<PAGE>
As filed with the U.S. Securities and Exchange Commission on January 26, 1999
File No. 33-33980
File No. 811-6067
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. 22 [X]
----
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 23 [X]
---
(Check appropriate box or boxes.)
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, Vice President and Secretary
DFA Investment Dimensions Group Inc.,
1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401
--------------------------------------------------------------
(Name and Address of Agent for Service)
Please send copies of all communications to:
Stephen W. Kline, Esquire
Stradley, Ronon, Stevens & Young, LLP
Great Valley Corporate Center
30 Valley Stream Parkway
Malvern, PA 19355, (610) 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)(1)
- --- 75 days after filing pursuant to paragraph (a)(2)
- --- on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
- --- This post-effective amendment designates a new effective date for a
- --- previously filed post-effective amendment.
<PAGE>
The Trustees and principal officers of The DFA Investment Trust Company also
have executed this registration statement.
Title of Securities Being Registered
------------------------------------
RWB/DFA U.S. High Book to Market Portfolio
RWB/DFA Two-Year Corporate Fixed Income Portfolio
RWB/DFA Two-Year Government Portfolio
<PAGE>
PROSPECTUS
MARCH 27, 1999
PLEASE CAREFULLY READ HTE IMPORTANT INFORMATION IT CONTAINS BEFORE INVESTING.
[DFA LOGO]
DFA INVESTMENT DIMENSIONS GROUP INC.
- -------------------------------------------------------------------------------
DIMENSIONAL INVESTMENT GROUP INC.
The two mutual funds described in this Prospectus offer a variety of
investment portfolios. Each of the Fund's Portfolios has its own investment
objective and policies, and is the equivalent of a separate mutual fund.
RWB/DFA International High Book To Market Portfolio is offered by DFA
Investment Dimensions Group Inc. The other listed Portfolios are part of
Dimensional Investment Group Inc. The four Portfolios: Are exclusively
available to clients of RWB Advisory Services Inc. Do not charge sales
commissions or "loads." Costs less to own than most mutual funds. Are
designed for long-term investors.
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
RWB/DFA INTERNATIONAL HIGH BOOK TO MARKET PORTFOLIO
RWS/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
-----------------------------
THE SECURITIES AND EXCHANGE COMMISSION ("SEC") DOES NOT DECIDE WHETHER ANY
MUTUAL FUNDS, INCLUDING THIS ONE (AND ITS PORTFOLIOS), ARE GOOD INVESTMENTS.
RATHER, THE SEC TRIES TO MAKE SURE, BUT CANNOT GUARANTEE, THAT MUTUAL FUNDS
DISCLOSE IMPORTANT FACTS TO INVESTORS. IT IS ILLEGAL TO CLAIM OTHERWISE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
RISK/RETURN SUMMARY................................................................... 4
MORE ABOUT THE PORTFOLIOS........................................................... 4
MANAGEMENT.......................................................................... 4
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS......................................... 5
OTHER RISKS......................................................................... 6
RISK AND RETURN BAR CHARTS AND TABLES............................................... 7
FEES AND EXPENSES..................................................................... 9
ANNUAL FUND OPERATING EXPENSES........................................................ 9
EXAMPLE............................................................................... 10
HIGHLIGHTS............................................................................ 10
MANAGEMENT AND ADMINISTRATIVE SERVICES.............................................. 10
DIVIDEND POLICY..................................................................... 10
PURCHASE, VALUATION AND REDEMPTION OF SHARES........................................ 10
INVESTMENT OBJECTIVES AND POLICIES--EQUITY PORTFOLIOS................................. 11
INVESTMENT OBJECTIVE AND POLICIES................................................... 11
PORTFOLIO STRUCTURE................................................................. 11
RWB/DFA INTERNATIONAL HIGH BOOK TO MARKET PORTFOLIO................................... 11
INVESTMENT OBJECTIVE AND POLICIES................................................... 11
INVESTMENT OBJECTIVES AND POLICIES--FIXED INCOME PORTFOLIOS........................... 12
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO................................... 12
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO............................................... 13
DESCRIPTION OF INVESTMENTS.......................................................... 13
INVESTMENTS IN THE BANKING INDUSTRY................................................. 14
PORTFOLIO STRATEGY.................................................................. 14
PORTFOLIO TRANSACTIONS--EQUITY PORTFOLIOS............................................. 15
DEVIATION FROM MARKET CAPITALIZATION WEIGHTING--EQUITY PORTFOLIOS..................... 15
SECURITIES LOANS...................................................................... 16
MANAGEMENT OF THE FUNDS............................................................... 16
CONSULTING SERVICES--INTERNATIONAL VALUE SERIES..................................... 16
CLIENT SERVICE AGENT--ALL PORTFOLIOS................................................ 17
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES...................................... 17
PURCHASE OF SHARES.................................................................... 18
IN KIND PURCHASES................................................................... 18
VALUATION OF SHARES................................................................... 19
EXCHANGE OF SHARES.................................................................... 20
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
REDEMPTION OF SHARES.................................................................. 20
REDEMPTION PROCEDURE................................................................ 20
REDEMPTION OF SMALL ACCOUNTS........................................................ 20
IN-KIND REDEMPTIONS................................................................. 21
THE FEEDER PORTFOLIOS................................................................. 21
FINANCIAL HIGHLIGHTS.................................................................. 23
</TABLE>
3
<PAGE>
RISK/RETURN SUMMARY
MORE ABOUT THE PORTFOLIOS
- ------------------------
SOME PORTFOLIOS HAVE SPECIAL STRUCTURES: Certain Portfolios, called "Feeder
Portfolios," do not buy individual securities directly. Instead, they invest in
corresponding mutual funds called "Master Funds." Master Funds in turn purchase
stocks, bonds and/or other securities.
POSSIBLE COMPLICATIONS: Designed to reduce costs, the Master-Feeder structure is
relatively new and more complex. As a result, a Feeder Portfolio might encounter
operational or other complications.
A Master Fund buys securities directly. A corresponding Feeder Portfolio invests
in the Master Fund's shares. The two have the same gross investment returns.
MANAGEMENT
- ------------
Dimensional Fund Advisors Inc. (the "Advisor") is the investment manager for
each non-Feeder Portfolio and all Master Funds. (A Feeder Portfolio does not
need an investment manager.) It is also the administrator for all Portfolios and
Master Funds. The Advisor has provided institutional investors with investment
management services since 1981, and manages about $28 billion. RWB Advisory
Services Inc. provides shareholders with client services such as performance
reporting.
EQUITY INVESTMENT APPROACH:
- -------------------------
The Advisor believes that equity investing should involve a long-term view and a
focus on asset class (e.g., large company stocks) selection, not stock picking.
It places priority on limiting expenses, portfolio turnover, and trading costs.
Many other investment managers concentrate on reacting to price movements and
choosing individual securities.
MARKET CAPITALIZATION means the number of shares of a company's stock
outstanding times price per share.
MARKET CAPITALIZATION WEIGHTED means the amount of a stock in an index or
portfolio is keyed to that stock's market capitalization compared to all
eligible stocks. The higher the stock's relative market cap, the greater its
representation.
NO MARKET TIMING OR STOCK PICKING: In contrast to some other managers, the
Advisor does not take defensive positions in anticipation of negative investment
conditions, or try to pick potentially outperforming securities.
PORTFOLIO CONSTRUCTION: Generally, the Advisor structures a portfolio by:
- - Selecting a starting universe of securities (for example, all publicly traded
U.S. common stocks).
- - Creating a sub-set of companies meeting investment guidelines.
- - Excluding certain companies after analyzing various factors (for example,
solvency).
- - Purchasing stocks so the portfolio is generally market cap weighted.
FIXED INCOME INVESTMENT APPROACH:
- --------------------------------
PORTFOLIO CONSTRUCTION: Generally, the Advisor structures a portfolio by:
- - Setting a maturity range.
4
<PAGE>
- - Implementing quality and eligibility guidelines.
- - Purchasing securities with a view to maximizing returns.
MARKET RISK: Even a long-term investment approach cannot guarantee a profit.
Economic, political and issuer specific events will cause the value of
securities, and the Portfolios that own them, to rise or fall. Fixed Income
portfolios are particularly sensitive to changing interest rates.
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
- -------------------------------------------
"VALUE STOCKS": Compared to other stocks, value stocks sell for low prices
relative to their earnings, dividends or book value. Precise definitions vary.
In selecting value stocks, the Advisor primarily considers price relative to
book value.
RWB/DFA International High Book To Market Portfolio's foreign currency risks are
generally not hedged.
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
- - INVESTMENT OBJECTIVE: Long-term capital appreciation.
- - INVESTMENT STRATEGY: Purchase a Master Fund that buys value stocks of large
United States companies on a market capitalization weighted basis.
RWB/DFA INTERNATIONAL HIGH BOOK TO MARKET PORTFOLIO
- - INVESTMENT OBJECTIVE: Long-term capital appreciation.
- - INVESTMENT STRATEGY: Purchase a Master Fund that buys value stocks of large
non-U.S. companies on a market capitalization weighted basis in each
applicable country.
THE MASTER FUND IN WHICH THE PORTFOLIO INVESTS STOPPED PURCHASING MALAYSIAN
STOCKS. This action was taken because the Malaysian government restricted the
ability of foreign investors--including the Master Fund in question--to withdraw
their investments from Malaysia.
FOREIGN SECURITIES AND CURRENCIES RISK: Investors in foreign securities take the
risk that economic or political actions of foreign governments will hurt their
investments. Less regulated and/or liquid securities markets and foreign
currency risk (the possibility that foreign currency will fluctuate in value
against the U.S. dollar) are also of concern. The latter can be minimized by
hedging. However, doing so may be expensive.
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
- - INVESTMENT OBJECTIVE: Maximize total return available from a universe of high
quality fixed income investments with an average maturity of two years or
less.
- - INVESTMENT STRATEGY: Purchase U.S. issued, dollar-denominated debt
instruments with maturities of no more than two years. Issuers might include
the U.S. government and its agencies, domestic and foreign corporations and
supranational organizations (e.g., the World Bank). The Portfolio intends to
concentrate investments in the banking industry in certain cases.
RISK OF BANKING CONCENTRATION: Focus on the banking industry might cause the
Portfolio's performance to fluctuate more.
5
<PAGE>
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
- - INVESTMENT OBJECTIVE: Maximize total return available from a universe of high
quality fixed income investments maturing in two years or less.
- - INVESTMENT STRATEGY: Acquire obligations of the U.S. government and its
agencies maturing within two years, and enter into repurchase agreements
backed by U.S. government securities.
OTHER RISKS
DERIVATIVES:
- -----------
Derivatives are securities, such as futures contracts, whose value is derived
from that of other securities or indices. Derivatives can be used for hedging
(attempting to reduce risk by offsetting one investment position with another)
or speculation (taking a position in the hope of increasing return). The Master
Fund in which RWB/DFA International High Book To Market Portfolio invests may
use long-term foreign currency contracts to hedge foreign currency risks.
Hedging with derivatives may increase expenses, and there is no guarantee that a
hedging strategy will work.
INTRODUCTION OF THE EURO:
- ------------------------
On January 1, 1999, The European Monetary Union ("EMU") introduced a common
currency, the Euro, replacing its members' national currencies. This
development will affect RWB/DFA International High Book To Market Portfolio
(the Master Fund it buys may invest in EMU countries) to the extent it
changes investment practices, opportunities, risks and investor behavior or
creates administrative problems. The Advisor and its global custodians are
attempting to assure that the Portfolio and Master Fund will be unaffected by
any transition related disruptions. However, they cannot guarantee that their
efforts will succeed completely. The relative value of the U.S. dollar and
Euro will fluctuate. Accordingly, currency risk (discussed above) will
continue to apply to any exposure the Portfolio may have (through the Master
Fund) to investments in EMU countries.
SECURITIES LENDING:
- ------------------
Non-Feeder Portfolios and Master Funds may lend their portfolio securities to
generate additional income. If they do so, they will use various strategies (for
example, only making fully collateralized and bank guaranteed loans) to reduce
related risks.
YEAR 2000 ISSUE:
- ---------------
Unless modified, many computer programs will not properly process information
from the year 2000 on. While the issue is international in scope, there is
particular concern with foreign entities. The Advisor has taken steps to ensure
that its computers and those of Portfolio and Master Fund service providers
(e.g., custodians) will operate properly. Portfolios and Master Funds may be
negatively affected if the Advisor's efforts prove inadequate, and/or year 2000
problems hurt economic conditions generally.
6
<PAGE>
RISK AND RETURN BAR CHARTS AND TABLES
- -------------------------------------
The Bar Charts and Tables below illustrate the risk/return history of each
Portfolio. Shown are changes in performance from year to year, and how
annualized 1 year, 5 year, and since inception returns compare with those of
a broad measure of market performance. Past performance is not an indication
of future results.
- -------------------------------------------------------------------------------
RWB/DFA
U.S. HIGH BOOK- [BAR GRAPH]
TO-MARKET PORTFOLIO
<TABLE>
<CAPTION>
1997 1998
- ------------------------------------------------
<S> <C> <C>
TOTAL RETURNS(%) 28.04 12.07
</TABLE>
<TABLE>
<CAPTION>
JUNE 1996 - DECEMBER 1998
---------------------------
HIGHEST QUARTER LOWEST QUARTER
--------------------------------------------------------------------
<S> <C>
16.84 (10/98-12/98) -17.09 (7/98-9/98)
</TABLE>
<TABLE>
<CAPTION>
PERIODS ENDING DECEMBER 31, 1998
--------------------------------
ONE SINCE 6/96
ANNUALIZED RETURNS (%) YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO 12.07 18.04
RUSSELL 10000 VALUE INDEX 15.65 24.76
</TABLE>
- --------------------------------------------------------------------------------
RWB/DFA
INTERNATIONAL [BAR GRAPH]
HIGH BOOK-TO
MARKET PORTFOLIO
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TOTAL RETURNS(%) 8.77 11.47 7.89 -3.16 14.97
</TABLE>
<TABLE>
<CAPTION>
JULY 1993 - DECEMBER 1998
-------------------------
HIGHEST QUARTER LOWEST QUARTER
----------------------------------------------------------------------
<S> <C>
17.98 (1/98-3/98) -16.86 (7/98-9/98)
</TABLE>
<TABLE>
<CAPTION>
PERIODS ENDING DECEMBER 31, 1998
--------------------------------
ONE FIVE SINCE 7/93
ANNUALIZED RETURNS (%) YEAR YEARS INCEPTION
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
RWB/DFA INTERNATIONAL HIGH
BOOK-TO-MARKET PORTFOLIO 14.97 7.81 9.14
MSCI EAFE INDEX 19.99 9.20 9.77
</TABLE>
- -------------------------------------------------------------------------------
RWB/DFA
TWO-YEAR
CORPORATE [BAR GRAPH]
FIXED INCOME
PORTFOLIO
<TABLE>
<CAPTION>
1997 1998
- ---------------------------------------------------------
<S> <C> <C>
TOTAL RETURNS (%) 5.92 5.68
</TABLE>
<TABLE>
<CAPTION>
JULY 1996 - DECEMBER 1998
-------------------------
HIGHEST QUARTER LOWEST QUARTER
--------------------------------------------------------------------
<S> <C>
2.03 (4/97-6/97) 0.83 (1/97-3/97)
</TABLE>
<TABLE>
<CAPTION>
PERIODS ENDING DECEMBER 31, 1998
--------------------------------
ONE SINCE 7/96
ANNUALIZED RETURNS (%) YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO 5.68 6.03
MERRILL LYNCH GOVERNMENTS, U.S. TREASURY,
SHORT TERM (1-2.99 YEARS) 7.01 6.92
</TABLE>
RWB/DFA
TWO-YEAR
GOVERNMENT [BAR GRAPH]
PORTFOLIO
<TABLE>
<CAPTION>
1997 1998
- ---------------------------------------------------------
<S> <C> <C>
TOTAL RETURNS(%) 6.15 5.44
</TABLE>
<TABLE>
<CAPTION>
JULY 1996 - DECEMBER 1998
-------------------------
HIGHEST QUARTER LOWEST QUARTER
--------------------------------------------------------------------
<S> <C>
2.11 (4/97-6/97) 0.65 (1/97-3/97)
</TABLE>
<TABLE>
<CAPTION>
PERIODS ENDING DECEMBER 31, 1998
--------------------------------
ONE SINCE 7/96
ANNUALIZED RETURNS (%) YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO 5.44 5.97
MERRILL LYNCH GOVERNMENTS, U.S. TREASURY,
SHORT TERM (1-2.99 YEARS) 7.01 6.92
</TABLE>
7
<PAGE>
FEES AND EXPENSES
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT): None*
* 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.
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM PORTFOLIO ASSETS)
Except as indicted below, the expenses in the following tables are based on
those incurred by the Portfolios and the corresponding Master Funds for the
fiscal year ended November 30, 1997.
[EXPENSES WILL BE UPDATED IN MARCH]
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
RWB/DFA U.S. High Book to Market Portfolio(1)
<S> <C>
Management Fee 0.10%
Administration Fee 0.01%
Other Expenses 0.25%
Total Operating Expenses 0.36%
</TABLE>
<TABLE>
<CAPTION>
RWB/DFA INTERNATIONAL High Book to Market Portfolio(1)
<S> <C>
Management Fee 0.20%
Administration Fee 0.01%
Other Expenses 0.29%
Total Operating Expenses 0.50%
</TABLE>
<TABLE>
<CAPTION>
RWB/DFA Two-Year Corporate Fixed Income Portfolio(2)(3)
<S> <C>
Management Fee 0.15%
Other Expenses 0.20%
Total Operating Expenses 0.35%
</TABLE>
<TABLE>
<CAPTION>
RWB/DFA Two-Year Corporate Fixed Income Portfolio(2)(3)
<S> <C>
Management Fee 0.15%
Other Expenses 0.23%
Total Operating Expenses 0.38%
</TABLE>
(1) Feeder Portfolio. The "Management Fee" is payable by the Master Fund and the
"Administration Fee" is payable by the Feeder Portfolio. The amount set
forth in "Other Expenses" represents the aggregate amount that is payable by
both the Feeder Portfolio and the Master Fund. It also includes a client
services fee of 0.09% and 0.13% payable to RWBAS by the RWB/DFA U.S. High
Book to Market Portfolio and the RWB/DFA International High Book to Market
Portfolio, respectively.
(2) A client services fee of 0.03% was payable by the Fixed Income Portfolios to
RWBAS; however, RWBAS waived its fee through December 31, 1996. After such
waiver by RWBAS, the annualized ratio of total operating expenses to average
net assets for the fiscal year ended November 30, 1997 was 0.32% for RWB/DFA
Two-Year Corporate Fixed Income Portfolio and 0.37% for RWB/DFA Two-
Year Government Portfolio.
9
<PAGE>
(3) Prior to November 30, 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. Beginning March 3, 1998, the client service fee of 0.03% payable
to RWBAS increased to 0.04% reflecting the elimination of the
Administration Fee of 0.01% previously paid when the Portfolios invested
in the Series. 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 ended November 30,
1997.
EXAMPLE
This Example is meant to help you compare the cost of investing in the
Portfolios with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Portfolio for the time
periods indicated and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
[EXAMPLE WILL BE UPDATED IN MARCH]
<TABLE>
<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
RWB/DFA U.S. High Book to Market Portfolio(1) $____ $____ $____ $____
RWB/DFA International High Book to Market Portfolio(1) $____ $____ $____ $____
RWB/DFA Two-Year Corporate Fixed Income Portfolio(2)(3) $____ $____ $____ $____
RWB/DFA Two-Year Corporate Fixed Income Portfolio(2)(3) $____ $____ $____ $____
</TABLE>
With respect to the Feeder Portfolios, the table summarizes the aggregate
estimated annual operating expenses of both the Portfolios and the Master Funds
in which the Portfolios invests.
HIGHLIGHTS
MANAGEMENT AND ADMINISTRATIVE SERVICES
Dimensional Fund Advisors Inc. (the "Advisor") provides each Portfolio with
administrative services and also serves as investment advisor to the non-Feeder
Portfolios and the Master Funds. RWBAS serves as client service agent to each
Portfolio. (See "MANAGEMENT OF THE PORTFOLIOS.")
DIVIDEND POLICY
The RWB/DFA U.S. High Book to Market Portfolio and the Fixed Income
Portfolios distribute dividends from their net investment income quarterly. The
RWB/DFA International High Book to Market Portfolio distributes dividends from
net investment income annually. Each of the Portfolios will distribute any
realized net capital gains annually after the end of the fiscal year. (See
"DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
PURCHASE, VALUATION AND REDEMPTION OF SHARES
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 shares of each Feeder Portfolio will fluctuate in
relation to the investment experience of the Master Fund in which it invests.
The value of the shares of each Fixed
10
<PAGE>
Income Portfolio will fluctuate in relation to its own investment experience.
The redemption price of a share of each Portfolio is equal to its net asset
value. (See "PURCHASE OF SHARES" and "REDEMPTION OF SHARES.")
INVESTMENT OBJECTIVES AND POLICIES--EQUITY PORTFOLIOS
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
INVESTMENT OBJECTIVE 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 of the Trust, 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
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 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 thereon, if, as a result, more
than 5% of its net assets would then consist of initial margin deposits and
premiums required to establish such positions. 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.
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.
RWB/DFA INTERNATIONAL HIGH BOOK TO MARKET PORTFOLIO
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of RWB/DFA International 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 DFA International Value
Series of the Trust, which has the same investment objective and policies as the
Portfolio. The International Value Series seeks to achieve its objective by
investing in the stocks of large non-U.S. companies that 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"). In measuring value, the Advisor may
consider additional factors such as cash flow, economic conditions and
developments in the issuer's industry. Generally, the shares of a company in any
given country 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 in that
country with the highest positive book to market ratios whose shares are listed
on a major exchange, and, except as described below, will be considered eligible
for investment. The International Value Series intends to invest in the stocks
of large companies in countries with developed markets. As of the date of this
prospectus, the International Value Series may invest in the stocks of large
companies in Australia, Belgium, Denmark, Finland, France, Germany, Hong Kong,
Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Singapore, Spain,
Sweden, Switzerland and the United
11
<PAGE>
Kingdom. As the Series' asset growth permits, it may invest in the stocks of
large companies in other developed markets, including Austria and Ireland.
Under normal market conditions, at least 65% of the International Value
Series' assets will be invested in companies organized or having a majority
of their assets in or deriving a majority of their operating income in at
least three non-U.S. countries, and no more than 40% of the Series' assets
will be invested in such companies in any one country. The International
Value Series reserves the right to invest in index futures contracts to
commit funds awaiting investment or to maintain liquidity. To the extent that
it invests in futures contracts for other than bona fide hedging purposes,
its will not purchase futures contracts if, as a result, more than 5% of its
net assets would then consist of initial margin deposits required to
establish such positions.
As of the date of this prospectus, the International Value Series intends to
invest in companies having at least $800 million of market capitalization, and
the Series will be approximately market capitalization weighted. The Advisor may
reset such floor from time to time to reflect changing market conditions. In
determining market capitalization weights, the Advisor, using its best judgment,
will seek to eliminate the effect of cross holdings on the individual country
weights. As a result, the weighting of certain countries in the International
Value Series may vary from their weighting in international indices such as
those published by The Financial Times, Morgan Stanley Capital International or
Salomon/Russell. The Advisor, however, will not attempt to account for cross
holding within the same country.
It is management's belief that the stocks of large companies with high book
to market ratios 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 International Value Series involves greater risk than
including a large number of them.
As of September 10, 1998, the International Value Series discontinued
further investment in Malaysian securities as a consequence of certain
restrictions imposed by the Malaysian government on the repatriation of assets
by foreign investors such as the International Value Series.
On September 1, 1998, the Malaysian government announced a series of capital
and foreign exchange controls on the Malaysian currency, the ringgit, and on
transactions on the Kuala Lumpur Stock Exchange, that operate to severely
constrain or prohibit foreign investors, including the International Value
Series, from repatriating assets. While there is some confusion in the market
concerning the interpretations of these changes, it appears that the
International Value Series will not be permitted to convert the proceeds of the
sale of its Malaysian investments into U.S. dollars prior to September 1, 1999.
As a consequence of these developments, the International Value Series has
stopped investing additional funds in Malaysia. With respect to the current
Malaysian investments owned, the Series is presently valuing the securities in
good faith at fair value by discounting the current market prices of the
Malaysian securities and discounting the U.S. dollar-ringgit currency exchange
rate. Pending further clarification from Malaysian regulatory authorities
regarding the controls identified above, the Series will treat its investments
in Malaysian securities as illiquid. As of the date of this prospectus,
Malaysian securities constitute approximately % of the net asset value of the
Series. [TO BE UPDATED IN MARCH]
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
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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 it
invests in futures contracts and options thereon for other than bona fide
hedging purposes, it will not purchase futures contracts or options thereon,
if, as a result, more than 5% of its net assets would then consist of initial
margin deposits and premiums required to establish such positions.
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 Portfolio may invest in
futures contracts and options on futures contracts. To the extent that it
invests in futures contracts and options thereon for other than bona fide
hedging purposes, it will not purchase futures contracts or options thereon, if,
as a result, more than 5% of its net assets would then consist of initial margin
deposits and premiums required to establish such positions.
DESCRIPTION OF INVESTMENTS
The following is a description of the categories of investments which may be
acquired by the Fixed Income Portfolios:
<TABLE>
<CAPTION>
PERMISSIBLE
CATEGORIES
-----------
<S> <C>
RWB/DFA Two-Year Corporate Fixed Income Portfolio................................ 1-7
RWB/DFA Two-Year Government Portfolio............................................ 1, 2, 6
</TABLE>
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 Portfolios
purchase securities ("underlying securities") from a bank, or a registered
U.S. government securities dealer, with an agreement by the
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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 Portfolios 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 Portfolio's total assets
would be so invested. The Portfolios 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. This policy 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 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 concentrating its investments in the banking industry. [UPDATE IN
MARCH]
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%.
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Taxable distributions ordinarily increase with trading activity. 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.
PORTFOLIO TRANSACTIONS--EQUITY PORTFOLIOS
With respect to the Equity Portfolios and the Master Funds in which such
Portfolios invest, investments will generally be made in eligible securities on
a market capitalization weighted basis. Securities will not be purchased or sold
based on the prospects for the economy, the securities markets or the individual
issuers whose shares are eligible for purchase. Securities which have
depreciated in value since their acquisition will not be sold solely because
prospects for the issuer are not considered attractive or due to an expected or
realized decline in securities prices in general. Securities will not be sold to
realize short-term profits, but when circumstances warrant, they may be sold
without regard to the length of time held. Securities, including those eligible
for purchase, may be disposed of, however, at any time when, in the Advisor's
judgment, circumstances warrant their sale, including, but not limited to,
tender offers, mergers and similar transactions, or bids made for block
purchases at opportune prices. Generally, securities will be purchased with the
expectation that they will be held for longer than one year and will be held
until such time as they are no longer considered an appropriate holding in light
of the investment policy of each Portfolio.
DEVIATION FROM MARKET CAPITALIZATION WEIGHTING--EQUITY PORTFOLIOS
The portfolio structures of the Master Funds, in which the Equity
Portfolios invest, involve market capitalization weighting. That is, their
investment portfolios are structured by basing the amount of each security
purchased on the issuer's relative market capitalization with a view to
achieving a reasonable reflection of the relative market capitalizations in
accordance with their investment objectives and strategies. Deviation from
strict market capitalization weighting may occur for several reasons. The
Advisor may exclude the stock of a company that meets applicable market
capitalization criterion if the Advisor determines in its best judgment that
the purchase of such stock is inappropriate given other conditions. (The
Advisor does not anticipate that a significant number of securities which
meet the market capitalization criteria will be selectively excluded.)
Deviation also will occur because the Advisor intends to purchase in round
lots only. Furthermore, the Advisor may reduce the relative amount of any
security held from the level of strict adherence to market capitalization
weighting, in order to retain sufficient portfolio liquidity. A portion, but
generally not in excess of 20% of assets may be invested in interest bearing
obligations, such as money market instruments, thereby causing further
deviation from strict market capitalization weighting. A further deviation
may occur due to investments in privately placed convertible debentures.
Block purchases of eligible securities may be made 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. In addition, securities eligible for purchase or
otherwise represented in a portfolio may be acquired in exchange for the
issuance of shares. (See "PURCHASE OF SHARES--In Kind Purchases.") While such
transactions might cause a temporary deviation from market capitalization
weighting, they would ordinarily be made in anticipation of further growth of
assets.
Changes in the composition and relative ranking (in terms of market
capitalization) of the stocks which are eligible for purchase take place with
every trade when the securities markets are open for trading due, primarily, to
price fluctuations of such securities. On at least a semi-annual basis, the
Advisor will prepare lists of companies with high book to market ratios whose
stock is eligible for investment by each portfolio. Only common stocks whose
market capitalizations are not less than the minimum on such list will be
purchased. Additional investments generally will not be made in securities which
have depreciated in value sufficiently that they are not then
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<PAGE>
considered by the Advisor to be large companies. This may result in further
deviation from strict market capitalization weighting. Such deviation could
be substantial if a significant amount of a portfolio's holdings decrease in
value sufficiently to be excluded from the requirement for eligible
securities, but not by a sufficient amount to warrant their sale.
SECURITIES LOANS
The Portfolios and Master Funds 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 Master Funds may
earn additional income from lending securities, such activity is incidental to
their investment objectives. The value of securities loaned may not exceed 33
1/3% of the value of each Portfolio's or Master Fund's total assets. In
connection with such loans, the Portfolio or the Master Fund 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 Portfolio or the Master
Fund will be able to terminate the loan at any time, will receive reasonable
compensation 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, a Portfolio or Master Fund could experience delay in recovering
the loaned securities. Management believes that this risk can be controlled
through careful monitoring procedures. Although each Feeder Fund is authorized
to lend its portfolio securities, as long as it only holds shares of its Master
Fund, it will not do so.
MANAGEMENT OF THE FUNDS
The Advisor serves as investment advisor to each of the Portfolios, except
the Feeder Portfolios, and each Master Fund. As such, it is responsible for the
management of their respective assets. Investment decisions for all non-Feeder
Portfolios and Master Funds 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 all non-Feeder Portfolios
and Master Funds 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 advisory fees that the Portfolios have incurred for the fiscal
year ended November 30, 1998, see "ANNUAL FUND OPERATING EXPENSES." 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 $28 billion.
The Funds and the Trust bear all of their 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
Master Fund are so allocated. Expenses of a Fund which are not allocable to a
particular Portfolio are borne by each Portfolio of that Fund on the basis of
its relative net assets. Similarly, the expenses of the Trust which are not
allocable to a particular Master Fund are to be borne by each Master Fund of
the Trust on the basis of its relative net assets.
CONSULTING SERVICES -- INTERNATIONAL VALUE SERIES
The Advisor has entered into a Consulting Services Agreement with
Dimensional Fund Advisors Ltd. ("DFAL") and DFA Australia Limited (" DFA
Australia"), respectively. Pursuant to the terms of each Consulting Services
Agreement, DFAL and DFA Australia provide certain trading and administrative
services to the Advisor
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<PAGE>
with respect to the International Value Series. The advisor owns 100% of the
outstanding shares of DFAL and beneficially owns 100% of DFA Australia.
CLIENT SERVICE AGENT -- ALL PORTFOLIOS
Pursuant to a Client Service Agent Agreement with each Portfolio, RWBAS
performs various services for the Portfolios. These services include
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 applicable Board of Directors may reasonably request.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
The RWB/DFA U.S. High Book to Market Portfolio and the Fixed Income
Portfolios distribute dividends from their net investment income quarterly. The
RWB/DFA International High Book to Market Portfolio distributes dividends from
net investment income annually. Each of the Portfolios will distribute any
realized net capital gains annually after the end of the fiscal year. Each
Portfolio is treated as a separate corporation for federal tax purposes.
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 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). With the exception of RWB/DFA International
High Book to Market Portfolio, upon written notice to the transfer agent,
shareholders of the remaining Portfolios may select one of the following
options:
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.
Certain investments by the Portfolios (or their corresponding Master Fund)
may be subject to special rules which may affect the amount, character and
timing of the income to the investing entity. Some of these rules are referenced
in the statement of additional information. Specifically, prospective investors
should consult the statement of additional information for further information
regarding the extent to which distributions from a Portfolio may be eligible for
the dividends received deduction or whether certain foreign tax credits may be
available to an investor in a Portfolio.
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
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between two Portfolios. 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. Similarly, it is anticipated that either
none or only a small portion of the distributions made by the RWB/DFA
International High Book to Market Portfolio will qualify for the corporate
dividends received deduction because of such Portfolios' investment (through its
Master Fund) in foreign equity securities. 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 its Master Fund from domestic (U.S.) sources.
In addition to federal taxes, shareholders may be subject to state and local
taxes on distributions from a Portfolio and on gains arising on redemption or
exchange of Portfolio shares. With regard to the Fixed Income Portfolios,
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.
IN KIND PURCHASES
If accepted by the applicable Fund, shares of a Portfolio may be
purchased in exchange for securities which are eligible for acquisition by
such Portfolio (or its corresponding Master Fund) or otherwise represented in
its portfolio as described in this prospectus. Shares of the RWB/DFA
International High Book to Market Portfolio may also be purchased in exchange
for local currencies in which securities owned by its corresponding Master
Fund are denominated. Securities and local currencies to be exchanged which
are accepted by a 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 (or its corresponding Master Fund) whose
shares are being acquired and must be delivered to the applicable Fund by the
investor upon receipt from the issuer.
The Funds 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 its corresponding
Master Fund) 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 (or its corresponding Master Fund) under the Securities Act of 1933 or
under the laws of the country in which the
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principal market for such securities exists or otherwise; and (3) at the
discretion of the applicable 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 Master Fund) may not exceed 5% of
the net assets of the Portfolio (or Master Fund) immediately after the
transaction. The Funds 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 or local currency exchanged. Investors interested in
such exchanges should contact the Advisor.
VALUATION OF SHARES
The net asset value per share of each Portfolio and Master Fund 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 Portfolio or Master Fund. The value of the shares of
each non-Feeder Portfolio will fluctuate in relation to its own investment
experience. The value of each Feeder Portfolio's shares will fluctuate in
relation to the investment experience of the Master Fund in which such Portfolio
invests. Securities held by a Portfolio or Master Fund 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. 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 respective Board of Directors or Trustees.
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 are not readily
available will be valued in good faith at fair value using methods determined
by the Board of Directors.
The net asset value per share of the International Value Series (in which
the RWB/DFA International High Book to Market Portfolio invests all of its
assets) is expressed in U.S. dollars by translating the net assets using the
mean price for the dollar as quoted by generally recognized reliable sources.
Generally, trading in foreign securities markets is completed each day at
various times prior to the close of the NYSE. The values of foreign securities
held by the International Value Series are determined as of such times for the
purpose of computing the net asset value of the International Value Series (and
the RWB/DFA International High Book to Market Portfolio). If events which
materially affect the value of the foreign investments occur subsequent to the
close of the securities market on which such securities are primarily traded,
the investments affected thereby will be valued at "fair value" as described
above.
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. If an order to purchase shares must be canceled
due to non-payment, the purchaser will be responsible for any loss incurred by
the Portfolio arising out of such cancellation. The Funds reserve the right to
redeem shares owned by any purchaser whose order is canceled to recover any
resulting loss 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
19
<PAGE>
fees may be charged prospectively from time to time based upon the future
experience of the Portfolios and the corresponding Master Funds. Any such
charges will be described in the prospectus.
EXCHANGE OF SHARES
An investor may exchange shares of one Portfolio for those of another
Portfolio described in this prospectus or another portfolio of the Funds, by
first contacting RWBAS and completing the documentation required by RWBAS and
the Advisor.
The minimum amount for an exchange into a portfolio of DFAIDG is $100,000.
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 Funds, 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 portfolios 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, plus any applicable
reimbursement fee on purchases by exchange. "Good order" means a completed
Exchange Form specifying the dollar amount to be exchanged, signed by all
registered owners of the shares; and (if no authorized signatures for the
account are on file) 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 accounts are identical, stock certificates have not been issued and the
shares of the portfolio being acquired may be issued in compliance with the
securities laws of the investor's state of residence.
There is no fee imposed on an exchange. However, the Funds reserve 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 Funds reserve
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
REDEMPTION PROCEDURE
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.
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 Funds 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.
REDEMPTION OF SMALL ACCOUNTS
With respect to each Portfolio, the Funds reserve the right to redeem a
shareholder's account if the value of the shares in a specific account is $500
or less, whether because of redemptions, a decline in the portfolio's net asset
20
<PAGE>
value per share or any other reason. Before a 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 Portfolio 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 a
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.
IN-KIND REDEMPTIONS
When in the best interests of a Portfolio, it may make a redemption payment,
in whole or in part, by a distribution of portfolio securities from the
Portfolio being redeemed (or its corresponding Master Fund) in lieu of cash in
accordance with Rule 18f-1 under the Investment Company Act of 1940. The RWB/DFA
International High Book to Market Portfolio also reserves the right to redeem
its shares in the currencies in which the International Value Series'
investments are denominated. Investors may incur brokerage charges and other
transaction costs selling securities which were received in payment of
redemptions and the value of foreign securities or currencies may be affected by
currency exchange fluctuations.
THE FEEDER PORTFOLIOS
Other institutional investors, including other mutual funds, may invest in
each Master Fund. The expenses of such other funds and, correspondingly, their
returns may differ from those of the Feeder Portfolios. Please contact the DFA
Investment Trust Company at 1299 Ocean Avenue, 11th Floor Santa Monica, CA
90401, (301) 395-8005 for information about the availability of investing in a
Master Fund other than through a Feeder Portfolio.
The aggregate amount of expenses for a Feeder Portfolio and the
corresponding Master Fund may be greater than it would be if the Portfolio were
to invest directly in the securities held by the corresponding Master Fund.
However, the total expense ratios for the Feeder Portfolios and the Master Funds
are expected to be less over time than such ratios would be if the Portfolios
were to invest directly in the underlying securities. this arrangement enables
various institutional investors, including the Feeder Portfolios, 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 a Master Fund, including a
Feeder Portfolio, will pay its proportionate share of the expenses of that
Master Fund.
The shares of the Master Funds 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. Investment in a Master Fund by
other institutional investors offers potential benefits to the Master Funds,
and through their investment in the Master Funds, the Feeder Portfolios also.
However, such 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 Master Funds.
Also, if an institutional investor were to redeem its interest in a Master
Fund, the remaining investors in that Master Fund could experience higher pro
rata operating expenses, thereby producing lower returns, and the Master
Fund's security holdings may become less diverse, resulting in increased
risk. Institutional investors that have a greater pro rata ownership interest
in a Master Fund than the corresponding Feeder Portfolio could have effective
voting control over the operation of the Master Fund.
If the Board of Directors of the relevant Fund determines that it is in the
best interest of a Feeder Portfolio, the Feeder Portfolio may withdraw its
investment in a Master Fund at any time. Upon any such withdrawal, the Board
would consider what action the Portfolio might take, including either seeking to
invest its assets in another registered investment company with the same
investment objective as the Portfolio, which might not be possible, or retaining
an investment advisor to manage the Portfolio's assets in accordance with its
own investment objective, possibly at increased cost. Shareholders of a Feeder
Portfolio will receive written notice thirty days prior to the effective date of
any changes in the investment objective of its corresponding Master Fund. A
withdrawal by a Feeder Portfolio of its investment in the corresponding Master
Fund 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
21
<PAGE>
addition, a distribution in kind to a Portfolio could result in a less
diversified portfolio of investments and could affect adversely the liquidity
of the Portfolio. Moreover, a distribution in kind by a Master Fund to a
Feeder Portfolio may constitute a taxable exchange for federal income tax
purposes resulting in gain or loss to such Portfolio. Any net capital gains
so realized will be distributed to that Portfolio's shareholders as described
in "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES."
22
<PAGE>
FINANCIAL HIGHLIGHTS
The Financial Highlights table is meant to help you understand each Portfolio's
financial performance for the past 5 years or, if shorter, the period of that
Portfolio's operations, as indicated by the table. The total returns in the
table represent the rate that you would have earned (or lost) on an investment
in the Portfolio, assuming reinvestment of all dividends and distributions. This
information has been audited by PricewaterhouseCoopers LLP (formerly Coopers &
Lybrand L.L.P.), whose report, along with the Portfolios' financial statements,
are included in the annual reports which are available upon request.
[November 30, 1998 numbers will be added for March filing]
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR JUNE 7,
ENDED TO
NOV.30, NOV.30,
1997 1996
----------- ----------
<S> <C> <C>
Net Asset Value, Beginning of Period............................ $ 10.77 $ 10.00
----------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................................... 0.20 0.08
Net Gains or Losses on Securities (Both Realized and Unrealized). 2.45 0.72
----------- ----------
Total from Investment Operations................................ 2.65 0.80
----------- ----------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income).......................... (0.20) (0.03)
Distribution (from Gains)....................................... (0.10) --
----------- ----------
Total Distributions............................................. (0.30) (0.03)
----------- ----------
Net Asset Value, End of Period.................................. $ 13.12 $ 10.77
----------- ----------
----------- ----------
Total Return.................................................... 25.01% 8.06%#
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)........................... $128,484 $ 40,708
Ratio of Expenses to Average Net Assets (1)..................... 0.36% 0.71%*
Ratio of Net Investment Income to Average Net Assets............ 1.76% 2.70%*
Portfolio Turnover Rate......................................... N/A N/A
Portfolio Turnover Rate of Master Fund Series................... 17.71% 20.12%(a)
</TABLE>
* Annualized
# Non-Annualized
(1) Represents the combined ratio for the Portfolio and its respective pro-rata
share of its Master Fund Series.
(a) Items calculated for the year ended November 30, 1996.
23
<PAGE>
THE RWB/DFA INTERNATIONAL HIGH BOOK TO MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX
MONTHS YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
MAY 31, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $ 12.84 $ 13.76 $ 12.02 $ 11.44 $ 9.92
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................. 0.07 0.22 0.22 0.19 0.14
Net Gains or Losses on Securities (Both Realized
and Unrealized)................................. 2.25 (0.77) 1.53 0.60 1.52
-------- -------- -------- -------- --------
Total From Investment Operations.................. 2.32 (0.55) 1.75 0.79 1.66
LESS DISTRIBUTIONS
Dividends (from Net Investment Income)............ (0.27 ) (0.23) (0.01) (0.19) (0.14)
Distributions (from Gains)........................ (0.22 ) (0.14) -- (0.02) --
-------- -------- -------- -------- --------
Total Distributions............................... (0.49 ) (0.37) (0.01) (0.21) (0.14)
Net Asset Value, End of Period.................... $ 14.67 $ 12.84 $ 13.76 $ 12.02 $ 11.44
Total Return...................................... 18.85%# (4.04)% 14.61% 6.95% 16.71%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)............. $318,776 $275,057 $257,371 $172,017 $112,952
Ratio of Expenses to Average Net Assets**......... 0.47%* 0.50% 0.54% 0.68% 0.69%(a)
Ratio of Net Investment Income to Average Net
Assets.......................................... 0.90%* 1.72% 1.88% 1.85% 1.39%(a)
Portfolio Turnover Rate........................... N/A N/A N/A N/A 0.15%*(b)
Portfolio Turnover Rate of Master Fund Series..... 18.78%* 22.55% 12.23% 9.75% 1.90%*(c)
</TABLE>
* Annualized
# Non-annualized
** Represents the combined ratios for the respective Portfolio and its
respective pro-rata share of its Master Fund Series for the period ended
November 30, 1994 and subsequent periods.
(a) Had certain waivers and assumptions of expenses not been in effect, for the
period ended November 30, 1994, the ratio of expenses to average net assets
would have been 0.73% and the ratio of net investment income to average net
assets would have been 1.38%.
(b) Portfolio turnover calculated for the period December 1, 1993 to February
15, 1994 (through the date on which the Portfolio transferred its investable
assets to its Master Fund Series in a tax-free exchange).
(c) Master Fund Series turnover calculated for the period February 16 to
November 30, 1994.
24
<PAGE>
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR JUNE 7,
ENDED TO
NOV. 30, NOV. 30,
1997 1996
---------- ----------
<S> <C> <C>
Net Asset Value, Beginning of Period................................................................ $ 10.24 $ 10.00
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................................................................... 0.57 0.26
Net Gains or Losses on Securities (Both Realized and Unrealized).................................... (0.01) 0.11
-------- --------
Total from Investment Operations.................................................................... 0.56 0.37
-------- --------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income).............................................................. (0.56) (0.13)
Distributions (from Gains).......................................................................... (0.01) --
-------- --------
Total Distributions................................................................................. (0.57) (0.13)
-------- --------
Net Asset Value, End of Period...................................................................... $ 10.23 $ 10.24
-------- --------
-------- --------
Total Return........................................................................................ 5.79% 3.69%#
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)............................................................... $153,772 $122,807
Ratio of Expenses to Average Net Assets (1)......................................................... 0.34%(a) 0.31%*(a)
Ratio of Net Investment Income to Average Net Assets................................................ 5.83%(a) 5.72%*(a)
Portfolio Turnover Rate............................................................................. N/A N/A
Portfolio Turnover Rate of Master Fund Series....................................................... 147.78% 81.97%*
</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 assumptions of expenses not been in effect, the
ratios of expenses to average net assets for the periods ended November 30,
1997 and 1996 would have been 0.35%, and 0.34%, respectively and the ratios
of net investment income to average net assets for the periods ended
November 30, 1997 and 1996 would have been 5.82% and 5.69%, respectively.
25
<PAGE>
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
-------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR JUNE 7,
ENDED TO
NOV. 30, NOV. 30,
1997 1996
---------- ----------
<S> <C> <C>
Net Asset Value, Beginning of Period................................................................ $ 10.23 $ 10.00
---------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income............................................................................... 0.54 0.26
Net Gains or Losses on Securities (Both Realized and Unrealized).................................... 0.01 0.10
---------- --------
Total from Investment Operations.................................................................... 0.55 0.36
---------- --------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income).............................................................. (0.53) (0.13)
Distributions (from Gains).......................................................................... (0.05) --
---------- --------
Total Distributions................................................................................. (0.58) (0.13)
---------- --------
Net Asset Value, End of Period...................................................................... $ 10.20 $ 10.23
---------- --------
---------- --------
Total Return........................................................................................ 5.58% 3.60%#
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (thousands)............................................................... $ 131,066 $ 104,644
Ratio of Expenses to Average Net Assets (1)......................................................... 0.37%(a) 0.38%*(a)
Ratio of Net Investment Income to Average Net Assets................................................ 5.53%(a) 5.81%*(a)
Portfolio Turnover Rate............................................................................. N/A N/A
Portfolio Turnover Rate of Master Fund Series....................................................... 153.67% 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 assumptions of expenses not been in effect, the
ratio of expenses to average net assets for the periods ended November 30,
1997 and 1996 would have been 0.38% and 0.41% and the ratios of net
investment income to average net assets for the periods ended November 30,
1997 and 1996 would have been 5.52% and 5.78%.
26
<PAGE>
SERVICE PROVIDERS
<TABLE>
<S> <C>
INVESTMENT ADVISOR CLIENT SERVICE AGENT
DIMENSIONAL FUND ADVISORS INC. REINHARDT WERBA BOWEN ADVISORY SERVICES
1299 Ocean Avenue, 11th floor 1190 Saratoga Avenue, Suite 200
Santa Monica, CA 90401 San Jose, CA 95129
Tel. No. (310) 395-8005 Tel. No. (800) 366-7266
CUSTODIAN--DOMESTIC CUSTODIAN--INTERNATIONAL
PNC BANK, N.A. CITIBANK, N.A.
200 Stevens Drive, Airport Business Center 111 Wall Street
Lester, PA 19113 New York, NY 10005
ACCOUNTING SERVICES, DIVIDEND DISBURSING LEGAL COUNSEL
AND TRANSFER AGENT STRADLEY, RONON, STEVENS & YOUNG, LLP
PFPC INC. 2600 One Commerce Square
400 Bellevue Parkway Philadelphia, PA 19103-7098
Wilmington, DE 19809
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
2400 Eleven Penn Center
19th and Market Streets
Philadelphia, PA 19103
</TABLE>
27
<PAGE>
OTHER AVAILABLE INFORMATION
You can find more information about the Funds and their Portfolios in the
Funds' Statement of Additional Information ("SAI") and Annual and Semi-Annual
Reports.
STATEMENT OF ADDITIONAL INFORMATION. The SAI supplements, and is technically
part of, this Prospectus. It includes an expanded discussion of investment
practices, risks, and fund operations.
ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. These reports focus on
Portfolio holdings and performance. The Annual Report also discusses the
market conditions and investment strategies that significantly affected the
Portfolios in their last fiscal year.
HOW TO GET THESE AND OTHER MATERIALS ABOUT THE FUNDS:
- Clients of Reinhardt Werba Bowen Advisory Services (RWBAS) should call
(800) 366-7266 ext. 124.
- If you are an RWB Advisory Services Inc. client, call that firm toll-free
at (800) 366-7266 to request free copies. Additional materials describing
the Funds and Portfolios, as well as the Advisor and its investment
approach, are also available.
- Access them on the SEC's Internet site--http://www.sec.gov.
- Review and copy them at the SEC's Public Reference Room in Washington D.C.
- Request copies from the Public Reference Section of the SEC, Washington,
D.C. 20549 (you will be charged a copying fee).
<TABLE>
<S> <C>
Client Service Agent:
DIMENSIONAL FUND ADVISORS INC. RWB ADVISORY SERVICES INC.
1299 Ocean Avenue, 11th Floor 1190 Saratoga Avenue, Suite 200
Santa Monica, CA 90401 San Jose, CA 95129
(310) 395-8005 (800) 366-7266
</TABLE>
DIMENSIONAL INVESTMENT GROUP INC.-- REGISTRATION NO. 811-6067
DFA INVESTMENT DIMENSIONS GROUP INC.--REGISTRATION NO. 811-3258
28
<PAGE>
DIMENSIONAL INVESTMENT GROUP INC.
DFA INVESTMENT DIMENSIONS GROUP INC.
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
RWB/DFA INTERNATIONAL 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
March 27, 1999
This statement of additional information ("SAI") 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 International High Book to Market Portfolio,
RWB/DFA Two-Year Corporate Fixed Income Portfolio and RWB/DFA Two-Year
Government Portfolio (individually, a "Portfolio" and collectively, the
"Portfolios"), dated March 27, 1999, as amended from time to time. RWB/DFA
International High Book to Market Portfolio is a series of DFA Investment
Dimensions Group Inc. ("IDG"). The other three Portfolios are series of
Dimensional Investment Group Inc. ("DIG"). IDG and DIG are open-end
management investment companies and are called the "Funds" in this SAI.
The audited financial statements and financial highlights of the Funds
are incorporated by reference from the Funds' annual reports to shareholders.
The prospectus and annual reports can be obtained by writing to the above
address or by calling the above telephone number.
-1-
<PAGE>
TABLE OF CONTENTS
PAGE
PORTFOLIO CHARACTERISTICS AND POLICIES . . . . . . . . . . . . . . . . . .3
BROKERAGE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . .3
INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . .4
FUTURES CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
CASH MANAGEMENT PRACTICES. . . . . . . . . . . . . . . . . . . . . . . . .7
CONVERTIBLE DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . .7
PORTFOLIO TURNOVER RATES . . . . . . . . . . . . . . . . . . . . . . . . .8
DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . .8
SERVICES TO THE FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . 10
ADVISORY FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
TOTAL EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SHAREHOLDER RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PRINCIPAL HOLDERS OF SECURITIES. . . . . . . . . . . . . . . . . . . . . 14
PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 15
TAXATION OF THE PORTFOLIOS . . . . . . . . . . . . . . . . . . . . . . . 15
CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . 17
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-2-
<PAGE>
PORTFOLIO CHARACTERISTICS AND POLICIES
The RWB/DFA U.S. High Book to Market Portfolio invests all of its assets
in the DFA U.S. Large Cap Value Series (the "U.S. Large Cap Value Series") of
The DFA Investment Trust Company (the "Trust"). The RWB/DFA International
High Book to Market Portfolio invests all of its assets in the DFA
International Value Series (the "International Value Series") of the Trust.
The RWB/DFA U.S. High Book to Market and the RWB/DFA International High Book
to Market Portfolios are called "Feeder Portfolios" in this SAI. The U.S.
Large Cap Value and the International Value Series are called "Master Funds"
in this SAI.
Dimensional Fund Advisors Inc. (the "Advisor") serves as investment
advisor to each of the Portfolios, except the Feeder Portfolios, and to each
Master Fund and provides administrative services to the Feeder Portfolios.
The following information supplements the information set forth in the
prospectus. Unless otherwise indicated, it applies to all of the Portfolios
and Master Funds, including the Feeder Portfolios, through their investment
in the Master Funds. Capitalized terms not otherwise defined in this SAI
have the meaning assigned to them in the prospectus.
Each of the Portfolios and the Master Funds are diversified under the
federal securities laws and regulations.
Because the structures of the Master Funds are based on the relative
market capitalizations of eligible holdings, it is possible that a Master
Fund might include at least 5% of the outstanding voting securities of one or
more issuers. In such circumstances, the Master Fund and the issuer would be
deemed affiliated persons and certain requirements under the federal
securities laws and regulations regulating dealings between mutual funds and
their affiliates might become applicable. However, based on the present
capitalizations of the groups of companies eligible for inclusion in the
Master Funds and the anticipated amount of the assets intended to be invested
in such securities, management does not anticipate that the Master Funds 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 Fixed Income
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 Master
Funds 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 Master
Funds 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, 1997, 1996 and 1995: the U.S. Large Cap Value Series paid
brokerage commissions of $929,005, $934,452 and $410,503, respectively; and
the International Value Series paid brokerage commissions of $1,133,787,
$1,251,242 and $542,306, respectively. The substantial increases or
decreases in the amount of brokerage commissions paid by the Master Funds
from year to year resulted from increases or decreases in the amount of
securities that were bought and sold by the Master Funds.
[TO BE UPDATED IN MARCH]
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
-3-
<PAGE>
services. The Investment Advisory Agreement for the Fixed Income Portfolios
and the Investment Management Agreement for the Master Funds permit the
Advisor knowingly to pay commissions on these transactions which are greater
than another broker, dealer or exchange member 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. Research
services furnished by brokers through whom securities transactions are
effected may be used by the Advisor in servicing all of its accounts and not
all such services may be used by the Advisor with respect to the applicable
Portfolio or Master Fund. Subject to obtaining best price and execution,
transactions may be placed with brokers which have assisted in the sale of
the Portfolios' shares. During the fiscal year ended November 30, 1997, the
U.S. Large Cap Value Series paid $122,527 in commissions (on securities
transactions totaling $78,961,638 in value) and the International Value
Series paid $13,922 (on securities transactions totaling $4,623,558 in value)
to brokers which provided them with market price monitoring services, market
studies and research services. [TO BE UPDATED IN MARCH]
The over-the-counter market companies eligible for purchase by the
Master Funds are thinly traded securities. Therefore, the Advisor believes
it needs maximum flexibility to effect over-the-counter 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 a Master Fund, 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 a Master Fund can effect transactions at the
best available prices.
The Feeder Portfolios will not incur any brokerage or other costs in
connection with their purchase or redemption of shares of the Master Funds,
except if a Portfolio receives securities or currencies from a Master Fund to
satisfy the Portfolio's redemption request.
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 each Master Fund are the same as those of the
corresponding Feeder 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;
-4-
<PAGE>
(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;
(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 and the RWB/DFA International High Book to Market Portfolio may
acquire warrants as a result of corporate actions involving their holdings of
equity securities;
(15) purchase securities on margin or sell short;
(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; or
(17) issue senior securities (as such term is defined in Section 18(f)
of the Investment Company Act of 1940 (the "1940 Act")), except to the extent
permitted under the 1940 Act.
The investment limitations described in (3), (4), (7), (9), (10), (11),
(12) and (16) above do not prohibit the Feeder Portfolios from investing all or
substantially all of their assets in the shares of another registered open-end
investment company, such as the Master Funds.
-5-
<PAGE>
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.
Although (2) above prohibits cash loans, the Portfolios are authorized
to lend portfolio securities. Inasmuch as the Feeder Portfolios will only
hold shares of the Master Funds, such Portfolios do not intend to lend those
shares.
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 stated in (7) 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.
The International Value Series may acquire and sell forward foreign
currency exchange contracts in order to hedge against changes in the level of
future currency rates. Such contracts involve an obligation to purchase or sell
a specific currency at a future date at a price set in the contract. While the
Portfolios and the Master Funds have retained authority to buy and sell
financial futures contracts and options thereon, they have no present intention
to do so.
Subject to future regulatory guidance, for purposes of those investment
limitations identified above that are based on total assets, "total assets"
refers to the assets that the Portfolios and Master Funds own, and does not
include assets which the Portfolios and Master Funds do not own but over which
they have effective control. For example, when applying a percentage investment
limitation that is based on total assets, the Portfolio or Master Fund will
exclude from its total assets those assets which represent collateral received
by such Portfolio or Master Fund for its securities lending transactions.
Unless otherwise indicated, all limitations applicable to the investments
of the Portfolios and Master Funds 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 Master Fund's assets
invested in certain securities or other instruments resulting from market
fluctuations or other changes in a Portfolio's or Master Fund's total assets
will not require a Portfolio or Master Fund 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 a Feeder Portfolio, the discussion applies to the Master Fund in
which such Portfolio invests all of its assets.
The Portfolios and the Master Funds 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 Master Fund 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
-6-
<PAGE>
brokers may 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 Master Fund. Variation margin
payments are made to and from the futures broker for as long as the contract
remains open. The Portfolios and the Master Funds expect to earn income on
their margin deposits. To the extent that a Portfolio or Master Fund invests in
futures contracts and options thereon for other than bona fide hedging purposes,
no Portfolio or Master Fund 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 Master Fund's net
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 Master Funds
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 Master Fund would continue
to be required to make variation margin deposits. In such circumstances, if a
Portfolio or Master Fund 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.
CASH MANAGEMENT PRACTICES
All Portfolios and Master Funds engage in cash management practices in
order to earn income on uncommitted cash balances. Generally, cash is
uncommitted pending investment in other obligations, payment of redemptions or
in other circumstances where the Advisor believes liquidity is necessary or
desirable. For example, cash investments may be made for temporary defensive
purposes during periods in which market, economic or political conditions
warrant.
All the Portfolios and Master Funds may invest cash in short-term
repurchase agreements. In addition, the U.S. Large Cap Value Series may
invest a portion of its assets, normally not more than 20%, in high quality,
highly liquid fixed income securities such as money market instruments. The
International Value Series may invest a portion of its assets, normally not
more than 20%, in interest bearing obligations such as money market
interests. The 20% guidelines set forth above are not absolute limitations
but the Master Funds do not expect to exceed these guidelines under normal
circumstances.
CONVERTIBLE DEBENTURES
The International Value Series may invest up to 5% of its assets in
convertible debentures issued by non U.S. companies located in the countries
where it is permitted to invest. Convertible debentures include corporate
bonds and notes that may be converted into or exchanged for common stock.
These securities are generally convertible either at a stated price or a
stated rate (that is, for a specific number of shares of common stock or
other security). As with other fixed income securities, the price of a
convertible debenture to some extent varies inversely with interest rates.
While providing a fixed income stream (generally higher in yield than the
income derived from a common stock but lower than that afforded by a
non-convertible debenture), a convertible debenture also affords the investor
an opportunity, through its conversion feature, to participate in the capital
appreciation of the common stock into which it is convertible. As the market
price of the underlying common stock declines, convertible debentures tend to
trade increasingly on a yield basis and so may not experience market value
declines to the same
-7-
<PAGE>
extent as the underlying common stock. When the market price of the
underlying common stock increases, the price of a convertible debenture tends
to rise as a reflection of the value of the underlying common stock. To
obtain such a higher yield, the International Value Series may be required to
pay for a convertible debenture an amount in excess of the value of the
underlying common stock. Common stock acquired upon conversion of a
convertible debenture will generally be held for as long as the Advisor
anticipates such stock will provide the Series with opportunities which are
consistent with the Series' investment objective and policies.
PORTFOLIO TURNOVER RATES
[For March update, explain any significant variation in portfolio turnover
rates over the last two fiscal years or any anticipated variation from that
reported in the Financial Highlights last year.]
DIRECTORS AND OFFICERS
The Board of Directors of each Fund is responsible for establishing Fund
policies and for overseeing the management of that Fund. Each of the Directors
and officers of IDG is also a Director and officer of DIG and a Trustee and
officer of the Trust. The Directors of the Funds, including all of the
disinterested directors, have adopted written procedures to monitor potential
conflicts of interest that might develop between the Feeder Portfolios and the
Master Funds.
The names, locations and dates of birth of the Directors and officers of
the Funds and a brief statement of their present positions and principal
occupations during the last five years are set forth below.
DIRECTORS
David G. Booth*, (12/2/46), Director, 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 Limited, DFA Investment Dimensions Group
Inc., Dimensional Investment Group Inc. and Dimensional Emerging Markets Value
Fund Inc., 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., Dimensional Investment Group Inc. and Dimensional Emerging Markets
Value 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 Investment Group Inc., Dimensional Emerging
Markets Value 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
Investment Group Inc., Dimensional Emerging Markets Value Fund Inc., Hospital
Fund, Inc. (investment management services) and BIRR Portfolio Analysis, Inc.
(software products). Chairman and President, Ibbotson Associates, Inc.,
Chicago, IL (software, data, publishing and consulting).
Merton H. Miller, (5/16/23), Director, Chicago, IL. Robert R. McCormick
Distinguished Service Professor Emeritus, Graduate School of Business,
University of Chicago. Trustee, The DFA Investment Trust Company. Director,
DFA Investment Dimensions Group Inc., Dimensional Investment Group Inc. and
Dimensional Emerging Markets Value Fund Inc. and Public Director, Chicago
Mercantile Exchange.
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<PAGE>
Myron S. Scholes, (7/1/41), 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 University.
Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions
Group Inc., Dimensional Investment Group Inc., Dimensional Emerging Markets
Value Fund Inc., Benham Capital Management Group of Investment Companies and
Smith Breeden Group of Investment Companies.
Rex A. Sinquefield*#, (9/7/44), Director, Chairman-Chief Investment
Officer, Santa Monica, CA. Chairman-Chief Investment Officer and Director,
Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA
Investment Dimensions Group Inc., Dimensional Investment Group Inc. and
Dimensional Emerging Markets Value 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 (except as otherwise
noted) in the following entities: Dimensional Fund Advisors Inc., DFA
Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc.,
Dimensional Investment Group Inc., The DFA Investment Trust Company, Dimensional
Fund Advisors Ltd., and Dimensional Emerging Markets Value Fund Inc.
Arthur Barlow, (11/7/55), Vice President, Santa Monica, CA.
Truman Clark, (4/18/41), 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.
Robert Deere, (10/8/57), Vice President, Santa Monica, CA.
Irene R. Diamant, (7/16/50), Vice President and Secretary (for all entities
other than Dimensional Fund Advisors Ltd.), Santa Monica, CA.
Richard Eustice, (8/5/65), Vice President and Assistant Secretary, (for all
entities other than Dimensional Fund Advisors Ltd.), 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 and Assistant Secretary (for
all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA.
Associate, Morrison & Foerster, LLP from 1989 to 1996.
David Plecha, (10/26/61), Vice President, Santa Monica, CA.
George Sands, (2/8/56), Vice President, Santa Monica, CA.
Michael T. Scardina, (10/12/55), Vice President, Chief Financial Officer
and Treasurer, Santa Monica, CA.
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<PAGE>
Jeanne C. Sinquefield, Ph.D.,# (12/2/46), 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. Director of
Research, LPL Financial Services, Inc., Boston, MA from 1987 to 1994.
#Rex A. Sinquefield and Jeanne C. Sinquefield are husband and wife.
Directors and officers as a group own less than 1% of each Portfolio's
outstanding stock.
Set forth below is a table listing, for each director entitled to receive
compensation, the compensation received from each Fund during the fiscal year
ended November 30, 1997, and the total compensation received from all four
registered investment companies for which the Advisor serves as investment
advisor during that same fiscal year. [TO BE UPDATED IN MARCH]
<TABLE>
<CAPTION>
Aggregate Aggregate Total Compensation from
Compensation Compensation Fund
Director from IDG From DIG and Fund Complex*
--------- ------------- -------------- -------------------------
<S> <C> <C> <C>
George M. Constantinides $15,000 $5,000 $30,000
John P. Gould $15,000 $5,000 $30,000
Roger G. Ibbotson $15,000 $5,000 $30,000
Merton H. Miller $15,000 $5,000 $30,000
Myron S. Scholes $15,000 $5,000 $30,000
</TABLE>
* The term Fund Complex refers to all registered investment companies for
which the Advisor performs advisory or administration services and for which
the individuals listed above serve as directors.
SERVICES TO THE FUNDS
ADMINISTRATIVE SERVICES - THE FEEDER PORTFOLIOS
The Funds have entered into administration agreements with the Advisor,
on behalf of each Feeder Portfolio. Pursuant to each administration
agreement, the Advisor performs various services, including: supervision of
the services provided by the Portfolio's custodian and transfer and dividend
disbursing agent and others who provide services to a Fund for the benefit of
a Portfolio; providing shareholders with information about the Portfolio and
their investments as they or the Fund may request; assisting the Portfolio in
conducting meetings of shareholders; furnishing information as the Board of
Directors may require regarding the Master Fund, and any other administrative
services for the benefit of the Portfolio as the Board of Directors may
reasonably request. For its administrative services, each Feeder Portfolio
pays the Advisor a monthly fee, which on an annual basis, equals .01% of the
average daily net assets of each Portfolio.
ADMINISTRATIVE SERVICES - ALL PORTFOLIOS
PFPC Inc. ("PFPC"), 400 Bellevue Parkway, Wilmington, DE 19809, serves as
the accounting services, dividend disbursing and transfer agent for the
Portfolios and Master Funds. The services provided by PFPC are subject to
supervision by the executive officers and the Boards of Directors of the Funds
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
custodians, and dividend disbursing agency services.
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For its services, the RWB/DFA U.S. High Book to Market Portfolio and
RWB/DFA International High Book to Market Portfolio each pay 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.
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<PAGE>
CUSTODIANS
PNC Bank, N.A., 200 Stevens Drive, Lester, PA 19113, serves as the
custodian for the Portfolios and the Master Funds. Citibank, N.A., 111 Wall
Street, New York, New York 10005, is the global custodian for the
International Value Series. The custodians maintain a separate account or
accounts for the Portfolios and the Master Funds; receive, hold and release
portfolio securities on account of the Portfolios and the Master Funds; make
receipts and disbursements of money on behalf of the Portfolios and the
Master Funds; and collect and receive income and other payments and
distributions on account of the Portfolios' and the Master Funds' portfolio
securities.
DISTRIBUTOR
Each Fund acts as distributor of each series of its own shares of stock.
Each Fund has, however, entered into an agreement with DFA Securities Inc., a
wholly owned subsidiary of the Advisor, pursuant to which DFA Securities Inc.
is responsible for supervising the sale of each series of shares. No
compensation is paid by the Funds to DFA Securities Inc. under these
agreements.
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP serves as legal counsel to the
Funds. Its address is 2600 One Commerce Square, Philadelphia, PA 19103-7098.
CLIENT SERVICES
For its services as Client Services Agent, each Portfolio pays Reinhardt
Werba Bowen Advisory Services 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, 0.13% of the RWB/DFA International High Book to Market Portfolio
and .04% of the Fixed Income Portfolios. RWBAS agreed to waive its clients
services fee for the Fixed Income Portfolios through December 31, 1996.
ADVISORY FEES
David G. Booth and Rex A. Sinquefield, as directors and officers of the
Advisor and shareholder of the Advisor's outstanding stock, may be deemed
controlling persons of the Advisor. For the services it provides as
investment advisor to the non-Feeder Portfolios and the Master Funds, the
Advisor is paid a monthly fee calculated as a percentage of average net
assets of each non-Feeder Portfolio and Master Fund. For the fiscal years
ended November 30, 1995, 1996 and 1997, the non-Feeder Portfolios and the
Master funds paid management fees to the Advisor (and any sub-advisor) as set
forth in the following table:
[TO BE UPDATED IN MARCH]
<TABLE>
<CAPTION>
1995 1996 1997
(000) (000) (000)
------ ------ ------
<S> <C> <C> <C>
U.S. Large Cap Value Series (1) n/a n/a $1,255
International Value Series $536 $2,124 $2,997
RWB/DFA Two-Year Corporate Fixed n/a n/a $210
Income Portfolio (2)
RWB/DFA Two-Year Government n/a n/a $175
Portfolio (2)
</TABLE>
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(1) The U.S. Large Cap Value Series has more than one investor; this
dollar amount represents the total dollar amount of advisory fees paid by the
U.S. Large Cap Value Series to the Advisor.
(2) Prior to November 30, 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 dollar amount shown for 1997 represents advisory fees paid by the
respective Series of the Trust.
GENERAL INFORMATION
IDG was incorporated under Maryland law on June 15, 1981. Until June
1983, IDG was named DFA Small Company Fund Inc. Until February, 1996,
RWB/DFA International High Book to Market Portfolio was named DFA
International High Book to Market Portfolio.
DIG was incorporated under Maryland law on March 19, 1990. DIG was
known as DFA U.S. Large Cap Inc. from February 1992, until it amended its
Articles of Incorporation in April 1993, to change to its present name.
Prior to a February 1992, amendment to the Articles of Incorporation, it was
known as DFA U.S. Large Cap Portfolio Inc. DIG began offering shares of the
Fixed Income Portfolios and the RWB/DFA U.S. High Book to Market Portfolio in
May 1996.
The DFA Investment Trust Company was organized as a Delaware business
trust on October 27, 1992. The Trust offers shares of its series, including
the U.S. Large Cap Value Series and the International Value Series, only to
institutional investors in private offerings.
TOTAL EXPENSES
For the fiscal year ended November 30, 1997, the total expenses to
average net assets of the RWB/DFA U.S. High Book to Market Portfolio, the
RWB/DFA International High Book to Market Portfolio, the RWB/DFA Two-Year
Corporate Fixed Income Portfolio and the RWB/DFA Two-Year Government
Portfolio were 0.36%, 0.50% 0.34% and 0.37%, respectively.
[TO BE UPDATED IN MARCH]
SHAREHOLDER RIGHTS
The shares of each Portfolio, when issued and paid for in accordance
with the Portfolios' prospectus, will be fully paid and non-assessable
shares, with equal, non-cumulative voting rights and no preferences as to
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 a 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 Funds do
not intend to hold annual meetings of shareholders, except as required by the
1940 Act or other applicable law. Each 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.
A Fund may withdraw the investment of a Feeder Portfolio in a Master
Fund 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
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<PAGE>
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 a Feeder Portfolio, as an investor in its corresponding Master
Fund, is asked to vote on a shareholder proposal, the respective Fund will
solicit voting instructions from the Portfolio's shareholders with respect to
the proposal. The Directors of the Fund will then vote the Feeder
Portfolio's shares in the Master Fund in accordance with the voting
instructions received from the Feeder Portfolio's shareholders. The
Directors of each Fund will vote shares of the Portfolio for which they
receive no voting instructions in accordance with their best judgment.
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 the 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.
PRINCIPAL HOLDERS OF SECURITIES
As of -----------------, 1998, the following person(s) beneficially
owned 5% or more of the outstanding stock of each Portfolio:
[THESE NUMBERS WILL BE UPDATED IN MARCH]
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
Charles Schwab & Co.-REIN* 82.87%
101 Montgomery Street
San Francisco, CA 94104
Donaldson, Lufkin & Jenrette Securities Corp.-
Pershing Division* 15.77%
P.O. Box 2052
Jersey City, NJ 07303
RWB/DFA INTERNATIONAL HIGH BOOK TO MARKET PORTFOLIO
Charles Schwab & Company, Inc. - REIN* (see above address) 88.82%
Donaldson Lufkin & Jenrette Securities Corp.* (see above address) 10.52%
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
Charles Schwab & Co.-CASH* (see above address) 87.09%
Donaldson, Lufkin & Jenrette Securities Corp.-
Pershing Division* (see above address) 10.03%
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
Charles Schwab & Co.-CASH* 91.88%
Donaldson, Lufkin & Jenrette Securities Corp.-
Pershing Division* 6.48%
*Owners of record only.
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<PAGE>
PURCHASE OF SHARES
The following information supplements the information set forth in the
prospectus under the caption "PURCHASE OF SHARES."
The Funds will accept purchase and redemption orders on each day that the
New York Stock Exchange ("NYSE") is open for business, regardless of whether the
Federal Reserve System is closed. However, no purchases by wire may be made on
any day that the Federal Reserve System is closed. The Funds will generally be
closed on days that the NYSE is 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. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The Federal
Reserve System is closed on the same days as the NYSE, except that it is open on
Good Friday and closed on Columbus Day and Veterans' Day. Orders for
redemptions and purchases will not be processed if the Funds are closed.
The Funds reserve the right, in their 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 that Fund or 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."
Each 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 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 such 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.
Shareholders may transfer shares of a 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.
TAXATION OF THE PORTFOLIOS
DISTRIBUTION OF NET INCOME
Each Portfolio receives income generally in the form of dividends and
interest on its investments. This income, less expenses incurred in the
operation of a Portfolio, constitutes its net investment income from which
dividends may be paid to its shareholders. Any distributions by a Portfolio
from such income will be taxable to a shareholder as ordinary income, whether
they are received in cash or in additional shares.
DISTRIBUTIONS OF CAPITAL GAINS
A Portfolio may derive capital gains and losses in connection with sales
or other dispositions of its portfolio securities. Distributions derived
from the excess of net short-term capital gain over net long-term capital
loss will be taxable to shareholders as ordinary income. Distributions paid
from long-term capital gains realized by a Portfolio will be taxable to
shareholders as long-term capital gain, regardless of how long the shares of
the Portfolio have
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<PAGE>
been held. Any net short-term or long-term capital gains realized by a
Portfolio (net of any capital loss carryovers) generally will be distributed
once each year, and may be distributed more frequently, if necessary, in
order to reduce or eliminate federal excise or income taxes on the Portfolio.
ELECTION TO BE TAXED AS A REGULATED INVESTMENT COMPANY
Each Portfolio intends to qualify each year as a regulated investment
company by satisfying certain distribution and asset diversification
requirements under the Internal Revenue Code (the "Code"). As a regulated
investment company, the Portfolios generally pay no federal income tax on the
income and gains it distributes to its shareholders. The Board reserves the
right not to maintain the qualification of a Portfolio as a regulated
investment company, if it determines such course of action to be beneficial
to shareholders. In such case, a Portfolio will be subject to federal, and
possibly state, corporate taxes on its taxable income and gains, and
distributions to shareholders will be taxed as ordinary dividend income to
the extent of a Portfolio's available earnings and profits.
EXCISE TAX DISTRIBUTION REQUIREMENT
The Code requires a Portfolio to distribute at least 98% of its taxable
ordinary income earned during the calendar year and 98% of its capital gain
net income earned during the twelve month period ending October 31 (in
addition to undistributed amounts from the prior year) to you by December 31
of each year in order to avoid federal excise taxes. Each Portfolio intends
to declare and pay sufficient dividends in December (or January that are
treated by you as received in December) but does not guarantee and can give
no assurances that its distributions will be sufficient to eliminate all such
taxes.
EFFECT OF FOREIGN INVESTMENTS ON DISTRIBUTIONS
Most foreign exchange gains realized on the sale of debt instruments are
treated as ordinary income by a Portfolio. Similarly, foreign exchange
losses realized by a Portfolio on the sale of debt instruments are generally
treated as ordinary losses by such Portfolio. These gains when distributed
will be taxable to shareholders as ordinary dividends, and any losses will
reduce a Portfolio's ordinary income otherwise available for distribution to
shareholders. This treatment could increase or reduce a Portfolio's ordinary
income distributions to shareholders, and may cause some or all of a
Portfolio's previously distributed income to be classified as a return of
capital.
A Portfolio which invests in foreign securities may be subject to
foreign withholding taxes on income from certain of their foreign securities.
If more than 50% in value of the total assets of a Portfolio are invested in
securities of foreign corporations, such Portfolio may elect to pass through
to its shareholders their pro rata share of foreign income taxes paid by such
Portfolio. If this election is made, shareholders will be required to
include in their gross income their pro rata share of foreign taxes paid by
the Portfolio. However, shareholders will be entitled to either deduct (as
an itemized deduction in the case of individuals) their share of such foreign
taxes in computing their taxable income or to claim a credit for such taxes
against their U.S. federal income tax, subject to certain limitations under
the Code.
DIVIDENDS RECEIVED DEDUCTION
Portfolios which will receive virtually all their net investment income
from the receipt of interest income or from investments in foreign securities
are not expected to make distributions eligible for the dividends received
deduction for corporations. In the case of the other Portfolios, dividends
from net investment income will generally qualify in part for the corporate
dividends received deduction, but the portion of dividends so qualified
depends on the aggregate qualifying dividend income received by the Portfolio
from domestic (U.S.) sources.
REDEMPTION OF PORTFOLIO SHARES
Redemptions and exchanges of Portfolio shares are taxable transactions
for federal and state income tax purposes that cause a shareholder to
recognize a gain or loss. If a shareholder holds his shares as a capital
asset, the gain or loss that he realizes will be capital gain or loss. Any
loss incurred on the redemption or exchange of shares
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<PAGE>
held for six months or less will be treated as a long-term capital loss to
the extent of any long-term capital gains distributed to the shareholder by
the Portfolio on those shares.
All or a portion of any loss that a shareholder realizes upon the
redemption of a Portfolio's shares will be disallowed to the extent that the
shareholder purchases other shares in the Portfolio (through reinvestment of
dividends or otherwise) within 30 days before or after the share redemption.
Any loss disallowed under these rules will be added to the shareholder's tax
basis in the new shares purchased by the shareholder.
U.S. GOVERNMENT OBLIGATIONS
Many states grant tax-free status to dividends paid from interest earned
on direct obligations of the U.S. government, subject in some states to
minimum investment requirements that must be met by a Portfolio. Investments
in GNMA/FNMA securities, bankers' acceptances, commercial paper and
repurchase agreements collateralized by U.S. government securities do not
generally qualify for tax-free treatment. The rules on exclusion of this
income are different for corporations.
COMPLEX SECURITIES
A Portfolio or Master Fund may invest in complex securities and such
investments may be subject to numerous special and complicated tax rules.
These rules could affect whether gains or losses recognized by a Portfolio or
Master Fund are treated as ordinary income or capital gain, accelerate the
recognition of income to the Portfolio or Master Fund, defer a Portfolio's or
a Master Fund's ability to recognize losses, and, in limited cases, subject
the Portfolio or Master Fund to U.S. federal income tax on income from
certain of its foreign investments. In turn, these rules may affect the
amount, timing or character of the income distributed to a shareholder by a
Portfolio or Master Fund.
OTHER SPECIAL RULES APPLICABLE TO FEEDER PORTFOLIOS WHICH INVEST IN MASTER FUNDS
A Feeder Portfolio which invests in a Master Fund may be subject to
certain special rules depending on whether the Master Fund in which such
Portfolio invests is taxable as a registered investment company ("RIC") or as
a partnership under the Code. For example, Portfolios which invest in RIC
Master Funds will not be permitted to passthrough foreign withholding taxes
paid by such Master Funds to such Portfolio's shareholders. These special
rules may affect the amount, timing or character of the income distributed to
shareholders of such Portfolios.
INFORMATION ON THE TAX CHARACTER OF DISTRIBUTIONS
The Portfolios will inform shareholders of the amount and character of
distributions at the time they are paid, and will advise shareholders of the
tax status for federal income tax purposes of such distributions shortly
after the close of each calendar year. Shareholders who have not held shares
of a Portfolio a full year may have designated and distributed to them as
ordinary income or capital gain a percentage of income that is not equal to
the actual amount of such income earned during the period of their investment
in the Portfolio.
CALCULATION OF PERFORMANCE DATA
The Portfolios and Master Funds 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 or Master
Fund. 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. 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
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<PAGE>
usually not equal the sum of returns expressed for consecutive interim
periods due to the compounding of the interim yields. The Funds' annual
reports to shareholders of the Portfolios for the fiscal year ended November
30, 1997, contain additional performance information. A copy of the annual
reports are available upon request and without charge.
With respect to the RWB/DFA International High Book to Market Portfolio,
rates of return expressed as a percentage of U.S. dollars will reflect
applicable currency exchange rates at the beginning and ending dates of the
investment periods presented. The return expressed in terms of U.S. dollars
is the return one would achieve by investing dollars in the Portfolio at the
beginning of the period and liquidating the investment in dollars at the end
of the period. Hence, the return expressed as a percentage of U.S. dollars
combines the investment performance of the Portfolio (and its corresponding
Master Fund) as well as the performance of the local currency or currencies
of the Portfolio.
Quotations of the annualized percentage total returns for each Portfolio
for the one-, five-, and ten-year periods ended November 30, 1997 (as
applicable) are set forth in the prospectus. Such quotations use the
standardized method of calculation required by the SEC.
For purposes of calculating the performance of the Feeder Portfolios,
the performance of the Master Fund will be utilized for the period prior to
when the Feeder Portfolio commenced operations, and, if applicable, restated
to reflect the Feeder Portfolio's fees and expenses. As the following formula
indicates, each Portfolio and Master Fund determines its average annual total
return by finding the average annual compounded rates of 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's
formula:
n
P(1 + T) = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total 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 Master Funds may disseminate
other performance data and may advertise total return calculated on a monthly
basis.
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.
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<PAGE>
FINANCIAL STATEMENTS
PricewaterhouseCoopers LLP (formerly Coopers & Lybrand L.L.P.), 2400
Eleven Penn Center, Philadelphia, PA 19103, are the Funds' independent
accountants. They audit the Funds' financial statements. The audited
financial statements and financial highlights of the Portfolios for the
fiscal year ended November 30, 1998, as set forth in the Funds' annual
reports to shareholders relating to the Portfolios, including the report of
PricewaterhouseCoopers LLP, are incorporated by reference into this SAI.
The audited financial statements of the U.S. Large Cap Value Series and
the International Value Series of the Trust for the Trust's fiscal year ended
November 30, 1998, as set forth in the Trust's annual report to shareholders,
including the report of PricewaterhouseCoopers LLP, are incorporated by
reference into this SAI.
A shareholder may obtain a copy of the reports upon request and without
charge, by contacting the Funds at the address or telephone number appearing
on the cover of this SAI.
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<PAGE>
DIMENSIONAL INVESTMENT GROUP, INC. (22/23)
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS.
(a) Articles of Incorporation.
(1) Form of Articles of Restatement.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
11/12 to the Registrant's
Registration Statement on Form
N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(2) Form of Articles Supplementary.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
16/17 to the Registrant's
Registration
Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: June 20, 1997.
(3) Articles Supplementary as filed with the Maryland
Secretary of State on December 7, 1998 re: the
addition of the:
* Tax-Managed U.S. Marketwide Value
Portfolio II
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
21/22 to the Registrant's Registration
Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: January 22, 1999.
(b) By-Laws.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 18/19 to the
Registrant's Registration Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: February 13, 1998.
(c) Instruments Defining Rights of Security Holders.
(1) See Article Fifth of the Registrant's Articles of
<PAGE>
Restatement.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 11/12 to the
Registrant's Registration Statement on
Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(d) Investment Advisory Contracts.
(1) Form of Investment Advisory Agreement between
the Registrant and DFA re: the:
* RWB/DFA Two-Year Corporate Fixed
Income Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 17/18 to the
Registration Statement of the registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: October 1, 1997.
(2) Form of Investment Advisory Agreement between
the Registrant and DFA re: the:
* RWB/DFA Two-Year Government
Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 17/18 to the
Registration Statement of the Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: October 1, 1997.
(e) Underwriting Contracts.
(1) Distribution Agreement dated April 16, 1993 between the
Registrant and DFA Securities Inc.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 19/20 to the
Registrant's Registration Statement on Form
N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(f) Bonus or Profit Sharing Contracts.
Not applicable.
(g) Custodian Agreements.
(1) Form of Custodian Agreement between the Registrant and
PNC Bank, N.A. (formerly Provident National Bank)
<PAGE>
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 19/20 to the
Registrant's Registration Statement on Form
N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(i) Addendum Number One.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
21/22 to the Registrant's
Registration
Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: January 22, 1999.
(h) Other Material Contracts.
(1) Form of Transfer Agency Agreement between the Registrant and
PFPC Inc. (formerly Provident Financial Processing
Corporation) (the "Transfer Agency Agreement")
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 19/20 to the
Registrant's Registration Statement on
Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(i) Addendum Number One to the Transfer
Agency Agreement
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
21/22 to the Registrant's
Registration Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: January 22, 1999.
(2) Form of Administration and Accounting Services
Agreement between the Registrant and PFPC Inc. (formerly
with Provident Financial Processing Corporation) (the
"Administration and Accounting Services Agreement")
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 19/20 to the
Registrant's Registration Statement on
Form N-1A.
File Nos.: 33-33980 and 811-6067.
<PAGE>
Filing Date: March 3, 1998.
(i) Addendum Number One to the Administration
and Accounting Services Agreement
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
21/22 to the Registrant's
Registration Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: January 22, 1999.
<PAGE>
(3) Administration Agreements between the Registrant and DFA.
(i) Form of Dated May 3, 1993 re: the:
* DFA 6-10 Institutional Portfolio
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 19/20 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(ii) Form of Dated December 1, 1993 re: the:
* DFA International Value Portfolio
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 19/20 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(iii) Form of Dated July 1, 1994 re: the:
* DFA International Value Portfolio II
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 19/20 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(iv) Form of Dated January 1, 1994 re: the:
* U.S. 6-10 Value Portfolio II
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 19/20 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(v) Form of Dated July 1, 1994 re: the:
* U.S. Large Cap Value Portfolio
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 19/20 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
<PAGE>
Filing Date: March 3, 1998.
(vi) Form of Dated September 30, 1994 re: the:
* DFA One-Year Fixed Income Portfolio II
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 19/20 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(vii) Form of Dated December 20, 1994 re: the:
* U.S. Large Cap Value Portfolio III
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 19/20 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(viii) Form of Dated December 20, 1994 re: the:
* DFA International Value Portfolio III
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 19/20 to the
Registration Statement of Registrant on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(ix) Form of 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.
(x) Form of 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
<PAGE>
N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(xi) Form of 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.
(xii) Form of Dated July, 1997 re: the:
* 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.
(xiii) Form of Dated July, 1997 re: the:
* 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.
(xiv) Dated December 8, 1998 re: the:
* Tax-Managed U.S. Marketwide Value
Portfolio II
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
21/22 to the Registrant's
Registration Statement on
Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: January 22, 1999.
(4) Client Service Agreements.
(i) Form of re: the:
* RWB/DFA Two-Year Corporate Fixed
Income Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
<PAGE>
Filing: Post-Effective Amendment No.
12/13 Registrant's Registration
Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(ii) Form of re: the:
* RWB/DFA Two-Year Government
Portfolio.
INCORPORATED BY REFERENCE TO:
Filing: Post-Effective Amendment No.
12/13 Registrant's Registration
Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(iii) Form of 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 Registrant's
Registration Statement
on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: December 15, 1995.
(5) Form of Facility Agreement with DFA.
Previously filed with this registration statement and
incorporated herein by reference.
(6) Form of Services Agreement, dated as of July 1, 1994
between Charles Schwab & Co., Inc. and the
Registrant re: the:
* U.S. Small Cap Portfolio II;
* U.S. Large Cap Portfolio II; and
* DFA International Value Portfolio II
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
19/20 to Registrant's Registration
Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(7) Form of Client Service Agreements between Reinhardt,
<PAGE>
Werba, Bowen, Inc. ("RWB") and the Registrant.
(i) Dated March 13, 1996 re: the:
* RWB/DFA Two-Year Government
Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 19/20 to Registrant's
Registration Statement on
Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(ii) Dated March 13, 1996 re: the:
* RWB/DFA Two-Year Corporate
Fixed Income Portfolio
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 19/20 to Registrant's
Registration Statement on
Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(iii) Dated March 13, 1996 re: the:
* RWB/DFA U.S. High Book to
Market Portfolio.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 19/20 to Registrant's
Registration Statement on
Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: March 3, 1998.
(i) Legal Opinion.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No.
21/22 to the Registrant's Registration
Statement on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: January 22, 1999.
(j) Other Opinions.
(1) Consent of PricewaterhouseCoopers LLP
IS FILED HEREWITH AS EXHIBIT EX-99.b11
<PAGE>
(k) Omitted Financial Statements.
Not applicable.
(l) Initial Capital Agreements.
Form of Subscription Agreement under Section 14(a)(3)
of the Investment of Investment Company Act of 1940, previously
filed with this registration statement and incorporated herein by
reference.
(m) Rule 12b-1 Plan.
Not applicable.
(n) Financial Data Schedules.
As of November 30, 1998 will be filed by amendment
prior to the effective date of this Post-Effective Amendment.
(o) Rule 18f-3 Plan.
Not Applicable.
(p) Powers-of-Attorney.
(1) 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.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 17/18 to the
Registrant's Registration Statement
on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: October 1, 1997.
(2) 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.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 17/18 to the
Registrant's Registration Statement
on Form N-1A.
File Nos.: 33-33980 and 811-6067.
Filing Date: October 1, 1997.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
<PAGE>
ITEM 25. INDEMNIFICATION.
(a) Reference is made to Section 1 of Article Ten of the Registrant's
By-Laws (as approved through 12/20/95), incorporated herein by
reference, which provides for indemnification, as set forth
below, with respect to 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, which are incorporated herein
by reference, 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 officer of the Corporation, whether or not such
person is a director or officer at the time of any
<PAGE>
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 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISOR.
(a) Dimensional Fund Advisors Inc., with a principal place of
business located at 1299 Ocean Drive, 11th Floor, Santa Monica,
CA 90401, the investment manager for the Registrant, is also the
investment manager for three other registered open-end investment
companies, The DFA Investment Trust Company, Dimensional Emerging
Markets Funds Inc. and DFA Investment Dimensions Group Inc.
The Advisor also serves as sub-advisor for certain other
registered investment companies.
The Advisor is engaged in the business of providing investment
advice primarily to institutional investors. For additional
information, please see "Management of the Fund"
in PART A and "Directors and Officers" in PART B of this
Registration Statement.
Additional information as to the Advisor and the directors and
officers of the Advisor is included in the Advisor's Form ADV
filed with the Commission (File No. 801-16283), which is
incorporated herein by reference and sets forth the officers and
directors of the Advisor and information as to any business,
profession, vocation or employment or a substantial nature
engaged in by those officers and directors during the past two
years.
ITEM 27. 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
<PAGE>
15(b) of the Investment Company Act of 1940.
(c) Commissions and other compensation received by each principal
underwriter who is not an affiliated person of the Registrant.
Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The accounts and records of the Registrant are located at the office
of the Registrant and at additional locations, as follows:
NAME ADDRESS
DFA Investment Dimensions Group Inc. 1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
PFPC Inc. 400 Bellevue Parkway,
Wilmington, DE 19809.
ITEM 29. MANAGEMENT SERVICES.
None.
ITEM 30. UNDERTAKINGS.
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused Post-Effective Amendment No.
22/23 to this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Santa Monica and State of
California on the 25th day of January, 1999.
DIMENSIONAL INVESTMENT GROUP INC.
(Registrant)
By: David G. Booth*
David G. Booth, President
(Signature and Title)
Pursuant to the requirements of the Securities Act of 1933, Post-Effective
Amendment No. 22/23 to this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
David G. Booth* Director and January 25th, 1999
David G. Booth Chairman-Chief
Executive Officer
Rex A. Sinquefield* Director and January 25th, 1999
Rex A. Sinquefield Chairman-Chief
Investment Officer
Michael T. Scardina* Chief Financial January 25th, 1999
Michael T. Scardina Officer, Treasurer
and Vice President
George M. Constantinides* Director January 25th, 1999
George M. Constantinides
John P. Gould* Director January 25th, 1999
John P. Gould
Roger G. Ibbotson* Director January 25th, 1999
Roger G. Ibbotson
Merton H. Miller* Director January 25th, 1999
Merton H. Miller
<PAGE>
Myron S. Scholes* Director January 25th, 1999
Myron S. Scholes
* By: Catherine L. Newell
Catherine L. Newell
Attorney-in-Fact (Pursuant to a Power-of-Attorney)
<PAGE>
THE DFA INVESTMENT TRUST COMPANY consents to the filing of this Amendment 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 25th day of January, 1999.
THE DFA INVESTMENT TRUST COMPANY
(Registrant)
By: David G. Booth*
David G. Booth, President
(Signature and Title)
The undersigned Directors and principal officers of THE DFA INVESTMENT TRUST
COMPANY consent to the filing of this Post-Effective Amendment No. 22/23 to the
Registration Statement of DFA Investment Dimensions Group Inc. on the dates
indicated.
Signature Title Date
David G. Booth* Director and January 25th, 1999
David G. Booth Chairman-Chief
Executive Officer
Rex A. Sinquefield* Director and January 25th, 1999
Rex A. Sinquefield Chairman-Chief
Investment Officer
Michael T. Scardina* Chief Financial January 25th, 1999
Michael T. Scardina Officer, Treasurer
and Vice President
George M. Constantinides* Director January 25th, 1999
George M. Constantinides
John P. Gould* Director January 25th, 1999
John P. Gould
Roger G. Ibbotson* Director January 25th, 1999
Roger G. Ibbotson
Merton H. Miller* Director January 25th, 1999
Merton H. Miller
Myron S. Scholes* Director January 25th, 1999
Myron S. Scholes
* By: Catherine L. Newell
<PAGE>
Catherine L. Newell
Attorney-in-Fact (Pursuant to a Power-of-Attorney)
<PAGE>
EXHIBIT INDEX
N-1A EDGAR
Exhibit No. Exhibit No. Description
23(j) EX-99.b11 Consent of PricewaterhouseCoopers LLP
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to our firm under the captions "Financial
Highlights" in the prospectus and "Financial Statements" in the Statement of
Additional Information constituting part of the Post Amendment No. 22 (File
No. 33-33980) under the Securities Act of 1933 and Post Effective Amendment
No. 23 (File No. 811-6067) under the Investment Company Act of 1940 to the
Registration Statement on Form N-1A of Dimensional Investment Group Inc. (the
"Fund") relating to 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.
PricewaterhouseCoopers, LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 26, 1999
