<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 1, 1999
FILE NO. 33-42484
FILE NO. 811-6400
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 37 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 36 /X/
------------------------
THE ADVISORS' INNER CIRCLE FUND
(Exact Name of Registrant as Specified in Charter)
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices, Zip Code)
Registrant's Telephone Number, including Area Code (800) 932-7781
MARK E. NAGLE
c/o SEI Corporation
Oaks, Pennsylvania 19456
(Name and Address of Agent for Service)
COPIES TO:
Richard W. Grant, Esquire
John H. Grady, Esquire
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103
------------------------
It is proposed that this filing become effective (check appropriate box)
<TABLE>
<C> <S>
/X/ immediately upon filing pursuant to paragraph (b)
/ / on [date] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / 75 days after filing pursuant to paragraph (a)
/ / on [date] pursuant to paragraph (a) of Rule 485.
</TABLE>
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- --------------------------------------------------------------------------------
<PAGE>
CLASS A SHARES
PROSPECTUS
March 1, 1999
-----------------------------------------
AIG MONEY MARKET FUND
A PORTFOLIO OF THE ADVISORS' INNER CIRCLE FUND
-----------------------------------------
INVESTMENT ADVISER:
AIG CAPITAL MANAGEMENT CORP.
The Securities and Exchange Commission has not approved any Fund shares or
determined whether this prospectus is accurate or complete.
Any representation to the contrary is a criminal offense.
<PAGE>
INTRODUCTION -- AIG MONEY MARKET FUND -- CLASS A SHARES
- --------------------------------------------------------------------------------
THE FUND
The AIG Money Market Fund (Fund) is a money market mutual fund that offers
investors a convenient and economical way to invest in a professionally managed
diversified portfolio of short-term high quality securities. The Fund is a
separate series of the Advisors' Inner Circle Fund, a Massachusetts business
trust (Trust).
The Fund consists of two classes of shares: Class A and Class B.
This prospectus offers Class A shares of the Fund and contains important
information about the objectives, risks and policies of the Fund. Investors are
advised to read this Prospectus and keep it for future reference. This
prospectus has been arranged into different sections so that investors can
easily review this important information.
FOR MORE DETAILED INFORMATION ABOUT THE FUND, PLEASE SEE:
<TABLE>
<S> <S>
Principal Investment Strategies and Principal Risks. . . . . . . . . . . . . . . . . . .3
Performance Information and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . .4
The Fund's Other Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
The Investment Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Purchasing and Selling Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
How to Obtain More Information About the AIG Money Market Fund . . . . . . . . . . . . .10
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
YEAR 2000
The Fund depends on the smooth functioning of computer systems in almost every
aspect of its business. Like other mutual funds, businesses and individuals
around the world, the Fund could be adversely affected if the computer systems
used by its service providers do not properly process dates on and after January
1, 2000, or distinguish between the year 2000 and the year 1900. The Fund has
asked its service providers whether they expect to have their computer systems
adjusted for the year 2000 transition, and is seeking assurances from each
service provider that they are devoting significant resources to prevent
material adverse consequences to the Fund. While it is likely that such
assurances will be obtained, the Fund and their shareholders may experience
losses if these assurances prove to be incorrect or as a result of year 2000
computer difficulties experienced by issuers of Fund securities or third
parties, such as custodians, banks, broker-dealers or others with which the Fund
does business.
- --------------------------------------------------------------------------------
<PAGE>
AIG Money Market Fund
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY
INVESTMENT OBJECTIVE PRESERVE PRINCIPAL VALUE AND MAINTAIN A
HIGH DEGREE OF LIQUIDITY WHILE PROVIDING
CURRENT INCOME. IT IS ALSO A FUNDAMENTAL
POLICY OF THE FUND TO MAINTAIN A STABLE
SHARE PRICE OF $1. THERE IS NO ASSURANCE
THAT THE FUND WILL ACHIEVE ITS INVESTMENT
OBJECTIVE OR THAT IT WILL BE ABLE TO
MAINTAIN A CONSTANT SHARE PRICE OF $1 ON A
CONTINUOUS BASIS.
INVESTMENT FOCUS MONEY MARKET INSTRUMENTS.
RISK LEVEL CONSERVATIVE.
PRINCIPAL INVESTMENT STRATEGY INVESTING IN A BROAD RANGE OF SHORT-TERM,
HIGH QUALITY U.S. DOLLAR DENOMINATED DEBT
SECURITIES.
INVESTOR PROFILE CONSERVATIVE INVESTORS WHO WANT TO RECEIVE
CURRENT INCOME THROUGH A LIQUID INVESTMENT.
- --------------------------------------------------------------------------------
[ICON] INVESTMENT STRATEGY OF THE AIG MONEY MARKET FUND
- --------------------------------------------------------------------------------
[ICON] PRINCIPAL RISKS OF INVESTING IN THE AIG MONEY MARKET FUND
An investment in the Fund is neither insured nor guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the Fund
seeks to keep a constant price per share of $1.00, it is possible to lose money
by investing in the Fund.
The Fund's investments are subject to fluctuations in the current interest rates
for short-term obligations. Accordingly, an investment in the Fund is subject
to income risk, which is the possibility that the Fund's yield will decline due
to falling interest rates.
An investment in the Fund is also subject, to a limited extent, to credit risk,
which is the possibility that the issuer of a security owned by the Fund will be
unable to repay interest and principal in a timely manner. AIG Capital
Management Corp., the Fund's investment adviser (Adviser), attempts to lessen
this risk through a conservative investment policy for the Fund, which includes
diversification (spreading Fund investments across a broad number of issuers),
and investing in obligations of high credit quality issuers.
- --------------------------------------------------------------------------------
The Fund invests in a broad range of high quality, short-term U.S. dollar
denominated money market instruments, such as obligations of the U.S. Treasury,
agencies and instrumentalities of the U.S. government, domestic and foreign
banks, domestic and foreign corporate issuers, supranational entities, and
foreign governments, as well as in repurchase agreements. The Fund's portfolio
is comprised only of short-term debt securities that are rated in the highest
category by nationally recognized ratings organizations or securities that the
Adviser determines are of equal quality. The Fund may concentrate its
investments (invest more than 25% of its assets) in obligations issued by
domestic branches of U.S. banks or U.S. branches of foreign banks that are
subject to a similar level of regulation. The Fund will maintain an average
weighted maturity of 90 days or less, and will only acquire securities that have
a remaining maturity of 397 days or less.
AIG MONEY MARKET FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in Class A Shares of the Fund by showing changes in
the Fund's performance from year to year and comparing this performance to an
average. Of course, past performance does not necessarily indicate future
performance.
This bar chart shows changes in the performance of the Fund's Class A Shares.
[BAR CHART]
<TABLE>
<S> <C>
1995 5.73%
1996 5.21%
1997 5.46%
1998 5.41%
</TABLE>
*The performance information shown above is based on a calendar year.
<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
1.44% 1.25%
(6/30/95) (6/30/96)
</TABLE>
<PAGE>
This table compares the Fund's average annual total returns for the periods
ending December 31, 1998 to those of the IBC First Tier Taxable Money Market
Funds Average (IBC Fist Tier).
<TABLE>
<CAPTION>
CLASS A SHARES 1 YEAR SINCE INCEPTION
(12/1/94)
<S> <C> <C>
AIG Money Market Fund 5.41% 5.46%
IBC First Tier 4.96% 5.07%
</TABLE>
- --------------------------------------------------------------------------------
* The inception date for the IBC First Tier is 12/1/94.
- --------------------------------------------------------------------------------
WHAT IS AN AVERAGE?
An average is a composite of mutual funds with similar investment goals. The
IBC First Tier Average is a widely-recognized average of money market funds
which invest in securities rated Prime-1 by Moody's or A-1 by S&P.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[icon] FUND FEES AND EXPENSES
This table describes the fees and expense that you may pay if you buy and hold
Class A shares of the Fund.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)*
CLASS A SHARES
<TABLE>
<S> <C>
Investment Advisory Fees .25%
Other Expenses .11%
----
Total Annual Fund Operating Expenses .36%
----
</TABLE>
* THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE MOST RECENT
FISCAL YEAR WERE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER IS
WAIVING .10% OF ITS ADVISORY FEES SO THAT TOTAL OPERATING EXPENSES DO NOT
EXCEED .40%. THE ADVISER MAY DISCONTINUE ALL OR PART OF THIS VOLUNTARY
WAIVER AT ANY TIME. WITH THIS FEE WAIVER, THE FUND'S ACTUAL TOTAL
OPERATING EXPENSES ARE AS FOLLOWS:
AIG MONEY MARKET FUND -- CLASS A .26%
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER."
EXAMPLE
This example is intended to help you compare the cost of investing Class A
shares of the Fund with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in the Fund for the time periods
indicated and that you sell your shares at the end of the period.
The example also assumes that each year your investment has a 5% return and Fund
operating expenses remain the same. Although your actual costs and returns
might be different, your approximate cost of investing $10,000 in Class A shares
of the Fund would be:
<TABLE>
<S> <C> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A Shares $37 $116 $202 $456
</TABLE>
<PAGE>
[icon] THE FUND'S OTHER INVESTMENTS
- --------------------------------------------------------------------------------
In addition to the principal investments and strategies described in this
prospectus, the Fund may also invest in other securities, use other strategies
and engage in other investment practices within its stated investment
objectives. These investments and strategies, as well as those described in the
prospectus, are described in detail in the Fund's Statement of Additional
Information. Of course, there is no guarantee that the Fund will achieve its
investment goal.
[icon] INVESTMENT ADVISER
- --------------------------------------------------------------------------------
The Investment Adviser makes investment decisions for the Fund and continuously
reviews, supervises and administers the Fund's investment program. The Board of
Trustees of the Advisors' Inner Circle Fund supervises the Adviser and
establishes policies that the Adviser must follow in its management activities.
AIG Capital Management Corp. is a wholly-owned subsidiary of American
International Group, Inc. (AIG) and is the Adviser to the Fund. For the fiscal
period ended October 31, 1998, AIG Capital Management Corp. received advisory
fees from the Fund as a percentage of average daily net assets (after waivers)
of:
AIG Money Market Fund .15%
<PAGE>
[icon] PURCHASING AND SELLING FUND SHARES
- --------------------------------------------------------------------------------
PURCHASING FUND SHARES
Shares of the Fund may be purchased by check, wire transfer or through certain
authorized dealers or other financial institutions authorized to sell Fund
shares. For first time purchases, an application form must be completed and
submitted to the Fund to establish an account.
- --------------------------------------------------------------------------------
WHEN CAN YOU PURCHASE SHARES?
Shares may be purchased only on days that the New York Stock Exchange and the
Federal Reserve are open for business (a Business day).
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
OPEN A NEW ACCOUNT ADD TO AN EXISTING ACCOUNT
- ------------------------------------------------------------------------------------------------------------
MINIMUM INVESTMENT $10,000,000 None
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BY MAIL Complete and sign the application Mail check with an Invest-By-Mail
form. form detached from account
statement.
Mail to: Check should be payable to: Check should be payable to:
AIG Money Market Fund AIG Money Market Fund-Class A. AIG Money Market Fund - Class A.
P.O. Box 419009 Reference account name and number. Reference the account name and
Kansas City, Missouri 64141-6009 number.
All purchases must be in U.S.
dollars, and checks must be drawn All purchases must be in U.S.
on U.S. banks. dollars, and checks must be drawn
on U.S. banks.
- ------------------------------------------------------------------------------------------------------------
BY WIRE Please call client services at Please call client services at
1-800-845-3885 to arrange the wire 1-800-845-3885 to arrange the wire
transfer. transfer.
Wire to:
United Missouri Bank, N.A. The shareholder's name and account The shareholder's name and account
ABA# 10-10-00695 number must be specified in the number must be specified in the
For a/c no. 9870600404 wire. wire.
Credit AIG Money Market Fund
- ------------------------------------------------------------------------------------------------------------
</TABLE>
For a purchase order to be eligible to receive dividends on the day of purchase,
the order must be received before 1:00 p.m. Eastern time and federal funds
(readily available funds) must be received before 3:00 p.m. Eastern time.
Checks received by the Fund will be credited to the investor's account upon
conversion of the proceeds in federal funds (readily available funds). The Fund
cannot accept third-party checks, credit cards, credit card checks or cash.
The Fund reserves the right to reject an account application or a purchase order
if it is not in the best interest of the Fund or its shareholders, and may
accept, at its discretion, amounts smaller than the stated minimum investment
amount.
HOW WE CALCULATE NAV
The Fund calculates its Net Asset Value (NAV) per share once each Business day
at 2:00 p.m. Eastern time. The Fund generally calculates NAV using the
amortized cost method of valuation, which is described in detail in the Fund's
Statement of Additional Information. If it is
<PAGE>
determined that this method is unreliable during certain market conditions or
for other reasons, fair value prices for the Fund's securities may be determined
in good faith using procedures approved by the Fund's Board of Trustees.
- --------------------------------------------------------------------------------
NET ASSET VALUE
NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund.
- --------------------------------------------------------------------------------
MINIMUM PURCHASES
The minimum investment in Class A shares is generally $10,000,000. An investor
may also purchase Class A shares in an amount below the minimum if the investor:
* makes an initial investment of $5,000,000 and intends to increase his or
her account balance to $10,000,000 within 90 days;
* invests assets managed by a registered investment advisor that is owned by
AIG;
* is AIG (or any company where AIG owns at least 19% of the stock);
* is C.V. Starr & Co., Inc. (including its subsidiaries and affiliates);
* is an AIG senior executive officer or their family members; or
* certain employee benefit plans sponsored by AIG.
The Fund may waive this minimum at its discretion.
- --------------------------------------------------------------------------------
TELEPHONE TRANSACTIONS
Purchasing and selling Fund shares over the telephone is extremely convenient,
but not without risk. Although the Fund has established certain safeguards and
procedures to confirm the identity of callers and the authenticity of
instructions, the Fund and its agents are not responsible for any losses or
costs incurred by following telephone instructions reasonably believed to be
genuine. If you or your financial institution transact with the Fund over the
telephone, you will generally bear the risk of any loss.
- --------------------------------------------------------------------------------
SELLING FUND SHARES
HOW TO SELL YOUR FUND SHARES
Fund shares may be sold (redeemed) on any Business day by contacting the Fund by
mail or telephone.
Redemption orders received prior to 1:00 p.m. Eastern time on any Business day
will be effective that same day. Shares redeemed will not receive the dividends
declared on that day. Redemption proceeds can be wire transferred to the
shareholder's bank account or sent by check. There is a charge for wire
transfers, currently $10.00, which may be waived by the Fund. Payments by check
of redemption proceeds will be made as promptly as possible, and no later than
seven days after the redemption order is received.
For shares recently purchased by check, redemption proceeds may not be available
until the check has cleared, which may take up to 15 days from the date of
purchase.
The purchase price per share will be the NAV next determined after receipt of
the redemption
<PAGE>
request.
REDEMPTIONS IN KIND
Redemption proceeds are generally paid in cash. However, under unusual
conditions that make the payment of cash unwise (and for the protection of the
Fund's remaining shareholders) redemption proceeds may be paid in liquid
securities with a market value equal to the redemption price (redemption in
kind). Although it is highly unlikely that Fund shares would ever be redeemed
in kind, shareholders would probably have to pay transaction costs to sell the
securities distributed, as well as taxes on any capital gains from the sale as
with any redemption.
INVOLUNTARY SALES OF SHARES
If an investor's account balance drops below $10,000,000 because of redemptions,
he or she may be required to sell shares. At least 30 days' written notice will
be given to allow sufficient time to add to the investor's account and avoid the
sale of shares.
SUSPENSION OF RIGHT TO SELL SHARES
The Fund may suspend your right to sell your shares if the New York Stock
Exchange restricts trading, the Securities and Exchange Commission declares an
emergency or for other reasons. More information about this is in the Fund's
Statement of Additional Information.
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
The Fund declares dividends of substantially all of its net investment income
(not including capital gains) every day and distributes this income each month.
The Fund makes distributions of capital gains, if any, at least annually.
Shareholders on a Fund's record date will be entitled to receive the
distribution.
Dividends and distributions are paid in the form of additional Fund shares
unless an election is made to receive payment in cash. To elect cash payment, a
shareholder must notify the Fund in writing prior to the date of the
distribution. The election will be effective for dividends and distributions
paid after receipt of the written notice. The election can be canceled by
simply sending written notice to the Fund.
- --------------------------------------------------------------------------------
THE "RECORD DATE"
If you own Fund shares on a Fund's record date, you will be entitled to receive
the distribution.
- --------------------------------------------------------------------------------
TAXES
INVESTORS SHOULD CONSULT A TAX ADVISOR REGARDING SPECIFIC QUESTIONS ABOUT
FEDERAL, STATE AND LOCAL INCOME TAXES. Below is a summary of some important tax
issues that affect the Fund and
<PAGE>
its shareholders. This summary is based on current tax laws, which may change.
- --------------------------------------------------------------------------------
FUND DISTRIBUTIONS
Distributions you receive from a Fund may be taxable whether or not you reinvest
them.
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of its investment income and capital
gains, if any. The dividends and distributions investors receive may be subject
to federal, state and local taxation, depending upon an investor's tax
situation. Distributions investors receive from the Fund may be taxable whether
or not an investor reinvests them.
MORE INFORMATION ABOUT TAXES IS IN THE FUND'S STATEMENT OF ADDITIONAL
INFORMATION.
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table that follows presents performance information about the Class A Shares
of the Fund. This information is intended to help you understand the Fund's
financial performance for the past five years, or, if shorter, the period of the
Fund's operations. Some of this information reflects financial information for
a single Fund share. The total returns in the tables represent the rate that an
investor would have earned (or lost) on an investment in the Fund, assuming
reinvestment of all dividends and distributions.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Study these tables to see how the Fund performed since it began investment
operations.
- --------------------------------------------------------------------------------
This information has been audited by Arthur Andersen LLP, independent auditors.
Their report, along with the Fund's financial statements, appears in the annual
report that accompanies the Fund's Statement of Additional Information. The
annual report, which contains more performance information, can be obtained at
no charge by calling 1-800-249-7445.
<TABLE>
<CAPTION>
AIG MONEY MARKET FUND - CLASS A SHARES
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FOR THE PERIOD ENDED OCTOBER 31: 1998 1997 1996 1995(1)
---- ---- ---- ----
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.05 0.05 0.05 0.05
Net Gains or Losses on Securities (both realized and unrealized) -- -- -- --
Total From Investment Operations 0.05 0.05 0.05 0.05
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.05) (0.05) (0.05) (0.05)
Distributions (from capital gains) --- --- --- ---
*************************************
Total Distributions (0.05) (0.05) (0.05) (0.05)
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 5.49% 5.41% 5.26% 5.75%*
*************************************
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 251,090 $329,125 $253,865 $313, 657
Ratio of Expenses to Average Net Assets 0.26% 0.27% 0.39% 0.40%*
Ratio of Net Income to Average Net Assets 5.37% 5.30% 5.15% 5.60%*
Ratio of Expenses to Average Net Assets (excluding waivers) 0.36% 0.39% 0.41% 0.47%*
Ratio of Net Investment Income (Loss) to 5.27% 5.18% 5.13% 5.53%*
Average Net Assets (excluding waivers)
</TABLE>
- ------------------------
* Annualized.
(1)The Class A Shares of the Fund commenced operations on December 1, 1994.
<PAGE>
[LOGO] AIG MONEY
MARKET FUND
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
AIG CAPITAL MANAGEMENT CORP.
70 PINE STREET
NEW YORK, NEW YORK 10270
- --------------------------------------------------------------------------------
DISTRIBUTOR
SEI INVESTMENTS DISTRIBUTION CO.
ONE FREEDOM VALLEY ROAD
OAKS, PENNSYLVANIA 19456
- --------------------------------------------------------------------------------
SUB-DISTRIBUTOR
AIG EQUITY SALES CORP.
70 PINE STREET
NEW YORK, NEW YORK 10270
LEGAL COUNSEL
MORGAN, LEWIS & BOCKIUS LLP
1800 M STREET, N.W.
WASHINGTON, D.C. 20036
More information about the Fund is available without charge through the
following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
- --------------------------------------------------------------------------------
The Fund's SAI dated March 1, 1999, includes detailed information about The
Advisors' Inner Circle Fund and the AIG Money Market Fund. The SAI is on file
with the SEC and is incorporated by reference into this prospectus. This means
that the SAI, for legal purposes, is a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
- --------------------------------------------------------------------------------
These reports list the Funds' holdings and contain information from the Fund's
managers about strategies and recent market conditions and trends also contain
detailed financial information about the Funds.
TO OBTAIN MORE INFORMATION:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BY TELEPHONE: Call 1-800-249-7445
BY MAIL: Write to:
AIG Money Market Fund
c/o Advisors' Inner Circle Fund
P.O. Box 419009
Kansas City, Missouri 64141-6009
FROM THE SEC: You can also obtain the SAI and the Annual Report and the
Semi-Annual Report, as well as other information about the Advisors' Inner
Circle Fund, from the SEC's website ("http://www.sec.gov"). You may review and
copy documents at the SEC Public Reference Room in Washington, DC (for
information call 1-800-SEC-0330). You may request documents by mail from the
SEC, upon payment of a duplicating fee, by writing to: Securities and Exchange
Commission, Public Reference Section, Washington, DC 20549-6009.
The Fund's Investment Company Act registration number is
811-6400.
- -------------------------------------------------------------------------------
<PAGE>
CLASS B SHARES
PROSPECTUS
March 1, 1999
-----------------------------------
AIG MONEY MARKET FUND
A PORTFOLIO OF THE ADVISORS' INNER CIRCLE FUND
-----------------------------------
INVESTMENT ADVISER:
AIG CAPITAL MANAGEMENT CORP.
The Securities and Exchange Commission has not approved any Fund shares or
determined whether this prospectus is accurate or complete.
Any representation to the contrary is a criminal offense.
<PAGE>
INTRODUCTION - AIG MONEY MARKET FUND - CLASS B SHARES
- --------------------------------------------------------------------------------
THE FUND
The AIG Money Market Fund (Fund) is a money market mutual fund that offers
investors a convenient and economical way to invest in a professionally managed
diversified portfolio of short-term high quality securities. The Fund is a
separate series of the Advisors' Inner Circle Fund, a Massachusetts business
trust (Trust).
The Fund consists of two classes of shares: Class A and Class B.
This prospectus offers Class B shares of the Fund and contains important
information about the objectives, risks and policies of the Fund. Investors are
advised to read this Prospectus and keep it for future reference. This
prospectus has been arranged into different sections so that investors can
easily review this important information.
FOR MORE DETAILED INFORMATION ABOUT THE FUND, PLEASE SEE:
Principal Investment Strategies and Principal Risks . . . . . . . . . . 3
Performance Information and Expenses . . . . . . . . . . . . . . . . . 4
The Fund's Other Investments. . . . . . . . . . . . . . . . . . . . . . 5
The Investment Adviser. . . . . . . . . . . . . . . . . . . . . . . . . 5
Purchasing and Selling Fund Shares. . . . . . . . . . . . . . . . . . . 6
Distribution of Fund Shares . . . . . . . . . . . . . . . . . . . . . . 8
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . . . 8
Financial Highlights . . . . . . . . . . . . . . . . . .. . . . . . . . 9
How to Obtain More Information About the AIG Money Market Fund. . . . . 10
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
YEAR 2000
The Fund depends on the smooth functioning of computer systems in almost every
aspect of its business. Like other mutual funds, businesses and individuals
around the world, the Fund could be adversely affected if the computer systems
used by its service providers do not properly process dates on and after January
1, 2000, or distinguish between the year 2000 and the year 1900. The Fund has
asked its service providers whether they expect to have their computer systems
adjusted for the year 2000 transition, and is seeking assurances from each
service provider that they are devoting significant resources to prevent
material adverse consequences to the Fund. While it is likely that such
assurances will be obtained, the Fund and their shareholders may experience
losses if these assurances prove to be incorrect or as a result of year 2000
computer difficulties experienced by issuers of Fund securities or third
parties, such as custodians, banks, broker-dealers or others with which the Fund
does business.
- --------------------------------------------------------------------------------
<PAGE>
AIG MONEY MARKET FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY
INVESTMENT OBJECTIVE PRESERVE PRINCIPAL VALUE AND MAINTAIN A HIGH
DEGREE OF LIQUIDITY WHILE PROVIDING CURRENT
INCOME. IT IS ALSO A FUNDAMENTAL POLICY OF THE
FUND TO MAINTAIN A STABLE SHARE PRICE OF $1.
THERE IS NO ASSURANCE THAT THE FUND WILL ACHIEVE
ITS INVESTMENT OBJECTIVE OR THAT IT WILL BE ABLE
TO MAINTAIN A CONSTANT SHARE PRICE OF $1 ON A
CONTINUOUS BASIS.
INVESTMENT FOCUS MONEY MARKET INSTRUMENTS.
RISK LEVEL CONSERVATIVE.
PRINCIPAL INVESTMENT STRATEGY INVESTING IN A BROAD RANGE OF SHORT-TERM, HIGH
QUALITY U.S. DOLLAR DENOMINATED DEBT SECURITIES.
INVESTOR PROFILE CONSERVATIVE INVESTORS WHO WANT TO RECEIVE
CURRENT INCOME THROUGH A LIQUID INVESTMENT.
- --------------------------------------------------------------------------------
[ICON] INVESTMENT STRATEGY OF THE AIG MONEY MARKET FUND
The Fund invests in a broad range of high quality, short-term U.S. dollar
denominated money market instruments, such as obligations of the U.S. Treasury,
agencies and instrumentalities of the U.S. government, domestic and foreign
banks, domestic and foreign corporate issuers, supranational entities, and
foreign governments, as well as in repurchase agreements. The Fund's portfolio
is comprised only of short-term debt securities that are rated in the highest
category by nationally recognized ratings organizations or securities that the
Adviser determines are of equal quality. The Fund may concentrate its
investments (invest more than 25% of its assets) in obligations issued by
domestic branches of U.S. banks or U.S. branches of foreign banks that are
subject to a similar level of regulation. The Fund will maintain an average
weighted maturity of 90 days or less, and will only acquire securities that have
a remaining maturity of 397 days or less.
- --------------------------------------------------------------------------------
[ICON] PRINCIPAL RISKS OF INVESTING IN THE AIG MONEY MARKET FUND
An investment in the Fund is neither insured nor guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the Fund
seeks to keep a constant price per share of $1.00, it is possible to lose money
by investing in the Fund.
The Fund's investments are subject to fluctuations in the current interest rates
for short-term obligations. Accordingly, an investment in the Fund is subject
to income risk, which is the possibility that the Fund's yield will decline due
to falling interest rates.
An investment in the Fund is also subject, to a limited extent, to credit risk,
which is the possibility that the issuer of a security owned by the Fund will be
unable to repay interest and principal in a timely manner. AIG Capital
Management Corp., the Fund's investment adviser (Adviser), attempts to lessen
this risk through a conservative investment policy for the Fund, which includes
diversification (spreading Fund investments across a broad number of issuers),
and investing in obligations of high credit quality issuers.
- --------------------------------------------------------------------------------
AIG MONEY MARKET FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in Class B Shares of the Fund by showing changes in
the Fund's performance from year to year and comparing this performance to an
average. Of course, past performance does not necessarily indicate future
performance.
This bar chart shows changes in the performance of the Fund's Class B Shares.
[BAR CHART]
<TABLE>
<S> <C>
1996 4.84%
1997 5.09%
1998 5.04%
</TABLE>
*The performance information shown above is based on a calendar year.
<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
1.36% 1.16%
(6/30/95) (6/30/96)
</TABLE>
<PAGE>
This table compares the Fund's average annual total returns for the periods
ending December 31, 1998 to those of the IBC First Tier Taxable Money Market
Funds Average (IBC Fist Tier).
<TABLE>
<CAPTION>
CLASS B SHARES 1 YEAR SINCE INCEPTION
(2/16/95)
<S> <C> <C>
AIG Money Market Fund 5.04% 5.08%
IBC First Tier 4.96% 5.06%
</TABLE>
- --------------------------------------------------------------------------------
* The inception date for the IBC First Tier is 2/28/95.
- --------------------------------------------------------------------------------
WHAT IS AN AVERAGE?
An average is a composite of mutual funds with similar investment goals. The
IBC First Tier Average is a widely-recognized average of money market funds
which invest in securities rated Prime-1 by Moody's or A-1 by S&P.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[icon] FUND FEES AND EXPENSES
This table describes the fees and expense that you may pay if you buy and hold
Class B shares of the Fund.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)*
<TABLE>
<CAPTION>
CLASS B SHARES
<S> <C>
Investment Advisory Fees .25%
12b-1 Fees .35%
Other Expenses .12%
----
Total Annual Fund Operating Expenses .72%
----
</TABLE>
* THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE MOST RECENT
FISCAL YEAR WERE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER IS
WAIVING .10% OF ITS ADVISORY FEES SO THAT TOTAL OPERATING EXPENSES DO NOT
EXCEED .75%. THE ADVISER MAY DISCONTINUE ALL OR PART OF THIS VOLUNTARY
WAIVER AT ANY TIME. WITH THIS FEE WAIVER, THE FUND'S ACTUAL TOTAL
OPERATING EXPENSES ARE AS FOLLOWS:
AIG MONEY MARKET FUND - CLASS B .62%
FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER" AND
"DISTRIBUTION OF FUND SHARES."
EXAMPLE
This example is intended to help you compare the cost of investing Class B
shares of the Fund with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in the Fund for the time periods
indicated and that you sell your shares at the end of the period.
The example also assumes that each year your investment has a 5% return and Fund
operating expenses remain the same. Although your actual costs and returns
might be different, your approximate cost of investing $10,000 in Class B shares
of the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class B Shares $74 $230 $401 $894
</TABLE>
<PAGE>
[icon] THE FUND'S OTHER INVESTMENTS
- --------------------------------------------------------------------------------
In addition to the principal investments and strategies described in this
prospectus, the Fund may also invest in other securities, use other strategies
and engage in other investment practices within its stated investment
objectives. These investments and strategies, as well as those described in the
prospectus, are described in detail in the Fund's Statement of Additional
Information. Of course, there is no guarantee that the Fund will achieve its
investment goal.
[icon] INVESTMENT ADVISER
- --------------------------------------------------------------------------------
The Investment Adviser makes investment decisions for the Fund and continuously
reviews, supervises and administers the Fund's investment program. The Board of
Trustees of the Advisors' Inner Circle Fund supervises the Adviser and
establishes policies that the Adviser must follow in its management activities.
AIG Capital Management Corp. is a wholly-owned subsidiary of American
International Group, Inc. (AIG) and is the Adviser to the Fund. For the fiscal
period ended October 31, 1998, AIG Capital Management Corp. received advisory
fees from the Fund as a percentage of average daily net assets (after waivers)
of:
AIG Money Market Fund .15%
<PAGE>
[icon] PURCHASING AND SELLING FUND SHARES
- --------------------------------------------------------------------------------
PURCHASING FUND SHARES
Shares of the Fund may be purchased by check, wire transfer or through certain
authorized dealers or other financial institutions authorized to sell Fund
shares. For first time purchases, an application form must be completed and
submitted to the Fund to establish an account.
- --------------------------------------------------------------------------------
WHEN CAN YOU PURCHASE SHARES?
Shares may be purchased only on days that the New York Stock Exchange and the
Federal Reserve are open for business (a Business day).
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
OPEN A NEW ACCOUNT ADD TO AN EXISTING ACCOUNT
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
MINIMUM INVESTMENT $25,000 None
- ---------------------------------------------------------------------------------------------------------
BY MAIL Complete and sign the Mail check with an
application form. Invest-By-Mail form detached
from account statement.
Mail to: Check should be payable to: Check should be payable to:
AIG Money Market Fund AIG Money Market Fund-Class B. AIG Money Market Fund - Class B.
P.O. Box 419009 Reference account name and Reference the account name and
Kansas City, Missouri 64141-6009 number. number.
All purchases must be in U.S. All purchases must be in U.S.
dollars, and checks must be dollars, and checks must be
drawn on U.S. banks. drawn on U.S. banks.
- ---------------------------------------------------------------------------------------------------------
BY WIRE Please call client services at Please call client services at
1-800-845-3885 to arrange the 1-800-845-3885 to arrange the
wire transfer. wire transfer.
Wire to:
United Missouri Bank, N.A. The shareholder's name and The shareholder's name and
ABA# 10-10-00695 account number must be account number must be specified
For a/c no. 9870600404 specified in the wire. in the wire.
Credit AIG Money Market Fund
- ---------------------------------------------------------------------------------------------------------
</TABLE>
For a purchase order to be eligible to receive dividends on the day of purchase,
the order must be received before 1:00 p.m. Eastern time and federal funds
(readily available funds) must be received before 3:00 p.m. Eastern time.
Checks received by the Fund will be credited to the investor's account upon
conversion of the proceeds in federal funds (readily available funds). The Fund
cannot accept third-party checks, credit cards, credit card checks or cash.
The Fund reserves the right to reject an account application or a purchase order
if it is not in the best interest of the Fund or its shareholders, and may
accept, at its discretion, amounts smaller than the stated minimum investment
amount.
HOW WE CALCULATE NAV
The Fund calculates its Net Asset Value (NAV) per share once each Business day
at 2:00 p.m. Eastern time. The Fund generally calculates NAV using the
amortized cost method of valuation,
<PAGE>
which is described in detail in the Fund's Statement of Additional Information.
If it is determined that this method is unreliable during certain market
conditions or for other reasons, fair value prices for the Fund's securities may
be determined in good faith using procedures approved by the Fund's Board of
Trustees.
- --------------------------------------------------------------------------------
NET ASSET VALUE
NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund.
- --------------------------------------------------------------------------------
MINIMUM PURCHASES
The minimum investment in Class B shares is $25,000. The Fund may waive this
minimum at its discretion.
- --------------------------------------------------------------------------------
TELEPHONE TRANSACTIONS
Purchasing, selling and exchanging Fund shares over the telephone is extremely
convenient, but not without risk. Although the Fund has established certain
safeguards and procedures to confirm the identity of callers and the
authenticity of instructions, the Fund is not responsible for any losses or
costs incurred by following telephone instructions reasonably believed to be
genuine. If you or your financial institution transact with us over the
telephone, you will generally bear the risk of any loss.
- --------------------------------------------------------------------------------
SELLING FUND SHARES
HOW TO SELL YOUR FUND SHARES
Fund shares may be sold (redeemed) on any Business day by contacting the Fund by
mail or telephone.
Redemption orders received prior to 1:00 p.m. Eastern time on any Business day
will be effective that same day. Shares redeemed will not receive the dividends
declared on that day. Redemption proceeds can be wire transferred to the
shareholder's bank account or sent by check. There is a charge for wire
transfers, currently $10.00, which may be waived by the Fund. Payments by check
of redemption proceeds will be made as promptly as possible, and no later than
seven days after the redemption order is received.
For shares recently purchased by check, redemption proceeds may not be available
until the check has cleared, which may take up to 15 days from the date of
purchase.
The purchase price per share will be the NAV next determined after receipt of
the redemption request.
<PAGE>
REDEMPTIONS IN KIND
Redemption proceeds are generally paid in cash. However, under unusual
conditions that make the payment of cash unwise (and for the protection of the
Fund's remaining shareholders) redemption proceeds may be paid in liquid
securities with a market value equal to the redemption price (redemption in
kind). Although it is highly unlikely that Fund shares would ever be redeemed
in kind, shareholders would probably have to pay transaction costs to sell the
securities distributed, as well as taxes on any capital gains from the sale as
with any redemption.
INVOLUNTARY SALES OF SHARES
If an investor's account balance drops below $25,000 because of redemptions, he
or she may be required to sell shares. At least 30 days' written notice will be
given to allow sufficient time to add to the investor's account and avoid the
sale of shares.
SUSPENSION OF RIGHT TO SELL SHARES
The Fund may suspend your right to sell your shares if the New York Stock
Exchange restricts trading, the Securities and Exchange Commission declares an
emergency or for other reasons. More information about this is in the Fund's
Statement of Additional Information.
DISTRIBUTION OF FUND SHARES
The Fund has adopted a distribution plan that allows the Fund to pay
distribution and service fees for the sale and distribution of its Class B
shares, and for services provided to Class B shareholders. Because these fees
are paid out of the Fund's assets continuously, over time these fees will
increase the cost of investment and may cost investors more than paying other
types of sales charges.
Distribution fees, as a percentage of average daily net assets, are 0.35% for
Class B Shares.
The Distributor or any Sub-Distributor may, from time to time in its sole
discretion, institute one or more promotional incentive programs for dealers,
which will be paid for by the Distributor or Sub-Distributor from any source
available to it.
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
The Fund declares dividends of substantially all of its net investment income
(not including capital gains) every day and distributes this income each month.
The Fund makes distributions of capital gains, if any, at least annually.
Shareholders on a Fund's record date will be entitled to receive the
distribution.
Dividends and distributions are paid in the form of additional Fund shares
unless an election is made to receive payment in cash. To elect cash payment, a
shareholder must notify the Fund in writing prior to the date of the
distribution. The election will be effective for dividends and distributions
paid after receipt of the written notice. The election can be canceled by
simply sending written notice to the Fund.
- --------------------------------------------------------------------------------
THE "RECORD DATE"
If you own Fund shares on a Fund's record date, you will be entitled to receive
the distribution.
- --------------------------------------------------------------------------------
TAXES
INVESTORS SHOULD CONSULT A TAX ADVISER REGARDING SPECIFIC QUESTIONS ABOUT
FEDERAL, STATE AND LOCAL INCOME TAXES. Below is a summary of some important tax
issues that affect the Fund and its shareholders. This summary is based on
current tax laws, which may change.
- --------------------------------------------------------------------------------
FUND DISTRIBUTIONS
Distributions you receive from a Fund may be taxable whether or not you reinvest
them.
- --------------------------------------------------------------------------------
The Fund will distribute substantially all of its investment income and capital
gains, if any. The dividends and distributions investors receive may be subject
to federal, state and local taxation, depending upon an investor's tax
situation. Distributions investors receive from the Fund may be taxable whether
or not an investor reinvests them.
MORE INFORMATION ABOUT TAXES IS IN THE FUND'S STATEMENT OF ADDITIONAL
INFORMATION.
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table that follows presents performance information about the Class B Shares
of the Fund. This information is intended to help you understand the Fund's
financial performance for the past five years, or, if shorter, the period of the
Fund's operations. Some of this information reflects financial information for
a single Fund share. The total returns in the tables represent the rate that an
investor would have earned (or lost) on an investment in the Fund, assuming
reinvestment of all dividends and distributions.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Study these tables to see how the Fund performed since it began investment
operations.
- --------------------------------------------------------------------------------
This information has been audited by Arthur Andersen LLP, independent auditors.
Their report, along with the Fund's financial statements, appears in the annual
report that accompanies the Fund's Statement of Additional Information. The
annual report, which contains more performance information, can be obtained at
no charge by calling 1-800-249-7445.
<TABLE>
<CAPTION>
AIG MONEY MARKET FUND - CLASS B SHARES
- --------------------------------------------------------------------------------------------------------------------
AIG MONEY MARKET FUND - CLASS B SHARES
FOR THE PERIOD ENDED OCTOBER 31: 1998 1997 1996 1995(1)
<S> <C> <C> <C> <C>
---- ---- ---- ----
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.05 0.05 0.05 0.04
Net Gains or Losses on Securities (both realized
and unrealized) -- -- -- --
Total From Investment Operations 0.05 0.05 0.05 0.04
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.05) (0.05) (0.05) (0.04)
Distributions (from capital gains) --- --- --- ---
*************************************
Total Distributions (0.05) (0.05) (0.05) (0.04)
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 5.12% 5.04% 4.89% 5.43%*
*************************************
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $155,078 $108,754 $135,384 $120,482
Ratio of Expenses to Average Net Assets 0.62% 0.63% 0.74% 0.75%*
Ratio of Net Income to Average Net Assets 5.00% 4.93% 4.79% 5.18%*
Ratio of Expenses to Average Net Assets 0.72% 0.74% 0.77% 0.85%*
(excluding waivers)
Ratio of Net Investment Income (Loss) to 4.90% 4.82% 4.76% 5.08%*
Average Net Assets (excluding waivers)
</TABLE>
* Annualized.
(1)The Class B Shares of the Fund commenced operations on February 16, 1995.
<PAGE>
[GRAPHIC] AIG MONEY More information about the Fund is
MARKET FUND available without charge through the
following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
- --------------------------------------------------------------------------------
The Fund's SAI dated March 1, 1999,
includes detailed information about The
INVESTMENT ADVISER Advisors' Inner Circle Fund and the AIG
Money Market Fund. The SAI is on file with
AIG CAPITAL MANAGEMENT CORP. the SEC and is incorporated by reference
70 PINE STREET into this prospectus. This means that the
NEW YORK, NEW YORK 10270 SAI, for legal purposes, is a part of this
prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
- --------------------------------------------------------------------------------
These reports list the Funds' holdings and
DISTRIBUTOR contain information from the Fund's
managers about strategies and recent market
SEI INVESTMENTS DISTRIBUTION CO. conditions and trends also contain detailed
ONE FREEDOM VALLEY ROAD financial information about the Funds.
OAKS, PENNSYLVANIA 19456
TO OBTAIN MORE INFORMATION:
- --------------------------------------------------------------------------------
--------------------------------------------
SUB-DISTRIBUTOR BY TELEPHONE: Call 1-800-249-7445
AIG EQUITY SALES CORP. BY MAIL: Write to:
70 PINE STREET AIG Money Market Fund
NEW YORK, NEW YORK 10270 c/o Advisors' Inner Circle Fund
P.O. Box 419009
Kansas City, Missouri 64141-6009
LEGAL COUNSEL
FROM THE SEC: You can also obtain the SAI
and the Annual Report and the Semi-Annual
MORGAN, LEWIS & BOCKIUS LLP Report, as well as other information about
1800 M STREET, N.W. the Advisors' Inner Circle Fund, from the
WASHINGTON, D.C. 20036 SEC's website ("http://www.sec.gov"). You
may review and copy documents at the SEC
Public Reference Room in Washington, DC
(for information call 1-800-SEC-0330).
You may request documents by mail from the
SEC, upon payment of a duplicating fee, by
writing to: Securities and Exchange
Commission, Public Reference Section,
Washington, DC 20549-6009.
The Fund's Investment Company Act
registration number is 811-6400.
--------------------------------------------
<PAGE>
AIG MONEY MARKET FUND
Investment Adviser:
AIG Capital Management Corp.
This STATEMENT OF ADDITIONAL INFORMATION is not a prospectus and relates
only to the Class A and Class B shares of the AIG Money Market Fund (the
"Fund"). It is intended to provide additional information regarding the
activities and operations of The Advisors' Inner Circle Fund (the "Trust") and
the Fund. This Statement of Additional Information should be read in conjunction
with the Fund's Prospectuses dated March 1, 1999, as amended or supplemented
from time to time. A copy of the Prospectuses for the Class A and Class B shares
of the Fund may be obtained by calling 1-800-249-7445.
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Trust................................................................. S-2
Investment Objectives and Policies........................................ S-2
Description of Permitted Investments...................................... S-3
Investment Limitations.................................................... S-7
The Adviser............................................................... S-9
The Administrator......................................................... S-9
The Distributor........................................................... S-10
The Transfer Agent........................................................ S-11
The Custodian............................................................. S-11
Independent Public Accountants............................................ S-11
Legal Counsel............................................................. S-11
Trustees and Officers of the Trust........................................ S-11
Performance Information................................................... S-14
Computation of Yield...................................................... S-14
Calculation of Total Return............................................... S-15
Purchasing Shares......................................................... S-15
Redeeming of Shares....................................................... S-15
Determination of Net Asset Value.......................................... S-16
Taxes..................................................................... S-17
Fund Transactions......................................................... S-19
Trading Practices and Brokerage........................................... S-19
Description of Shares..................................................... S-22
Shareholder Liability..................................................... S-22
Limitation of Trustees' Liability......................................... S-22
5% and 25% Shareholders................................................... S-22
Experts................................................................... S-23
Financial Statements...................................................... S-23
Appendix.................................................................. A-1
</TABLE>
March 1, 1999
AIG-F-003-06
<PAGE>
THE TRUST
This Statement of Additional Information relates only to the AIG Money
Market Fund (the "Fund"). The Fund is a separate series of The Advisors' Inner
Circle Fund (the "Trust"), an open-end management investment company,
established under Massachusetts law as a Massachusetts business trust under a
Declaration of Trust dated July 18, 1991. The Declaration of Trust permits the
Trust to offer separate series ("portfolios") of shares of beneficial interest
("shares"). Shares of the Fund are offered through two separate classes (Class A
and Class B) which provide for variations in minimum investment balances,
distribution fees, voting rights and dividends. Except for these differences,
each share of the Fund represents an equal proportionate interest in the Fund.
See "Description of Shares." No investment in shares of the Fund should be made
without first reading the applicable Prospectuses of the Fund. Capitalized terms
not defined herein are defined in the Prospectuses.
The Fund pays its (i) operating expenses, including fees of its service
providers, expenses of preparing prospectuses, proxy solicitation material and
reports to shareholders, costs of custodial services and registering shares
under federal and state securities laws, pricing and insurance expenses,
brokerage costs, interest charges, taxes and organization expenses and (ii) pro
rata share of the Trust's other expenses, including audit and legal expenses.
Expenses not attributable to a specific portfolio are allocated across all of
the portfolios on the basis of relative net assets.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Fund is to preserve principal value and
maintain a high degree of liquidity while providing current income. This
investment objective is fundamental and cannot be changed without the consent of
shareholders. It is also a fundamental policy of the Fund to use its best
efforts to maintain a constant net asset value of $1.00 per share. There is no
assurance that the Fund will achieve its investment objective or that it will be
able to maintain a constant net asset value of $1.00 per share on a continuous
basis.
RESTRAINTS ON INVESTMENTS BY MONEY MARKET FUNDS--Investments by a money
market fund are subject to limitations imposed under regulations adopted by the
SEC. These regulations impose certain quality, maturity and diversification
restraints on investments by a money market fund. Under these regulations, money
market funds may only acquire obligations that present minimal credit risk and
that are "eligible securities," which means they are (i) rated, at the time of
investment, by at least two NRSROs (one if it is the only organization rating
such obligation) in the highest rating category or, if unrated, determined to be
of comparable quality (a "first tier security"); or (ii) rated according to the
foregoing criteria in the second highest rating category or, if unrated,
determined to be of comparable quality ("second tier security"). A security is
not considered to be unrated if its issuer has outstanding obligations of
comparable priority and security that have a short-term rating. A money market
fund may invest up to 25% of its assets in "first tier" securities of a single
issuer for a period of up to three business days. The securities that money
market funds may acquire may be supported by credit enhancements, such as demand
features or guarantees. The SEC regulations limit the percentage of securities
that a money market fund may hold for which a single issuer provides credit
enhancements. The Fund invests only in first tier securities.
INVESTMENT STRATEGIES OF THE FUND
In seeking its investment objective, the Fund will invest exclusively in (i)
bills, notes and bonds issued by the United States Treasury ("U.S. Treasury
Obligations") and separately traded interest and principal component parts of
such obligations ("Stripped Government Securities"); (ii) obligations issued or
guaranteed as to principal and interest by the agencies or instrumentalities of
the United States Government; (iii) U.S. dollar denominated short-term
obligations of issuers rated at the time of investment in the highest rating
category for short-term debt obligations (within which there may be
sub-categories or
S-2
<PAGE>
gradations indicating relative standing) by two or more nationally recognized
statistical rating organizations ("NRSROs"), or only one NRSRO if only one NRSRO
has rated the security, or, if not rated, as determined by the Adviser to be of
comparable quality, consisting of obligations of U.S. and foreign corporations,
domestic banks, foreign banks, and U.S. and foreign savings and loan
institutions; (iv) repurchase agreements with respect to the foregoing; (v)
obligations of supranational entities satisfying the credit standards described
above or, if not rated, determined by the Adviser to be of comparable quality;
and (vi) obligations of foreign governments, agencies and instrumentalities
satisfying the credit standards described above or, if not rated, determined by
the Adviser to be of comparable quality.
The Fund reserves the right to invest more than 25% of its total assets in
obligations issued by domestic branches of U.S. banks or U.S. branches of
foreign banks subject to similar regulations as U.S. banks. To the extent that
the Fund invests more than 25% of its net assets in bank obligations, it will be
exposed to the risks associated with that industry as a whole. The Fund may
purchase asset-backed securities rated in the highest NRSRO rating category at
the time of investment. The Fund may invest in securities which pay interest on
a variable or floating rate basis. In addition, the Fund may acquire securities
on a when-issued basis and may buy securities which are subject to puts or
standby commitments. The Fund will not invest more than 10% of its net assets in
illiquid securities. The Fund reserves the right to enter into reverse
repurchase agreements and engage in securities lending.
The Fund will use NRSROs such as Standard & Poor's Corporation and Moody's
Investors Service, Inc. when determining security credit ratings.
DESCRIPTION OF PERMITTED INVESTMENTS
ASSET-BACKED SECURITIES--Asset-backed securities are securities backed by
non-mortgage assets such as company receivables, truck and auto loans, leases
and credit card receivables. Other asset-backed securities may be created in the
future. These securities may be traded over-the-counter and typically have a
short-intermediate maturity structure depending on the paydown characteristics
of the underlying financial assets which are passed through to the security
holder. These securities are generally issued as pass-through certificates,
which represent undivided fractional ownership interests in the underlying pool
of assets. Asset-backed securities may also be debt obligations, which are known
as collateralized obligations and are generally issued as the debt of a special
purpose entity, such as a trust, organized solely for the purpose of owning
these assets and issuing debt obligations.
Asset-backed securities are not issued or guaranteed by the U.S. Government,
its agencies or instrumentalities; however, the payment of principal and
interest on such obligations may be guaranteed up to certain amounts and, for a
certain period, by a letter of credit issued by a financial institution (such as
a bank or insurance company) unaffiliated with the issuers of such securities.
The purchase of asset-backed securities raises risk considerations peculiar to
the financing of the instruments underlying such securities. For example, there
is a risk that another party could acquire an interest in the obligations
superior to that of the holders of the asset-backed securities. There also is
the possibility that recoveries on repossessed collateral may not, in some
cases, be available to support payments on those securities.
Asset-backed securities entail prepayment risk, which may vary depending on
the type of asset, but is generally less than the prepayment risk associated
with mortgage-backed securities. In addition, credit card receivables are
unsecured obligations of the card holder. There may be a limited secondary
market for such securities.
BANKERS' ACCEPTANCES--Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by a commercial bank. Bankers' acceptances are used
by corporations to finance the shipment and storage of goods. Maturities are
generally six months or less.
S-3
<PAGE>
CERTIFICATES OF DEPOSIT--Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity.
COMMERCIAL PAPER--Commercial paper is a term used to describe unsecured
short-term promissory notes issued by banks, municipalities, corporations and
other entities. Maturities on these issues vary from a few to 270 days.
EURODOLLAR AND YANKEE BANK OBLIGATIONS--Eurodollar bank obligations are U.S.
dollar denominated certificates of deposit or time deposits issued outside the
United States by foreign branches of U.S. banks or by foreign banks. Yankee bank
obligations are U.S. dollar denominated obligations issued in the United States
by foreign banks.
ILLIQUID SECURITIES--Illiquid securities are securities that cannot be
disposed of within seven business days at approximately the price at which they
are being carried on the Fund's books. An illiquid security includes a demand
instrument with a demand notice period exceeding seven days, where there is no
secondary market for such security, and repurchase agreements with a remaining
term to maturity in excess of 7 days.
OBLIGATIONS OF SUPRANATIONAL ENTITIES--Supranational entities are entities
established through the joint participation of several governments, and include
the Asian Development Bank, the Inter-American Development Bank, International
Bank for Reconstruction and Development (World Bank), African Development Bank,
European Economic Community, European Investment Bank and the Nordic Investment
Bank.
REPURCHASE AGREEMENTS--Repurchase agreements are agreements by which a
person (E.G., the Fund) obtains a security and simultaneously commits to return
the security to the seller (a primary securities dealer as recognized by the
Federal Reserve Bank of New York or a national member bank as defined in Section
3(d)(1) of the Federal Deposit Insurance Act, as amended) at an agreed upon
price (including principal and interest) on an agreed upon date within a number
of days (usually not more than seven) from the date of purchase. The resale
price reflects the purchase price plus an agreed upon market rate of interest
which is unrelated to the coupon rate or maturity of the underlying security. A
repurchase agreement involves the obligation of the seller to pay the agreed
upon price, which obligation is, in effect, secured by the value of the
underlying security.
Repurchase agreements are considered to be loans by the Fund for purposes of
its investment limitations. The repurchase agreements entered into by the Fund
will provide that the underlying security at all times shall have a value at
least equal to 102% of the resale price stated in the agreement (the Adviser
monitors compliance with this requirement). Under all repurchase agreements
entered into by the Fund, the appropriate Custodian or its agent must take
possession of the underlying collateral. However, if the seller defaults, the
Fund could realize a loss on the sale of the underlying security to the extent
that the proceeds of the sale including accrued interest are less than the
resale price provided in the agreement including interest. In addition, even
though the Bankruptcy Code provides protection for most repurchase agreements,
if the seller should be involved in bankruptcy or insolvency proceedings, the
Fund may incur delay and costs in selling the underlying security or may suffer
a loss of principal and interest if the Fund is treated as an unsecured creditor
and required to return the underlying security to the seller's estate.
RESTRICTED SECURITIES--Restricted securities are securities that may not be
sold to the public without registration under the Securities Act of 1933 (the
"1933 Act") or an exemption from registration. Permitted investments for the
Fund includes restricted securities. Restricted securities, including securities
eligible for re-sale under 1933 Act Rule 144A, that are determined to be liquid
are not subject to this limitation. This determination is to be made by the Fund
Adviser pursuant to guidelines adopted by the Board of Trustees. Under these
guidelines, the particular Adviser will consider the frequency of trades and
quotes for the security, the number of dealers in, and potential purchasers for,
the securities, dealer
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undertakings to make a market in the security, and the nature of the security
and of the marketplace trades. In purchasing such Restricted Securities, each
Adviser intends to purchase securities that are exempt from registration under
Rule 144A under the 1933 Act.
REVERSE REPURCHASE AGREEMENTS--Reverse repurchase agreements are agreements
by which the Fund sells securities to financial institutions and simultaneously
agrees to repurchase those securities at a mutually agreed-upon date and price.
At the time the Fund enters into a reverse repurchase agreement, the Fund will
place liquid assets having a value equal to the repurchase price in a segregated
custodial account and monitor this account to ensure equivalent value is
maintained. Reverse repurchase agreements involve the risk that the market value
of securities sold by the Fund may decline below the price at which the Fund is
obligated to repurchase the securities. Reverse repurchase agreements are
considered to be borrowings by the Fund under the 1940 Act.
SECURITIES LENDING--The Fund may lend securities pursuant to agreements
which require that the loans be continuously secured by collateral at all times
equal to 100% of the market value of the loaned securities which consists of:
cash, securities of the U.S. Government or its agencies, or any combination of
cash and such securities. Such loans will not be made if, as a result, the
aggregate amount of all outstanding securities loans for the Fund exceed
one-third of the value of the Fund's total assets taken at fair market value.
The Fund will continue to receive interest on the securities lent while
simultaneously earning interest on the investment of the cash collateral in U.S.
Government securities. However, the Fund will normally pay lending fees to such
broker-dealers and related expenses from the interest earned on invested
collateral. There may be risks of delay in receiving additional collateral or
risks of delay in recovery of the securities or even loss of rights in the
collateral should the borrower of the securities fail financially. However,
loans are made only to borrowers deemed by the appropriate Adviser to be of good
standing and when, in the judgment of that Adviser, the consideration which can
be earned currently from such securities loans justifies the attendant risk. Any
loan may be terminated by either party upon reasonable notice to the other
party. The Fund may use the Distributor or a broker-dealer affiliate of an
Adviser as a broker in these transactions.
SECURITIES OF FOREIGN GOVERNMENTS--The Fund may invest in U.S. dollar
denominated obligations of foreign governments. These instruments may subject
the Fund to investment risks that differ in some respects from those related to
investments in obligations of U.S. domestic issuers. Such risks include future
adverse political and economic developments, the possible imposition of
withholding taxes on interest or other income, possible seizure,
nationalization, or expropriation of foreign deposits, the possible
establishment of exchange controls or taxation at the source, greater
fluctuations in value due to changes in exchange rates, or the adoption of other
foreign governmental restrictions which might adversely affect the payment of
principal and interest on such obligations. Such investments may also entail
higher custodial fees and sales commissions than domestic investments. Foreign
issuers of securities or obligations are often subject to accounting treatment
and engage in business practices different from those respecting domestic
issuers of similar securities or obligations. Foreign branches of U.S. banks and
foreign banks may be subject to less stringent reserve requirements than those
applicable to domestic branches of U.S. banks.
SECURITIES OF FOREIGN ISSUERS--There are certain risks connected with
investing in foreign securities. These include risks of adverse political and
economic developments (including possible governmental seizure or
nationalization of assets), the possible imposition of exchange controls or
other governmental restrictions, less uniformity in accounting and reporting
requirements, the possibility that there will be less information on such
securities and their issuers available to the public, the difficulty of
obtaining or enforcing court judgments abroad, restrictions on foreign
investments in other jurisdictions, difficulties in effecting repatriation of
capital invested abroad, and difficulties in transaction settlements and the
effect of delay on shareholder equity. Foreign securities may be subject to
foreign taxes, and may be less marketable than comparable U.S. securities.
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STANDBY COMMITMENTS AND PUTS--The Fund may purchase securities at a price
which would result in a yield to maturity lower than that generally offered by
the seller at the time of purchase when they can simultaneously acquire the
right to sell the securities back to the seller, the issuer or a third party
(the "writer") at an agreed-upon price at any time during a stated period or on
a certain date. Such a right is generally denoted as a "standby commitment" or a
"put." The purpose of engaging in transactions involving puts is to maintain
flexibility and liquidity to permit the Fund to meet redemptions and remain as
fully invested as possible in municipal securities. The Fund reserves the right
to engage in put transactions. The right to put the securities depends on the
writer's ability to pay for the securities at the time the put is exercised. The
Fund would limit its put transactions to institutions which the Adviser believes
present minimal credit risks, and the Adviser would use its best efforts to
initially determine and continue to monitor the financial strength of the
sellers of the options by evaluating their financial statements and such other
information as is available in the marketplace. It may, however be difficult to
monitor the financial strength of the writers because adequate current financial
information may not be available. In the event that any writer is unable to
honor a put for financial reasons, the Fund would be a general creditor (I.E.,,
on a parity with all other unsecured creditors) of the writer. Furthermore,
particular provisions of the contract between the Fund and the writer may excuse
the writer from repurchasing the securities; for example, a change in the
published rating of the underlying securities or any similar event that has an
adverse effect on the issuer's credit or a provision in the contract that the
put will not be exercised except in certain special cases, for example, to
maintain portfolio liquidity. The Fund could, however, at any time sell the
underlying portfolio security in the open market or wait until the portfolio
security matures, at which time it should realize the full par value of the
security.
The securities purchased subject to a put may be sold to third persons at
any time, even though the put is outstanding, but the put itself, unless it is
an integral part of the security as originally issued, may not be marketable or
otherwise assignable. Therefore, the put would have value only to the Fund. Sale
of the securities to third parties or lapse of time with the put unexercised may
terminate the right to put the securities. Prior to the expiration of any put
option, the Fund could seek to negotiate terms for the extension of such an
option. If such a renewal cannot be negotiated on terms satisfactory to the
Fund, the Fund could, of course, sell the portfolio security. The maturity of
the underlying security will generally be different from that of the put. There
will be no limit to the percentage of portfolio securities that the Fund may
purchase subject to a standby commitment or put, but the amount paid directly or
indirectly for all standby commitments or puts which are not integral parts of
the security as originally issued held in the Fund will not exceed 1/2 of 1% of
the value of the total assets of the Fund calculated immediately after any such
put is acquired.
STRIPPED GOVERNMENT SECURITIES--The Fund may purchase Separately Traded
Registered Interest and Principal Securities ("STRIPS") that are created when
the coupon payments and the principal payment are stripped from an outstanding
United States Treasury bond by the Federal Reserve Bank of New York and sold
separately. The Fund may not actively trade STRIPS.
TIME DEPOSITS--Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits with a withdrawal penalty or a
remaining term to maturity in excess of 7 days are considered to be illiquid
securities.
U.S. GOVERNMENT AGENCY OBLIGATIONS--U.S. Government agency obligations are
obligations issued or guaranteed by agencies or instrumentalities of the U.S.
Government. Agencies of the United States Government which issue obligations
consist of, among others, the Export Import Bank of the United States, Farmers
Home Administration, Federal Farm Credit Bank, Federal Housing Administration,
Government National Mortgage Association ("GNMA"), Maritime Administration,
Small Business Administration and The Tennessee Valley Authority. Obligations of
instrumentalities of the United States Government include securities issued by,
among others, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation
("FHLMC"), Federal Intermediate Credit Banks, Federal Land Banks, Fannie
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Mae and the United States Postal Service as well as government trust
certificates. Some of these securities are supported by the full faith and
credit of the United States Treasury, others are supported by the right of the
issuer to borrow from the Treasury and still others are supported only by the
credit of the instrumentality. Guarantees of principal by agencies or
instrumentalities of the U.S. Government may be a guarantee of payment at the
maturity of the obligation so that in the event of a default prior to maturity
there might not be a market and thus no means of realizing the value of the
obligation prior to maturity.
U.S. TREASURY OBLIGATIONS--U.S. Treasury obligations consist of bills, notes
and bonds issued by the U.S. Treasury and separately traded interest and
principal component parts of such obligations that are transferable through the
federal book-entry system known as STRIPS.
VARIABLE AND FLOATING RATE INSTRUMENTS--Certain obligations may carry
variable or floating rates of interest, and may involve a conditional or
unconditional demand feature. Such instruments bear interest at rates which are
not fixed, but which vary with changes in specified market rates or indices. The
interest rates on these securities may be reset daily, weekly, quarterly or some
other reset period. There is a risk that the current interest rate on such
obligations may not accurately reflect existing market interest rates. A demand
instrument with a demand notice exceeding seven days may be considered illiquid
if there is no secondary market for such security.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES--When-issued or delayed delivery
basis transactions involve the purchase of an instrument with payment and
delivery taking place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the purchase commitment.
The Fund will maintain with the Custodian a separate account with liquid assets
in an amount at least equal to these commitments. The interest rate realized on
these securities is fixed as of the purchase date and no interest accrues to the
Fund before settlement. These securities are subject to market fluctuation due
to changes in market interest rates and it is possible that the market value at
the time of settlement could be higher or lower than the purchase price if the
general level of interest rates has changed. Although the Fund generally
purchases securities on a when-issued or forward commitment basis with the
intention of actually acquiring securities for its portfolio, the Fund may
dispose of a when-issued security or forward commitment prior to settlement if
it deems appropriate.
INVESTMENT LIMITATIONS
The following are fundamental policies of the Fund and cannot be changed
with respect to the Fund without the consent of the holders of a majority of the
Fund's outstanding shares. The term "majority of the outstanding shares" means
the vote of (i) 67% or more of the Fund's shares present at a meeting, if more
than 50% of the outstanding shares of the Fund are present or represented by
proxy, or (ii) more than 50% of the Fund's outstanding shares, whichever is
less.
The Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States Government, its agencies or instrumentalities and
repurchase agreements involving such securities) if, as a result, more than
5% of the total assets of the Fund would be invested in the securities of
such issuer; provided, however, that the Fund may invest up to 25% of its
total assets without regard to this restriction as permitted by applicable
law.
2. Purchase any securities which would cause 25% or more of the total assets of
the Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, provided that this
limitation does not apply to investments in the obligations issued or
guaranteed by the United States Government, its agencies or
instrumentalities, repurchase agreements involving such securities and
obligations issued by domestic branches of U.S. banks or U.S. branches of
foreign banks subject to the same regulations as U.S. banks. For purposes of
this limitation, (i) utility companies will be classified according to their
services, for example, gas, gas
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transmission, electric and telephone will each be considered a separate
industry; (ii) financial service companies will be classified according to
the end users of their services, for example, automobile finance, bank
finance and diversified finance will each be considered a separate industry;
(iii) supranational entities will be considered a separate industry; and
(iv) asset-backed securities will be classified according to the underlying
assets securing such securities.
3. Make loans, except that the Fund may (i) purchase or hold debt instruments
in accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending as described
in this Statement of Additional Information.
4. Borrow money, except that the Fund may (i) enter into reverse repurchase
agreements and (ii) borrow money for temporary or emergency purposes and
then only in an amount not exceeding 33 1/3% of the value of its total
assets. Any borrowing will be done from a bank and asset coverage of at
least 300% is required. In the event that such asset coverage shall at any
time fall below 300%, the Fund shall, within three days thereafter or such
longer period as the SEC may prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that the asset coverage of such
borrowings shall be at least 300%. This borrowing provision is included for
temporary liquidity or emergency purposes. All borrowings will be repaid
before making investments and any interest paid on such borrowings will
reduce income.
5. Acquire more than 5% of the voting securities of any one issuer.
6. Invest in companies for the purpose of exercising control.
7. Pledge, mortgage or hypothecate assets except to secure temporary borrowings
in aggregate amounts not to exceed 10% of total assets taken at current
value at the time of the incurrence of such loan.
8. Purchase or sell real estate, real estate limited partnership interests,
futures contracts, commodities or commodities contracts and interests in a
pool of securities that are secured by interests in real estate. However,
subject to the permitted investments of the Fund, it may invest in municipal
securities or other marketable obligations secured by real estate or
interests therein.
9. Make short sales of securities, maintain a short position or purchase
securities on margin, except that the Fund may obtain short-term credits as
necessary for the clearance of security transactions.
10. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling the Fund security.
11. Purchase securities of other investment companies except as permitted by the
1940 Act and the rules and regulations thereunder.
13. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowings as described above or as permitted by rule,
regulation or order of the SEC.
14. Purchase or retain securities of an issuer if, to the knowledge of the Fund,
an officer, trustee, partner or director of the Trust or any investment
adviser of the Fund owns beneficially more than 0.5% of the shares or
securities of such issuer and all such officers, trustees, partners and
directors owning more than 0.5% of such shares or securities together own
more than 5% of such shares or securities.
15. Invest in interests in oil, gas or other mineral exploration or development
programs and oil, gas or mineral leases.
16. Write puts, calls, options or combinations thereof or invest in warrants.
The foregoing percentages will apply at the time of the purchase of a
security.
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THE ADVISER
The Trust and AIG Capital Management Corp. (the "Adviser") have entered into
an advisory agreement dated November 21, 1994 (the "Advisory Agreement"). The
Advisory Agreement provides that the Adviser shall not be protected against any
liability to the Trust or its shareholders by reason of willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard of its obligations or duties thereunder.
The Adviser is an indirect wholly-owned subsidiary of American International
Group, Inc. ("AIG"). AIG is a holding company which through its subsidiaries is
primarily engaged in a broad range of insurance and insurance-related and
financial services activities in the United States and abroad. The Adviser was
formed in June 1994. Its officers and employees include individuals with
investment management experience, including experience with short-term
investments. The principal business address of the Adviser is 70 Pine Street,
New York, New York 10270.
The Adviser serves as the Fund's investment adviser and makes the investment
decisions for the assets of the Fund and continuously reviews, supervises and
administers the Fund's investment program, subject to the supervision of, and
policies established by, the Trustees of the Trust.
The Adviser is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .25% of the average daily net assets of the Fund.
The Adviser has voluntarily agreed to waive 10 basis points (.10%) of its fees
and to waive additional fees and/or reimburse certain expenses of the Fund to
the extent necessary in order to limit net operating expenses to an annual rate
of not more than .40% of the average daily net assets of the Class A shares of
the Fund and not more than .75% of the average daily net assets of the Class B
Shares of the Fund. The Adviser reserves the right to terminate its waiver or
any reimbursements at any time upon sixty days' notice to the Fund in its sole
discretion. For the fiscal year ended October 31, 1998, the Adviser received
(after fee waivers) a fee equal to .15% of the Fund's average daily net assets.
For the fiscal years ended October 31, 1996, October 31, 1997 and October
31, 1998, the Adviser was paid advisory fees of $1,023,856, $689,323 and
$932,230, respectively, and waived advisory fees of $81,307, $459,559 and
$504,977, respectively, with respect to the Fund.
The continuance of the Advisory Agreement must be specifically approved at
least annually (i) by the vote of the Trustees or by a vote of the shareholders
of the Fund, and (ii) by the vote of a majority of the Trustees who are not
parties to the Agreement or "interested persons" of any party thereto, cast in
person at a meeting called for the purpose of voting on such approval. The
Advisory Agreement will terminate automatically in the event of its assignment,
and is terminable at any time without penalty by the Trustees of the Trust or,
with respect to the Fund, by a majority of the outstanding shares of the Fund,
on not less than 30 days' nor more than 60 days' written notice to the Adviser,
or by the Adviser on 90 days' written notice to the Trust.
THE ADMINISTRATOR
SEI Investments Mutual Funds Services (the "Administrator") serves as the
Administrator of the Trust. The Administrator provides the Trust with
administrative services, including regulatory reporting and all necessary office
space, equipment, personnel and facilities. The Trust shall pay the
Administrator compensation for services rendered at an annual rate equal to the
sum of (i) .10% of average daily net assets up to $50 million; (ii) .08% of
average daily net assets from $50 million up to $250 million; (iii) .06% of
average daily net assets from $250 million up to and including $450 million; and
(iv) .05% of average daily net assets in excess of $450 milion. There is a
minimum annual fee of $75,000 per portfolio plus $15,000 for each additional
class.
The Administration Agreement provides that the Administrator shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust in connection with the matters to which the
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Administration Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Administrator in
the performance of its duties or from reckless disregard by it of its duties and
obligations thereunder. For the fiscal years ended October 31, 1996, October 31,
1997 and October 31, 1998, the Administrator received a fee of $411,405,
$326,095 and $343,631, respectively, from the Fund. The Administrator waived
$13,365, $56,655 and $48,702, respectively, of fees for the fiscal years ended
October 31, 1996, October 31, 1997 and October 31, 1998.
The Trust and the Administrator have also entered into a shareholder
servicing agreement pursuant to which the Administrator provides certain
shareholder services in addition to those set forth in the Administration
Agreement.
The Administrator, a Delaware business trust, has its principal business
offices at Oaks, Pennsylvania 19456. SEI Investments Management Corporation
("SIMC"), a wholly-owned subsidiary of SEI Investments Company ("SEI
Investments"), is the owner of all beneficial interest in the Administrator. SEI
Investments and its subsidiaries and affiliates, including the Administrator,
are leading providers of funds evaluation services, trust accounting systems,
and brokerage and information services to financial institutions, institutional
investors, and money managers. The Administrator and its affiliates also serve
as administrator or sub-administrator to the following other mutual funds: The
Achievement Funds Trust, The Arbor Fund, ARK Funds, Armada Funds, Bishop Street
Funds, Boston 1784 Funds-Registered Trademark-, CrestFunds, Inc., CUFUND, The
Expedition Funds, First American Funds, Inc., First American Investment Funds,
Inc., First American Strategy Funds, Inc., HighMark Funds, Monitor Funds, The
Nevis Funds, Oak Associates Funds, The PBHG Funds, Inc., PBHG Advisor Funds,
Inc., PBHG Insurance Series Fund, Inc., The Pillar Funds, SEI Asset Allocation
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional International
Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI
Liquid Asset Trust, SEI Tax Exempt Trust, STI Classic Funds, STI Classic
Variable Trust, TIP Funds and Alpha Select Funds.
THE DISTRIBUTOR
SEI Investments Distribution Co. (the "Distributor"), a wholly-owned
subsidiary of SEI Investments, and the Trust are parties to a distribution
agreement dated November 14, 1991 ("Distribution Agreement") which applies to
both Class A and Class B shares of the Fund.
The Distribution Agreement is renewable annually. The Distribution Agreement
may be terminated by the Distributor, by a majority vote of the Trustees who are
not interested persons and have no financial interest in the Distribution
Agreement or by a majority of the outstanding shares of the Trust upon not more
than 60 days' written notice by either party or upon assignment by the
Distributor. The Distributor does not receive compensation for distribution of
Class A shares of the Fund. Class B shares are subject to the terms of a
distribution plan dated August 8, 1994 (the "Class B Plan").
CLASS B PLAN
The Distribution Agreement and the Class B Plan provide that the Class B
shares of the Fund will pay the Distributor a fee of .35% of the average daily
net assets of the Class B shares which the Distributor may make payments
pursuant to written agreements to financial institutions and intermediaries such
as banks, savings and loan associations, insurance companies including, without
limit, other subsidiaries and affiliates of AIG, investment counselors,
broker-dealers and the Distributor's affiliates and subsidiaries (collectively,
"Agents") as compensation for services, reimbursement of expenses incurred in
connection with distribution assistance or provision of shareholder services.
The Class B Plan is characterized as a compensation plan since the distribution
fee will be paid to the Distributor without regard to the distribution or
shareholder service expenses incurred by the Distributor or the amount of
payments made to other financial institutions and intermediaries. Investors
should understand that some Agents may charge their clients fees in connection
with purchases of Class B shares or the provision of shareholder
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services with respect to Class B shares. The Trust intends to operate the Class
B Plan in accordance with its terms and with the NASD rules concerning sales
charges.
The Distributor has appointed AIG Equity Sales Corp. (the
"Sub-Distributor"), a wholly-owned subsidiary of AIG and an affiliate of the
Adviser, as sub-distributor and servicing agent with respect to the Class B
shares of the Fund. The Sub-Distributor may appoint additional sub-distributors
and/or servicing agents.
The Trust has adopted the Class B Plan in accordance with the provisions of
Rule 12b-1 under the 1940 Act, which regulates circumstances under which an
investment company may directly or indirectly bear expenses relating to the
distribution of its shares. Continuance of the Class B Plan must be approved
annually by a majority of the Trustees of the Trust and by a majority of the
Trustees who are not parties to the Distribution Agreement or interested persons
(as defined by the 1940 Act) of any party to the Distribution Agreement
("Qualified Trustees"). The Class B Plan requires that quarterly written reports
of amounts spent under the Class B Plan and the purposes of such expenditures be
furnished to and reviewed by the Trustees. The Class B Plan may not be amended
to increase materially the amount which may be spent thereunder without approval
by a majority of the outstanding Class B shares of the Fund. All material
amendments of the Plan will require approval by a majority of the Trustees of
the Trust and of the Qualified Trustees.
For the fiscal years ended October 31, 1996, October 31, 1997 and October
31, 1998 the Distributor received from the Fund, pursuant to the Class B Plan,
distribution fees in the amount of $397,438, $419,962 and $482,117,
respectively, with respect to the Class B shares. The entire amount of these
fees was paid by the Distributor to the Sub-Distributor, as compensation for its
services, in accordance with an agreement between the Distributor and the
Sub-Distributor.
THE TRANSFER AGENT
DST Systems, Inc., 330 W. 9th Street, Kansas City, MO 64105 serves as the
Trust's transfer agent.
THE CUSTODIAN
First Union National Bank, Broad and Chestnut Streets, P.O. Box 7618,
Philadelphia, Pennsylvania 19101 acts as custodian (the "Custodian") of the
Trust. The Custodian holds cash, securities and other assets of the Trust as
required by the 1940 Act.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP serves as independent public accountants for the Trust.
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP, 1800 M Street, N.W., Washington, D.C. serves as
legal counsel to the Trust.
TRUSTEES AND OFFICERS OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under
the laws of the Commonwealth of Massachusetts. The Trustees have approved
contracts under which, as described above, certain companies provide essential
management services to the Trust. The Trust pays the fees for unaffiliated
Trustees.
The Trustees and Executive Officers of the Trust, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with the named companies during that
period. Unless otherwise noted, the business address of each Trustee and each
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Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain
officers of the Trust also serve as officers of some or all of the following:
The Achievement Funds Trust, The Arbor Fund, ARK Funds, Armada Funds, Bishop
Street Funds, Boston 1784 Funds-Registered Trademark-, CrestFunds, Inc., CUFUND,
The Expedition Funds, First American Funds, Inc., First American Investment
Funds, Inc., First American Strategy Funds, Inc., HighMark Funds, Monitor Funds,
Oak Associates Funds, The PBHG Funds, Inc., PBHG Advisor Funds, Inc., PBHG
Insurance Series Fund, Inc., The Pillar Funds, SEI Asset Allocation Trust, SEI
Daily Income Trust, SEI Index Funds, SEI Institutional International Trust, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid
Asset Trust, SEI Tax Exempt Trust, STI Classic Funds, STI Classic Variable
Trust, TIP Funds and Alpha Select Funds, each of which is an open-end management
investment company managed by SEI Investments Mutual Funds Services or its
affiliates and, except for PBHG Advisor Funds, Inc., distributed by SEI
Investments Distribution Co.
ROBERT A. NESHER (DOB 08/17/46)--Chairman of the Board of
Trustees*--Currently performs various services on behalf of SEI Investments for
which Mr. Nesher is compensated. Executive Vice President of SEI Investments,
1986-1994. Director and Executive Vice President of the Administrator and the
Distributor, 1981-1994. Trustee of The Arbor Fund, Boston 1784 Funds-Registered
Trademark-, The Expedition Funds, Oak Associates Funds, Pillar Funds, SEI Asset
Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
Investments Trust, SEI Institutional Managed Trust, SEI Institutional
International Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
JOHN T. COONEY (DOB 01/20/27)--Trustee**--Vice Chairman of Ameritrust Texas
N.A., 1989-1992, and MTrust Corp., 1985-1989. Trustee of The Arbor Fund, The
Expedition Funds, and Oak Associates Funds.
WILLIAM M. DORAN (DOB 05/26/40)--Trustee*--1701 Market Street, Philadelphia,
PA 19103-2921. Partner, Morgan, Lewis & Bockius LLP (law firm), counsel to the
Trust, SEI Investments, the Administrator and the Distributor. Director and
Secretary of SEI Investments and Secretary of the Administrator and the
Distributor. Trustee of The Arbor Fund, The Expedition Funds, Oak Associates
Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, SEI
Institutional International Trust, SEI Liquid Asset Trust and SEI Tax Exempt
Trust.
ROBERT A. PATTERSON (DOB 11/05/27)--Trustee**--Pennsylvania State
University, Senior Vice President, Treasurer (Emeritus). Financial and
Investment Consultant, Professor of Transportation (1984-present). Vice
President-Investments, Treasurer, Senior Vice President (Emeritus) (1982-1984).
Director, Pennsylvania Research Corp.; Member and Treasurer, Board of Trustees
of Grove City College. Trustee of The Arbor Fund, The Expedition Funds and Oak
Associates Funds.
EUGENE B. PETERS (DOB 06/03/29)--Trustee**--Private investor from 1987 to
present. Vice President and Chief Financial Officer, Western Company of North
America (petroleum service company) (1980-1986). President of Gene Peters and
Associates (import company) (1978-1980). President and Chief Executive Officer
of Jos. Schlitz Brewing Company before 1978. Trustee of The Arbor Fund, The
Expedition Funds and Oak Associates Funds.
JAMES M. STOREY (DOB 04/12/31)--Trustee**--Partner, Dechert Price & Rhoads,
from September 1987 - December 1993; Trustee of The Arbor Fund, The Expedition
Funds, Oak Associates Funds, SEI Asset Allocation Trust, SEI Daily Income Trust,
SEI Index Funds, SEI Institutional Investments Trust, SEI Institutional Managed
Trust, SEI Institutional International Trust, SEI Liquid Asset Trust and SEI Tax
Exempt Trust.
GEORGE J. SULLIVAN, JR. (DOB 11/13/42)--Trustee** Chief Executive Officer,
Newfound Consultants Inc. since April 1997. General Partner, Teton Partners,
L.P., June 1991 - December 1996; Chief Financial Officer, Noble Partners, L.P.,
March 1991 - December 1996; Treasurer and Clerk, Peak Asset Management, Inc.,
since 1991; Trustee, Navigator Securities Lending Trust, since 1995. Trustee of
The
S-12
<PAGE>
Arbor Fund, The Expedition Funds, Oak Associates Funds, SEI Asset Allocation
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Liquid Asset Trust, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, SEI
Institutional International Trust, and SEI Tax Exempt Trust.
TODD B. CIPPERMAN (DOB 02/14/66)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of SEI Investments, the
Administrator and the Distributor since 1995. Associate, Dewey Ballantine (law
firm), 1994-1995. Associate, Winston & Strawn (law firm) 1991-1994.
JAMES R. FOGGO (DOB 06/30/64)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of the Administrator and the Distributor since
1998. Associate, Paul Weiss, Rifkind, Wharton & Garrison (law firm), 1998.
Associate, Baker & McKenzie (law firm), 1995-1998. Associate, Battle Fowler
L.L.P. (law firm), 1993-1995. Operations Manager, The Shareholder Services
Group, Inc., 1986-1990.
LYDIA A. GAVALIS (DOB 06/05/64)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of the Administrator and the
Distributor since 1998. Assistant General Counsel and Director of Arbitration,
Philadelphia Stock Exchange, 1989-1998.
KATHY HEILIG (DOB 12/21/58)--Vice President and Assistant
Secretary--Treasurer of SEI Investments since 1997; Assistant Controller of SEI
Investments since 1995; Vice President of SEI Investments since 1991; Director
of Taxes of SEI Investments, 1987 to 1991. Tax Manager, Arthur Andersen LLP
prior to 1987.
JOSEPH M. O'DONNELL (DOB 11/13/54)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of the Administrator and the
Distributor since 1998. Vice President and General Counsel, FPS Services, Inc.,
1993-1997. Staff Counsel and Secretary, Provident Mutual Family of Funds,
1990-1993.
SANDRA K. ORLOW (DOB 10/18/53)--Vice President and Assistant
Secretary--Secretary of the Distributor since 1998; Vice President of the
Distributor since 1988. Vice President and Assistant Secretary of the Manager
since 1988. Assistant Secretary of the Distributor from 1988 to 1998.
KEVIN P. ROBINS (DOB 04/15/61)--Vice President and Assistant
Secretary--Senior Vice President and General Counsel of SEI Investments, the
Administrator and the Distributor since 1994. Assistant Secretary of SEI
Investments since 1992; Secretary of the Administrator since 1994. Vice
President, General Counsel and Assistant Secretary of the Administrator and the
Distributor, 1992-1994. Associate, Morgan, Lewis & Bockius LLP (law firm),
1988-1992.
LYNDA J. STRIEGEL (DOB 10/30/48)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of the Administrator and the
Distributor since 1998. Senior Asset Management Counsel, Barnett Banks, Inc.,
1997-1998. Partner, Groom and Nordberg, Chartered, 1996-1997. Associate General
Counsel, Riggs Bank, N.A., 1991-1995.
MARK E. NAGLE (DOB 10/20/59)--Controller and Chief Financial Officer--Vice
President of Fund Accounting and Administration for SEI Fund Resources and Vice
President of the Administrator since 1996. Vice President of the Distributor
since December 1997. Vice President, Fund Accounting, BISYS Fund Services,
September 1995 to November 1996. Senior Vice President and Site Manager,
Fidelity Investments 1981 to September 1995.
JOHN H. GRADY, JR. (DOB 06/01/61)--Secretary--1701 Market Street,
Philadelphia, PA 19103-2921, Partner since 1995, Morgan, Lewis & Bockius LLP
(law firm), counsel to the Trust, SEI Investments, the Administrator and the
Distributor.
- ------------------------
* Messrs. Nesher and Doran are Trustees who may be deemed to be "interested"
persons of the Fund as that term is defined in the 1940 Act.
** Messrs. Cooney, Patterson, Peters, Storey and Sullivan serve as members of
the Audit Committee of the Fund.
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<PAGE>
The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust. The Trust pays the fees for unaffiliated Trustees.
The following table exhibits Trustee compensation for the fiscal year ended
October 31, 1998.
<TABLE>
<CAPTION>
AGGREGATE TOTAL COMPENSATION FROM
COMPENSATION PENSION OR REGISTRANT AND
FROM REGISTRANT RETIREMENT ESTIMATED FUND COMPLEX* PAID TO
FOR THE FISCAL BENEFITS ACCRUED ANNUAL TRUSTEES FOR THE
YEAR ENDED AS PART OF BENEFITS UPON FISCAL YEAR ENDED
NAME OF PERSON, POSITION OCTOBER 31, 1998 TRUST EXPENSES RETIREMENT OCTOBER 31, 1998
- ------------------------------- ----------------- ------------------- ----------------- ----------------------------
<S> <C> <C> <C> <C>
John T. Cooney................. $ 8,142 N/A N/A $29,000 for services on 1
board
**Frank E. Morris.............. $ 8,142 N/A N/A $29,000 for services on 1
board
Robert Patterson............... $ 8,337 N/A N/A $30,000 for services on 1
board
Eugene B. Peters............... $ 8,337 N/A N/A $30,000 for services on 1
board
James M. Storey, Esq........... $ 8,337 N/A N/A $30,000 for services on 1
board
William A. Doran, Esq.......... $ 0 N/A N/A $ 0 for services on 1
board
Robert A. Nesher............... $ 0 N/A N/A $ 0 for services on 1
board
</TABLE>
- ------------------------------
* For purposes of this table, the Fund is the only investment company in the
"Fund Complex."
**Retired December 31, 1998
PERFORMANCE INFORMATION
From time to time, the Trust may advertise yield, effective yield and total
return of the Fund. These figures will be based on historical earnings and are
not intended to indicate future performance. No representation can be made
concerning actual future yields.
CLASSES OF SHARES AND PERFORMANCE
The performance of Class A shares will normally be higher than that of Class
B shares because Class A shares are not subject to distribution expenses charged
to Class B shares. Yield quotations are computed and presented separately for
the Class A and Class B shares.
PERFORMANCE COMPARISONS
The Fund may periodically compare its performance to other mutual funds
tracked by mutual fund rating services, to broad groups of comparable mutual
funds, or to unmanaged indices. These comparisons may assume reinvestment of
dividends but generally do not reflect deductions for administrative and
management costs.
COMPUTATION OF YIELD
The yield of the Fund refers to the annualized income generated by an
investment in the Fund over a specified 7-day period. The yield is calculated by
assuming that the income generated by the investment during that 7-day period is
generated in each period over one year and is shown as a percentage of the
investment. The "effective yield" is calculated similarly, but when annualized,
the income earned by an investment in the Fund is assumed to be reinvested. The
"effective yield" will be slightly higher than the "yield" because of the
compounding effect of this assumed investment. In particular, these yields will
be calculated as follows:
The current yield of the Fund will be calculated daily based upon the seven
days ending on the date of calculation ("base period"). The yield is computed by
determining the net change during the period (exclusive of capital changes) in
the value of a hypothetical pre-existing shareholder account having a balance of
one share at the beginning of the period, subtracting a hypothetical charge
reflecting deductions from shareholder accounts, and dividing such net change by
the value of the account at the beginning of the same period to obtain the base
period return and multiplying the result by (365/7). Realized and
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<PAGE>
unrealized gains and losses are not included in the calculation of the yield.
The effective yield of the Fund is determined by computing the net change during
the period, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of the
period, subtracting a hypothetical charge reflecting deductions from shareholder
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and then
compounding the base period return, according to the following formula:
Effective Yield = [(Base Period Return + 1)to the power of(365/7)] - 1.
The effective yield reflects the reinvestment of net income earned daily on
the Fund's assets.
For the 7-day period ended October 31, 1998, the end of the Fund's most
recent fiscal year, the current and effective yields for Class A shares of the
Fund were 5.10% and 5.23%, respectively, and for Class B shares were 4.77% and
4.88%, respectively.
CALCULATION OF TOTAL RETURN
The total return of the Fund refers to the average compounded rate of return
to a hypothetical investment for designated time periods (including, but not
limited to, the period from which the Trust commenced operations through the
specified date), assuming that the entire investment is redeemed at the end of
each period. In particular, total return will be calculated according to the
following formula: P (1 + T)to the power of n = ERV, where P = a hypothetical
initial payment of $1,000; T = average annual total return; n = number of years;
and ERV = ending redeemable value, as of the end of the designated time period,
of a hypothetical $1,000 payment made at the beginning of the designated time
period. Total return is calculated separately for each class of shares of the
Trust.
The average annual total returns for Class A Shares of the Fund for the
fiscal year ended October 31, 1998 and for the three year period ended October
31, 1998 were 5.49% and 5.39%, and for the period from December 1, 1994
(commencement of operations) through October 31, 1998, the cumulative return for
Class A Shares of the Fund was 23.20%.
The average annual total returns for Class B Shares of the Fund for the
fiscal year ended October 31, 1998 and for the three year period ended October
31, 1998 were 5.12% and 5.02%, and for the period from February 16, 1995
(commencement of operations) through October 31, 1998, the cumulative return for
Class B Shares of the Fund was 20.21%.
PURCHASING SHARES
Purchases and redemptions may be made through the Distributor on a day when
the New York Stock Exchange and Federal Reserve wire system are open for
business. Shares of the Fund are offered on a continuous basis. Currently, the
Fund is closed for business when the following holidays are observed: New Year's
Day, Martin Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving and
Christmas.
REDEEMING SHARES
It is currently the Trust's policy to pay all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in-kind of securities held by the Fund in
lieu of cash. Shareholders may incur brokerage charges on the sale of any such
securities so received in payment of redemptions. The Trust has obtained an
exemptive order from the SEC that permits the Trust to make in-kind redemptions
to those Shareholders that are affiliated with the Trust solely by their
ownership of a certain percentage of the Trust's investment portfolios.
A Shareholder will at all times be entitled to aggregate cash redemptions
from all portfolios of the Trust during any 90-day period of up to the lesser of
$250,000 or 1% of the Trust's net assets.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period on which trading on
the New York Stock Exchange is restricted,
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<PAGE>
or during the existence of an emergency (as determined by the SEC by rule or
regulation) as a result of which the disposal or valuation of the Fund's
securities is not reasonably practicable, or for such other periods as the SEC
has by order permitted. The Trust also reserves the right to suspend sales of
shares of any Fund for any period during which the New York Stock Exchange, the
Adviser, the Administrator, the Transfer Agent and/or the Custodian are not open
for business.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of the Fund is calculated by
adding the value of securities and other assets, subtracting liabilities and
dividing by the number of outstanding shares. Securities will be valued by the
amortized cost method which involves valuing a security at its cost on the date
of purchase and thereafter (absent unusual circumstances) assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuations in general market rates of interest on the value of the instrument.
While this method provides certainty in valuation, it may result in periods
during which a security's value, as determined by this method, is higher or
lower than the price the Fund would receive if it sold the instrument. During
periods of declining interest rates, the daily yield of the Fund may tend to be
higher than a like computation made by a company with identical investments
utilizing a method of valuation based upon market prices and estimates of market
prices for all of its portfolio securities. Thus, if the use of amortized cost
by the Fund resulted in a lower aggregate portfolio value on a particular day, a
prospective investor in the Fund would be able to obtain a somewhat higher yield
than would result from investment in a company utilizing solely market values,
and existing investors in the Fund would experience a lower yield. The converse
would apply in a period of rising interest rates.
The use of amortized cost valuation by the Fund and the maintenance of the
Fund's net asset value at $1.00 are permitted by regulations promulgated by Rule
2a-7 under the Investment Company Act of 1940 (the "1940 Act"), provided that
certain conditions are met. Under Rule 2a-7 as amended, a money market portfolio
must maintain a dollar-weighted average maturity in the Fund of 90 days or less
and not purchase any instrument having a remaining maturity of more than 397
days. In addition, money market funds may acquire only U.S. dollar denominated
obligations that present minimal credit risks and that are "eligible securities"
which means they are (i) rated, at the time of investment, by at least two
nationally recognized statistical rating organizations (one if it is the only
organization rating such obligation) in the highest short-term rating category
or, if unrated, determined to be of comparable quality (a "first tier
security"), or (ii) rated according to the foregoing criteria in the second
highest short-term rating category or, if unrated, determined to be of
comparable quality ("second tier security"). The Fund does not invest in second
tier securities. The Adviser will determine that an obligation presents minimal
credit risks or that unrated instruments are of comparable quality to first tier
securities in accordance with guidelines established by the Trustees. In
addition, investments in second tier securities are subject to the further
constraints that (i) no more than 5% of the Fund's assets may be invested in
such securities in the aggregate, and (ii) any investment in such securities of
one issuer is limited to the greater of 1% of the Fund's total assets or $1
million. The regulations also require the Trustees to establish procedures which
are reasonably designed to stabilize the net asset value per share at $1.00 for
the Fund. However, there is no assurance that the Fund
will be able to meet this objective. The Trust's procedures include the
determination of the extent of deviation, if any, of the Fund's current net
asset value per unit calculated using available market quotations from the
Fund's amortized cost price per share at such intervals as the Trustees deem
appropriate and reasonable in light of market conditions and periodic reviews of
the amount of the deviation and the methods used to calculated such deviation.
In the event that such deviation exceeds 1/2 of 1%, the Trustees are required to
consider promptly what action, if any, should be initiated. If the Trustees
believe that the extent of any deviation may result in material dilution or
other unfair results to Shareholders, the Trustees are required to take such
corrective action as they deem appropriate to eliminate or reduce such dilution
or unfair results to the extent reasonably practicable. In addition, if the Fund
incurs a significant loss or liability, the Trustees have the authority to
reduce pro rata the number of shares of the Fund in each Shareholder's account
and to offset each Shareholder's pro rata portion of such loss or lability from
the Shareholder's accrued but unpaid dividends or from future dividends.
S-16
<PAGE>
The securities of the Fund are valued by the Administrator. The
Administrator will use an independent pricing service to obtain valuations of
securities. The pricing service relies primarily on prices of actual market
transactions as well as trader quotations. However, the service may also use a
matrix system to determine valuations, which system considers such factors as
security prices, yields, maturities, call features, ratings and developments
relating to specific securities in arriving at valuations. The procedures of the
pricing service and its valuations are reviewed by the officers of the Trust
under the general supervision of the Trustees.
TAXES
The following is only a summary of certain additional federal income tax
considerations generally affecting the Fund and its shareholders that are not
described in the Fund's prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Fund or its shareholders, and the
discussion here and in the Fund's prospectus is not intended as a substitute for
careful tax planning. Shareholders are urged to consult their tax advisors with
specific reference to their own tax situations, including their state and local
tax liabilities.
FEDERAL INCOME TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS
The following general discussion of certain federal income tax consequences
is based on the Internal Revenue Code of 1986, as amended (the "Code") and the
regulations issued thereunder as in effect on the date of this Statement of
Additional Information. New legislation, as well as administrative changes or
court decisions, may significantly change the conclusions expressed herein, and
may have a retroactive effect with respect to the transactions contemplated
herein.
QUALIFICATION AS REGULATED INVESTMENT COMPANY
The Fund intends to qualify and elect to be treated as a "regulated
investment company" ("RIC") under Subchapter M of the Code. By following such a
policy, the Fund expects to eliminate or reduce to a nominal amount the federal
taxes to which it may be subject.
In order to qualify as a RIC, the Fund must distribute at least 90% of its
net investment income (generally, dividends, taxable interest, and the excess of
net short-term capital gains over net long-term capital losses less operating
expenses) and at least 90% of its net tax exempt interest income, for each tax
year (the "Distribution Requirement"), if any, to its shareholders and also must
meet several additional requirements. Among these requirements are the
following: (i) at least 90% of the Fund's gross income each taxable year must be
derived from dividends, interest, payments with respect to securities loans and
gains from the sale or other disposition of stock or securities, or certain
other income; (ii) at the close of each quarter of the Fund's taxable year, at
least 50% of the value of its total assets must be represented by cash and cash
items, U.S. Government securities, securities of other RICs and other
securities, with such other securities limited, in respect to any one issuer, to
an amount that does not exceed 5% of the value of the Fund's assets and that
does not represent more than 10% of the outstanding voting securities of such
issuer; and (iii) at the close of each quarter of the Fund's taxable year, not
more than 25% of the value of its assets may be invested in securities (other
than U.S. Government securities or the securities of other RICs) of any one
issuer or of two or more issuers that the Fund controls or that are engaged in
the same, similar or related trades or business.
The Fund may make investments in securities (such as STRIPS) that bear
"original issue discount" or "acquisition discount" (collectively, "OID
Securities"). The holder of such securities is deemed to have received interest
income even though no cash payments have been received. Accordingly, OID
Securities may not produce sufficient current cash receipts to match the amount
of distributable net investment income the Fund must distribute to satisfy the
Distribution Requirement. In some cases, the Fund may have to borrow money or
dispose of other investments in order to make sufficient cash distributions to
satisfy the Distribution Requirement.
S-17
<PAGE>
Although the Fund intends to distribute substantially all of its net
investment income and may distribute its capital gains for any taxable year, the
Fund will be subject to federal income taxation to the extent any such income or
gains are not distributed.
If the Fund fails to qualify for any taxable year as a RIC, all of its
taxable income will be subject to tax at regular corporate income tax rates
without any deduction for distributions to shareholders and such distributions
generally will be taxable to shareholders as ordinary dividends to the extent of
the Fund's current and accumulated earnings and profits. In this event,
distributions generally will be eligible for the dividends-received deduction
for corporate shareholders.
FUND DISTRIBUTIONS
Distributions of investment company taxable income will be taxable to
shareholders as ordinary income, regardless of whether such distributions are
paid in cash or are reinvested in additional Shares, to the extent of the Fund's
earnings and profits. The Fund anticipates that it will distribute substantially
all of its investment company taxable income for each taxable year.
The Fund may either retain or distribute to shareholders its excess of net
long-term capital gains over net short-term capital losses ("net capital
gains"). If such gains are distributed as a capital gains distribution, they are
taxable to shareholders who are individuals at a maximum rate of 20%, regardless
of the length of time the shareholder has held shares. If any such gains are
retained, the Fund will pay federal income tax thereon.
In the case of corporate shareholders, distributions (other than capital
gains distributions) from a RIC, generally qualify for the dividends-received
deduction only to the extent of the gross amount of qualifying dividends
received by the Fund for the year. Generally, and subject to certain
limitations, a dividend will be treated as a qualifying dividend if it has been
received from a domestic corporation. Accordingly, it is not expected that any
Fund distribution will qualify for the corporate dividends-received deduction.
Ordinarily, investors should include all dividends as income in the year of
payment. However, dividends declared payable to shareholders of record in
December of one year, but paid in January of the following year, will be deemed
for tax purposes to have been received by the shareholder and paid by the Fund
in the year in which the dividends were declared.
The Fund will provide a statement annually to shareholders as to the federal
tax status of distributions paid (or deemed to be paid) by the Fund during the
year, including the amount of dividends eligible for the corporate
dividends-received deduction.
SALE OR EXCHANGE OF FUND SHARES
Generally, gain or loss on the sale or exchange of a Share will be capital
gain or loss that will be long-term if the Share has been held for more than
twelve months and otherwise will be short-term. For individuals, long-term
capital gains are currently taxed at a maximum rate of 20% and short-term
capital gains are currently taxed at ordinary income tax rates. However, if a
shareholder realizes a loss on the sale, exchange or redemption of a Share held
for six months or less and has previously received a capital gains distribution
with respect to the Share (or any undistributed net capital gains of the Fund
with respect to such Share are included in determining the shareholder's
long-term capital gains), the shareholder must treat the loss as a long-term
capital loss to the extent of the amount of the prior capital gains distribution
(or any undistributed net capital gains of the Fund that have been included in
determining such shareholder's long-term capital gains). In addition, any loss
realized on a sale or other disposition of Shares will be disallowed to the
extent an investor repurchases (or enters into a contract or option to
repurchase) Shares within a period of 61 days (beginning 30 days before and
ending 30 days after the disposition of the Shares). This loss disallowance rule
will apply to Shares received through the reinvestment of dividends during the
61-day period.
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<PAGE>
In certain cases, the Fund will be required to withhold, and remit to the
United States Treasury, 31% of any distributions paid to a shareholder who (1)
has failed to provide a correct taxpayer identification number, (2) is subject
to backup withholding by the Internal Revenue Service, or (3) has failed to
certify to the Fund that such shareholder is not subject to backup withholding.
FEDERAL EXCISE TAX
If the Fund fails to distribute in a calendar year at least 98% of its
ordinary income for the year and 98% of its capital gain net income (the excess
of short and long term capital gains over short and long term capital losses)
for the one-year period ending October 31 of that year (and any retained amount
from the prior calendar year), the Fund will be subject to a nondeductible 4%
Federal excise tax on the undistributed amounts. The Fund intends to make
sufficient distributions to avoid imposition of this tax, or to retain, at most
its net capital gains and pay tax thereon.
STATE AND LOCAL TAXES
The Fund is not liable for any income or franchise tax in Massachusetts if
it qualifies as a RIC for federal income tax purposes. Distributions by the Fund
to shareholders and the ownership of shares may be subject to state and local
taxes.
FUND TRANSACTIONS
The Fund has no obligation to deal with any broker-dealer or group of
broker-dealers in the execution of transactions in portfolio securities. Subject
to policies established by the Trustees of the Trust, the Adviser is responsible
for placing the orders to execute transactions for the Fund. In placing orders,
it is the policy of the Trust to seek to obtain the best net results taking into
account such factors as price (including the applicable dealer spread), the
size, type and difficulty of the transaction involved, the firm's general
execution and operational facilities and the firm's risk in positioning the
securities involved. While the Adviser generally seeks reasonably competitive
spreads or commissions, the Fund will not necessarily be paying the lowest
spread or commission available.
The money market instruments in which the Fund invests are traded primarily
in the over-the-counter market. Bonds and debentures are usually traded
over-the-counter, but may be traded on an exchange. Where possible, the Adviser
will deal directly with the dealers who make a market in the securities involved
except in those circumstances where better prices and execution are available
elsewhere. Such dealers usually are acting as principal for their own account.
On occasion, securities may be purchased directly from the issuer. Money market
instruments are generally traded on a net basis and do not normally involve
either brokerage commissions or transfer taxes. The cost of executing portfolio
securities transactions of the Fund will primarily consist of dealer spreads and
underwriting commissions.
TRADING PRACTICES AND BROKERAGE
The Adviser, consistent with the interests of the Fund, selects brokers or
dealers to execute transactions for the purchase or sale of portfolio securities
on the basis of its judgment of their professional capability to provide the
service. The primary consideration is to have brokers or dealers provide
transactions at best price and execution for the Trust. Best price and execution
includes many factors, including the price paid or received for a security, the
commission charged, the promptness and reliability of execution, the
confidentiality and placement accorded the order and other factors affecting the
overall benefit obtained by the account on the transaction. The Adviser's
determination of what are reasonably competitive rates is based upon the
professional knowledge of its trading department as to rates paid and charged
for similar transactions throughout the securities industry. In some instances,
the Trust pays a minimal share transaction cost when the transaction presents no
difficulty. Some trades are made on a net basis where the Trust either buys
securities directly from the dealer or sells them to the dealer. In these
S-19
<PAGE>
instances, there is no direct commission charged but there is a spread (the
difference between the buy and sell price) which is the equivalent of a
commission.
The Trust may allocate out of all commission business generated by the Fund
and accounts under management by the Adviser, brokerage business to brokers or
dealers who provide brokerage and research services. These research services
include advice, either directly or through publications or writings, as to the
value of securities, the advisability of investing in, purchasing or selling
securities, and the availability of securities or purchasers or sellers of
securities; furnishing of analyses and reports concerning issuers, securities or
industries; providing information on economic factors and trends, assisting in
determining portfolio strategy, providing computer software used in security
analyses, and providing portfolio performance evaluation and technical market
analyses. Such services are used by the Adviser in connection with its
investment decision-making process with respect to one or more funds and
accounts managed by it, and may not be used exclusively with respect to the fund
or account generating the brokerage.
As provided in the Securities Exchange Act of 1934 (the "1934 Act") higher
commissions may be paid to broker-dealers who provide brokerage and research
services than to broker-dealers who do not provide such services if such higher
commissions are deemed reasonable in relation to the value of the brokerage and
research services provided. Although transactions are directed to broker-dealers
who provide such brokerage and research services, the Adviser believes that the
commissions paid to such broker-dealers are not, in general, higher than
commissions that would be paid to broker-dealers not providing such services and
that such commissions are reasonable in relation to the value of the brokerage
and research services provided. In addition, portfolio transactions which
generate commissions or their equivalent are directed to broker-dealers who
provide daily portfolio pricing services to the Trust. Subject to best price and
execution, commissions used for pricing may or may not be generated by the funds
receiving the pricing service.
The Adviser may place a combined order for two or more accounts or funds
engaged in the purchase or sale of the same security if, in its judgment, joint
execution is in the best interest of each participant and will result in best
price and execution. Transactions involving commingled orders are allocated in a
manner deemed equitable to each account or fund. It is believed that the ability
of the accounts to participate in volume transactions will generally be
beneficial to the accounts and funds. Although it is recognized that, in some
cases, the joint execution of orders could adversely affect the price or volume
of the security that a particular account or the Fund may obtain, it is the
opinion of the Adviser and the Trust's Board of Trustees that the advantages of
combined orders outweigh the possible disadvantages of separate transactions.
Consistent with the Conduct Rules of the National Association of Securities
Dealers, Inc., and subject to seeking best price and execution, the Fund, at the
request of the Distributor, give consideration to sales of shares of the Trust
as a factor in the selection of brokers and dealers to execute Trust portfolio
transactions.
The Adviser may, consistent with the interests of the Fund, select brokers
on the basis of the research services they provide to the Adviser. Such services
may include analyses of the business or prospects of a company, industry or
economic sector, or statistical and pricing services. Information so received by
the Adviser will be in addition to and not in lieu of the services required to
be performed by the Adviser under the Advisory Agreement. If, in the judgment of
the Adviser, the Fund or other accounts managed by the Adviser will be
benefitted by supplemental research services, the Adviser is authorized to pay
brokerage commissions to a broker furnishing such services which are in excess
of commissions which another broker may have charged for effecting the same
transaction. These research services include advice, either directly or through
publications or writings, as to the value of securities, the advisability of
investing in, purchasing or selling securities, and the availability of
securities or purchasers or sellers of securities; furnishing of analyses and
reports concerning issuers, securities or industries; providing information on
economic factors and trends; assisting in determining portfolio strategy;
providing computer software used in security analyses; and providing portfolio
performance evaluation and technical market analyses. The expenses of
S-20
<PAGE>
the Adviser will not necessarily be reduced as a result of the receipt of such
supplemental information, such services may not be used exclusively, or at all,
with respect to the Fund or account generating the brokerage, and there can be
no guarantee that the Adviser will find all of such services of value in
advising the Fund. For the fiscal year ended October 31, 1998, the Fund directed
no transactions to broker-dealers for research services.
It is expected that the Fund may execute brokerage or other agency
transactions through the Distributor, which is a registered broker-dealer, for a
commission in conformity with the 1940 Act, the Securities Exchange Act of 1934
and rules promulgated by the SEC. Under these provisions, the Distributor is
permitted to receive and retain compensation for effecting portfolio
transactions for the Fund on an exchange if a written contract is in effect
between the Distributor and the Trust expressly permitting the Distributor to
receive and retain such compensation. These rules further require that
commissions paid to the Distributor by the Fund for exchange transactions not
exceed "usual and customary" brokerage commissions. The rules define "usual and
customary" commissions to include amounts which are "reasonable and fair
compared to the commission, fee or other remuneration received or to be received
by other brokers in connection with comparable transactions involving similar
securities being purchased or sold on a securities exchange during a comparable
period of time." The Trustees, including those who are not "interested persons"
of the Trust, have adopted procedures for evaluating the reasonableness of
commissions paid to the Distributor and will review these procedures
periodically.
For the fiscal years ended October 31, 1996, 1997 and 1998, the Fund paid
the following brokerage commissions:
<TABLE>
<CAPTION>
TOTAL BROKERAGE COMMISSIONS AMOUNT PAID TO SEI INVESTMENTS(1)
- ------------------------------------ ---------------------------------------
1996 1997 1998 1996 1997 1998
----- ----- ----- ----- ----------- --------
<S> <C> <C> <C> <C> <C>
$0 $0 $0 $0 $2,260 $0
</TABLE>
- ------------------------
(1) The amounts paid to SEI Investments reflect fees paid in connection with
repurchase agreement transactions.
For the fiscal years indicated, the Fund paid the following brokerage
commissions:
<TABLE>
<CAPTION>
% OF TOTAL
BROKERAGE % OF TOTAL
TOTAL $ AMOUNT COMMISSIONS BROKERAGE
TOTAL $ AMOUNT OF BROKERAGE PAID TO THE TRANSACTIONS
OF BROKERAGE COMMISSIONS PAID TO AFFILIATED EFFECTED THROUGH
COMMISSIONS PAID AFFILIATED BROKERS BROKERS AFFILIATED BROKERS
- --------------------- -------------------- ----------------- --------------------
1996 1997 1998 1996 1997 1998 1998 1998
- ----- ----- ----- ----- ----- ---- ----------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0 $0 $0 $0 $0 $0 0% 0%
</TABLE>
Since the Fund does not market its shares through intermediary brokers or
dealers, it is not the Trust's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. However, the Adviser may place portfolio orders with qualified
broker-dealers who recommend the Fund's shares to clients, and may, when a
number of brokers and dealers can provide best net results on a particular
transaction, consider such recommendations by a broker or dealer in selecting
among broker-dealers.
The Fund is required to identify any securities of its "regular brokers or
dealers" (as such term is defined in the 1940 Act), which the Fund has acquired
during its most recent fiscal year. As of October 31, 1998, the Fund held
$17,997,150 of debt securities issued by Goldman Sachs.
S-21
<PAGE>
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
portfolios and different classes of shares of each portfolio, each of which
represents an equal proportionate interest in the portfolio with each other
share. Shares are entitled upon liquidation to a pro rata share in the net
assets of the Fund. Shareholders have no preemptive rights. The Declaration of
Trust provides that the Trustees of the Trust may create additional series of
shares divided into different classes. All consideration received by the Trust
for shares of any additional series and all assets in which such consideration
is invested would belong to that series and would be subject to the liabilities
related thereto. Share certificates representing shares will not be issued.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust could,
under certain circumstances, be held personally liable as partners for the
obligations of the trust. Even if, however, the Trust were held to be a
partnership, the possibility of the shareholders incurring financial loss for
that reason appears remote because the Trust's Declaration of Trust contains an
express disclaimer of shareholder liability for obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by or on behalf of the Trust or the
Trustees, and because the Declaration of Trust provides for indemnification out
of the Trust property for any shareholder held personally liable for the
obligations of the Trust.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for
his or her own willful defaults and, if reasonable care has been exercised in
the selection of officers, agents, employees or investment advisers, shall not
be liable for any neglect or wrongdoing of any such person. The Declaration of
Trust also provides that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with actual or
threatened litigation in which they may be involved because of their offices
with the Trust unless it is determined in the manner provided in the Declaration
of Trust that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust. However, nothing in the
Declaration of Trust shall protect or indemnify a Trustee against any liability
for his or her willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties.
5% AND 25% SHAREHOLDERS
As of February 1, 1999, the following persons were the only persons who were
record owners (or to the knowledge of the Trust, beneficial owners) of 5% and
25% or more of each class of the Fund's shares. Persons who owned of record or
beneficially more than 25% of the Fund's outstanding shares may be deemed to
control the Fund within the meaning of the Act.
<TABLE>
<CAPTION>
SHAREHOLDER NUMBER OF SHARES PERCENTAGE
- -------------------------------------------------------------------- ----------------- ---------------
<S> <C> <C>
CLASS A:
- --------------------------------------------------------------------
Chase Bank of Texas................................................. 30,217,823 6.10%
Attn: STIF Unit 18HCB 340
P.O. Box 2558
Houston, TX 77252-2558
</TABLE>
S-22
<PAGE>
<TABLE>
<CAPTION>
SHAREHOLDER NUMBER OF SHARES PERCENTAGE
- -------------------------------------------------------------------- ----------------- ---------------
<S> <C> <C>
AIG Life Insurance--Investment...................................... 109,104,755 22.01%
c/o AIG Inc.
70 Pine Street, 19th Floor
New York, NY 10270-0002
AIG Life Insurance--Investment...................................... 74,241,810 14.98%
c/o AIG Inc.
70 Pine Street, 19th Floor
New York, NY 10270-0002
AI Life Assurance of NY--GIC........................................ 47,249,663 9.53%
c/o AIG Inc.
70 Pine Street, 19th Floor
New York, NY 10270-0002
CLASS B: (AS OF FEBRUARY 16, 1999)
- --------------------------------------------------------------------
U.S. Clearing....................................................... 8,725,278 5.54%
A Division of Fleet Securities Inc.
26 Broadway
New York, NY 10004-1703
NUF/Machine Deductible.............................................. 50,129,308 31.84%
Attn: AIG Treasury
70 Pine Street, 19th Floor
New York, NY 10270-0002
AIG Global Real Estate Investment................................... 26,650,196 16.93%
Corp as Escrow Agent
PC Village Apt. Dallas LP as Pledgor
c/o PC Village Apartments Dallas LP
3300 Lincoln St. #500
Dallas, TX 75226
</TABLE>
The Trust believes that most of the shares referred to above were held by
the above persons in accounts for their fiduciary, agency or custodial
customers.
EXPERTS
The financial statements of the Trust have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference hereto in reliance upon the authority
of said firm as experts in giving said report.
FINANCIAL STATEMENTS
The financial statements for the fiscal year ended October 31, 1998,
including notes thereto and the report of Arthur Andersen LLP thereon, are
herein incorporated by reference in reliance upon the authority of said firm as
experts in giving said report. A copy of the 1998 Annual Report to Shareholders
must accompany the delivery of this Statement of Additional Information.
S-23
<PAGE>
APPENDIX
DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
A-1--This is Standard & Poor's Corporation ("S&P") highest rating category
for short-term obligations and indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+) designation.
A-2--Capacity for timely payment for this S&P category on issues with this
designation is satisfactory and the obligation is somewhat more susceptible to
the adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories.
PRIME-1--Issues rated Prime-1 (or supporting institutions) by Moody's
Investors Service, Inc. ("Moody's") have a superior ability for repayment of
short-term debt obligations. Prime-1 repayment ability will often be evidenced
by many of the following characteristics:
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
PRIME-2--Issuers rated Prime-2 (or supporting institutions) by Moody's have
a strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned
by Fitch Investors Service, Inc. ("Fitch"). Paper rated Fitch-1 is regarded as
having the strongest degree of assurance for timely payment. The rating Fitch-2
(Very Good Grade) is the second highest short-term obligations rating assigned
by Fitch which reflects an assurance of timely payment only slightly less in
degree than the strongest issues.
The rating Duff-1 is the highest short-term obligations rating assigned by
Duff & Phelps, Inc. ("Duff"). Paper rated Duff-1 is regarded as having very high
certainty of timely payment with excellent liquidity factors which are supported
by ample asset protection. Risk factors are minor. Paper rated Duff-2 is
regarded as having good certainty of timely payment, good access to capital
markets and sound liquidity factors and company fundamentals. Risk factors are
small. The designation A1 by IBCA, Inc. ("IBCA") indicates that the obligation
is supported by a very strong capacity for timely repayment. Those obligations
rated A1+ are supported by the highest capacity for timely repayment.
Obligations rated A2 are supported by a strong capacity for timely repayment,
although such capacity may be susceptible to adverse changes in business,
economic or financial conditions.
Securities rated A-2, P-2, Fitch-2, Duff-2 and (IBCA) A2 are deemed to be
second tier securities. The Fund's fundamental policy is not to invest in such
securities.
A-1
<PAGE>
PART C: OTHER INFORMATION
POST EFFECTIVE AMENDMENT NO. 37
ITEM 23. EXHIBITS:
<TABLE>
<S> <C>
(a)(1) Registrant's Agreement and Declaration of Trust dated July 18, 1991, as
originally filed with the SEC on August 29, 1991, is incorporated herein
by reference to Post- Effective Amendment No. 32 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on February 27, 1998.
(a)(2) Registrant's Amendment to the Agreement and Declaration of Trust dated
December 2, 1996, is incorporated herein by reference to Post-Effective
Amendment No. 27 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on
December 13, 1996.
(a)(3) Registrant's Amendment to the Agreement and Declaration of Trust dated
February 18, 1997, is incorporated herein by reference to Post-Effective
Amendment No. 28 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on
February 27, 1997.
(b)(1) Registrant's By-Laws are incorporated herein by reference to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on August 29, 1991.
(b)(2) Registrant's Amended and Restated By-Laws are incorporated herein by
reference to Post-Effective Amendment No. 27 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and
Exchange Commission on December 12, 1996.
(c) Not Applicable.
(d)(1) Investment Advisory Agreement between Registrant and HGK Asset Management,
Inc. with respect to HGK Fixed Income Fund dated August 15, 1994 as
originally filed with Post-Effective Amendment No. 15 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on June 15, 1994 is incorporated herein
by reference to Post-Effective Amendment No. 24 filed on February 28,
1996.
(d)(2) Investment Advisory Agreement between Registrant and AIG Capital Management
Corp. with respect to AIG Money Market Fund originally filed with
Post-Effective Amendment No. 17 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on September 19, 1994 is incorporated herein by reference to
Post-Effective Amendment No. 28 filed February 27, 1997.
(d)(3) Investment Advisory Agreement between Registrant and First Manhattan Co.
with respect to FMC Select Fund dated May 3, 1995 as originally filed with
Post-Effective Amendment No. 19 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484) filed with the Securities and Exchange
Commission on February 1, 1995 is incorporated herein by reference to
Post-Effective Amendment No. 24 filed on February 28, 1996.
(d)(4) Investment Advisory Agreement between Registrant and CRA Real Estate
Securities L.P. dated December 31, 1996 with respect to the CRA Realty
Shares Portfolio is incorporated herein by reference to Post-Effective
Amendment No. 29 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484) filed with the Securities and Exchange Commission on May 22,
1997.
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C>
(d)(5) Investment Advisory Agreement between Registrant and MDL Capital Management,
Inc. with respect to the MDL Broad Market Fixed Income Portfolio and the
MDL Large Cap Growth Equity Portfolio is incorporated herein by reference
to Post-Effective Amendment No. 32 to Registrant's Registration Statement
on Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on February 27, 1998.
(d)(6) Investment Advisory Agreement between Registrant and SAGE Global Funds, LLC
with respect to the SAGE Corporate Bond Fund is incorporated herein by
reference to Post-Effective Amendment No. 32 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and
Exchange Commission on February 27, 1998.
(d)(7) Investment Sub-Advisory Agreement between SAGE Global Funds, LLC and
Standard Asset Group, Inc. with respect to the SAGE Corporate Bond Fund is
incorporated herein by reference to Post-Effective Amendment No. 33 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the Securities and Exchange Commission on May 18, 1998.
(d)(8) Form of Investment Advisory Agreement between Registrant and LSV Asset
Management Company is incorporated herein by reference to Post-Effective
Amendment No. 34 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on
December 29, 1998.
(d)(9) Amended and Restated Schedule to the Investment Advisory Agreement dated May
3, 1995 between Registrant and First Manhattan Company is incorporated
herein by reference to Post-Effective Amendment No. 34 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on December 29, 1998.
(e)(1) Amended and Restated Distribution Agreement between Registrant and SEI
Financial Services Company dated August 8, 1994 as originally filed with
Post-Effective Amendment No. 17 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484) filed with the Securities and Exchange
Commission on September 19, 1994 is incorporated herein by reference to
Post-Effective Amendment No. 24 filed on February 28, 1996.
(e)(2) Distribution Agreement between Registrant and CCM Securities, Inc. dated
February 28, 1997 is incorporated herein by reference to Post-Effective
Amendment No. 30 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on June
30, 1997.
(e)(3) Amended and Restated Sub-Distribution and Servicing Agreement between SEI
Investments Company and AIG Equity Sales Corporation is incorporated
herein by reference to Post-Effective Amendment No. 32 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on February 27, 1998.
(f) Not Applicable.
(g) Custodian Agreement between Registrant and CoreStates Bank N.A. originally
filed Pre-Effective Amendment No. 1 to Registrant's Registration Statement
on Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on October 28, 1991 is incorporated herein by reference to
Post-Effective Amendment No. 28 filed on February 27, 1997.
</TABLE>
C-2
<PAGE>
<TABLE>
<S> <C>
(h)(1) Amended and Restated Administration Agreement between Registrant and SEI
Financial Management Corporation, including schedules relating to Clover
Capital Equity Value Fund, Clover Capital Fixed Income Fund, White Oak
Growth Stock Fund, Pin Oak Aggressive Stock Fund, Roulston Midwest Growth
Fund, Roulston Growth and Income Fund, Roulston Government Securities
Fund, A+P Large-Cap Fund, Turner Fixed Income Fund, Turner Small Cap Fund,
Turner Growth Equity Fund, Morgan Grenfell Fixed Income Fund, Morgan
Grenfell Municipal Bond Fund and HGK Fixed Income Fund dated May 17, 1994
as originally filed with Post-Effective Amendment No. 15 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on June 15, 1994 is incorporated herein
by reference to Post-Effective Amendment No. 24 filed on February 28,
1996.
(h)(2) Schedule dated November 11, 1996 to Administration Agreement dated November
14, 1991 as Amended and Restated May 17, 1994 adding the CRA Realty Shares
Portfolio is incorporated herein by reference to Post-Effective Amendment
No. 29 to Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the Securities and Exchange Commission on May 22,
1997.
(h)(3) Shareholder Service Plan and Agreement for the Class A Shares of the CRA
Realty Shares Portfolio is incorporated herein by reference to
Post-Effective Amendment No. 30 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on June 30, 1997.
(h)(4) Schedule to Amended and Restated Administration Agreement dated May 8, 1995
to the Administration Agreement dated November 14, 1991 as Amended and
Restated May 17, 1994 with respect to the FMC Select Fund is incorporated
herein by reference to Post-Effective Amendment No. 28 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on February 27, 1997.
(h)(5) Consent to Assignment and Assumption of Administration Agreement dated June
1, 1996 is incorporated herein by reference to Post-Effective Amendment
No. 28 to Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the Securities and Exchange Commission on February
27, 1997.
(h)(6) Schedule to the Amended and Restated Administration Agreement adding the MDL
Broad Market Fixed Income Fund and the MDL Large Cap Growth Equity Fund
incorporated herein by reference to Post-Effective Amendment No. 32 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the Securities and Exchange Commission on February 27, 1998.
(h)(7) Schedule to the Amended and Restated Administration Agreement adding the
SAGE Corporate Fixed Bond Fund is incorporated herein by reference to
Post-Effective Amendment No. 32 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on February 27, 1998.
(h)(8) Schedule dated May 19, 1997 to Administration Agreement dated November 14,
1991 between the Advisors' Inner Circle Fund and SEI Financial Management
Corporation adding the AIG Money Market Fund is incorporated herein by
reference to Post-Effective Amendment No. 32 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and
Exchange Commission on February 27, 1998.
(h)(9) Schedule to Administration Agreement relating to the CRA Realty Portfolio is
incorporated herein by reference to Post-Effective Amendment No. 32 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the Securities and Exchange Commission on February 27, 1998.
</TABLE>
C-3
<PAGE>
<TABLE>
<S> <C>
(h)(10) [Form of] Shareholder Servicing Agreement for AIG Money Market Fund is
incorporated herein by reference to Post-Effective Amendment No. 32 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the Securities and Exchange Commission on February 27, 1998.
(h)(11) Transfer Agency Agreement dated November 30, 1994 is incorporated herein by
reference to Post-Effective Amendment No. 33 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and
Exchange Commission on May 18, 1998.
(h)(12) Amendment dated August 17, 1998 to the Schedule dated May 8, 1995 to the
Administration Agreement dated November 14, 1991 as amended and restated
May 17, 1994 between Registrant and SEI Financial Management Corporation
is incorporated herein by reference to Post-Effective Amendment No. 34 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the Securities and Exchange Commission on December 29, 1998.
(h)(13) Assignment and Assumption Agreement dated February 27, 1998 between
Registrant and Oak Associates Funds is incorporated herein by reference to
Post-Effective Amendment No. 34 to Registrant's Registration Statement on
Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on December 29, 1998.
(i) Opinion and Consent of Counsel dated October 24, 1991, as originally filed
October 28, 1991, is incorporated herein by reference to Post-Effective
Amendment No. 32 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on
February 27, 1998.
(j) Consent of Independent Public Accountants is filed herewith.
(k) Not Applicable.
(l) Not Applicable.
(m) Distribution Plan for The Advisors' Inner Circle Fund as originally filed
with Post-Effective Amendment No. 17 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and
Exchange Commission on September 19, 1994 is incorporated herein by
reference to Post-Effective Amendment No. 24 filed on February 28, 1996.
(n) Financial Data Schedules are filed herewith.
(o) Rule 18f-3 Plan dated May 15, 1995, as originally filed June 1, 1995, is
incorporated herein by reference to Post-Effective Amendment No. 32 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484),
filed with the Securities and Exchange Commission on February 27, 1998.
(p) Powers of Attorney for Mark E. Nagle, John T. Cooney, William M. Doran,
Frank E. Morris, Robert A. Nesher, Eugene B. Peters, Robert A. Patterson
and James M. Storey are incorporated herein by reference to Post-Effective
Amendment No. 34 to Registrant's Registration Statement on Form N-1A (File
No. 33-42484), filed with the Securities and Exchange Commission on
December 29, 1998.
</TABLE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:
See Statements of Additional Information regarding the control relationships
of The Advisors' Inner Circle Fund (the "Fund"). SEI Investments Management
Corporation a wholly-owned subsidiary of SEI Investments Company ("SEI"), is the
owner of all beneficial interest in SEI Investments Mutual Funds Services ("the
Administrator"). SEI and its subsidiaries and affiliates, including the
Administrator, are leading providers of funds evaluation services, trust
accounting systems, and brokerage and information services to financial
institutions, institutional investors, and money managers.
C-4
<PAGE>
ITEM 25. INDEMNIFICATION:
Article VIII of the Agreement and Declaration of Trust filed as Exhibit a to
the Registration Statement is incorporated by reference. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to trustees, directors, officers and controlling persons of the
Registrant by the Registrant pursuant to the Declaration of Trust or otherwise,
the Registrant is aware that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and, therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by trustees, directors, officers or
controlling persons of the Registrant in connection with the successful defense
of any act, suit or proceeding) is asserted by such trustees, directors,
officers or controlling persons in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issues.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR:
Other business, profession, vocation, or employment of a substantial nature
in which each director or principal officer of the Adviser is or has been, at
any time during the last two fiscal years, engaged for his own account or in the
capacity of director, officer, employee, partner or trustee are as follows:
HGK ASSET MANAGEMENT, INC.
- -----------------------------
HGK Asset Management, Inc. is the investment adviser for the HGK Fixed
Income Fund. The principal address of HGK Asset Management, Inc. is Newport
Tower, 525 Washington Blvd., Jersey City, NJ 07310.
The list required by this Item 26 of general partners of HGK Asset
Management, Inc., together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such general
partners during the past two years is incorporated by reference to Schedules B
and D of Form ADV filed by HGK Asset Management, Inc. under the Advisers Act of
1940 (SEC File No. 801-19314).
AIG CAPITAL MANAGEMENT CORP.
- ----------------------------
AIG Capital Management Corp. is the investment adviser for the AIG Money
Market Fund. The principal address of AIG Capital Management Corp. is 70 Pine
Street, New York, NY 10270.
The list required by this Item 26 of directors and officers of AIG Capital
Management Corp., together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such directors and
officers during the past two years is incorporated by reference to Schedules A
and D of Form ADV filed by AIG Capital Management Corp. under the Advisers Act
of 1940 (SEC File No. 801-47192).
FIRST MANHATTAN CO.
- -------------------
First Manhattan Co. is the investment adviser for the FMC Select Fund. The
principal address of First Manhattan Co. is 437 Madison Avenue, New York, NY
10022.
The list required by this Item 26 of general partners of First Manhattan
Co., together with information as to any other business profession, vocation, or
employment of a substantial nature engaged in by such general partners during
the past two years is incorporated by reference to Schedules B and D of Form ADV
filed by First Manhattan Co. under the Advisers Act of 1940 (SEC File No.
801-12411).
C-5
<PAGE>
CRA REAL ESTATE SECURITIES L.P.
- -------------------------------
CRA Real Estate Securities L.P. is the investment adviser for the CRA Realty
Shares Portfolio. The principal address of CRA Real Estate Securities L.P. is
Suite 205, 259 Radnor-Chester Road, Radnor, PA 19087.
The list required by this Item 26 of general partners of CRA Real Estate
Securities L.P., together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such general
partners during the past two years is incorporated by reference to Schedules B
and D of Form ADV filed by CRA Real Estate Securities L.P. under the Advisers
Act of 1940 (SEC File No. 801-49083).
MDL CAPITAL MANAGEMENT, INC.
- ----------------------------
MDL Capital Management, Inc. is the investment adviser for the MDL Broad
Market Fixed Income Portfolio and the MDL Large Cap Growth Equity Portfolio. The
principal address of MDL Capital Management, Inc. is 225 Ross Street,
Pittsburgh, PA 15222.
The list required by this Item 26 of general partners of MDL Capital
Management, Inc., together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such general
partners during the past two years is incorporated by reference to Schedules B
and D of Form ADV filed by MDL Capital Management, Inc. under the Advisers Act
of 1940 (SEC File No. 801-43419).
SAGE GLOBAL FUNDS, LLC
- ----------------------
SAGE Global Funds, LLC is the investment adviser for the SAGE Corporate Bond
Fund. The principal address of SAGE Global Funds, LLC is 55 William Street,
Suite G-40, Wellesley, MA 02181.
The list required by this Item 26 of general partners of SAGE Global Funds,
LLC, together with information as to any other business profession, vocation, or
employment of a substantial nature engaged in by such general partners during
the past two years is incorporated by reference to Schedules B and D of Form ADV
filed by SAGE Global Funds, LLC under the Advisers Act of 1940 (SEC File No.
801-54753).
STANDARD ASSET GROUP, INC.
- -----------------------------
Standard Asset Group, Inc. is the investment sub-adviser for the SAGE
Corporate Bond Fund. The principal address of Standard Asset Group, Inc. is 55
William Street, Suite G-40, Wellesley, MA 02181.
The list required by this Item 26 of general partners of Standard Asset
Group, Inc., together with information as to any other business profession,
vocation, or employment of a substantial nature engaged in by such general
partners during the past two years is incorporated by reference to Schedules B
and D of Form ADV filed by Standard Asset Group, Inc. under the Advisers Act of
1940 (SEC File No. 801-29883).
LSV ASSET MANAGEMENT COMPANY
- ----------------------------
LSV Asset Management Company is the investment adviser for the LSV Value
Equity Fund. The address of LSV Asset Management Company 200 W. Madison Street,
27th Floor, Chicago, Illinois 60606.
The list required by this Item 26 of general partners of LSV Asset
Management Company, together with information as to any other business
profession, vocation, or employment of a substantial nature engaged in by such
general partners during the past two years is incorporated by reference to
Schedules B and D of Form ADV filed by LSV Asset Management Company under the
Advisers Act of 1940 (SEC File No. 801-47689).
C-6
<PAGE>
ITEM 27. PRINCIPAL UNDERWRITERS:
(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing the securities of
the Registrant also acts as a principal underwriter, distributor or investment
adviser.
Registrant's distributor, SEI Investments Distribution Co. (the
"Distributor"), acts as distributor for:
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI Institutional International Trust August 30, 1988
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
Boston 1784 Funds-Registered Trademark- June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
The Expedition Funds June 9, 1997
Alpha Select Funds January 1, 1998
Oak Associates Funds February 27, 1998
The Nevis Funds, Inc. June 29, 1998
The Parkstone Group of Funds September 14, 1998
The Distributor provides numerous financial services to investment managers,
pension plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement and consulting services
("Funds Evaluation") and automated execution, clearing and settlement of
securities transactions ("MarketLink").
(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in the
answer to Item 21 of Part B. Unless otherwise noted, the business address of
each director or officer is Oaks, PA 19456.
C-7
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------- ------------------------------------------------------ ------------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman of the Board of Directors --
Henry H. Greer Director --
Carmen V. Romeo Director --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President --
Dennis J. McGonigle Executive Vice President --
Robert M. Silvestri Chief Financial Officer & Treasurer --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
Jack May Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
Kevin P. Robins Senior Vice President & General Counsel Vice President,
Assistant Secretary
Patrick K. Walsh Senior Vice President --
Robert Aller Vice President --
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President,
Assistant Secretary
S. Courtney E. Collier Vice President & Assistant Secretary --
Robert Crudup Vice President & Managing Director --
Barbara Doyne Vice President --
Jeff Drennen Vice President --
Vic Galef Vice President & Managing Director --
Lydia A. Gavalis Vice President & Assistant Secretary Vice President,
Assistant Secretary
Greg Gettinger Vice President & Assistant Secretary --
Kathy Heilig Vice President Vice President,
Assistant Secretary
Jeff Jacobs Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
John Krzeminski Vice President & Managing Director --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Mark Nagle Vice President Controller & Chief
Financial Officer
Joanne Nelson Vice President --
</TABLE>
C-8
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------- ------------------------------------------------------ ------------------------
<S> <C> <C>
Joseph M. O'Donnell Vice President & Assistant Secretary Vice President,
Assistant Secretary
Sandra K. Orlow Vice President & Assistant Secretary Vice President,
Assistant Secretary
Cynthia M. Parrish Vice President & Assistant Secretary --
Kim Rainey Vice President --
Rob Redican Vice President --
Maria Rinehart Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President,
Assistant Secretary
Lydia J. Streigel Vice President & Assistant Secretary Vice President,
Assistant Secretary
Lori L. White Vice President & Assistant Secretary --
Wayne M. Withrow Vice President & Managing Director --
</TABLE>
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3);
(6); (8); (12); and 31a-I (d), the required books and records are maintained
at the offices of Registrant's Custodian:
First Union National Bank
Broad & Chestnut Streets
P.O. Box 7618
Philadelphia, PA 19101
(b)/(c) With respect to Rules 31a-1(a); 31a-1 (b)(1),(4); (2)(C) and
(D); (4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required books
and records are maintained at the offices of Registrant's Administrator:
SEI Investments Mutual Funds Services
Oaks, PA 19456
(c) With respect to Rules 31a-1 (b)(5), (6), (9) and (10) and 31a-1 (f),
the required books and records are maintained at the offices of the
Registrant's Advisers:
HGK Asset Management, Inc.
Newport Tower
525 Washington Blvd.
Jersey City, NJ 07310
AIG Capital Management Corp.
70 Pine Street
20th Floor
New York, NY 10270
C-9
<PAGE>
First Manhattan Co.
437 Madison Avenue
New York, NY 10022-7022
CRA Real Estate Securities L.P.
Suite 205
259 North Radnor-Chester Road
Radnor, PA 19087
MDL Capital Management, Inc.
225 Ross Street
Pittsburgh, PA 15222
SAGE Global Funds, LLC
55 William Street, Suite G-40
Wellesley, MA 02181
Standard Asset Group, Inc.
55 William Street
Wellesley, MA 02181
LSV Asset Management Company
200 W. Madison Street, 27th Floor
Chicago, Illinois 60606
ITEM 29. MANAGEMENT SERVICES: None.
ITEM 30. UNDERTAKINGS:
Registrant hereby undertakes that whenever shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940 inform the
Board of Trustees of their desire to communicate with shareholders of the Fund,
the Trustees will inform such shareholders as to the approximate number of
shareholders of record and the approximate costs of mailing or afford said
shareholders access to a list of shareholders.
Registrant hereby undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a Trustee(s) when requested in
writing to do so by the holders of at least 10% of Registrant's outstanding
shares and in connection with such meetings to assist in communications with
other shareholders as required by the provisions of Section 16(c) of the
Investment Company Act of 1940.
Registrant hereby undertakes to furnish each prospective person to whom a
prospectus for any series of the Registrant is delivered with a copy of the
Registrant's latest annual report to shareholders for such series, when such
annual report is issued containing information called for by Item 5A of Form
N-1A, upon request and without charge.
NOTICE
A copy of the Agreement and Declaration of Trust for The Advisors' Inner
Circle Fund is on file with the Secretary of State of The Commonwealth of
Massachusetts and notice is hereby given that this Registration Statement has
been executed on behalf of the Fund by an officer of the Fund as an officer and
by its Trustees as trustees and not individually and the obligations of or
arising out of this Registration Statement are not binding upon any of the
Trustees, officers, or shareholders individually but are binding only upon the
assets and property of the Fund.
C-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for the effectiveness of this Post-Effective Amendment to the
Registrant's Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Post-Effective Amendment No. 37 to the
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Oaks, Commonwealth of Pennsylvania on the 25th
day of February, 1999.
THE ADVISORS' INNER CIRCLE FUND
By: /s/ MARK E. NAGLE
-----------------------------------------
Mark E. Nagle PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacity and on the dates indicated.
*
- ------------------------------ Trustee February 25, 1999
John T. Cooney
*
- ------------------------------ Trustee February 25, 1999
William M. Doran
*
- ------------------------------ Trustee February 25, 1999
Robert A. Nesher
*
- ------------------------------ Trustee February 25, 1999
Robert A. Patterson
*
- ------------------------------ Trustee February 25, 1999
Eugene Peters
*
- ------------------------------ Trustee February 25, 1999
James M. Storey
/s/ MARK E. NAGLE
- ------------------------------ President, Controller & February 25, 1999
Mark E. Nagle Chief Financial Officer
*By: /s/ MARK E. NAGLE
-------------------------
Mark E. Nagle
ATTORNEY-IN-FACT
C-11
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. AND DESCRIPTION
- -------------------------------------------------------------------------------------------------------
<S> <C>
EX-99.A1 Registrant's Agreement and Declaration of Trust dated July 18, 1991, as originally
filed with the SEC on August 29, 1991, is incorporated herein by reference to
Post-Effective Amendment No. 32 to Registrant's Registration Statement on Form N-1A
(File No. 33-42484), filed with the Securities and Exchange Commission on February
27, 1998.
EX-99.A2 Registrant's Amendment to the Agreement and Declaration of Trust dated December 2,
1996, is incorporated herein by reference to Post-Effective Amendment No. 27 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on December 13, 1996.
EX-99.A3 Registrant's Amendment to the Agreement and Declaration of Trust dated February 18,
1997, is incorporated herein by reference to Post-Effective Amendment No. 28 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on February 27, 1997.
EX-99.B1 Registrant's By-Laws are incorporated herein by reference to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on August 29, 1991.
EX-99.B2 Registrant's Amended and Restated By-Laws are incorporated herein by reference to
Post-Effective Amendment No. 27 to Registrant's Registration Statement on Form N-1A
(File No. 33-42484), filed with the Securities and Exchange Commission on December
12, 1996.
EX-99.C Not Applicable.
EX-99.D1 Investment Advisory Agreement between Registrant and HGK Asset Management, Inc. with
respect to HGK Fixed Income Fund dated August 15, 1994 as originally filed with
Post-Effective Amendment No. 15 to Registrant's Registration Statement on Form N-1A
(File No. 33-42484), filed with the Securities and Exchange Commission on June 15,
1994 is incorporated herein by reference to Post-Effective Amendment No. 24 filed on
February 28, 1996.
EX-99.D2 Investment Advisory Agreement between Registrant and AIG Capital Management Corp. with
respect to AIG Money Market Fund is incorporated herein by reference to
Post-Effective Amendment No. 17 to Registrant's Registration Statement on Form N-1A
(File No. 33-42484), filed with the Securities and Exchange Commission on September
19, 1994 is incorporated herein by reference to Post-Effective Amendment No. 28 filed
February 27, 1997.
EX-99.D3 Investment Advisory Agreement Between Registrant and First Manhattan Co. with respect
to FMC Select Fund dated May 3, 1995 as originally filed with Post-Effective
Amendment No. 19 to Registrant's Registration Statement on Form N-1A (File
No.33-42484), filed with the Securities and Exchange Commission on February 1, 1995
is incorporated herein by reference to Post-Effective Amendment No. 24 filed on
February 28, 1996.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. AND DESCRIPTION
- -------------------------------------------------------------------------------------------------------
<S> <C>
EX-99.D4 Investment Advisory Agreement between Registrant and CRA Real Estate Securities L.P.
dated December 31, 1996 with respect to the CRA Realty Shares Portfolio is
incorporated herein by reference to Post-Effective Amendment No. 29 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484) filed with the Securities and
Exchange Commission on May 22, 1997.
EX-99.D5 Investment Advisory Agreement between Registrant and MDL Capital Management, Inc. with
respect to the MDL Broad Market Fixed Income Portfolio and the MDL Large Cap Growth
Equity Portfolio is incorporated herein by reference to Post-Effective Amendment No.
32 to Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the Securities and Exchange Commission on February 27, 1998.
EX-99.D6 Investment Advisory Agreement between Registrant and SAGE Global Funds, LLC with
respect to the SAGE Corporate Bond Fund is incorporated herein by reference to
Post-Effective Amendment No. 32 to Registrant's Registration Statement on Form N-1A
(File No. 33-42484), filed with the Securities and Exchange Commission on February
27, 1998.
EX-99.D7 Investment Sub-Advisory Agreement between SAGE Global Funds, LLC and Standard Asset
Group, Inc. with respect to the SAGE Corporate Bond Fund is incorporated herein by
reference to Post-Effective Amendment No. 33 to Registrant's Registration Statement
on Form N-1A (File No. 33-42484), filed with the Securities and Exchange Commission
on May 18, 1998.
EX-99.D8 Form of Investment Advisory Agreement between Registrant and LSV Asset Management
Company is incorporated herein by reference to Post-Effective Amendment No. 34 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on December 29, 1998.
EX-99.D9 Amended and Restated Schedule to the Investment Advisory Agreement dated May 3, 1995
between Registrant and First Manhattan Company is incorporated herein by reference to
Post-Effective Amendment No. 34 to Registrant's Registration Statement on Form N-1A
(File No. 33-42484), filed with the Securities and Exchange Commission on December
29, 1998.
EX-99.E1 Amended and Restated Distribution Agreement between Registrant and SEI Financial
Services Company dated August 8, 1994 as originally filed with Post-Effective
Amendment No. 17 to Registrant's Registration Statement on Form N-1A (File No.
33-42484), filed with the Securities and Exchange Commission on September 19, 1994 is
incorporated herein by reference to Post-Effective Amendment No. 24 filed on February
28, 1996.
EX-99.E2 Distribution Agreement between Registrant and CCM Securities, Inc. dated February 28,
1997 is incorporated herein by reference to Post-Effective Amendment No. 30 to
Registrant's Registration Statement on From N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on June 30, 1997.
EX-99.E3 Amended and Restated Sub-Distribution and Servicing Agreement between SEI Investments
Company and AIG Equity Sales Corporation is incorporated herein by reference to
Post-Effective Amendment No. 32 to Registrant's Registration Statement on Form N-1A
(File No. 33-42484), filed with the Securities and Exchange Commission on February
27, 1998.
EX-99.F Not Applicable.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. AND DESCRIPTION
- -------------------------------------------------------------------------------------------------------
<S> <C>
EX-99.G Custodian Agreement between Registrant and CoreStates Bank N.A. is incorporated herein
by reference to Pre-Effective Amendment No. 1 to Registrant's Registration Statement
on Form N-1A (File No. 33-42484), filed with the Securities and Exchange Commission
on October 28, 1991 is incorporated herein by reference to Post-Effective Amendment
No. 28 filed on February 27, 1997.
EX-99.H1 Amended and Restated Administration Agreement between Registrant and SEI Financial
Management Corporation, including schedules relating to Clover Capital Equity Value
Fund, Clover Capital Fixed Income Fund, White Oak Growth Stock Fund, Pin Oak
Aggressive Stock Fund, Roulston Midwest Growth Fund, Roulston Growth and Income Fund,
Roulston Government Securities Fund, A+P Large-Cap Fund, Turner Fixed Income Fund,
Turner Small Cap Fund, Turner Growth Equity Fund, Morgan Grenfell Fixed Income Fund,
Morgan Grenfell Municipal Bond Fund and HGK Fixed Income Fund dated May 17, 1994 as
originally filed with Post-Effective Amendment No. 15 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on June 15, 1994 is incorporated herein by reference to Post-Effective
Amendment No. 24 filed on February 28, 1996.
EX-99.H2 Schedule dated November 11, 1996 to Administration Agreement dated November 14, 1991 as
Amended and Restated May 17, 1994 adding the CRA Realty Shares Portfolio is
incorporated herein by reference to Post-Effective Amendment No. 29 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the Securities
and Exchange Commission on May 22, 1997.
EX-99.H3 Shareholder Service Plan and Agreement for the Class A Shares of the CRA Realty Shares
Portfolio is incorporated herein by reference to Post-Effective Amendment No. 30 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on June 30, 1997.
EX-99.H4 Schedule to Amended and Restated Administration Agreement dated May 8, 1995 to the
Administration Agreement dated November 14, 1991 as Amended and Restated May 17, 1994
with respect to the FMC Select Fund is incorporated herein by reference to
Post-Effective Amendment No. 28 to Registrant's Registration Statement on Form N-1A
(File No. 33-42484), filed with the Securities and Exchange Commission on February
27, 1997.
EX-99.H5 Consent to Assignment and Assumption of Administration Agreement dated June 1, 1996 is
incorporated herein by reference to Post-Effective Amendment No. 28 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the Securities
and Exchange Commission on February 27, 1997.
EX-99.H6 Schedule to the Amended and Restated Administration Agreement adding the MDL Broad
Market Fixed Income Fund and the MDL Large Cap Growth Equity Fund is incorporated
herein by reference to Post-Effective Amendment No. 32 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on February 27, 1998.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. AND DESCRIPTION
- -------------------------------------------------------------------------------------------------------
<S> <C>
EX-99.H7 Schedule to the Amended and Restated Administration Agreement adding the SAGE Corporate
Fixed Bond Fund incorporated herein by reference to Post-Effective Amendment No. 32
to Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed with
the Securities and Exchange Commission on February 27, 1998.
EX-99.H8 Schedule dated May 19, 1997 to Administration Agreement dated November 14, 1991 between
the Advisors' Inner Circle Fund and SEI Financial Management Corporation adding the
AIG Money Market Fund is incorporated herein by reference to Post-Effective Amendment
No. 32 to Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the Securities and Exchange Commission on February 27, 1998.
EX-99.H9 Schedule to Administration Agreement relating to the CRA Realty Portfolios is
incorporated herein by reference to Post-Effective Amendment No. 32 to Registrant's
Registration Statement on Form N-1A (File No. 33-42484), filed with the Securities
and Exchange Commission on February 27, 1998.
EX-99.H10 [Form of] Shareholder Servicing Agreement for AIG Money Market Fund is incorporated
herein by reference to Post-Effective Amendment No. 32 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on February 27, 1998.
EX-99.H11 Transfer Agency Agreement dated November 30, 1994 is incorporated herein by reference
to Post-Effective Amendment No. 33 to Registrant's Registration Statement on Form
N-1A (File No. 33-42484), filed with the Securities and Exchange Commission on May
18, 1998.
EX-99.H12 Amendment dated August 17, 1998 to the Schedule dated May 8, 1995 to the Administration
Agreement dated November 14, 1991 as amended and restated May 17, 1994 between
Registrant and SEI Financial Management Corporation is incorporated herein by
reference to Post-Effective Amendment No. 34 to Registrant's Registration Statement
on Form N-1A (File No. 33-42484), filed with the Securities and Exchange Commission
on December 29, 1998.
EX.99.H13 Assignment and Assumption Agreement dated February 27, 1998 between Registrant and Oak
Associates Funds is incorporated herein by reference to Post-Effective Amendment No.
34 to Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed
with the Securities and Exchange Commission on December 29, 1998.
EX-99.I Opinion and Consent of Counsel dated October 24, 1991, as originally filed October 28,
1991, is incorporated herein by reference to Post-Effective Amendment No. 32 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on February 27, 1998.
EX-99.J Consent of Independent Public Accountants is filed herewith.
EX-99.K Not Applicable.
EX-99.L Not Applicable.
EX-99.M Distribution Plan for The Advisors' Inner Circle Fund as originally filed with
Post-Effective Amendment No. 17 to Registrant's Registration Statement on Form N-1A
(File No. 33-42484), filed with the Securities and Exchange Commission on September
19, 1994 is incorporated herein by reference to Post-Effective Amendment No. 24 filed
on February 28, 1996.
EX-99.N Financial Data Schedules are filed herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. AND DESCRIPTION
- -------------------------------------------------------------------------------------------------------
<S> <C>
EX-99.O Rule 18f-3 Plan dated May 15, 1995, as originally filed June 1, 1995, is incorporated
herein by reference to Post-Effective Amendment No. 32 to Registrant's Registration
Statement on Form N-1A (File No. 33-42484), filed with the Securities and Exchange
Commission on February 27, 1998.
EX-99.P Powers of Attorney for Mark E. Nagle, John T. Cooney, William M. Doran, Frank E.
Morris, Robert A. Nesher, Eugene B. Peters, Robert A. Patterson and James M. Storey
are incorporated herein by reference to Post-Effective Amendment No. 34 to
Registrant's Registration Statement on Form N-1A (File No. 33-42484), filed with the
Securities and Exchange Commission on December 29, 1998.
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated December 18, 1998 on the October 31, 1998 financial statements of the
Advisors' Inner Circle Fund, incorporated by reference in the Post-Effective
Amendment No. 37 to the Registration Statement on Form N-1A of the Advisors'
Inner Circle Fund (File No. 33-42484), and to all references to our firm
included in or made part of this Registration Statement.
/s/ Arthur Andersen LLP
Philadelphia, Pennsylvania,
February 24, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000878719
<NAME> ADVISERS INNER CIRCLE
<SERIES>
<NUMBER> 160
<NAME> AIG MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 406801
<INVESTMENTS-AT-VALUE> 406801
<RECEIVABLES> 1639
<ASSETS-OTHER> 7
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 408447
<PAYABLE-FOR-SECURITIES> 2279
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 2279
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 406165
<SHARES-COMMON-STOCK> 251087
<SHARES-COMMON-PRIOR> 329122
<ACCUMULATED-NII-CURRENT> 3
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 406168
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 32347
<OTHER-INCOME> 0
<EXPENSES-NET> (2008)
<NET-INVESTMENT-INCOME> 30339
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 30339
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (23453)
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<NAME> ADVISERS INNER CIRCLE FUNDS
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<NAME> AIG MONEY MARKET - RETAIL CLASS
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