<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1997.
FILE NO. 33-52784
FILE NO. 811-7244
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 11 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 12 /X/
REMBRANDT FUNDS(R)
(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) 342-5734
DAVID G. LEE
C/O SEI INVESTMENTS
OAKS, PENNSYLVANIA 19456
(NAME AND ADDRESS OF AGENT FOR SERVICE)
Copies to:
RICHARD W. GRANT, ESQUIRE JOHN H. GRADY, ESQUIRE
MORGAN, LEWIS & BOCKIUS LLP MORGAN, LEWIS & BOCKIUS LLP
2000 ONE LOGAN SQUARE 1800 M STREET, N.W.
PHILADELPHIA, PENNSYLVANIA 19103 WASHINGTON, D.C. 20036
It is proposed that this filing will become effective (check appropriate box)
X immediately upon filing pursuant to paragraph (b)
- ----
____ on [date] pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)
____ on [date] pursuant to paragraph (a); or
____ 75 days after filing pursuant to paragraph (a) of Rule 485
Pursuant to the provisions of Rule 24f-2 under the Investment Company Act of
1940, an indefinite number of units of beneficial interest is being registered
by this Registration Statement. Registrant's Rule 24f-2 Notice for fiscal year
ended December 31, 1996 was filed on February 27, 1997.
<PAGE>
REMBRANDT FUNDS(R)
POST-EFFECTIVE AMENDMENT NO. 11
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- --------------------------------------------------------------------------------------------------------
<S> <C>
PART A -
Item 1. Cover Page Cover Page
Item 2. Synopsis Summary
Item 3. Condensed Financial Information Financial Highlights
Item 4. General Description of Registrant The Trust; Investment Objectives and Investment
Policies; General Investment Policies; Risk Factors;
Fundamental Policies; Investment Limitations; General
Information--The Trust
Item 5. Management of the Trust General Information--Trustees of the Trust; The
Advisor; The Administrator; The Transfer Agent; The
Distributor
Item 6. Capital Stock and Other Securities General Information--Voting Rights; General
Information--Shareholder Inquiries; General
Information--Dividends; Taxes
Item 7. Purchase of Securities Being Offered Purchase of Shares; Eligibility of Reduced Sales
Charge
Item 8. Redemption or Repurchase Redemption of Shares
Item 9. Pending Legal Proceedings *
PART B -
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Trust
Item 13. Investment Objectives and Policies Description of Permitted Investments; Investment
Limitations; Non-Fundamental Policies
Item 14. Management of the Registrant Trustees and Officers of the Trust; The Administrator
Item 15. Control Persons and Principal Holders Trustees and Officers of the Trust
of Securities
Item 16. Investment Advisory and Other Services The Advisor; The Administrator; The Distributor;
Experts
Item 17. Brokerage Allocation Fund Transactions; Trading Practices and Brokerage
Item 18. Capital Stock and Other Securities Description of Shares
Item 19. Purchase, Redemption, and Pricing Purchase and Redemption of Shares;
of Securities Being Offered Determination of Net Asset Value
Item 20. Tax Status Taxes
Item 21. Underwriters The Distributor
Item 22. Calculation of Yield Quotations Computation of Yield; Calculation of Total Return
Item 23. Financial Statements Financial Statements
</TABLE>
-2-
<PAGE>
REMBRANDT FUNDS (R)
APRIL 30, 1997
- --------------------------------------------------------------------------------
Equity Funds Fixed Income Funds
. VALUE FUND . FIXED INCOME FUND
. GROWTH FUND . INTERMEDIATE GOVERNMENT FIXED INCOME FUND
. SMALL CAP FUND . TAX-EXEMPT FIXED INCOME FUND
. INTERNATIONAL EQUITY FUND
. TRANSEUROPE FUND . INTERNATIONAL FIXED INCOME FUND
. LIMITED VOLATILITY FIXED INCOME FUND
. ASIAN TIGERS FUND Money Market Funds
. LATIN AMERICA EQUITY FUND . TREASURY MONEY MARKET FUND
. GOVERNMENT MONEY MARKET FUND
Balanced Fund . MONEY MARKET FUND
. BALANCED FUND . TAX-EXEMPT MONEY MARKET FUND
- --------------------------------------------------------------------------------
Please read this Prospectus carefully before investing, and keep it on file for
future reference. It concisely sets forth information that can help you decide
if a Fund's investment goals match your own.
A Statement of Additional Information dated April 30, 1997 has been filed with
the Securities and Exchange Commission (the "SEC") and is available upon
request and without charge by calling 1-800-443-4725. The Statement of
Additional Information is incorporated into this Prospectus by reference.
Trust Class shares of the Rembrandt Funds(R) (the "Trust") are offered
primarily to customers of LaSalle National Bank, its affiliates and
correspondents, for the investment of their own funds or funds for which they
act in a fiduciary, agency or custodial capacity.
Investor Class shares are offered primarily to individuals and institutional
investors that meet the minimum investment requirement but for whom LaSalle
National Bank does not act in a fiduciary, agency or custodial capacity.
Investors in the Trust Class shares and investors in the Investor Class shares
are referred to hereinafter as "Shareholders."
AN INVESTMENT IN ANY OF THE TRUST'S MONEY MARKET FUNDS IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT ANY MONEY
MARKET FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, INCLUDING LASALLE NATIONAL BANK, OR ANY OF
ITS AFFILIATES OR CORRESPONDENTS, INCLUDING LASALLE NATIONAL
CORPORATION. THE TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR
ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK,
INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
TABLE OF
CONTENTS
<TABLE>
<S> <C>
Fund Highlights........................................... 2
Annual Operating Expenses................................. 5
Financial Highlights...................................... 9
Your Account and Doing Business
with Us.................................................. 14
Investment Objective and Policies......................... 20
General Investment Policies............................... 31
Certain Risk Factors...................................... 33
Investment Limitations.................................... 34
The Advisor............................................... 35
The Sub-Advisor........................................... 37
The Administrator......................................... 38
The Transfer Agent........................................ 38
The Distributor........................................... 38
Performance............................................... 39
Taxes..................................................... 40
Additional Information
About Doing Business with Us............................. 43
General Information....................................... 45
Description of Permitted
Investments and Risk Factors............................. 47
</TABLE>
HOW TO READ THIS PROSPECTUS
This Prospectus gives you information that you should know about the Funds
before investing. Brief descriptions are also provided throughout the
Prospectus to better explain certain key points. To find these helpful guides,
look for this symbol.
[LOGO OF REMBRANDT FUNDS APPEARS HERE]
FUND HIGHLIGHTS
The following summary provides basic information about the Trust Class and
Investor Class shares of the following Funds: Value Fund, Growth Fund, Small
Cap Fund, International Equity Fund, TransEurope Fund, Asian Tigers Fund, Latin
America Equity Fund (collectively, the "Equity Funds"), Balanced Fund
("Balanced Fund"), Fixed Income Fund, Intermediate Government Fixed Income
Fund, Tax-Exempt Fixed Income Fund, International Fixed Income Fund, Limited
Volatility Fixed Income Fund (collectively, the "Fixed Income Funds"), Treasury
Money Market Fund, Government Money Market Fund, Money Market Fund and Tax-
Exempt Money Market Fund (collectively, the "Money Market Funds," and together
with the Equity Funds, the Balanced Fund and the Fixed Income Funds, the
"Funds"). This summary is qualified in its entirety by reference to the more
detailed information provided elsewhere in this Prospectus and in the Statement
of Additional Information.
INVESTMENT OBJECTIVE Below are the investment objectives and some basic
AND POLICIES investment policies of each Fund. For more
information, see "Investment Objective and
Policies," "General Investment Policies" and
"Description of Permitted Investments and Risk
Factors."
EQUITY AND The Growth Fund and Small Cap Fund both seek a high
BALANCED FUNDS level of total return primarily through capital
appreciation. The Value Fund, International Equity
Fund and TransEurope Fund all seek a high level of
total return through capital appreciation and
current income. The TransEurope Fund currently is
not offering its shares to the public.
The Asian Tigers Fund seeks to achieve capital
appreciation through investments within the
economies of the Far East, with the exception of
Japan. The Latin America Equity Fund seeks long-term
capital appreciation.
The Balanced Fund seeks to obtain a favorable total
rate of return through current income and capital
appreciation consistent with the preservation of
capital, derived from investing in a portfolio
comprised of fixed income and equity securities.
2
<PAGE>
FIXED INCOME The Fixed Income Fund seeks a high level of total return
FUNDS relative to funds with like investment objectives from
income and, to a lesser degree, capital appreciation derived
from investing in a portfolio consisting primarily of
quality intermediate- and long-term fixed income securities.
The Intermediate Government Fixed Income Fund seeks a
high level of total return relative to funds with like
investment objectives, consistent with preservation of
capital, from income and, to a lesser degree, capital
appreciation, derived from investing in a portfolio
consisting of primarily short- and intermediate-term U.S.
Government securities.
The Tax-Exempt Fixed Income Fund seeks a high level of
total return, relative to funds with like investment
objectives, consistent with preservation of capital, from
income derived from investing in a portfolio consisting
primarily of securities that are exempt from federal income
tax and not subject to taxation as a preference item for
purposes of the federal alternative minimum tax.
The International Fixed Income Fund (formerly the Global
Fixed Income Fund) seeks a high level of total return,
relative to funds with like objectives, measured in U.S.
dollar terms, from income and capital appreciation derived
from investing in a portfolio consisting of quality fixed
income securities denominated in foreign currencies.
The Limited Volatility Fixed Income Fund seeks a high
level of current income, consistent with relative stability
of principal, derived from investing in a portfolio
consisting primarily of short- and intermediate-term fixed
income securities. The Limited Volatility Fund currently is
not offering its shares to the public.
MONEY MARKET The Treasury Money Market Fund seeks to preserve principal
FUNDS value and maintain a high degree of liquidity while
providing current income.
The Government Money Market Fund and the Money Market
Fund seek to provide as high a level of current income as is
consistent with preservation of capital and liquidity.
The Tax-Exempt Money Market Fund seeks to preserve
principal value and maintain a high degree of liquidity
while providing current income exempt from federal income
taxes.
UNDERSTANDING Each Fund invests in different securities. Values of equity
RISK securities may be affected by the financial markets as well
as by developments impacting specific issuers. Values of
fixed income securities tend to vary inversely with interest
rates and may be affected by other market and economic
factors as well. The International Equity, TransEurope,
Asian Tigers, International Fixed Income, and Latin America
Equity Funds will, and certain other Funds may invest in
securities of foreign issuers. Securities of foreign issuers
are subject to certain risks not typically associated with
domestic securities, including, among other risks, changes
in currency rates and in exchange control regulations, costs
in connection with conversions between various currencies,
limited publicly available information regarding foreign
issuers, lack of uniformity in accounting, auditing and
financial standards and requirements, greater securities
market volatility, less liquidity of securities, less
3
<PAGE>
government supervision and regulation of securities markets,
withholding taxes and changes in taxes on income on
securities, and possible seizure, nationalization or
expropriation of the foreign issuer or foreign deposits.
Investments in certain Latin American countries also may
involve additional risks of political instability, high
inflation rates, and limited trading markets. See "General
Investment Policies," "Risk Factors" and "Description of
Permitted Investments and Risk Factors" in this prospectus,
and the Statement of Additional Information.
MANAGEMENT LaSalle Street Capital Management, Ltd. (the "Advisor")
PROFILE serves as the Advisor to the Funds. ABN AMRO-NSM
International Funds Management B.V. (the "Sub-Advisor")
serves as the investment sub-advisor to the International
Equity Fund, TransEurope Fund, Asian Tigers Fund, Latin
America Equity Fund and International Fixed Income Fund. SEI
Fund Resources (the "Administrator") serves as the
Administrator and shareholder servicing agent of the Trust.
DST Systems, Inc. ("DST") serves as transfer agent
("Transfer Agent") and dividend disbursing agent for the
Trust. Rembrandt(R) Financial Services Company, an affiliate
of the Administrator (the "Distributor"), serves as
distributor of the Trust's shares. See "The Advisor," "The
Sub-Advisor," "The Administrator" and "The Distributor."
YOUR ACCOUNT You may open an Investor Class account with a minimum amount
AND DOING of $2,000 per Fund and make additional investments with as
BUSINESS WITH little as $100. A Trust Class account may be opened by
US contacting LaSalle National Bank, its affiliates and
correspondents. Redemptions of a Fund's shares are made at
net asset value per share. See "Your Account and Doing
Business With Us."
DIVIDENDS Substantially all of the net investment income (exclusive of
capital gains) of each of the Equity, Balanced and Fixed
Income Funds is distributed in the form of periodic
dividends. Substantially all of the net investment income
(exclusive of capital gains) of each of the Money Market
Funds is distributed in the form of daily dividends. Any
capital gain is distributed at least annually. Distributions
are paid in additional shares unless the shareholder elects
to take the payment in cash. See "General Information--
Dividends."
INFORMATION/ For more information, call 1-800-443-4725.
SERVICE
CONTACTS
4
<PAGE>
PORTFOLIO EXPENSES _____________________________________________________________
The purpose of the following table is to help you understand the various cost
and expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in TRUST CLASS SHARES.
ANNUAL OPERATING EXPENSES (As a percentage of average net assets) TRUST CLASS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY/BALANCED FUNDS
---------------------
SMALL INT'L TRANS ASIAN LATIN AMERICA
VALUE GROWTH CAP EQUITY EUROPE TIGERS EQUITY BALANCED
----- ------ ----- ------ ------ ------ ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees (after fee
waivers, if applicable) .80% .80% .80% 1.00% 1.00% 1.00% 1.00% .70%
Other Expenses (after
fee waivers, if
applicable)(1) .23% .22% .25% .36% .54% .54% .70% .24%
- ------------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers, if
applicable) 1.03% 1.02% 1.05% 1.36% 1.54% 1.54% 1.70% .94%
- ------------------------------------------------------------------------------------------
</TABLE>
(1) "Other Expenses" for the TransEurope Fund are based on estimated amounts
for the current fiscal year.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME FUNDS
------------------
INTERMEDIATE LIMITED
GOVERNMENT TAX-EXEMPT INTERNATIONAL VOLATILITY
FIXED INCOME FIXED INCOME FIXED INCOME FIXED INCOME FIXED INCOME
------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Advisory Fees
(after fee waivers, if
applicable)(1) .50% .50% .48% .80% .50%
Other Expenses (after
fee waivers, if
applicable)(2) .23% .24% .73% .31% .24%
- -------------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers, if
applicable)(3) .73% .74% .75% 1.11% .74%
- -------------------------------------------------------------------------------------------
</TABLE>
(1) The Advisor is waiving, on a voluntary basis, a portion of its fee from
each Fixed Income Fund (except the International Fixed Income Fund). The
Advisor reserves the right to terminate its waiver at any time in its sole
discretion. Absent such waiver, Advisory Fees for the other Funds would be
as follows: Fixed Income Fund--.60%, Intermediate Government Fixed Income
Fund--.60%, Tax-Exempt Fixed Income Fund--.60%, and Limited Volatility
Fixed Income Fund--.60%. See "The Advisor."
(2) "Other Expenses" for the Limited Volatility Fixed Income Fund are based on
estimated amounts for the current fiscal year.
(3) Absent the voluntary waivers described above, Total Operating Expenses for
the Funds would be as follows: Fixed Income Fund--.83%, Intermediate
Government Fixed Income Fund--.84%, Tax-Exempt Fixed Income Fund--.85%, and
Limited Volatility Fixed Income Fund--.84%.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET FUNDS
------------------
TREASURY GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY MONEY
MARKET MARKET MARKET MARKET
-------- ---------- ------ ----------
<S> <C> <C> <C> <C>
Advisory Fees (after fee waivers, if
applicable)(1) .20% .20% .20% .19%
Other Expenses (after fee waivers, if
applicable)(2) .16% .16% .15% .13%
- ----------------------------------------------------------------------------
Total Operating Expenses (after fee
waivers, if applicable)(3) .36% .36% .35% .32%
- ----------------------------------------------------------------------------
</TABLE>
(1) The Advisor is waiving, on a voluntary basis, a portion of its fee from
each Money Market Fund (except the Government Money Market Fund). The
Advisor reserves the right to terminate its waiver at any time in its sole
discretion. Absent such waiver, Advisory Fees for the Funds would be as
follows: Treasury Money Market Fund--.35%, Money Market Fund--.35% and Tax-
Exempt Money Market Fund--.35%. Additional information may be found under
"The Advisor."
(2) The Administrator is waiving, on a voluntary basis, a portion of its fee
from each Money Market Fund. The Administrator reserves the right to change
the amount of or terminate its waiver at any time in its sole discretion.
"Other Expenses" have been restated to reflect current administrative fee
waivers. Absent such current waivers, "Other Expenses" for the Funds would
be as follows: Treasury Money Market Fund--.24%, Government Money Market
Fund--.24%, Money Market Fund--.23% and Tax-Exempt Money Market Fund--.21%.
(3) Absent the voluntary waivers described above, Total Operating Expenses for
the Funds would be as follows: Treasury Money Market Fund--.59%, Money
Market Fund--.58% and Tax-Exempt Money Market Fund--.56%.
5
<PAGE>
EXAMPLE TRUST CLASS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YR. 3 YRS. 5 YRS. 10 YRS.
----- ------ ------ -------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on
a $1,000 investment assuming (1) 5% annual re-
turn and (2) redemption at the end of each
time period:
Value Fund $11 $33 $57 $126
Growth Fund 10 32 56 125
Small Cap Fund 11 33 58 128
International Equity Fund 14 43 74 164
TransEurope Fund 16 49 -- --
Asian Tigers Fund 16 49 84 183
Latin America Equity Fund 17 54 92 201
Balanced Fund 10 30 52 115
Fixed Income Fund 7 23 41 91
Intermediate Government Fixed Income Fund 8 24 41 92
Tax-Exempt Fixed Income Fund 7 23 41 91
International Fixed Income Fund 11 35 61 135
Limited Volatility Fixed Income Fund 8 24 -- --
Treasury Money Market Fund 4 12 20 46
Government Money Market Fund 4 12 20 46
Money Market Fund 4 11 20 44
Tax-Exempt Money Market Fund 3 10 18 41
- ----------------------------------------------------------------------------
</TABLE>
THE EXAMPLE IS BASED UPON TOTAL OPERATING EXPENSES, EXCEPT WITH RESPECT TO THE
TRANSEUROPE FUND AND LIMITED VOLATILITY FIXED INCOME FUND, FOR WHICH IT IS
BASED ON ESTIMATED EXPENSES, FOR THE CURRENT FISCAL YEAR. THE EXAMPLE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN. The purpose of this table is to assist
the investor in understanding the various costs and expenses that may be
directly or indirectly borne by investors in the Trust Class shares of the
Funds. A person who purchases shares through a financial institution may be
charged separate fees by the financial institution. See "The Advisor," "The
Administrator" and "The Distributor."
6
<PAGE>
PORTFOLIO EXPENSES _____________________________________________________________
The purpose of the following table is to help you understand the various cost
and expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in INVESTOR CLASS SHARES.
SHAREHOLDER TRANSACTION EXPENSES (As a percentage of offering price)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Maximum Sales Charge Imposed on Purchases. 4.50%
Redemption Fee(*) None
- --------------------------------------------------------------------------------
</TABLE>
(*) A charge, currently $10.00, is imposed on wires of redemption proceeds.
ANNUAL OPERATING EXPENSES (As a percentage of average net assets) INVESTOR CLASS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY/BALANCED FUNDS
---------------------
SMALL INT'L TRANS ASIAN LATIN AMERICA
VALUE GROWTH CAP EQUITY EUROPE TIGERS EQUITY BALANCED
----- ------ ----- ------ ------ ------ ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees (after fee
waivers, if applicable) .80% .80% .80% 1.00% 1.00% 1.00% 1.00% .70%
12b-1 Fees .25% .25% .25% .25% .25% .25% .25% .25%
Other Expenses (after
fee waivers, if
applicable)(1) .23% .22% .25% .36% .54% .54% .70% .24%
- ----------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers, if
applicable) 1.28% 1.27% 1.30% 1.61% 1.79% 1.79% 1.95% 1.19%
- ----------------------------------------------------------------------------------------
</TABLE>
(1) "Other Expenses" for the TransEurope and Latin America Equity Funds are
based on estimated amounts for the current fiscal year.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
FIXED INCOME FUNDS
------------------
INTERMEDIATE INTERNATIONAL LIMITED
FIXED GOVERNMENT TAX-EXEMPT FIXED VOLATILITY
INCOME FIXED INCOME FIXED INCOME INCOME FIXED INCOME
------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Advisory Fees (after fee
waivers, if
applicable)(1) .50% .50% .48% .80% .50%
12b-1 Fees .25% .25% .25% .25% .25%
Other Expenses (after
fee waivers if
applicable)(2) .23% .24% .25% .31% .24%
- -------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers, if
applicable)(3) .98% .99% .98% 1.36% .99%
- -------------------------------------------------------------------------------------
</TABLE>
(1) The Advisor is waiving on a voluntary basis a portion of its fee from each
Fixed Income Fund (except the International Fixed Income Fund). The Advisor
reserves the right to terminate its waiver at any time in its sole
discretion. Absent such waiver, Advisory Fees for the Funds would be as
follows: Fixed Income Fund--.60%, Intermediate Government Fixed Income
Fund--.60%, Tax-Exempt Fixed Income Fund-- .60% and Limited Volatility
Fixed Income Fund-- .60%. See "The Advisor."
(2) "Other Expenses" for the Limited Volatility Fixed Income Fund are based on
estimated amounts for the current fiscal year.
(3) Absent the voluntary waivers described above, Total Operating Expenses for
the Funds would be as follows: Fixed Income Fund--1.08%, Intermediate
Government Fixed Income Fund--1.09%, Tax-Exempt Fixed Income Fund--1.10%,
and Limited Volatility Fixed Income Fund--1.09%.
7
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET FUNDS
------------------
TREASURY GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY MONEY
MARKET MARKET MARKET MARKET
-------- ---------- ------ ----------
<S> <C> <C> <C> <C>
Advisory Fees (after fee waivers, if
applicable)(1) .20% .20% .20% .19%
12b-1 Fees .25% .25% .25% .25%
Other Expenses (after fee waivers, if
applicable)(2) .16% .16% .15% .13%
- ----------------------------------------------------------------------------
Total Operating Expenses (after fee
waivers, if applicable)(3) .61% .61% .60% .57%
- ----------------------------------------------------------------------------
</TABLE>
(1) The Advisor has waived, on a voluntary basis, a portion of its fees from
each Fund (except the Government Money Market Fund). The Advisor reserves
the right to terminate its waiver at any time in its sole discretion.
Absent such waiver, Advisory Fees would be as follows: Treasury Money
Market Fund--.35%, Money Market Fund--.35% and Tax-Exempt Money Market
Fund--.35%. See "The Advisor."
(2) The Administrator is waiving, on a voluntary basis, a portion of its fee
from each Money Market Fund. The Administrator reserves the right to change
the amount of or terminate its waiver at any time in its sole discretion.
"Other Expenses" have been restated to reflect current administrative fee
waivers. Absent such current waivers, "Other Expenses" for the Funds would
be as follows: Treasury Money Market Fund--.24%, Government Money Market
Fund--.24%, Money Market Fund,--.23% and Tax-Exempt Money Market Fund--
.21%.
(3) Absent the voluntary waivers described above, Total Operating Expenses for
the Funds would be as follows: Treasury Money Market Fund--.84%, Money
Market Fund--.83% and Tax-Exempt Money Market Fund--.81%.
EXAMPLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YR. 3 YRS. 5 YRS. 10 YRS.
----- ------ ------ -------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on
a $1,000 investment assuming (1) imposition of
the maximum sales charge; (2) 5% annual return
and
(3) redemption at the end of each time period:
Value Fund $57 $84 $112 $193
Growth Fund 57 83 112 191
Small Cap Fund 58 84 113 195
International Equity Fund 61 94 129 228
TransEurope Fund 62 99 -- --
Asian Tigers Fund 62 99 138 246
Latin America Equity Fund 64 103 -- --
Balanced Fund 57 81 107 183
Fixed Income Fund 55 75 97 160
Intermediate Government Fixed Income Fund 55 75 97 161
Tax-Exempt Fixed Income Fund 55 75 97 160
International Fixed Income Fund 58 86 116 201
Limited Volatility Fixed Income Fund 55 75 -- --
Treasury Money Market Fund 6 20 34 76
Government Money Market Fund 6 20 34 76
Money Market Fund 6 19 33 75
Tax-Exempt Money Market Fund 6 18 32 71
- ----------------------------------------------------------------------------
</TABLE>
THE EXAMPLE IS BASED ON TOTAL OPERATING EXPENSES, EXCEPT FOR THE TRANSEUROPE
FUND AND LIMITED VOLATILITY FIXED INCOME FUND, FOR WHICH IT IS BASED ON
ESTIMATED EXPENSES FOR THE CURRENT FISCAL YEAR. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN. The purpose of this table is to assist the
investor in understanding the various costs and expenses that may be directly
or indirectly borne by investors in the Investor Class shares of the Funds. A
person who purchases shares through a financial institution may be charged
separate fees by the financial institution. See "The Advisor," "The
Administrator" and "The Distributor."
The rules of the Securities and Exchange Commission require that the maximum
sales charge be reflected in the above table. However, certain investors may
qualify for reduced sales charges. See "Purchase of Shares," "Redemption of
Shares" and "Eligibility For Reduced Sales Charge."
Long-term Shareholders in the Investor Class shares of the Funds (other than
the Money Market Funds) may eventually pay more than the economic equivalent of
the maximum front-end sales charge otherwise permitted by the Conduct Rules of
the National Association of Securities Dealers, Inc.
8
<PAGE>
FINANCIAL HIGHLIGHTS ___________________________________________________________
The following information has been audited by Ernst & Young LLP, the Trust's
independent auditors, as indicated in their report dated January 24, 1997 on
the Trust's financial statements as of December 31, 1996 incorporated by
reference to the Trust's Statement of Additional Information under "Financial
Information." This table should be read in conjunction with the Trust's
financial statements and related notes thereto. As of December 31, 1996, the
TransEurope Fund and Limited Volatility Fixed Income Fund had not yet commenced
operations. Additional performance information is set forth in the Trust's 1997
Annual Report to Shareholders and is available upon request and without charge
by calling 1-800-443-4725.
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
Ratio of Ratio of
Net Expenses
Realized Net Ratio of Investment to
Net Net and Distri- Asset Net Expenses Income Average
Asset Invest- Unrealized Dividends butions Contri- Value Assets to (Loss) to Net
Value ment Gains from Net from bution End End of Average Average Assets
Beginning Income/ (Losses )on Investment Capital of of Total Period Net Net (Excluding
of Period (Loss) Securities Income Gains Capital Period Return (000) Assets Assets Waivers)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
VALUE FUND
----------
TRUST CLASS
1996 $12.26 $ 0.29 $ 2.18 $(0.29) $(1.20) $0.00 $13.24 20.43% $164,710 1.01% 2.19 % 1.03%
1995 9.79 0.34 2.74 (0.35) (0.26) 0.00 12.26 32.02 131,243 1.03 3.07 1.05
1994 10.30 0.35 (0.35) (0.34) (0.17) 0.00 9.79 0.00 61,557 1.06 3.45 1.06
1993(1) 10.00 0.28 0.38 (0.28) (0.08) 0.00 10.30 6.73 54,340 1.10 2.85 1.10
INVESTOR CLASS
1996 $12.28 $ 0.25 $ 2.18 $(0.25) $(1.20) $0.00 $13.26 20.09%* $ 1,672 1.28% 1.94 % 1.28%
1995 9.80 0.32 2.74 (0.32) (0.26) 0.00 12.28 31.72 * 1,497 1.33 2.79 1.33
1994 10.30 0.31 (0.33) (0.31) (0.17) 0.00 9.80 (0.21)* 731 1.37 3.13 1.37
1993(2) 10.41 0.21 (0.03) (0.21) (0.08) 0.00 10.30 1.95 * 435 1.48 2.51 8.99
GROWTH FUND
-----------
TRUST CLASS
1996 $11.61 $ 0.17 $ 2.31 $(0.17) $(0.86) $0.00 $13.06 21.69% $ 95,215 1.02% 1.36 % 1.02%
1995 9.73 0.16 2.88 (0.16) (1.00) 0.00 11.61 31.60 78,216 1.02 1.37 1.02
1994 10.21 0.16 (0.36) (0.16) (0.12) 0.00 9.73 (2.05) 82,710 1.02 1.58 1.03
1993(1) 10.00 0.17 0.33 (0.17) (0.12) 0.00 10.21 5.07 98,581 1.06 1.70 1.07
INVESTOR CLASS
1996 $11.62 $ 0.14 $ 2.33 $(0.14) $(0.86) $0.00 $13.09 21.41%* $ 3,031 1.27% 1.11 % 1.27%
1995 9.74 0.12 2.89 (0.13) (1.00) 0.00 11.62 31.29 * 2,681 1.31 1.10 1.31
1994 10.23 0.13 (0.37) (0.13) (0.12) 0.00 9.74 (2.42)* 1,530 1.33 1.30 1.33
1993(3) 10.44 0.10 (0.08) (0.11) (0.12) 0.00 10.23 (0.23)* 840 1.43 1.24 6.55**
SMALL CAP FUND
--------------
TRUST CLASS
1996 $12.46 $(0.03) $ 2.38 $ 0.00 $(1.78) $0.00 $13.03 19.42% $ 36,375 1.05% (0.27)% 1.05%
1995 9.57 0.02 3.05 (0.02) (0.16) 0.00 12.46 32.13 23,844 1.10 0.18 1.10
1994 10.24 0.03 (0.67) (0.03) 0.00 0.00 9.57 (6.27) 31,527 1.06 0.27 1.06
1993(1) 10.00 0.04 0.24 (0.04) 0.00 0.00 10.24 2.82 53,357 1.09 0.40 1.10
INVESTOR CLASS
1996 $12.46 $(0.07) $ 2.39 $ 0.00 $(1.78) $0.00 $13.00 19.18%* $ 579 1.30% (0.52)% 1.30%
1995 9.58 (0.01) 3.05 0.00 (0.16) 0.00 12.46 31.73 * 553 1.39 (0.08) 1.39
1994 10.25 0.00 (0.67) 0.00 0.00 0.00 9.58 (6.54)* 294 1.38 0.02 1.38
1993(4) 9.51 0.00 0.75 (0.01) 0.00 0.00 10.25 10.55 * 124 1.57 (0.10) 33.84**
<CAPTION>
Ratio of
Net
Investment
Income
(Loss) to
Average
Net Assets Portfolio Average
(Excluding Turnover Commission
Waivers) Rate Rate+++
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
VALUE FUND
----------
TRUST CLASS
1996 2.19 % 58% $0.0493
1995 3.07 37 N/A
1994 3.45 38 N/A
1993(1) 2.85 40 N/A
INVESTOR CLASS
1996 1.94 % 58% $0.0493
1995 2.79 37 N/A
1994 3.13 38 N/A
1993(2) (5.00)** 40 N/A
GROWTH FUND
-----------
TRUST CLASS
1996 1.36 % 58% $0.0600
1995 1.37 71 N/A
1994 1.57 68 N/A
1993(1) 1.69 82 N/A
INVESTOR CLASS
1996 1.11 % 58% $0.0600
1995 1.10 71 N/A
1994 1.30 68 N/A
1993(3) (3.88)** 82 N/A
SMALL CAP FUND
--------------
TRUST CLASS
1996 (0.27)% 158% $0.0599
1995 0.18 142 N/A
1994 0.27 43 N/A
1993(1) 0.39 27 N/A
INVESTOR CLASS
1996 (0.52)% 158% $0.0599
1995 (0.08) 142 N/A
1994 0.02 43 N/A
1993(4) (32.37)** 27 N/A
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Sales load is not included in total return.
** Ratios are high relative to subsequent years as a result of the low initial
asset levels during the Investor Classes' initial year of operations.
+++ Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is required for fiscal years
beginning after 09/01/95.
1. Commenced operations on January 4, 1993. All ratios and total returns for
the period have been annualized.
2. Commenced operations on March 26, 1993. All ratios and total returns for the
period have been annualized.
3. Commenced operations on March 8, 1993. All ratios and total returns for the
period have been annualized.
4. Commenced operations on April 12, 1993. All ratios and total returns for the
period have been annualized.
9
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED) _______________________________________________
<TABLE>
<CAPTION>
Ratio of
Realized Net
and Net Ratio of Investment
Net Net Unrealized Distri- Asset Net Expenses Income
Asset Invest- Gains Dividends butions Contri- Value Assets to (Loss) to
Value ment (Losses) from Net from bution End End of Average Average
Beginning Income on Investment Capital of of Total Period Net Net
of Period (Loss) Securities Income Gains Capital Period Return (000) Assets Assets
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INTERNATIONAL EQUITY FUND
-------------------------
TRUST CLASS
1996 $14.56 $ 0.06 $ 1.37 $(0.04) $(0.15) $0.03 $15.83 10.09%+ $96,442 1.36% 0.44 %
1995 13.00 0.07 1.75 (0.06) (0.20) 0.00 14.56 14.03 77,519 1.38 0.70
1994 12.59 0.02 0.40 0.00 (0.01) 0.00 13.00 3.32 41,324 1.43 0.21
1993(1) 10.00 0.00 2.63 0.00 (0.04) 0.00 12.59 26.55 23,457 1.64 0.03
INVESTOR CLASS
1996 $14.52 $ 0.04 $ 1.35 $ 0.00 $(0.15) $0.03 $15.79 9.85%*+ $ 1,608 1.61% 0.20 %
1995 12.96 0.05 1.73 (0.02) (0.20) 0.00 14.52 13.79 * 1,686 1.68 0.42
1994 12.58 0.02 0.37 0.00 (0.01) 0.00 12.96 3.08 * 1,179 1.73 0.03
1993(2) 10.93 (0.01) 1.70 0.00 (0.04) 0.00 12.58 23.52 * 321 1.92 (0.38)
ASIAN TIGERS FUND
-----------------
TRUST CLASS
1996 $10.45 $ 0.02 $ 1.48 $(0.04) $(0.02) $0.02 $11.91 14.55%++ $33,602 1.54% 0.23 %
1995 9.47 0.12 0.98 (0.12) 0.00 0.00 10.45 11.61 23,145 1.52 1.38
1994(3) 10.00 0.03 (0.53) (0.02) (0.01) 0.00 9.47 (5.07) 17,860 1.60 0.45
INVESTOR CLASS
1996 $10.44 $(0.02) $ 1.48 $(0.01) $(0.02) $0.02 $11.89 14.21%*++ $ 840 1.79% (0.15)%
1995 9.47 0.11 0.95 (0.09) 0.00 0.00 10.44 11.18 * 733 1.81 1.05
1994(4) 10.00 0.01 (0.53) 0.00 (0.01) 0.00 9.47 (5.37)* 705 1.90 0.15
LATIN AMERICA EQUITY FUND
-------------------------
TRUST CLASS
1996(5) $10.00 $(0.02) $ 0.26 $ 0.00 $ 0.00 $0.00 $10.24 2.40% $11,490 2.09% (0.55)%
<CAPTION>
Ratio of
Net
Ratio of Investment
Expenses Income
to (Loss) to
Average Average
Net Net
Assets Assets Portfolio Average
(Excluding (Excluding Turnover Commission
Waivers) Waivers) Rate Rate+++
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTERNATIONAL EQUITY FUND
-------------------------
TRUST CLASS
1996 1.36% 0.44 % 9% $0.0561
1995 1.38 0.70 11 N/A
1994 1.46 0.18 6 N/A
1993(1) 1.64 0.03 13 N/A
INVESTOR CLASS
1996 1.61% 0.20 % 9% $0.0561
1995 1.68 0.42 11 N/A
1994 2.22 (0.46) 6 N/A
1993(2) 20.12** (18.58)** 13 N/A
ASIAN TIGERS FUND
-----------------
TRUST CLASS
1996 1.54% 0.23 % 24% $0.0106
1995 1.60 1.30 28 N/A
1994(3) 1.71 0.34 13 N/A
INVESTOR CLASS
1996 1.79% (0.15)% 24% $0.0106
1995 1.88 0.98 28 N/A
1994(4) 2.75** (0.70)** 13 N/A
LATIN AMERICA EQUITY FUND
-------------------------
TRUST CLASS
1996(5) 2.09% (0.55)% 10% $0.0004
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Sales load is not included in total return.
** Ratios are high relative to subsequent years as a result of the low initial
asset levels during the Investor Classes' initial year of operations.
+ The total return for the period ended December 31, 1996 includes the effect
of a capital contribution from an affiliate of the Advisor. Without the
capital contribution, the total return for the Trust Class and Investor
Class would have been 9.87% and 9.64%, respectively.
++ The total return for the period ended December 31, 1996 includes the effect
of a capital contribution from an affiliate of the Advisor. Without the
capital contribution, the total return for the Trust Class and Investor
Class would have been 14.36% and 14.02%, respectively.
+++ Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is required for fiscal years
beginning after 09/01/95.
1. Commenced operations on January 4, 1993. All ratios and total returns for
the period have been annualized.
2. Commenced operations on April 12, 1993. All ratios and total returns for
the period have been annualized.
3. Commenced operations on January 3, 1994. All ratios and total returns for
the period have been annualized.
4. Commenced operations on January 12, 1994. All ratios and total returns for
the period have been annualized.
5. Commenced operations on July 1, 1996. All ratios and total returns for the
period have been annualized.
10
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED) _______________________________________________
<TABLE>
<CAPTION>
Ratio of Ratio of
Realized Net Expenses
and Net Ratio of Investment to
Unrealized Distri- Asset Net Expenses Income Average
Net Asset Net Gains Dividends butions Value Assets to to Net
Value Invest- (Losses) from Net from End End of Average Average Assets
Beginning ment on Investment Capital of Total Period Net Net (Excluding
of Period Income Securities Income Gains Period Return (000) Assets Assets Waivers)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCED FUND
-------------
TRUST CLASS
1996 $10.75 $0.35 $ 1.02 $(0.35) $(0.79) $10.98 13.15 % $ 54,546 0.94% 3.14% 0.94%
1995 9.53 0.39 1.65 (0.39) (0.43) 10.75 21.85 49,899 0.92 3.74 0.92
1994 10.04 0.30 (0.50) (0.30) (0.01) 9.53 (2.11) 72,086 0.94 3.11 0.94
1993(1) 10.00 0.29 0.39 (0.29) (0.35) 10.04 7.09 58,510 0.97 2.88 0.97
INVESTOR CLASS
1996 $10.75 $0.30 $ 1.04 $(0.32) $(0.79) $10.98 12.86 %* $ 3,710 1.19% 2.89% 1.19%
1995 9.53 0.34 1.67 (0.36) (0.43) 10.75 21.52* 3,949 1.22 3.36 1.22
1994 10.03 0.27 (0.49) (0.27) (0.01) 9.53 (2.29)* 2,894 1.24 2.86 1.34
1993(4) 10.28 0.20 0.12 (0.22) (0.35) 10.03 4.07* 1,265 1.30 2.30 5.06**
FIXED INCOME FUND
-----------------
TRUST CLASS
1996 $10.32 $0.59 $(0.26) $(0.59) $ 0.00 $10.06 3.42 % $123,930 0.73% 5.92% 0.83%
1995 9.30 0.59 $ 1.02 (0.59) 0.00 10.32 17.75 125,563 0.74 5.97 0.84
1994 10.23 0.54 $(0.93) (0.54) 0.00 9.30 (3.82) 92,402 0.72 5.45 0.82
1993(1) 10.00 0.47 $ 0.50 (0.47) (0.27) 10.23 9.92 131,002 0.77 4.60 0.87
INVESTOR CLASS
1996 $10.35 $0.57 $(0.26) $(0.57) $ 0.00 $10.09 3.24 %* $ 459 0.98% 5.65% 1.08%
1995 9.32 0.55 1.04 (0.56) 0.00 10.35 17.40* 646 0.99 5.72 1.09
1994 10.24 0.50 (0.90) (0.52) 0.00 9.32 (3.97)* 442 0.98 5.38 1.08
1993(2) 10.30 0.35 0.23 (0.37) (0.27) 10.24 7.44* 86 1.06 4.08 42.44**
INTERMEDIATE GOVERNMENT FIXED INCOME FUND
-----------------------------------------
TRUST CLASS
1996 $10.06 $0.54 $(0.21) $(0.54) $ 0.00 $ 9.85 3.51 % $ 56,895 0.74% 5.38% 0.84%
1995 9.33 0.54 0.73 (0.54) 0.00 10.06 13.86 73,466 0.73 5.48 0.83
1994 10.08 0.47 (0.75) (0.47) 0.00 9.33 (2.78) 91,002 0.74 4.88 0.84
1993(1) 10.00 0.41 0.18 (0.41) (0.10) 10.08 6.04 104,826 0.76 4.15 0.86
INVESTOR CLASS
1996 $10.05 $0.49 $(0.18) $(0.51) $ 0.00 $ 9.85 3.30 %* $ 251 0.99% 4.87% 1.09%
1995 9.32 0.49 0.76 (0.52) 0.00 10.05 13.59* 2,946 0.98 5.18 1.08
1994 10.07 0.43 (0.73) (0.45) 0.00 9.32 (3.03)* 1,133 1.02 5.05 1.12
1993(3) 10.21 0.28 (0.02) (0.30) (0.10) 10.07 3.42* 46 1.04 3.85 77.08**
<CAPTION>
Ratio of
Net
Investment
Income
(Loss) to
Average
Net
Assets Portfolio Average
(Excluding Turnover Commission
Waivers) Rate Rate+++
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BALANCED FUND
-------------
TRUST CLASS
1996 3.14 % 104% $0.0496
1995 3.74 85 N/A
1994 3.11 85 N/A
1993(1) 2.88 126 N/A
INVESTOR CLASS
1996 2.89 % 104% $0.0496
1995 3.36 85 N/A
1994 2.76 85 N/A
1993(4) (1.46)** 126 N/A
FIXED INCOME FUND
-----------------
TRUST CLASS
1996 5.82 % 194% N/A
1995 5.87 59 N/A
1994 5.35 126 N/A
1993(1) 4.50 163 N/A
INVESTOR CLASS
1996 5.55 % 194% N/A
1995 5.62 59 N/A
1994 5.28 126 N/A
1993(2) (37.30)** 163 N/A
INTERMEDIATE GOVERNMENT FIXED INCOME FUND
-----------------------------------------
TRUST CLASS
1996 5.28 % 179% N/A
1995 5.38 115 N/A
1994 4.78 124 N/A
1993(1) 4.05 81 N/A
INVESTOR CLASS
1996 4.77 % 179% N/A
1995 5.08 115 N/A
1994 4.95 124 N/A
1993(3) (72.19)** 81 N/A
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Sales load is not included in total return.
** Ratios are high relative to subsequent years as a result of the low initial
asset levels during the Investor Classes' initial year of operations.
+++ Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is required for fiscal years
beginning after 09/01/95.
1. Commenced operations on January 4, 1993. All ratios and total returns for
the period have been annualized.
2. Commenced operations on March 12, 1993. All ratios and total returns for
the period have been annualized.
3. Commenced operations on April 12, 1993. All ratios and total returns for
the period have been annualized.
4. Commenced operations on March 9, 1993. All ratios and total returns for the
period have been annualized.
11
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED) _______________________________________________
<TABLE>
<CAPTION>
Ratio of
Net
Investment
Ratio of Ratio of Income
Realized Net Expenses (Loss)
and Net Ratio of Investment to to
Net Unrealized Distri- Asset Net Expenses Income Average Average
Asset Net Gains Dividends butions Value Assets to to Net Net
Value Invest- (Losses) from Net from End End of Average Average Assets Assets
Beginning ment on Investment Capital of Total Period Net Net (Excluding (Excluding
of Period Income Securities Income Gains Period Return (000) Assets Assets Waivers) Waivers)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TAX-EXEMPT FIXED INCOME FUND
----------------------------
TRUST CLASS
1996 $10.20 $0.50 $(0.21) $(0.50) $ 0.00 $ 9.99 2.96% $ 39,756 0.73% 4.95% 0.85% 4.83%
1995 9.26 0.48 0.94 (0.48) 0.00 10.20 15.67 50,079 0.75 4.84 0.87 4.72
1994 10.23 0.44 (0.94) (0.44) (0.03) 9.26 (4.93) 53,588 0.71 4.54 0.84 4.41
1993(1) 10.00 0.42 0.42 (0.42) (0.19) 10.23 8.64 67,162 0.75 4.17 0.85 4.07
INVESTOR CLASS
1996 $10.18 $0.43 $(0.17) $(0.47) $ 0.00 $ 9.97 2.70%* $ 680 0.98% 4.70% 1.10% 4.58%
1995 9.24 0.43 0.97 (0.46) 0.00 0.18 15.43 * 1,131 1.00 4.59 1.12 4.47
1994 10.22 0.40 (0.93) (0.42) (0.03) 9.24 (5.27)* 1,059 0.97 4.35 1.10 4.22
1993(2) 10.29 0.32 0.14 (0.34) (0.19) 10.22 5.73 * 428 1.05 3.88 11.86** (6.93)**
INTERNATIONAL FIXED INCOME FUND
-------------------------------
TRUST CLASS
1996 $10.58 $0.48 $(0.18) $(0.64) $ 0.00 $10.24 2.82% $ 17,561 1.11% 4.66% 1.11% 4.66%
1995 9.54 0.62 1.38 (0.96) 0.00 10.58 20.99 17,433 1.10 5.86 1.16 5.80
1994 10.43 0.56 (0.72) (0.55) (0.18) 9.54 (1.47) 15,021 1.16 5.09 1.22 5.03
1993(3) 10.00 0.54 0.94 (0.64) (0.41) 10.43 16.33 16,488 1.21 5.95 1.21 5.95
INVESTOR CLASS
1996 $10.56 $0.54 $(0.27) $(0.60) $ 0.00 $10.23 2.62%* $ 112 1.36% 4.43% 1.36% 4.43%
1995 9.53 0.52 1.45 (0.94) 0.00 10.56 20.68 * 125 1.35 5.57 1.41 5.51
1994 10.42 0.46 (0.64) (0.53) (0.18) 9.53 (1.71)* 87 1.41 5.03 7.54 (1.10)
1993(1) 10.88 0.40 0.12 (0.57) (0.41) 10.42 6.61 * 17 1.56 5.85 319.45** (312.04)**
TREASURY MONEY MARKET FUND
--------------------------
TRUST CLASS
1996 $ 1.00 $0.05 $ 0.00 $(0.05) $ 0.00 $ 1.00 4.80% $156,455 0.44% 4.70% 0.59% 4.55%
1995 1.00 0.05 0.00 (0.05) 0.00 1.00 5.28 110,475 0.44 5.16 0.59 5.01
1994 1.00 0.04 0.00 (0.04) 0.00 1.00 3.58 111,545 0.45 3.50 0.61 3.34
1993(1) 1.00 0.03 0.00 (0.03) 0.00 1.00 2.56 108,495 0.47 2.53 0.62 2.38
INVESTOR CLASS
1996 $ 1.00 $0.04 $ 0.00 $(0.04) $ 0.00 $ 1.00 4.54% $ 10,910 0.69% 4.45% 0.84% 4.30%
1995 1.00 0.05 0.00 (0.05) 0.00 1.00 5.02 7,931 0.69 4.89 0.84 4.74
1994 1.00 0.03 0.00 (0.03) 0.00 1.00 3.32 3,231 0.70 3.52 0.86 3.36
1993(2) 1.00 0.02 0.00 (0.02) 0.00 1.00 2.29 1,347 0.75 2.28 5.23** (2.20)**
<CAPTION>
Portfolio Average
Turnover Commission
Rate Rate+++
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TAX-EXEMPT FIXED INCOME FUND
----------------------------
TRUST CLASS
1996 98% N/A
1995 129 N/A
1994 146 N/A
1993(1) 149 N/A
INVESTOR CLASS
1996 98% N/A
1995 129 N/A
1994 146 N/A
1993(2) 149 N/A
INTERNATIONAL FIXED INCOME FUND
-------------------------------
TRUST CLASS
1996 85% N/A
1995 105 N/A
1994 138 N/A
1993(3) 146 N/A
INVESTOR CLASS
1996 85% N/A
1995 105 N/A
1994 138 N/A
1993(1) 146 N/A
TREASURY MONEY MARKET FUND
--------------------------
TRUST CLASS
1996 N/A N/A
1995 N/A N/A
1994 N/A N/A
1993(1) N/A N/A
INVESTOR CLASS
1996 N/A N/A
1995 N/A N/A
1994 N/A N/A
1993(2) N/A N/A
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Sales load is not included in total return.
** Ratios are high relative to subsequent years as a result of the low initial
asset levels during the Investor Classes' initial year of operations.
+++ Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is required for fiscal years
beginning after 09/01/95.
1. Commenced operations on January 4, 1993. All ratios and total returns for
the period have been annualized.
2. Commenced operations on March 9, 1993. All ratios and total returns for the
period have been annualized.
3. Commenced operations on February 7, 1993. All ratios and total returns for
the period have been annualized.
4. Commenced operations on April 26, 1993. All ratios and total returns for the
period have been annualized.
12
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED) _______________________________________________
<TABLE>
<CAPTION>
Ratio of
Net
Investment
Net Ratio of Ratio of Income/
Realized Net Expenses (Loss)
and Distri- Net Ratio of Investment to to
Net Unrealized butions Asset Net Expenses Income Average Average
Asset Net Gains Dividends from Value Assets to to Net Net
Value Invest- (Losses) from Net Realized End End of Average Average Assets Assets
Beginning ment on Investment Capital of Total Period Net Net (Excluding (Excluding
of Period Income Securities Income Gains Period Return (000) Assets Assets Waivers) Waivers)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GOVERNMENT MONEY MARKET FUND
----------------------------
TRUST CLASS
1996 $1.00 $0.05 $0.00 (0.05) $0.00 $1.00 5.08% $256,392 0.44% 4.96% 0.44% 4.96%
1995 1.00 0.05 0.00 (0.05) 0.00 $1.00 5.59 207,615 0.42 5.45 0.42 5.45
1994 1.00 0.04 0.00 (0.04) 0.00 $1.00 3.89 157,140 0.42 3.81 0.42 3.81
1993(1) 1.00 0.03 0.00 (0.03) 0.00 $1.00 3.00 159,401 0.45 2.92 0.45 2.92
INVESTOR CLASS
1996 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 4.82% $ 5,093 0.69% 4.71% 0.69% 4.71%
1995 1.00 0.05 0.00 (0.05) 0.00 $1.00 5.33 3,002 0.67 5.18 0.67 5.18
1994 1.00 0.04 0.00 (0.04) 0.00 $1.00 3.63 2,739 0.67 3.62 0.67 3.62
1993(4) 1.00 0.02 0.00 (0.02) 0.00 $1.00 2.78 1,814 0.72 2.69 2.37 1.04**
MONEY MARKET FUND
-----------------
TRUST CLASS
1996 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 5.13% $598,715 0.43% 5.02% 0.58% 4.87%
1995 1.00 0.06 0.00 (0.06) 0.00 $1.00 5.64 475,688 0.41 5.50 0.56 5.35
1994 1.00 0.04 0.00 (0.04) 0.00 $1.00 3.97 460,583 0.41 3.93 0.56 3.78
1993(1) 1.00 0.03 0.00 (0.03) 0.00 $1.00 3.01 367,110 0.46 2.92 0.61 2.77
INVESTOR CLASS
1996 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 4.87% $ 1,466 0.68% 4.77% 0.83% 4.62%
1995 1.00 0.05 0.00 (0.05) 0.00 $1.00 5.38 1,358 0.66 5.22 0.81 5.07
1994 1.00 0.04 0.00 (0.04) 0.00 $1.00 3.71 605 0.66 4.13 0.81 3.98
1993(2) 1.00 0.02 0.00 (0.02) 0.00 $1.00 2.76 118 0.72 2.69 10.48 (7.09)**
TAX-EXEMPT MONEY MARKET FUND
----------------------------
TRUST CLASS
1996 $1.00 $0.03 $0.00 $(0.03) $0.00 $1.00 3.14% $187,629 0.40% 3.10% 0.56% 2.94%
1995 1.00 0.03 0.00 (0.03) 0.00 $1.00 3.49 167,945 0.41 3.44 0.56 3.29
1994 1.00 0.02 0.00 (0.02) 0.00 $1.00 2.50 161,054 0.43 2.52 0.59 2.36
1993(1) 1.00 0.02 0.00 (0.02) 0.00 $1.00 1.98 116,000 0.45 1.97 0.60 1.82
INVESTOR CLASS
1996 $1.00 $0.03 $0.00 $(0.03) $0.00 $1.00 2.88% $ 2,807 0.65% 2.85% 0.81% 2.69%
1995 1.00 0.03 0.00 (0.03) 0.00 $1.00 3.24 3,244 0.66 3.19 0.81 3.04
1994 1.00 0.02 0.00 (0.02) 0.00 $1.00 2.24 4,204 0.68 2.31 0.84 2.15
1993(3) 1.00 0.01 0.00 (0.01) 0.00 $1.00 1.65 1,394 0.74 1.81 4.88 (2.33)**
<CAPTION>
Portfolio Average
Turnover Commission
Rate Rate+++
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GOVERNMENT MONEY MARKET FUND
----------------------------
TRUST CLASS
1996 N/A N/A
1995 N/A N/A
1994 N/A N/A
1993(1) N/A N/A
INVESTOR CLASS
1996 N/A N/A
1995 N/A N/A
1994 N/A N/A
1993(4) N/A N/A
MONEY MARKET FUND
-----------------
TRUST CLASS
1996 N/A N/A
1995 N/A N/A
1994 N/A N/A
1993(1) N/A N/A
INVESTOR CLASS
1996 N/A N/A
1995 N/A N/A
1994 N/A N/A
1993(2) N/A N/A
TAX-EXEMPT MONEY MARKET FUND
----------------------------
TRUST CLASS
1996 N/A N/A
1995 N/A N/A
1994 N/A N/A
1993(1) N/A N/A
INVESTOR CLASS
1996 N/A N/A
1995 N/A N/A
1994 N/A N/A
1993(3) N/A N/A
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
** Ratios are high relative to subsequent years as a result of the low initial
asset levels during the Investor Classes' initial year of operations.
+++ Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is required for fiscal years
beginning after 09/01/95.
1. Commenced operations on January 4, 1993. All ratios and total returns for
the period have been annualized.
2. Commenced operations on March 31, 1993. All ratios and total returns for
the period have been annualized.
3. Commenced operations on April 13, 1993. All ratios and total returns for the
period have been annualized.
4. Commenced operations on April 22, 1993. All ratios and total returns for the
period have been annualized.
13
<PAGE>
................................................................................
[SYMBOL WHAT IS AN
APPEARS INTERMEDIARY?
HERE]
........................................
Any entity, such as a bank, broker-
dealer, other financial institution,
association or organization that
has entered into an arrangement with
the Distributor to sell Investor Class
shares to its customers.
........................................
YOUR ACCOUNT AND DOING BUSINESS WITH US
Trust Class and Investor Class shares of a Fund are sold on a continuous basis
and may be purchased directly from the Trust's Transfer Agent, DST Systems,
Inc., 1004 Baltimore Avenue, Kansas City, Missouri 64105, either by mail,
telephone or by wire. Shares may also be purchased through financial
institutions or broker-dealers which have established a dealer agreement with
the Distributor ("Intermediaries"). Shares of each Fund are offered only to
residents of states in which the shares are eligible for purchase. For more
information about the following topics, see "Additional Information About Doing
Business with Us."
- --------------------------------------------------------------------------------
HOW TO BUY,
SELL AND Trust Class shares of the Funds may be purchased through
EXCHANGE accounts established with LaSalle National Bank ("LaSalle"),
SHARES THROUGH its affiliates and correspondents.
INTERMEDIARIES Investor Class shares of the Funds may be purchased through
Intermediaries (including LaSalle) which provide various
services to their customers ("Customers"). Contact your
Intermediary for information about the services available to
you and for specific instructions on how to buy, sell and
exchange shares. To allow for processing and transmittal of
orders to the Transfer Agent on the same day, Intermediaries
may impose earlier cut-off times for receipt of purchase
orders. Certain Intermediaries may charge account fees.
Information concerning shareholder services and any charges
will be provided to the customer by the Intermediary. Certain
of these Intermediaries may be required to register as broker-
dealers under state law.
The shares you purchase through an Intermediary may be
held "of record" by that Intermediary. If you want to
transfer the registration of shares beneficially owned by
you, but held "of record" by an Intermediary, you should call
the Intermediary to request this change.
HOW TO BUY
INVESTOR CLASS
SHARES FROM
THE TRANSFER
AGENT
Opening an
Account Investors may purchase Investor Class shares of any Fund by
By Mail completing and signing an Account Application form and
mailing it, along with a check (or other negotiable bank
instrument or money order) payable to "Rembrandt Funds(R),
[Fund Name]," to Rembrandt Funds, P.O. Box 419402, Kansas
City, Missouri 64141-6402. Subsequent purchases of shares may
be made at any time by mailing a check (or other negotiable
bank draft or money order) to the Transfer Agent.
All purchases made by check should be in U.S. dollars and
made payable to the Rembrandt Funds(R). Third party checks,
credit cards, credit card checks and cash will not be
accepted. When purchases are made by check, redemptions will
not be allowed until the investment being redeemed has been
in the account for 15 days.
Account Application forms can be obtained by calling 1-
800-443-4725.
14
<PAGE>
By Telephone If an Account Application has been previously received, an
investor may also purchase shares by telephone by calling 1-
800-443-4725. With respect to the Investor Class shares,
orders by telephone will not be executed until payment has
been received. If a check received for purchase of Investor
Class shares does not clear, the purchase will be canceled
and the investor could be liable for any losses or fees
incurred.
By Wire
Shareholders having an account with a commercial bank that
is a member of the Federal Reserve System may purchase
shares of any Fund by requesting their bank to transmit
funds by wire to: United Missouri Bank, N.A.; ABA #10-10-
00695; for Account Number 98-7052-349-3; Further Credit:
[Name of Fund]. The Shareholder's name and account number
must be specified in the wire.
Initial Purchases: Before making an initial investment by
wire, an investor must first telephone 1-800-443-4725 to be
assigned an account number. The investor's name, account
number, taxpayer identification number or Social Security
number, and address must be specified in the wire. In
addition, an Account Application should be promptly
forwarded to: Rembrandt Funds, P.O. Box 419402, Kansas City,
Missouri 64141-6402.
Subsequent Purchases: Additional investments may be made
at any time through the wire procedures described above,
which must include a Shareholder's name and account number.
The investor's bank may impose a fee for investments by
wire.
Other Other Shareholders who desire to transfer the registration
Information of their shares should contact the Administrator.
Regarding
Purchases Purchases of Investor Class shares may be made by direct
deposit or Automated Clearing House transactions.
No certificates representing shares will be issued.
SALES CHARGES The following table shows the regular sales charge on
Investor Class shares of the Equity, Balanced and Fixed
Income Funds payable by a "single purchaser" (defined below)
together with the sales charge reallowed to certain
financial institutions (the "reallowance").
W
<TABLE>
-----------------------------------------------------------------
<CAPTION>
SALES CHARGE AS SALES CHARGE AS REALLOWANCE AS
A PERCENTAGE OF A PERCENTAGE OF PERCENTAGE OF
AMOUNT OF OFFERING PRICE NET AMOUNT OFFERING PRICE
PURCHASE PER SHARE INVESTED PER SHARE
-----------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 4.50% 4.71% 4.05%
$100,000 but less than
$250,000 3.50% 3.63% 3.15%
$250,000 but less than
$500,000 3.00% 3.09% 2.70%
$500,000 and above 1.00% 1.01% 0.90%
-----------------------------------------------------------------
</TABLE>
The sales charge shown in the table is the maximum sales
charge that applies to sales of Investor Class shares. Under
certain circumstances, reallowances of up to the entire
amount of the sales charge may be paid to certain financial
institutions, who might then be deemed to be "underwriters"
under the Securities Act of 1933.
15
<PAGE>
The 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 from the sales charge it receives or from any
other source available to it. Under any such program, the
Distributor may provide incentives, in the form of cash or
other compensation, including merchandise, airline vouchers,
trips and vacation packages, to dealers selling shares of
the Funds.
ELIGIBILITY FOR Investors in Investor Class shares of the Equity and Fixed
REDUCED SALES Income Funds will be entitled to lower, graduated sales
CHARGE charges if the investors' total investment in a Fund exceeds
certain thresholds. In calculating the sales charge rates
applicable to current purchases of Investor Class shares of
Rights of the Equity, Balanced and Fixed Income Funds, a "single
Accumulation purchaser" is entitled to accumulate current purchases with
the current market value of previously purchased shares of
the Fund and the other eligible Funds of the Trust which are
sold subject to a comparable sales charge (the "Eligible
Funds").
The term "single purchaser" refers to (i) an individual,
(ii) an individual and spouse purchasing shares for their
own account or for trust or custodial accounts for their
minor children, or (iii) a fiduciary purchasing for any one
trust, estate or fiduciary account, including employee
benefit plans created under Sections 401 or 457 of the
Internal Revenue Code of 1986, as amended (the "Code"),
including related plans of the same employer.
To be entitled to a reduced sales charge based upon
shares already owned, the investor (or the Intermediary)
must ask the Transfer Agent for such reduction at the time
of purchase and provide the account number(s) of the
investor, and, as applicable, the investor and spouse,
and/or their minor children. The Funds may amend or
terminate this right of accumulation at any time as to
purchases made thereafter.
Letter of By submitting a Letter of Intent (the "Letter") to the
Intent Transfer Agent, a "single purchaser" may purchase Investor
Class shares of the Fund and the other Eligible Funds during
a 13-month period at the sales charge rates applicable to
the aggregate amount of the intended purchases stated in the
Letter. The Letter may apply to purchases made up to 90 days
before the date of the Letter. To receive credit for such
prior purchases, the Shareholder must notify the Transfer
Agent at the time the Letter is submitted that there are
prior purchases that may apply, and, at the time of later
purchases, notify the Transfer Agent that such purchases are
applicable under the Letter.
Other No sales charge is imposed on Investor Class shares of the
Circumstances Funds: (i) issued in plans of reorganization, such as
mergers, asset acquisitions and exchange offers, to which
the Trust is a party; (ii) sold to dealers or brokers that
have a sales agreement with the Distributor, for their own
account or for retirement plans for their employees; (iii)
sold to employees (and their spouses) of dealers or brokers
that certify to the Transfer Agent at the time of purchase
that such purchase is for their own account (or for the
benefit of such employees' minor children); (iv) in
aggregate purchases of $1 million or more by tax
16
<PAGE>
.......................................
HOW DOES
[SYMBOL AN
APPEARS EXCHANGE TAKE
HERE] PLACE?
When making an exchange, you
authorize the sale of your
shares of one or more Funds in
order to purchase the shares
of another Fund. In other words,
you are executing a sell order
and then a buy order. This sale
of your shares is a taxable
event which could result in
a taxable gain or loss.
.......................................
exempt organizations enumerated in Section 501(c) of the
Code, or employee benefit plans created under Sections 401 or
457 of the Code; (v) sold to employees (and immediate family
members) of the Advisor and its affiliates or sold to retired
employees (and immediate family members) of ABN AMRO Holding
N.V. and its affiliates and subsidiaries; (vi) purchased with
the proceeds of trust or employee benefit plan distributions
for which the Advisor and its affiliates act in a fiduciary
capacity (vii) purchased with the proceeds of any
distribution made by a qualified employee benefit plan
(including a 401(k) Plan), or rollovers from individual
Retirement Accounts ("IRAs"); (viii) sold to the participants
in a 401(k) Plan that is a shareholder of any Fund; (ix)
acquired in any exchange of Trust Class shares for Investor
Class shares of the same Fund; (x) sold through broker-
dealers who provide mutual fund transaction services, and who
have entered into an arrangement with the Distributor
relating to waivers of sales charges (for more information,
please see the Statement of Additional Information); or (xi)
sold to existing customers of LaSalle National Bank and its
banking affiliates. Certain broker-dealers who provide such
mutual fund transaction services may charge a fee for this
service.
Automatic You may systematically buy Investor Class shares through
Investment deductions from your checking account, provided these
Plan ("AIP") accounts are maintained through banks which are part of the
Automated Clearing House system. Upon notice, the amount you
commit to the AIP may be changed or canceled at any time. The
minimum pre-authorized investment amount is $50 per month.You
may obtain an AIP application form by calling 1-800-443-4725.
EXCHANGING
SHARES
When Can You Once payment for your shares has been received and accepted
Exchange (i.e., an account has been established), you may exchange
Shares? some or all of your Investor Class or Trust Class shares for
Investor Class or Trust Class shares of other Funds within
the Trust. Exchanges are made at net asset value plus any
applicable sales charge. Any Shareholder or Customer who wishes
to make an exchange must have received a current prospectus of
the Fund in which he or she wishes to invest before the
exchange will be effected. For an established account,
exchanges will be made only after instructions in writing or by
telephone (an "Exchange Request") are received by the Transfer
Agent.
When Do Sales Non-Money Market Funds currently impose a sales charge on
Charges Apply Investor Class shares. If you exchange your Investor Class
to an shares into one of these Funds, you will have to pay a sales
Exchange? charge on any portion of your exchanged Investor Class shares
for which you have not previously paid a sales charge.
17
<PAGE>
................................................................................
[SYMBOL WHAT IS A
APPEARS SIGNATURE
HERE] GUARANTEE?
A signature guarantee verifies the
authenticity of your signature and
may be obtained from any of the
following: banks, brokers, dealers,
certain credit unions, securities
exchange or association, clearing
agency or savings association. A
notary public cannot provide a
signature guarantee.
........................................
If you buy Investor Class shares of a "non-money market"
fund and you receive a sales charge waiver, you will be
deemed to have paid the sales charge for purposes of this
exchange privilege.
The Trust reserves the right to change the terms and
conditions of the exchange privilege discussed herein, or to
terminate the exchange privilege, upon 60 days' notice.
Requesting an To request an exchange, you must provide proper written
Exchange of instructions to the Transfer Agent. Telephone exchanges will
Shares also be accepted if you previously elected this option on
your account application.
To exchange shares beneficially owned by a Customer, but
held of record by an Intermediary or, LaSalle, the Customer
should contact the Intermediary or, where applicable,
LaSalle, who will contact the Transfer Agent and effect the
exchange on behalf of the Customer.
If an Exchange Request in good order is received by the
Transfer Agent by 4:00 p.m., Eastern time, on any Business
Day, the exchange usually will occur on that day.
REDEMPTION OF Shareholders may redeem their shares on any Business Day.
SHARES Redemption requests may be made directly to the Customer's
Intermediary. Shareholders may also redeem their shares by
mail or by telephone. Redemption proceeds may not be
transmitted by Federal Reserve wire on federal holidays
restricting wire transfers. Redemption orders for the Equity,
Balanced and Fixed Income Funds must be received by 4:00
p.m., Eastern time. Redemption orders for the Money Market
Funds must be received by 1:00 p.m., Eastern time.
By Mail A written request for redemption must be received by the
Transfer Agent in order to constitute a valid request for
redemption. The Transfer Agent may require that the signature
on the written request be guaranteed by a bank which is a
member of the Federal Deposit Insurance Corporation, a trust
company, broker, dealer, credit union (if authorized under
state law), securities exchange or association, clearing
agency or savings association. The signature guarantee
requirement will be waived if all of the following conditions
apply: (1) the redemption is for $5,000 worth of shares or
less, (2) the redemption check is payable to the
Shareholder(s) of record, and (3) the redemption check is
mailed to the Shareholder(s) at the address of record. The
Shareholder may also have the proceeds mailed to a commercial
bank account previously designated on the Account Application
or by written instruction to the Transfer Agent. There is no
charge for having redemption requests mailed to a designated
bank account.
18
<PAGE>
By Telephone Shares may be redeemed by telephone if the Shareholder
elects that option on the Account Application. The
Shareholder may have the proceeds mailed to his or her
address or mailed or wired to a commercial bank account
previously designated on the Account Application. Under most
circumstances, payments will be transmitted on the next
Business Day following receipt of a valid request for
redemption. Wire transfer redemption requests may be made by
the Shareholder by calling the Transfer Agent at 1-800-443-
4725, who will deduct a wire charge of $10.00 from the
amount of the redemption. Trust Class Shareholders may have
proceeds of redemptions wired without payment of the wire
charge.
Neither the Trust nor the Transfer Agent will be
responsible for any loss, liability, cost or expense for
acting upon wire instructions or upon telephone instructions
that it reasonably believes to be genuine. The Trust and the
Transfer Agent will each employ reasonable procedures to
confirm that instructions communicated by telephone are
genuine, including requiring a form of personal
identification prior to acting upon instructions received by
telephone and recording telephone instructions. If market
conditions are extraordinarily active, or other
extraordinary circumstances exist, and a Shareholder
experiences difficulties placing redemption orders by
telephone, the Shareholder may wish to consider placing the
order by other means. Shareholders may not close their
accounts by telephone.
Other All redemption orders are effected at the net asset value
Information per share next determined after receipt of a valid request
Regarding for redemption, as described above. Payment to Shareholders
Redemptions for shares redeemed will be made within seven days after
receipt by the Transfer Agent of the valid request for
redemption.
At various times, a Fund may be requested to redeem
shares for which it has not yet received good payment. In
such circumstances, the forwarding of proceeds will be
delayed for at least 15 days from the date of purchase or
until payment has been collected for the purchase of such
shares. The Funds intend to pay cash for all shares
redeemed, but under conditions which make payment in cash
unwise, payment may be made wholly or partly in portfolio
securities with a market value equal to the redemption
price. In such cases, a Shareholder may incur brokerage
costs in converting such securities to cash.
See "Purchase and Redemption of Shares" in the Statement
of Additional Information for examples of when the right of
redemption may be suspended.
Systematic The Funds offer a Systematic Withdrawal Plan ("SWP") which
Withdrawal Plan may be utilized by Investor Class Shareholders who wish to
receive regular distributions from their account. Upon
commencement of the SWP, the account must have a current
value of $5,000 or more. Shareholders may elect to receive
automatic payments via check or Automated Clearing House of
$50 or more on a monthly, quarterly, semi-annual or annual
basis. A SWP Application Form may be obtained by calling
1-800-443-4725.
Shareholders should realize that if withdrawals exceed
income dividends, their invested principal in the account
will be depleted. Thus, depending on the frequency and
19
<PAGE>
................................................................................
[SYMBOL WHAT ARE
APPEARS INVESTMENT
HERE] OBJECTIVES AND
POLICIES?
Each Fund's investment objective is
a statement of what it seeks to
achieve. It is important to make sure
that the investment objective matches
your own financial needs and
circumstances. The investment policies
section spells out the types of
securities in which each Fund invests.
.............................................
amounts of the withdrawal payments and/or any fluctuations in
the net asset value per share, their original investment
could be exhausted entirely. To participate in the SWP,
Shareholders must have their dividends automatically
reinvested. Shareholders may change or cancel the SWP at any
time, upon written notice to the Transfer Agent.
CHECKWRITING Checkwriting is offered free of charge to Investor Class
SERVICE Shareholders in the Money Market Funds. An Investor Class
Shareholder in any Money Market Fund may redeem shares by
(Money Market writing checks on his or her account for $500 or more. Once a
Funds) Shareholder has signed and returned a signature card, he or
she will receive a supply of checks. A check may be made
payable to any person, and the Shareholder's account will
continue to earn dividends until the check clears.
Because of the difficulty of determining in advance the
exact value of a Fund account, a Shareholder may not use a
check to close his or her account. The checks are free, but a
Shareholder's account will be charged a fee for stopping
payment of a check upon a Shareholder's request or if the
check cannot be honored because of insufficient funds or
other valid reasons.
INVESTMENT OBJECTIVE AND POLICIES ______________________________________________
VALUE FUND
The Value Fund seeks a high level of total return through
capital appreciation and current income.
The Value Fund will invest at least 65% of its total assets
in U.S. common stocks that the Advisor believes are
undervalued and present the opportunity to increase
shareholder value. The Value Fund will invest in common stocks
that are traded on a national securities exchange or are
actively traded in the over-the-counter market and that: (i)
are priced below their intrinsic value as determined by the
Advisor's dividend discount model; (ii) have consistently paid
dividends; and (iii) are issued by companies that the Advisor
believes are financially sound.
Any remaining assets of the Fund may be invested in: (i)
warrants to purchase common stocks; (ii) debt securities
convertible into common stocks rated in the highest four
rating categories by a nationally recognized statistical
rating organization ("NRSRO") or determined by the Advisor to
be of comparable quality at the time of purchase; (iii)
preferred stock convertible into common stocks; and (iv) U.S.
dollar denominated equity securities of foreign issuers
(including sponsored American Depositary Receipts ("ADRs")).
20
<PAGE>
The Fund will invest in securities of foreign issuers only
if they are listed on national securities exchanges or
actively traded in the over-the-counter market. The Fund
will invest in options and futures for hedging purposes
only.
GROWTH FUND The Growth Fund seeks a high level of total return primarily
through capital appreciation.
The Growth Fund will invest at least 65% of its total
assets in the common stock of corporations of any size that,
in the Advisor's opinion, have strong prospects for
appreciation through growth in earnings. The Growth Fund
invests primarily in common stocks that: (i) are traded on a
national securities exchange or are actively traded in the
over-the-counter market and have an average trading volume
of more than $1 million per day; (ii) have sales and
earnings growth rates that exceed the growth rate of the
Gross Domestic Product; and (iii) maintain a positive return
on equity and total assets.
Any remaining Fund assets may be invested in: (i)
warrants to purchase common stocks; (ii) debt securities
convertible into common stocks; (iii) preferred stock
convertible into common stocks; and (iv) U.S. dollar
denominated equity securities of foreign issuers (including
sponsored ADRs). The Fund will invest in securities of
foreign issuers only if they are listed on national
securities exchanges or actively traded in the over-the-
counter market. The Fund will invest in options and futures
for hedging purposes only.
SMALL CAP FUND The Small Cap Fund seeks a high level of total return
primarily through capital appreciation.
The Small Cap Fund will invest at least 65% of its total
assets in the common stocks of corporations with smaller
capitalization levels that the Advisor believes have strong
prospects for appreciation through growth in earnings. The
Advisor's emphasis will be on a diversified portfolio of
common stocks of companies with aggregate market
capitalization of less than $1 billion. In selecting stocks
for the Fund, factors reviewed will include sales and
earnings growth rates and the strength of the issuer's
balance sheet.
Because the Fund invests primarily in common stocks of
smaller capitalization companies, the Fund's shares may
fluctuate significantly in value, and thus may be more
suitable for long-term investors who can bear the risk of
short-term fluctuations.
Any remaining Fund assets may be invested in: (i)
warrants to purchase common stocks; (ii) debt securities
convertible into common stocks; (iii) preferred stock
convertible into common stocks; and (iv) U.S. dollar
denominated equity securities of foreign issuers (including
sponsored ADRs). The Fund will invest in equity securities
of foreign issuers that satisfy in substance the criteria
for investing in smaller capitalization stocks set forth
above. The Fund will invest in equity securities of foreign
issuers only if they are listed on national securities
exchanges or actively traded in the over-the-counter market.
The Fund will invest in options and futures for hedging
purposes only.
INTERNATIONAL The International Equity Fund seeks a high level of total
EQUITY FUND return through capital appreciation and current income.
21
<PAGE>
The International Equity Fund will invest at least 65% of
its total assets in equity securities of issuers in at least
three countries other than the U.S.
While the Fund will not necessarily spread its
investments among more than three countries other than the
U.S., the Advisor intends to diversify its investments among
countries to reduce currency risk. Investments will be made
primarily in common stocks of companies domiciled in
developed countries, but may be made in the securities of
companies domiciled in developing countries, as well.
Although the Fund will invest primarily in securities listed
on national stock exchanges, it will also invest in
securities actively traded in over-the-counter markets.
Securities of companies in developing countries may pose
liquidity risks.
Any remaining Fund assets will be invested in common
stocks of closed-end management investment companies that
invest primarily in international common stocks, stocks of
U.S. issuers listed on national securities exchanges or
actively traded in the over-the-counter market, convertible
securities of U.S. issuers (whether or not they are listed
on national securities exchanges) and money market
instruments. The Fund will invest in options and futures for
hedging purposes only.
TRANSEUROPE The TransEurope Fund seeks a high level of total return
FUND through capital appreciation and current income.
The TransEurope Fund will invest as fully as feasible
(and at least 65% of its total assets) in equity securities
of European issuers located in Belgium, Denmark, Finland,
France, Germany, Italy, the Netherlands, Norway, Spain,
Sweden, Switzerland and the United Kingdom. Investments may
also be made in the equity securities of issuers located in
the smaller and emerging markets of Europe. The Fund may
also invest in the equity securities of issuers in the
following Eastern European countries: the Czech Republic,
Hungary, Poland and Slovakia. Emerging markets are subject
to special risks not associated with domestic markets. See
"Certain Risk Factors."
The Fund's remaining assets will be invested in money
market instruments of European issuers. The Fund will invest
in options and futures for hedging purposes only.
ASIAN TIGERS The Asian Tigers Fund seeks to achieve capital appreciation.
FUND The Asian Tigers Fund will invest primarily in equity
securities that are traded on recognized stock exchanges of
the countries of Asia and in equity securities of companies
organized under the laws of an Asian country. The Fund may
also invest in sponsored ADRs of Asian issuers that are
traded on stock exchanges in the United States. The Fund
does not intend to invest in securities which are
principally traded in markets in Japan or in companies
organized under the laws of Japan.
Under normal circumstances, at least 65% of the total
assets of the Fund will be invested in equity securities of
issuers located in some or all of the following Asian
countries: China, Hong Kong, Indonesia, Malaysia, the
Philippines, Singapore and Thailand. The Fund may also
invest in common stocks traded on markets in India,
Pakistan, Sri
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Lanka, South Korea and Taiwan, and may invest up to 5% of
its net assets in other developing markets. The Fund has no
set policy for allocating investments among the several
Asian countries. Allocation of investments among the various
countries will depend on the relative attractiveness of the
stocks of issuers in the respective countries. Government
regulation and restrictions in many of the countries of
interest may limit the amount, mode, and extent of
investment in companies of such countries.
Any of the Fund's remaining assets will be invested in
common stocks of closed-end management investment companies
that invest primarily in common stocks of Asian countries or
money market instruments of Asian and European issuers.
In selecting industries and particular issuers, the
Advisor will evaluate costs of labor and raw materials,
access to technology, export of products and government
regulation. Although the Fund seeks to invest in larger
companies, it may invest in medium and small companies that,
in the Advisor's opinion, have potential for growth.
While the Fund intends to invest primarily in securities
listed on stock exchanges, it may also invest in securities
traded in over-the-counter markets, which may pose liquidity
risks. No more than 5% of the Fund's net assets will be
invested in unlisted securities. The Fund will invest in
options and futures for hedging purposes only.
LATIN AMERICA The Latin America Equity Fund seeks long-term capital
EQUITY FUND appreciation.
The Fund will invest primarily in equity securities of
(i) companies organized in, or for which the principal
securities trading market is in Latin America, and (ii)
companies, wherever organized, that, in one of the last two
fiscal years derived more than 50% of their annual revenues
or profits from goods produced, sales made or services
performed in Latin America ("Latin American issuers"). Under
normal circumstances, at least 65% of the Fund's total
assets will be invested in equity securities of Latin
American issuers.
The Fund seeks to benefit from economic and other
developments in Latin America. The Advisor and Sub-Advisor
believe that investment opportunities may be present in
Latin America as a result of an evolving long-term
international trend encouraging greater market orientation
and diminishing governmental intervention in economic
affairs. This trend may be facilitated by local or
international political, economic or financial developments
that could benefit the capital markets of certain Latin
American countries. For the purpose of this prospectus,
Latin America includes Argentina, Bolivia, Brazil, Chile,
Colombia, Costa Rica, the Dominican Republic, Ecuador, El
Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama,
Paraguay, Peru, Uruguay, Venezuela, and the Spanish-speaking
island nations of the Caribbean (not including Cuba and
Haiti). Although the Fund has no set policy for allocating
investments among Latin American countries, it is currently
contemplated that the Fund will emphasize investments in
issuers located in Argentina, Brazil, Chile, Colombia,
Mexico, Peru and Venezuela. The Fund may be precluded from
investing in certain of the remaining eleven countries and
certain Spanish-speaking islands until such time as adequate
custodial arrangements can be established. Government
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regulation and restrictions may limit the amount, mode and
extent of investment in companies in such countries.
Although the Fund intends to invest primarily in equity
securities listed on stock exchanges, it may also invest in
securities traded in over-the-counter markets and in
securities for which there is no organized market.
The Fund may invest in investment grade debt securities,
including debt securities issued or guaranteed by a Latin
American government or governmental entity ("Sovereign
Debt"), obligations of supranational entities, Brady Bonds
and money market instruments.
For hedging purposes only, the Fund may also enter into
options, futures, interest rate swaps, currency
transactions, caps, collars and floors. The Fund may also
write (i.e., sell) covered call options on the securities in
which it may invest.
The Fund is non-diversified for purposes of the
Investment Company Act of 1940, as amended (the "1940 Act"),
which means that it is not limited by the 1940 Act in the
proportion of its assets that it may invest in the
obligations of a single issuer. The Fund may be more
susceptible to any single economic, political or regulatory
occurrence than a diversified investment company. The
investment of a large percentage of the Fund's assets in the
securities of a small number of issuers may cause the Fund's
share price to fluctuate more than that of a diversified
investment company.
BALANCED FUND The Balanced Fund seeks a favorable total rate of return
through current income and capital appreciation consistent
with preservation of capital, by investing in a portfolio
comprised of fixed income and equity securities.
The Balanced Fund will invest at least 80% of its net
assets in fixed income and equity securities, with at least
25% of its assets in fixed income senior securities.
Permissible investments for the Fund include: (i) corporate
bonds and debentures of U.S. or foreign issuers rated in the
highest four rating categories by an NRSRO or determined by
the Advisor to be of comparable quality at the time of
purchase; (ii) securities denominated in U.S. dollars or in
foreign currencies, issued or guaranteed as to principal and
interest by the U.S. Government, its agencies or
instrumentalities or issued or guaranteed by foreign
governments, their political subdivisions, agencies or
instrumentalities; (iii) short-term commercial paper of U.S.
or foreign issuers rated in the highest two rating
categories by an NRSRO or determined by the Advisor to be of
comparable quality at the time of investment; (iv) short-
term bank obligations consisting of certificates of deposit,
time deposits and bankers' acceptances of U.S. or foreign
commercial banks or savings and loan institutions with
assets as of the end of their most recent fiscal year of at
least $500 million, or its equivalent in appropriate foreign
currency measured using currency exchange rates in effect at
the time of investment; (v) obligations denominated in U.S.
dollars or foreign currencies of supranational entities
rated in the highest three rating categories by an NRSRO;
(vi) mortgage-backed securities rated in the highest two
rating categories by an NRSRO; (vii) asset-backed securities
rated in the highest three rating categories by an NRSRO;
(viii) STRIPS and receipts; (ix) repurchase
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<PAGE>
agreements involving such securities; (x) loan
participations, in which the Fund will not invest more than
5% of its total assets; (xi) guaranteed investment contracts
("GICs") and bank investment contracts ("BICs") deemed by
the Advisor to be of investment grade; (xii) swaps; (xiii)
municipal notes rated in the highest two rating categories
by an NRSRO or, if unrated, determined by the Advisor to be
of comparable quality; and (xiv) municipal bonds rated in
the highest three rating categories by an NRSRO or, if
unrated, determined by the Advisor to be of comparable
quality. The Balanced Fund is not subject to maturity
restrictions. The Balanced Fund may invest up to 15% of its
assets in fixed income securities that are either
denominated in foreign currencies or issued by foreign
issuers, provided that assets invested in such securities
will not constitute more than 50% of the assets of the
Balanced Fund invested in fixed income securities.
The remainder of the Fund's assets will be invested in:
(i) common stocks; (ii) warrants to purchase common stocks;
(iii) debt securities convertible into common stocks; (iv)
preferred stocks convertible into common stocks; (v) U.S.
dollar denominated equity securities of foreign issuers
(including sponsored ADRs); (vi) foreign securities; and
(vii) equity options. The equity securities in which the
Fund will invest are listed on national securities exchanges
or actively traded in the over-the-counter market. The Fund
will invest, based on dividend paying characteristics and
growth potential, in equity securities of companies of all
sizes. There are no minimum rating criteria applicable to
convertible securities.
The Balanced Fund is also permitted to invest in options
and futures (for hedging purposes only), engage in
securities lending, acquire floating and variable rate
securities, enter into dollar roll transactions with
selected banks and broker-dealers and purchase securities on
a when-issued basis where the purchase is for investment in
the securities, not for leveraging, and subject to the
investment restrictions described above.
FIXED INCOME The Fixed Income Fund seeks a high level of total return
FUND relative to funds with like investment objectives, from
income and, to a lesser degree, capital appreciation by
investing in a portfolio consisting primarily of quality
intermediate- and long-term fixed income securities.
The Fixed Income Fund will invest as fully as feasible
(and at least 65% of its total assets) in the following
fixed income securities: (i) corporate bonds and debentures
rated in the highest four rating categories by an NRSRO or,
if unrated, determined by the Advisor to be of comparable
quality at the time of purchase; (ii) obligations issued or
guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities; (iii) short-
term commercial paper rated in the highest two rating
categories by an NRSRO or, if unrated, determined by the
Advisor to be of comparable quality at the time of
investment; (iv) short-term bank obligations rated in the
highest two rating categories by an NRSRO, including
certificates of deposit, time deposits, and bankers'
acceptances of U.S. commercial banks or savings and loan
institutions with assets of at least $500 million as of the
end of their most recent fiscal year; (v) U.S. dollar
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denominated securities issued or guaranteed by foreign
governments, their political subdivisions, agencies or
instrumentalities; (vi) U.S. dollar denominated obligations
of supranational entities rated in the highest three rating
categories by an NRSRO; (vii) mortgage-backed securities
rated in the highest two rating categories by an NRSRO;
(viii) asset-backed securities rated in the highest three
rating categories of an NRSRO; (ix) STRIPS and receipts
evidencing separately traded interest and principal
component parts of U.S. Government obligations ("Receipts");
(x) repurchase agreements involving such securities; (xi)
loan participations, in which the Fund will not invest more
than 5% of its total assets; (xii) GICs; (xiii) BICs; (xiv)
swaps; (xv) municipal notes rated in the highest two rating
categories by an NRSRO or, if unrated, determined by the
Advisor to be of comparable quality; and (xvi) municipal
bonds rated in the highest three rating categories by an
NRSRO or, if unrated, determined by the Advisor to be of
comparable quality.
There are no restrictions on the average maturity of the
Fund or on the maturity of any single instrument. Maturities
may vary widely depending on the Advisor's assessment of
interest rate trends and other economic and market factors.
The estimated dollar-weighted average portfolio maturity of
the Fund is approximately eight years.
Any remaining assets of the Fund may be invested in
variable and floating rate obligations, dollar rolls,
forward commitments, when-issued securities, and securities
of foreign issuers. In addition, the Fund may lend the
securities in which it is invested. The Fund may invest in
options and futures for hedging purposes only.
INTERMEDIATE The Intermediate Government Fixed Income Fund seeks a high
GOVERNMENT level of total return relative to funds with like investment
FIXED INCOME objectives, consistent with preservation of capital from
FUND income and, to a lesser degree, capital appreciation, by
investing in a portfolio consisting of short- and
intermediate-term U.S. Government securities.
The Intermediate Government Fixed Income Fund will invest
100% of its total assets in government securities, which
include obligations issued or guaranteed as to principal and
interest by the U.S. Government, its agencies or
instrumentalities.
Normally, the Fund will maintain an average weighted
maturity of three to ten years; under certain circumstances,
however, the average weighted maturity may fall below three
years. The Fund may invest in options and futures for
hedging purposes only.
TAX-EXEMPT The Tax-Exempt Fixed Income Fund seeks a high level of total
FIXED INCOME return, relative to funds with like investment objectives,
FUND consistent with preservation of capital, from income by
investing in a portfolio consisting primarily of securities
that are exempt from federal income tax and not subject to
taxation as a preference item for purposes of the federal
alternative minimum tax.
The Tax-Exempt Fixed Income Fund will invest as fully as
feasible (at least 65% of the value of its total assets) in
fixed income securities issued by or on behalf of the
states, territories and possessions of the United States and
the District of Columbia and their political subdivisions,
agencies and instrumentalities, rated in the highest four
rating
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<PAGE>
categories by an NRSRO or, if unrated, determined by the
Advisor to be of comparable quality, and will invest at
least 80% of its net assets in comparably-rated fixed income
securities the interest on which is exempt from federal
income tax and which are not subject to taxation as a
preference item for purposes of the federal alternative
minimum tax.
The remainder of the Fund's assets may be invested in:
(i) short-term, tax-exempt commercial paper rated in the
highest two rating categories by an NRSRO or, if unrated,
determined by the Advisor to be of comparable quality at the
time of investment; (ii) municipal notes rated in the
highest two rating categories by an NRSRO or, if unrated,
determined by the Advisor to be of comparable quality; (iii)
fixed income options and futures; (iv) asset-backed
securities; (v) Receipts; (vi) securities issued or
guaranteed by the U.S. Government or its agencies; and (vii)
corporate bonds rated in one of the three highest categories
by an NRSRO.
There are no restrictions on the average maturity of the
Fund or the maturity of any single instrument. Maturities
may vary widely depending on the Advisor's assessment of
interest rate trends and other economic and market factors.
The Fund may invest in options and futures for hedging
purposes only.
INTERNATIONAL The International Fixed Income Fund, formerly the Global
FIXED INCOME Fixed Income Fund, seeks a high level of total return
FUND relative to funds with like investment objectives, measured
in U.S. dollar terms, from income and capital appreciation
by investing in a portfolio consisting of investment quality
fixed income securities denominated in foreign currencies.
The International Fixed Income Fund will invest as fully
as feasible (at least 65% of its total assets) in investment
quality fixed income securities of issuers in at least three
of the following countries: Austria, Australia, Belgium,
Canada, Denmark, Finland, France, Germany, Ireland, Italy,
Japan, Luxembourg, The Netherlands, New Zealand, Norway,
Spain, Sweden, Switzerland and the United Kingdom.
The Fund strives to take maximum advantage of financial
and economic developments and currency fluctuations. All
investments will be in high quality securities denominated
in various currencies, including the European Currency Unit,
and listed on stock exchanges of major industrialized
countries. At least 50% of investments will be made in
government bonds or in bonds issued by government-backed
institutions (but no more than 25% of the Fund's assets will
be invested in securities of governmental issuers in any one
country). Investments in non-government bonds will be rated
in one of the highest four rating categories by an NRSRO.
Fixed income securities consist of: (i) corporate bonds
and debentures rated in the highest four rating categories
by an NRSRO or, if unrated, determined by the Advisor to be
of comparable quality at the time of purchase; (ii) short-
term commercial paper rated in the highest two rating
categories by an NRSRO or, if unrated, determined by the
Advisor to be of comparable quality at the time of
investment; (iii) securities issued or guaranteed by foreign
governments, their political subdivisions, agencies or
instrumentalities;
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<PAGE>
(iv) obligations of supranational entities; (v) repurchase
agreements involving such securities; (vi) loan
participations, in which the Fund will not invest more than
5% of its total assets; and (vii) swaps, fixed income
options and futures.
Any remaining Fund assets will be invested in: (i)
securities denominated in U.S. dollars or foreign currencies
comparable in quality to the fixed income instruments
described above; (ii) obligations issued or guaranteed as to
principal and interest by the U.S. Government or its
agencies and instrumentalities; (iii) short-term bank
obligations, including certificates of deposit, time
deposits, and bankers' acceptances of U.S. or foreign
commercial banks or savings and loans institutions with
assets as of the end of their most recent fiscal year of at
least $500 million or its equivalent in appropriate foreign
currency measured using currency exchange rates in effect at
the time of investment; (iv) mortgage-backed securities
rated in the highest two rating categories by an NRSRO; (v)
asset-backed securities rated in the highest three rating
categories by an NRSRO; (vi) Receipts; (vii) GICs; and
(viii) BICs.
There are no restrictions on the average maturity of the
Fund or on the maturity of any single instrument. Maturities
may vary widely depending on the Advisor's assessment of
interest rate trends and other economic and market factors.
The Fund may invest in options and futures for hedging
purposes only.
LIMITED The Limited Volatility Fixed Income Fund seeks a high level
VOLATILITY of current income, consistent with relative stability of
FIXED INCOME principal, by investing primarily in a portfolio consisting
FUND of short- and intermediate-term fixed income securities.
The Limited Volatility Fixed Income Fund will invest as
fully as feasible (at least 65% of its total assets) in the
following short- and intermediate-term taxable fixed income
obligations: (i) corporate bonds and debentures rated in the
highest four rating categories by an NRSRO or, if unrated,
determined by the Advisor to be of comparable quality at the
time of purchase; (ii) obligations issued or guaranteed as
to principal and interest by the U.S. Government, its
agencies or instrumentalities; (iii) short-term commercial
paper rated in the highest two rating categories by an NRSRO
or, if unrated, determined by the Advisor to be of
comparable quality at the time of purchase; (iv) short-term
bank obligations: certificates of deposit, time deposits,
and bankers' acceptances of U.S. commercial banks or savings
and loans institutions with assets of at least $500 million
as of the end of their most recent fiscal year; (v) U.S.
dollar denominated securities issued or guaranteed by
foreign governments, their political subdivisions, agencies
or instrumentalities; (vi) U.S. dollar denominated
obligations of supranational entities rated in the highest
three rating categories by an NRSRO; (vii) mortgage-backed
securities rated in the highest two rating categories by an
NRSRO; (viii) asset-backed securities rated in the highest
three rating categories by an NRSRO; (ix) Receipts; (x)
repurchase agreements involving such securities; (xi) swaps;
(xii) municipal notes rated in the highest two rating
categories by an NRSRO or, if unrated, determined by the
Advisor to be of comparable quality; and (xiii) municipal
bonds rated in the highest three rating categories by an
NRSRO
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<PAGE>
or, if unrated, determined by the Advisor to be of
comparable quality. The Fund will also invest in fixed
income options and futures for hedging purposes only.
The Fund may also invest in dollar roll transactions,
variable and floating rate obligations, forward commitments,
when-issued securities, and securities of foreign issuers.
In addition, the Fund may lend the securities in which it is
invested under certain conditions.
The dollar-weighted average maturity of the Fund will be
less than six years. The Advisor may shorten the average
maturity substantially, as a temporary defensive position,
in anticipation of a change in the interest rate
environment.
TREASURY MONEY The Treasury Money Market Fund seeks to preserve principal
MARKET FUND value and maintain a high degree of liquidity while
providing current income by investing exclusively in U.S.
Treasury obligations.
The Treasury Money Market Fund invests in 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
(such component parts of obligations are commonly known as
"STRIPS" and all of the foregoing obligations are referred
to herein collectively as "U.S. Treasury Obligations").
The Fund's investments in STRIPS will be limited to
components with maturities of less than 397 days. Investing
in these securities entails certain risks, including that
interest components may be more volatile in value than
comparable maturity Treasury bills, as further described in
"Description of Permitted Investments and Risk Factors." The
Fund will invest primarily in U.S. Treasury Obligations
other than STRIPS.
GOVERNMENT The Government Money Market Fund seeks to provide as high a
MONEY MARKET level of current income as is consistent with preservation
FUND of capital and liquidity by investing in obligations of the
U.S. Government, its agencies or instrumentalities.
The Government Money Market Fund invests exclusively in
high quality money market instruments denominated in U.S.
dollars consisting of (i) U.S. Treasury Obligations; (ii)
securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities (e.g., Government National
Mortgage Association ("GNMA"), Fannie Mae, Federal Home Loan
Mortgage Corporation ("FHLMC"), Federal Land Bank); and
(iii) repurchase agreements involving such obligations.
MONEY MARKET The Money Market Fund seeks to provide as high a level of
FUND current income as is consistent with the preservation of
capital and liquidity by investing exclusively in high
quality money market instruments.
The Money Market Fund invests exclusively in the
following: (i) U.S. Treasury Obligations; (ii) obligations
issued or guaranteed as to principal and interest by the
U.S. Government or its agencies and instrumentalities; (iii)
commercial paper of U.S. and foreign issuers rated in the
highest two short-term rating categories of an NRSRO at the
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<PAGE>
time of investment or, if unrated, determined by the Advisor
to be of comparable quality; (iv) obligations (certificates
of deposit, time deposits, and bankers' acceptances) of U.S.
commercial banks, U.S. savings and loan institutions, and
U.S. and London branches of foreign banks that have total
assets of $500 million or more as shown on their last
published financial statements at the time of investment;
(v) short-term corporate obligations of U.S. and foreign
issuers whose commercial paper the Fund may purchase; (vi)
repurchase agreements involving such obligations; (vii)
obligations of supranational entities; (viii) loan
participations; (ix) receipts evidencing separately traded
interest and principal component parts of U.S. Government
obligations; (x) standby commitments; and (xi) municipal
securities. The Fund may not invest more than 25% of its
total assets in obligations issued by foreign branches of
U.S. banks and London branches of foreign banks.
TAX-EXEMPT The Tax-Exempt Money Market Fund seeks to preserve principal
MONEY MARKET value and maintain a high degree of liquidity while
FUND providing current income exempt from federal income tax and
not included as a preference item under the alternative
minimum tax.
The Tax-Exempt Money Market Fund invests at least 80% of
its total assets in eligible securities issued by or on
behalf of the states, territories and possessions of the
United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, the
interest of which, in the opinion of bond counsel for the
issuer, is exempt from federal income tax (collectively,
"Municipal Securities"). In pursuing this policy, the Fund
may purchase municipal bonds, municipal notes, tax-exempt
commercial paper rated in the highest two short-term rating
categories by an NRSRO in accordance with SEC regulations at
the time of investment or, if unrated, determined by the
Advisor to be of comparable quality, and shares of tax-
exempt money market funds.
The Advisor has discretion to invest up to 20% of the
Fund's assets in the aggregate in taxable money market
instruments (including repurchase agreements) and securities
subject to the alternative minimum tax.
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GENERAL
INVESTMENT
POLICIES ____________________________________________________
THE EQUITY AND Each Fund will invest in equity securities only if they are
BALANCED FUNDS listed on national securities exchanges or actively traded
in the over-the-counter market. Each Fund may invest in
convertible securities whether or not they are listed on
national securities exchanges.
Each Fund will invest not more than 10% of its total
assets in restricted securities. In addition, a Fund may
invest up to 5% of its assets in restricted securities that
the Advisor determines are liquid. Each Fund will not invest
more than 15% of its total assets in illiquid securities.
A Fund may enter into futures contract transactions only
to the extent that obligations under such contracts
represent less than 20% of the Fund's assets. The aggregate
value of option positions may not exceed 10% of a Fund's net
assets as of the time such options are entered into by a
Fund.
THE FIXED Each Fund may purchase mortgage-backed securities issued or
INCOME AND guaranteed as to payment of principal and interest by the
BALANCED FUNDS U.S. Government, its agencies or instrumentalities and
mortgage-backed securities issued by non-governmental
issuers that are rated in the highest two rating categories
of an NRSRO.
The Fixed Income Fund, Intermediate Government Fixed
Income Fund, Limited Volatility Fixed Income Fund and
Balanced Fund may enter into dollar roll transactions with
selected banks and broker-dealers.
The quality standards of debt securities and other
obligations as described for the Funds must be satisfied at
the time an investment is made. In the event that an
investment held by a Fund is assigned a lower rating or
ceases to be rated, the Advisor will promptly reassess
whether such security presents suitable credit risks and
whether the Fund should continue to hold the security or
obligation in its portfolio. If a portfolio security or
obligation no longer presents suitable credit risks or is in
default, the Fund will dispose of the security or obligation
as soon as reasonably practicable unless the Trustees of the
Trust determine that to do so is not in the best interest of
the Fund.
Each Fund will invest not more than 10% of its total
assets in restricted securities. In addition, a Fund may
invest up to 5% of its assets in restricted securities that
the Advisor determines are liquid. Each Fund will not invest
more than 15% of its total assets in illiquid securities.
A Fund may enter into futures contract transactions only
to the extent that obligations under such contracts
represent less than 20% of the Fund's assets. The aggregate
value of option positions may not exceed 10% of a Fund's net
assets as of the time such options are entered into by a
Fund.
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<PAGE>
THE MONEY Each Money Market Fund intends to comply with regulations of
MARKET FUNDS the SEC applicable to funds using the amortized cost method
for calculating net asset value found in Rule 2a-7 under the
1940 Act. These regulations impose certain quality, maturity
and diversification restraints on investments by the Funds.
Under these regulations, the Funds will invest only in U.S.
dollar denominated securities, will maintain an average
maturity on a dollar-weighted basis of 90 days or less, and
will acquire only "eligible securities" that present minimal
credit risks and have a maturity of 397 days or less. These
constraints effectively preclude the Funds from investing in
securities with interest rates as high as those of
securities that may be acquired by Funds that are permitted
to buy lower rated or longer term securities. For a further
discussion of these rules, see the "Description of Permitted
Investments and Risk Factors--Restraints on Investments by
Money Market Funds".
Each Money Market Fund will not invest more than 10% of
its net assets in illiquid securities.
ALL FUNDS All Funds may invest in variable and floating rate
obligations and may purchase securities on a when-issued
basis. A Fund (except the Money Market Funds) may enter into
futures contracts and options on futures for bona fide
hedging purposes only.
In addition, each Fund (with the exception of the
Treasury Money Market Fund) reserves the right to engage in
securities lending.
There will be no limit to the percentage of portfolio
securities that a Fund may purchase subject to a standby
commitment, but the amount paid directly or indirectly for a
standby commitment held by the Fund will not exceed 1/2 of
1% of the value of the total assets of the Fund.
For temporary defensive purposes when the Advisor
determines that market conditions warrant, the Equity Funds,
Fixed Income Funds and Balanced Fund may invest up to 100%
of its assets in money market instruments. To the extent a
Fund is investing for temporary defensive purposes, the Fund
will not be pursuing its investment objective.
RATINGS NRSROs provide ratings for certain instruments in which the
Funds may invest. For example, bonds rated in the fourth
highest rating category have an adequate capacity to pay
principal and interest but may have speculative
characteristics as well.
For a description of ratings, see the Statement of
Additional Information.
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CERTAIN RISK FACTORS ___________________________________________________________
The investment policies of each Fund entail certain risks
and considerations of which an investor should be aware.
Foreign The International Equity, TransEurope, Latin America Equity,
Securities Asian Tigers and International Fixed Income Funds will, and
certain other Funds may, invest in securities of foreign
issuers. Securities of foreign issuers are subject to
certain risks not typically associated with domestic
securities, including, among other risks, changes in
currency rates and in exchange control regulations, costs in
connection with conversions between various currencies,
limited publicly available information regarding foreign
issuers, lack of uniformity in accounting, auditing and
financial standards and requirements, greater securities
market volatility, less liquidity of securities, less
government supervision and regulations of securities
markets, withholding taxes and changes in taxes on income on
securities, and possible seizure, nationalization or
expropriation of the foreign issuer or foreign deposits.
Certain Latin American countries are among the largest
debtors to commercial banks and foreign governments. Trading
in Sovereign Debt involves a high degree of risk, since the
governmental entity that controls the repayment of Sovereign
Debt may not be willing or able to repay the principal
and/or interest of such debt obligations when it becomes
due, due to factors such as debt service burden, political
constraints, cash flow problems and other national economic
factors. As a result, Latin American governments may default
on their Sovereign Debt, which may require holders of such
Sovereign Debt to participate in debt rescheduling or
additional lending to defaulting governments. There is no
bankruptcy proceeding by which defaulted Sovereign Debt may
be collected in whole or in part.
Investments in securities of foreign issuers are
frequently denominated in foreign currencies and the value
of the Fund's assets measured in U.S. dollars may be
affected favorably or unfavorably by changes in currency
rates and in exchange control regulations, and the Fund may
incur costs in connection with conversions between various
currencies. The Fund may enter into forward foreign currency
contracts as a hedge against possible variations in foreign
exchange rates or to hedge a specific security transaction
or portfolio position. Currently, only a limited market, if
any, exists for hedging transactions relating to currencies
in most Latin American markets. This may limit a Fund's
ability to effectively hedge its investments in Latin
American markets.
33
<PAGE>
INVESTMENT LIMITATIONS _________________________________________________________
No Equity, Fixed Income or Balanced Fund may:
1. Purchase securities of any issuer (except securities
issued or guaranteed by the United States, 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 or more than 10% of the outstanding voting
securities of such issuer would be owned by the Fund.
This restriction applies to 75% of the Fund's assets, and
does not apply to the Latin America Equity or
International Fixed Income Funds.
2. Purchase any securities which would cause more than 25%
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 U.S. Government or its agencies and instrumentalities
and repurchase agreements involving such securities. For
purposes of this limitation (i) utility companies will be
divided according to their services, for example, gas,
gas 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; and (iii) supranational entities will
be considered to be a separate industry.
3. Make loans, except that a 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.
No Money Market Fund may:
1. Purchase securities of any issuer (except securities
issued or guaranteed by the United States, 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 or more than 10% of the
outstanding voting securities of such issuer would be
owned by the Fund. Each Money Market Fund, except the
Tax-Exempt Money Market Fund, may invest up to 25% of its
assets in securities of a single issuer for a period of
up to three business days if such securities qualify as
"first tier securities" under applicable SEC Rules.
2. Purchase any securities which would cause more than 25%
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 or
securities the interest upon which is paid from revenue
of similar type industrial development projects, provided
that this limitation does not apply to (i) investments in
obligations issued or guaranteed by the U.S. Government
or its agencies and instrumentalities and in repurchase
agreements involving such securities; and (ii)
obligations issued by domestic branches of U.S. banks or
U.S.
34
<PAGE>
..........................
[SYMBOL INVESTMENT
APPEARS ADVISOR
HERE]
A Fund's investment advisor manages
the investment activities and is
responsible for the performance of
the Fund. The advisor conducts
investment research, executes
investment strategies based on an
assessment of economic and market
conditions, and determines which
securities to buy, hold or sell.
......................................
branches of foreign banks subject to the same regulations as
U.S. banks; or (iii) tax-exempt securities issued by
governments or political subdivisions of governments. For
purposes of this limitation, (i) loan participations are
considered to be issued by both the issuing bank and the
underlying corporate borrower; (ii) utility companies will
be divided according to their services, for example, gas,
gas transmission, electric and telephone will each be
considered a separate industry; (iii) 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; and (iv) supranational entities will be
considered to be a separate industry.
3. Make loans, except that a 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.
The foregoing percentages will apply at the time of the
purchase of a security. Additional fundamental and non-
fundamental investment limitations are set forth in the
Statement of Additional Information.
THE ADVISOR ____________________________________________________________________
The Trust and LaSalle Street Capital Management, Ltd. (the
"Advisor"), 10 South LaSalle Street, Suite 3701, Chicago,
Illinois 60603 have entered into an advisory agreement (the
"Advisory Agreement"). Under the Advisory Agreement, the
Advisor makes the investment decisions for the assets of the
Funds and continuously reviews, supervises and administers the
Funds' investment programs, subject to the supervision of, and
policies established by, the Trustees of the Trust.
The Advisor is entitled to a fee, which is calculated daily
and paid monthly, at an annual rate of .80% of the average
daily net assets of the Value, Growth, Small Cap and
International Fixed Income Funds; 1.00% of the average daily
net assets of the International Equity, TransEurope, Latin
America Equity and Asian Tigers Funds; .70% of the average
daily net assets of the Balanced Fund; .60% of the average
daily net assets of the Fixed Income, Intermediate Government
Fixed Income, Tax-Exempt Fixed Income and Limited Volatility
Fixed Income Funds; .35% of the average daily net assets of the
Treasury Money Market, Money Market and Tax-Exempt Money Market
Funds; and .20% of the average daily net assets of the
Government Money Market Fund. The Advisor may voluntarily waive
a portion of its fee in order to limit the total operating
expenses of the Funds. The Advisor reserves the right, in its
sole discretion, to terminate this voluntary fee waiver at any
time.
35
<PAGE>
For the fiscal year ended December 31, 1996, the Advisor
received an advisory fee of .80% for the Value Fund, .80%
for the Growth Fund, .80% for the Small Cap Fund, .70% for
the Balanced Fund, 1.00% for the International Equity Fund,
1.00% for the Asian Tigers Fund, 1.00% for the Latin America
Equity Fund, .50% for the Fixed Income Fund, .50% for the
Intermediate Government Fixed Income Fund, .50% for the Tax-
Exempt Fixed Income Fund, .80% for the International Fixed
Income Fund, .20% for the Tax-Exempt Money Market Fund, .20%
for the Treasury Money Market Fund, .20% for the Government
Money Market Fund and .20% for the Money Market Fund. The
TransEurope Fund and Limited Volatility Fixed Income Fund
had not commenced operations at fiscal year end.
LaSalle Street Capital Management, Ltd. was organized in
March, 1991 under the laws of the State of Delaware. The
Advisor manages assets for corporations, unions,
governments, insurance companies and charitable
organizations. As of December 31, 1996, total assets under
management by the Advisor were approximately $3.4 billion.
The Advisor is a direct, wholly-owned subsidiary of ABN
AMRO North America, Inc., which is an indirect, wholly-owned
subsidiary of ABN AMRO Holding N.V., a Netherlands company.
Jac A. Cerney, Senior Vice President of the Advisor, has
served as portfolio manager for the Value and Balanced Funds
since their inception. Mr. Cerney has been associated with
the Advisor and its predecessor since April, 1990.
Keith Dibble, Senior Vice President of the Advisor, has
served as portfolio manager for the Growth Fund since its
inception. Mr. Dibble has been associated with the Advisor
and its predecessor since 1987.
John F. Bonetti, Vice President of the Advisor, has
served as portfolio manager for the Small Cap Fund Since
February, 1995 and co-portfolio manager for the Small Cap
Fund since March, 1997. Mr. Bonetti has been associated with
the Advisor and its predecessor since 1989.
Marc G. Borghans, Vice President of the Advisor, has
served as co-manager of the Small Cap Fund since March,
1997. Mr. Borghans has been associated with the Advisor or
its affiliates since 1988.
Mark W. Karstrom, Vice President of the Advisor, has
served as portfolio manager for the Intermediate Government
Fixed Income Fund and the Limited Volatility Fixed Income
Fund since September, 1996. Mr. Karstrom joined the Advisor
in August 1996. He served as a Vice President, Portfolio
Manager with Norwest Investment Management and Trust and a
predecessor firm from May, 1985 to July, 1996.
Charles H. Self, III, Senior Vice President of the
Advisor, has served as portfolio manager for the Fixed
Income Fund since October, 1995 and the Tax-Exempt Fixed
Income Fund since September, 1996 and co-manager of the Tax-
Exempt Fixed Income Fund since April, 1997. Mr. Self joined
the Advisor in October, 1995. He served as a Vice President
with CSI Asset Management from December, 1988 to July, 1995.
36
<PAGE>
Phillip P. Mierzwa, Assistant Vice President of the
Advisor, has served as co-manager of the Tax-Exempt Fixed
Income Fund since April, 1997. He has been associated with
the Advisor or its affiliates since February, 1990.
Gregory D. Boal, Vice President of the Advisor, has
served as portfolio manager of the fixed income portion of
the Balanced Fund since April, 1997. Mr. Boal joined the
Advisor in March, 1997. He served as Manager, Fixed Income
Division of First Citizens Bank from November, 1989 to
March, 1997.
THE SUB-ADVISOR ________________________________________________________________
ABN AMRO-NSM International Funds Management B.V. (the "Sub-
Advisor"), Foppingadreef 22, P.O. Box 246, 1000 EA
Amsterdam, The Netherlands, serves as the investment sub-
advisor of the International Equity Fund, TransEurope Fund,
Asian Tigers Fund, International Fixed Income Fund and Latin
America Equity Fund pursuant to a Sub-Advisory Agreement
with the Advisor. The Sub-Advisor is a holding company
affiliate of the Advisor. Under the Sub-Advisory Agreement,
the Sub-Advisor manages the Funds, selects investments and
places all orders for purchases and sales of the Funds'
securities, subject to the general supervision of the
Trustees of the Trust and the Advisor. The Sub-Advisor has
approximately $828 million under management, and manages two
non-U.S. investment companies.
Wypke Postma fund manager with the Sub-Advisor, has
served as portfolio manager for the International Equity
Fund since March, 1997. Mr. Postma has been associated with
the Sub-Advisor and/or its affiliates since 1984.
Alex Ng has served as portfolio manager for the Asian
Tigers Fund since July, 1995. Mr. Ng has been associated
with the Sub-Advisor and/or its parent since 1988. Mr. Ng
also serves as the Far East Director of Asset Management for
a Hong Kong-based affiliate of the Advisor.
Felix Lanters, portfolio manager for the TransEurope
Fund, has been associated with the Sub-Advisor and/or its
parent since 1987.
Rogier Crijns, an officer of the Sub-Advisor has served
as portfolio manager for the International Fixed Income Fund
since June, 1996. Mr. Crijns has worked as a Portfolio
Manager with ABN AMRO and/or its affiliates since 1990.
Jan-Wim Derks, an officer of the Sub-Advisor, has served
as portfolio manager for the Latin America Equity Fund since
its inception. Mr. Derks has served as a Portfolio Manager
with ABN AMRO and/or its affiliates since 1989.
For services provided and expenses incurred pursuant to
the Sub-Advisory Agreement, AANIFM is entitled to receive
from the Advisor a fee, which is computed daily and paid
quarterly, at the annual rate of .50% of the average daily
net assets of each of the International Equity Fund,
TransEurope Fund, Latin America Equity Fund and Asian Tigers
Fund, and .40% of the average daily net assets of the
International Fixed Income Fund. The Sub-Advisor received
fees from the Advisor of .50% for the Asian Tigers Fund,
.50% for the Latin America Equity Fund and International
Equity Fund and .40% for the International Fixed Income Fund
for the fiscal year ended December 31, 1996.
37
<PAGE>
THE ADMINISTRATOR ______________________________________________________________
SEI Fund Resources (the "Administrator"), Oaks,
Pennsylvania, 19456, a Delaware business trust, provides the
Trust with administrative services, including fund
accounting, regulatory reporting, necessary office space,
equipment, personnel and facilities. SEI
Financial Management Corporation, a wholly-owned subsidiary
of SEI Corporation ("SEI"), is the owner of all beneficial
interest in the Administrator.
The Administrator is entitled to a fee, which is
calculated daily and paid monthly, at an annual rate of .15%
of the average daily net assets of the Funds.
THE TRANSFERAGENT ______________________________________________________________
DST Systems, Inc., 1004 Baltimore Avenue, Kansas City,
Missouri 64105, serves as the transfer agent, and dividend
disbursing agent for the Trust. Compensation for these
services is paid under a transfer agency agreement with the
Trust.
THE DISTRIBUTOR ________________________________________________________________
Rembrandt(R) Financial Services Company (the "Distributor"),
Oaks, Pennsylvania 19456, a subsidiary of SEI Financial
Services Company, and the Trust are parties to a
distribution agreement (the "Distribution Agreement"). The
Investor Class shares of the Trust have a distribution plan
dated December 31, 1992 (the "Investor Class Plan"). As
provided in the Investor Class Plan, the Trust pays a fee of
.25% of the average daily net assets of the Investor Class
shares of the Funds to the Distributor as compensation for
its services. From this amount, the Distributor may make
payments to financial institutions and intermediaries such
as banks (including LaSalle National Bank), savings and loan
associations, insurance companies, and investment
counselors, broker-dealers, and the Distributor's affiliates
and subsidiaries as compensation for services, reimbursement
of expenses incurred in connection with distribution
assistance, or provision of shareholder services. The
Investor Class Plan is characterized as a compensation plan
since the distribution fee is paid to the Distributor
without regard to the distribution or shareholder service
expenses incurred by the Distributor or the amount of
payments made to financial institutions and intermediaries.
The Funds may also execute brokerage or other agency
transactions through an affiliate of the Advisor or through
the Distributor for which the affiliate or the Distributor
receives compensation.
It is possible that a financial institution may offer
different classes of shares of the Funds to its customers
and the shares of such customers may be assessed for
different distribution expenses with respect to different
classes of shares.
38
<PAGE>
PERFORMANCE ____________________________________________________________________
THE EQUITY, From time to time, the Funds may advertise yield and total
BALANCED AND return. These figures will be based on historical earnings
FIXED INCOME and are not intended to indicate future performance. The
FUNDS yield of a Fund refers to the annualized income generated by
an investment in the Fund over a specified 30-day period.
The yield is calculated by assuming that the same amount of
income generated by the investment during that period is
generated in each 30-day period over one year, and is shown
as a percentage of the investment.
The total return of a Fund refers to the average
compounded rate of return on a hypothetical investment, net
of any sales charge imposed on Investor Class shares, for
designated time periods (including, but not limited to, the
period from which the Fund commenced operations through the
specified date), assuming that the entire investment is
redeemed at the end of each period and assuming the
reinvestment of all dividend and capital gain distributions.
The total return of a Fund may also be quoted as a dollar
amount or on an aggregate basis, an actual basis, without
inclusion of any sales charge, or with a reduced sales
charge in advertisements distributed to investors entitled
to a reduced sales charge.
THE MONEY From time to time a Fund may advertise its current yield and
MARKET FUNDS effective compound yield. Both yield figures are based on
historical earnings and are not intended to indicate future
performance. The current yield of a Fund refers to the
income generated by an investment in the Fund over a seven-
day period (which period will be stated in the
advertisement). This income is then annualized. That is, the
amount of income generated by the investment during that
week is assumed to be generated each week over a 52-week
period and is shown as a percentage of the investment. The
effective compound yield is calculated similarly, but when
annualized, the income earned by an investment in a Fund is
assumed to be reinvested. The effective compound yield will
be slightly higher than the current yield because of the
compounding effect of this assumed reinvestment. The Tax-
Exempt Money Market Fund may also advertise a tax-equivalent
yield, which is calculated by determining the rate of return
that would have to be achieved on a fully taxable investment
to produce the after-tax equivalent of the Tax-Exempt Money
Market Fund's yield, assuming certain tax brackets for a
Shareholder.
ALL FUNDS A Fund may periodically compare its performance to that of
other mutual funds tracked by mutual fund rating services
(such as Lipper Analytical Securities Corp.) or by financial
and business publications and periodicals, broad groups of
comparable mutual funds or unmanaged indices which may
assume investment of dividends but generally do not reflect
deductions for administrative and management costs. A Fund
may quote services such as Morningstar, Inc., a service that
ranks mutual funds on the basis of risk-adjusted
performance, and Ibbotson Associates of Chicago, Illinois,
which provides historical returns of the capital markets in
the U.S. A Fund may use long-term performance of these
capital markets to demonstrate general long-term risk versus
reward scenarios and could include
39
<PAGE>
..........................
[SYMBOL TAXES
APPEARS
HERE]
You must pay
taxes on your
Fund's earnings,
whether you take
your payments in
cash or addi-
tional shares.
..........................
the value of a hypothetical investment in any of the capital
markets. A Fund may also quote financial and business
publications and periodicals as they relate to fund
management, investment philosophy, and investment techniques.
A Fund may quote various measures of volatility and
benchmark correlation in advertising, and may compare these
measures to those of other funds. Measures of volatility
attempt to compare historical share price fluctuations or
total returns to a benchmark while measures of benchmark
correlation indicate the validity of a comparative benchmark.
Measures of volatility and correlation are calculated using
averages of historical data and cannot be precisely
calculated.
The performance of Trust Class shares will normally be
higher than for Investor Class shares because the Trust Class
is not subject to distribution expenses charged to the
Investor Class shares.
Additional performance information is set forth in the
1996 Annual Report to Shareholders, and is available upon
request and without charge by calling 1-800-443-4725.
The portfolio turnover rates for the Small Cap,
Intermediate Government Fixed Income, Fixed Income and
Balanced Funds for the fiscal year ended December 31, 1996
were 158%, 179%, 194% and 104%, respectively. A high turnover
rate will result in higher transaction costs and may result
in additional tax consequences for shareholders.
TAXES __________________________________________________________________________
The following summary of federal income tax consequences is
based on current tax laws and regulations, which may be
changed by legislative, judicial, or administrative action.
No attempt has been made to present a detailed explanation of
the federal, state, or local income tax treatment of a Fund
or its Shareholders. Accordingly, Shareholders are urged to
consult their tax advisors regarding specific questions as to
federal, state, and local income taxes. State and local tax
consequences on an investment in a Fund may differ from the
federal income tax consequences described below. Additional
information concerning taxes is set forth in the Statement of
Additional Information.
Tax Status of Each Fund is treated as a separate entity for federal income
the Funds tax purposes and is not combined with the Trust's other Funds.
Each Fund intends to qualify for the special tax treatment
afforded regulated investment companies as defined under
Subchapter M of the Internal Revenue Code of 1986, as amended.
As long as each Fund qualifies for this special tax treatment,
it will be relieved of federal income tax on that part of its
net investment income and net capital gains (the
E0
<PAGE>
..........................
[SYMBOL DISTRIBUTIONS
APPEARS
HERE]
The Fund distributes income
dividends and capital gains.
Income dividends represent the
earnings from the Fund's
investments; capital gains
distributions occur when
investments in the Fund are
sold for more than the
original purchase price.
..........................
excess of net long-term capital gain over net short-term
capital loss) which is distributed to Shareholders.
Tax Status of Each Fund will distribute all of its net investment income
Distributions (including, for this purpose, net short-term capital gain) to
Shareholders. Dividends from net investment income will be
taxable to Shareholders as ordinary income whether received in
cash or in additional shares. Any net capital gains will be
distributed annually and will be taxed to Shareholders as long-
term capital gains, regardless of how long the Shareholder has
held shares and regardless of whether the distributions
are received in cash or in additional shares. Each Fund will
notify annually Shareholders of the federal income tax
character of all distributions.
Certain securities purchased by a Fund (such as STRIPS,
TRs, TIGRs and CATS, defined in "Description of Permitted
Investments and Risk Factors"), are sold at original issue
discount, and thus do not make periodic cash interest
payments. Each Fund will be required to include as part of
its current income the imputed interest on such obligations
even though the Fund has not received any interest payments
on such obligations during that period. Because each Fund
distributes all of its net investment income to its
Shareholders, a Fund may have to sell portfolio securities to
distribute such imputed income, which may occur at a time
when the Advisor would not have chosen to sell such
securities and which may result in a taxable gain or loss.
Income received on U.S. obligations is exempt from tax at
the state level when received directly by a Fund and may be
exempt, depending on the state, when received by a
Shareholder as income dividends from the Fund, provided
certain State-specific conditions are satisfied. Each Fund
will inform Shareholders annually of the percentage of income
and distributions derived from U.S. obligations. Shareholders
should consult their tax advisor to determine whether any
portion of the income dividends received from a Fund is
considered tax exempt in their particular state.
Dividends declared by a Fund in October, November or
December of any year and payable to Shareholders of record on
a date in that month will be deemed to have been paid by the
Fund and received by the Shareholder on December 31 of that
year, if paid by the Fund at any time during the following
January.
Each Fund intends to make sufficient distributions prior
to the end of each calendar year to avoid liability for the
federal excise tax applicable to regulated investment
companies.
Investment income received by a Fund from sources within
foreign countries may be subject to foreign income taxes
withheld at the source. The International Equity Fund,
TransEurope Fund, Latin America Equity Fund, Asian Tigers
Fund and International Fixed
41
<PAGE>
Income Fund expect to be able to elect to treat Shareholders
as having paid their proportionate share of such foreign
taxes withheld.
As a general rule, dividends (not capital gain
distributions) paid by a Fund, to the extent derived from
dividends received from domestic corporations, will,
provided certain conditions are met, qualify for the
dividends received deduction for corporate Shareholders.
Distributions of net capital gains from any Fund do not
qualify for the dividends received deduction.
Dividends paid by the Fixed Income Funds will not qualify
for the dividends received deduction for corporate
Shareholders.
Each of the Tax-Exempt Fixed Income Fund and Tax-Exempt
Money Market Fund intends to qualify to pay "exempt interest
dividends" by satisfying the Code's requirement that at the
close of each quarter of its taxable year at least 50
percent of the value of its total assets consists of
obligations, the interest on which is exempt from federal
income tax. So long as this and certain other requirements
are met, dividends consisting of such Funds' net tax-exempt
interest income will be exempt interest dividends, which are
exempt from federal income tax in the hands of the
Shareholders of the Fund, but may have alternative minimum
tax consequences. See the Statement of Additional
Information.
Current federal income tax laws limit the types and
volume of bonds qualifying for the federal income tax
exemption of interest, which may have an effect on the
ability of the Tax-Exempt Fixed Income Fund and the Tax-
Exempt Money Market Fund to purchase sufficient amounts of
tax-exempt securities to satisfy the Code's requirements for
the payment of "exempt interest dividends." Accordingly,
municipal funds may not be an appropriate investment for
persons (including corporations and other business entities)
who are "substantial users" (or persons related to
"substantial users") of facilities financed by private
activity bonds or certain industrial development bonds.
"Substantial user" is defined generally as including a "non-
exempt person" who regularly uses in a trade or business a
part of a facility financed from the proceeds of industrial
development bonds. Current federal tax law also makes
interest on certain tax-exempt bonds a tax preference item
for purposes of the individual and corporate alternative
minimum tax.
Interest on indebtedness incurred by Shareholders to
purchase or carry shares of the Tax-Exempt Fixed Income Fund
and the Tax-Exempt Money Market Fund is generally not
deductible for federal income tax purposes.
Each sale, exchange, or redemption of Fund shares is a
taxable event to the Shareholder.
42
<PAGE>
..........................
[SYMBOL BUY, EXCHANGE AND
APPEARS SELL REQUESTS ARE IN
HERE] "GOOD ORDER" WHEN:
. The account number and Fund
name are shown
. The amount of the transaction
is specified in dollars or
shares
. Signatures of all owners
appear exactly as they are
registered on the account
. Any required signature
guarantees (if applicable)
are included
. Other supporting legal
documents (as necessary) are
present
..........................
ADDITIONAL INFORMATION ABOUT DOING BUSINESS WITH US ____________________________
Business Days You may buy, sell or exchange shares on days on which the New
York Stock Exchange is open for business (a "Business Day").
However, shares of a Money Market Fund cannot be purchased by
Federal Reserve wire on federal holidays restricting wire
transfers.
A purchase order for Trust Class shares of the Equity,
Balanced and Fixed Income Funds will be effective as of the day
received by the Transfer Agent if the Transfer Agent receives
the order before 4:00 p.m., Eastern time. The purchase price of
Trust Class shares of the Fund is the net asset value next
determined after a purchase order is effective. An investor in
Trust Class shares of a Fund may not purchase shares by check.
A purchase order for Investor Class shares of the Equity,
Balanced and Fixed Income Funds will be effective as of the
Business Day received by the Transfer Agent if the Transfer
Agent receives the order and payment before 4:00 p.m., Eastern
time.
However, an order may be canceled if the Custodian does not
receive federal funds before 4:00 p.m., Eastern time on the
next Business Day, and the investor could be liable for any
fees or expenses incurred by the Trust. The purchase price of
Investor Class shares of a Fund is the net asset value next
determined after a purchase order is effective plus a sales
load.
A purchase order for Trust Class shares or Investor Class
shares of the Money Market Funds will be effective as of the
day received by the Transfer Agent and eligible to receive
dividends declared the same day if the Transfer Agent
receives the order and the Custodian receives federal funds
payment before 1:00 p.m., Eastern time on such day.
Otherwise, the purchase order will be effective the next
Business Day.
Minimum The minimum initial investment in the Investor Class shares
Investment is $2,000; however, the minimum investment may be waived at
the Distributor's discretion. All subsequent purchases must
be at least $100. The Funds are intended to be long-term
investment vehicles and are not designed to provide investors
with a means of speculating on short-term movements.
Consequently, the Trust reserves the right to reject a
purchase order for Trust Class shares or Investor Class
shares when the Trust or the Transfer Agent determines that
it is not in the best interest of the Trust or its
shareholders to accept such order.
43
<PAGE>
Maintaining a Due to the relatively high cost of handling small
Minimum Account investments, each Fund reserves the right to redeem, at net
Balance asset value, the shares of any Shareholder if, because of
redemptions of shares by or on behalf of any Shareholder,
the account of such Shareholder in any Fund has a value of
less than $1,000, the minimum initial purchase amount.
Accordingly, an investor purchasing shares of any Fund in
only the minimum investment amount may be subject to such
involuntary redemption if he or she thereafter redeems any
of these shares. Before any Fund exercises its right to
redeem such shares and to send the proceeds to the
Shareholder, the Shareholder will be given notice that the
value of the shares in his or her account is less than the
minimum amount and will be allowed 60 days to make an
additional investment in such Fund in an amount that will
increase the value of the account to at least $1,000. See
"Purchase and Redemption of Shares" in the Statement of
Additional Information for examples of when the right of
redemption may be suspended.
Net Asset Value The purchase price of a share of the Funds is the net asset
value per share next computed after the order is received
and accepted by the Trust, plus any applicable sales charge.
The selling price of a share of the Funds is the net asset
value per share next determined after receipt of the request
for redemption in good order. The net asset value per share
of the Money Market Funds is calculated as of 1:00 p.m.,
Eastern time, each Business Day. The net asset value of the
Equity, Balanced and Fixed Income Funds is determined as of
the regular close of business of the New York Stock Exchange
(currently 4:00 p.m. Eastern time) each Business Day.
How the Net The net asset value per share of a Fund is determined by
Asset Value is dividing the total market value of the Fund's investments
Determined and other assets, less any liabilities, by the total number
of outstanding shares of the Fund. The Equity, Balanced and
Fixed Income Funds value their portfolio securities at the
last quoted sales price for such securities, or, if there is
no such reported sales price on the valuation date, at the
most recent quoted bid price. The investments of the Money
Market Funds will be valued using the amortized cost method
described in the Statement of Additional Information.
Pursuant to guidelines adopted and monitored by the Trustees
of the Trust, the Funds may use a pricing service to provide
market quotations. A pricing service may use a matrix system
of valuation to value fixed income securities which
considers factors such as securities prices, call features,
ratings, and developments related to a specific security.
Although the methodology and procedures for determining
net asset value are identical for both classes of a Fund,
the net asset value per share of such classes may differ
because of the distribution expenses charged to Investor
Class shares.
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GENERAL INFORMATION ____________________________________________________________
The Trust The Trust was organized as a Massachusetts business trust
under a Declaration of Trust dated September 17, 1992, and
amended September 28, 1992 and October 20, 1992. The
Declaration of Trust permits the Trust to offer shares of
separate funds and different classes of each fund. The Trust
consists of the following funds: Money Market Fund,
Government Money Market Fund, Treasury Money Market Fund,
Tax-Exempt Money Market Fund, Fixed Income Fund,
Intermediate Government Fixed Income Fund, Tax-Exempt Fixed
Income Fund, International Fixed Income Fund, Limited
Volatility Fixed Income Fund, Latin America Equity Fund,
Value Fund, Growth Fund, Small Cap Fund, International
Equity Fund, TransEurope Fund, Asian Tigers Fund and
Balanced Fund. All consideration received by the Trust for
shares of any Fund and all assets of such Fund belong to
that fund, and would be subject to liabilities related
thereto. The Trust reserves the right to create and issue
shares of additional funds. As of December 31, 1996, the
Limited Volatility Fixed Income Fund and TransEurope Fund
had not commenced operations.
The Trust pays its expenses, including fees of its
service providers, audit and legal expenses, expenses of
preparing prospectuses, proxy solicitation material and
reports to Shareholders, costs of custodial services and
registering the shares under federal and state securities
laws, pricing, insurance expenses, litigation and other
extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses. See "Financial Highlights"
for more information regarding the Trust's expenses.
Trustees of the The management and affairs of the Trust are supervised by
Trust the Trustees under the laws governing business trusts in the
Commonwealth of Massachusetts. The Trustees have approved
contracts under which, as described above, certain companies
provide essential management, administrative and Shareholder
services to the Trust.
Voting Rights Each share held entitles the Shareholder of record to one
vote. Shareholders of each Fund or class will vote
separately on matters relating solely to that Fund or class.
As a Massachusetts business trust, the Trust is not required
to hold annual meetings of Shareholders, but meetings of
Shareholders will be held from time to time to seek approval
for certain changes in the operation of the Trust and for
the election of Trustees under certain circumstances. In
addition, a Trustee may be removed by the remaining Trustees
or by Shareholders at a special meeting called upon written
request of Shareholders owning at least 10% of the
outstanding shares of the Trust. In the event that such a
meeting is requested, the Trust will provide appropriate
assistance and information to the Shareholders requesting
the meeting.
Reporting The Trust issues unaudited financial information semi-
annually and audited financial statements annually. The
Trust furnishes periodic reports to Shareholders of record,
and, as necessary, proxy statements for Shareholder
meetings.
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Shareholder Shareholder inquiries should be directed to the
Inquiries Administrator, Oaks, Pennsylvania, 19456, at 1-800-443-4725.
Dividends
Substantially all of the net investment income (not
including capital gains) of the Value, Growth, Small Cap,
Balanced, Fixed Income, Intermediate Government Fixed
Income, Tax-Exempt Fixed Income and Limited Volatility Fixed
Income Funds is distributed in the form of monthly
dividends, and that of the International Equity, Latin
America Equity, TransEurope, Asian Tigers and International
Fixed Income Funds is distributed in the form of dividends
at least annually. Shareholders who own shares at the close
of business on the record date will be entitled to receive
the dividend. Currently, capital gains of the Funds, if any,
will be distributed at least annually.
The net investment income (exclusive of capital gains) of
each of the Money Market Funds is distributed in the form of
dividends, which are declared daily and distributed monthly
to Shareholders. Currently, capital gains of the Funds, if
any, will be distributed at least annually.
Shareholders automatically receive all income dividends
and capital gain distributions in additional shares at the
net asset value next determined following the record date,
unless the Shareholder has elected to take such payment in
cash. Shareholders may change their election by providing
written notice to the Transfer Agent at least 15 days prior
to the distribution.
Dividends and distributions of the Funds are paid on a
per-share basis. The value of each share will be reduced by
the amount of the payment. If shares are purchased shortly
before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the
shares and receive some portion of the price back as a
taxable dividend or distribution. The amount of dividends
payable on Trust Class shares will typically be higher than
the dividends payable on the Investor Class shares because
of the distribution expenses charged to Investor Class
shares.
The Trust believes that as of April 1, 1997, LaSalle
National Bank and its affiliates owned of record or
beneficially, substantially all of the Trust Class shares of
the Value, Growth, Small Cap, International Equity, Asian
Tigers, Balanced, Fixed Income, Intermediate Government
Fixed Income, Tax-Exempt Fixed Income, International Fixed
Income, Treasury Money Market, Government Money Market,
Money Market and Tax-Exempt Money Market Funds. As a
consequence, LaSalle National Bank may be deemed to
"control" these Funds within the meaning of the 1940 Act.
Counsel and Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
Auditors Ernst & Young LLP serves as the independent auditors of the
Trust.
Custodians CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box
7618, Philadelphia, Pennsylvania 19101, acts as Custodian of
the Trust. Morgan Stanley Trust Company, serves as foreign
Sub-Custodian of the Trust. The Custodians hold cash,
securities and other assets of the Trust as required by the
1940 Act.
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DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS __________________________
American The following is a description of certain of the permitted
Depositary investments and risk factors for the Funds:
Receipts ADRs are securities, typically issued by a U.S. financial
("ADRs") institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a
foreign issuer and deposited with the depositary. ADRs may
be available through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by
the issuer of the security underlying the receipt and a
depositary, whereas an unsponsored facility may be
established by a depositary without participation by the
issuer of the underlying security. Holders of unsponsored
depositary receipts generally bear all the costs of the
unsponsored facility. The depositary of an unsponsored
facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the
deposited security or to pass through, to the holders of the
receipts, voting rights with respect to the deposited
securities.
Asset-Backed Asset-backed securities consist of securities secured by
Securities company receivables, truck and auto loans, leases and credit
(Non-mortgage) card receivables. Such securities are generally issued as
pass-through certificates, which represent undivided
fractional ownership interests in the underlying pools of
assets. Such securities also may be debt instruments, which
are also known as collateralized obligations and are
generally issued as the debt of a special purpose entity,
such as a trust, organized solely for purpose of owning such
assets and issuing such debt. A Fund may invest in other
asset-backed securities that may be created in the future if
the Advisor determines they are suitable.
Bankers' Bankers' acceptances are bills of exchange or time drafts
Acceptances 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.
Bank Investment BICs are contracts issued by U.S. banks and savings and loan
Contracts ("BICs")institutions. Pursuant to such contracts, a Fund makes cash
contributions to a deposit fund of the general account of
the bank or savings and loan institution. The bank or
savings and loan institution then credits to the Fund on a
monthly basis guaranteed interest at either a fixed,
variable or floating rate. Generally, BICs are not
assignable or transferable without the permission of the
issuing bank or savings and loan institution. For this
reason, BICs are considered to be illiquid investments.
Certificates of Certificates of deposit are interest bearing instrument with
Deposit a specific maturity. Certificates of deposit 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. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.
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Commercial Commercial paper is a term used to describe unsecured short-
Paper term promissory notes issued by banks, municipalities,
corporations and other entities. Maturities on these issues
vary from a few to 270 days.
Convertible Convertible securities are corporate securities that are
Securities exchangeable for a set number of shares of another security
at a prestated price. Convertible securities have
characteristics similar to both fixed income and equity
securities. Because of the conversion feature, the market
value of convertible securities tends to move together with
the market value of the underlying stock. The value of
convertible securities is also affected by prevailing
interest rates, the credit quality of the issuer, and any
call provisions.
Dollar Rolls Dollar roll transactions consist of the sale of mortgage-
backed securities to a bank or broker-dealer, together with
a commitment to purchase similar, but not necessarily
identical, securities at a future date. Any difference
between the sale price and the purchase price is netted
against the interest income foregone on the securities to
arrive at an implied borrowing (reverse repurchase) rate.
Alternatively, the sale and purchase transactions which
constitute the dollar roll can be executed at the same
price, with the Fund being paid a fee as consideration for
entering into the commitment to purchase. Dollar rolls may
be renewed after cash settlement and initially may involve
only a firm commitment agreement by the Fund to buy a
security.
If the broker-dealer to whom the Fund sells the security
becomes insolvent, the Fund's right to purchase or
repurchase the security may be restricted. Also, the value
of the security may change adversely over the term of the
dollar roll, such that the security that the Fund is
required to repurchase may be worth less than the security
that the Fund originally held.
Equity Equity securities are common stocks and common stock
Securities equivalents consisting of securities convertible into common
stocks and securities having common stock characteristics
(i.e., rights and warrants to purchase common stocks,
sponsored and unsponsored ADRs and equity securities of
closed-end investment companies. Investments in common
stocks are subject to market risks which may cause their
prices to fluctuate over time. Changes in the value of
portfolio securities will not necessarily affect cash income
derived from these securities but will not affect a Fund's
net asset value.
Fixed Income The market value of fixed income investments will change in
Securities response to interest rate changes and other factors. During
periods of falling interest rates, the values of outstanding
fixed income securities generally rise. Conversely, during
periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities
with longer maturities tend to produce higher yields, the
prices of securities with longer maturities are also subject
to greater market fluctuations as a result of changes in
interest rates. Changes by NRSROs in the rating of any fixed
income security and in the ability of an issuer to make
payments of interest and principal also affect the value of
these investments.
Forward Foreign A forward contract involves an obligation to purchase or
Currency sell a specific currency amount at a future date, agreed
Contracts upon by the parties, at a price set at the time of the
contract.
At the maturity of a forward contract, a Fund may either
sell a portfolio security and make delivery of the foreign
currency, or it may retain the security and terminate its
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contractual obligation to deliver the foreign currency by
purchasing an "offsetting" contract with the same currency
trader, obligating it to purchase, on the same maturity
date, the same amount of the foreign currency. A Fund may
realize a gain or loss from currency transactions.
Futures Futures contracts provide for the future sale by one party
Contracts and and purchase by another party of a specified amount of a
Options on specific security at a specified future time and at a
Futures specified price. An option on a futures contract gives the
Contracts purchaser the right, in exchange for a premium, to assume a
position in a futures contract at a specified exercise price
during the term of the option. A Fund may use futures
contracts and related options for bona fide hedging
purposes, to offset changes in the value of securities held
or expected to be acquired or be disposed of, to minimize
fluctuations in foreign currencies, or to gain exposure to a
particular market or instrument. A Fund will minimize the
risk that it will be unable to close out a futures contract
by only entering into futures contracts which are traded on
national futures exchanges. In addition, a Fund will only
sell covered futures contracts and options on futures
contracts.
Stock and bond index futures are futures contracts for
various stock and bond indices that are traded on registered
securities exchanges. Stock and bond index futures contracts
obligate the seller to deliver (and the purchaser to take)
an amount of cash equal to a specific dollar amount times
the difference between the value of a specific stock or bond
index at the close of the last trading day of the contract
and the price at which the agreement is made.
Eurodollar futures are U.S. dollar-denominated futures
contracts or options thereon which are linked to the London
Interbank Offered Rate ("LIBOR"), although foreign currency
denominated instruments are available from time to time.
Eurodollar futures contracts enable purchasers to obtain a
fixed rate for the lending of the funds and sellers to
obtain a fixed rate for borrowings.
No price is paid upon entering into futures contracts.
Instead, a Fund is required to deposit an amount of cash or
U.S. Treasury securities known as "initial margin."
Subsequent payments, called "variation margin," to and from
the broker, are made on a daily basis as the value of the
futures position varies (a process known as "marking to
market"). The margin is in the nature of a performance bond
or good-faith deposit on a futures contract.
In order to avoid leveraging and related risks, when a
Fund purchases futures contracts, it will collateralize its
position by depositing an amount of liquid securities, cash
or cash equivalents, equal to the market value of the
futures positions held, less margin deposits, in a
segregated account with the Trust's custodian. Collateral
equal to the current market value of the futures position
will be marked to market on a daily basis.
There are risks associated with these activities,
including the following: (1) the success of a hedging
strategy may depend on an ability to predict movements in
the prices of individual securities, fluctuations in markets
and movements in interest rates; (2) there
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may be an imperfect or no correlation between the changes in
market value of the securities held by a Fund and the prices
of futures and options on futures; (3) there may not be a
liquid secondary market for a futures contract or option;
(4) trading restrictions or limitations may be imposed by an
exchange; and (5) government regulations may restrict
trading in futures contracts and futures options.
Guaranteed GICs are contracts issued by U.S. insurance companies.
Investment Pursuant to such contracts, the Fund makes cash
Contracts contributions to a deposit fund of the insurance company's
("GICs") general account. The insurance company then credits to the
Fund on a monthly basis guaranteed interest at either a
fixed, variable or floating rate. Generally, GICs are not
assignable or transferable without the permission of the
issuing insurance companies. For this reason, GICs are
considered by a Fund to be illiquid investments.
Illiquid Illiquid securities are securities that cannot be disposed
Securities of within 7 business days at approximately the price at
which they are being carried on a Fund's books. An illiquid
security includes a demand instrument with a demand notice
period exceeding 7 days, if there is no secondary market for
such security, and repurchase agreements with durations (or
maturities) over 7 days in length.
Loan Loan participations are interests in loans to U.S.
Participations corporations which are administered by the lending bank or
agent for a syndicate of lending banks, and sold by the
lending bank or syndicate member ("intermediary bank"). In a
loan participation, the borrower corporation will be deemed
to be the issuer of the participation interest except to the
extent the Fund derives its rights from the intermediary
bank. Because the intermediary bank does not guarantee a
loan participation in any way, a loan participation is
subject to the credit risks generally associated with the
underlying corporate borrower. In the event of the
bankruptcy or insolvency of the corporate borrower, a loan
participation may be subject to certain defenses that can be
asserted by such borrower as a result of improper conduct by
the intermediary bank. In addition, in the event the
underlying corporate borrower fails to pay principal and
interest when due, the Fund may be subject to delays,
expenses and risks that are greater than those that would
have been involved if the Fund had purchased a direct
obligation of such borrower. Under the terms of a loan
participation, the Fund may be regarded as a creditor of the
intermediary bank, (rather than of the underlying corporate
borrower), so that the Fund may also be subject to the risk
that the intermediary bank may become insolvent. The
secondary market, if any, for these loan participations is
limited.
Mortgage-Backed Mortgage-backed securities are instruments that entitle the
Securities holder to a share of all interest and principal payments
from mortgages underlying the security. The mortgages
backing these securities include conventional thirty-year
fixed rate mortgages, graduated payment mortgages, balloon
mortgages and adjustable rate mortgages. During periods of
declining interest rates, prepayment of mortgages underlying
mortgage-backed securities can be expected to accelerate.
Prepayment of mortgages which underlie securities purchased
at a
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premium often results in capital losses, while prepayment of
mortgages purchased at a discount often results in capital
gains. Because of these unpredictable prepayment
characteristics, it is often not possible to predict
accurately the average life or realized yield of a
particular issue.
Government Pass-Through Securities: These are securities
that are issued or guaranteed by a U.S. Government agency
representing an interest in a pool of mortgage loans. The
primary issuers or guarantors of these mortgage-backed
securities are GNMA, Fannie Mae and FHLMC. GNMA, Fannie Mae
and FHLMC guarantee timely distributions of interest to
certificate holders. GNMA and Fannie Mae also guarantee
timely distributions of scheduled principal. Fannie Mae and
FHLMC obligations are not backed by the full faith and
credit of the U.S. Government as GNMA certificates are, but
Fannie Mae and FHLMC securities are supported by the
instrumentalities' right to borrow from the U.S. Treasury.
Private Pass-Through Securities: These are mortgage-
backed securities issued by a non-governmental entity, such
as a trust or corporation. These securities include
collateralized mortgage obligations ("CMOs") and real estate
mortgage investment conduits ("REMICs"). While they are
generally structured with one or more types of credit
enhancement, private pass-through securities typically lack
a guarantee by an entity having the credit status of a
governmental agency or instrumentality.
In a CMO, series of bonds or certificates are usually
issued in multiple classes. Principal and interest paid on
the underlying mortgage assets may be allocated among the
several classes of a series of a CMO in a variety of ways.
Principal payments on the underlying mortgage assets may
cause CMOs to be retired substantially earlier then their
stated maturities or final distribution dates, resulting in
a loss of all or part of any premium paid.
A REMIC is a CMO that qualifies for special tax treatment
under the Internal Revenue Code and invests in certain
mortgages principally secured by interests in real property.
Investors may purchase beneficial interests in REMICs, which
are known as "regular" interests, or "residual" interests.
Guaranteed REMIC pass-through certificates ("REMIC
Certificates") issued by Fannie Mae or FHLMC represent
beneficial ownership interests in a REMIC trust consisting
principally of mortgage loans or Fannie Mae. FHLMC or GNMA-
guaranteed mortgage pass-through certificates. For FHLMC
REMIC Certificates, FHLMC guarantees the timely payment of
interest, and also guarantees the payment of principal as
payments are required to be made on the underlying mortgage
participation certificates.
Stripped Mortgage-Backed Securities ("SMBs"): SMBs are
usually structured with two classes that receive specified
proportions of the monthly interest and principal payments
from a pool of mortgage securities. One class may receive
all of the interest payments and is thus termed an interest-
only class ("IO"), while the other class may receive all of
the principal payments and is thus termed the principal-only
class ("PO"). The value of IOs tends to increase as rates
rise and decrease as rates fall; the opposite is true
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of POs. SMBs are extremely sensitive to changes in interest
rates because of the impact thereon of prepayment of
principal on the underlying mortgage securities.
Municipal Municipal securities consist of (i) debt obligations issued
Securities by or on behalf of public authorities to obtain funds to be
used for various public facilities, for refunding
outstanding obligations, for general operating expenses, and
for lending such funds to other public institutions and
facilities, and (ii) certain private activity and industrial
development bonds issued by or on behalf of public
authorities to obtain funds to provide for the construction,
equipment, repair, or improvement of privately operated
facilities. General obligation bonds are backed by the
taxing power of the issuing municipality. Revenue bonds are
backed by the revenues of a project or facility; tolls from
a toll bridge for example. The payment of principal and
interest on private activity and industrial development
bonds generally is dependent solely on the ability of the
facility's user to meet its financial obligations and the
pledge, if any, of real and personal property so financed as
security for such payment.
Municipal securities include both municipal notes and
municipal bonds. Municipal notes include general obligation
notes, tax anticipation notes, revenue anticipation notes,
bond anticipation notes, certificates of indebtedness,
demand notes, and construction loan notes. Municipal bonds
include general obligation bonds, revenue or special
obligation bonds, private activity and industrial
development bonds.
Obligations of Supranational entities are entities established through the
Supranational joint participation of several governments, and include the
Entities Asian Development Bank, Inter-American Development Bank,
International Bank for Reconstruction and Development (World
Bank), African Development Bank, European Economic
Community, European Investment Bank and Nordic Investment
Bank. The governmental members, or "stockholders," usually
make initial capital contributions to the supranational
entity and in many cases are committed to make additional
capital contributions if the supranational entity is unable
to repay its borrowings.
Options A put option gives the purchaser the right to sell, and the
writer the obligation to buy, the underlying security at any
time during the option period. A call option gives the
purchaser the right to buy, and the writer the obligation to
sell, the underlying security at any time during the option
period. The premium paid to the writer is the consideration
for undertaking the obligations under the option contract.
A Fund may purchase put and call options to protect
against a decline in the market value of the securities in
its portfolio or to protect against an increase in the cost
of securities that the Fund may seek to purchase in the
future. A Fund purchasing put and call options pays a
premium therefor. If price movements in the underlying
securities are such that exercise of the options would not
be profitable for the Fund, loss of the premium paid may be
offset by an increase in the value of the Fund's securities
or by a decrease in the cost of acquisition of securities by
the Fund.
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A Fund may write covered put and call options as a means
of increasing the yield on its portfolio and as a means of
providing limited protection against decreases in its market
value. When a Fund sells an option, if the underlying
securities do not increase or decrease to a price level that
would make the exercise of the option profitable to the
holder thereof, the option generally will expire without
being exercised and the Fund will realize as profit the
premium received for such option. When a call option of
which a Fund is the writer is exercised, the Fund will be
required to sell the underlying securities to the option
holder at the strike price, and will not participate in any
increase in the price of such securities above the strike
price. When a put option of which a Fund is the writer is
exercised, the Fund will be required to purchase the
underlying securities at the strike price, which may be in
excess of the market value of such securities.
A Fund may purchase and write options on an exchange or
over-the-counter. Over-the-counter options ("OTC options")
differ from exchange-traded options in several respects.
They are transacted directly with dealers and not with a
clearing corporation, and therefore entail the risk of non-
performance by the dealer. OTC options are available for a
greater variety of securities and for a wider range of
expiration dates and exercise prices than are available for
exchange-traded options. Because OTC options are not traded
on an exchange, pricing is done normally by reference to
information from a market maker. It is the position of the
Securities and Exchange Commission that OTC options are
illiquid.
A Fund may purchase and write put and call options on
foreign currencies (traded on U.S. and foreign exchanges or
over-the-counter markets) to manage its exposure to exchange
rates. Call options on foreign currency written by a Fund
will be "covered," which means that the Fund will own an
equal amount of the underlying foreign currency. With
respect to put options on foreign currency written by a
Fund, the Fund will establish a segregated account with its
custodian bank consisting of cash, cash equivalents or
liquid securities in an amount equal to the amount the Fund
would be required to pay upon exercise of the put.
A Fund may purchase and write put and call options on
indices and enter into related closing transactions. Put and
call options on indices are similar to options on securities
except that options on an index give the holder the right to
receive, upon exercise of the option, an amount of cash if
the closing level of the underlying index is greater than
(or less than, in the case of puts) the exercise price of
the option. This amount of cash is equal to the difference
between the closing price of the index and the exercise
price of the option, expressed in dollars multiplied by a
specified number. Thus, unlike options on individual
securities, all settlements are in cash, and gain or loss
depends on price movements in the particular market
represented by the index generally, rather than the price
movements in individual securities. All options written on
indices must be covered. When a Fund writes an option on an
index, it will establish a segregated account containing
cash, cash equivalents or liquid securities with its
custodian in an amount at least equal to the market value of
the option and will maintain the account while the option is
open or will otherwise cover the transaction.
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Risk Factors. Risks associated with options transactions
include: (1) the success of a hedging strategy may depend on
an ability to predict movements in the prices of individual
securities, fluctuations in markets and movements in
interest rates; (2) there may be an imperfect correlation
between the movement in prices of options and the securities
underlying them; (3) there may not be a liquid secondary
market for options; and (4) while a Fund will receive a
premium when it writes covered call options, it may not
participate fully in a rise in the market value of the
underlying security. A Fund may choose to terminate an
option position by entering into a closing transaction. The
ability of a Fund to enter into closing transactions depends
upon the existence of a liquid secondary market for such
transactions.
Receipts Receipts are interests in separately traded interest and
principal component parts of U.S. Treasury obligations that
are issued by banks and brokerage firms and are created by
depositing U.S. Treasury obligations into a special account
at a custodian bank. The custodian holds the interest and
principal payments for the benefit of the registered owners
of the certificates or receipts. The custodian arranges for
the issuance of the certificates or receipts evidencing
ownership and maintains the register. Receipts are sold as
zero coupon securities which means that they are sold at a
substantial discount and redeemed at face value at their
maturity date without interim cash payments of interest or
principal. This discount is amortized over the life of the
security, and such amortization will constitute the income
earned on the security for both accounting and tax purposes.
Because of these features, receipts may be subject to
greater price volatility than interest paying U.S. Treasury
obligations. See also "Taxes".
Repurchase Repurchase agreements are agreements by which a Fund obtains
Agreements a security and simultaneously commits to return the security
to the seller at an agreed upon price on an agreed upon date
within a number of days from the date of purchase. The Fund
or its agent will have actual or constructive possession of
the securities held as collateral for the repurchase
agreement. Collateral must be maintained at a value at least
equal to 100% of the purchase price. The Fund bears a risk
of loss in the event the other party defaults on its
obligations and the Fund is delayed or prevented from
exercising its right to dispose of the collateral securities
or if the Fund realizes a loss on the sale of the collateral
securities. A Fund will enter into repurchase agreements
only with financial institutions deemed to present minimal
risk of bankruptcy during the term of the agreement based on
established guidelines. Repurchase agreements are considered
loans under the 1940 Act, as well as for federal and state
income tax purposes.
Restraints on Investments by each Money Market Fund are subject to
Investments by limitations imposed under regulations adopted by the SEC.
Money Market Under these regulations, money market funds may acquire only
Funds 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 NRSROs (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
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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"). 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. The Advisor will determine
that an obligation presents minimal credit risks or that
unrated instruments are of comparable quality in accordance
with guidelines established by the Trustees. In addition, in
the case of taxable money market funds, investments in
second tier securities are subject to the further
constraints that (i) no more than 5% of a 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. A taxable money market fund may hold up to 25% its
assets in first tier securities of a single issuer for three
Business Days.
Restricted Restricted securities are securities that may not be sold
Securities freely to the public absent registration under the
Securities Act of 1933 or an exemption from registration.
Rights Rights are instruments giving Shareholders the right to
purchase shares of newly issued common stock below the
public offering price before they are offered to the public.
Securities In order to generate additional income, a Fund may lend the
Lending securities in which it is invested pursuant to agreements
requiring that the loan be continuously secured by
collateral consisting of cash, securities of the U.S.
Government or its agencies equal at all times to 100% of the
market value plus accrued interest of the loaned securities.
Collateral is marked to market daily. A Fund continues to
receive interest on the loaned securities while
simultaneously earning interest on the investment of cash
collateral in U.S. Government securities. There may be risks
of delay in recovery of the securities or even loss of
rights in the collateral should the borrower of the
securities fail financially.
Standby Securities subject to standby commitments or puts permit the
Commitments holder thereof to sell the securities at a fixed price prior
and Puts to maturity. Securities subject to a standby commitment or
put may be sold at any time at the current market price.
However, unless the standby commitment or put was an
integral part of the security as originally issued, it may
not be marketable or assignable; therefore, the standby
commitment or put would only have value to the Fund owning
the security to which it relates. In certain cases, a
premium may be paid for a standby commitment or put, which
premium will have the effect of reducing the yield otherwise
payable on the underlying security.
Swaps, Caps, Interest rate swaps, mortgage swaps, currency swaps and
Floors and other types of swap agreements such as caps, floors and
Collars collars are designed to permit the purchaser to preserve a
return or spread on a particular investment or portion of
its portfolio, and to protect against any increase in the
price of securities the Fund anticipates purchasing at a
later date. In a typical interest rate swap, one party
agrees to make regular payments equal to a floating interest
rate times a "notional principal amount," in return for
payments equal to a fixed rate times the same amount, for a
specific period of time. Swaps may also depend on other
prices or rates, such as the value of an index or mortgage
prepayment rates.
55
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In a typical cap or floor agreement, one party agrees to
make payments only under specified circumstances, usually in
return for payment of a fee by the other party.
Swap agreements will tend to shift the Fund's investment
exposure from one type of investment to another. Depending
on how they are used, swap agreements may increase or
decrease the overall volatility of the Fund's investment and
their share price and yield.
Time Deposits Time deposits are non-negotiable receipts issued by a bank
in exchange for the deposit of funds. Time deposits with a
withdrawal penalty are considered to be illiquid.
U.S. Government Obligations issued or guaranteed by agencies of the U.S.
Agency Government, including, among others, the Federal Farm Credit
Obligations Bank, the Federal Housing Administration and the Small
Business Administration, and obligations issued or
guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage
Corporation, the Federal Land Banks and the U.S. Postal
Service. Some of these securities are supported by the full
faith and credit of the U.S. Treasury (e.g., Government
National Mortgage Association securities), others are
supported by the right of the issuer to borrow from the
Treasury (e.g., Federal Farm Credit Bank securities), while
still others are supported only by the credit of the
instrumentality (e.g., Fannie Mae securities). 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 on the obligation prior to maturity. Guarantees as
to the timely payment of principal and interest do not
extend to the value or yield of these securities nor to the
value of the Fund's shares.
U.S. Treasury U.S. Treasury obligations consist of bills, notes and bonds
Obligations issued by the U.S. Treasury.
Variable and Certain obligations may carry variable or floating rates of
Floating Rate interest, and may involve conditional or unconditional
Instruments demand features. 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, and may have a floor or ceiling on
interest rate changes. There is a risk that the current
interest rate on such obligations may not accurately reflect
existing market interest rates.
Warrants Warrants are instruments giving holders the right, but not
the obligation, to buy shares of a company at a given price
during a specified period.
When-Issued and When-issued or delayed delivery basis transactions involve
Delayed the purchase of an instrument with payment and delivery
Delivery taking place in the future. Delivery of and payment for
Securities these securities may occur a month or more after the date of
the purchase commitment. A Fund will maintain with the
Custodian a separate account with liquid securities, cash or
cash equivalents 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 fluctuations due to changes in market
56
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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 a Fund generally purchases securities on a
when-issued or forward commitment basis with the intention
of actually acquiring securities for its portfolio, a Fund
may dispose of a when-issued security or forward commitment
prior to settlement if it deems appropriate. When investing
in when-issued securities, a Fund will not accrue income
until delivery of the securities and will invest in such
securities only for purposes of actually acquiring the
securities and not for the purpose of leveraging.
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<PAGE>
REMBRANDT FUNDS(R)
INVESTMENT ADVISOR:
LASALLE STREET CAPITAL MANAGEMENT, LTD.
This Statement of Additional Information is not a prospectus. It is intended to
provide additional information regarding the activities and operations of
Rembrandt Funds(R) (the "Trust") and should be read in conjunction with the
Trust's prospectus dated April 30, 1997. Prospectuses may be obtained through
the Distributor, Rembrandt(R) Financial Services Company, Oaks, Pennsylvania
19456.
TABLE OF CONTENTS
<TABLE>
<S> <C>
THE TRUST .....................................................................
DESCRIPTION OF PERMITTED INVESTMENTS...........................................
INVESTMENT LIMITATIONS.........................................................
NON-FUNDAMENTAL POLICIES.......................................................
THE ADVISOR....................................................................
THE SUB-ADVISOR................................................................
THE ADMINISTRATOR..............................................................
THE DISTRIBUTOR................................................................
TRUSTEES AND OFFICERS OF THE TRUST.............................................
COMPUTATION OF YIELD...........................................................
CALCULATION OF TOTAL RETURN....................................................
PURCHASE AND REDEMPTION OF SHARES..............................................
LETTER OF INTENT...............................................................
DETERMINATION OF NET ASSET VALUE...............................................
TAXES..........................................................................
PORTFOLIO TRANSACTIONS.........................................................
TRADING PRACTICES AND BROKERAGE................................................
DESCRIPTION OF SHARES..........................................................
SHAREHOLDER LIABILITY..........................................................
LIMITATION OF TRUSTEES' LIABILITY..............................................
FINANCIAL STATEMENTS...........................................................
APPENDIX....................................................................A-1
FINANCIAL INFORMATION.......................................................F-1
</TABLE>
APRIL 30, 1997
REM-F-007-[_] 06
<PAGE>
THE TRUST
Rembrandt Funds(R) is an open-end management investment company established as a
Massachusetts business trust pursuant to a Declaration of Trust dated September
17, 1992. The Declaration of Trust permits the Trust to offer separate series of
units of beneficial interest ("shares") and different classes of shares of each
fund. Shareholders may purchase shares through two separate classes, the Trust
Class and the Investor Class, which provide for variations in distribution
costs, voting rights and dividends. Except for these differences between Trust
Class shares and Investor Class shares, each share of each fund represents an
equal proportionate interest in that fund. See "Description of Shares." This
Statement of Additional Information relates to the Trust Class shares and
Investor Class shares of the following funds: Value Fund, Growth Fund, Latin
America Equity Fund, Small Cap Fund, International Equity Fund, TransEurope
Fund, Asian Tigers Fund (collectively, the "Equity Funds"), Fixed Income Fund
(formerly the Taxable Fixed Income Fund), Intermediate Government Fixed Income
Fund (formerly the Short/Intermediate Government Fixed Income Fund), Tax-Exempt
Fixed Income Fund, International Fixed Income Fund (formerly the Global Fixed
Income Fund), Limited Volatility Fixed Income Fund (collectively, the "Fixed
Income Funds"), Balanced Fund (the "Balanced Fund"), Money Market Fund,
Government Money Market Fund, Treasury Money Market Fund and Tax-Exempt Money
Market Fund (collectively, the "Money Market Funds" and together with the
Equity, Balanced and Fixed Income Funds, the "Funds").
DESCRIPTION OF PERMITTED INVESTMENTS
VARIABLE AMOUNT MASTER DEMAND NOTES
Variable amount master demand notes may or may not be backed by bank letters of
credit. These notes permit the investment of fluctuating amounts at varying
market rates of interest pursuant to direct arrangements between the Trust, as
lender, and the borrower. Such notes provide that the interest rate on the
amount outstanding varies on a daily, weekly or monthly basis depending upon a
stated short-term interest rate index. Both the lender and the borrower have the
right to reduce the amount of outstanding indebtedness at any time. There is no
secondary market for the notes. It is not generally contemplated that such
instruments will be traded.
BRADY BONDS
"Brady Bonds" are a particular type of Latin American debt security. During
1990, the Mexican external debt markets experienced significant changes with the
completion of the "Brady Plan" restructurings in those markets. The
restructurings provided for the exchange of loans and cash for newly issued
bonds ("Brady Bonds"). Brady Bonds fall into two categories: collaterized Brady
Bonds and bearer Brady Bonds. Both types of Brady Bonds are issued in various
currencies, primarily the U.S. dollar. Brady Bonds are actively traded in the
over-the-counter secondary market for Latin American debt. U.S.
dollar-denominated collaterized bonds, which may be fixed par bonds
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or floating rate discount bonds, are collaterized in full as to principal by
U.S. Treasury zero coupon bonds having the same maturity. At least one year of
rolling interest payments are collaterized by cash or other investments.
FLOATING RATE NOTES
Floating rate notes will normally involve industrial development or revenue
bonds which provide that the rate of interest is set as a specific percentage of
a designated base rate (such as the prime rate) at a major commercial bank, and
that the Fund can demand payment of the obligation at all times or at stipulated
dates on short notice (not to exceed 30 days) at par plus accrued interest. A
Fund may use the longer of the period required before the Fund is entitled to
prepayment under such obligations or the period remaining until the next
interest rate adjustment date for purposes of determining the maturity. Such
obligations are frequently secured by letters of credit or other credit support
arrangements provided by banks. The quality of the underlying credit or of the
bank, as the case may be, must be rated in the third highest rating category or,
in the Advisor's opinion, be of comparable quality. The Advisor will monitor the
earning power, cash flow and liquidity ratios of the issuers of such instruments
and the ability of an issuer of a demand instrument to pay principal and
interest on demand. The Advisor may purchase other types of tax-exempt
instruments as long as they are of a quality equivalent to the bond or
commercial paper ratings stated above.
GNMA CERTIFICATES
GNMA Certificates are securities issued by the Government National Mortgage
Association ("GNMA"), a wholly-owned U.S. Government corporation which
guarantees the timely payment of principal and interest. The market value and
interest yield of these instruments can vary due to market interest rate
fluctuations and early prepayments of underlying mortgages. These securities
represent ownership in a pool of federally insured mortgage loans. GNMA
certificates consist of underlying mortgages with a maximum maturity of 30
years. However, due to scheduled and unscheduled principal payments, GNMA
certificates have a shorter average maturity and, therefore, less principal
volatility than a comparable 30-year bond. Since prepayment rates vary widely,
it is not possible to accurately predict the average maturity of a particular
GNMA pool. The scheduled monthly interest and principal payments relating to
mortgages in the pool will be "passed through" to investors. GNMA securities
differ from conventional bonds in that principal is paid back to the certificate
holders over the life of the loan rather than at maturity. As a result, there
will be monthly scheduled payments of principal and interest. In addition, there
may be unscheduled principal payments representing prepayments on the underlying
mortgages. Although GNMA certificates may offer yields higher than those
available from other types of U.S. Government securities, GNMA certificates may
be less effective than other types of securities as a means of "locking in"
attractive long-term rates because of the prepayment feature. For instance, when
interest rates decline, the value of a GNMA certificate likely will not rise as
much as comparable debt securities due to the prepayment feature. In addition,
these prepayments can cause the price of a GNMA certificate originally purchased
at a premium to decline in price to its par value, which may result in a loss.
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<PAGE>
JUNK BONDS
Junk bonds are debt securities which are rated below investment grade or are not
rated. When debt securities are rated, it is expected that such ratings will
generally be below investment grade. Below investment grade securities are debt
securities rated BB or lower by S&P or Ba or lower by Moody's or, if unrated,
deemed by the Advisor or Sub-Advisor to be of comparable quality. Securities
rated below investment grade are the equivalent of high yield, high risk bonds,
commonly known as "junk bonds."
Such securities involve greater risk of default or price declines than
investment grade securities due to changes in the issuer's creditworthiness and
the outlook for economic growth. The market for these securities may be less
active, causing market price volatility and limited liquidity in the secondary
market. This may limit the Fund's ability to sell such securities at their
market value. In addition, the market for these securities may also be adversely
affected by legislative and regulatory developments. Credit quality in the junk
bond market can change suddenly and unexpectedly, and even recently issued
credit ratings may not fully reflect the actual risks imposed by a particular
security.
MORTGAGE-BACKED SECURITIES
Two principal types of mortgage-backed securities are collateralized mortgage
obligations ("CMOs") and real estate mortgage investment conduits ("REMICs"),
which are rated in one of the two highest rating categories by a nationally
recognized statistical rating organization ("NRSRO"). CMOs are securities
collateralized by mortgages, mortgage pass-throughs, mortgage pay-through bonds
(bonds representing an interest in a pool of mortgages where the cash flow
generated from the mortgage collateral pool is dedicated to bond repayment), and
mortgage-backed bonds (general obligations of the issuers payable out of the
issuers' general funds that are secured by a first lien on a pool of single
family detached properties). Many CMOs are issued with a number of classes or
series which have different maturities and are retired in sequence.
Investors purchasing such CMOs in the shortest maturities receive or are
credited with their pro rata portion of the scheduled payments of interest and
--- ----
principal on the underlying mortgages plus all unscheduled prepayments of
principal up to a predetermined portion of the total CMO obligation. Until that
portion of such CMO obligation is repaid, investors in the longer maturities
receive interest only. Accordingly, the CMOs in the longer maturity series are
less likely than other mortgage pass-throughs to be prepaid prior to their
stated maturity. Although some of the mortgages underlying CMOs may be supported
by various types of insurance, and some CMOs may be backed by GNMA certificates
or other mortgage pass-throughs issued or guaranteed by U.S. Government agencies
or instrumentalities, the CMOs themselves are not generally guaranteed. FHLMC
has in the past guaranteed only the ultimate collection of principal of the
underlying mortgage loan; however, FHLMC now issues mortgage-backed securities
(FHLMC Gold PCs) which also guarantee timely payment of monthly principal
reductions. Government and private guarantees do not extend to the securities'
value, which is likely to vary inversely with fluctuations in interest rates.
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<PAGE>
Certain of the Funds also may invest in parallel pay CMOs and Planned
Amortization Class CMOs ("PAC Bonds"). Parallel pay CMOs are structured to
provide payments of principal on each payment date to more than one class. These
simultaneous payments are taken into account in calculating the stated maturity
date or final distribution date of each class, which, as with other CMO
structures, must be retired by its stated maturity date or final distribution
date, but may be retired earlier. PAC Bonds are always parallel pay CMOs with
the required principal payment on such securities having the highest priority
after interest has been paid to all classes.
REMICs, which were authorized under the Tax Reform Act of 1986, are private
entities formed for the purpose of holding a fixed pool of mortgages secured by
an interest in real property. REMICs are similar to CMOs in that they issue
multiple classes of securities.
ASSET-BACKED SECURITIES
Asset-backed securities include company receivables, truck and auto loans,
leases, and credit card receivables. These issues 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.
Principal and interest on non-mortgage asset-backed securities may be guaranteed
up to certain amounts and for a certain time 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 non-mortgage 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 holder of the asset-backed securities. There 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,
unlike most other asset-backed securities, credit card receivables are unsecured
obligations of the card holder.
STRIPS
Separately traded interest and principal securities ("STRIPS") are component
parts of U.S. Treasury Securities traded through the Federal Book-Entry System.
The Advisor will purchase only STRIPS that it determines are liquid or, if
illiquid, that do not violate the Fund's investment policy concerning
investments in illiquid securities. Consistent with Rule 2a-7, the Advisor will
purchase for Money Market Funds only STRIPS that have a remaining maturity of
397 days or less; therefore, the Money Market Funds currently may purchase only
interest component parts of U.S. Treasury Securities. While there is no
limitation on the percentage of a Fund's assets that may be comprised of STRIPS,
the Advisor will monitor the level of such holdings to avoid the risk of
impairing shareholders' redemption rights and of deviations in the value of
shares of the Money Market Funds.
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<PAGE>
REPURCHASE AGREEMENTS
Repurchase agreements, into which each of the Funds, except the Treasury Money
Market Fund, is permitted to enter, are agreements by which a person (e.g., a
----
Fund) obtains a security and simultaneously commits to return the security to
the seller (primary securities dealer 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 Funds for purposes of
their investment limitations. The repurchase agreements entered into by the
Funds will provide that the underlying security at all times shall have a value
at least equal to 100% of the resale price stated in the agreement (the Advisor
monitors compliance with this requirement). Under all repurchase agreements
entered into by the Funds, the Custodian or its agent must take possession of
the underlying collateral. However, if the seller defaults, the Funds could
realize a loss on the sale of the underlying security to the extent that the
proceeds of 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 Funds may
incur delay and costs in selling the underlying security or may suffer a loss of
principal and interest if the Funds are treated as an unsecured creditors and
required to return the underlying securities to the seller's estate.
MUNICIPAL SECURITIES
Municipal notes include, but are not limited to, general obligation notes, tax
anticipation notes (notes sold to finance working capital needs of the issuer in
anticipation of receiving taxes on a future date), revenue anticipation notes
(notes sold to provide needed cash prior to receipt of expected non-tax revenues
from a specific source), bond anticipation notes, certificates of indebtedness,
demand notes and construction loan notes. A Fund's investments in any of the
notes described above will be limited to those obligations (i) rated in the
highest two rating categories by an NRSRO or (ii) if not rated, of equivalent
quality in the Advisor's judgment.
Municipal bonds must be rated in the highest four rating categories by an NRSRO
at the time of investment or, if unrated, must be deemed by the Advisor to have
essentially the same characteristics and quality as bonds rated in the above
rating categories. The Advisor may purchase industrial development and pollution
control bonds if the interest paid is exempt from federal income tax. These
bonds are issued by or on behalf of public authorities to raise money to finance
various privately-operated facilities for business and manufacturing, housing,
sports, and pollution control. These bonds are also used to finance public
facilities such as airports, mass transit systems, ports and
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<PAGE>
parking facilities. The payment of the principal and interest on such bonds is
dependent solely on the ability of the facility's user to meet its financial
obligations and the pledge, if any, of real and personal property so financed as
security for such payment.
COMMERCIAL PAPER
Investments in tax-exempt commercial paper will be limited to investments in
obligations rated in one of the two highest rating categories by an NRSRO at the
time of investment, or determined by the Advisor to be of equivalent quality.
STANDBY COMMITMENTS, OR PUTS
The Advisor has the authority to 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 a Fund to meet redemptions and remain as fully invested as
possible in municipal securities. The Funds reserve 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 Funds will limit
their put transactions to institutions which the Advisor believes present
minimal credit risks, and the Advisor will 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 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 municipal 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 municipal 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 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
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<PAGE>
percentage of portfolio securities that the Fund may purchase subject to a put,
but the amount paid directly or indirectly for puts which are not integral parts
of the security as originally issued which are held by the Fund will not exceed
1/2 of 1% of the value of the total assets of such Fund calculated immediately
after any such put is acquired. For the purpose of determining the "maturity" of
securities purchased subject to an option to put, and for the purpose of
determining the dollar-weighted average maturity of the Fund including such
securities, the Trust will consider "maturity" to be the first date on which it
has the right to demand payment from the writer of the put although the final
maturity of the security is later than such date.
OPTIONS
Put and call options may be used by a Fund from time to time as the Advisor
deems to be appropriate except as limited by each Fund's investment
restrictions, but will not be used for speculative purposes. Among the
strategies the Advisor may use are: protective puts on stocks owned by a Fund,
buying calls on stocks a Fund is attempting to buy and writing covered calls on
stocks a Fund owns.
A put option gives the purchaser of the option the right to sell, and the writer
the obligation to buy, the underlying security at any time during the option
period. A call option gives the purchaser of the option the right to buy, and
the writer of the option the obligation to sell, the underlying security at any
time during the option period. The premium paid to the writer is the
consideration for undertaking the obligations under the option contract. The
initial purchase (sale) of an option contract is an "opening transaction". In
order to close out an option position, a Fund may enter into a "closing
transaction" -- the sale (purchase) of an option contract on the same security
with the same exercise price and expiration date as the option contract
originally opened.
A Fund may buy protective put options from time to time on such portion of its
assets as the Advisor determines is appropriate in seeking the Fund's investment
objective. The advantage to the Fund of buying the protective put is that if the
price of the stock falls during the option period, the Fund may exercise the put
and receive the higher exercise price for the stock. However, if the security
rises in value, the Fund will have paid a premium for the put which will expire
unexercised.
A Fund may buy call options from time to time as the Advisor determines is
appropriate in seeking the Fund's investment objective. The Fund may elect to
buy calls on stocks that the Fund is trying to buy. The advantage of the Fund
buying the fiduciary call is that if the price of the stock rises during the
option period, the Fund may exercise the call and buy the stock for the lower
exercise price. If the security falls in value, the Fund will have paid a
premium for the call (which will expire worthless) but will be able to buy the
stock at a lower price.
A Fund may write covered call options from time to time on such portion of its
assets as the Advisor determines is appropriate in seeking the Fund's investment
objective. The advantage to the Fund of writing covered call options is that the
Fund receives a premium which is additional income. How ever, if the security
rises in value, the Fund may not fully participate in the market appreciation.
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<PAGE>
During the option period, a covered call option writer may be assigned an
exercise notice by the broker-dealer through whom such call option was sold
requiring the writer to deliver the underlying security against payment of the
exercise price. This obligation is terminated upon the expiration of the option
period or at such earlier time in which the writer effects a closing purchase
transaction. A closing purchase transaction is one in which a Fund, when
obligated as a writer of an option, terminates its obligation by purchasing an
option of the same series as the option previously written. A closing purchase
transaction cannot be effected with respect to an option once the option writer
has received an exercise notice for such option.
The market value of an option generally reflects the market price of an
underlying security. Other principal factors affecting market value include
supply and demand, interest rates, the pricing volatility of the underlying
security and the time remaining until the expiration date.
There are risks associated with option transactions, including the following:
(i) the success of a hedging strategy may depend on the ability of the Advisor
to predict movements in the prices of the individual securities, fluctuations in
markets and movements in interest rates; (ii) there may be imperfect correlation
between the movement in prices of securities held by a Fund; (iii) there may not
be a liquid secondary market for options; and (iv) while a Fund will receive a
premium when it writes covered call options, it may not participate fully in a
rise in the market value of the underlying security.
FOREIGN SECURITIES
Foreign securities may be U.S. dollar denominated or non-U.S. dollar denominated
obligations or securities of foreign issuers, including obligations of foreign
branches of U.S. banks and of foreign banks, including European certificates of
deposit, European time deposits, Canadian time deposits and Yankee certificates
of deposit, and investments in Canadian commercial paper, foreign securities and
Europaper. In addition, a Fund may invest in American Depositary Receipts
("ADRs"). These instruments may subject a 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.
Further, it may be more difficult for the Fund's agents to keep currently
informed about corporate actions which may affect the prices of portfolio
securities. Communications between the U.S. and
-9-
<PAGE>
foreign countries may be less reliable than within the U.S., increasing the risk
of delayed settlements of portfolio securities. Certain markets may require
payment for securities before delivery. The Fund's ability and decisions to
purchase and sell portfolio securities may be affected by laws or regulations
relating to the convertibility of currencies and repatriation of assets. Some
countries restrict the extent to which foreigners may invest in their securities
markets.
The Latin America Equity Fund may invest in securities denominated in currencies
of Latin American countries. Accordingly, changes in the value of these
currencies against the U.S. dollar will result in corresponding changes in the
U.S. dollar value of the Fund's assets denominated in those currencies. Some
Latin American countries also may have managed currencies, which are not free
floating against the U.S. dollar. In addition, there is risk that certain Latin
American countries may restrict the free conversion of their currencies into
other currencies. Further, it may be difficult to reduce the Fund's Latin
American currency risk through hedging. Any devaluations in the currencies in
which the Fund's portfolio securities are denominated may have a detrimental
impact on the Fund's net asset value.
Certain risks associated with international investments and investing in
smaller, developing capital markets are heightened for investments in Latin
American countries. For example, some of the currencies of Latin American
countries have experienced steady devaluations relative to the U.S. dollar, and
major adjustments have been made in certain of these currencies periodically.
Any devaluations in the currencies in which the Fund's portfolio securities are
denominated may have a detrimental impact on the Fund. Furthermore, Latin
American currencies may not be internationally traded. Also, many Latin American
countries have experienced substantial, and in some periods extremely high,
rates of inflation for many years. Inflation and rapid fluctuations in inflation
rates have had and may continue to have very negative effects on the economies
and securities markets of certain Latin American countries. In addition,
although there is a trend toward less government involvement in commerce,
governments of many Latin American countries have exercised and continue to
exercise substantial influence over many aspects of the private sector. In
certain cases, the government still owns or controls many companies, including
some of the largest companies in the country. Accordingly, government actions in
the future could have a significant effect on economic conditions in Latin
American countries, which could affect private sector companies and the Fund, as
well as the value of securities in the Fund's portfolio.
Securities of Latin American issuers pose greater liquidity risks and other
risks than securities of companies located in developed countries and traded in
more established markets. Low liquidity in markets may adversely affect the
Fund's ability to buy and sell securities and cause increased volatility. Many
of the countries in Latin America may at various times have less stable
political environments than more developed nations. Changes of control may
adversely affect the pricing of securities from time to time. Some of the Latin
American countries may afford only limited opportunities for investing. In
certain Latin American countries, the Fund may be able to invest solely or
primarily through ADRs or similar securities and government approved investment
vehicles (including closed-end investment funds). For example, due to Chile's
current investment restrictions (in most cases, capital invested directly in
Chile cannot be repatriated for at least one year), the Fund's investments
-10-
<PAGE>
in Chile primarily will be through investments in ADRs and established Chilean
investment companies not subject to repatriation restrictions. The Fund may
invest up to 10% of its total assets in the securities of closed-end investment
companies. If the Fund invests in closed-end investment companies, the Fund's
shareholders will bear not only their proportionate share of the expenses of the
Fund, but also will directly bear duplicative fees (including advisory fees) of
the underlying closed-end fund.
WHEN-ISSUED SECURITIES
The Funds will only make commitments to purchase obligations on a when-issued
basis with the intention of actually acquiring the securities, but may sell them
before the settlement date. The when-issued securities are subject to market
fluctuation, and the purchaser accrues no interest on the security during this
period. The payment obligation and the interest rate that will be received on
the securities are each fixed at the time the purchaser enters into the
commitment. Purchasing obligations on a when-issued basis may be used as a form
of leveraging because the purchaser may accept the market risk prior to payment
for the securities. The Funds will segregate [_] cash, cash equivalents or
liquid securities in an amount at least equal in value to the Funds' commitments
to purchase when-issued securities. If the value of these assets declines, the
Funds will place additional liquid assets aside on a daily basis so that the
value of the assets set aside is equal to the amount of such commitments.
Consequently, the Funds will not use such purchases for leveraging.
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") absent an
exemption from registration. Up to 10% of a Fund's assets may consist of
restricted securities that are illiquid and the Advisor may invest up to an
additional 5% of the total assets of a Fund in restricted securities, provided
it determines that at the time of investment such securities are not illiquid
(generally, an illiquid security cannot be disposed of within seven days in the
ordinary course of business at its full value), based on guidelines and
procedures developed and established by the Board of Trustees of the Trust. The
Board of Trustees will periodically review such procedures and guidelines and
will monitor the Advisor's implementation of such procedures and guidelines.
Under these procedures and guidelines, the Advisor will consider the frequency
of trades and quotes for the security, the number of dealers in, and potential
purchasers for, the securities, dealer undertakings to make a market in the
security and the nature of the security and of the marketplace trades. In
purchasing such restricted securities, the Advisor intends to rely upon the
exemption from registration provided by Rule 144A under the 1933 Act.
SECURITIES LENDING
Securities loaned by a Fund pursuant to an agreement which requires collateral
to secure the loan 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 a
Fund's total assets taken at fair market value. A Fund will continue
-11-
<PAGE>
to receive interest on the loaned securities while simultaneously earning
interest on the investment of the cash collateral in U.S. Government securities.
However, a Fund will normally pay lending fees to such broker-dealers and
related expenses from the interest earned on invested collateral. Loans are made
only to borrowers deemed by the Advisor to be of good standing and when, in the
judgment of the Advisor, 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 Funds may use the
Distributor or a broker-dealer affiliate of the Advisor as a broker in these
transactions.
INVESTMENT COMPANY SHARES
Investments in shares of open-end funds and closed-end funds, as described in
the prospectus, may result in the layering of expenses. Since such funds pay
management fees and other expenses, shareholders of a Fund would indirectly pay
both Fund expenses and the expenses of underlying funds with respect to Fund
assets invested therein. Under applicable regulations, the Funds are prohibited
from acquiring the securities of other investment companies if, as a result of
such acquisition, the Funds own more than 3% of the total voting stock of the
company; securities issued by any one investment company represent more than 5%
of the Fund's total assets; or securities (other than treasury stock) issued by
all investment companies represent more than 10% of the total assets of the
Funds. See also "Investment Limitations."
The Trust has received an exemptive order from the Securities and Exchange
Commission ("SEC") to permit the Funds to invest in shares of the Money Market
Funds. Pursuant to this order, each Fund is permitted to invest in shares of the
Money Market Funds provided that the Advisor and any of its affiliates waive
management fees and other expenses with respect to Fund assets invested therein.
It is the position of the staff of the SEC that certain nongovernmental issuers
of CMOs and REMICs constitute investment companies pursuant to the Investment
Company Act of 1940, as amended ("1940 Act") and either (a) investments in such
instruments are subject to the limitations set forth above or (b) the issuers of
such instruments have been granted orders from the SEC exempting such
instruments from the definition of investment company.
STANDARD & POOR'S DEPOSITARY RECEIPTS ("SPDRS")
SPDRs are interests in a unit investment trust ("UIT") that may be obtained from
the UIT or purchased in the secondary market as SPDRs are listed on the American
Stock Exchange. A UIT is a type of investment company, so investments in SPDRs
are subject to those regulations described above limiting a Fund's acquisition
of investment company securities.
The UIT will issue SPDRs in aggregations of 50,000 known as "Creation Units" in
exchange for a "Portfolio Deposit" consisting of (a) a portfolio of securities
substantially similar to the component securities ("Index Securities") of the
Standard & Poor's 500 Composite Stock Price Index (the "S&P
-12-
<PAGE>
Index"), (b) a cash payment equal to a pro rata portion of the dividends accrued
on the UIT's portfolio securities since the last dividend payment by the UIT,
net of expenses and liabilities, and (c) a cash payment or credit ("Balancing
Amount") designed to equalize the net asset value of the S&P Index and the net
asset value of a Portfolio Deposit.
SPDRs are not individually redeemable, except upon termination of the UIT. To
redeem, the Funds must accumulate enough SPDRs to reconstitute a Creation Unit.
The liquidity of small holdings of SPDRs, therefore, will depend upon the
existence of a secondary market. Upon redemption of a Creation Unit, the Funds
will receive Index Securities and cash identical to the Portfolio Deposit
required of an investor wishing to purchase a Creation Unit that day.
The price of SPDRs is derived and based upon the securities held by the UIT.
Accordingly, the level of risk involved in the purchase or sale of a SPDR is
similar to the risk involved in the purchase or sale of traditional common
stock, with the exception that the pricing mechanism for SPDRs is based on a
basket of stocks. Disruptions in the markets for the securities underlying SPDRs
purchased or sold by the Funds could result in losses on SPDRs. Trading in SPDRs
involves risks similar to those risks, described above under "Options," involved
in the writing of options on securities.
SWAPS, CAPS AND FLOORS
Swap agreements are sophisticated hedging instruments that typically involve a
small investment of cash relative to the magnitude of risk assumed. As a result,
swaps can be highly volatile and have a considerable impact on the Fund's
performance. Swap agreements are subject to risks related to the counterparty's
ability to perform, and may decline in value if the counterparty's
creditworthiness deteriorates. The Fund may also suffer losses if it is unable
to terminate outstanding swap agreements or reduce its exposure through
offsetting transactions. Any obligation the Fund may have under these types of
arrangements will be covered by setting aside liquid, high grade debt securities
in a segregated account. The Fund will enter into swaps only with counterparties
believed to be creditworthy.
In a typical cap or floor agreement, the buyer of an interest rate cap obtains
the right to receive payments to the extent that a specific interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate falls
below an agreed-upon level. An interest rate collar combines elements of buying
a cap and selling a floor. In swap agreements, if the Fund agrees to exchange
payments in dollars for payments in foreign currency, the swap agreement would
tend to decrease the Fund's exposure to U.S. interest rates and increase its
exposure to foreign currency and interest rates. Caps and floors have an effect
similar to buying or writing options. Depending on how they are used, swap
agreements may increase or decrease the overall volatility of the Fund's
investment and their share price and yield.
-13-
<PAGE>
INVESTMENT LIMITATIONS
Each Fund has adopted certain investment limitations which, in addition to those
limitations in the Prospectus, are fundamental and may not be changed without
approval by a majority vote of the Fund's outstanding shares. The term "majority
of the Fund's 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.
NO FUND MAY:
1. Acquire more than 10% of the voting securities of any one issuer.
2. Invest in companies for the purpose of exercising control.
3. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter under federal securities laws in selling a Fund
security.
4. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowings as described below or as permitted by rule,
regulation or order of the SEC.
THE MONEY MARKET FUNDS MAY NOT:
1. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding one-third of the value of total assets. Any borrowing
will be done from a bank and to the extent that such borrowing exceeds 5%
of the value of the Fund's assets, 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
solely to facilitate the orderly sale of portfolio securities to
accommodate heavy redemption requests if they should occur and is not for
investment purposes. All borrowings will be repaid before making additional
investments and any interest paid on such borrowings will reduce income.
2. Pledge, mortgage or hypothecate assets except to secure temporary
borrowings permitted by (1) above in aggregate amounts not to exceed 10% of
total assets taken at current value at the time of the incurrence of such
loan, except as permitted with respect to securities lending.
3. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts and interests in a pool of securities
that are secured by interests in real estate. However, subject to their
permitted investments, any Fund may invest in companies which invest in
real estate commodities or commodities contracts.
-14-
<PAGE>
4. Make short sales of securities, maintain a short position or purchase
securities on margin, except that the Trust may obtain short-term credits
as necessary for the clearance of security transactions.
5. Purchase securities of other investment companies except for money market
funds and then only as permitted by the 1940 Act and the rules and
regulations thereunder. The Money Market Funds will invest in shares of
another money market fund only if (i) such other money market fund is
subject to Rule 2a-7 under the 1940 Act; (ii) such other money market fund
has investment criteria equal to or higher than those of the investing
Money Market Fund; and (iii) the Trust's Board of Trustees monitors the
activities of such other money market fund.
6. Write or purchase puts, calls, options or combinations thereof.
THE EQUITY, FIXED INCOME AND BALANCED FUNDS MAY NOT:
1. Borrow money in an amount exceeding 33 1/3% of the value of its total
assets, provided that, for purposes of this limitation, investment
strategies which either obligate a Fund to purchase securities or require a
Fund to segregate assets are not considered to be borrowing. Except where a
Fund has borrowed money for temporary purposes in amounts not exceeding 5%
of its total assets, asset coverage of at least 300% is required for all
borrowings.
2. Purchase or sell real estate, physical commodities, or commodities
contracts, except that each Fund may purchase: (i) marketable securities
issued by companies which own or invest in real estate (including real
estate investment trusts), commodities, or commodities contracts, and (ii)
commodities contracts relating to financial instruments, such as financial
futures contracts and options on such contracts.
NON-FUNDAMENTAL POLICIES
NO FUND MAY:
1. Invest in warrants, except that each of the Tax-Exempt Fixed Income Fund,
Value Fund, Growth Fund, Small Cap Fund, International Equity Fund,
TransEurope Fund, Latin America Equity Fund, Asian Tigers Fund and Balanced
Fund may invest in warrants in an amount not exceeding 5% of the Fund's net
assets as valued at the lower of cost or market value. Included in that
amount, but not to exceed 2% of the Fund's net assets, may be warrants not
listed on the New York Stock Exchange or the American Stock Exchange.
2. Invest in illiquid securities in an amount exceeding, in the aggregate, 15%
of the Fund's net assets (except for all Money Market Funds for which the
limit is 10%).
-15-
<PAGE>
3. Purchase or retain securities of an issuer if, to the knowledge of the
Trust, an officer, trustee, partner or director of the Trust or any
investment adviser of the Trust owns beneficially more than 1/2 of 1% of
the shares or securities of such issuer and all such officers, trustees,
partners and directors owning more than 1/2 of 1% of such shares or
securities together own more than 5% of such shares or securities.
4. Invest in interests in oil, gas or other mineral exploration or development
programs and oil, gas or mineral leases.
5. Purchase securities of any company which has (with predecessors) a record
of less than three years continuing operations if, as a result more than 5%
of total assets (taken at fair market value) of the Fund would be invested
in such securities, except obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities or municipal securities which
are rated by at least two nationally recognized bond rating services.
THE EQUITY, FIXED INCOME AND BALANCED FUNDS MAY NOT:
1. Purchase securities on margin or effect short sales, except that each Fund
may: (i) obtain short-term credits as necessary for the clearance of
security transactions; (ii) provide initial and variation margin in
connection with futures contracts and options on such contracts; (iii) make
short sales "against the box" or in compliance with the SEC's position
regarding the asset segregation requirements imposed by Section 18 of the
1940 Act.
2. Pledge, mortgage or hypothecate assets, except to secure temporary
borrowings permitted by the Fund's fundamental limitation on permitted
borrowings.
3. Invest its assets in securities of any investment company, except: (i) by
purchase in the open market involving only customary brokers' commissions;
(ii) in connection with mergers, acquisitions of assets or consolidations;
or (iii) as otherwise permitted by the 1940 Act.
The foregoing percentages (except for the limitation on illiquid securities)
will apply at the time of the purchase of a security and shall not be considered
violated unless an excess occurs or exists immediately after and as a result of
a purchase of such security.
THE ADVISOR
The Trust and LaSalle Street Capital Management, Ltd., 10 South LaSalle Street,
Suite 3701, Chicago, Illinois 60603 (the "Advisor"), have entered into an
advisory agreement (the "Advisory Agreement"). The Advisory Agreement provides
that the Advisor 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.
-16-
<PAGE>
The Advisory Agreement provides that if, for any fiscal year, the ratio of
expenses of any Fund (including amounts payable to the Advisor but excluding
interest, taxes, brokerage, litigation, and other extraordinary expenses)
exceeds limitations established by the State of California, the Advisor will
bear the amount of such excess.
The continuance of the Advisory Agreement, after the first two years, must be
specifically approved at least annually (i) by the vote of the Trustees, 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 Funds by a majority of the outstanding shares of the Funds, on
not less than 30 days' nor more than 60 days' written notice to the Advisor, or
by the Advisor on 90 days' written notice to the Trust.
For the fiscal years ended December 31, 1994, 1995, and 1996, the Funds paid the
following advisory fees:
<TABLE>
<CAPTION>
=================================================================================================================
Net Fees Paid Fees Waived
================================================================================
Fund 1994 1995 1996 1994 1995 1996
=================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Treasury Money Market Fund $233,796 $229,313 $ 291,794 $166,562 $184,294 $235,779
- -----------------------------------------------------------------------------------------------------------------
Government Money Market $337,352 $376,824 $ 448,001 $ 0 $ 0 $ 0
Fund
- -----------------------------------------------------------------------------------------------------------------
Money Market Fund $952,538 $998,172 $1,138,578 $605,293 $647,771 $853,933
- -----------------------------------------------------------------------------------------------------------------
Tax-Exempt Money Market $271,281 $362,794 $ 318,245 $206,848 $289,877 $275,379
Fund
- -----------------------------------------------------------------------------------------------------------------
Fixed Income Fund $549,880 $576,717 $ 625,690 $ 96,978 $100,132 $125,138
- -----------------------------------------------------------------------------------------------------------------
Intermediate Government Fixed $508,997 $419,323 $ 334,912 $ 92,677 $ 72,093 $ 66,982
Income Fund
- -----------------------------------------------------------------------------------------------------------------
Tax-Exempt Fixed Income Fund $297,375 $249,245 $ 218,761 $ 75,458 $ 64,521 $ 56,636
- -----------------------------------------------------------------------------------------------------------------
International Fixed Income Fund $129,517 $139,512 $ 140,609 $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------
Limited Volatility Fixed Income
Fund * * * * * *
- -----------------------------------------------------------------------------------------------------------------
Value Fund $448,762 $788,698 $1,170,294 $ 103 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------
Growth Fund $752,337 $685,748 $ 723,113 $ 2,930 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------
Small Cap Fund $342,751 $163,166 $ 235,012 $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------
International Equity Fund $353,164 $643,380 $ 886,424 $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------
TransEurope Fund * * * * * *
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
-17-
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================================
Net Fees Paid Fees Waived
================================================================================
Fund 1994 1995 1996 1994 1995 1996
=================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Asian Tigers Fund $151,709 $211,903 $ 312,823 $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------
Latin America Equity Fund * * $ 44,270 * * $ 0
- -----------------------------------------------------------------------------------------------------------------
Balanced Fund $430,126 $454,111 $ 391,615 $ 0 $ 0 $ 0
=================================================================================================================
</TABLE>
* Not in operation during the period.
THE SUB-ADVISOR
LaSalle Street Capital Management, Ltd., on behalf of the Trust, and ABN
AMRO-NSM International Funds Management B.V., Foppingadreef 22, Amsterdam, 1000
EA Amsterdam, The Netherlands (the "Sub-Advisor"), have entered into a sub-
advisory agreement (the "Sub-Advisory Agreement"). The Sub-Advisory Agreement
provides that the Sub-Advisor 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 or duties thereunder.
The Sub-Advisory Agreement provides that if, for any fiscal year, the Advisor is
required, under its Advisory Agreement with the Trust, to reduce its fees for
the Fund because of excess expenses, the Sub-Advisor shall reduce its fees by an
amount equal to one-half of the amount by which the Advisor reduced its fees. In
addition, from time to time, the Sub-Advisor may voluntarily agree to waive or
reduce some or all of the compensation to which it is entitled under the Sub-
Advisory Agreement.
The continuance of the Sub-Advisory Agreement, after the first year, must be
specifically approved at least annually (a) by the vote of a majority of those
members of the Trust's Board of Trustees who are not interested persons of the
Trust, the Sub-Advisor, or the Advisor, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the vote of a majority of the
Trust's Board of Trustees or by the vote of a majority of all votes attributable
to the outstanding shares of the Fund. Notwithstanding the foregoing, this
Agreement may be terminated as to the Fund at any time, without the payment of
any penalty, on sixty (60) days' written notice by the Advisor or by the Sub-
Advisor. The Sub-Advisory Agreement will immediately terminate in the event of
its assignment.
THE ADMINISTRATOR
The Trust and SEI Fund Resources (the "Administrator"), a wholly-owned
subsidiary of SEI Investments Company ("SEI") have entered into an
administration agreement (the "Administration Agreement"). 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 Administration Agreement relates, except a loss
resulting from willful
-18-
<PAGE>
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.
The Administrator, a Delaware business trust has its principal business offices
at Oaks, Pennsylvania 19456. SEI Financial Management Corporation (SFM), a
wholly-owned subsidiary of SEI Corporation ("SEI"), is the owner of all
beneficial interest in 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.
The Administrator and its affiliates also serve as administrator to the
following other mutual funds: The Achievement Funds Trust; The Advisors' Inner
Circle Fund; The Arbor Fund; ARK Funds; Bishop Street Funds; CoreFunds, Inc.;
CrestFunds, Inc.; CUFUND; FMB Funds, Inc.; First American Funds, Inc.; First
American Investment Funds, Inc.; Inventor Funds, Inc; Marquis Funds(R); Monitor
Funds; Morgan Grenfell Investment Trust; The PBHG Funds, Inc.; The Pillar Funds;
1784 Funds(R); SEI Asset Allocation Trust; SEI Daily Income Trust; SEI Index
Funds; SEI Institutional Investments Trust; SEI Institutional Managed Trust; SEI
International Trust; SEI Liquid Asset Trust; SEI Tax Exempt Trust; Stepstone
Funds; STI Classic Funds; STI Classic Variable Trust; and Turner Funds.
For the fiscal years ended December 31, 1994, 1995, and 1996, the Funds paid the
following fees to the Administrator:
<TABLE>
<CAPTION>
===============================================================
Net Fees Paid
----------------------------
Fund 1994 1995 1996
===============================================================
<S> <C> <C> <C>
Treasury Money Market Fund $158,779 $176,434 $226,103
- ---------------------------------------------------------------
Government Money Market Fund $253,014 $282,618 $336,001
- ---------------------------------------------------------------
Money Market Fund $605,293 $647,771 $853,933
- ---------------------------------------------------------------
Tax-Exempt Money Market Fund $187,532 $277,850 $254,410
- ---------------------------------------------------------------
Fixed Income Fund $150,882 $159,185 $187,707
- ---------------------------------------------------------------
Intermediate Government Fixed $142,816 $113,044 $100,473
Income Fund
- ---------------------------------------------------------------
Tax-Exempt Fixed Income Fund $ 90,263 $ 78,442 $ 68,849
- ---------------------------------------------------------------
International Fixed Income Fund $ 14,686 $ 26,158 $ 26,364
- ---------------------------------------------------------------
Limited Volatility Fixed Income * * *
Fund
- ---------------------------------------------------------------
Value Fund $ 84,163 $147,881 $219,430
- ---------------------------------------------------------------
Growth Fund $141,613 $128,578 $135,584
- ---------------------------------------------------------------
Small Cap Fund $ 64,266 $ 30,713 $ 44,065
- ---------------------------------------------------------------
</TABLE>
-19-
<PAGE>
<TABLE>
<CAPTION>
===============================================================
Net Fees Paid
----------------------------
Fund 1994 1995 1996
===============================================================
<S> <C> <C> <C>
- ---------------------------------------------------------------
International Equity Fund $ 43,927 $ 96,507 $132,965
- ---------------------------------------------------------------
TransEurope Fund * * *
- ---------------------------------------------------------------
Asian Tigers Fund $ 6,456 $ 31,786 $ 46,924
- ---------------------------------------------------------------
Latin America Equity Fund * * $ 6,640
- ---------------------------------------------------------------
Balanced Fund $ 92,170 $ 97,310 $ 83,917
===============================================================
</TABLE>
* Not in operation during the period.
THE DISTRIBUTOR
Rembrandt(R) Financial Services Company, Oaks, Pennsylvania 19456 (the
"Distributor"), a wholly-owned subsidiary of SEI Financial Services Company
("SFS"), and the Trust are parties to a distribution agreement (the
"Distribution Agreement"). Unless otherwise terminated as provided therein, the
Distribution Agreement is renewable annually. Notwithstanding the foregoing,
the Distribution Agreement shall be reviewed and ratified at least annually (i)
by the Trustees or by the vote of a majority of the outstanding shares of the
Trust, and (ii) by the vote of a majority of the Trustees of the Trust who are
not parties to the Distribution Agreement or "interested persons" (as defined in
the 1940 Act) of any party to the Distribution Agreement, cast in person at a
meeting called for the purpose of voting on such approval. The Distribution
Agreement will terminate in the event of any assignment, as defined in the 1940
Act, and is terminable with respect to a particular Fund on not less than 60
days' notice by the Trustees, by vote of a majority of the outstanding shares of
such Fund or by the Distributor.
RULE 12B-1 FEES
The Trust has adopted a distribution plan for the Investor Class shares of each
Fund (the "Investor Class 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 Investor Class Plan must be approved annually by
a majority of the Trustees of the Trust and by a majority of the Trustees who
are not "interested persons" of the Trust or the Distributor, as that term is
defined in the 1940 Act ("Disinterested Trustees"). The Investor Class Plan
requires that quarterly written reports of amounts spent under the Investor
Class Plan and the purposes of such expenditures be furnished to and reviewed by
the Trustees. In accordance with Rule 12b-1 under the 1940 Act, the Investor
Class Plan may be terminated with respect to any Fund by a vote of a majority of
the Disinterested Trustees, or by a vote of a majority of the outstanding shares
of that Fund. The Investor Class Plan may be amended by vote of the Trust's
Board of Trustees, including a majority of the Disinterested Trustees, cast in
person at a meeting called for such purpose, except that any change that would
effect a material
-20-
<PAGE>
increase in any distribution fee with respect to a Fund requires the approval of
that Fund's shareholders. All material amendments of the Plan will require
approval by a majority of the Trustees of the Trust and of the Disinterested
Trustees.
Pursuant to the Distribution Agreement and the Investor Class Plan, Investor
Class shares are subject to an ongoing distribution fee calculated on each
Fund's aggregate average daily net assets attributable to its Investor Class
shares.
The Distribution Agreement and the Investor Class Plan provide for payments to
the Distributor at an annual rate of .25% of the Investor Class average daily
net assets. The Investor Class Plan is characterized as a compensation plan and
is not directly tied to expenses incurred by the Distributor; the payments the
Distributor receives during any year may therefore be higher or lower than its
actual expenses.
For the fiscal year ended December 31, 1996, the Funds paid the following
amounts pursuant to the Investor Class Plan:
<TABLE>
<CAPTION>
===========================================================================
Distribution Amount Paid
Fund 1996
===========================================================================
<S> <C>
Treasury Money Market Fund $23,603
- ---------------------------------------------------------------------------
Government Money Market Fund $11,419
- ---------------------------------------------------------------------------
Money Market Fund $ 3,753
- ---------------------------------------------------------------------------
Tax-Exempt Money Market Fund $ 7,665
- ---------------------------------------------------------------------------
Fixed Income Fund $ 1,540
- ---------------------------------------------------------------------------
Intermediate Government Fixed Income Fund $ 2,487
- ---------------------------------------------------------------------------
Tax-Exempt Fixed Income Fund $ 2,165
- ---------------------------------------------------------------------------
International Fixed Income Fund $ 340
- ---------------------------------------------------------------------------
Limited Volatility Fixed Income Fund *
- ---------------------------------------------------------------------------
Value Fund $ 4,103
- ---------------------------------------------------------------------------
Growth Fund $ 7,113
- ---------------------------------------------------------------------------
Small Cap Fund $ 1,414
- ---------------------------------------------------------------------------
International Equity Fund $ 4,177
- ---------------------------------------------------------------------------
TransEurope Fund *
- ---------------------------------------------------------------------------
Asian Tigers Fund $ 2,265
- ---------------------------------------------------------------------------
Latin America Equity Fund *
- ---------------------------------------------------------------------------
Balanced Fund $ 9,712
===========================================================================
</TABLE>
-21-
<PAGE>
* Not in operation during the period.
The distribution-related services that may be provided under the Investor Class
Plan include establishing and maintaining customer accounts and records;
aggregating and processing purchase and redemption requests from customers;
placing net purchase and redemption orders with the Distributor;
automatically investing customer account cash balances; providing periodic
statements to customers; arranging for wires; answering customer inquiries
concerning their investments; assisting customers in changing dividend options,
account designations, and addresses; performing sub-accounting functions;
processing dividend payments from the Trust on behalf of customers; and
forwarding shareholder communications from the Trust (such as proxies,
shareholder reports, and dividend distribution, and tax notices) to these
customers with respect to investments in the Trust. Certain state securities
laws may require those financial institutions providing such distribution
services to register as dealers pursuant to state law.
Except to the extent that the Administrator or Advisor benefitted through
increased fees from an increase in the net assets of the Trust which may have
resulted in part from the expenditures, no "interested person" of the Trust nor
any Trustee of the Trust who is not an "interested person" of the Trust had a
direct or indirect financial interest in the operation of the Investor Class
Plan or related agreements.
TRUSTEES AND OFFICERS OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees and executive officers of the Trust and their principal occupations for
the last five years are set forth below.
ARNOLD F. BROOKSTONE (4/8/30) -- Trustee and Chairman -- 150 N. Michigan Avenue,
Chicago, Illinois 60601. Retired. Executive Vice President, Chief Financial
Officer and Planning Officer of Stone Container Corporation, 1991-1995. Senior
Vice President, Chief Financial Officer and Planning Officer of Stone Container
Corporation since 1981. Prior thereto, Mr. Brookstone held various other
executive positions with Stone Container Corporation since 1973.
WILLIAM T. SIMPSON (7/26/27) -- Trustee -- 1318 Navajo Court, Louisville,
Kentucky. Consultant, PNC Bank of Kentucky (formerly Citizens Fidelity Bank and
Trust company) (a state chartered bank) since 1992. Senior Vice President, PNC
Bank of Kentucky 1973-1992.
ROBERT A. NESHER (8/17/46) -- Trustee* -- 8 South Street, P.O. Box 89,
Kennebunkport, Maine 04046-0089. Retired since 1994. Director, Executive Vice
President of SEI, 1986-1994. Director and Executive Vice President of the
Administrator and Distributor, 1981-1994.
-22-
<PAGE>
DAVID G. LEE (4/16/52) -- President and Chief Executive Officer -- Senior Vice
President of the Administrator and Distributor since 1993. Vice President of
the Administrator and Distributor 1991-1993. President, GW Sierra Trust Funds
before 1991.
RICHARD W. GRANT (10/25/45) -- Secretary -- 2000 One Logan Square, Philadelphia,
Pennsylvania 19103, Partner of Morgan, Lewis & Bockius LLP (law firm), Counsel
to SEI, the Trust, the Administrator and Distributor.
JIM VOLK (8/28/62) -- Controller, Chief Financial Officer -- Director of
Investment Accounting Operations of SEI, the Administrator and Distribution
since 1996. Assistant Chief Accountant, Securities and Exchange Commission,
Division of Investment Management, 1993 to 1996. Senior Manager, Coopers &
Lybrand, 1985-1993.
SANDRA K. ORLOW (10/18/53) -- Vice President, Assistant Secretary -- Vice
President and Assistant Secretary of SEI and the Administrator and Distributor
since 1983.
TODD CIPPERMAN (2/14/66) - Vice President and Assistant Secretary - Vice
President and Assistant Secretary of SEI, the Administrator and Distributor
since May, 1995, Associate, Dewey Ballantine (law firm) 1994-1995, Associate,
Winston & Strawn (law firm) 1991-1995.
KATHRYN L. STANTON (11/19/58) -- Vice President, Assistant Secretary -- Vice
President, Assistant Secretary of SEI, the Administrator and Distributor since
1994. Associate, Morgan, Lewis & Bockius LLP (law firm), 1989-1994.
KEVIN P. ROBINS (4/15/61) -- Vice President, Assistant Secretary -- Senior Vice
President and General Counsel of SEI, the Administrator and Distributor since
1994. Vice President and Assistant Secretary of SEI, the Administrator and
Distributor since 1992. Associate, Morgan, Lewis & Bockius LLP (law firm),
1988-1992.
BARBARA A. NUGENT (6/18/56) -Vice President, Assistant Secretary -Vice President
and Assistant Secretary of SEI, the Administrator and Distributor; Associate,
Drinker Biddle & Reath (law firm), 1994-1996; Assistant Vice
President/Administration, Delaware Service Company, Inc., 1981-1994.
MARC H. CAHN (6/19/57) -Vice President, Assistant Secretary -Vice President and
Assistant Secretary of SEI, the Administrator and Distributor; Associate General
Counsel, Barclays Bank PLC, 1995-1996; Counsel for First Fidelity Bancorporation
prior to 1995.
-23-
<PAGE>
JOHN H. GRADY, JR. (6/1/61) -Assistant Secretary -1800 M Street, N.W.
Washington, DC 20036. Partner, Morgan, Lewis & Bockius LLP (law firm) since
1995; Associate, Morgan, Lewis & Bockius LLP, 1993-1995; Associate, Ropes & Gray
(law firm), 1988-1993.
____________________________
*Mr. Nesher is a Trustee who may be deemed to be an "interested person" of the
Trust as the term is defined in the 1940 Act.
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.
Compensation of officers and affiliated Trustees of the Trust is paid by the
Administrator.
For the fiscal year ended December 31, 1996, the Trustees received the following
compensation:
<TABLE>
<CAPTION>
=============================================================================================================
Total Compensation
Aggregate Pension or from Registrant and
Compensation Retirement Estimated Fund Complex Paid
From Registrant Benefits Accrued Annual Benefits to Directors for
Name of Person, Position for Fiscal Year as Part of Fund Upon Retirement Fiscal Year Ended
Ended 1996 Expenses 1996
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arnold F. Brookstone, $14,000 N/A N/A $14,000 for service
Trustee on one board
- -------------------------------------------------------------------------------------------------------------
William T. Simpson, $14,000 N/A N/A $14,000 for service
Trustee on one board
- -------------------------------------------------------------------------------------------------------------
Robert A. Nesher,* $ 0 N/A N/A $0 for service on
Trustee one board
=============================================================================================================
</TABLE>
- ---------------
*Mr. Nesher is a Trustee who may be deemed an "interested person" of the Trust
as the term is defined in the 1940 Act.
COMPUTATION OF YIELD
From time to time the Treasury Money Market Fund, Government Money Market Fund,
Money Market Fund and Tax-Exempt Money Market Fund advertise their current yield
and effective compound yield. Both yield figures are based on historical
earnings and are not intended to indicate future performance. The yield of the
Funds refers to the income generated by an investment in a Fund over a seven-day
period (which period will be stated in the advertisement). This income is then
"annualized." That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period 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 a Fund is
assumed to be reinvested. The effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvestment.
The current yield of the Funds 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 (exclusive of
-24-
<PAGE>
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 unrealized gains and losses are not included in the
calculation of the yield. The effective yield of the Funds is determined by
computing the net change, 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 by adding 1, raising the sum to a power equal
to 365 divided by 7, and subtracting 1 from the result, according to the
following formula: Effective Yield = (Base Period Return + 1)365/7) - 1. The
current and the effective yields reflect the reinvestment of net income earned
daily on portfolio assets.
Tax Equivalent yields are computed by dividing that portion of a Fund's yield
which is tax-exempt by one minus a federal and/or state income tax rate and
adding the product to that portion, if any, of the Fund's yield that is not tax-
exempt.
Yield = 2[((a-b)/(cd) + 1)/6/ - 1] where a = dividends and interest earned
during the period; b = expenses accrued for the period (net of reimbursement); c
= the current daily number of shares outstanding during the period that were
entitled to receive dividends; and d = the maximum offering price per share on
the last day of the period.
The yield of these Funds fluctuates, and the annualization of a week's dividend
is not a representation by the Trust as to what an investment in the Fund will
actually yield in the future. Actual yields will depend on such variables as
asset quality, average asset maturity, the type of instruments the Fund invests
in, changes in interest rates on money market instruments, changes in the
expenses of the Fund and other factors.
For the seven-day period ended December 31, 1996, the end of the Trust's most
recent fiscal year, the Money Market Funds' current, effective and tax-
equivalent yields were as follows:
<TABLE>
<CAPTION>
=================================================================================
7-Day Tax-
7-Day 7-Day Tax- Equivalent
Effective Equivalent Effective
Fund Class 7-Day Yield Yield Yield Yield
=================================================================================
<S> <C> <C> <C> <C> <C>
Treasury Money Trust 4.58% 4.68% N/A N/A
Market Fund
------------------------------------------------------------
Investor 4.33% 4.42% N/A N/A
- ---------------------------------------------------------------------------------
Government Money Trust 5.04% 5.16% N/A N/A
Market Fund
------------------------------------------------------------
Investor 4.79% 4.90% N/A N/A
- ---------------------------------------------------------------------------------
Money Market Fund Trust 5.14% 5.27% N/A N/A
------------------------------------------------------------
</TABLE>
-25-
<PAGE>
<TABLE>
<CAPTION>
=================================================================================
7-Day Tax-
7-Day 7-Day Tax- Equivalent
Effective Equivalent Effective
Fund Class 7-Day Yield Yield Yield Yield
=================================================================================
<S> <C> <C> <C> <C> <C>
Investor 4.89% 5.00% N/A N/A
- ---------------------------------------------------------------------------------
Tax-Exempt Money Trust 3.40% 3.45% 5.63% 5.30%
Market Fund
--------------------------------------------------------------
Investor 3.15% 3.20% 5.22% 5.30%
==============================================================
</TABLE>
Yields are one basis upon which investors may compare the Funds with other money
market funds; however, yields of other money market funds and other investment
vehicles may not be comparable because of the factors set forth above and
differences in the methods used in valuing portfolio instruments.
The Value Fund, Growth Fund, Small Cap Fund, International Equity Fund,
TransEurope Fund, Asian Tigers Fund, Fixed Income Fund, Intermediate Government
Fixed Income Fund, Tax-Exempt Fixed Income Fund, International Fixed Income
Fund, Limited Volatility Fixed Income Fund, Latin America Equity Fund, and
Balanced Fund may also advertise a 30-day yield figure. These figures will be
based on historical earnings and are not intended to indicate future
performance. The yield of these Funds refers to the annualized income generated
by an investment in the Funds over a specified 30-day period. The yield is
calculated by assuming that the income generated by the investment during that
30-day period is generated over one year and is shown as a percentage of the
investment.
For the thirty-day period ended December 31, 1996, the yield for the following
Funds were:
<TABLE>
<CAPTION>
===================================================================
Fund Class 30-Day Yield
===================================================================
<S> <C> <C>
Fixed Income Fund Trust 5.90%
----------------------
Investor 5.39%
- -------------------------------------------------------------------
Intermediate Government Fixed Income Fund Trust 5.53%
----------------------
Investor 5.04%
- -------------------------------------------------------------------
</TABLE>
-26-
<PAGE>
<TABLE>
<CAPTION>
===================================================================
Fund Class 30-Day Yield
===================================================================
<S> <C> <C>
Tax-Exempt Fixed Income Fund Trust 4.80%
----------------------
Investor 4.34%
- -------------------------------------------------------------------
International Fixed Income Fund Trust 2.94%
----------------------
Investor 2.57%
- -------------------------------------------------------------------
Limited Volatility Fixed Income Fund Trust *
----------------------
Investor *
- -------------------------------------------------------------------
Value Fund Trust 2.00%
----------------------
Investor 1.66%
- -------------------------------------------------------------------
Growth Fund Trust 1.16%
----------------------
Investor 0.87%
- -------------------------------------------------------------------
Small Cap Fund Trust 0.00%
----------------------
Investor 0.00%
- -------------------------------------------------------------------
International Equity Fund Trust N/A
----------------------
Investor N/A
----------------------
TransEurope Fund Trust *
----------------------
Investor *
- -------------------------------------------------------------------
Asian Tigers Fund Trust N/A
----------------------
Investor N/A
- -------------------------------------------------------------------
Latin America Equity Fund Trust N/A
----------------------
Investor *
- -------------------------------------------------------------------
Balanced Fund Trust 2.94%
----------------------
Investor 2.56%
===================================================================
</TABLE>
* Not in operation at the end of the period.
The 30-day tax equivalent yields for the Tax-Exempt Fixed Income Fund for the
period ended December 31, 1996, was 7.95% for the Trust Shares and 7.19% for the
Investor Shares.
CALCULATION OF TOTAL RETURN
From time to time, the Value Fund, Growth Fund, Small Cap Fund, International
Equity Fund, TransEurope Fund, Asian Tigers Fund, Latin America Equity Fund,
Fixed Income Fund, Intermediate
-27-
<PAGE>
Government Fixed Income Fund, Tax-Exempt Fixed Income Fund, International Fixed
Income Fund, Limited Volatility Fixed Income Fund and Balanced Fund may
advertise total return. The total return of a 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 Fund 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)/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 of a hypothetical $1,000
payment made at the beginning of the designated time period as of the end of
such period.
Based on the foregoing, the average annual total return for the Funds from
commencement of operations through December 31, 1996, and for the one and three
year periods ended December 31, 1996, were as follows:
<TABLE>
<CAPTION>
====================================================================================================
Average Annual Total Return
-------------------------------
Fund Class
Since
One Year Three Year Inception
====================================================================================================
<S> <C> <C> <C> <C>
Treasury Money Market Fund Investor-Net Asset Value/1/ 4.54% 4.29% 3.88%
-----------------------------------------------------------------
Trust/2/ 4.80% 4.55% 4.06%
- ----------------------------------------------------------------------------------------------------
Government Money Market Fund Investor-Net Asset Value/3/ 4.82% 4.59% 4.24%
-----------------------------------------------------------------
Trust/2/ 5.08% 4.85% 4.39%
- ----------------------------------------------------------------------------------------------------
Money Market Fund Investor-Net Asset Value/4/ 4.87% 4.65% 4.27%
-----------------------------------------------------------------
Trust/2/ 5.13% 4.91% 4.44%
- ----------------------------------------------------------------------------------------------------
Tax-Exempt Money Market Fund Investor-Net Asset Value/5/ 2.88% 2.79% 2.56%
-----------------------------------------------------------------
Trust/2/ 3.14% 3.05% 2.78%
- ----------------------------------------------------------------------------------------------------
Fixed Income Fund Investor-Offering Price/6/ (1.43)% 3.59% 4.32%
-----------------------------------------------------------------
Investor-Net Asset Value/6/ 3.24% 5.19% 5.60%
- ----------------------------------------------------------------------------------------------------
Trust/2/ 3.42% 5.41% 6.51%
-----------------------------------------------------------------
Intermediate Government Fixed Investor-Offering Price/7/ (1.32)% 2.82% 2.93%
Income Fund
-----------------------------------------------------------------
Investor-Net Asset Value/7/ 3.30% 4.40% 4.21%
-----------------------------------------------------------------
Trust/2/ 3.51% 4.64% 4.99%
- ----------------------------------------------------------------------------------------------------
Tax-Exempt Fixed Income Fund Investor-Offering Price/8/ (1.93)% 2.36% 3.00%
-----------------------------------------------------------------
Investor-Net Asset Value/8/ 2.70% 3.94% 4.27%
-----------------------------------------------------------------
Trust/2/ 2.96% 4.23% 5.31%
- ----------------------------------------------------------------------------------------------------
International Fixed Income Fund Investor-Offering Price/9/ (2.02)% 5.15% 5.27%
-----------------------------------------------------------------
</TABLE>
-28-
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================
Average Annual Total Return
------------------------------
Fund Class
Since
One Year Three Year Inception
====================================================================================================
<S> <C> <C> <C> <C>
Investor-Net Asset Value/9/ 2.62% 6.77% 6.60%
-----------------------------------------------------------------
Trust/10/ 2.82% 7.02% 9.16%
- ----------------------------------------------------------------------------------------------------
Limited Volatility Fixed Income Investor-Offering Price * * *
Fund
-----------------------------------------------------------------
Investor-Net Asset Value * * *
-----------------------------------------------------------------
Trust * * *
- ----------------------------------------------------------------------------------------------------
Balanced Fund Investor-Offering Price/8/ 7.75% 8.58% 7.61%
-----------------------------------------------------------------
Investor-Net Asset Value/8/ 12.86% 10.25% 8.90%
-----------------------------------------------------------------
Trust/2/ 13.15% 10.51% 9.65%
- ----------------------------------------------------------------------------------------------------
Value Fund Investor-Offering Price/11/ 14.67% 14.65% 12.03%
-----------------------------------------------------------------
Investor-Net Asset Value/11/ 20.09% 16.44% 13.41%
-----------------------------------------------------------------
Trust/2/ 20.43% 16.72% 14.16%
- ----------------------------------------------------------------------------------------------------
Growth Fund Investor-Offering Price/12/ 15.92% 14.11% 10.99%
-----------------------------------------------------------------
Investor-Net Asset Value/12/ 21.41% 15.86% 12.33%
-----------------------------------------------------------------
Trust/2/ 21.69% 16.19% 13.33%
- ----------------------------------------------------------------------------------------------------
Small Cap Fund Investor-Offering Price/7/ 13.79% 11.91% 11.65%
-----------------------------------------------------------------
Investor-Net Asset Value/7/ 19.18% 13.63% 13.04%
-----------------------------------------------------------------
Trust/2/ 19.42% 13.93% 11.07%
- ----------------------------------------------------------------------------------------------------
International Equity Fund Investor-Offering Price/7/ 4.93% 7.17% 9.88%
-----------------------------------------------------------------
Investor-Net Asset Value/7/ 9.85% 8.82% 11.26%
-----------------------------------------------------------------
Trust/2/ 10.09% 9.05% 13.16%
- ----------------------------------------------------------------------------------------------------
Asian Tigers Fund Investor-Offering Price/13/ 9.09% * 4.82%
-----------------------------------------------------------------
Investor-Net Asset Value/13/ 14.21% * 6.45%
-----------------------------------------------------------------
Trust/14/ 14.55% * 6.70%
- ----------------------------------------------------------------------------------------------------
Latin America Equity Fund Investor-Offering Price * * *
-----------------------------------------------------------------
Investor-Net Asset Value * * *
-----------------------------------------------------------------
Trust 2.40% * 4.76%
- ----------------------------------------------------------------------------------------------------
TransEurope Fund Investor-Offering Price * * *
-----------------------------------------------------------------
Investor-Net Asset Value * * *
-----------------------------------------------------------------
</TABLE>
-29-
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================
Average Annual Total Return
----------------------------------
Fund Class
Since
One Year Three Year Inception
===================================================================================================
<S> <C> <C> <C> <C>
Trust * * *
===================================================================================================
</TABLE>
* Not in operation during the period.
_______________
/1/ Commenced operations 3/25/93 /9/ Commenced operations 4/26/93
/2/ Commenced operations 1/4/93 /10/ Commenced operations 2/7/93
/3/ Commenced operations 4/22/93 /11/ Commenced operations 3/26/93
/4/ Commenced operations 3/31/93 /12/ Commenced operations 3/8/93
/5/ Commenced operations 4/13/93 /13/ Commenced operations 1/12/94
/6/ Commenced operations 3/12/93 /14/ Commenced operations 1/3/94
/7/ Commenced operations 4/12/93 /15/ Commenced operations 7/1/96
/8/ Commenced operations 3/9/93
PURCHASE AND REDEMPTION OF SHARES
It is currently the Trust's policy to pay for all redemptions in cash. The
Trust retains the right, how ever, to alter this policy to provide for
redemptions in whole or in part by a distribution in-kind of securities held by
the Funds in lieu of cash. Shareholders may incur brokerage charges on the sale
of any such securities so received in payment of redemptions. However, a
Shareholder will at all times be entitled to aggregate cash redemptions from all
Funds 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, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of
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 the Fund for any period during
which the New York Stock Exchange, the Advisor, the Administrator and/or the
Custodian are not open for business. Currently, the following holidays are
observed by the Trust: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
In calculating the sales charge rates applicable to purchases of shares of the
International Fixed Income, Fixed Income, Intermediate Government Fixed Income,
Tax-Exempt Fixed Income, Limited Volatility Fixed Income, Balanced, Growth,
Small Cap, International Equity, TransEurope and Asian Tigers Funds, customers
of the following broker-dealers which have entered into an
-30-
<PAGE>
agreement with the Distributor are entitled to the following percentage-based
discount from the otherwise applicable sales charge:
<TABLE>
<CAPTION>
Name of Group Percentage of Waiver Date Offer Starts
- ------------- -------------------- -----------------
<S> <C> <C>
Jack White & Company 100% January 1, 1996
</TABLE>
LETTER OF INTENT
Reduced sales charges are applicable to the aggregate amount of purchases made
by any such purchaser previously enumerated within a 13-month period pursuant to
a written Letter of Intent (the "Letter") provided by the Transfer Agent, DST
Systems, Inc., and not legally binding on the signer or a Fund which provides
for the holding in escrow by the Transfer Agent of 5% of the total amount
intended to be purchased until such purchase is completed within the 13-month
period. The 13-month period begins on the date of the earliest purchase. If
the intended investment is not completed, the purchaser will be asked to pay an
amount equal to the difference between the sales charge on the shares purchased
at the reduced rate and the sales charge otherwise applicable to the total
shares purchased. If such payment is not made within 20 days following the
expiration of the 13-month period, the Transfer Agent will surrender an
appropriate number of the escrowed shares for redemption in order to realize the
difference. Such purchasers may include the value (at offering price at the
level designated in their Letter) of all their shares of the Fund and of any
other Fund previously purchased and still held as of the date of their Letter
toward the completion of such Letter.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Funds is calculated by adding the value of
securities and other assets, subtracting liabilities and dividing by the total
number of outstanding shares. Securities of the Treasury Money Market,
Government Money Market, Money Market and Tax-Exempt Money Market Funds 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
-31-
<PAGE>
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.
A Fund's use of amortized cost and the maintenance of the Fund's net asset value
at $1.00 are per mitted by Rule 2a-7 under the 1940 Act, provided that certain
conditions are met. Rule 2a-7 also requires the Trustees to establish
procedures which are reasonably designed to stabilize the net asset value per
share at $1.00 for the Funds. Such procedures include the determination of the
extent of deviation, if any, of the Funds' current net asset value per share
calculated using available market quotations from the Funds 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 calculate 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, and, 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. Such actions may include the sale of
portfolio instruments prior to maturity to realize capital gains or losses or to
shorten average portfolio maturity; withholding dividends; redeeming shares in
kind; or establishing a net asset value per share by using available market
quotations. In addition, if the Funds incur a significant loss or liability,
the Trustees have the authority to reduce pro rata the number of shares of the
--------
Funds in each Shareholder's account and to offset each Shareholder's pro rata
--------
portion of such loss or liability from the Shareholder's accrued but unpaid
dividends or from future dividends while each other Fund must annually
distribute at least 90% of its investment company taxable income.
The securities of the Equity, Balanced and Fixed Income Funds are valued by the
Administrator pursuant to valuations provided by an independent pricing service.
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 of fixed income securities, 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. Although
the methodology and procedures are identical, the net asset value per share of
Trust Class and Investor Class shares within the Funds may differ because of the
distribution expenses charged to Investor Class shares.
TAXES
The following is only a summary of certain income tax considerations generally
affecting a Fund and its Shareholders, and is not intended as a substitute for
careful tax planning. Shareholders are urged to consult their tax advisers with
specific reference to their own tax situations, including their state and local
income tax liabilities.
-32-
<PAGE>
FEDERAL INCOME TAX
ALL FUNDS
Each Fund intends to qualify as a "regulated investment company" ("RIC") as
defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code").
In order to qualify for treatment as a RIC under the Code, each Fund must
distribute annually to its Shareholders at least the sum of 90% of its net
interest income excludable from gross income plus 90% of its investment company
taxable income (generally, net investment income plus net short-term capital
gain) (the "Distribution Requirement") and also must meet several additional
requirements. Among these requirements are the following: (a) at least 90% of a
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; (b) a Fund must
derive less than 30% of its gross income each taxable year from the sale or
other disposition of stocks, securities, options, futures or forward contracts,
or foreign currencies (or options, futures or forward contracts on foreign
currencies) that are not directly related to a Fund's business of investing in
stock or securities, held for less than three months; and (c) diversify its
holdings so that; (i) at the close of each quarter of a 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 a Fund's assets and that does
not represent more than 10% of the outstanding voting securities of such issuer;
and (ii) at the close of each quarter of a 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 which are engaged in the same, similar or related trades or
businesses if the Fund owns at least 20% of the voting power of such
issuers.
Notwithstanding the Distribution Requirement described above, which only
requires a Fund to distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital gain
(the excess of net long-term capital gain over net short-term capital loss), a
Fund will be subject to a nondeductible 4% excise tax to the extent it fails to
distribute by the end of any calendar year 98% of its ordinary income for that
year and 98% of its capital gain net income for the one-year period ending on
October 31 of that year, plus certain other amounts. Each Fund intends to make
sufficient distributions to avoid liability for the 4% federal excise tax.
If for any taxable year a Fund does not qualify as a RIC, all of its taxable
income will be subject to tax at regular corporate rates without any deduction
for distributions to Shareholders. In such case, distributions (including
capital gains distributions) will be taxable as ordinary dividends to the extent
of the Fund's current and accumulated earnings and profits. Such distributions
generally will be eligible for the dividends-received deduction in the case of
corporate Shareholders.
-33-
<PAGE>
TAX EXEMPT FUNDS
Interest on indebtedness incurred by a Shareholder in order to purchase or carry
shares in the Tax-Exempt Fixed Income Fund or Tax-Exempt Money Market Fund is
generally not deductible for federal income tax purposes to the extent that the
Fund distributes exempt-interest dividends during the taxable year. If a
Shareholder receives exempt-interest dividends with respect to any share of
these Funds and if such share is held by the Shareholder for six months or less,
then any loss on the sale or exchange of such share will be disallowed to the
extent of the amount of exempt-interest dividends. In addition, the Code may
require a Shareholder who receives exempt-interest dividends to treat as taxable
income a portion of certain social security and railroad retirement benefit
payments. Furthermore, entities or persons who are "substantial users" (or
persons related to "substantial users") of facilities financed by "private
activity bonds" or certain industrial development bonds should consult their tax
advisers before purchasing shares in the Tax-Exempt Funds. For these purposes,
the term "substantial user" is defined generally to include a "non-exempt
person" who regularly uses in trade or business a part of a facility financed
from the proceeds of such bonds. Moreover, some or all of dividends received
from the Tax-Exempt Funds may be a specific preference item, or a component of
an adjustment item, for purposes of the federal individual and corporate
alternative minimum taxes. The receipt of these exempt-interest dividends and
distributions also may affect a corporate Shareholder's federal "environmental"
tax liability, a foreign corporate Shareholder's federal "branch profits" tax
liability, and an S corporation Shareholder's federal excess "passive investment
income."
Shareholders of the Tax-Exempt Funds should consult their tax advisers to
determine whether any portion of the income dividends received from such Funds
is considered tax exempt in their particular states.
Issuers of bonds purchased by the Tax-Exempt Funds (or the beneficiary of such
bonds) may have made certain representations or covenants in connection with the
issuance of such bonds to satisfy certain requirements of the Code that must be
satisfied subsequent to the issuance of such bonds. Shareholders should be aware
that exempt-interest dividends may become subject to federal income taxation
retroactively to the date of issuance of the bonds to which such dividends are
attributable if such representations are determined to have been inaccurate or
if the issuers (or the beneficiary) of the bonds fail to comply with certain
covenants made at that time.
-34-
<PAGE>
EQUITY AND BALANCED FUNDS
A dividends-received deduction is available to corporations that receive
dividends from domestic corporations. Dividends paid by an Equity or Balanced
Fund will be eligible for the dividends-received deduction for corporate
shareholders to the extent they are derived from dividends from domestic
corporations and to the extent that the respective security has been held for at
least three months. Equity and Balanced Fund Shareholders will be advised each
year of the portion of ordinary income dividends eligible for the deduction.
Individual shareholders are not entitled to the dividends received deduction
regardless of which fund paid the dividend.
FIXED INCOME AND MONEY MARKET FUNDS
Dividends received from other funds, e.g., Money Market or Fixed Income Funds,
----
will not be eligible for the dividends-received deduction.
STATE TAXES
A 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 Funds
to Shareholders and the ownership of shares may be subject to state and local
taxes.
FOREIGN TAXES
Dividends and interest received by a Fund may be subject to income, withholding
or other taxes imposed by foreign countries and U.S. possessions that would
reduce the yield on a Fund's securities. Tax conventions between certain
countries and the United States may reduce or eliminate these taxes. Foreign
countries generally do not impose taxes on capital gains with respect to
investments by foreign investors. If a Fund meets the Distribution Requirement
and if more than 50% of the value of such Fund's total assets at the close of
its taxable year consists of stock or securities of foreign corporations, such
Fund will be eligible to file an election with the Internal Revenue Service that
will enable Shareholders, in effect, to receive the benefit of the foreign tax
credit with respect to any foreign and U.S. possessions income taxes paid by the
Fund. Pursuant to the election, a Fund will treat those taxes as dividends paid
to its Shareholders. Each Shareholder will be required to include a
proportionate share of those taxes in gross income as income received from a
foreign source and must treat the amount so included as if the Shareholder had
paid the foreign tax directly. The Shareholder may then either deduct the taxes
deemed paid by him or her in computing his or her taxable income or,
alternatively, use the foregoing information in calculating the foreign tax
credit against the Shareholder's federal income tax. If a Fund makes the
election, it will report annually to its Shareholders the respective amounts per
share of such Fund's income from sources within, and taxes paid to, foreign
countries and U.S. possessions.
-35-
<PAGE>
PORTFOLIO TRANSACTIONS
The Trust has no obligation to deal with any dealer or group of dealers in the
execution of transactions in portfolio securities. Subject to policies
established by the Trustees, the Advisor and Sub-Advisor 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 Advisor and Sub-Advisor generally seeks
reasonably competitive spreads or commissions, the Trust will not necessarily be
paying the lowest spread or commission available.
The money market securities in which the Funds invest 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 Advisor and Sub-
Advisor 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 securities 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 Trust will primarily consist of dealer
spreads and underwriting commissions.
TRADING PRACTICES AND BROKERAGE
The Advisor and Sub-Advisor select brokers or dealers to execute transactions
for the purchase or sale of portfolio securities on the basis of their judgment
of the professional capability of the brokers or dealers to provide the service.
The primary consideration is to have brokers or dealers execute transactions at
best price and execution. Best price and execution refer to 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 Trust'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 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 all of the
Funds and any other accounts under management by the Advisor and Sub-Advisor,
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
-36-
<PAGE>
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 Advisor
and Sub-Advisor in connection with their investment decision-making process with
respect to one or more funds and accounts managed by them, 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 Trust 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 Advisor and Sub-Advisor may place a combined order for two or more accounts
or Funds engaged in the purchase or sale of the same security if, in their
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 Fund may obtain, it
is the opinion of the Advisor and Sub-Advisor 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 Funds may
place orders with broker-dealers which have agreed to defray certain Trust
expenses such as custodian fees, and may, 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.
It is expected that the Trust may execute brokerage or other agency transactions
through the Distributor or an affiliate of the Advisor or Sub-Advisor, which is
a registered broker-dealer, for commissions in conformity with the 1940 Act, the
1934 Act and rules promulgated by the SEC. Under these provisions, the
Distributor or an affiliate of the Advisor or Sub-Advisor is permitted to
receive and retain compensation for effecting portfolio transactions for the
Trust on an exchange. These rules
-37-
<PAGE>
further require that commissions paid to the Distributor by the Trust 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." In addition, the Trust
may direct commission business to one or more designated broker-dealers in
connection with such broker-dealers' provision of services to the Trust or
payment of certain Trust expenses (e.g., custody, pricing and professional
----
fees). 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 year ended December 31, 1996, the Funds paid the following
brokerage fees:
<TABLE>
<CAPTION>
====================================================================================================================================
% of Total Total
Total $ % of Total of Brokerage Commissions Total $ Amount
Total $ Amount of Brokerage Transactions Paid to SFS in of Brokerage
Amount of Brokerage Commissions Effected Connection with Commissions
Brokerage Commissions Paid to Through Repurchase Paid for
Fund Commissions Paid to Affiliates in Affiliated Agreement Research
Paid in 1996 Affiliates in 1996 Brokers in Transactions in in 1996
1996 1996 1996
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Intermediate Government
Fixed Income Fund $ 0 $ 0 0% 0% $ 1,652.54 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Tax-Exempt Fixed Income
Fund $ 0 $ 0 0% 0% $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Fixed Income Fund $ 0 $ 0 0% 0% $ 2,941.04 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
International Fixed Income
Fund $ 0 $ 0 0% 0% $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Limited Volatility Fixed
Income Fund * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Value Fund $185,275 $ 0 0% 0% $ 1,699.77 $130,921
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Fund $ 99,324 $ 0 0% 0% $ 1,717.97 $ 99,324
- ------------------------------------------------------------------------------------------------------------------------------------
Small Cap Fund $ 89,340 $ 0 0% 0% $ 838.21 $ 78,287
- ------------------------------------------------------------------------------------------------------------------------------------
International Equity Fund $ 80,851 $ 0 0% 0% $ 0 $ 80,851
- ------------------------------------------------------------------------------------------------------------------------------------
Asian Tigers Fund $109,083 $ 0 0% 0% $ 0 $101,066
- ------------------------------------------------------------------------------------------------------------------------------------
TransEurope Fund * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Latin America Equity Fund $ 38,488 $ 0 0% 0% $ 0 $ 38,488
- ------------------------------------------------------------------------------------------------------------------------------------
Balanced Fund $ 37,786 $ 0 0% 0% $ 831.08 $ 27,594
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-38-
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
% of Total Total
Total $ % of Total of Brokerage Commissions Total $ Amount
Total $ Amount of Brokerage Transactions Paid to SFS in of Brokerage
Amount of Brokerage Commissions Effected Connection with Commissions
Brokerage Commissions Paid to Through Repurchase Paid for
Fund Commissions Paid to Affiliates in Affiliated Agreement Research
Paid in 1996 Affiliates in 1996 Brokers in Transactions in in 1996
1996 1996 1996
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Tax-Exempt Money Market
Fund $ 0 $ 0 0% 0% $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Money Market Fund $ 0 $ 0 0% 0% $101,268.72 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Treasury Money Market Fund $ 0 $ 0 0% 0% $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Government Money Market
Fund $ 0 $ 0 0% 0% $ 39,439.90 $ 0
====================================================================================================================================
</TABLE>
* Not in operation during the period.
For the fiscal years ended December 31, 1994 and 1995, the Funds paid the
following brokerage fees:
<TABLE>
<CAPTION>
===============================================================================================================================
Total $ Amount of Brokerage Commissions Total $ Amount of Brokerage
Paid in Commissions Paid Affiliates in
Fund 1994 1995 1994 1995
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Intermediate Government Fixed Income Fund $ 0 $ 0 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------------------------
Tax-Exempt Fixed Income Fund $ 0 $ 0 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------------------------
Fixed Income Fund $ 0 $ 0 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------------------------
International Fixed Income Fund $ 0 $ 0 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------------------------
Limited Volatility Fixed Income Fund * * * *
- -------------------------------------------------------------------------------------------------------------------------------
Value Fund $ 78,580 $125,283 $ 0 $ 2,994
- -------------------------------------------------------------------------------------------------------------------------------
Growth Fund $155,975 $117,644 $ 0 $10,080
- -------------------------------------------------------------------------------------------------------------------------------
Small Cap Fund $ 35,240 $ 73,502 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------------------------
International Equity Fund $113,705 $169,608 $62,007 $66,033
- -------------------------------------------------------------------------------------------------------------------------------
Asian Tigers Fund $160,589 $102,905 $59,738 $24,295
- -------------------------------------------------------------------------------------------------------------------------------
TransEurope Fund * * * *
- -------------------------------------------------------------------------------------------------------------------------------
Latin America Equity Fund * * * *
- -------------------------------------------------------------------------------------------------------------------------------
Balanced Fund $ 89,161 $ 87,467 $ 0 $ 732
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-39-
<PAGE>
<TABLE>
<CAPTION>
===============================================================================================================================
Total $ Amount of Brokerage Commissions Total $ Amount of Brokerage
Paid in Commissions Paid Affiliates in
Fund 1994 1995 1994 1995
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax-Exempt Money Market Fund $ 0 $ 0 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------------------------
Money Market Fund $ 0 $ 0 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------------------------
Treasury Money Market Fund $ 0 $ 0 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------------------------
Government Money Market Fund $ 0 $ 0 $ 0 $ 0
===============================================================================================================================
</TABLE>
* Not in operation during the period.
The broker-dealers who executed transactions on behalf of the Funds and who are
affiliates of the Fund's Advisor and Sub-Advisor are brokers in the ABN AMRO
International brokerage network. In addition, the Funds executed brokerage
trades through SEI Financial Services Company, an affiliate of the Administrator
and Distributor.
Except for the Intermediate Government Fixed Income, Fixed Income, Tax Exempt
Fixed Income and International Fixed Income Funds, it is expected that the
portfolio turnover rate will normally not exceed 100% for any Fund. A portfolio
turnover rate would exceed 100% if all of its securities, exclusive of U.S.
Government securities and other securities whose maturities at the time of
acquisition are one year or less are replaced in the period of one year.
Turnover rates may vary from year to year and may be affected by cash
requirements for redemptions and by requirements which enable a Fund to receive
favorable tax treatment.
For the fiscal years ended December 31, 1995 and 1996, the portfolio turnover
rate for each of the Funds was:
<TABLE>
<CAPTION>
================================================================================
Turnover Rate
Fund 1995 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Value Fund 37% 58%
- --------------------------------------------------------------------------------
Growth Fund 71% 58%
- --------------------------------------------------------------------------------
Small Cap Fund 142% 158%
- --------------------------------------------------------------------------------
International Equity Fund 11% 9%
- --------------------------------------------------------------------------------
TransEurope Fund * *
- --------------------------------------------------------------------------------
Asian Tigers Fund 28% 24%
- --------------------------------------------------------------------------------
Latin America Equity Fund * 10%
- --------------------------------------------------------------------------------
Fixed Income Fund 59% 194%
- --------------------------------------------------------------------------------
</TABLE>
-40-
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Turnover Rate
Fund 1995 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Intermediate Government Fixed Income Fund 115% 179%
- --------------------------------------------------------------------------------
Tax-Exempt Fixed Income Fund 129% 98%
- --------------------------------------------------------------------------------
International Fixed Income Fund 105% 85%
- --------------------------------------------------------------------------------
Limited Volatility Fixed Income Fund * *
- --------------------------------------------------------------------------------
Balanced Fund 85% 104%
================================================================================
</TABLE>
* Not in operation during the period.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of the Funds each of which represents an equal proportionate interest in
that Fund with each other share. Shares are entitled upon liquidation to a pro
---
rata share in the net assets of the Funds. Shareholders have no preemptive
- ----
rights. The Declaration of Trust provides that the Trustees of the Trust may
create additional series of shares. 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, under certain
circumstances, could 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.
5% AND 25% SHAREHOLDERS
As of April 1, 1997, the following persons were the only persons who were record
owners (or to the knowledge of the Trust, beneficial owners) of 5% or 25% or
more of the shares of the Funds.
-41-
<PAGE>
Persons who owned of record or beneficially more than 25% of a Fund's
outstanding shares may be deemed to control the Fund within the meaning of the
1940 Act. The Trust believes that most of the shares of the Trust Class shares
of the Funds were held for the record owner's fiduciary, agency or custodial
customers.
<TABLE>
<S> <C> <C>
TREASURY MONEY MARKET FUND
LaSalle National Bank N.A. 210,781,047.7500 95.90%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
GOVERNMENT MONEY MARKET FUND
LaSalle National Bank N.A. 200,060,372.9100 97.10%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
MONEY MARKET FUND
LaSalle National Bank N.A. 618,984,122.3000 99.49%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
TAX-EXEMPT MONEY MARKET FUND
LaSalle National Bank N.A. 264,175,440.8600 98.95%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
FIXED INCOME FUND
LaSalle National Bank N.A. 12,699,633.0270 99.66%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
</TABLE>
-42-
<PAGE>
<TABLE>
<S> <C> <C>
INTERMEDIATE GOVERNMENT FIXED INCOME FUND
LaSalle National Bank N.A. 5,680,987.3080 99.74%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
TAX-EXEMPT FIXED INCOME FUND
LaSalle National Bank N.A. 3,939,396.7920 98.43%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
INTERNATIONAL FIXED INCOME FUND
LaSalle National Bank N.A. 2,011,407.4540 99.51%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
VALUE FUND
LaSalle National Bank N.A. 12,945,512.5880 99.08%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
GROWTH FUND
LaSalle National Bank N.A. 7,539,904.8240 97.07%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
SMALL CAP FUND
LaSalle National Bank N.A. 2,697,812.5030 98.43%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
</TABLE>
-43-
<PAGE>
<TABLE>
<S> <C> <C>
INTERNATIONAL EQUITY FUND
LaSalle National Bank N.A. 6,215,886.1060 98.57%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
ASIAN TIGERS FUND
LaSalle National Bank N.A. 3,026,941.1560 98.04%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
BALANCED FUND
LaSalle National Bank N.A. 5,045,815.4230 94.02%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
LATIN AMERICA EQUITY FUND
LaSalle National Bank N.A. 1,563,465.4440 100.00%
Attn: Income Collection
P.O. Box 1443
Chicago, IL 60690-1443
</TABLE>
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for his
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 willful
misfeasance, bad faith, gross negligence or reckless disregard of his duties.
-44-
<PAGE>
FINANCIAL STATEMENTS
The Trust's financial statements for the fiscal year ended December 31, 1996,
including notes thereto and the report of Ernst & Young are herein incorporated
by reference from the Trust's Annual Report. A copy of the 1996 Annual Report to
Shareholders must accompany the delivery of this Statement of Additional
Information.
-45-
<PAGE>
APPENDIX
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Fitch Investors Service, Inc. ("Fitch"), Duff & Phelps, Inc.
("Duff") and IBCA Limited and IBCA, Inc. (together, "IBCA").
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1, 1+ and 2, to indicate the relative degree of safety. Issues rated
A-1+ are those with "extremely strong safety characteristics." Those rated A-1,
the highest rating category, reflect a "satisfactory" degree of safety regarding
timely payment. Those rated A-2, the second highest rating category, reflect a
safety regarding timely payment but not as high as A-1.
Commercial paper issues rated Prime-1 or Prime-2 by Moody's are judged by
Moody's to be of "superior" quality and "strong" quality respectively on the
basis of relative repayment capacity.
The rating F-1+ (Exceptionally Strong) is the highest commercial paper rating
assigned by Fitch. Paper rated Fitch. Paper rated Fitch-1+ is regarded as having
the strongest degree of assurance for timely payment. Paper rated F-1 (Very
Strong) reflects an assurance of timely payment only slightly less in degree
than paper rated F-1+ the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by good fundamental protection
factors. Risk factors are minor. Duff has incorporated gradations of 1+ and 1-
to assist investors in recognizing quality differences within this highest tier.
Paper rated Duff-1+ has the highest certainty of timely payment, with
outstanding short-term liquidity and safety just below risk-free U.S. Treasury
short-term obligations. Paper rated Duff-1- has high certainty of timely payment
with strong liquidity factors which are supported by good fundamental protection
factors. Risk factors are very small. Paper rated Duff-2 is regarded as having
good certainty of timely payment, good access to capital markets (although
ongoing funding may enlarge total financing requirements) and sound liquidity
factors and company fundamentals. Risk factors are small.
The designation A1, the highest rating category established by 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, the second highest rating category, are
supported by a satisfactory capacity for timely repayment, although such
capacity may be susceptible to adverse changes in business, economic or
financial conditions.
<PAGE>
DESCRIPTION OF CORPORATE BOND RATINGS
The following descriptions of corporate bond ratings have been published by S&P,
Moody's, Fitch, Duff and IBCA.
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and differs from AAA issues only in small
degree. Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
Bonds which are rated BBB are considered as medium-grade obligations (i.e., they
are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Bonds which are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged". Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than in Aaa securities.
Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Debt rated Baa is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high grade, broadly
marketable, suitable for investment by trustees and fiduciary institutions
liable to but slight market fluctuation other than through changes in the money
rate. The prime feature of an AAA bond is a showing of earnings several times or
many times interest requirements, with such stability of applicable earnings
that safety
A-2
<PAGE>
is beyond reasonable question whatever changes occur in conditions. Bonds rated
AA by Fitch are judged by Fitch to be of safety virtually beyond question and
are readily salable, whose merits are not unlike those of the AAA class, but
whose margin of safety is less strikingly broad. The issue may be the obligation
of a small company, strongly secured but influenced as to rating by the lesser
financial power of the enterprise and more local type market. Fitch uses plus
and minus signs to indicate the relative position of a credit within the AA
rating category. Bonds rated AAA by Fitch are considered to be investment grade
and of the highest credit quality. The obligor has an exceptionally strong
ability to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events. Bonds rated AA by Fitch are considered to be
investment grade and of very high credit quality. The obligor's ability to pay
interest and repay principal is very strong, although not quite as strong as
bonds rated AAA. Because bonds rated in the AAA and AA categories are not
significantly vulnerable to foreseeable future developments, short-term debt of
these issuers is generally rated F-1+.
Fitch uses plus and minus signs to indicate the relative position of a credit
within the AA rating category. Bonds rated AAA by Fitch are considered to be
investment grade and of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events. Bonds rated AA by
Fitch are considered to be investment grade of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future developments,
short-term debt of these issuers is generally rated F-1+.
Bonds rated Duff-1 are judged by Duff to be of the highest credit quality with
negligible risk factors; only slightly more than for risk-free U.S. Treasury
debt. Bonds rated AA by Duff are judged to be of high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.
Obligations rated AAA by IBCA have the lowest expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial, such
that adverse changes in business, economic or financial conditions are unlikely
to increase investment risk significantly. Obligations for which there is a very
low expectation of investment risk are rated AA by IBCA. Capacity for timely
repayment of principal and interest is substantial. Adverse changes in business,
economic or financial conditions may increase investment risk albeit not very
significantly.
A-3
<PAGE>
PART C -
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this Registration Statement.
* Not Applicable
-3-
<PAGE>
REMBRANDT FUNDS(R)
PART C: OTHER INFORMATION
POST EFFECTIVE AMENDMENT NO. 11
Item 24. Financial Statements and Exhibits:
(a) Financial Statements
Part A--Prospectus:
Part B--Statement of Additional Information: The following audited
financial statements as of December 31, 1996 and the report of Ernst &
Young LLP dated January 24, 1997, are hereby incorporated by reference to
the Statement of Additional Information from Form N-30D, the Annual Report
of Shareholders, as filed with the Securities and Exchange Commission on
February 27, 1997 with Accession Number 0000935069-97-000017.
Statement of Net Assets
Schedule of Investments
Statements of Assets and Liabilities
Statements of Operations
Statements of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
(b) Additional Exhibits
1 Agreement and Declaration of Trust and Amendment thereto as
originally filed as Exhibit 1 to Registrant's initial Registration
Statement on October 2, 1992 and filed herewith.
1(a) Amendment dated October 20, 1992 to Registrant's Agreement and
Declaration of Trust as originally filed as Exhibit 1(b) with
Registrant's Pre-Effective Amendment No. 1 filed on December 3, 1992
and filed herewith.
2 Registrant's By-Laws as originally filed as Exhibit 2 with
Registrant's initial Registration Statement on October 2, 1992 and
filed herewith.
3 Not applicable.
4 Not applicable.
5 Investment Advisory Agreement with LaSalle Street Capital
Management, Ltd. as originally filed as Exhibit 5(b) with
Registrant's initial Registration Statement on October 2, 1992 and
filed herewith.
5(a) Investment Sub-Advisory Agreement between LaSalle Street Capital
Management Ltd., on behalf of the Registrant, and ABN AMRO-NSM
International Funds Management B.V. as originally filed as Exhibit
5(c) with Registrant's Pre-Effective Amendment No. 1 and filed
herewith.
6 Distribution Agreement as originally filed as Exhibit 6 with
Registrant's Pre-Effective Amendment No. 1 and filed herewith.
7 Not applicable.
8 Custodian Agreement as originally filed as Exhibit 8(a) with
Registrant's Pre-Effective Amendment No. 1 and filed herewith.
8(a) Sub-Custodian Agreement between CoreStates Bank, N.A. and Barclays
Bank PLC incorporated herein by reference to Exhibit 8(a)(1) to
Post-Effective Amendment No. 6 to Registrant's Registration
Statement on Form N-1A (File No. 33-52784), filed with the
Securities and Exchange Commission on January 13, 1995.
8(b) Form of Transfer Agency Agreement between the Registrant and
Supervised Service Company incorporated herein by reference to
Exhibit 8(c) to Post-Effective Amendment No. 4 to Registrant's
Registration Statement on Form N-1A (File No. 33-52784) filed with
the Securities and Exchange Commission on April 1, 1994.
-4-
<PAGE>
9 Administration Agreement as originally filed as Exhibit 5(a) with
Registrant's Pre-Effective Amendment No. 1 filed on December 3, 1992
and filed herewith.
9(a) Consent to Assignment and Assumption (of the Administration
Agreement)
10 Opinion and Consent of Counsel as originally filed as Exhibit 10
with Registrant's Post-Effective Amendment No. 2 and filed
herewith.
11 Consent of Independent Public Accountants, filed herewith.
12 Not applicable.
13 Not applicable.
14 Not applicable.
15 Distribution Plan - Investor Class as originally filed as Exhibit 15
with Registrant's Pre-Effective Amendment No. 1 and filed
herewith.
16 Performance Quotation Computation
18 Rule 18f-3 Plan as originally filed as Exhibit 18 with Registrant's
Post-Effective Amendment No. 8 and filed herewith.
24 Powers of Attorney, filed herewith.
27 Financial Data Schedules, filed herewith.
Item 25. Persons Controlled by or under Common Control with Registrant:
See the Prospectuses and the Statement of Additional Information
regarding the Trust's control relationships. The Administrator is a subsidiary
of SEI Corporation, which also controls other corporations engaged in providing
various financial and record keeping services, primarily to bank trust
departments, pension plan sponsors, and investment managers.
Item 26. Number of Holders of Securities:
<TABLE>
<CAPTION>
As of April 1, 1997
Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
Units of beneficial interest, without par value -
TRUST CLASS
Value Fund................................................................ 4
Growth Fund............................................................... 5
Small Cap Fund............................................................ 5
International Equity Fund................................................. 4
TransEurope Fund.......................................................... 0
Asian Tigers Fund......................................................... 7
Fixed Income Fund......................................................... 4
Intermediate Government Fixed Income Fund................................. 4
Tax-Exempt Fixed Income Fund.............................................. 4
International Fixed Income Fund........................................... 5
Limited Volatility Fixed Income Fund...................................... 0
Money Market Fund......................................................... 4
Government Money Market Fund.............................................. 5
Treasury Money Market Fund................................................ 5
Tax-Exempt Money Market Fund.............................................. 4
Balanced Fund............................................................. 4
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
Title of Class Record Holders
-------------- --------------
<S> <C>
Latin America Equity Fund................................................. 8
INVESTOR CLASS
Value Fund................................................................ 29
Growth Fund............................................................... 400
Small Cap Fund............................................................ 96
International Equity Fund................................................. 279
TransEurope Fund.......................................................... 0
Asian Tigers Fund......................................................... 198
Fixed Income Fund......................................................... 55
Intermediate Government Fixed Income Fund................................. 16
Tax-Exempt Fixed Income Fund.............................................. 42
International Fixed Income Fund........................................... 43
Limited Volatility Fixed Income........................................... 0
Money Market Fund......................................................... 102
Government Money Market Fund.............................................. 13
Treasury Money Market Fund................................................ 9
Tax Exempt Money Market Fund.............................................. 42
Balanced Fund............................................................. 406
Latin America Equity Fund................................................. 0
</TABLE>
Item 27. Indemnification:
Article VIII of the Agreement of Declaration of Trust filed as Exhibit
1 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 28. Business and Other Connections of Investment Advisor and Investment
Sub-Advisor:
<TABLE>
<CAPTION>
Name and Position Name of Other Connection with
with Investment Advisor Company Other Company
- ----------------------- ------------- -------------
<S> <C> <C>
Robert T. Brehm ABN AMRO Chicago Corporation Executive Vice President,
Chairman Director
ABN AMRO Asset Management (USA) President, Director
Inc.
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
Name and Position Name of Other Connection with
with Investment Advisor Company Other Company
- ----------------------- ------- -------------
<S> <C> <C>
Richard A. Frodsham ABN AMRO Chicago Corporation Senior Vice President
President
Chief Executive Officer
Director
John A. Wing ABN AMRO Chicago Corporation Chairman, CEO
Vice Chairman Amerus Life Director
Chicago Board Options Exchange Director
Perry L. Taylor, Jr. ABN AMRO Chicago Corporation Executive Vice President &
Director, Secretary Director
Erikson Institute Trustee
Daniel J. Shannon Catholic Charities Board of Advisors,
Director Board of Directors
Notre Dame National Monogram Club President
Dental Benefit Services of Illinois Vice Chairman
Total Travel, Inc. Director
BioSafe International Director
Charles R. Klimkowski ABN AMRO Chicago Corporation Senior Vice President
Director Director
Theregenics, Inc. Director
Charles H. Self III LaSalle National Bank Senior Vice President & Assistant
Director Secretary
Senior Vice President Government Insurance Managers, Inc. Director
Keith Dibble LaSalle National Bank Senior Vice President & Assistant
Senior Vice President Secretary
Thomas F. McGrath LaSalle National Bank Senior Vice President & Assistant
Senior Vice President Secretary
ABN AMRO Chicago Corporation Senior Vice President
John F. Bonetti LaSalle National Bank Senior Vice President & Assistant
Vice President Secretary
Marc G. Borghans LaSalle National Bank Vice President & Assistant Secretary
Vice President
James J. Baudendistel None
Vice President
Gregory D. Boal LaSalle National Bank Vice President & Assistant Secretary
Vice President
A. Wade Buckles LaSalle National Bank First Vice President & Assistant
First Vice President Secretary
ABN AMRO Chicago Corporation Senior Vice President
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
Name and Position Name of Other Connection with
with Investment Advisor Company Other Company
- ----------------------- ------- -------------
<S> <C> <C>
Jac A. Cerney LaSalle National Bank Vice President & Assistant Secretary
Senior Vice President
Martin L. Eisenberg ABN AMRO Bank N.V. Vice President
Vice President Netherlands Trading Society East, Inc. Vice President
Pine Tree Capital Holdings, Inc. Vice President
AMRO Securities, Inc. Vice President
ABN AMRO North America Finance, Inc. Vice President
DBI Holdings, Inc. Vice President
ABN AMRO North America, Inc. Senior Vice President
ABN AMRO Mortgage Corp. Vice President
ABN AMRO Resource Management, Inc. Vice President
Danic Asset Management Corp. Vice President
National Asset Management Vice President
SFH, Inc. Vice President
ABN AMRO Acceptance Corp. Vice President
ABN AMRO Asset Management (USA) Vice President
Inc.
ABN AMRO Credit Corp. Vice President
ABN AMRO Investment Services, Inc. Vice President
LaSalle Management Company, Inc. Vice President
Cragin Financial Corp. Vice President
Cragin Service Corp. Vice President
Cumberland & Higgins, Inc. Vice President
LaSalle Bank, F.S.B. Vice President
Lease Plan Illinois, Inc. Vice President
LaSalle Financial Services, Inc. Tax Officer
LaSalle Home Mortgage Corporation Tax Officer
LaSalle National Corporation Vice President
ABN AMRO Capital (USA) Inc. Vice President
Lease Plan North America, Inc. Vice President
ABN AMRO Information Technology Vice President
Services Company
Lisle Corporation Vice President
ABN AMRO Services Company, Inc. Vice President
LaSalle Bank Vice President
LaSalle Bank NI Vice President
LaSalle Northwest National Bank Vice President
LaSalle National Bancorp, Inc. Vice President
LaSalle Bank Illinois Vice President
Amsterdam Pacific Corporation Vice President
LaSalle Trade Services Limited Vice President
Heigl Mortgage and Financial Corporation Vice President
CNBC Bancorp, Inc. Vice President
Columbia Financial Services, Inc. Vice President
Columbia National Bank of Chicago Vice President
CNBC Development Corporation Vice President
CNBC Investment Corporation Vice President
CNBC Leasing Corporation Vice President
Sky Mortgage Company Vice President
Sky Finance Company Vice President
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
Name and Position Name of Other Connection with
with Investment Advisor Company Other Company
- ----------------------- ------- -------------
<S> <C> <C>
CNB Property Corporation Vice President
Union Realty Mortgage Co., Inc. Vice President
Leonard Voila Corporation Vice President
LaSalle National Bank Vice President
Monroe Corporation of Delaware Vice President
LaSalle National Safe Deposit Vice President
Corporation
Rob-Wal Investment Co. Vice President
ENB Realty Co., Inc. Vice President
LaSalle Trade Services Corporation Vice President
LaSalle National Leasing Corporation Vice President
LaSalle Business Credit, Inc. Vice President
European American Bank Vice President
Cityspire Realty Corp. Vice President
EA Debt Corp. Vice President
EA Land Corp. Vice President
EAB Land Company, Inc. Vice President
EAB Mortgage Company, Inc. Vice President
EAB Realty Corp. Vice President
EAB Realty of Florida, Inc. Vice President
EAB Securities, Inc. Vice President
Ashland Properties, Inc. Vice President
Discount Brokers International, Inc. Vice President
Kany Long Island City Corp. Vice President
Cragin Service Development Corp. Vice President
Wasco Funding Corp. Vice President
Island Abodes Corp. Vice President
Lyric Holdings, Inc. Vice President
EAB Credit Corp. Vice President
ORE Realty, Inc. Vice President
Texas Holdings, Inc. Vice President
Twelve Polo Realty Inc. Vice President
Vail at North Salem Inc. Vice President
32A Realty Inc. Vice President
81 Lee Avenue Corp. Vice President
169 East Flagler Corp. Vice President
EAB Plaza, Inc. Vice President
117 Seaman Realty, Inc. Vice President
Garden City Marble Corp. Vice President
Mamaroneck Point Realty, Inc. Vice President
East River 52 Corp. Vice President
Huntington Bay Development Corp. Vice President
Plaza Homes Inc. (Metrofund) Vice President
Tower East 147 Inc. Vice President
LSR Realty Inc. Vice President
Beckman Hospitality Corp. Vice President
Atlantic Avenue Development Corp. Vice President
Bald Hills Park at Farmingville Inc. Vice President
Bennett 143 Corp. Vice President
Birch Locust Valley Corp. Vice President
Broadhollow 532 Melville Corporation Vice President
CK at Manorville Inc. Vice President
</TABLE>
-9-
<PAGE>
<TABLE>
<CAPTION>
Name and Position Name of Other Connection with
with Investment Advisor Company Other Company
- ----------------------- ------- -------------
<S> <C> <C>
Colony at Sayerville, Corp. Vice President
Corners Estates at Hauppauge Inc. Vice President
Corona 114 Apartments Inc. Vice President
Country Knolls at Manorville Inc. Vice President
Cove Townhouses at Southold Inc. Vice President
Crystal Domiciles Inc. Vice President
Eastern Shores at Northampton Corp. Vice President
Edison Townhouse Corp. Vice President
Forestwood at North Hills Inc. Vice President
Garden State Convention Center at Vice President
Somerest County, Inc.
Half Acre on 347 at Nesoonset Inc. Vice President
Horse Race Lane at Nissequogue Inc. Vice President
Hunt Club at Middletown Inc. Vice President
Jericho 969 Turnpike Inc. Vice President
Fairfield Avenue Corp. Vice President
Amsterdam Development Corp. Vice President
Brownstone Apts. Inc. Vice President
Central Cedarhurst Corp. Vice President
GSC Land Corp. Vice President
East 91st Street Development Corp. Vice President
East 92nd Street Development Corp. Vice President
LLPA Corporation Vice President
Lake and Pulaski at Greenlawn Inc. Vice President
Lake Front Land Corp. Vice President
Lattingtown Mansion, Inc. Vice President
Long Beach Breeze Corp. Vice President
Lowell Acquisition Corp. Vice President
Ludlow Development Corp. Vice President
MPE at St. James Inc. Vice President
Manor Homes at Aberdeen Corp. Vice President
Maspeth 56-25 58th Street Corp. Vice President
Metro Case Corp. Vice President
Mills Pond Estates at St. James Inc. Vice President
Montauk Hospitality Corp. Vice President
Montauk YC Corp. Vice President
Moreland Hauppauge Corp. Vice President
Nineteenth Street Development Corp. Vice President
North Hills Links Corp. Vice President
Old Country Road at Wyandanch Inc. Vice President
Omni General Realty Corp. Vice President
Omni Realty Corp. Vice President
Orchards at Mt. Sinai Inc. "(The)" Vice President
Parkway Plaza 1400 Corp. Vice President
Plaza Boulevard Equities Corp. Vice President
Plaza Boulevard Properties Corp. Vice President
Plaza Uniondale Equities Corp. Vice President
Plaza Uniondale Properties Corp. Vice President
Remington Ronkonkoma Corp. Vice President
Rendezvous Realty Corp. Vice President
SE at Commack Inc. Vice President
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
Name and Position Name of Other Connection with
with Investment Advisor Company Other Company
- ----------------------- ------- -------------
<S> <C> <C>
SE at Commack II Inc. Vice President
SE at Commack III Inc. Vice President
SE at Commack IV Inc. Vice President
Scholar Estates at Commack Inc. Vice President
Seaman Shares at Inwood Corp. Vice President
Shoreham North Country Corp. Vice President
Showcase Estates at Dix Hills Inc. Vice President
Smith Island at Everett Corp. Vice President
Soho 350 Corp. Vice President
Southampton Settlers Corporation Vice President
Southeast Ridgefield Land Corp. Vice President
Steinway 18-50 Astoria Corp. Vice President
Sterling DTVA Corp. Vice President
TE at Dix Hills Inc. Vice President
TE at Dix Hills II Inc. Vice President
TE at Dix Hills III Inc. Vice President
TO at Mt. Sinai Inc. Vice President
Tara II at Hauppauge Inc. Vice President
Thornwood Estates at Dix Hills Inc. Vice President
Vermilyea 119 Corp. Vice President
Veterans 4320 Bohemia Corp. Vice President
Village 185 Corp. Vice President
W.M. Seaman at Inwood Corp. Vice President
Welcome Center at Manorville Inc. Vice President
West End 700 Inc. Vice President
Westminster Downs at Dix Hills, Inc. Vice President
Westwood Hills at Middletown, Inc. Vice President
Windsor 37th Corp. Vice President
Z161 Corp. Vice President
Z174 Corp. Vice President
Ziegfeld Villas Corp. Vice President
41 East Sunrise Highway Corporation Vice President
55 Commerce, Inc. (Sold to EMI 1/20/92) Vice President
Seventh Street Development Corp. Vice President
Fourteenth Street Development Corp. Vice President
West 51st Street Development Corp. Vice President
West 73rd Street Development Corp. Vice President
Lemark Land in Setauket, Inc. Vice President
Ludlow Street Development Corp. Vice President
Milestone Square Corp. Vice President
Oceanside 35-05 Hampton Road Inc. Vice President
Oceanside 35-39 Hampton Road Inc. Vice President
Sangeo 709 Merrick Road Corp. Vice President
Sherwood Plaza Corp. Vice President
Syosset 240 Jericho, Inc. Vice President
Mark Karstrom LaSalle National Bank Vice President & Assistant Secretary
Vice President
Kathryn L. Martin ABN AMRO Asset Management (USA) Compliance Officer
Vice President Inc.
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION>
Name and Position Name of Other Connection with
with Investment Advisor Company Other Company
- ----------------------- ------- -------------
<S> <C> <C>
Ronald C. Scheuer LaSalle National Bank Vice President & Assistant Secretary
Vice President
Roger R. Sullivan LaSalle National Bank Vice President & Assistant Secretary
Vice President
Karen Van Cleave LaSalle National Bank Vice President & Assistant Secretary
Vice President
Nancy A. Ellefson LaSalle National Bank Assistant Vice President & Assistant
Vice President Secretary
Mark T. Morgan LaSalle National Bank Assistant Vice President & Assistant
Assistant Vice President Secretary
ABN AMRO Chicago Corporation Vice President
Phillip P. Mierzwa LaSalle National Bank Trust Officer & Assistant Secretary
Assistant Vice President
Susan M. Wiemeler None
Officer
Christine R. Dragon LaSalle National Bank Employee
Officer
</TABLE>
Other business, profession, vocation, or employment of a substantial nature
in which each director or principal officer of the Sub-Advisor 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:
ABN AMRO-NSM International Funds Management B.V., a registered investment
advisor, serves as the investment sub-advisor of the Latin America Equity Fund,
International Equity Fund, TransEurope Fund, Asian Tigers Fund and International
Fixed Income Fund.
<TABLE>
<CAPTION>
Name and Position with Name of Other Connection with
Investment Sub-Advisor Company Other Company
- ---------------------- ------------- ---------------
<S> <C> <C>
Hendrik Stienstra ABN AMRO Investment Management B.V. Director
Director ABN AMRO Beheer Beleggingsfondsen B.V. Director
B.V. Hollandsche Belegging en Beheer Maatshchappij Director
ABN AMRO Bank N.V. Senior Vice President
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
Name and Position with Name of Other Connection with
Investment Sub-Advisor Company Other Company
- ---------------------- ------------- ---------------
<S> <C> <C>
Diederik Wermolder ABN AMRO Investment Management B.V. Director
Director ABN AMRO Beheer Beleggingsfondsen B.V. Director
B.V. Hollandsche Belegging en Beheer Maatshchappij Director
ABN AMRO Luxembourg Investment Management S.A. Director
ABN AMRO Funds Investment Advisory (Luxembourg) S.A. Director
ABN AMRO Interest Growth Fund Investment Advisory Director
(Luxembourg) S.A.
ABN AMRO Valurente Investment Adviosry (Luxembourg) Director
S.A.
ABN AMRO Bank N.V. Vice President
Wypke Postma ABN AMRO Investment Management B.V. Officer
Director ABN AMRO Beheer Beleggingsfondsen B.V. Officer
B.V. Hollandsche Belegging en Beheer Maatschappij Officer
ABN AMRO Bank N.V. Vice President
Mathilde De La Serviere Banque NSM, Paris Vice President
Director
Anne-Marie George Banque NSM, Paris Vice President
Director
Rogier Crijns ABN AMRO Bank N.V. Vice President
Portfolio Manager
Jan-Wim Derks ABN AMRO Bank N.V. Vice President
Portfolio Manager
Gijs Dooresteijn ABN AMRO Bank N.V. Vice President
Portfolio Manager
Alex Ng ABN AMRO Asset Management (Asia) Ltd. Director
Portfolio Manager P.T. ABN AMRO Manajemen Investasl Director
George Theodoridis ABN AMRO Investment Management B.V. Officer
Officer ABN AMRO Beheer Beleggingsfondsen B.V. Officer
B.V. Hollandsche Belegging en Beheer Maatshchappij Officer
ABN AMRO Bank N.V. Vice President
Erik Eleveld ABN AMRO Bank N.V. Assistant Vice President
Trader
John Vaartjes ABN AMRO Investment Management B.V. Officer
Compliance Officer ABN AMRO Beheer Beleggingsfondsen B.V. Officer
B.V. Hollandsche Belegging en Beheer Maatshchapij Officer
ABN AMRO Bank N.V. Assistant Vice President
</TABLE>
-13-
<PAGE>
Item 29. 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 Financial Services Company ("SFS"), acts
as distributor for:
<TABLE>
<CAPTION>
<S> <C>
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 International Trust August 30, 1988
Stepstone Funds January 30, 1991
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
1784 Funds/(R)/ June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis Funds/(R)/ August 17, 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
FMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
Turner 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
</TABLE>
SFS 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.
-14-
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief Executive Officer --
Henry H. Greer Director, President & Chief Operating Officer --
Carmen V. Romeo Director, Executive Vice President & Treasurer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President, President-Investment Services Division --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Jerome Hickey Senior Vice President --
Larry Hutchison Senior Vice President --
Steven Kramer Senior Vice President --
David G. Lee Senior Vice President --
William Madden Senior Vice President --
Jack May Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
James V. Morris Senior Vice President --
Steven Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, General Counsel & Secretary --
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Aller Vice President --
Marc H. Cahn Vice President & Assistant Secretary --
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary --
Robert Crudup Vice President & Managing Director --
Ed Daly Vice President --
Jeff Drennen Vice President --
Mick Duncan Vice President and Team Leader --
Vic Galef Vice President & Managing Director --
Kathy Heilig Vice President --
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
Donald H. Korytowski Vice President --
John Krzeminski Vice President & Managing Director --
Robert S. Ludwig Vice President and Team Leader --
Vicki Malloy Vice President and Team Leader --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Barbara A. Nugent Vice President & Assistant Secretary --
Sandra K. Orlow Vice President & Assistant Secretary --
Donald Pepin Vice President & Managing Director --
Larry Pokora Vice President --
Kim Rainey Vice President --
</TABLE>
-15 -
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
<S> <C> <C>
Paul Sachs Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary --
Wayne M. Withrow Vice President & Managing Director --
William Zawaski Vice President --
James Dougherty Director of Brokerage Services --
</TABLE>
Item 30. 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-1(d), the required books and records are maintained at the offices
of Registrant's Custodian:
CoreStates Bank, N.A. Morgan Stanley Trust Company
Broad and Chestnut Streets One Pierrepont Plaza
P.O. Box 7618 Brooklyn, NY 11201
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 Financial Management Corporation
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 principal offices of the
Registrant's Advisor:
LaSalle Street Capital ABN AMRO-NSM International Funds
Management, Ltd. Management B.V.
10 South LaSalle Street 22 Foppingadreef
Suite 3701 P.O. Box 283, 1000 E.A.
Chicago, IL 60603 Amsterdam, The Netherlands ZU100GST
Item 31. Management Services: None.
Item 32. 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 Trust,
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 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
-16-
<PAGE>
shares and in connection with such meetings to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to Shareholder
communications.
Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to Shareholders,
upon request and without charge.
NOTICE
A copy of the Agreement and Declaration of Trust for Rembrandt Funds(R)
(formerly The LSNT Funds and The Passport Funds) 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 Trust by an
officer of the Trust 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 Trust.
-17-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-
Effective Amendment No. 11 to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Wayne,
State of Pennsylvania, on the 28th day of April, 1997.
REMBRANDT FUNDS(R)
By: /s/ David G. Lee
------------------------------------
David G. Lee, 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 on the dates indicated.
<TABLE>
<S> <C> <C>
* Trustee April 28, 1997
- -----------------------
Arnold F. Brookstone
* Trustee April 28, 1997
- -----------------------
William T. Simpson
* Trustee April 28, 1997
- -----------------------
Robert A. Nesher
/s/ David G. Lee President & Chief April 28, 1997
- -----------------------
David G. Lee Executive Officer
/s/ Stephen G. Meyer Controller & Chief April 28, 1997
- -----------------------
Stephen G. Meyer Financial Officer
</TABLE>
*By: /s/ David G. Lee
---------------------------------
David G. Lee, Attorney-in-Fact
-18-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Name Exhibit
- ---- -------
<S> <C>
Agreement and Declaration of Trust and Amendment thereto as originally Ex-99.B1
filed as Exhibit 1 with Registrant's initial Registration Statement on
October 2, 1992 and filed herewith.
Amendment dated October 20, 1992 to Registrant's Agreement and Ex-99.B1A
Declaration of Trust as originally filed as Exhibit 1(b) with Registrant's Pre-
Effective Amendment No. 1 filed on December 3, 1992 and filed herewith.
Registrant's By-Laws as originally filed as Exhibit 2 with Registrant's initial Ex-99.B2
Registration Statement on October 2, 1992 and filed herewith.
Not applicable. Ex-99.B3
Not applicable. Ex-99.B4
Investment Advisory Agreement with LaSalle Street Capital Managment, Ex-99.B5
Ltd. as originally filed as Exhibit 5(b) with Registrant's initial Registration
Statement on October 2, 1992 and filed herewith.
Investment Sub-Advisory Agreement between LaSalle Street Capital Ex-99.B5A
Management Ltd., on behalf of the Registrant, and ABN AMRO-NSM
International Funds Management B.V. as originally filed as Exhibit 5(c)
with Registrant's Pre-Effective Amendment No. 1 and filed herewith.
Distribution Agreement as originally filed as Exhibit 6 with Registrant's Ex-99.B6
Pre-Effective Amendment No. 1 and filed herewith.
Not applicable. Ex-99.B7
Custodian Agreement as originally filed as Exhibit 8(a) with Registrant's Ex-99.B8
Pre-Effective Amendment No. 1 and filed herewith.
Sub-Custodian Agreement between CoreStates Bank, N.A. and Barclays Ex-99.B8A
Bank PLC incorporated herein by reference to Exhibit 8(a)(1) to Post-Effective
Amendment No. 6 to Registrant's Registration Statement on Form N-1A (File No.
33-52784), filed with the Securities and Exchange Commission on
January 13, 1995.
Form of Transfer Agency Agreement between the Registrant and Supervised Ex-99.B8B
Service Company incorporated herein by reference to Exhibit 8(c) to
Post-Effective Amendment No. 4 to Registrant's Registration Statement on
Form N-1A (File No. 33-52784) filed with the Securities and Exchange
Commission on April 1, 1994.
Administration Agreement as originally filed as Exhibit 5(a) with Registrant's Ex-99.B9
Pre-Effective Amendment No. 1 filed on December 3, 1992 and filed herewith.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Consent to Assignment and Assumption (of the Administration Ex-99.B9A
Agreement)
Opinion and Consent of Counsel as originally filed as Exhibit 10 with Ex-99.B10
Registrant's Post-Effective Amendment No. 2 and filed herewith.
Consent of Independent Public Accountants, filed herewith. Ex-99.B11
Not applicable. Ex-99.B12
Not applicable. Ex-99.B13
Not applicable. Ex-99.B14
Distribution Plan - Investor Class as originally filed as Exhibit 15 in Ex-99.B13
Registrant's Pre-Effective Amendment No. 1 and filed herewith.
Performance Quotation Computation Ex-99.B16
Rule 18f-3 Plan as originally filed as Exhibit 8 with Registrant's Post- Ex-99.B18
Effective Amendment No. 8 and filed herewith.
Powers of Attorney, filed herewith. Ex-99.B24
Financial Data Schedules
Fixed Income (Trust Class) Ex-27.1A
Fixed Income (Investor Class) Ex-27.1B
Intermediate Government (Trust Class) Ex-27.2A
Intermediate Government (Investor Class) Ex-27.2B
Tax Exempt Fixed Income (Trust Class) Ex-27.3A
Tax Exempt Fixed Income (Investor Class) Ex-27.3B
International Fixed (Trust Fund) Ex-27.4A
International Fixed (Investor Fund) Ex-27.4B
Balanced (Trust) Ex-27.5A
Balanced (Investor) Ex-27.5B
Value (Trust) Ex-27.6A
Value (Investor) Ex-27.6B
Growth (Trust) Ex-27.7A
Growth (Investor) Ex-27.7B
Small Cap (Trust) Ex-27.8A
Small Cap (Investor) Ex-27.8B
International Equity (Trust) Ex-27.9A
International Equity (Investor) Ex-27.9B
Asian Tigers (Trust) Ex-27.10A
Asian Tigers (Investor) Ex-27.10B
Treasury Money Market (Trust) Ex-27.11A
Treasury Money Market (Investor) Ex-27.11B
Government Money Market (Trust) Ex-27.12A
Government Money Market (Investor) Ex-27.12B
Money Market (Trust) Ex-27.13A
Money Market (Investor) Ex-27.13B
Tax Exempt Money Market (Trust) Ex-27.14A
Tax Exempt Money Market (Investor) Ex-27.14B
Latin America Equity (Trust) Ex-27.15A
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 010
<NAME> FIXED INCOME TRUST
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 122,403
<INVESTMENTS-AT-VALUE> 123,975
<RECEIVABLES> 0
<ASSETS-OTHER> 414
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 124,389
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 125,600
<SHARES-COMMON-STOCK> 12,322
<SHARES-COMMON-PRIOR> 12,166
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,254)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,572
<NET-ASSETS> 124,389
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,319
<OTHER-INCOME> 0
<EXPENSES-NET> (918)
<NET-INVESTMENT-INCOME> 7,401
<REALIZED-GAINS-CURRENT> 944
<APPREC-INCREASE-CURRENT> (4,280)
<NET-CHANGE-FROM-OPS> 4065
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7,368)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,660
<NUMBER-OF-SHARES-REDEEMED> (2,503)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (1,820)
<ACCUMULATED-NII-PRIOR> 1
<ACCUMULATED-GAINS-PRIOR> (4,198)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 751
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,043
<AVERAGE-NET-ASSETS> 124,522
<PER-SHARE-NAV-BEGIN> 10.32
<PER-SHARE-NII> .59
<PER-SHARE-GAIN-APPREC> (.26)
<PER-SHARE-DIVIDEND> (.59)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.06
<EXPENSE-RATIO> .73
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 011
<NAME> FIXED INCOME INVESTOR CLASS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 122,403
<INVESTMENTS-AT-VALUE> 123,975
<RECEIVABLES> 0
<ASSETS-OTHER> 414
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 124,389
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 471
<SHARES-COMMON-STOCK> 45
<SHARES-COMMON-PRIOR> 62
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,254)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,572
<NET-ASSETS> 124,389
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,319
<OTHER-INCOME> 0
<EXPENSES-NET> (918)
<NET-INVESTMENT-INCOME> 7,401
<REALIZED-GAINS-CURRENT> 944
<APPREC-INCREASE-CURRENT> (4,280)
<NET-CHANGE-FROM-OPS> 4,065
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (34)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10
<NUMBER-OF-SHARES-REDEEMED> (30)
<SHARES-REINVESTED> 3
<NET-CHANGE-IN-ASSETS> (1,820)
<ACCUMULATED-NII-PRIOR> 1
<ACCUMULATED-GAINS-PRIOR> (4,198)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 751
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,043
<AVERAGE-NET-ASSETS> 616
<PER-SHARE-NAV-BEGIN> 10.35
<PER-SHARE-NII> .57
<PER-SHARE-GAIN-APPREC> (.26)
<PER-SHARE-DIVIDEND> (.57)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.09
<EXPENSE-RATIO> .98
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 020
<NAME> INTERMEDIATE GOVERNMENT TRUST
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 60,439
<INVESTMENTS-AT-VALUE> 60,956
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 60,956
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,810
<TOTAL-LIABILITIES> 3,810
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 60,031
<SHARES-COMMON-STOCK> 5,773
<SHARES-COMMON-PRIOR> 7,305
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (1)
<ACCUMULATED-NET-GAINS> (3,520)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 517
<NET-ASSETS> 57,146
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,092
<OTHER-INCOME> 0
<EXPENSES-NET> (496)
<NET-INVESTMENT-INCOME> 3,596
<REALIZED-GAINS-CURRENT> (1,069)
<APPREC-INCREASE-CURRENT> (412)
<NET-CHANGE-FROM-OPS> 2,115
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,552)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,424
<NUMBER-OF-SHARES-REDEEMED> (2,955)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (19,266)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (2,450)
<OVERDISTRIB-NII-PRIOR> (3)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 402
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 563
<AVERAGE-NET-ASSETS> 65,987
<PER-SHARE-NAV-BEGIN> 10.06
<PER-SHARE-NII> .54
<PER-SHARE-GAIN-APPREC> (.21)
<PER-SHARE-DIVIDEND> (.54)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.85
<EXPENSE-RATIO> .74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 021
<NAME> INTERMEDIATE GOVERNMENT INVESTOR
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 60,439
<INVESTMENTS-AT-VALUE> 60,956
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 60,956
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,810
<TOTAL-LIABILITIES> 3,810
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 119
<SHARES-COMMON-STOCK> 25
<SHARES-COMMON-PRIOR> 293
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (1)
<ACCUMULATED-NET-GAINS> (3,520)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 517
<NET-ASSETS> 57,146
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,092
<OTHER-INCOME> 0
<EXPENSES-NET> (496)
<NET-INVESTMENT-INCOME> 3,596
<REALIZED-GAINS-CURRENT> (1,069)
<APPREC-INCREASE-CURRENT> (412)
<NET-CHANGE-FROM-OPS> 2,115
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (41)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1
<NUMBER-OF-SHARES-REDEEMED> (273)
<SHARES-REINVESTED> 4
<NET-CHANGE-IN-ASSETS> (19,266)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (2,450)
<OVERDISTRIB-NII-PRIOR> (3)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 402
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 563
<AVERAGE-NET-ASSETS> 995
<PER-SHARE-NAV-BEGIN> 10.05
<PER-SHARE-NII> .49
<PER-SHARE-GAIN-APPREC> (.18)
<PER-SHARE-DIVIDEND> (.51)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.85
<EXPENSE-RATIO> .99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 030
<NAME> TAX EXEMPT FIXED INCOME TRUST
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 38,886
<INVESTMENTS-AT-VALUE> 39,978
<RECEIVABLES> 0
<ASSETS-OTHER> 458
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40,436
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 41,059
<SHARES-COMMON-STOCK> 3,979
<SHARES-COMMON-PRIOR> 4,909
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (2)
<ACCUMULATED-NET-GAINS> (2,402)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,092
<NET-ASSETS> 40,436
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,599
<OTHER-INCOME> 0
<EXPENSES-NET> (335)
<NET-INVESTMENT-INCOME> 2,264
<REALIZED-GAINS-CURRENT> 123
<APPREC-INCREASE-CURRENT> (1,230)
<NET-CHANGE-FROM-OPS> 1,157
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,225)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 204
<NUMBER-OF-SHARES-REDEEMED> (1,135)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (10,774)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (2,525)
<OVERDISTRIB-NII-PRIOR> (1)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 275
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 392
<AVERAGE-NET-ASSETS> 44,909
<PER-SHARE-NAV-BEGIN> 10.20
<PER-SHARE-NII> .50
<PER-SHARE-GAIN-APPREC> (.21)
<PER-SHARE-DIVIDEND> (.50)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.99
<EXPENSE-RATIO> .73
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 031
<NAME> TAX EXEMPT FIXED INCOME INVESTOR
<MULTIPLIER> 1,000
<S> <C>
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<PAGE>
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<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 040
<NAME> INTERNATIONAL FIXED INCOME FUND TRUST CLASS
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<S> <C>
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 041
<NAME> INTERNATIONAL FIXED INCOME INVESTOR CLASS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 060
<NAME> BALANCED TRUST
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 061
<NAME> BALANCED INVESTOR
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 070
<NAME> VALUE TRUST
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 071
<NAME> VALUE INVESTOR
<MULTIPLIER> 1,000
<S> <C>
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 080
<NAME> GROWTH TRUST
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
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<NAME> GROWTH INVESTOR
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<S> <C>
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<NAME> REMBRANDT FUNDS
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<NUMBER> 090
<NAME> SMALL CAP TRUST
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<S> <C>
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<CIK> 0000892567
<NAME> REMBRANDT FUNDS
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<NUMBER> 091
<NAME> SMALL CAP INVESTOR
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<S> <C>
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<PAGE>
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<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 100
<NAME> INTERNATIONAL EQUITY FUND TRUST CLASS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
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<PAGE>
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<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 101
<NAME> INTERNATIONAL EQUITY FUNDINVESTOR CLASS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
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<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 120
<NAME> ASIAN TIGERS FUND TRUST CLASS
<MULTIPLIER> 1,000
<S> <C>
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<PAGE>
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<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 121
<NAME> ASIAN TIGERS FUND INVESTOR CLASS
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<S> <C>
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<PAGE>
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<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 130
<NAME> TREASURY MONEY MARKET TRUST
<MULTIPLIER> 1,000
<S> <C>
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<PAGE>
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<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
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<NAME> TREASURY MONEY MARKET INVESTOR
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<S> <C>
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<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 140
<NAME> GOVERNMENT MONEY MARKET TRUST
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<S> <C>
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 986
<AVERAGE-NET-ASSETS> 219,433
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .44
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 141
<NAME> GOVERNMENT MONEY MARKET INVESTOR
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 262,108
<INVESTMENTS-AT-VALUE> 262,108
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</TABLE>
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<PAGE>
<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 150
<NAME> MONEY MARKET TRUST
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
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<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 598,711
<SHARES-COMMON-STOCK> 598,711
<SHARES-COMMON-PRIOR> 475,684
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
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<INTEREST-INCOME> 30,989
<OTHER-INCOME> 0
<EXPENSES-NET> (2,429)
<NET-INVESTMENT-INCOME> 28,560
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<DISTRIBUTIONS-OF-GAINS> 0
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<SHARES-REINVESTED> 0
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<ACCUMULATED-NII-PRIOR> 0
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<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 3,283
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<PER-SHARE-NAV-END> 1.00
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<NAME> REMBRANDT FUNDS
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<EXPENSES-NET> (2,429)
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (72)
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<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,375
<NUMBER-OF-SHARES-REDEEMED> (5,337)
<SHARES-REINVESTED> 70
<NET-CHANGE-IN-ASSETS> 123,135
<ACCUMULATED-NII-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 1.00
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</TABLE>
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<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 160
<NAME> TAX EXEMPT MONEY MARKET TRUST
<MULTIPLIER> 1,000
<S> <C>
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<TOTAL-LIABILITIES> 0
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<PAID-IN-CAPITAL-COMMON> 187,633
<SHARES-COMMON-STOCK> 187,633
<SHARES-COMMON-PRIOR> 167,956
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 190,436
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,927
<OTHER-INCOME> 0
<EXPENSES-NET> (681)
<NET-INVESTMENT-INCOME> 5,246
<REALIZED-GAINS-CURRENT> 7
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 5,253
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,159)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 492,151
<NUMBER-OF-SHARES-REDEEMED> (472,474)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 19,247
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (11)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 956
<AVERAGE-NET-ASSETS> 166,541
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 0
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</TABLE>
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<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 161
<NAME> TAX EXEMPT MONEY MARKET INVESTOR
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 189,768
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<PAID-IN-CAPITAL-COMMON> 2,807
<SHARES-COMMON-STOCK> 2,807
<SHARES-COMMON-PRIOR> 3,244
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4)
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<NET-ASSETS> 190,436
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,927
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<EXPENSES-NET> (681)
<NET-INVESTMENT-INCOME> 5,246
<REALIZED-GAINS-CURRENT> 7
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<NET-CHANGE-FROM-OPS> 5,253
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (87)
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 13,188
<NUMBER-OF-SHARES-REDEEMED> (13,715)
<SHARES-REINVESTED> 90
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<ACCUMULATED-NII-PRIOR> 0
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<AVERAGE-NET-ASSETS> 3,066
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 0
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</TABLE>
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<ARTICLE> 6
<CIK> 0000892567
<NAME> REMBRANDT FUNDS
<SERIES>
<NUMBER> 170
<NAME> LATIN AMERICA EQUITY FUND TRUST CLASS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 9,912
<INVESTMENTS-AT-VALUE> 10,329
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36
<TOTAL-LIABILITIES> 268
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,181
<SHARES-COMMON-STOCK> 1,122
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (108)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 417
<NET-ASSETS> 11,490
<DIVIDEND-INCOME> 46
<INTEREST-INCOME> 22
<OTHER-INCOME> 0
<EXPENSES-NET> (92)
<NET-INVESTMENT-INCOME> (24)
<REALIZED-GAINS-CURRENT> (111)
<APPREC-INCREASE-CURRENT> 417
<NET-CHANGE-FROM-OPS> 282
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,182
<NUMBER-OF-SHARES-REDEEMED> (60)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 11,490
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 43
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 92
<AVERAGE-NET-ASSETS> 8,788
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> .26
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.24
<EXPENSE-RATIO> 2.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
THE LSNT FUNDS
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST dated the 17th day of September, 1992,
by the Trustees hereunder, and by the holders of Shares of beneficial interest
to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts voluntary association with transferable
Shares in accordance with the provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the holders from time
to time of Shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
Name
- ----
Section 1. This Trust shall be known as The LSNT Funds, and the Trustees
---------
shall conduct the business of the Trust under that name or any other name as
they may from time to time determine.
Definitions
- -----------
Section 2. Whenever used herein, unless otherwise required by the context
---------
or specifically provided:
(a) The "Trust" shall mean the Massachusetts voluntary association
established by this Agreement and Declaration of Trust, as amended
from time to time;
(b) "Trustees" shall mean the Trustees of the Trust named herein or
elected in accordance with Article IV and then in office;
(c) The term "Shares" shall mean units of beneficial interest in the
assets, or in
<PAGE>
specified assets, of the Trust;
(d) "Shareholder" shall mean a record owner of Shares;
(e) The terms "Affiliated Person," "Assignment," "Commission," "Interested
Person," "Principal Underwriter" and "Majority Shareholder Vote" (the
67% or 50% requirement of the third sentence of Section 2(a) (42) of
the Investment Company Act of 1940 (the "1940 Act") and the Rules and
Regulations thereunder, all as amended from time to time, whichever
may be applicable) shall have the meanings given them in the 1940 Act;
(f) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust as amended or restated from time to time; and
(g) "By-Laws" shall mean the By-Laws of the Trust as amended from time to
time;
(h) The "1940 Act" shall mean the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time.
ARTICLE II
Purpose
The purpose of the Trust is to provide investors with one or more
investment portfolio(s) consisting primarily of securities, including debt
instruments or obligations.
ARTICLE III
Shares
Division of Beneficial Interest
- -------------------------------
Section 1. The Trustees may divided the beneficial interest in the Trust
---------
into an unlimited number of Shares and authorize the issuance of Shares without
prior Shareholder approval. Shares may be issued in series and, if so, Shares
of any series will constitute units of beneficial interest in assets of the
Trust specifically allocated to such series. Shares of the Trust, or any series
thereof, shall have no par value; shall represent equal and proportionate
interests in the Trust, or such series, with none having priority or preference
over any other except as specifically set forth in this Article III: and shall
be transferable. Shares of the Trust or of any series may be divided into
classes with Shares of any class being identical to those of any other class of
the Trust or such series except insofar as the Trustees may, consistent with the
1940 Act and other applicable law, allocate certain expenses to particular
classes of the Trust or a series thereof, and may
2
<PAGE>
provide for separate voting by holders of securities of a class on matters
affecting solely that class as prescribed in Article V hereof.
Ownership of Shares
- -------------------
Section 2. The ownership of Shares shall be recorded on the books of the
---------
Trust or its transfer or similar agent. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent of the Trust, as the case may be, shall be conclusive
as to who are the Shareholders of each series and as to the number of Shares of
each series held from time to time by each Shareholder.
Investments in the Trust; Assets of the Series
- -----------------------------------------------
Section 3. The Trustees may accept investments in the Trust from such
---------
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they may from time to time authorize.
All consideration received by the Trust for the issue or sale of Shares of
each series, together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to the series of Shares
with respect to which the same were received by the Trust for all purposes,
subject only to the rights of creditors, and shall be so recorded upon the books
of account of the Trust and are herein referred to as "assets of" such series.
In addition, any assets, income, earnings, profits, and proceeds thereof, funds,
or payments which are not readily identifiable as belonging to any particular
series shall be allocated by the Trustees between and among one or more of the
series in such manner as they, in their sole discretion, deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all series for all purposes, and shall be referred to as assets
belonging to that series.
No Preemptive Rights
- --------------------
Section 4. Shareholders shall have no preemptive or other right to
---------
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust.
Status of Shares and Limitation of Personal Liability
- -----------------------------------------------------
3
<PAGE>
Section 5. Shares shall be deemed to be personal property giving only the
---------
rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms of this Declaration of Trust and to have become a party thereto. The
death of a Shareholder during the continuance of the Trust shall not operate to
terminate the same nor entitle the representative of any deceased Shareholder to
an accounting or to take any action in court or elsewhere against the Trust or
the Trustees, but only to the rights of said descendent under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholder, nor, except as specifically provided herein, to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.
Trustees and Officers as Shareholders
- -------------------------------------
Section 6. Any Trustee, officer or other agent of the Trust may acquire,
---------
own and dispose of Shares of the Trust to the same extent as if he were not a
Trustee, officer or agent; and the Trustees may issue and sell or cause to be
issued and sold Shares to and buy such Shares from any such person of any firm
or company in which he is interested, subject only to the general limitations
herein contained as to the sale and purchase of such Shares; and all subject to
any restrictions which may be contained in the By-Laws.
ARTICLE IV
The Trustees
Election
- --------
Section 1. A Trustee may be elected either by the Trustees or the
---------
Shareholders subject to the limitations of the 1940 Act. The number of Trustees
shall be fixed by the Trustees, except that, commencing with the first
shareholders meeting at which Trustees are elected, there shall be not less than
three nor more than fifteen Trustees, each of whom shall hold office during the
lifetime of this Trust or until the election and qualification of his or her
successor, or until he or she sooner dies, resigns or is removed. The number of
Trustees so fixed may be increased either by the Shareholders or by the Trustees
by a vote of a majority of the Trustees then in office. The number of Trustees
so fixed may be decreased either by the Shareholders or by the Trustees by vote
of a majority of the Trustees then in office, but only to eliminate vacancies
existing by reason of the death, resignation or removal of one or more Trustees.
4
<PAGE>
The initial Trustees, each of whom shall serve until the first meeting of
Shareholders at which Trustees are elected and until his or her successor is
elected and qualified, or until he or she sooner dies, resigns or is removed,
shall be Robert A. Nesher and such other persons as the Trustee or Trustees then
in office shall, prior to any sale of Shares pursuant to public offering,
appoint. By vote of the Shareholders holding a majority of the shares entitled
to vote, the Shareholders may remove a Trustee with or without cause. By vote of
a majority of the Trustees then in office, the Trustees may remove a Trustee.
Any Trustee may resign at any time by written instrument signed by him and
delivered to any officer of the Trust, to each other Trustee or to a meeting of
the Trustees. Such resignation shall be effective upon receipt unless specified
to be effective at some other time. Except to the extent expressly provided in a
written agreement with the Trust, no Trustee resigning and no Trustee removed
shall have any right to any compensation for any period following his
resignation or removal, or any right to damages on account of such removal. Any
Trustee may, but need not, be a Shareholder.
In case of the declination, death, resignation, retirement, removal,
incapacity, or inability of any of the Trustees, or in case a vacancy shall
exist by reason of an increase in number, or for any other reason, the remaining
Trustees shall fill such vacancy by appointing such other person as they in
their discretion shall see fit consistent with the limitations under the 1940
Act. Such appointment shall be evidenced by a written instrument signed by a
majority of the Trustees in office or by recording in the records of the Trust,
whereupon the appointment shall take effect. An appointment of a Trustee may be
made by the Trustees then in office in anticipation of a vacancy to occur by
reason of retirement, resignation or increase in number of Trustees effective at
a later date, provided that said appointment shall become effective only at or
after the effective date of said retirement, resignation or increase in number
of Trustees. As soon as any Trustee so appointed shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. The power of appointment is subject to the
provisions of Section 16(a) of the 1940 Act. In the event that at any time after
the commencement of public sales of Trust Shares less than a majority of the
Trustees then holding office were elected to such office by the Shareholders,
the Trustees or the Trust's President promptly shall call a meeting of
Shareholders for the purpose of electing Trustees. Each Trustee elected by the
Shareholders or by the Trustees shall serve until the election or qualification
of his or her successor, or until he or she sooner dies, resigns or is removed.
Effect of Death, Resignation, Etc. of a Trustee
- -----------------------------------------------
Section 2. The death, declination, resignation, retirement, removal, or
---------
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
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Powers
- ------
Section 3. Subject to the provisions of this Declaration of Trust, the
---------
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt By-Laws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the Trust
and may amend and repeal them to the extent that such By-Laws do not reserve
that right to the Shareholders; they may fill vacancies in their number,
including vacancies resulting from increases in their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; they may appoint from their own number, and terminate, any one or
more committees consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session, exercise some or all
of the powers and authority of the Trustees as the Trustees may determine; they
may appoint an advisory board, the members of which shall not be Trustees and
need not be Shareholders; they may employ one or more investment advisers or
administrators as provided in Section 7 of this Article IV; they may employ one
or more custodians of the assets of the Trust and may authorize such custodians
to employ subcustodians and to deposit all or any part of such assets in a
system or systems for the central handling of securities, retain a transfer
agent or a Shareholder servicing agent, or both, provide for the distribution of
Shares by the Trust, through one or more principal underwriters or otherwise,
set record dates for the determination of Shareholders with respect to various
matters, and in general delegate such authority as they consider desirable to
any officer of the Trust, to any committee of the Trustees and to any agent or
employee of the Trust or to any such custodian or underwriter; and they may
elect and remove such officers and appoint and terminate such agents as they
consider appropriate.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper;
(d) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
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(e) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in the
name of the Trustees or of the Trust or in the name of a custodian,
subcustodian or other depositary or a nominee or nominees or
otherwise;
(f) To establish separate and distinct series of shares with separately
defined investment objectives, policies and purposes, and to allocate
assets, liabilities and expenses of the Trust to a particular series
of Shares or to apportion the same among two or more series, provided
that any liability or expense incurred by a particular series of
Shares shall be payable solely out of the assets of that series and to
establish separate classes of shares of each series, all in accordance
with Article III hereof;
(g) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or
property of which is or was held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect
to any security held in the Trust;
(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power
and authority with relation to any security (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees
shall deem proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not
limited to claims for taxes;
(j) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;
(k) To borrow funds;
(l) To endorse or guarantee the payment of any notes or other obligations
of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and
pledge the Trust property or any part thereof to secure any or all of
such obligations;
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(m) To purchase and pay for entirely out of Trust property such insurance
as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring
the assets of the Trust and payment of distributions and principal on
its portfolio investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents, investment
advisers or administrators, principal underwriters, or independent
contractors of the Trust individually against all claims and
liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such person as
Shareholder, Trustee, officer, employee, agent, investment adviser or
administrator, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have the power
to indemnify such person against such liability;
(n) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-
sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions,
including the purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for any or all
of the Trustees, officers, employees and agents of the Trust;
(o) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder;
(p) To enter into contracts of any kind and description;
(q) To name, or to change the name or designation of the Trust or any
series or class of the Trust;
(r) To take whatever action may be necessary to enable the Trust to comply
with any applicable Federal, state or local statute, rule or
regulation; and
(s) To engage in any other lawful act or activity in which corporations
organized under the Massachusetts Business Corporation Law may engage.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by Trustees. Except as otherwise
provided herein or from time to time in the By-Laws, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
Trustees (if a quorum be present), within
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or without Massachusetts, including any meeting held by means of a conference
telephone or other communications equipment by which all persons participating
in the meeting can communicate with each other simultaneously and participation
by such means shall constitute presence in person at a meeting, or by written
consent of a majority of the Trustees then in office.
Payment of Expenses by the Trust
- --------------------------------
Section 4. The Trustees are authorized to pay or to cause to be paid out
---------
of the principal or income of the Trust, or partly out of principal and partly
out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser or administrator, principal underwriter,
auditor, counsel, custodian, transfer agent, Shareholder servicing agent, and
such other agents or independent contractors and such other expenses and charges
as the Trustees may deem necessary or proper to incur, provided, however, that
all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with a particular series of Shares or class as determined by the
Trustees consistent with applicable law, shall be payable solely out of the
assets of that series or class. Any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as belonging
to any particular series shall be allocated and charged by the Trustees between
or among any one or more of the series in such manner as the Trustees in their
sole discretion deem fair and equitable. Each such allocation shall be
conclusive and binding upon the Shareholders of all series for all purposes.
Any creditor of any series may look only to the assets of that series to satisfy
such creditor's debt.
Section 5. The Trustees shall have the power, as frequently as they may
---------
determine, to cause each Shareholder to pay directly, in advance or arrears, for
any and all expenses of the Trust, an amount fixed from time to time by the
Trustees, by setting off such charges due from such Shareholder from declared
but unpaid dividends owed such Shareholder and/or by reducing the number of
Shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from such Shareholder.
Ownership of Assets of the Trust
- --------------------------------
Section 6. Title to all of the assets of each series of Shares and the
---------
Trust shall at all times be considered as vested in the Trustees.
Advisory, Administration and Distribution
- -----------------------------------------
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Section 7. The Trustees may, at any time and from time to time, contract
---------
with respect to the Trust or any series thereof for exclusive or nonexclusive
advisory and/or administration services with SEI Financial Management
Corporation, a Delaware corporation, and/or any other corporation, trust,
association or other organization, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine, including, without
limitation, in the case of a contract for advisory or sub-advisory services,
authority to determine from time to time what investments shall be purchased,
held, sold or exchanged and what portion, if any, of the assets of the Trust
shall be held uninvested and to make changes in the Trust's investments. Any
contract for advisory services shall be subject to such Shareholder approval as
is required by the 1940 Act. The Trustees may also, at any time and from time
to time, contract with SEI Financial Services Company, a Pennsylvania
corporation, and/or any other corporation, trust, association or other
organization, appointing it exclusive or nonexclusive distributor or principal
underwriter for the Shares, every such contract to comply with such requirements
and restrictions as may be set forth in the By-Laws, and any such contract may
contain such other terms interpretive of or in addition to said requirements and
restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, , adviser,
principal underwriter, or distributor or agent of or for any
corporation, trust, association, or other organization, or of or for
any parent or affiliate of any organization, with which an advisory or
administration or principal underwriter's or distributor's contract,
or transfer, Shareholder servicing or other agency contract may have
been or may hereafter be made, or that any such organization, or any
parent or affiliate thereof, is a Shareholder or has an interest in
the Trust, or that
(ii) any corporation, trust, association or other organization with which
an advisory or administration or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract may have been or may hereafter be made also has an
advisory or administration contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract with one or more other corporations, trusts,
associations, or other organizations, or has other businesses or
interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or
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accountability to the Trust or its Shareholders.
ARTICLE V
Shareholders' Voting Powers and Meetings
Voting Powers
- -------------
Section 1. The Shareholders shall have power to vote only (i) for the
---------
election or removal of Trustees as provided in Article IV, Section 1, (ii) with
respect to any investment adviser as provided in Article IV, Section 7, (iii)
with respect to any termination of the Trust or any series to the extent and as
provided in Article IX, Section 4, (iv) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Article IX, Section 7, (v)
to the same extent as the stockholders of a Massachusetts business corporation
as to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (vi) with respect to such additional matters relating
to the Trust as may be required by law, by this Declaration of Trust, by the By-
Laws or by any registration of the Trust with the Securities and Exchange
Commission or any state, or as the Trustees may consider necessary or desirable.
Each whole Share shall be entitled to one vote as to any matter on which it
is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. Notwithstanding any other provisions of this
Declaration of Trust, or any matter submitted to a vote of Shareholders, all
Shares of the Trust then entitled to vote shall be voted by individual series or
class, except (1) when required by the 1940 Act, Shares shall be voted in the
aggregate and not by individual series or class, and (2) when the Trustees have
determined that the matter affects only the interests of one or more series or
class, then only Shareholders of such series or class shall be entitled to vote
thereon. There shall be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy.
A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to the exercise
of the proxy the Trust receives a specific written notice to the contrary from
any one of them. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise
and the burden of proving invalidity shall rest on the challenger. Until Shares
are issued, the Trustees may exercise all rights of Shareholders and may take
any action required by law, this Declaration of Trust or the By-Laws to be taken
by Shareholders.
Voting Power and Meetings
- -------------------------
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Section 2. Meetings of Shareholders of the Trust or of any series or class
---------
may be called by the Trustees, or such other person or persons as may be
specified in the By-Laws, and held from time to time for the purpose of taking
action upon any matter requiring the vote or the authority of the Shareholders
of the Trust or any series or class as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Written notice of any
meeting of Shareholders shall be given or caused to be given by the Trustees by
mailing such notice at least seven days before such meeting, postage prepaid,
stating the time, place and purpose of the meeting, to each Shareholder at the
Shareholder's address as it appears on the records of the Trust. If the
Trustees shall fail to call or give notice of any meeting of Shareholders for a
period of thirty days after written application by Shareholders holding at least
10% of the Shares then outstanding requesting a meeting to be called for a
purpose requiring action by the Shareholders as provided herein or in the By-
Laws, then Shareholders holding at least 10% of the Shares then outstanding may
call and give notice of such meeting, and thereupon the meeting shall be held in
the manner provided for herein in case of call thereof by the Trustees. Notice
of a meeting need not be given to any Shareholder if a written waiver of notice,
executed by him or her before or after the meeting, is filed with the records of
the meeting, or to any Shareholder who attends the meeting without protesting
prior thereto or at its commencement the lack of notice to him or her.
Quorum and Required Vote
- ------------------------
Section 3. A majority of the Shares entitled to vote shall be a quorum for
---------
the transaction of business at a Shareholders' meeting, except that where any
provision of law or of this Declaration of Trust permits or requires that
holders of any series [or class] shall vote as a series or class, then a
majority of the aggregate number of Shares of that series or class entitled to
vote shall be necessary to constitute a quorum for the transaction of business
by that series or class. Any lesser number, however, shall be sufficient for
adjournments. Any adjourned session or sessions may be held within a reasonable
time after the date set for the original meeting without the necessity of
further notice.
Except when a larger vote is required by any provisions of this Declaration
of Trust or the By-Laws, a majority of the Shares voted on any matter shall
decide such matter and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or requires that
the holders of any series or class shall vote as a series or class, then a
majority of the Shares of that series or class voted on the matter shall decide
that matter insofar as that series or class is concerned.
Action by Written Consent
- -------------------------
Section 4. Any action taken by Shareholders may be taken without a meeting
---------
if a majority of Shareholders entitled to vote on the matter (or such larger
vote as shall be
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<PAGE>
required by any provision of this Declaration of Trust or the By-Laws) consent
to the action in writing and such written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
Additional Provisions
- ---------------------
Section 5. The By-Laws may include further provisions for Shareholders'
---------
votes and meetings and related matters.
ARTICLE VI
Distributions, Redemptions, Repurchases
and Determination of Net Asset Value
Distributions
- -------------
Section 1. The Trustees may, but need not, distribute each year to the
---------
Shareholders of each series such income and gains, accrued or realized, as the
Trustees may determine, after providing for actual and accrued expenses and
liabilities (including such reserves as the Trustees may establish) determined
in accordance with good accounting practices. The Trustees shall have full
discretion to determine which items shall be treated as income and which items
as capital and their determination shall be binding upon the Shareholders.
Distributions of each year's income of each series, if any be made, may be made
in one or more payments, which shall be in Shares, in cash or otherwise and on a
date or dates determined by the Trustees. At any time and from time to time in
their discretion, the Trustees may distribute to the Shareholders of any one or
more series as of a record date or dates determined by the Trustees, in shares,
in cash or otherwise, all or part of any gains realized on the sale or
disposition of property of the series or otherwise, or all or part of any other
principal of the Trust attributable to the series. Each distribution pursuant to
this Section 1 shall be made ratably according to the number of Shares of the
series or class held by the several Shareholders on the applicable record date
thereof, provided that no distributions need be made on Shares purchased
pursuant to orders received, or for which payment is made, after such time or
times as the Trustees may determine. Any such distribution paid in Shares will
be paid at the net asset value thereof as determined in accordance with this
Declaration of Trust.
Redemptions and Repurchases
- ---------------------------
Section 2. Any holder of Shares of the Trust may, by presentation of a
---------
written request, together with his certificates, if any, for such Shares, in
proper form for transfer, at the office of the Trust, the adviser, the
underwriter or the distributors, or at a principal office of a transfer or
Shareholder services agent appointed by the Trust (as the Trustees
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<PAGE>
may determine), redeem his Shares for the net asset value thereof determined and
computed in accordance with the provisions of this Section 2, less any
redemption charge which the Trustees may establish. Upon receipt of such written
request for redemption of Shares by the Trust, the adviser, the underwriter or
the distributor, or the Trust's transfer or Shareholder services agent, such
Shares shall be redeemed at the net asset value per share of the particular
series next determined after such Shares are tendered in proper form for
transfer to the Trust or determined as of such other time fixed by the Trustees,
as may be permitted or required by the 1940 Act, provided that no such tender
shall be required in the case of Shares for which a certificate or certificates
have not been issued, and in such case such Shares shall be redeemed at the net
asset value per share of the particular series next determined after such demand
has been received or determined at such other time fixed by the Trustees, as may
be determined or required by the 1940 Act.
The obligation of the Trust to redeem its Shares of each series as set
forth above in this Section 2 shall be subject to the condition that, during any
time of emergency, as hereinafter defined, such obligation may be suspended by
the Trust by or under authority of the Trustees for such period or periods
during such time of emergency as shall be determined by or under authority of
the Trustees. If there is such a suspension, any Shareholder may withdraw any
demand for redemption and any tender of Shares which has been received by the
Trust during any such period and any tender of Shares the applicable net asset
value of which would but for such suspension be calculated as of a time during
such period. Upon such withdrawal, the Trust shall return to the Shareholder
the certificates therefor, if any. For the purposes of any such suspension
"time of emergency" shall mean, either with respect to all Shares or any series
of Shares, any period during which:
(a) the New York Stock Exchange is closed other than for customary weekend
and holiday closings; or
(b) the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and regulations or
orders of the Commission, either that trading on the New York Stock
Exchange is restricted, or that an emergency exists as a result of
which (i) disposal by the Trust of securities owned by it is not
reasonably practicable or (ii) it is not reasonably practicable for
the Trust fairly to determine the current value of its net assets; or
(c) the suspension or postponement of such obligations is permitted by
order of the Commission.
The Trust may also purchase, repurchase or redeem Shares in accordance with
such other methods, upon such other terms and subject to such other conditions
as the
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Trustees may from time to time authorize at a price not exceeding the net asset
value of such Shares in effect when the purchase or repurchase or any contract
to purchase or repurchase is made.
Payment in Kind
- ---------------
Section 3. Subject to any generally applicable limitation imposed by the
---------
Trustees, any payment on redemption, purchase or repurchase by the Trust of
Shares may, if authorized by the Trustees, be made wholly or partly in kind,
instead of in cash. Such payment in kind shall be made by distributing
securities or other property, constituting, in the opinion of the Trustees, a
fair representation of the various types of securities and other property then
held by the series of Shares being redeemed, purchased or repurchased (but not
necessarily involving a portion of each of the series' holdings) and taken at
their value used in determining the net asset value of the Shares in respect of
which payment is made.
Additional Provisions Relating to Redemptions and Repurchases
- -------------------------------------------------------------
Section 4. The completion of redemption, purchase or repurchase of Shares
---------
shall constitute a full discharge of the Trust and the Trustees with respect to
such Shares and the Trustees may require that any certificate or certificates
issued by the Trust to evidence the ownership of such Shares shall be
surrendered to the Trustees for cancellation or notation.
Dividends, Distributions, Redemptions and Repurchases
- -----------------------------------------------------
Section 5. No dividend or distribution (including, without limitation, any
---------
distribution paid upon termination of the Trust or of any series) with respect
to, nor any redemption or repurchase of, the Shares of any series shall be
effected by the Trust other than from the assets of such series.
ARTICLE VII
Compensation and Limitation
of Liability of Trustees
Compensation
- ------------
Section 1. The Trustees as such shall be entitled to reasonable
---------
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, administration, legal, accounting, investment banking or other
services and payment for the same by the Trust.
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Limitation of Liability
- -----------------------
Section 2. The Trustees shall not be responsible or liable in any event
---------
for any neglect or wrongdoing of any officer, agent, employee, investment
adviser or administrator, principal underwriter or custodian, nor shall any
Trustee be responsible for the act or omission of any other Trustee, but nothing
herein contained shall protect any Trustee against any liability to which he or
she would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his or her office.
Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
ARTICLE VIII
Indemnification
Subject to the exceptions and limitations contained in this Article, every
person who is, or has been, a Trustee or officer of the Trust shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Trustee or officer:
(a) against any liability to the Trust or its Shareholders by reason of a
final adjudication by the court or other body before which the
proceeding was brought that he engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office;
(b) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interests of the Trust;
(c) in the event of a settlement or other disposition not involving a
final adjudication (as provided in paragraph (a) or (b)) and resulting
in a payment by a Trustee or officer, unless there has been either a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his
16
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office by the court or other body approving the settlement or other
disposition or a reasonable determination, based on a review of
readily available facts (as opposed to a full trial-type inquiry) that
he did not engage in such conduct:
(i) by a vote of a majority of the Disinterested Trustees acting
on the matter (provided that a majority of the Disinterested
Trustees then in office act on the matter); or
(ii) by written opinion of independent legal counsel.
The rights of indemnification hereinafter provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such Trustee or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person. Nothing contained herein shall affect any rights to indemnification to
which Trust personnel other than Trustees and officers may be entitled by
contract or otherwise under law.
Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding of the character described in the next to the last paragraph
of this Article shall be advanced by the Trust prior to final disposition
thereof upon receipt of an undertaking by or on behalf of the recipient to repay
such amount if it is ultimately determined that he is not entitled to
indemnification under this Article, provided that either:
(a) such undertaking is secured by a surety bond or some other appropriate
security or the Trust shall be insured against losses arising out of
any such advances; or
(b) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office
act on the matter) or independent legal counsel in a written opinion
shall determine, based upon a review of the readily available facts
(as opposed to a full trial-type inquiry), that there is reason to
believe that the recipient ultimately will be found entitled to
indemnification.
As used in this Article, a "Disinterested Trustee" is one (i) who is not an
"interested person of the Trust (as defined by the 1940 Act) (including anyone
who has been exempted from being an "interested person:" by any rule, regulation
or order of the Securities and Exchange Commission), and (ii) against whom none
of such actions, suits or other proceedings or another action, suit or other
proceeding on the same or similar grounds is then or has been pending.
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As used in this Article, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include without limitation, attorney's fees,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.
In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his or her being or having been a
shareholder and not because of his or her acts or omissions or for some other
reason, the shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled to be
held harmless from and indemnified against all loss and expenses arising from
such liability, but only out of the assets of the particular series of Shares of
which he or she is or was a Shareholder.
ARTICLE IX
Miscellaneous
Trustees, Shareholders, Etc. Not Personally Liable; Notice
- ----------------------------------------------------------
Section 1. All persons extending credit to, contracting with or having any
---------
claim against the Trust or a particular series of Shares shall look only to the
assets of the Trust or the assets of that particular series of Shares for
payment under such credit, contract or claim; and neither the Shareholders nor
the Trustees, nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect any Trustee against any liability to which
such Trustee would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
Trustees' Good Faith Action, Expert Advice; No Bond or Surety
- -------------------------------------------------------------
18
<PAGE>
Section 2. The exercise by the Trustees of their powers and discretion
---------
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustees
- ------------------------------------------------
Section 3. No person dealing with the Trustees shall be bound to make any
---------
inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
Duration and Termination of Trust
- ---------------------------------
Section 4. Unless terminated as provided herein, the Trust shall continue
---------
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least a majority of the Shares entitled to vote or by
the Trustees by written notice to the Shareholders. Any series of Shares may be
terminated at any time by vote of Shareholders holding at least a majority of
the Shares of such series entitled to vote or by the Trustees by written notice
to the Shareholders of such series. Upon termination of the Trust or of any one
or more series of Shares, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated, of the
Trust or of the particular series as may be determined by the Trustees, the
Trust shall, in accordance with such procedures as the Trustees consider
appropriate, reduce the remaining assets to distributable form in cash or Shares
or other securities, or any combination thereof, and distribute the proceeds to
the Shareholders of the series involved, ratably according to the number of
Shares of such series held by the several Shareholders of such series on the
date of termination.
Section 5. The original or a copy of this instrument and of each amendment
---------
hereto shall be kept at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of the Commonwealth of Massachusetts and
with the Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the Trust may
rely on certificate by an officer of the Trust as to whether or not any such
amendments have been made and as to any matters in connection with the Trust
hereunder; and, with the same effect as if it were the original,
19
<PAGE>
may rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in such amendment,
references to this instrument, and the expression "herein," "hereof," and
"hereunder" shall be deemed to refer to this instrument as amended from time to
time. Headings are placed herein for convenience of reference only and shall not
be taken as part hereof or control or affect the meaning, construction or effect
of this instrument. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
Applicable Law
- --------------
Section 6. The Trust shall be of the type commonly called a Massachusetts
---------
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust. This
Declaration of Trust is to be governed by and construed and administered
according to the laws of said Commonwealth.
Amendments
- ----------
Section 7. This Declaration of Trust may be amended at any time by an
---------
instrument in writing signed by a majority of the then Trustees when authorized
to do so by a vote of Shareholders holding a majority of the Shares entitled to
vote, except that an amendment which shall affect the holders of one or more
series or classes of Shares but not the holders of all outstanding series as
classes shall be authorized by vote of the Shareholders holding a majority of
the Shares entitled to vote of each series or classes affected and no vote of
Shareholders of a series or classes not affected shall be required. Amendments
having the purpose of changing the name of the Trust or of supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.
Resident Agent and Address
- --------------------------
Section 8. The resident agent of the Trust shall be CT Corporation, 2
-----------
Oliver Street, Boston, MA 02109 and the principal address of the Trust shall be
2 Oliver Street, Boston, Massachusetts 02109.
IN WITNESS WHEREOF, the undersigned, being the sole initial Trustee of the
Trust, has executed this document this 17th day of September, 1992.
/s/ Robert A. Nesher
--------------------------------
Robert A. Nesher
20
<PAGE>
c/o SEI Financial Services Company
680 E. Swedesford Road
Wayne, PA 19087
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF PHILADELPHIA
I, the undersigned authority, hereby certify that the foregoing is a true and
correct copy of the instrument presented to me by Robert A. Nesher as the
original of such instrument.
WITNESS my hand and official seal, this 17th day of September, 1992.
/s/ Renee L. Gilbert
-------------------------
Notary Public
My commission expires: 4-15-96 [ SEAL ]
21
<PAGE>
EX-99.B1b
THE PASSPORT FUNDS
CONSENT OF SOLE TRUSTEE
The undersigned, being the sole trustee of The Passport Funds, a business trust
organized under the laws of the Commonwealth of Massachusetts pursuant to an
Agreement and Declaration of Trust dated September 17, 1992, and amended on
September 29, 1992 (the "Trust") does hereby amend, effective upon the filing of
this instrument in the office of the Secretary of State of the Commonwealth of
Massachusetts, the Agreement and Declaration of Trust of the Trust by changing
the name of the Trust to "Rembrandt Funds."
IN WITNESS WHEREOF, the undersigned has executed this Consent of Sole Trustees
as of the 19th day of October, 1992.
/s/ Robert A. Nesher
--------------------
Robert A. Nesher
<PAGE>
BY-LAWS
OF
THE PASSPORT FUNDS
Section 1. Agreement and Declaration of Trust and Principal Office
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject to the
-----------------------------------
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of The Passport Funds, the Massachusetts business
trust established by the Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust. The principal office of the Trust shall be
------------------------------
located in Boston, Massachusetts.
Section 2. Shareholders
2.1 Annual Meeting. The annual meeting of the shareholders shall be at such
---------------
time and on such date in each year as the president or Trustees may from
time to time determine.
2.2 Special Meeting in Place of Annual Meeting. If no annual meeting has been
-------------------------------------------
held in accordance with the foregoing provisions, a special meeting of the
shareholders may be held in place thereof, and any action taken at such
special meeting shall have the same force and effect as if taken at the
annual meeting, and in such case all references in these By-Laws to the
annual meeting of the shareholders shall be deemed to refer to such special
meeting.
2.3 Special Meetings. A special meeting of the shareholders may be called at
-----------------
any time by the Trustees, by the president or, if the Trustees and the
president shall fail to call any meeting of shareholders for a period of 30
days after written application of one or more shareholders who hold at
least 25% of all shares issued and outstanding and entitled to vote at the
meeting, then such shareholders may call such meeting. Each call of a
meeting shall state the place, date, hour and purposes of the meeting.
2.4 Place of Meetings. All meetings of the shareholders shall be held at the
------------------
principal office of the Trust, or, to the extent permitted by the
Declaration of Trust, at such other place within the United States as shall
be designated by the
1
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Trustees or the president of the Trust.
2.5 Notice of Meetings. A written notice of each meeting of shareholders,
-------------------
stating the place, date and hour and the purposes of the meeting, shall be
given at least seven days before the meeting to each shareholder entitled
to vote thereat by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, and addressed to
such shareholder at his address as it appears in the records of the Trust.
Such notice shall be given by the secretary or an assistant secretary or by
an officer designated by the Trustees. No notice of any meeting of
shareholders need be given to a shareholder if a written waiver of notice,
executed before or after the meeting by such shareholder or his attorney
thereunto duly authorized, is filed with the records of the meeting.
2.6 Ballots. No ballot shall be required for any election unless requested by
--------
a shareholder present or represented at the meeting and entitled to vote in
the election.
2.7 Proxies. Shareholders entitled to vote may vote either in person or by
--------
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted.
Unless otherwise specifically limited by their terms, such proxies shall
entitle the holders thereof to vote at any adjournment of such meeting but
shall not be valid after the final adjournment of such meeting.
Section 3. Trustees
3.1 Committees and Advisory Board. The Trustees may appoint from their number
------------------------------
an executive committee and other committees. Except as the Trustees may
otherwise determine, any such committee may make rules for conduct of its
business. The Trustees may appoint an advisory board to consist of not
less than two nor more than five members. The members of the advisory
board shall be compensated in such manner as the Trustees may determine and
shall confer with and advise the Trustees regarding the investments and
other affairs of the Trust. Each member of the advisory board shall hold
office until the first meeting of the Trustees following the next annual
meeting of the shareholders and until his successor is elected and
qualified, or until he sooner dies, resigns, is removed, or becomes
disqualified, or until the advisory board is sooner abolished by the
Trustees.
2
<PAGE>
3.2 Regular Meetings. Regular meetings of the Trustees may be held without
-----------------
call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A
regular meeting of the Trustees may be held without call or notice
immediately after and at the same place as the annual meeting of the
shareholders.
3.3 Special Meetings. Special meetings of the Trustees may be held at any time
-----------------
and at any place designated in the call of the meeting, when called by the
Chairman of the Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the
secretary or an assistant secretary or by the officer or one of the
Trustees calling the meeting.
3.4 Notice. It shall be sufficient notice to a Trustee to send notice by mail
-------
at least forty-eight hours or by telegram at least twenty-four hours before
the meeting addressed to the Trustee at his or her usual or last known
business or residence address or to give notice to him or her in person or
by telephone at least twenty-four hours before the meeting. Notice of a
meeting need not be given to any Trustee if a written waiver of notice,
executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him
or her. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.
3.5 Quorum. At any meeting of the Trustees one-third of the Trustees then in
-------
office shall constitute a quorum; provided, however, a quorum shall not be
less than two. Any meeting may be adjourned from time to time by a
majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice.
Section 4. Officers and Agents
4.1 Enumeration; Qualification. The officers of the Trust shall be a
---------------------------
president, a treasurer, a secretary and such other officers, if any, as the
Trustees from time to time may in their discretion elect or appoint. The
Trust may also have such agents, if any, as the Trustees from time to time
may in their discretion appoint. Any officer may be but none need be a
Trustee or shareholder. Any two or more offices may be held by the same
person.
4.2 Powers. Subject to the other provisions of these By-Laws, each officer
-------
shall have, in addition to the duties and powers herein and in the
Declaration of Trust
3
<PAGE>
set forth, such duties and powers as are commonly incident to his or her
office as if the Trust were organized as a Massachusetts business
corporation and such other duties and powers as the Trustees may from time
to time designate.
4.3 Election. The president, the treasurer and the secretary shall be elected
---------
annually by the Trustees at their first meeting following the annual
meeting of the shareholders. Other officers, if any, may be elected or
appointed by the Trustees at said meeting or at any other time.
4.4 Tenure. The president, the treasurer and the secretary shall hold office
-------
until the first meeting of Trustees following the next annual meeting of
the shareholders and until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed
or becomes disqualified. Each agent shall retain his or her authority at
the pleasure of the Trustees.
4.5 President and Vice Presidents. The president shall be the chief executive
------------------------------
officer of the Trust. The president shall, subject to the control of the
Trustees, have general charge and supervision of the business of the Trust.
Any vice president shall have such duties and powers as shall be designated
from time to time by the Trustees.
4.6 Chairman of the Board. If a Chairman of the Board of Trustees is elected,
----------------------
he shall have the duties and powers specified in these By-Laws and, except
as the Trustees shall otherwise determine, preside at all meetings of the
shareholders and of the Trustees at which he or she is present and have
such other duties and powers as may be determined by the Trustees.
4.7 Treasurer and Controller. The treasurer shall be the chief financial
-------------------------
officer of the Trust and subject to any arrangement made by the Trustees
with a bank or trust company or other organization as custodian or transfer
or shareholder services agent, shall be in charge of its valuable papers
and shall have such other duties and powers as may be designated from time
to time by the Trustees or by the president. If at any time there shall be
no controller, the treasurer shall also be the chief accounting officer of
the Trust and shall have the duties and powers prescribed the Trust and
shall have the duties and powers prescribed herein for the controller. Any
assistant treasurer shall have such duties and powers as shall be
designated from time to time by the Trustees.
The controller, if any be elected, shall be the chief accounting officer of
the Trust and shall be in charge of its books of account and accounting
records. The controller shall be responsible for preparation of financial
statements of the Trust and shall have such other duties and powers as may
be designated from time to
4
<PAGE>
time by the Trustees or the president.
4.8 Secretary and Assistant Secretaries. The secretary shall record all
------------------------------------
proceedings of the shareholders and the Trustees in books to be kept
therefor, which books shall be kept at the principal office of the Trust.
In the absence of the secretary from any meeting of shareholders or
Trustees, an assistant secretary, or if there be none or he or she is
absent, a temporary clerk chosen at the meeting shall record the
proceedings thereof in the aforesaid books.
Section 5. Resignation and Removals
Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the secretary or to a meeting of the Trustees. The
Trustees may remove any officer elected by them with or without cause by the
vote of a majority of the Trustees then in office. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee, officer,
or advisory board member resigning, and no officer or advisory board member
removed shall have any right to any compensation for any period following his or
her resignation or removal, or any right to damages on account of such removal.
Section 6. Vacancies
A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.
Section 7. Shares of Beneficial Interest
7.1 Share Certificates. No certificates certifying the ownership of shares
-------------------
shall be issued except as the Trustees may otherwise authorize. In the
event that the Trustees authorize the issuance of share certificates,
subject to the provisions of Section 7.3, each shareholder shall be
entitled to a certificate stating the number of shares owned by him or her,
in such form as shall be prescribed from time to time by the Trustees.
Such certificate shall be signed by the president or a vice president and
by the treasurer or an assistant treasurer. Such signatures may be
facsimiles if the certificate is signed by a transfer or shareholder
services agent or by a registrar, other than a Trustee, officer or employee
of the Trust. In case any officer who has signed or whose facsimile
signature has been placed on such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the Trust
with the same effect as if he or she were such officer at the time of its
issue.
5
<PAGE>
In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares,
who shall in either case be deemed, for all purposes hereunder, to be the
holders of certificates for such shares as if they had accepted such
certificates and shall be held to have expressly assented and agreed to the
terms hereof.
7.2 Loss of Certificates. In the case of the alleged loss or destruction or
---------------------
the mutilation of a share certificate, a duplicate certificate may be
issued in place thereof, upon such terms as the Trustees may prescribe.
7.3 Discontinuance of Issuance of Certificates. The Trustees may at any time
-------------------------------------------
discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the surrender of share certificates to the
Trust for cancellation. Such surrender and cancellation shall not affect
the ownership of shares in the Trust.
Section 8. Record Date
The Trustees may fix in advance a time, which shall not be more than 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the record
date for determining the shareholders having the right to notice and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date.
Section 9. Seal
The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts", together with the name of
the Trust and the year of its organization, cut or engraved thereon; but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
Section 10. Execution of Papers
Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and any transfers of securities standing in the name
of the Trust shall be
6
<PAGE>
executed, by the president or by one of the vice presidents or by the treasurer
or by whomsoever else shall be designated for that purpose by the vote of the
Trustees and need not bear the seal of the Trust.
Section 11. Fiscal Year
The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.
Section 12. Provisions Relating to the Conduct of the Trust's Business
12.1 Dealings with Affiliates. The Trust shall not purchase or retain
-------------------------
securities issued by any issuer if one or more of the holders of the
securities of such issuer or one or more of the officers or directors of
such issuer is an officer or Trustee of the Trust or officer or director
of any organization, association or corporation with which the Trust has
an investment advisor's contract ("investment advisor"), if to the
knowledge of the Trust one or more of such officers or Trustees of the
Trust or such officers or directors of such investment advisors owns
beneficially more than one-half of one percent of the shares or securities
of such issuer and such officers, Trustees and directors owning more than
on-half of one percent of such shares or securities together own
beneficially more than five percent of such outstanding shares or
securities. Each Trustee and officer of the Trust shall give notice to the
secretary of the identity of all issuers whose securities are held by the
Trust of which such officer or Trustee owns as much as one-half of one
percent of the outstanding securities, and the Trust shall not be charged
with the knowledge of such holdings in the absence of receiving such
notice if the Trust has requested such information not less often than
quarterly.
Subject to the provisions of the preceding paragraph, no officer, Trustee
or agent of the Trust and no officer, director or agent of any investment
advisor shall deal for or on behalf of the Trust with himself as principal
or agent, or with any partnership, association or corporation in which he
has a material financial interest; provided that the foregoing provisions
shall not prevent (a) officers and Trustees of the Trust from buying,
holding or selling shares in the Trust, or from being partners, officers
or directors of or financially interested in any investment advisor to the
Trust or in any corporation, firm or association which may at any time
have a distributor's or principal underwriter's contract with the Trust;
(b) purchases or sales of securities or other property if such transaction
is permitted by or is exempt or exempted from the provisions of the
Investment Company Act of 1940 or any Rule or Regulation thereunder and if
such transaction does not involve any commission or profit to any security
dealer who is, or one or more of whose partners, shareholders, officers or
directors is, an officer or Trustee of the
7
<PAGE>
Trust or an officer or director of the investment advisor, manager or
principal underwriter of the Trust; (c) employment of legal counsel,
registrar, transfer agent, shareholder services, dividend disbursing agent
or custodian who is, or has a partner, stockholder, officer or director
who is, an officer or Trustee of the Trust; (d) sharing statistical,
research and management expenses, including office hire and services, with
any other company in which an officer or Trustee of the Trust is an
officer or director or financially interested.
12.2 Dealing in Securities of the Trust. The Trust, the investment advisor,
-----------------------------------
any corporation, firm or association which may at any time have an
exclusive distributor's or principal underwriter's contract with the Trust
(the "distributor") and the officers and Trustees of the Trust and
officers and directors of every investment advisor and distributor, shall
not take long or short positions in the securities of the Trust, except
that:
(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;
(b) shares of the Trust may be purchased at not less than net asset value
for investment by the investment advisor and by officers and
directors of the distributor, investment advisor, or the Trust and by
any trust, pension, profit-sharing or other benefit plan for such
persons, no such purchase to be in contravention of any applicable
state or federal requirement.
12.3 Limitation on Certain Loans. The Trust shall not make loans to any
----------------------------
officer, Trustee or employee of the Trust or any investment advisor or
distributor or their respective officers, directors or partners or
employees.
12.4 Custodian. All securities and cash owned by the Trust shall be maintained
----------
in the custody of one or more banks or trust companies having (according
to its last published report) not less than two million dollars
($2,000,000) aggregate capital, surplus and undivided profits (any such
bank or trust company is hereinafter referred to as the "custodian");
provided, however, the custodian may deliver securities as collateral on
borrowings effected by the Trust, provided, that such delivery shall be
conditioned upon receipt of the borrowed funds by the custodian except
where additional collateral is being pledged on an outstanding loan and
the custodian may deliver securities lent by the trust against receipt of
initial collateral specified by the Trust. Subject to such rules,
regulations and orders, if any, as the Securities and Exchange Commission
may adopt, the Trust may, or may not permit any custodian to, deposit all
or any part of the securities owned by the Trust in a system for the
central handling of securities operated by
8
<PAGE>
the Federal Reserve Banks, or established by a national securities
exchange or national securities association registered with said
Commission under the Securities Exchange Act of 1934, or such other person
as may be permitted by said Commission, pursuant to which system all
securities of any particular class or series of any issue deposited with
the system are treated as fungible and may be transferred or pledged by
bookkeeping entry, without physical delivery of such securities.
The Trust shall upon the resignation or inability to serve of its
custodian or upon change of the custodian:
(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;
(b) require that the cash and securities owned by this corporation be
delivered directly to the successor custodian; and
(c) in the event that no successor custodian can be found, submit to the
shareholders, before permitting delivery of the cash and securities
owned by this Trust otherwise than to a successor custodian, the
question whether or not this Trust shall be liquidated or shall
function without a custodian.
12.5 Limitations on Investment. Each series of shares may not:
--------------------------
(a) Invest in securities other than those described in the Trust's then
current prospectus as appropriate for the series of shares for which
such securities are being purchased, except that the Trust may make
temporary investments for any series of shares in notes issued by or
on behalf of municipal or corporate issuers, obligations of the
United States Government and its agencies or instrumentalities, and
any such items subject to short-term repurchase agreements.
(b) Purchase securities of any issuer (except the United States
Government, its agencies or instrumentalities and any security
guaranteed thereby) if as a result more than 5% of the total assets
of any series of shares (based on their current value at the time of
investment) would be invested in the securities of such issuer.
9
<PAGE>
(c) Invest in companies for the purpose of exercising control.
(d) Purchase any securities which would cause more than 25% of the total
assets of the series of shares, based on current value at the time of
such purchase, to be invested in the securities of one or more
issuers conducting their principal business activities in the same
industry, provided that this limitation shall not apply to
investments in municipal obligations or to obligations issued or
guaranteed by the United States Government, its agencies or
instrumentalities.
(e) Purchase or sell real estate, commodities or commodities contracts.
However, any series of shares may invest in municipal obligations or
other obligations secured by real estate or interests therein.
(f) Purchase securities on margin, make short sales of securities or
maintain a short position, except that the Trust may obtain short-
term credits as necessary for the clearance of security transactions.
(g) Borrow money in any series of shares except for temporary or
emergency purposes of that series, and then only in an amount not
exceeding 10% of the value of the total assets of that series of
shares. The Trust will repay all borrowings in a particular series of
shares before making additional investments for that series.
(h) Make loans, except that any series of shares may purchase or hold
debt instruments in accordance with its investment objective and
policies, and may enter into repurchase agreements; provided that
repurchase agreements maturing in more than 7 days may not exceed 10%
of the total assets of any series of shares.
(i) Pledge, mortgage or hypothecate the assets of any series of shares
except to secure temporary borrowings permitted by (g) above in
aggregate amounts not to exceed 10% of the net assets of that series,
at the time of the incurrence of such loan, taken at current value.
(j) Act as an underwriter of securities of other issuers, except as it
may be deemed an underwriter in selling a portfolio security.
(k) Purchase securities of other investment companies except as permitted
by the Investment Company Act of 1940 and the rules and regulations
thereunder, and in any event may not purchase securities of other
open-end investment companies.
10
<PAGE>
(l) Issue senior securities (as defined in the Investment Company Act of
1940), except as permitted by (g) above or by rule, regulation or
order of the Securities and Exchange Commission.
(m) Purchase or retain securities of an issuer if, to the knowledge of
the Trust, an officer, trustee, partner or director of the Trust or
of any investment advisor of the Trust owns beneficially more than
1/2 of 1% of the shares or securities of such issuer and all such
officers, trustees, partners and directors owning more than 1/2 of 1%
of such shares or securities together own more than 5% of such shares
or securities.
(n) Purchase securities of any issuer which has (with predecessors) a
record of less than three years' continuing operations, except (i)
obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities, or (ii) municipal obligations which
are rated by at least two nationally recognized municipal bond rating
services, if as a result more than 5% of the total assets of any
series of shares (taken at current value) would be invested in such
securities.
(o) Invest in interests in oil, gas or other mineral exploration or
development programs.
(p) Invest in securities or other instruments (except for repurchase
agreements) with legal or contractual restrictions on resale or for
which no readily available market exists.
(q) Purchase puts, calls, straddles, spreads or combinations thereof,
except that the Trust may purchase puts as permitted by its
investment objective and policies.
12.6 Reports to Shareholders; Distributions from Realized Gains. The Trust
-----------------------------------------------------------
shall send to each shareholder of record at least annually a statement of
the condition of the Trust and of the results of its operation, containing
all information required by applicable laws or regulations.
Section 13. Amendments
These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority.
11
<PAGE>
EX-99.B5B
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT executed as of December 31, 1992 by and between LaSalle
Street Capital Management, Ltd., a registered investment advisor (the Advisor")
and ABN de Neuflize International Investment Advisory Company B.V., a
Netherlands company and registered investment advisor (the "Sub-Advisor").
WHEREAS, the Advisor is the investment manager (the "Advisor") for
Rembrandt Funds (the "Trust"), an open-end management investment company
registered under the Investment Company Act of 1940, as amended ("1940 Act");
and
WHEREAS, the Advisor desires to retain the Sub-Advisor as its agent to
furnish investment advisory services for the Global Fixed Income Fund,
International Equity Fund, TransEurope Fund and Asian Tigers Fund, diversified
investment portfolios of the Trust (the "Funds").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Appointment. The Advisor hereby appoints the Sub-Advisor to
------------
provide certain investment sub-advisory services to the Funds for the period and
on the terms set forth in this Agreement. The Sub-Advisor accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
2. Delivery of Documents. The Advisor has furnished the Sub-Advisor
----------------------
with copies of each of the following:
(a) the Trust's Agreement and Declaration of Trust, as filed
with the Secretary of State of the Commonwealth of Massachusetts on September
18, 1992, and all amendments thereto or restatements thereof (such Declaration,
as presently in effect and as it shall from time to time be amended or restated,
is herein called the "Declaration of Trust");
(b) the Trust's By-Laws and all amendments thereto;
(c) the resolutions of the Trust's Board of Trustees
authorizing the appointment of the Sub-Advisor and approving this Agreement;
(d) the Trust's Notification of Registration on Form N-8A
under the 1940 Act, as filed with the Securities and Exchange Commission (the
"SEC") on October 2, 1992, and all amendments thereto;
(e) the Trust's Registration Statement on Form N-1A under
the Securities Act of 1933, as amended (the "1933 Act") and under the 1940 Act
as filed with the SEC
<PAGE>
and all amendments thereto insofar as such Registration Statement and such
amendments relate to the Fund;
(f) the Trust's most recent prospectuses and Statement of Additional
Information for the Funds (such prospectuses and Statement of Additional
Information, as presently in effect, and all amendments and supplements thereto
are herein collectively called the "Prospectuses"); and
(g) any other information reasonably needed by the Sub-Adviso to
satisfy its obligations under this Agreement.
The Advisor will furnish the Sub-Advisor from time to time
with copies of all amendments of or supplements to the foregoing.
3. Management. Subject always to the supervision of the Trust's
-----------
Board of Trustees and the Advisor, the Sub-Advisor will furnish an investment
program in respect of, and make investment decisions for, all assets of the
Funds and place all orders for the purchase and sale of securities, all on
behalf of the Funds. In the performance of its duties the Sub-Advisor will
satisfy its fiduciary duties to the Funds (as set forth in Section 8 below), and
will monitor the Funds' investments, and will comply with the provisions of the
Trust's Declaration of Trust and By-Laws, as amended from time to time, and the
stated investment objectives, policies and restrictions of the Funds. The Sub-
Advisor and the Advisor will each make its officers and employees available to
the other from time to time at reasonable times to review investment policies of
the Funds and to consult with each other regarding the investment affairs of the
Funds. The Sub- Advisor shall also make itself reasonably available to the Board
of Trustees of the Trust at such times as the Board of Trustees shall request.
The Sub-Advisor represents and warrants that it is in compliance
with all applicable rules and regulations of the SEC pertaining to its
investment advisory activities and agrees that it:
(a) will conform with all applicable rules and regulations of
the SEC pertaining to its investment advisory activities;
(b) will place orders pursuant to its investment determinations
for each of the Funds either directly with the issuer or with any broker or
dealer. In placing orders with brokers or dealers, the Sub-Advisor will attempt
to obtain the best combination of prompt execution of orders in an effective
manner and at the most favorable price. Consistent with this obligation, when
the execution and price offered by two or more brokers or dealers are
comparable, the Sub-Advisor may, in its discretion, purchase and sell portfolio
securities to and from brokers and dealers who provide the Sub-Advisor with
research advice and other services. In no instance will portfolio securities be
purchased from or sold to the Advisor, the Sub-Advisor, Rembrandt Financial
Services Company or any affiliated person of either the Trust, the Advisor,
Rembrandt Financial Services
2
<PAGE>
Company or the Sub-Advisor, except as may be permitted under the 1940 Act;
(c) will report regularly to the Advisor and will make
appropriate persons available for the purpose of reviewing at reasonable times
with representatives of the Advisor and the Board of Trustees of the Trust the
management of each of the Funds, including, without limitation, review of the
general investment strategy of each of the Funds, the performance of each of the
Funds in relation to standard industry indices, interest rate considerations and
general conditions affecting the marketplace and will provide various other
reports from time to time as reasonably requested by the Advisor;
(d) will maintain books and records with respect to the Trust's
securities transactions which it has affected and will furnish the Advisor and
the Board of Trustees of the Trust such periodic and special reports as the
Board of Trustees or the Advisor may request;
(e) will act upon instructions from the Advisor not inconsistent
with the fiduciary duties hereunder; and
(f) will treat confidentially and as proprietary information of
the Trust all such records and other information relative to the Trust
maintained by the Sub-Advisor, and will not use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Trust, which
approval shall not be unreasonably withheld and may not by withheld where the
Sub-Advisor may be exposed to civil or criminal contempt proceeding for failure
to comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Trust.
The Sub-Advisor shall have the right to execute and deliver, or cause
its nominee to execute and deliver, all proxies and notices of meetings and
other notices affecting or relating to the securities of each of the Funds.
4. Books and Records. In compliance with the requirements of
------------------
Rule 31a-3 under the 1940 Act, the Sub-Advisor hereby agrees that all records
which it maintains for the Trust are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon the Trust's
request. The Sub-Advisor further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act.
5. Expenses. During the term of this Agreement, the Sub-Advisor will
---------
pay all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions,
if any) purchased for the Trust.
3
<PAGE>
6. Compensation. For the services provided and the expenses assumed
-------------
pursuant to this Agreement, the Advisor will pay the Sub-Advisor, and the
Sub-Advisor agrees to accept as full compensation therefor, a sub-advisory fee,
accrued daily and payable quarterly, in accordance with Schedule A hereto. If
----------
the Advisor is required, under its Advisory Agreement with the Trust, to reduce
its fees for any of the Funds because of excess expenses, the Sub-Advisor shall
reduce its fees by an amount equal to one-half of the amount by which the
Advisor reduced its fees. In addition, from time to time, the Sub- Advisor or
may voluntarily agree to waive or reduce some or all of the compensation to
which it is entitled under this Agreement.
7. Services to Others. The Advisor understands, and has advised the
-------------------
Trust's Board of Trustees, that the Sub-Advisor now acts, and may in the future
act, as an investment adviser to fiduciary and other managed accounts, and as
investment adviser, sub-investment adviser, and/or administrator to other
investment companies, provided, however, that the Sub-Advisor shall not provide
advisory or sub-advisory services to any bank-advised investment company without
the express written consent of the Advisor, which will not be unreasonably
withheld. With the exception previously noted, the Advisor has no objection to
the Sub-Advisor's acts in such capacities, provided that the services to the
Funds are not impaired thereby and that whenever the Fund and one or more other
investment companies advised by the Sub-Advisor have available funds for
investment, investments suitable and appropriate for each will by allocated in
accordance with a formula believed by the Sub-Advisor to be equitable to each
company. The Advisor recognizes, and has advised the Trust's Board of Trustees,
that in some cases this procedure may adversely affect the size of the position
that the Fund may obtain in a particular security. In addition, the Advisor
understands, and has advised the Trust's Board of Trustees, that the persons
employed by the Sub-Advisor to assist in the Sub- Advisor's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement will be deemed to limit or restrict the right of Sub- Advisor
or any of its affiliates to engage in and devote time and attention to other
businesses or to render services or whatever kind or nature.
8. Limitation of Liability. The Advisor will not take any action
------------------------
against the Sub-Advisor to hold the Sub-Advisor liable for any error of
judgement or mistake of law or for any loss suffered by the Fund in connection
with the performance of the Sub-Advisor's duties under this Agreement, except a
loss resulting from the Sub-Advisor's willful misfeasance, bad faith, or gross
negligence in the performance of its duties under this Agreement.
9. Indemnification. The Advisor and the Sub-Advisor each agree to
----------------
indemnify the other against any claim against, loss or liability to such other
party (including reasonable attorney's fees) arising out of any action on the
part of the indemnifying party which constitutes willful misfeasance, bad faith
or gross negligence.
4
<PAGE>
10. Duration and Termination. This Agreement will become effective as
-------------------------
to each of the Funds on the first day each Fund's shares are offered to the
public provided that it has been approved by vote of a majority of the
outstanding voting securities of the Fund in accordance with the requirements
under the 1940 Act, and, unless sooner terminated as provided herein, will
continue in effect for one year.
Thereafter, if not terminated, this Agreement will continue in effect for
the Fund for successive periods of 12 months, each ending on the day preceding
the anniversary of the Agreement's effective date of each year, provided that
--------
such continuation is specifically approved at least annually (a) by the vote of
a majority of those members of the Trust's Board of Trustees who are not
interested persons of the Trust, the Sub- Advisor, or the Advisor, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the vote of a majority of the Trust's Board of Trustees or by the vote of a
majority of all votes attributable to the outstanding shares of the Fund.
Notwithstanding the forgoing, this Agreement may be terminated as to the Fund at
any time, without the payment of any penalty, on sixty (60) days' written notice
by the Advisor or by the Sub-Advisor. This Agreement will immediately terminate
in the event of its assignment. (As used in this Agreement, the terms "majority
of the outstanding voting securities", "interested persons" and "assignment"
have the same meaning of such terms in the 1940 Act.)
This Agreement will terminate automatically if the advisory agreement
between the Fund and the Advisor is terminated.
11. Amendment of this Agreement. No provision of this Agreement may be
----------------------------
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
12. Miscellaneous. The captions in this Agreement are included for
--------------
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and will be governed by the
laws of the state of Illinois.
The name "Rembrandt Funds" and "Trustees of Rembrandt Funds" refers
respectively to the Trust created by, and the Trustees, as trustees but not
individually or personally, acting from time to time under, the Declaration of
Trust, to which reference is hereby made and a copy of which is on file at the
office of the Secretary of State of the Commonwealth of Massachusetts and
elsewhere as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of "Rembrandt Funds"
5
<PAGE>
entered in the name or on behalf thereof by any of the Trustees, representatives
or agents are made not individually but only in such capacities and are not
binding upon any of the Trustees, shareholders or representatives of the Trust
personally, but bind only the assets of the Trust, and persons dealing with the
Fund must look solely to the assets of the Trust belonging to such Fund for the
enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
LaSalle Street Capital Management, Ltd.
By: /s/ Jan B. Persson
-----------------------------------------
Name: Jan B. Persson, CFA
---------------------------------------
Title: President
--------------------------------------
ABN de Neuflize International Investment Advisory
Company B.V.
By: /s/ R. Vander Graaf /s/ M.T.I. Jongmans
-----------------------------------------
Name: R. Vander Graaf, M.T.I. Jongmans
---------------------------------------
Title: Director, Director
--------------------------------------
6
<PAGE>
Schedule A
to
Investment Sub-Advisory Agreement
dated
December 31, 1992
The Advisor shall pay to the Sub-Advisor compensation at an annual rate as
follows:
Portfolio Fee(in basis points)
Global Fixed Income Fund 40
International Equity Fund 50
TransEurope Fund 50
Asian Tigers Fund 50
Latin America Equity Fund 50
LaSalle Street Capital Management, Ltd.
By: /s/ Jan B. Persson
-----------------------------------------
Name: Jan B. Persson, CFA
---------------------------------------
Title: President
--------------------------------------
ABN de Neuflize International Investment Advisory
Company B.V.
By: /s/ R. Vander Graaf /s/ M.T.I. Jongmans
-----------------------------------------
Name: R. Vander Graaf, M.T.I. Jongmans
---------------------------------------
Title: director, director
--------------------------------------
<PAGE>
EX-99.B6
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of the 31st day of December, 1992, between
Rembrandt Funds (the "Trust"), a Massachusetts business trust and
Rembrandt/(sm)/ Financial Services Company (the "Distributor"), a Pennsylvania
corporation.
WHEREAS, the Trust is registered as an investment company with the
Securities and Exchange Commission (the "SEC") under the Investment Company Act
of 1940, as amended (the "1940 Act"), and its Shares are registered with the SEC
under the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Trust and the Distributor hereby agree as follows:
ARTICLE 1. Sale of Shares. The Trust grants to the Distributor the
--------------
exclusive right to sell Shares of the Trust at the public offering price in
accordance with the current prospectus, as agent and on behalf of the Trust,
during the term of this Agreement and subject to the registration requirements
of the 1933 Act, the rules and regulations of the SEC and the laws governing the
sale of securities in the various states ("Blue Sky Laws"), except that the
Trust, in its absolute discretion, may issue shares in connection with the
acquisition of assets or shares or securities of another corporation or entity,
or in connection with a merger or consolidation with any other entity or
corporation or directly to the shareholders of the Trust.
ARTICLE 2. Solicitation of Sales. In consideration of these rights
---------------------
granted to the Distributor, the Distributor agrees to use all reasonable
efforts, consistent with its other business, in connection with the distribution
of Shares of the Trust. The provisions of this paragraph do not obligate the
Distributor to register as a broker or dealer under the Blue Sky Laws of any
jurisdiction when it determines it would be uneconomical for it to do so or to
maintain its registration in any jurisdiction in which it is now registered nor
obligate the Distributor to sell any particular number of Shares.
ARTICLE 3. Authorized Representations. The Distributor is not
--------------------------
authorized by the Trust to give any information or to make any representations
other than those contained in the current registration statements and
prospectuses of the Trust filed with the SEC or contained in Shareholder reports
or other material that may be prepared by or on behalf of the Trust for the
Distributor's use. The Distributor may prepare and distribute sales literature
and other material as it may deem appropriate, provided that such literature and
materials have been approved by the Trust prior to their use.
<PAGE>
ARTICLE 4. Registration of Shares. The Trust agrees that it will
----------------------
take all action necessary to register Shares under the federal and state
securities laws so that there will be available for sale the number of Shares
the Distributor may reasonably be expected to sell and to pay all fees
associated with said registration. The Trust shall make available to the
Distributor such number of copies of its currently effective prospectus and
statement of additional information as the Distributor may reasonably request.
The Trust shall furnish to the Distributor copies of all information, financial
statements and other papers which the Distributor may reasonably request for use
in connection with the distribution of Shares of the Trust.
ARTICLE 5. Compensation. As compensation for the services performed
------------
and the expenses assumed under this Agreement relative to retail class, and to
the extent provided in the Trust's annual budget under its retail class
Distribution Plan adopted in accordance with Rule 12b-1 under the 1940 Act, the
Trust shall reimburse the Distributor for services, reimbursement of expenses
incurred in connection with distribution assistance or provision of shareholder
services.
ARTICLE 6. Indemnification of Distributor. The Trust agrees to
------------------------------
indemnify and hold harmless the Distributor and each of its directors and
officers and each person, if any, who controls the Distributor within the
meaning of Section 15 of the 1933 Act against any loss, liability, claim,
damages or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages, or expense and reasonable counsel
fees and disbursements incurred in connection therewith), arising by reason of
any person acquiring any Shares, based upon the ground that the registration
statement, prospectus, Shareholder reports or other information filed or made
public by the Trust (as from time to time amended) included an untrue statement
of a material fact or omitted to state a material fact required to be stated or
necessary in order to make the statements made not misleading. However, the
Trust does not agree to indemnify the Distributor or hold it harmless to the
extent that the statements or omission was made in reliance upon, and in
conformity with, information furnished to the Trust by or on behalf of the
Distributor.
In no case (i) is the indemnity of the Trust to be deemed to protect
the Distributor against any liability to the Trust or its Shareholders to which
the Distributor or such person otherwise would be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Trust to be liable to the Distributor under the
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
other person shall have notified the Trust in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such other person (or after the Distributor or the person shall
have received notice of service on any designated agent). However, failure to
notify the Trust of any claim shall not relieve the Trust from any liability
which it may have to the Distributor or any person
<PAGE>
against whom such action is brought otherwise than on account of its indemnity
agreement contained in this paragraph.
The Trust shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Trust elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Trust and satisfactory to the indemnified defendants in the suit
whose approval shall not be unreasonably withheld. In the event that the Trust
elects to assume the defense of any suit and retain counsel, the indemnified
defendants shall bear the fees and expenses of any additional counsel retained
by them. If the Trust does not elect to assume the defense of a suit, it will
reimburse the indemnified defendants for the reasonable fees and expenses of any
counsel retained by the indemnified defendants.
The Trust agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its officers
or Trustees in connection with the issuance or sale of any of its Shares.
ARTICLE 7. Indemnification of Trust. The Distributor covenants and
------------------------
agrees that it will indemnify and hold harmless the Trust and each of its
Trustees and officers and each person, if any, who controls the Trust within the
meaning of Section 15 of the 1933 Act, against any loss, liability, damages,
claim or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, damages, claim or expense and reasonable counsel
fees incurred in connection therewith) based upon the 1933 Act or any other
statute or common law and arising by reason of any person acquiring any Shares,
and alleging a wrongful act of the Distributor or any of its employees or
alleging that the registration statement, prospectus, Shareholder reports or
other information filed or made public by the Trust (as from time to time
amended) included an untrue statement of a material fact or omitted to state a
material fact required to be stated or necessary in order to make the statements
not misleading, insofar as the statement or omission was made in reliance upon
and in conformity with information furnished to the Trust by or on behalf of the
Distributor.
In no case (i) is the indemnity of the Distributor in favor of the
Trust or any other person indemnified to be deemed to protect the Trust or any
other person against any liability to which the Trust or such other person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Trust or any person
indemnified unless the Trust or person, as the case may be, shall have notified
the Distributor in writing of the claim within a reasonable time after the
summons or other first written notification giving information of the nature of
the claim shall have been served upon the Trust or upon any person (or after the
Trust or such person shall have received notice of service on any designated
agent). However, failure to notify the
<PAGE>
Distributor of any claim shall not relieve the Distributor from any liability
which it may have to the Trust or any person against whom the action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph.
The Distributor shall be entitled to participate, at its own expense,
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably withheld.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the defendants in the suit shall bear the fees and expenses of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any suit, it will reimburse the indemnified defendants in
the suit for the reasonable fees and expenses of any counsel retained by them.
The Distributor agrees to notify the Trust promptly of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any of the Trusts' Shares.
ARTICLE 8. Effective Date. This Agreement shall be effective upon
--------------
its execution, and unless terminated as provided, shall continue in force for
one year from the effective date and thereafter from year to year, provided that
such annual continuance is approved by (i) either the vote of a majority of the
Trustees of the Trust, or the vote of a majority of the outstanding voting
securities of the Trust, and (ii) the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or the Trust's Distribution Plan
or interested persons of any such party ("Qualified Trustees"), cast in person
at a meeting called for the purpose of voting on the approval. This Agreement
shall automatically terminate in the event of its assignment. As used in this
paragraph the terms "vote of a majority of the outstanding voting securities",
"assignment" and "interested person" shall have the respective meanings
specified in the 1940 Act. In addition, this Agreement may at any time be
terminated without penalty by the Distributor, by a vote of a majority of
Qualified Trustees or by vote of a majority of the outstanding voting securities
of the Trust upon not less than sixty days prior written notice to the other
party.
ARTICLE 9. Notices. Any notice required or permitted to be given by
-------
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Trust, at 680 East Swedesford Road, Wayne, Pennsylvania
19087, and if to the Distributor, 680 East Swedesford Road, Wayne, Pennsylvania
19087.
ARTICLE 10. Limitation of Liability. A copy of the Declaration of
-----------------------
Trust of the Trust is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trustees of the Trust as
<PAGE>
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees, officers or shareholders of the Trust
individually but binding only upon the assets and property of the Trust.
ARTICLE 11. Governing Law. This Agreement shall be construed in
-------------
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.
ARTICLE 12. Multiple Originals. This Agreement may be executed in
------------------
two or more counterparts, each of which when so executed shall be deemed to be
an original, but such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the Trust and the Distributor have each duly
executed this Agreement, as of the day and year above written.
REMBRANDT FUNDS
By: /s/ Todd B. Cipperman
---------------------------
Attest: /s/ Robert B. Carroll
-----------------------
REMBRANDT FINANCIAL SERVICES COMPANY
By: /s/ Sandra K. Orlow
---------------------------
Attest: /s/ Robert B. Carroll
-----------------------
<PAGE>
CUSTODIAN AGREEMENT
This Agreement, dated as of the 31st day of December, 1992 by and between
Rembrandt Funds (the "Trust"), a business trust operating as an open-end
investment company, duly organized under the laws of the Commonwealth of
Massachusetts and CoreStates Bank N.A.;
WITNESSETH:
WHEREAS, the Trust desires to deposit cash and securities with CoreStates
Bank N.A. as custodian; and
WHEREAS, CoreStates Bank N.A. is qualified and authorized to act as
custodian for the cash and securities of an open-end investment company and is
willing to act in such capacity upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
do hereby agree as follows:
Section 1. The terms as defined in this Section wherever used in this
- ----------
Agreement, or in any amendment or supplement hereto, shall have meanings herein
specified unless the context otherwise requires.
Custodian: The term Custodian shall mean CoreStates Bank N.A. in its
---------
capacity as Custodian under this Agreement.
Proper Instructions: For purposes of this Agreement the Custodian shall be
-------------------
deemed to have received Proper Instructions upon receipt of written (including
instructions received by means of computer terminals), telephone or telegraphic
instructions from a person or persons authorized from time to time by the
Trustees of the Trust to give the particular class of instructions. Telephone
or telegraphic instructions shall be confirmed in writing by such person or
persons as said Trustees or said Board of Directors shall have from time to time
authorized to give the particular class of instructions in question. The
Custodian may act upon telephone or telegraphic instructions without awaiting
receipt of written confirmation, and shall not be liable for the Trust's or such
investment adviser's failure to confirm such instructions in writing.
Shareholders: The term Shareholders shall mean the registered owners from
------------
time to time of the Shares of the Trust in accordance with the registry records
maintained by the Trust or agents on its behalf.
Shares: The term Shares of the Trust shall mean the units of beneficial
------
interest of the Trust.
<PAGE>
Section 2. The Trust shall from time to time file with the Custodian a
- ----------
certified copy of each resolution of its Board of Trustees authorizing the
person or persons to give Proper Instructions (as defined in Section 1) and
specifying the class of instructions that may be given by each person to the
Custodian under this Agreement, together with certified signatures of such
persons authorized to sign, which shall constitute conclusive evidence of the
authority of the officers and signatories designated therein to act, and shall
be considered in full force and effect with the Custodian fully protected in
acting in reliance thereon until it receives written notice to the contrary;
provided, however, that if the certifying officer is authorized to give Proper
Instructions, the certification shall be also signed by a second officer of the
Trust.
Section 3. The Trust hereby appoints the Custodian as custodian of cash and
- ----------
securities from time to time on deposit hereunder, to be held by the Custodian
and applied as provided in this Agreement. The Custodian hereby accepts such
appointment subject to the terms and conditions hereinafter provided. Such cash
and securities shall, however, be segregated from the assets of others and shall
be and remain the sole property of the Trust and the Custodian shall have only
the bare custody thereof.
The Custodian may perform some or all of its duties hereunder through a
subcustodian.
The Custodian may deposit the Trust's portfolio securities with a U.S.
securities depository or in U.S. Federal book-entry systems pursuant to rules
and regulations of the Securities and Exchange Commission.
Section 4. The Trust will make an initial deposit of cash to be held and
- ----------
applied by the Custodian hereunder. Thereafter the Trust will cause to be
deposited with the Custodian hereunder the applicable net asset value of Shares
sold from time to time whether representing initial issue, other stock or
reinvestments of dividends and/or distributions payable to Shareholders.
Section 5. The Custodian is hereby authorized and directed to disburse cash
- ----------
from time to time upon receipt of and in accordance with Proper Instructions.
Section 6. The Custodian's compensation shall be as set forth in Schedule A
- ----------
hereto attached, or as shall be set forth in amendments to such schedule
approved by the Trust and the Custodian.
Section 7. In connection with its functions under this Agreement, the Custodian
- ----------
shall:
(a) render to the Trust a daily report of all monies received or paid on
behalf of the Trust.
2
<PAGE>
(b) create, maintain and retain all records relating to its activities and
obligations under this Agreement in such manner as will meet the
obligations of the Trust with respect to said Custodian's activities
in accordance with generally accepted accounting principles. All
records maintained by the Custodian in connection with the performance
of its duties under this Agreement will remain the property of the
Trust and in the event of termination of this Agreement will be
relinquished to the Trust.
Section 8. No liability of any kind shall be attached to or incurred by the
- ----------
Custodian by reason of its custody of the assets held by it from time to time
under this Agreement, or otherwise by reason of its position as Custodian
hereunder except only for its own negligence, bad faith, or willful misconduct
in the performance of its duties as specifically set forth in the Agreement.
Without limiting the generality of the foregoing sentence, the Custodian:
(a) may rely upon the advice of counsel, who may be counsel for the Trust
or for the Custodian, and upon statements of accountants, brokers and
other persons believed by it in good faith to be expert in the matters
upon which they are consulted; and for any action taken or suffered in
good faith based upon such advice or statements the Custodian shall
not be liable to anyone;
(b) shall not be liable for anything done or suffered to be done in good
faith in accordance with any request or advice of, or based upon
information furnished by, the Trust or its authorized officers or
agents;
(c) is authorized to accept a certificate of the Secretary or Assistant
Secretary of the Trust, or Proper Instructions, to the effect that a
resolution in the form submitted has been duly adopted by its Board of
Trustees or by the Shareholders, as conclusive evidence that such
resolution has been duly adopted and is in full force and effect;
(d) may rely and shall be protected in acting upon any signature, written
(including telegraph or other mechanical) instructions, request,
letter of transmittal, certificate, opinion of counsel, statement,
instrument, report, notice, consent, order, or other paper or document
reasonably believed by it to be genuine and to have been signed,
forwarded or presented by the purchaser, Trust or other proper party
or parties.
Section 9. The Trust, its successors and assigns hereby indemnify and hold
- ----------
harmless the Custodian, its successors and assigns, of and from any and all
liability whatsoever arising out of or in connection with the Custodian's
status, acts, or omissions under this Agreement, except the Trust shall not
indemnify and hold harmless for liability arising out
3
<PAGE>
of the Custodian's own negligence, bad faith, or willful misconduct.
Without limiting the generality of the foregoing, the Trust, its successors and
assigns do hereby fully indemnify and hold harmless the Custodian its successors
and assigns, from any and all loss, liability, claims, demand, actions, suits
and expenses of any nature as the same may arise from the failure of the Trust
to comply with any law, rule, regulation or order of the United States, any
state or any other jurisdiction, governmental authority, body, or board relating
to the sale, registration, qualification of units of beneficial interest in the
Trust, or from the failure of the Trust to perform any duty or obligation under
this Agreement.
Upon written request of the Custodian, the Trust shall assume the entire defense
of any claim subject to the foregoing indemnity, or the joint defense with the
Custodian of such claim, as the Custodian shall request. The indemnities and
defense provisions of this Section 9 shall indefinitely survive termination of
this Agreement.
Section 10. This Agreement may be amended from time to time without notice to
- -----------
or approval of the Shareholders by a supplemental agreement executed by the
Trust and the Custodian and amending and supplementing this Agreement in the
manner mutually agreed.
Section 11. Either the Trust or the Custodian may give one hundred twenty (120)
- -----------
days written notice to the other of the termination of this Agreement, such
termination to take effect at the time specified in the notice. In case such
notice of termination is given either by the Trust or by the Custodian, the
Trustees of the Trust shall, by resolution duly adopted, promptly appoint a
Successor Custodian which Successor Custodian shall be a bank, trust company, or
a bank and trust company in good standing, with legal capacity to accept custody
of the cash and securities of a mutual fund.
Upon receipt of written notice from the Trust of the appointment of such
successor and upon receipt of Proper Instructions, the Custodian shall deliver
such cash and securities as it may then be holding hereunder directly and only
to the Successor Custodian. Unless or until a Successor Custodian has been
appointed as above provided, the Custodian then acting shall continue to act as
Custodian under this Agreement.
Every Successor Custodian appointed hereunder shall execute and deliver an
appropriate written acceptance of its appointment and shall thereupon become
vested with the rights, powers, obligations and custody of its predecessor
Custodian. The Custodian ceasing to act shall nevertheless, upon request of the
Trust and the Successor Custodian and upon payment of its charges and
disbursements, execute an instrument in form approved by its counsel
transferring to the Successor Custodian all the predecessor Custodian's rights,
duties, obligations and custody.
4
<PAGE>
In case the Custodian shall consolidate with or merge into any other
corporation, the corporation remaining after or resulting from such
consolidation or merger shall ipso facto without the execution or filing of any
papers or other documents, succeed to and be substituted for the Custodian with
like effect as though originally named as such.
Section 12. This Agreement shall take effect when assets of the Trust are first
- -----------
delivered to the Custodian.
Section 13. This Agreement may be executed in two or more counterparts, each of
- -----------
which when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
Section 14. A copy of the Declaration of Trust of the Trust is on file with the
- -----------
Secretary of the Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Trustees of the Trust as Trustees
and not individually and that the obligations of this instrument are not binding
upon any of the Trustees, officers or Shareholders of the Trust individually,
but binding only upon the assets and property of the Trust.
Section 15. The Custodian shall create and maintain all records relating to its
- -----------
activities and obligations under this Agreement in such manner as will meet the
obligations of the Trust under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable Federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Trust.
Subject to security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as to the conduct of such monitors as may be reasonably imposed by
the Custodian after prior consultation with an officer of the Trust, the books
and records of the Custodian pertaining to its actions under this Agreement
shall be open to inspection and audit at any reasonable times by officers of,
attorneys for, and auditors employed by, the Trust.
Section 16. Nothing contained in this Agreement is intended to or shall require
- -----------
the Custodian in any capacity hereunder to perform any functions or duties on
any holiday or other day of special observance on which the Custodian is closed.
Functions or duties normally scheduled to be performed on such days shall be
performed on, and as of, the next business day the Custodian is open.
Section 17. This Agreement shall extend to and shall be binding upon the
- -----------
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Trust without the written
consent of the Custodian, or by the Custodian without the written consent of the
Trust, authorized or approved by a resolution
5
<PAGE>
of its Board of Trustees.
6
<PAGE>
IN WITNESS WHEREOF, the Trust and the Custodian have caused this Agreement to be
signed by their respective officers as of the day and year first above written.
Rembrandt Funds
By: /s/ Kevin S. Robins
----------------------------
Attest: /s/ Mary Jane Maloney
------------------------
CoreStates Bank N.A.
By:
----------------------
Attest: /s/ Rebecca B. Ley
------------------------
<PAGE>
SCHEDULE A
Fee Schedule
1.00 basis points on the first $2.5 billion
.75 basis points on the next $2.5 billion
.50 basis points on the next $4 billion
.40 basis points on remainder
Transactions billed separately by portfolio at the now current rates. Asset
level charges billed as one invoice covering all Trust portfolios custodied at
CoreStates. SEI will allocate charges back to individual portfolios.
Transactions charges are subject to change.
<PAGE>
SCHEDULE B
Custody Services
Transaction Fees
$4.00 Per trade and maturity clearing through Depository Trust
Company.
$10.00 Per trade and maturity clearing book entry through
Philadelphia Federal Reserve.
$15.00 Per trade and maturity for assets requiring physical
settlement.
$10.00 Per trade and maturity clearing book through Participants
Trust Company.
$4.00 Paydowns on Mortgage Backed Securities.
$5.50 Fed wire charge on Repo collateral in/out.
$5.50/$7.50 Other cash wire transfers in/out.
$5.50 Dividend re-investment
<PAGE>
Exhibit 99.B9
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 31st day of December, 1995, between
Rembrandt Funds (the "Trust"), a Massachusetts business trust, and SEI Financial
Management Corporation (the "Administrator"), a Delaware corporation.
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust desires the Administrator to provide, and the
Administrator is willing to provide management, administrative and shareholder
servicing services to the Trust's Fixed Income Fund, Intermediate Government
Fixed Income Fund, Tax-Exempt Fixed Income Fund, Global Fixed Income Fund,
Limited Volatility Fixed Income Fund, Balanced Fund, Value Fund, Growth Fund,
Small Cap Fund, International Equity Fund, TransEurope Fund, Asian Tigers Fund,
Treasury Money Market Fund, Government Money Market Fund, Money Market Fund,
Tax-Exempt Money Market Fund, Latin America Equity Fund and such other
portfolios as the Trust and the Administrator may agree on (the "Portfolios"),
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Administrator hereby agree as follows:
ARTICLE 1. Retention of the Administrator. The Trust hereby retains
------------------------------
the Administrator to act as the Administrator of the Portfolios and to furnish
the Portfolios with the management, administrative and shareholder servicing
services as set forth below. The Administrator hereby accepts such employment
to perform the duties set forth below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Trust in any way and shall
not be deemed an agent of the Trust. All of the Administrator's duties shall be
subject always to the objectives, policies and restrictions contained in the
Trust's current registration statement under the 1940 Act, to the Trust's
Declaration of Trust and By-Laws, to the provisions of the 1940 Act, and to any
other guidelines that may be established by the Trust's Trustees.
ARTICLE 2. Other Administrative Services. The Administrator shall
-----------------------------
perform or supervise the performance by others of other administrative services
in connection with the operations of the Portfolios, and, on behalf of the
Trust, will investigate, assist in the selection of and conduct relations with
custodians, depositories, accountants, underwriters, brokers and dealers,
corporate fiduciaries, insurers, banks and persons in any other capacity deemed
to be necessary or desirable for the Portfolios' operation. The Administrator
shall provide the Trustees of the Trust with such reports regarding investment
performance as they may reasonably request but shall have no responsibility for
supervising the performance by any investment adviser or sub-adviser of its
responsibilities.
<PAGE>
The Administrator shall provide the Trust with regulatory reporting,
fund accounting and related portfolio accounting services, all necessary office
space, equipment, personnel compensation and facilities (including facilities
for Shareholders' and Trustees' meetings) for handling the affairs of the
Portfolios and such other services as the Administrator shall, from time to
time, determine to be necessary to perform its obligations under this Agreement.
The Administrator shall make reports to the Trust's Trustees
concerning the performance of its obligations hereunder; furnish advice and
recommendations with respect to other aspects of the business and affairs of the
Portfolios as the Trust and the Administrator shall determine desirable; and
shall provide the Portfolios' Shareholders with the reports described in the
Trust's current prospectus.
The Administrator shall calculate the daily net asset value of the
Portfolios in accordance with the procedures prescribed in the Trust's
Registration Statement and such other procedures as may be established by the
Trustees of the Trust.
The Administrator will answer such correspondence and inquiries from
shareholders, securities brokers and others relating to its duties hereunder
concerning Fund performance or net asset value to the extent permitted by
applicable law, and such other correspondence and inquiries on such terms as
may, from time to time, be mutually agreed upon between the Administrator and
the Trust.
Also, the Administrator will perform other services for the Trust as
agreed from time to time, including, but not limited to, preparation and mailing
of appropriate federal income tax forms; mailing the annual reports of the
Trust; preparing an annual list of Shareholders; furnishing the Trust with such
reports regarding the sale and redemption of Shares as may be required in order
to comply with federal and state securities law; and mailing notices of
Shareholders' meetings, proxies and proxy statements, for all of which the Trust
will pay the Administrator's out-of-pocket expenses.
ARTICLE 3. Allocation of Charges and Expenses.
----------------------------------
(a) The Administrator. The Administrator shall furnish at its own
-----------------
expense the executive, supervisory and clerical personnel
necessary to perform its obligations under this Agreement. The
Administrator shall also provide the items which it is obligated
to provide under this Agreement, and shall pay all compensation,
if any, of officers of the Trust as well as all Trustees of the
Trust who are affiliated persons of the Administrator or any
affiliated corporation; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated
to pay the compensation of any employee of the Trust retained by
the Trustees of the Trust to perform services on behalf of the
Trust.
(b) The Trust. The Trust assumes and shall pay or cause to be paid
---------
all other expenses of the Trust not otherwise allocated herein,
including, without
<PAGE>
limitation, organizational costs, taxes, expenses for legal and
auditing services, the expenses of preparing (including typesetting),
printing and mailing reports, prospectuses, statements of additional
information, proxy solicitation material and notices to existing
Shareholders, all expenses incurred in connection with issuing and
redeeming Shares, the costs of custodial services, the cost of initial
and ongoing registration of the Trust's Shares under federal and state
securities laws, fees and out-of-pocket expenses of Trustees who are
not affiliated persons of the Administrator or any affiliated
corporation, insurance, interest, brokerage costs, litigation and
other extraordinary or nonrecurring expenses, all fees and charges of
investment advisers to the Trust. In addition, the Trust will bear
distribution expenses in accordance with the Trust's Distribution
Plan.
ARTICLE 4. Compensation of the Administrator.
----------------------------------
(a) Administration Fee. For the services to be rendered, the facilities
------------------
furnished and the expenses assumed by the Administrator pursuant to
this Agreement, the Trust shall pay to the Administrator compensation
at an annual rate specified in the schedules which are attached hereto
and made a part of this Agreement ("Schedules"). Such compensation
shall be calculated and accrued daily, and paid to the Administrator
monthly.
If this Agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, the
Administrator's compensation for that part of the month in which this
Agreement is in effect shall be prorated in a manner consistent with
the calculation of the fees as set forth above. Payment of the
Administrator's compensation for the preceding month shall be made
promptly.
(b) Compensation from Transactions. The Trust hereby authorizes any
------------------------------
entity or person associated with the Administrator which is a member
of a national securities exchange to effect any transaction on the
exchange for the account of the Trust which is permitted by Section
11(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T)
thereunder, and the Trust hereby consents to the retention of
compensation for such transactions in accordance with Rule 11a2-2(T)
(a) (2) (iv).
(c) Survival of Compensation Rights. All rights of compensation under
-------------------------------
this Agreement for services performed as of the termination date shall
survive the termination of this Agreement.
ARTICLE 5. Limitation of Liability of the Administrator. The duties of
--------------------------------------------
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for
<PAGE>
any act or omission in carrying out its duties hereunder, except a loss
resulting from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties hereunder, except as may otherwise be provided under provisions of
applicable state law which cannot be waived or modified hereby. (As used in this
Article 5, the term "Administrator" shall include directors, officers, employees
and other corporate agents of the Administrator as well as that corporation
itself).
So long as the Administrator acts in good faith and with due diligence and
without gross negligence, the Trust assumes full responsibility and shall
indemnify the Administrator and hold it harmless from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of said
administration and dividend disbursing relationships to the Trust or any other
service rendered to the Trust hereunder. The indemnity and defense provisions
set forth herein shall indefinitely survive the termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Trust may be asked to indemnify or hold the
Administrator harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Administrator will use all reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Trust, but failure to do so in good faith shall not effect the rights
hereunder.
The Administrator may apply to the Trust at any time for instructions and
may consult counsel for the Trust or its own counsel and with accountants and
other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. Nor shall the Administrator be held to have
notice of any change of authority of any officers, employee or agent of the
Trust until receipt of written notice thereof from the Trust.
ARTICLE 6. Activities of the Administrator. The services of the
-------------------------------
Administrator rendered to the Trust are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that Trustees, officers, employees
and Shareholders of the Trust are or may be or become interested in the
Administrator, as directors, officers, employees and shareholders or
<PAGE>
otherwise and that directors, officers, employees and shareholders of the
Administrator and its counsel are or may be or become similarly interested in
the Trust, and that the Administrator may be or become interested in the Trust
as a Shareholder or otherwise.
ARTICLE 7. Duration of This Agreement. This Agreement shall remain in
--------------------------
effect for two years after the date of the Agreement and shall continue in
effect for successive periods of one year subject to review at least annually by
the Trustees of the Trust unless terminated by either party on not less than
ninety days written notice to the other party.
In the event of a material breach of this Agreement by either party, the
non-breaching party shall notify the breaching party in writing of such breach
and upon receipt of such notice, the breaching party shall have 45 days to
remedy the breach or the non-breaching party may terminate this Agreement
immediately.
This Agreement shall not be assignable by either party without the written
consent of the other party.
ARTICLE 8. Amendments. This Agreement may be amended by the parties
----------
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Trustees of the Trust, and (ii) by the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a Board of Trustees meeting called
for the purpose of voting on such approval.
For special cases, the parties hereto may amend such procedures set forth
herein as may be appropriate or practical under the circumstances, and the
Administrator may conclusively assume that any special procedure which has been
approved by the Trust does not conflict with or violate any requirements of its
Declaration of Trust, By-Laws or prospectus, or any rule, regulation or
requirement of any regulatory body.
ARTICLE 9. Trustees' Liability. A copy of the Declaration of Trust of the
-------------------
Trust is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of the Trust as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or Shareholders of the Trust individually, but binding only upon the
assets and property of the Trust.
ARTICLE 10. Certain Records. The Administrator shall maintain customary
---------------
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and 31a-
2 under the 1940 Act which are prepared or maintained by the Administrator on
behalf of the Trust shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Trust and will be made available
to or surrendered promptly to the Trust on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Trust and follow the Trust's
instructions as to permitting or
<PAGE>
refusing such inspection; provided that the Administrator may exhibit such
records to any person in any case where it is advised by its counsel that it may
be held liable for failure to do so, unless (in cases involving potential
exposure only to civil liability) the Trust has agreed to indemnify the
Administrator against such liability.
ARTICLE 11. Definitions of Certain Terms. The terms "interested person"
----------------------------
and "affiliated person", when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 12. Notice. Any notice required or permitted to be given by
------
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Trust, at 680 East Swedesford Road, Wayne, PA 19087 and if to
the Administrator at 680 East Swedesford Road, Wayne, PA 19087.
ARTICLE 13. Governing Law. This Agreement shall be construed in
--------------
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.
ARTICLE 14. Multiple Originals. This Agreement may be executed in two or
------------------
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
REMBRANDT FUNDS
By: /s/ Todd B. Cipperman
------------------------------
Attest: /s/ Robert B. Carroll
--------------------------
SEI FINANCIAL MANAGEMENT CORPORATION
By: /s/ Sandra K. Orlow
------------------------------
Attest: /s/ Robert B. Carroll
--------------------------
<PAGE>
SCHEDULE A
DATED DECEMBER 31, 1995
TO THE ADMINISTRATION AGREEMENT
DATED DECEMBER 31, 1995
BETWEEN
REMBRANDT FUNDS
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Pursuant to Article 4, Section A, the Trust shall pay the Administrator
compensation for services rendered to Rembrandt Funds (the "Trust") at an annual
rate of .15% of the average daily net assets of the Trust which is calculated
daily and paid monthly.
<PAGE>
EX-99.B9A
CONSENT TO ASSIGNMENT AND ASSUMPTION
1. SEI Financial Management Corporation ("Assignor") hereby notifies the
Rembrandt Funds ("Trust") that it intends to assign all of its rights and
delegate its obligations under the Administration Agreement, dated as of
December 31, 1995, by and between the Rembrandt Funds and SEI Financial
Management Corporation, dated May 31, 1996 (the "Assignment and Assumption
Agreement") to SEI Fund Resources ("Assignee"), no later than June 1, 1996,
in connection with the transition of Assignor's fund administration and
distribution business to Assignee;
2. Trust releases Assignor from its rights and obligations under the Agreement
on or after the date the Assignment and Assumption Agreement is executed
and any liability or responsibility for (i) breach of the Agreement by
Assignee or (ii) demands and claims made against the Trust or damages,
losses or expenses incurred by the Trust on or after the date of the
Assignment and Assumption Agreement, unless such demands, claims, losses,
damages or expenses arose out of or resulted from (a) an act or omission of
Assignor prior to the date of the Assignment and Assumption Agreement; (b)
the Assignor's assignment of its rights and obligations pursuant to the
Assignment and Assumption Agreement; or (c) increased federal, state or
local taxes imposed on the Trust as a result of such assignment ("Increased
Taxes"). Assignor hereby agrees to indemnify the Trust against the
imposition of any Increased Taxes.
3. This consent is not a waiver or estoppel with respect to any rights the
Trust may have by reason of the past performance or failure to perform by
Assignor.
4. This consent is conditioned upon the execution of an Assignment and
Assumption Agreement between Assignor and Assignee that require(s) Assignee
(i) to assume all rights and obligations of Assignor under the Agreement
and (ii) to be liable to the Trust for any default or breach of the
Agreement to the extent the default or breach occurs on or after the date
of execution of the Assignment and Assumption Agreement.
5. Except as provided herein, neither this consent nor the Assignment and
Assumption Agreement shall alter or modify the terms or conditions of the
Agreement.
Trust: Assignor:
Rembrandt Funds SEI Financial Management Corporation
By: /s/ Todd Cipperman By: /s/ Kate Stanton
------------------------------- -----------------------------------
Title: Vice President Title: Vice President
------------------------------ --------------------------------
Date: 5/31/96 Date: 6/11/96
------------------------------- ---------------------------------
<PAGE>
Exhibit 99.B10
[MORGAN, LEWIS & BOCKIUS LOGO APPEARS HERE]
June 25, 1993
Rembrandt Funds
2 Oliver Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
We are furnishing this opinion with respect to the proposed offer and
sale from time to time of units of beneficial interest, without par value (the
"Shares"), of Rembrandt Funds/sm/ (the "Trust"), a Massachusetts business trust,
in registration under the Securities Act of 1933 and the Investment Company Act
of 1940, by a Registration Statement on Form N-1A (File Nos. 33-52784 and 811-
7244) as amended from time to time (the "Registration Statement").
We have acted as counsel to the Trust since its inception, and we are
familiar with the actions taken by its Trustees to authorize the issuance of the
Shares. We have reviewed the Agreement and Declaration of Trust, the By-laws,
and the minute books of the Trust, and such other certificates, documents and
opinions of counsel as we deem necessary for the purpose of this opinion.
We have reviewed the Trust's Notification of Registration on Form N-8A
under the Investment Company Act of 1940. We have assisted in the preparation
of the Trust's Registration Statement, including all pre-effective amendments
thereto and including Post-Effective Amendment No. 1 thereto, filed with the
Securities and Exchange Commission.
We have assumed the appropriate action will be taken to register or
qualify the sale of the Shares under any applicable state and federal laws
regulating sales and offerings of securities.
Based upon the foregoing, we are of the opinion that:
1. The Trust is a business trust validly existing under the
Agreement and Declaration of Trust of the Trust and the laws of the Commonwealth
of Massachusetts. The Trust is authorized to issue an unlimited number of Shares
in series representing interests in the Treasury Money Market Fund, Government
Money Market Fund, Taxable Money Market Fund, Tax-Exempt Money Market Fund,
Taxable Fixed Income Fund, Short/Intermediate Government Fixed Income Fund,
Global Fixed Income Fund, Limited Volatility Fixed Income Fund, Balanced Fund,
Value Fund, Growth Fund, Small Cap Fund, International Equity Fund, TransEurope
Fund, and Asian Tigers Fund of the Trust, and in such other series or classes as
the Trustees may hereafter duly authorize.
2. Upon the issuance of any Shares of any of the series or
classes of the Trust for payment therefor as described in the prospectus and
Statement of Additional Information for such series or class filed as part of
the Registration Statement, the Shares so issued will be validly issued, fully
paid and non-assessable except that, as set forth in the Registration Statement,
shareholders of the Trust could, under certain circumstances, be held personally
liable for its obligations.
<PAGE>
Rembrandt Funds
June 25, 1993
Page 2
This opinion is intended only for your use in connection with the
offering of Shares and may not be relied upon by any other person.
We hereby consent to the inclusion of this opinion as Exhibit 10 to
the Trust's Registration Statement on Form N-1A to be filed with the Securities
and Exchange Commission and to the reference to our firm under the caption
"Counsel and Auditors" in the Prospectus and Statement of Additional Information
filed as part of such Registration Statement.
Very truly yours,
/s/ Morgan, Lewis & Bockius
<PAGE>
Consent of Independent Auditors
We consent to the references to our firm under the captions "Financial
Highlights" and "Counsel and Auditors" in the Prospectus and under the caption
"Financial Statements" in the Statement of Additional Information for the Money
Market Fund, Government Money Market Fund, Treasury Money Market Fund, Tax-
Exempt Money Market Fund, Fixed Income Fund, Intermediate Government Fixed
Income Fund, Tax Exempt Fixed Income Fund, International Fixed Income Fund,
Balanced Fund, Growth Fund, Small Cap Fund, Value Fund, International Equity
Fund, Asian Tigers Fund and Latin America Equity Fund, and to the incorporation
by reference in this Post-Effective Amendment No. 11 to the Registration
Statement (Form N-1A No. 33-52784) of the Rembrandt Funds of our report dated
January 24, 1997, included in the 1996 Annual Report to Shareholders of the
Rembrandt Funds.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
April 29, 1997
<PAGE>
Exhibit 99.B15
REMBRANDT FUNDS
DISTRIBUTION PLAN
Investor Class
WHEREAS, Rembrandt Funds (the "Trust") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution Plan will benefit the
Trust and the owners of units of beneficial interest (the "Shareholders") in the
Trust;
NOW, THEREFORE, the Trustees of the Trust hereby adopt this
Distribution Plan pursuant to Rule 12b-1 under the 1940 Act.
Section 1. The Trust has adopted this Investor Class Distribution
----------
Plan (the "Plan") to enable the Trust to directly or indirectly bear expenses
relating to the distribution of Investor Class securities of which the Trust is
the issuer.
Section 2. The Trust may incur expenses for the items stipulated in
----------
Section 3 of this Plan. All expenditures pursuant to the Plan shall be made
only pursuant to authorization by the President, any Vice President or the
Treasurer of the Trust. If there should be more than one series of Trust
shares, expenses incurred pursuant to this Plan shall be allocated among the
several series of the Trust on the basis of their relative net asset values,
unless otherwise determined by a majority of the Qualified Trustees.
In addition, the Trust will pay the Distributor a fee of up to .25% of the
Investor Class Portfolios' average daily net assets. Compensation of
broker/dealers and service providers which provide specified services shall be
made by the Distributor from such fees. The actual fee paid will be negotiated
based on the extent and quality of services provided.
Section 3. Expenses permitted pursuant to this Plan shall include,
----------
and be limited to, the following:
(a) The incremental printing costs incurred in producing for and
distributing to persons other than current Shareholders of the
Trust the reports, prospectuses, notices and similar materials
that are prepared by the Trust for current Shareholders;
(b) advertising;
<PAGE>
(c) the costs of preparing, printing and distributing any literature used
in connection with the offering of the Trust's Shares and not covered
by Section 3(a) of this Plan; and
(d) expenses incurred in connection with the promotion and sale of the
Trust's Shares including, without limitation, travel and communication
expenses and expenses for the compensation of and benefits for sales
personnel.
Section 4. This Plan shall not take effect until it has been approved (a)
----------
by a vote of at least a majority of the outstanding voting securities of the
Trust; and (b) together with any related agreements, by votes of the majority of
both (i) the Trustees of the Trust and (ii) the Qualified Trustees, cast in
person at a Board of Trustees meeting called for the purpose of voting on this
Plan or such agreement.
Section 5. This Plan shall continue in effect for a period of more than
----------
one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in Part (b) of
Section 4 herein for the approval of this Plan.
Section 6. Any person authorized to direct the disposition of monies paid
----------
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
Section 7. This Plan may be terminated at any time by the vote of a
----------
majority of the Qualified Trustees or by vote of a majority of the Trust's
outstanding voting securities.
Section 8. All agreements with any person relating to implementation of
----------
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of the Qualified Trustees or by the
vote of Shareholders holding a majority of the Trust's outstanding voting
securities, on not more than 60 days written notice to any other party to the
agreement; and (b) that such agreement shall terminate automatically in the
event of its assignment.
Section 9. This Plan may not be amended to increase materially the amount
----------
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of Shareholders holding a majority of the outstanding voting securities
of the Trust, and all material amendments to this Plan shall be approved in the
manner provided in Part (b) of Section 4 herein for the approval of this Plan.
Section 10. As used in this Plan, (a) the term "Qualified Trustees" shall
-----------
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b)
<PAGE>
the terms "assignment" and "interested person" shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
Section 11. While this Plan is in effect, the selection and nomination of
-----------
those Trustees who are not interested persons of the Trust within the meaning of
Section 2(a) (19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
Section 12. This Plan shall not obligate the Trust or any other party to
-----------
enter into an agreement with any particular person.
September 27, 1995
<PAGE>
Rembrandt Funds(R)
Rule 18f-3
Multiple Class Plan
June 22, 1995
Introduction
Rembrandt Funds(R) (the "Trust"), a registered investment company that
currently consists of seventeen (17) separately managed portfolios (the Treasury
Money Market Fund, Government Money Market Fund, Money Market Fund, Tax-Exempt
Money Market Fund, Value Fund, Growth Fund, Small Cap Fund, International Equity
Fund, TransEurope Fund, Asian Tigers Fund, Balanced Fund, Fixed Income Fund,
Intermediate Government Fixed Income Fund, Tax-Exempt Fixed Income Fund, Global
Fixed Income Fund, Limited Volatility Fixed Income Fund, and Latin America
Equity Fund) and that may consist of additional portfolios in the future as
listed on Schedule A hereto (each a "Fund" and, collectively, the "Funds"), have
elected to rely on Rule 18f-3 under the Investment Company Act of 1940, as
amended (the "1940 Act") in offering multiple classes of units of beneficial
interest ("shares") in each Fund. The Plan sets forth the differences among
classes, including shareholder services, distribution arrangements, expense
allocations, and conversion or exchange options.
A. Attributes of Share Classes
The rights of each existing class of the Funds (i.e., Trust and Investor
----
Classes) shall be as set forth in the resolutions and related materials of the
Trust's Board adopted pursuant to the order dated September 9, 1993, obtained by
SEI Liquid Asset Trust, et al. (Inv. Co. Act Release No. IC-19698), and attached
-- ---
hereto as Exhibits A - C.
With respect to any class of shares of a Fund created after the date
hereof, each share of a Fund will represent an equal pro rata interest in the
--- ----
Fund and will have identical terms and conditions, except that: (i) each new
class will have a different class name (or other designation) that identifies
the class as separate from any other class; (ii) each class will separately bear
any distribution expenses ("distribution fees") in connection with a plan
adopted pursuant to Rule 12b-1 under the 1940 Act (a "Rule 12b-1 Plan"), and
will separately bear any non-Rule 12b-1 Plan service payments ("service fees")
that are made under any servicing agreement entered into with respect to that
class; (iii) each class may bear, consistent with rulings and other published
statements of position by the Internal Revenue Service, the expenses of the
Fund's operations which are directly attributable to such class ("Class
Expenses"); and (iv) shareholders of the class will have exclusive voting rights
regarding the Rule 12b-1 Plan and the servicing agreements relating to such
class, and will have separate voting rights on any matter submitted to
shareholders in which the interests of that class differ from the interests of
any other class.
<PAGE>
B. Expense Allocations
Expenses of each existing class and of each class created after the date
hereof shall be allocated as follows: (i) distribution and shareholder
servicing payments associated with any Rule 12b-1 Plan or servicing agreement
relating to each class of shares are (or will be) borne exclusively by that
class; (ii) any incremental transfer agency fees relating to a particular class
are (or will be) borne exclusively by that class; and (iii) class Expenses
relating to a particular class are (or will be) borne exclusively by that class.
Until and unless changed by the Board, the methodology and procedures for
calculating the net asset value of the various classes of shares and the proper
allocation of income and expenses among the various classes of shares shall be
as set forth in the Report rendered by Ernst & Young LLP.
C. Amendment of Plan; Periodic Review
This Plan must be amended to properly describe (through additional exhibits
hereto or otherwise) each new class of shares approved by the Board after the
date hereof.
The Board of the Trust, including a majority of the independent Trustees,
must periodically review this Plan for its continued appropriateness, and must
approve any material amendment of the Plan as it relates to any class of any
Fund covered by the Plan.
<PAGE>
EXHIBIT B
WHEREAS, on December 24, 1990 the Securities and Exchange Commission granted an
order exempting mutual funds administered or distributed by SEI now or in the
future from Sections 18(f), 18(g), and 18(i) of the Investment Company Act of
1940 to permit such funds to sell five classes of shares with different
distribution arrangements; and
WHEREAS, said exemptive order requires that the Board of Trustees of the Trust,
including a majority of the non-interested Trustees approve the offering of
different classes of shares only after a determination that multiple classes is
in the best interest of the Trust and its Shareholders;
NOW THEREFORE, be it
VOTED: That based upon information presented to this Board of Trustees, the
Trustees, including a majority of the non-interested Trustees, have
determined that a two class system for distribution of shares of the
Trust is in the best interests of the Trust and its shareholders.
FURTHER
VOTED: That the Board of Trustees must receive and review quarterly statements
detailing the amounts paid by the Trust under its Rule 12b-1 Plan for
Investor Class shares and under related Servicing Agreements.
FURTHER
VOTED: That the Adviser and the Distributor shall report to the Board of
Trustees any material conflicts of interest that develop between classes
of shares of the Trust.
<PAGE>
REMBRANDT FUNDS(R)
Investment Advisor:
LASALLE STREET CAPITAL MANAGEMENT, LTD.
Rembrandt Funds(R) (the "Trust") is a mutual fund that offers a convenient means
of investing in one or more professionally managed portfolios of securities.
This Prospectus relates to the Trust Class shares and Investor Class shares of
the following Funds:
. Value Fund
. Growth Fund
. Small Cap Fund
. International Equity Fund
. TransEurope Fund
. Asian Tigers Fund
. Balanced Fund
The Trust Class Shares of the Trust are offered primarily to institutional
investors, including customers of LaSalle National Trust, N.A. its affiliates
and correspondents for the investment of their own funds or funds for which they
act in a fiduciary, agency or custodial capacity. The Investor Class shares are
offered primarily to individuals and institutional accounts for which LaSalle
National Trust, N.A. does not act in a fiduciary, agency or custodial capacity.
Investors in the Trust Class shares and investors in the Investor Class shares
are referred to hereinafter as "Shareholders"
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, INCLUDING LASALLE NATIONAL TRUST, N.A. OR ANY OF ITS AFFILIATES OR
CORRESPONDENTS INCLUDING LASALLE NATIONAL CORPORATION. THE TRUST'S SHARES ARE
NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES
RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated April 30, 1995 has been filed with the Securities and Exchange
Commission (the "SEC") and is available without charge by calling 1-800-443-
4725. The Statement of Additional Information is incorporated into this
Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
April 30, 1995
<PAGE>
EXPENSE SUMMARY
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets) TRUST CLASS
<TABLE>
<CAPTION>
Small Int'l Trans Asian
Value Growth Cap Equity Europe Tigers Balanced
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees............. .80% .80% .80% 1.00% 1.00% 1.00% .70%
Other Expenses............ .26% .22% .26% .43% .60% .60% . 24%
- ------------------------------------------------------------------------------------------
Total Operating Expenses.. 1.06% 1.02% 1.06% 1.43% 1.60% 1.60% . 94%
==========================================================================================
</TABLE>
(1) The Administrator has waived, on a voluntary basis, a portion of its fee
from the International Equity and Asian Tigers Funds. The Administrator reserves
the right to terminate its waiver at any time in its sole discretion. Absent
such waivers Other Expenses and Total Operating Expenses respectively would be
as follows: International Equity Fund (.46% and 1.46%) and Asian Tigers Fund
(.71% and 1.71%). Additional information may be found under "The
Administrator".
(2) "Other Expenses" for the TransEurope Fund is based on estimated amounts for
the current fiscal year.
<TABLE>
<CAPTION>
EXAMPLE
- ----------------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on
a $1,000 investment assuming (1) 5% annual
return and (2) redemption at the end of each
time period:
Value Fund.................................. $11 $34 $58 $129
Growth Fund................................ 10 32 56 125
Small Cap Fund............................. 11 34 58 129
International Equity Fund.................. 15 45 78 171
TransEurope Fund........................... 16 50 87 190
Asian Tigers Fund.......................... 16 50 87 190
Balanced Fund.............................. 10 30 52 115
==================================================================================
</TABLE>
The example is based upon total operating expenses, except with respect to the
TransEurope Fund for which it is based on estimated expenses for the current
fiscal year. The example should not be considered a representation of past or
future expenses and actual expenses may be greater or less than those shown. The
purpose of this table is to assist the investor in understanding the various
costs and expenses that may be directly or indirectly borne by investors in the
Funds. A person who purchases shares through a financial institution may be
charged separate fees by the financial institution. The information set forth in
the foregoing table and example relates only to the Trust Class shares. The
Trust also offers Investor Class shares of the Funds which are subject to the
same expenses except for a sales load and certain distribution costs. Additional
information may be found under "The Advisor", "The Administrator" and "The
Distributor".
<PAGE>
SHAREHOLDER TRANSACTION EXPENSES
(As a percentage of offering price) INVESTOR CLASS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
<S> <C>
Maximum Sales Charge imposed on Purchases......................... 4.50%
Redemption Fee (1) ............................................... None
- ------------------------------------------------------------------------------
</TABLE>
(1) A charge, currently $10.00, is imposed on wires of redemption proceeds.
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<CAPTION>
Small Int'l Trans Asian
Value Growth Cap Equity Europe Tigers Balanced
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees............. .80% .80% .80% 1.00% 1.00% 1.00% . 70%
12b-1 Fees................ .30% .30% .30% .30% .30% .30% . 30%
Other Expenses............ .26% .22% .26% .43% .60% .60% . 24%
- ----------------------------------------------------------------------------------------
Total Operating Expenses.. 1.36% 1.32% 1.36% 1.73% 1.90% 1.90% 1.24%
========================================================================================
</TABLE>
(1) The Administrator has waived, on a voluntary basis, a portion of its fee
from the International Equity and Asian Tigers Funds. The Administrator
reserves the right to terminate its waiver at any time in its sole discretion.
Absent such waivers Other Expenses and Total Operating Expenses respectively
would be as follows: International Equity Fund (.46% and 1.76%) and Asian
Tigers Fund (.71% and 2.01%). Additional information may be found under "The
Administrator".
(2) "Other Expenses" for the TransEurope Fund is based on estimated amounts for
the current fiscal year.
<TABLE>
<CAPTION>
EXAMPLE
- ----------------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on
a $1,000 investment assuming (1) imposition of
the maximum sales load; (2) 5% annual return;
and (3) redemption at the end of each time
period:
Value Fund.................................. $58 $ 86 $116 $201
Growth Fund................................ 58 85 114 197
Small Cap Fund............................. 58 87 116 201
International Equity Fund.................. 62 97 135 240
TransEurope Fund........................... 63 102 143 257
Asian Tigers Fund.......................... 63 102 143 257
Balanced Fund.............................. 57 83 110 188
==================================================================================
</TABLE>
The example is based upon total operating expenses, except with respect to the
TransEurope Fund for which it is based on estimated expenses for the current
fiscal year. The example should not be considered a representation of past or
future expenses and actual expenses may be greater or less than those shown.
The purpose of this table is to assist the investor in understanding the various
costs and expenses that may be directly or indirectly borne by investors in the
Funds. A person who purchases shares through a financial institution may be
charged separate fees by the financial institution. The information set forth in
the foregoing table and example relates only to the Investor Class shares. The
Trust also offers Trust Class shares of the Funds which are subject to the same
expenses except there are no sales load or distribution fees. Additional
information may be found under "The Advisor", "The Administrator" and "The
Distributor".
The rules of the Securities and Exchange Commission require that the maximum
sales charge be reflected in the above table. However, certain investors may
qualify for reduced sales charges. See "Purchase of Shares", "Redemption of
Shares" and "Eligibility For Reduced Sales Charge".
Long-term Shareholders may eventually pay more than the economic equivalent of
the maximum front-end sales charge otherwise permitted by the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
<PAGE>
THE TRUST
Rembrandt Funds(R) (the "Trust") is an open-end management investment company
that offers units of beneficial interest ("shares") in any of its currently
offered investment funds. Shareholders may purchase shares in a fund through two
separate classes, the Trust Class and the Investor Class, which provide for
variations in distribution costs, voting rights and dividends. Except for these
differences between classes, each share of each fund represents an undivided,
proportionate interest in that fund. This Prospectus relates to the Trust class
shares and the Investor Class shares of the following funds of the Trust: Value
Fund, Growth Fund, Small Cap Fund, International Equity Fund, TransEurope Fund,
Asian Tigers Fund (collectively, the "Equity Funds") and the Balanced Fund (the
"Balanced Fund") (together, the "Funds"). Each of the Funds is a diversified
mutual fund. Information regarding the Trust's other funds is contained in
separate prospectuses that may be obtained from the Trust's Distributor,
Rembrandt(R) Financial Services Company, 680 East Swedesford Road, Wayne, PA
19087 or by calling 1-800-443-4725.
THE DISTRIBUTOR
Rembrandt(R) Financial Services Company (the "Distributor"), 680 East Swedesford
Road, Wayne, PA 19087, a subsidiary of SEI Financial Services Company, and the
Trust are parties to a distribution agreement (the "Distribution Agreement").
The Investor Class shares of the Trust have a distribution plan dated December
31, 1992 (the "Investor Class Plan"). As provided in the Investor Class Plan,
the Trust will pay a fee of .30% of the average daily net assets of the Investor
Class shares of the Funds to the Distributor as compensation for its services.
From this amount the Distributor may make payments to financial institutions and
intermediaries such as banks (including LaSalle National Trust, N.A.), savings
and loan associations, insurance companies, and investment counselors, broker-
dealers, and the Distributor's affiliates and subsidiaries as compensation for
services, reimbursement of expenses incurred in connection with distribution
assistance, or provision of Shareholder services. The Investor Class Plan is
characterized as a compensation plan since the distribution fee will be paid to
the Distributor without regard to the distribution or Shareholder services
expenses incurred by the Distributor or the amount of payments made to financial
institutions and intermediaries. The Funds may also execute brokerage or other
agency transactions through an affiliate of the Advisor or through the
Distributor for which the affiliate or the Distributor receives compensation.
The Trust Class shares of the Funds are offered without distribution fees to
institutional investors, including customers of LaSalle National Trust, N.A.,
its affiliates and correspondent banks, for the investment of their own funds or
funds for which they act in a fiduciary, agency or custodial capacity. It is
possible that a financial institution may offer different classes of shares of
the Funds to its customers and the shares of such customers may be assessed for
different distribution expenses with respect to different classes of shares.
<PAGE>
ELIGIBILITY FOR REDUCED SALES CHARGE
Rights of Accumulation
Investors in Investor Class shares will be entitled to lower, graduated sales
charges if the investors' total investment in a Fund exceeds certain thresholds.
In calculating the sales charge rates applicable to current purchases of
Investor Class shares, a "single purchaser" is entitled to cumulate current
purchases with the current market value of previously purchased shares of the
Fund and the following other eligible funds: Fixed Income Fund, Intermediate
Government Fixed Income Fund, Tax-Exempt Fixed Income Fund, Global Fixed Income
Fund and Limited Volatility Fixed Income Fund (the "Eligible Funds") which are
sold subject to a comparable sales charge.
PERFORMANCE
The performance of Trust Class shares will normally be higher than for Investor
Class shares because the Trust Class is not subject to distribution expenses
charged to the Investor Class shares.
Dividends and distributions of the Funds are paid on a per-share basis. The
value of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution. The amount
of dividends payable on Trust Class shares will be more than the dividends
payable on the Investor Class shares because of the distribution expenses
charged to Investor Class shares.
<PAGE>
THE REMBRANDT FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of The Rembrandt Funds ("Trust"), a business trust organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Kevin P. Robins and Carmen V. Romeo, and each of them singly, his or her
true and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him or her and in his or her name, place and stead,
and in the capacity indicated below, to sign any or all amendments (including
post-effective amendments) to the Trust's Registration Statement on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ Arnold F. Brookstone Date: 6/23/94
- ------------------------- ----------------
Arnold F. Brookstone
Trustee
<PAGE>
THE REMBRANDT FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of The Rembrandt Funds ("Trust"), a business trust organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Kevin P. Robins and Carmen V. Romeo, and each of them singly, his or her
true and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him or her and in his or her name, place and stead,
and in the capacity indicated below, to sign any or all amendments (including
post-effective amendments) to the Trust's Registration Statement on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ Robert A. Nesher Date: 6/23/94
- --------------------- ---------------
Robert A. Nesher
Trustee
<PAGE>
THE REMBRANDT FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of The Rembrandt Funds ("Trust"), a business trust organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Kevin P. Robins and Carmen V. Romeo, and each of them singly, his or her
true and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him or her and in his or her name, place and stead,
and in the capacity indicated below, to sign any or all amendments (including
post-effective amendments) to the Trust's Registration Statement on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ William Simpson Date: June 23, 1994
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William Simpson
Trustee
<PAGE>
THE REMBRANDT FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of The Rembrandt Funds ("Trust"), a business trust organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints Kevin
P. Robins and Carmen V. Romeo, and each of them singly, his or her true and
lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him or her and in his or her name, place and stead,
and in the capacity indicated below, to sign any or all amendments (including
post-effective amendments) to the Trust's Registration Statement on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
/s/ David G. Lee Date:
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David G. Lee
President and Chief Executive Officer
