<PAGE>
REMBRANDT FUNDS(R)
Latin America Equity Fund
Supplement dated January 30, 1997
to Prospectus dated April 1, 1996
The Prospectus dated April 1, 1996 for the Rembrandt Funds(R) is hereby
amended and supplemented by the addition of the following unaudited financial
information for the Latin America Equity Fund for the six months ended December
31, 1996.
Financial Highlights (unaudited)
For the Six Months Ended December 31, 1996
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Unaudited
-------------------
For the
Six Months Ended
December 31,
1996(1)
-------------------
<S> <C>
Net Asset Value, Beginning of Period $ 10.00
Net Investment Loss (0.02)
Realized and Unrealized Gains on Securities 0.26
Dividends from Net Investment Income 0.00
Distributions from Capital Gains 0.00
Net Asset Value, End of Period $ 10.24
Total Return 2.40%
Net Assets, End of Period (000) $11,490
Ratio of Expenses to Average Net Assets 2.09%
Ratio of Net Investment Loss to Average Net Assets (0.55)%
Ratio of Expenses to Average Net Assets (Excluding Waivers) 2.09%
Ratio of Net Investment Loss to Average Net Assets
(Excluding Waivers) (0.55)%
Portfolio Turnover Rate 10%
Average Commission Rate+ $0.0004
-------------------
</TABLE>
(1) Commenced operations on July 1, 1996. All ratios except total return for
the period have been annualized.
+ Average commissions rate paid per share for security purchases and sales
during the period.
The accompanying notes are an integral part of the financial statements.
<PAGE>
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
REMBRANDT FUNDS(R)
Latin America Equity Fund
Supplement dated January 30, 1997
to the Statement of Additional Information dated April 1, 1996
The Statement of Additional Information dated April 1, 1996 for the
Rembrandt Funds(R) is hereby amended and supplemented by the addition of the
following unaudited financial information for the Latin America Equity Fund for
the period ended December 31, 1996.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
[LOGO OF REMBRANDT APPEARS HERE]
Schedule of Investments (Unaudited)
Latin America Equity Fund
[PIE CHART APPEARS HERE]
<TABLE>
<CAPTION>
Market
Description Shares Value (000)
===============================================================================
<S> <C> <C>
Foreign Common Stocks -- 67.3%
Argentina -- 9.1%
Disco* 10,000 $ 280
Perez Companc 50,000 352
Siderar, Cl A* 71,500 206
Telefonica de Argentina ADR 8,000 207
--------
1,045
--------
Brazil -- 19.6%
Bompreco Supermercado GDR 11,500 207
Centrais Electricas Bras 1,500,000 537
Light Participacoes* 1,200,000 291
Telebras ADR 11,000 845
Transportes Aerose Region, ADR* 25,000 378
--------
2,258
--------
Chile -- 11.7%
Andina Embotelladora ADR 6,000 183
CIA Telecomunicacion Chile ADR* 2,500 253
Enersis ADR 10,000 276
Quimica y Minera Chile 3,500 189
Santa Isabel ADR 10,000 226
Vina Concha y Toro Chile ADR 9,500 223
--------
1,350
--------
Mexico -- 17.0%
Empresas ICA, ADR* 25,000 366
Gruma, Cl B* 40,000 244
Grupo Imsa, ADR* 11,250 214
Grupo Industrial Durango, ADR* 20,000 210
Grupo Televisa* 6,000 154
Kimberly Clark, Cl A 10,000 194
Panamerican Beverages, ADR 8,000 375
Sanluis 30,000 191
--------
1,948
--------
Panama -- 1.8%
Bladex 4,000 203
--------
Peru -- 6.4%
Cementos Lima 15,000 220
Credicorp 12,500 231
Telefonica de Peru ADR 15,000 283
--------
734
--------
United States -- 1.7%
BHI 10,000 197
--------
Total Foreign Common Stocks
(Cost $7,318) 7,735
--------
Foreign Preferred Stocks -- 22.6%
Brazil -- 22.6%
Banco Bradesco 30,000,000 217
CIA Bras Distr Pao Acucar 10,000,000 178
CIA Cervejaria Brahma 500,000 273
CIA Energetica Minas 12,000,000 409
CIA Vale Do Rio Doce 10,000 193
Dixie Toga 200,000 152
Ericsson Telecomunoicacoes* 15,000,000 231
Ipiranga CIA Petroleo 12,500,000 182
Itau Banco* 450,000 195
Petrol Brasileiros 1,500,000 239
Telecomunicacoes de Sao Paulo* 1,500,000 325
--------
2,594
--------
Total Foreign Preferred Stocks
(Cost $2,594) 2,594
--------
Total Investments -- 89.9%
(Cost $9,912) 10,329
--------
Other Assets and Liabilities, Net -- 10.1% 1,161
--------
Total Net Assets -- 100.0% $ 11,490
========
</TABLE>
- -------------------------------------------------------------------------------
* Non-income producing security
Cl -- Class
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
- -------------------------------------------------------------------------------
1
- -------------------------------------------------------------------------------
<PAGE>
================================================================================
Statement of Assets and Liabilities (000) (Unaudited)
For the Six Months Ended December 31, 1996
<TABLE>
<CAPTION>
Latin America
Equity Fund
==============================================================================
<S> <C>
Assets:
Investments at market value (Cost $9,912) $ 10,329
Cash and foreign currency 1,407
Receivable for capital shares sold 9
Other assets 13
--------
Total assets 11,758
--------
Liabilities:
Payable for investment securities purchased 232
Payable for capital shares repurchased 3
Other liabilities 33
--------
Total liabilities 268
--------
Net assets:
Portfolio shares of the Trust Class (unlimited authorization -
no par value) based on 1,121,552 outstanding shares of
beneficial interest, respectively 11,208
Accumulated net investment loss (24)
Accumulated net realized loss on investments (108)
Accumulated net realized loss from foreign currency transactions (3)
Net unrealized appreciation on investments 417
--------
Net Assets $ 11,490
=========
Net Asset Value, Offering and Redemption Price Per Share --
Trust Class $ 10.24
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
[LOGO OF REMBRANDT APPEARS HERE]
Statement of Operations (000) (Unaudited)
For the Six Months Ended December 31, 1996
<TABLE>
<CAPTION>
Latin
America
Fund(1)
- --------------------------------------------------------------------------------
<S> <C>
Investment Income:
Dividends $ 50
Interest 22
Less: foreign taxes withheld (4)
------
Total investment income 68
------
Expenses:
Administration fees 7
Investment advisory fees 44
Custodian fees 24
Transfer agent fees 1
Professional fees 1
Registration & filing fees 7
Printing 1
Pricing 6
Amortization of deferred organization costs 1
------
Total Expenses 92
------
Net Investment Loss (24)
------
Net Realized and Unrealized Gain (Loss)
On Investments:
Net realized loss from security transactions (108)
Net realized loss from foreign currency transactions (3)
Net change in unrealized appreciation on investments 417
------
Net Increase In Net Assets From Operations $ 282
======
</TABLE>
(1) Commenced operations on 7/1/96.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
3
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets (000) (Unaudited)
<TABLE>
<CAPTION>
Latin
America
Equity
Fund*
==================================================================================================================================
1996
==================================================================================================================================
<S> <C>
Operations:
Net investment loss $ (24)
Net realized loss from security and foreign currency transactions (111)
Net change in unrealized appreciation on investments and foreign currency transactions 417
--------
Net increase in net assets resulting from operations 282
--------
Dividends distributed from:
Net investment income:
Trust Class --
Net realized gains:
Trust Class --
--------
Total dividends distributed --
--------
Capital share transactions:
Trust Class:
Proceeds from shares issued 11,807
Shares issued in lieu of cash distributions --
Cost of shares repurchased (599)
--------
Increase in net assets derived from Trust Class transactions 11,208
--------
Net increase in net assets 11,490
Net assets:
Beginning of period --
--------
End of period $11,490
========
Capital share transactions:
Trust Class:
Shares issued 1,182
Shares issued in lieu of cash distributions --
Shares repurchased (60)
--------
Total Trust Class transactions 1,122
========
</TABLE>
*Commenced operations on July 1, 1996.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Financial Highlights (Unaudited)
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Realized
Net Asset and Dividends Distributions
Value Net Unrealized from Net from
Beginning Investment Gains on Investment Capital
of Period Loss Securities Income Gains
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Latin America Equity Fund
- -----------------------------------------------------------------------------------------------
Trust Class
1996(1) $10.00 $(0.02) $0.26 $0.00 $0.00
- -----------------------------------------------------------------------------------------------
</TABLE>
1. Commenced operations on July 1, 1996. All ratios except total return for the
period have been annualized.
+ Average commission rate paid per share for security purchases and sales
during the period.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
6
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
December 31, 1996
- --------------------------------------------------------------------------------
[LOGO OF REMBRANDT APPEARS HERE]
<TABLE>
Ratio of Net
Investment
Ratio of Net Ratio of Expenses Loss to
Ratio of Investment to Average Average
Net Asset Net Assets Expenses Loss to Net Assets Net Assets Portfolio Average
Value End Total End of to Average Average (Excluding (Excluding Turnover Commission
of Period Return Period (000) Net Assets Net Assets Waivers) Waivers) Rate Rate+
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
$10.24 2.40% $11,490 2.09% (0.55)% 2.09% (0.55)% 10% $0.0004
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
7
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
1. Organization
Rembrandt Funds(R) (the "Trust") was organized as a Massachusetts business
trust under a Declaration of Trust dated September 17, 1992. The Trust is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company with 18 funds: Treasury Money Market Fund,
Government Money Market Fund, Money Market Fund, Tax-Exempt Money Market Fund
(collectively "the Money Market Funds"), Fixed Income Fund, 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, Value Fund,
Growth Fund, International Equity Fund, Small Cap Fund, TransEurope Fund, Asian
Tigers Fund and Latin America Equity Fund (collectively "the Equity Funds").
The Limited Volatility Fixed Income Fund and TransEurope Fund had not yet
commenced operations as of December 31, 1996. The Fund's prospectus provides a
description of each Fund's investment objectives, policies and strategies. The
assets of each Fund are segregated, and a shareholder's interest is limited to
the Fund in which shares are held. The Trust is registered to offer two classes
of shares: Trust Class and Investor Class.
2. Significant Accounting Policies
The following is a summary of the significant accounting policies followed by
the Funds.
Security Valuation--Investments in equity securities that are traded on a
national securities exchange (or reported on NASDAQ national market system) are
stated at the last quoted sales price, if readily available for such equity
securities, on each business day; other equity securities traded in the over-
the-counter market and listed equity securities for which no sale was reported
on that date are stated at the last quoted bid price. Debt obligations exceeding
60 days to maturity for which market quotations are readily available are valued
at the most recently quoted bid price. Debt obligations with 60 days or less
until maturity may be valued at their amortized cost. Foreign securities in the
International Fixed Income Fund, Asian Tigers Fund, International Equity Fund
and Latin America Equity Fund are valued based upon quotations from the primary
market in which they are traded.
Investment securities held by the Money Market Funds are stated at
amortized cost which approximates market value. Under the amortized cost method,
any discount or premium is amortized ratably to the maturity of the security and
is included in interest income.
Federal Income Taxes--It is each Fund's intention to qualify as a regulated
investment company for Federal income tax purposes by complying with the
appropriate provisions of the Internal Revenue Code of 1986, as amended.
Accordingly, no provisions for Federal income taxes are required in the
accompanying financial statements.
Security Transactions and Related Income--Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Dividend income is recognized on the ex-dividend date, and interest income is
recognized on an accrual basis. Costs used in determining realized gains and
losses on the sales of investment securities are those of the specific
securities sold, adjusted for the accretion and amortization of purchase
discounts and premiums during the respective holding periods. Purchase discounts
and premiums on securities held by the Equity and Fixed Income Funds are
accreted and amortized to maturity using the interest method, which approximates
the effective interest method.
- --------------------------------------------------------------------------------
8
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
[LOGO OF REMBRANDT APPEARS HERE]
Repurchase Agreements--Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of the repurchase agreements ensure that the market value of
the collateral, including accrued interest thereon, is sufficient in the event
of default of the counterparty. If the counterparty defaults and the value of
the collateral declines or if the counterparty enters an insolvency proceeding,
realization of the collateral by the Funds may be delayed or limited.
Net Asset Value Per Share--The net asset value per share of each Fund or
class of shares is calculated each business day. In general, it is computed by
dividing the assets of each Fund or class of shares less its liabilities, by the
number of outstanding shares of the Fund or class.
Foreign Currency Transactions--With respect to the International Fixed
Income Fund, Asian Tigers Fund, International Equity Fund and Latin America
Equity Fund (the "International Funds"), the books and records are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(II) purchases and sales of investment securities, income, and expenses at
the relevent rates of exchange prevailing on the respective dates of
such transactions.
The International Funds do not isolate the portion of gains and losses on
investments in equity securities that is due to changes in the foreign exchange
rates from that which is due to change in market prices of equity securities.
The International Funds report certain foreign currency-related
transactions as components of realized gains for financial reporting purposes,
whereas such components are treated as ordinary income for Federal income tax
purposes.
Forward Foreign Currency Contracts--The International Fixed Income Fund
enters into forward foreign currency contracts as hedges against fund positions.
The aggregate principal amounts of the contracts are not recorded as the Fund
intends to settle the contracts prior to delivery. All commitments are "marked-
to-market" daily at the applicable foreign exchange rate and any resulting
unrealized gains or losses are recorded currently. The Fund realizes gains or
losses at the time the forward contracts are extinguished. Unrealized gains or
losses on outstanding positions in forward foreign currency contracts held at
the close of the year are recognized as ordinary income or loss for Federal
income tax purposes.
Maturity Dates--Certain variable rate and floating rate securities of the
Funds are subject to "maturity shortening" devices such as put or demand
features. Under Rule 2a-7 of the Investment Company Act of 1940, as amended,
these securities are deemed to have maturities shorter than the ultimate
maturity dates. Accordingly, the maturity dates reflected in the Statements of
Net Assets are the shorter of the effective put/demand date or the ultimate
maturity date.
Classes--Class-specific expenses are borne by that class. Income, expenses,
and realized and unrealized gains/losses are allocated to the respective classes
on the basis of relative daily net assets.
Expenses--Expenses that are directly related to one of the Funds are
charged directly to that Fund. Other operating expenses of the Fund are prorated
to the Funds on the basis of relative net assets.
Other--Distributions from net investment income for the Equity and Fixed
Income Funds are paid to shareholders on a periodic basis. Distributions from
net investment income for the Money Market Funds are distributed to shareholders
daily. Any net realized capital gains on sales of securities are distributed to
shareholders at least annually.
- --------------------------------------------------------------------------------
9
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
The amounts of distributions from net investment income and net realized
capital gains are determined in accordance with Federal income tax regulations,
that may differ from those amounts recorded under generally accepted accounting
principles. These book/tax differences are either temporary or permanent in
nature. To the extent that these differences are permanent, they are charged or
credited to paid-in capital in the period that the difference arises.
3. Administration and Distribution Agreements
The Trust and SEI Fund Resources (the "Administrator") have entered into an
administration agreement. Under the terms of the Administration Agreement (the
"Administration Agreement"), the Administrator is entitled to a fee calculated
daily and paid monthly at an annual rate of .15% of the average daily net assets
of each Fund.
The Trust and Rembrandt Financial Services Company (the "Distributor"), a
wholly owned subsidiary of SEI Financial Services Company, have entered into a
distribution agreement. The Distributor receives no fees for its distribution
services under this agreement for Trust Class shares of any Fund. The
Distributor is entitled to a fee of .25% of the average daily net assets of the
Investor Class shares of each Fund.
4. Organizational Costs and Transactions with Affiliates
Organizational costs have been capitalized by the Funds and are being amortized
over 60 months, commencing with operations. In the event any of the initial
shares are redeemed by any holder thereof during the period that the Fund is
amortizing its organizational costs, the redemption proceeds payable to the
holder thereof by the Fund will be reduced by the unamortized organizational
costs in the same ratio as the number of initial shares being redeemed bears to
the number of initial shares outstanding at the time of the redemption. These
costs include legal fees of approximately $53,000 for organizational work
performed by a law firm of which an officer of the Trust is a partner.
Certain officers of the Trust are also officers of the Administrator and/or
Distributor. Such officers are paid no fees by the Trust for serving in their
roles as officers of the Trust.
During the year ended December 31, 1996, ABN AMRO-NSM International Funds
Management B.V. ("ABN AMRO"), an affiliate of the Advisor, contributed $196,900
and $43,300 to the International Equity Fund and the Asian Tigers Fund,
respectively. The payments represented reimbursements for certain transactions
effected with affiliated brokers. The payments, which have been accounted for as
contributions to capital, increased net asset value per share by $.03 for the
International Equity Fund and by $.02 for the Asian Tigers Funds.
5. Investment Advisory Agreement
The Trust has entered into an investment advisory agreement with LaSalle Street
Capital Management, Ltd. (the "Advisor"), under which the Advisor is entitled to
an annual fee equal to .60% of the average daily net assets of each of the Fixed
Income, Intermediate Government Fixed Income, Limited Volatility Fixed Income
and Tax-Exempt Fixed Income Funds; .80% of the average daily net assets of the
International Fixed Income, Value, Growth, and Small Cap 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; .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 has
voluntarily agreed for an indefinite period of time, to waive a
- --------------------------------------------------------------------------------
10
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
[LOGO OF REMBRANDT APPEARS HERE]
portion of its fee in an amount equal to .10% of the average daily net assets of
each of the Fixed Income Funds, except the International Fixed Income Fund. The
Advisor has also voluntarily agreed for an indefinite period of time, to waive a
portion of its fee in an amount equal to .15% of the average daily net assets of
each of the Money Market Funds, except the Government Money Market Fund.
ABN AMRO-NSM International Funds Management B.V. has entered into a sub-
advisory agreement with the Advisor and serves as Sub-Advisor to the
International Funds. Sub-Advisory fees are paid by the Advisor.
6. Investment Transactions
The cost of security purchases and the proceeds from the sale of securities
including U.S. Government securities, other than temporary cash investments,
during the year ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
Purchases Sales
(000) (000)
--------- -------
<S> <C> <C>
Latin America Equity $10,505 $718
</TABLE>
At December 31, 1996, the total cost of securities and the net realized
gains or losses on securities sold for Federal income tax purposes was not
materially different from amounts reported for financial reporting purposes. The
aggregate gross unrealized appreciation and depreciation on investments at
December 31, 1996, is as follows:
<TABLE>
<CAPTION>
Net
Appreciated Depreciated Unrealized
Securities Securities Appreciation
(000) (000) (000)
----------- ----------- ------------
<S> <C> <C> <C>
Latin America Equity $753 $336 $417
</TABLE>
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
