunder.
-3-
<PAGE>
10. SEVERABILITY
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed this ____ day of _________, 1997.
DIMENSIONAL FUND DIMENSIONAL
ADVISORS INC. INVESTMENT GROUP INC.
By: By:
---------------------- ---------------------
Chairman-Chief President
Investment Officer
-4-
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Statement of Additional
Information of Dimensional Investment Group Inc., RWB/DFA Two-Year Government
Portfolio, RWB/DFA Two-Year Corporate Fixed Income Portfolio, and RWB/DFA U.S.
High Book to Market Portfolio, of our report dated January 17, 1997 on our
audits of the financial statements and financial highlights of Dimensional
Investment Group Inc., RWB/DFA Two-Year Government Portfolio, RWB/DFA Two-Year
Corporate Fixed Income Portfolio, and RWB/DFA U.S. High Book to Market
Portfolio, as of November 30, 1996 and for each of the periods in the period
then ended.
We also consent to the reference to our Firm under the caption "Other
Information" and "Financial Statements" in the Statement of Additional
Information.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
September 26, 1997
<PAGE>
Exhibit No. 99(b)(19)(c)
DIMENSIONAL INVESTMENT GROUP INC.
POWER OF ATTORNEY
The undersigned officers and directors of DIMENSIONAL INVESTMENT GROUP
INC. (the "Fund") hereby appoint DAVID G. BOOTH, REX A. SINQUEFIELD, MICHAEL T.
SCARDINA, IRENE R. DIAMANT, CATHERINE L. NEWELL and STEPHEN W. KLINE, ESQUIRE
(with full power to any one of them to act) as attorney-in-fact and agent, in
all capacities, to execute, and to file any of the documents referred to below
relating to the Fund's Registration Statement on Form N-1A under the Investment
Company Act of 1940 and under the Securities Act of 1933, including any and all
amendments thereto, covering the registration of the Fund as an investment
company and the sale of shares by the Fund, including all exhibits and any and
all documents required to be filed with respect thereto with any regulatory
authority, including applications for exemptive order rulings. Each of the
undersigned grants to each of said attorneys full authority to do every act to
be done in order to effectuate the same as fully, to all intents and purposes,
as he could do if personally present, thereby ratifying all that said
attorneys-in-fact and agents may lawfully do or cause to be done by virtue
hereof.
The undersigned officers and directors hereby execute this Power of
Attorney as of this 18th day of July, 1997.
/s/ David G. Booth /s/ Rex A. Sinquefield
- ------------------------------ --------------------------------
David G. Booth, Rex A. Sinquefield, Chairman-
Chairman-Chief Executive Chief Investment Officer and
Officer, President and Director
Director
/s/ George M. Constantinides /s/ John P. Gould
- ------------------------------ --------------------------------
George M. Constantinides, John P. Gould, Director
Director
/s/ Roger G. Ibbotson /s/ Merton H. Miller
- ------------------------------ --------------------------------
Roger G. Ibbotson, Director Merton H. Miller, Director
/s/ Myron S. Scholes /s/ Michael T. Scardina
- ------------------------------ --------------------------------
Myron S. Scholes, Director Michael T. Scardina, Chief
Financial Officer, Treasurer
and Vice President
<PAGE>
Exhibit No. 99(b)(19)(d)
THE DFA INVESTMENT TRUST COMPANY
POWER OF ATTORNEY
The undersigned officers and trustees of THE DFA INVESTMENT TRUST
COMPANY (the "Fund") hereby appoint DAVID G. BOOTH, REX A. SINQUEFIELD, MICHAEL
T. SCARDINA, IRENE R. DIAMANT, CATHERINE L. NEWELL AND STEPHEN W. KLINE, ESQUIRE
(with full power to any of them to act) as attorney-in-fact and agent, in all
capacities, to execute, and to file any of the documents referred to below
relating to a Registration Statement under the Securities Act of 1933 and/or the
Investment Company Act of 1940, including any and all amendments thereto,
covering the registration of any registered investment company for which any
Series of the Fund serves as a master fund in a master fund-feeder fund
structure, including all exhibits and any and all documents required to be filed
with respect thereto with any regulatory authority. Each of the undersigned
grants to each of said attorneys full authority to do every act necessary to be
done in order to effectuate the same as fully, to all intents and purposes, as
he could do if personally present, thereby ratifying all that said
attorneys-in-fact and agents may lawfully do or cause to be done by virtue
hereof.
The undersigned officers and trustees hereby execute this Power of
Attorney as of the 18th day of July, 1997.
/s/ David G. Booth /s/ Rex A. Sinquefield
- ------------------------------ -------------------------------
David G. Booth, Rex A. Sinqufield, Chairman-
Chairman-Chief Executive Chief Investment Officer and
Officer, President and Trustee Trustee
/s/ George M. Constantinides /s/ John P. Gould
- ------------------------------ -------------------------------
George M. Constantinides, John P. Gould, Trustee
Trustee
/s/ Roger G. Ibbotson /s/ Merton H. Miller
- ------------------------------ -------------------------------
Roger G. Ibbotson, Trustee Merton H. Miller, Trustee
/s/ Myron S. Scholes /s/ Michael T. Scardina
- ------------------------------ -------------------------------
Myron S. Scholes, Trustee Michael T. Scardina, Chief
Financial Officer, Treasurer
and Vice President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000861929
<NAME> DIMENSIONAL INVESTMENT GROUP, INC.
<SERIES>
<NUMBER> 01
<NAME> DFA 6-10 INSTITUTIONAL PORTFOLIO
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 10005448
<INVESTMENTS-AT-VALUE> 12064691
<RECEIVABLES> 3779
<ASSETS-OTHER> 1089
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12069559
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 19143
<TOTAL-LIABILITIES> 19143
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8948239
<SHARES-COMMON-STOCK> 1188452
<SHARES-COMMON-PRIOR> 752629
<ACCUMULATED-NII-CURRENT> (6368)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1049302
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2059243
<NET-ASSETS> 12050416
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 14921
<EXPENSES-NET> 4940
<NET-INVESTMENT-INCOME> 9981
<REALIZED-GAINS-CURRENT> 1351438
<APPREC-INCREASE-CURRENT> (496064)
<NET-CHANGE-FROM-OPS> 865355
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 100193
<DISTRIBUTIONS-OF-GAINS> 3855295
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 53806
<NUMBER-OF-SHARES-REDEEMED> 34350
<SHARES-REINVESTED> 416367
<NET-CHANGE-IN-ASSETS> 1060354
<ACCUMULATED-NII-PRIOR> 83844
<ACCUMULATED-GAINS-PRIOR> 3553160
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 22889
<AVERAGE-NET-ASSETS> 11347059
<PER-SHARE-NAV-BEGIN> 14.60
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> .76
<PER-SHARE-DIVIDEND> .13
<PER-SHARE-DISTRIBUTIONS> 5.11
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.14
<EXPENSE-RATIO> .20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000861929
<NAME> DIMENSIONAL INVESTMENT GROUP, INC.
<SERIES>
<NUMBER> 02
<NAME> DFA INTERNATIONAL VALUE PORTFOLIO
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 340820088
<INVESTMENTS-AT-VALUE> 385152580
<RECEIVABLES> 363133
<ASSETS-OTHER> 52178
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 385567891
<PAYABLE-FOR-SECURITIES> 286689
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 153878
<TOTAL-LIABILITIES> 440567
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 334393698
<SHARES-COMMON-STOCK> 32288176
<SHARES-COMMON-PRIOR> 26608246
<ACCUMULATED-NII-CURRENT> (217298)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6618432
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 44332492
<NET-ASSETS> 385127324
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 827627
<EXPENSES-NET> 399304
<NET-INVESTMENT-INCOME> 428323
<REALIZED-GAINS-CURRENT> 6283375
<APPREC-INCREASE-CURRENT> 7037848
<NET-CHANGE-FROM-OPS> 13749546
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1523677
<DISTRIBUTIONS-OF-GAINS> 7928197
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7109781
<NUMBER-OF-SHARES-REDEEMED> 2267090
<SHARES-REINVESTED> 837239
<NET-CHANGE-IN-ASSETS> 68419097
<ACCUMULATED-NII-PRIOR> 878056
<ACCUMULATED-GAINS-PRIOR> 8263254
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 399304
<AVERAGE-NET-ASSETS> 336243640
<PER-SHARE-NAV-BEGIN> 11.90
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> .36
<PER-SHARE-DIVIDEND> .06
<PER-SHARE-DISTRIBUTIONS> .29
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.93
<EXPENSE-RATIO> .39
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000861929
<NAME> DIMENSIONAL INVESTMENT GROUP, INC.
<SERIES>
<NUMBER> 03
<NAME> DFA U.S. LARGE CAP VALUE PORTFOLIO II
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 30416426
<INVESTMENTS-AT-VALUE> 36132237
<RECEIVABLES> 100753
<ASSETS-OTHER> 31511
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 36264501
<PAYABLE-FOR-SECURITIES> 100753
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 24034
<TOTAL-LIABILITIES> 124787
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29328004
<SHARES-COMMON-STOCK> 2174238
<SHARES-COMMON-PRIOR> 1689856
<ACCUMULATED-NII-CURRENT> 68804
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1027097
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5715811
<NET-ASSETS> 36139714
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 173477
<EXPENSES-NET> 50665
<NET-INVESTMENT-INCOME> 122812
<REALIZED-GAINS-CURRENT> 1309182
<APPREC-INCREASE-CURRENT> 1912484
<NET-CHANGE-FROM-OPS> 3344478
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 338838
<DISTRIBUTIONS-OF-GAINS> 422162
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 627496
<NUMBER-OF-SHARES-REDEEMED> 193983
<SHARES-REINVESTED> 50869
<NET-CHANGE-IN-ASSETS> 10060949
<ACCUMULATED-NII-PRIOR> 284830
<ACCUMULATED-GAINS-PRIOR> 140077
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 50665
<AVERAGE-NET-ASSETS> 31188803
<PER-SHARE-NAV-BEGIN> 15.43
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> 1.58
<PER-SHARE-DIVIDEND> .20
<PER-SHARE-DISTRIBUTIONS> .25
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.62
<EXPENSE-RATIO> .51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000861929
<NAME> DIMENSIONAL INVESTMENT GROUP, INC.
<SERIES>
<NUMBER> 04
<NAME> DFA SMALL CAP VALUE PORTFOLIO II
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 58462973
<INVESTMENTS-AT-VALUE> 68939539
<RECEIVABLES> 531717
<ASSETS-OTHER> 32122
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 69503378
<PAYABLE-FOR-SECURITIES> 531717
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 23139
<TOTAL-LIABILITIES> 554856
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 57136847
<SHARES-COMMON-STOCK> 4316122
<SHARES-COMMON-PRIOR> 2769174
<ACCUMULATED-NII-CURRENT> (63091)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1398200
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10476566
<NET-ASSETS> 68948522
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 59720
<EXPENSES-NET> 74406
<NET-INVESTMENT-INCOME> (14686)
<REALIZED-GAINS-CURRENT> 1931767
<APPREC-INCREASE-CURRENT> 4216384
<NET-CHANGE-FROM-OPS> 6133465
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 225062
<DISTRIBUTIONS-OF-GAINS> 759412
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1721678
<NUMBER-OF-SHARES-REDEEMED> 242021
<SHARES-REINVESTED> 67291
<NET-CHANGE-IN-ASSETS> 28311573
<ACCUMULATED-NII-PRIOR> 176657
<ACCUMULATED-GAINS-PRIOR> 225845
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 74406
<AVERAGE-NET-ASSETS> 57220306
<PER-SHARE-NAV-BEGIN> 14.67
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 1.63
<PER-SHARE-DIVIDEND> .07
<PER-SHARE-DISTRIBUTIONS> .25
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.97
<EXPENSE-RATIO> .54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000861929
<NAME> DIMENSIONAL INVESTMENT GROUP, INC.
<SERIES>
<NUMBER> 05
<NAME> DFA INTERNATIONAL VALUE P0RTFOLIO II
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 35133128
<INVESTMENTS-AT-VALUE> 38606010
<RECEIVABLES> 200753
<ASSETS-OTHER> 29469
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 38836232
<PAYABLE-FOR-SECURITIES> 200753
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 33269
<TOTAL-LIABILITIES> 234022
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 35078582
<SHARES-COMMON-STOCK> 3366590
<SHARES-COMMON-PRIOR> 2642716
<ACCUMULATED-NII-CURRENT> (30732)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 81478
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3472882
<NET-ASSETS> 38602210
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 81358
<EXPENSES-NET> 72276
<NET-INVESTMENT-INCOME> 9082
<REALIZED-GAINS-CURRENT> 406472
<APPREC-INCREASE-CURRENT> 1000150
<NET-CHANGE-FROM-OPS> 1415704
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 396612
<DISTRIBUTIONS-OF-GAINS> 266566
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1106889
<NUMBER-OF-SHARES-REDEEMED> 444081
<SHARES-REINVESTED> 61066
<NET-CHANGE-IN-ASSETS> 8583971
<ACCUMULATED-NII-PRIOR> 356798
<ACCUMULATED-GAINS-PRIOR> (58428)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 72276
<AVERAGE-NET-ASSETS> 33750286
<PER-SHARE-NAV-BEGIN> 11.36
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> .36
<PER-SHARE-DIVIDEND> .15
<PER-SHARE-DISTRIBUTIONS> .10
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.47
<EXPENSE-RATIO> .75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000861929
<NAME> DIMENSIONAL INVESTMENT GROUP, INC.
<SERIES>
<NUMBER> 06
<NAME> DFA ONE-YEAR FIXED INCOME PORTFOLIO II
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 7704004
<INVESTMENTS-AT-VALUE> 7731590
<RECEIVABLES> 67103
<ASSETS-OTHER> 34337
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7833030
<PAYABLE-FOR-SECURITIES> 67102
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 17690
<TOTAL-LIABILITIES> 84792
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7729738
<SHARES-COMMON-STOCK> 763710
<SHARES-COMMON-PRIOR> 464808
<ACCUMULATED-NII-CURRENT> (4576)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4510)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 27586
<NET-ASSETS> 7748238
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 174345
<EXPENSES-NET> 20699
<NET-INVESTMENT-INCOME> 153646
<REALIZED-GAINS-CURRENT> (2436)
<APPREC-INCREASE-CURRENT> (3259)
<NET-CHANGE-FROM-OPS> 147951
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 159502
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 409664
<NUMBER-OF-SHARES-REDEEMED> 126548
<SHARES-REINVESTED> 15786
<NET-CHANGE-IN-ASSETS> 3015818
<ACCUMULATED-NII-PRIOR> 1314
<ACCUMULATED-GAINS-PRIOR> (2074)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 41531
<AVERAGE-NET-ASSETS> 6334457
<PER-SHARE-NAV-BEGIN> 10.18
<PER-SHARE-NII> .26
<PER-SHARE-GAIN-APPREC> (.02)
<PER-SHARE-DIVIDEND> .27
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.15
<EXPENSE-RATIO> .75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000861929
<NAME> DIMENSIONAL INVESTMENT GROUP, INC.
<SERIES>
<NUMBER> 07
<NAME> DFA INTERNATIONAL VALUE PORTFOLIO III
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 245845495
<INVESTMENTS-AT-VALUE> 279216341
<RECEIVABLES> 179303
<ASSETS-OTHER> 39875
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 279435519
<PAYABLE-FOR-SECURITIES> 51200
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 143552
<TOTAL-LIABILITIES> 194752
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 242644722
<SHARES-COMMON-STOCK> 22428919
<SHARES-COMMON-PRIOR> 19561601
<ACCUMULATED-NII-CURRENT> 192147
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3033052
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33370846
<NET-ASSETS> 279240767
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 618951
<EXPENSES-NET> 77414
<NET-INVESTMENT-INCOME> 541537
<REALIZED-GAINS-CURRENT> 4539609
<APPREC-INCREASE-CURRENT> 5149989
<NET-CHANGE-FROM-OPS> 10231135
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4258447
<DISTRIBUTIONS-OF-GAINS> 2441761
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3180542
<NUMBER-OF-SHARES-REDEEMED> 882485
<SHARES-REINVESTED> 569261
<NET-CHANGE-IN-ASSETS> 36870137
<ACCUMULATED-NII-PRIOR> 3909057
<ACCUMULATED-GAINS-PRIOR> 935204
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 77414
<AVERAGE-NET-ASSETS> 249250845
<PER-SHARE-NAV-BEGIN> 12.39
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> .37
<PER-SHARE-DIVIDEND> .22
<PER-SHARE-DISTRIBUTIONS> .12
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.45
<EXPENSE-RATIO> .39
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000861929
<NAME> DIMENSIONAL INVESTMENT GROUP, INC.
<SERIES>
<NUMBER> 08
<NAME> DFA LARGE CAP VALUE PORTFOLIO III
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 340057337
<INVESTMENTS-AT-VALUE> 433415850
<RECEIVABLES> 243641
<ASSETS-OTHER> 54944
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 433714435
<PAYABLE-FOR-SECURITIES> 60577
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 205381
<TOTAL-LIABILITIES> 265958
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 322779176
<SHARES-COMMON-STOCK> 25684161
<SHARES-COMMON-PRIOR> 24108794
<ACCUMULATED-NII-CURRENT> 1220512
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 16090276
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 93358513
<NET-ASSETS> 433448477
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 2226091
<EXPENSES-NET> 108235
<NET-INVESTMENT-INCOME> 2117856
<REALIZED-GAINS-CURRENT> 19764247
<APPREC-INCREASE-CURRENT> 21005414
<NET-CHANGE-FROM-OPS> 42887517
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6889032
<DISTRIBUTIONS-OF-GAINS> 6871590
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2527782
<NUMBER-OF-SHARES-REDEEMED> 1493385
<SHARES-REINVESTED> 540970
<NET-CHANGE-IN-ASSETS> 53474848
<ACCUMULATED-NII-PRIOR> 5991688
<ACCUMULATED-GAINS-PRIOR> 3197619
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 108235
<AVERAGE-NET-ASSETS> 392275299
<PER-SHARE-NAV-BEGIN> 15.76
<PER-SHARE-NII> .09
<PER-SHARE-GAIN-APPREC> 1.61
<PER-SHARE-DIVIDEND> .29
<PER-SHARE-DISTRIBUTIONS> .29
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.88
<EXPENSE-RATIO> .23
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000861929
<NAME> DIMENSIONAL INVESTMENT GROUP, INC.
<SERIES>
<NUMBER> 09
<NAME> RWB/DFA US HIGH BOOK TO MARKET PORTFOLIO
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 71121895
<INVESTMENTS-AT-VALUE> 79093300
<RECEIVABLES> 416514
<ASSETS-OTHER> 44403
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 79554217
<PAYABLE-FOR-SECURITIES> 333372
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 105144
<TOTAL-LIABILITIES> 438516
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 69282717
<SHARES-COMMON-STOCK> 6740805
<SHARES-COMMON-PRIOR> 3781468
<ACCUMULATED-NII-CURRENT> (34739)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1896318
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7971405
<NET-ASSETS> 79115701
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 302003
<EXPENSES-NET> 61198
<NET-INVESTMENT-INCOME> 240805
<REALIZED-GAINS-CURRENT> 2288612
<APPREC-INCREASE-CURRENT> 4424755
<NET-CHANGE-FROM-OPS> 6954172
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 451621
<DISTRIBUTIONS-OF-GAINS> 390758
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3435685
<NUMBER-OF-SHARES-REDEEMED> 542684
<SHARES-REINVESTED> 66336
<NET-CHANGE-IN-ASSETS> 38407955
<ACCUMULATED-NII-PRIOR> 176076
<ACCUMULATED-GAINS-PRIOR> (1535)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 61198
<AVERAGE-NET-ASSETS> 57555025
<PER-SHARE-NAV-BEGIN> 10.77
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 1.12
<PER-SHARE-DIVIDEND> .10
<PER-SHARE-DISTRIBUTIONS> .10
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.74
<EXPENSE-RATIO> .43
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000861929
<NAME> DIMENSIONAL GROUP, INC.
<SERIES>
<NUMBER> 10
<NAME> RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 136231410
<INVESTMENTS-AT-VALUE> 138479929
<RECEIVABLES> 184758
<ASSETS-OTHER> 65457
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 138730144
<PAYABLE-FOR-SECURITIES> 16671
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 188466
<TOTAL-LIABILITIES> 205137
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 136363990
<SHARES-COMMON-STOCK> 13597439
<SHARES-COMMON-PRIOR> 11990506
<ACCUMULATED-NII-CURRENT> (49275)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (38227)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2248519
<NET-ASSETS> 138525007
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 2025710
<EXPENSES-NET> 72247
<NET-INVESTMENT-INCOME> 1953463
<REALIZED-GAINS-CURRENT> 123641
<APPREC-INCREASE-CURRENT> 1094806
<NET-CHANGE-FROM-OPS> 3171910
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3579806
<DISTRIBUTIONS-OF-GAINS> 163750
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2763807
<NUMBER-OF-SHARES-REDEEMED> 1164261
<SHARES-REINVESTED> 7387
<NET-CHANGE-IN-ASSETS> 15718026
<ACCUMULATED-NII-PRIOR> 1577068
<ACCUMULATED-GAINS-PRIOR> 1882
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 75397
<AVERAGE-NET-ASSETS> 130859028
<PER-SHARE-NAV-BEGIN> 10.24
<PER-SHARE-NII> .15
<PER-SHARE-GAIN-APPREC> .09
<PER-SHARE-DIVIDEND> .28
<PER-SHARE-DISTRIBUTIONS> .01
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.19
<EXPENSE-RATIO> .32
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000861929
<NAME> DIMENSIONAL INVESTMENT GROUP, INC.
<SERIES>
<NUMBER> 11
<NAME> RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 111918254
<INVESTMENTS-AT-VALUE> 111787532
<RECEIVABLES> 97827
<ASSETS-OTHER> 49920
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 111935279
<PAYABLE-FOR-SECURITIES> 53018
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 74005
<TOTAL-LIABILITIES> 127023
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 110634374
<SHARES-COMMON-STOCK> 11045123
<SHARES-COMMON-PRIOR> 10227279
<ACCUMULATED-NII-CURRENT> 1529088
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (224484)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (130722)
<NET-ASSETS> 111808256
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 3026379
<EXPENSES-NET> 77687
<NET-INVESTMENT-INCOME> 2948692
<REALIZED-GAINS-CURRENT> (221989)
<APPREC-INCREASE-CURRENT> (487833)
<NET-CHANGE-FROM-OPS> 2238870
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2802785
<DISTRIBUTIONS-OF-GAINS> 506404
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2446510
<NUMBER-OF-SHARES-REDEEMED> 1630506
<SHARES-REINVESTED> 1840
<NET-CHANGE-IN-ASSETS> 7164022
<ACCUMULATED-NII-PRIOR> 1383181
<ACCUMULATED-GAINS-PRIOR> 503909
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 80320
<AVERAGE-NET-ASSETS> 108834873
<PER-SHARE-NAV-BEGIN> 10.23
<PER-SHARE-NII> .27
<PER-SHARE-GAIN-APPREC> (.06)
<PER-SHARE-DIVIDEND> .27
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.12
<EXPENSE-RATIO> .37
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
