DFA INVESTMENT TRUST CO, POS AMI, 1999-05-28

DFA INVESTMENT TRUST CO
POS AMI, 1999-05-28

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File No. 811-7436

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 (X)

Amendment No. 18 (X)

THE DFA INVESTMENT TRUST COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

(310) 395-8005
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

Irene R. Diamant, 1299 Ocean Avenue, 11th Floor, Santa Monica CA 90401
(NAME AND ADDRESS OF AGENT FOR SERVICE OF PROCESS)

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Please Send Copy of Communications to:

Stephen W. Kline, Esq.
Stradley, Ronon, Stevens & Young, LLP
Great Valley Corporate Center
30 Valley Stream Parkway
Malvern, Pennsylvania 19355

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THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES
THE ENHANCED U.S. LARGE COMPANY SERIES
THE U.S. LARGE CAP VALUE SERIES
THE TAX-MANAGED U.S. MARKETWIDE VALUE SERIES
THE U.S. 4-10 VALUE SERIES
THE U.S. 6-10 VALUE SERIES
THE U.S. 6-10 SMALL COMPANY SERIES
THE U.S. 9-10 SMALL COMPANY SERIES
THE DFA INTERNATIONAL VALUE SERIES
THE JAPANESE SMALL COMPANY SERIES
THE PACIFIC RIM SMALL COMPANY SERIES
THE UNITED KINGDOM SMALL COMPANY SERIES
THE CONTINENTAL SMALL COMPANY SERIES
THE GLOBAL VALUE SERIES
THE GLOBAL LARGE COMPANY SERIES
THE GLOBAL SMALL COMPANY SERIES
THE EMERGING MARKETS SERIES
THE EMERGING MARKETS SMALL CAP SERIES
THE DFA ONE-YEAR FIXED INCOME SERIES
THE DFA TWO-YEAR GLOBAL FIXED INCOME SERIES

MAY 28, 1999

FORM N-1A, Part A:

RESPONSES TO ITEMS 1 THROUGH 3 HAVE BEEN OMITTED PURSUANT TO PARAGRAPH 2(b) OF
INSTRUCTION B OF THE GENERAL INSTRUCTIONS TO FORM N-1A

ITEM 4. INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES, AND RELATED
RISKS

(a) AND (b) INVESTMENT OBJECTIVES AND IMPLEMENTATION OF INVESTMENT OBJECTIVES.
The DFA Investment Trust Company (the "Trust") issues twenty series which are
listed above, each of which operates as a diversified investment company and
represents a separate class ("Series") of the Trust's shares of beneficial
interest. Dimensional Fund Advisors Inc. (the "Advisor") serves as investment
advisor to each of the Series, except The Global Value Series, The Global Large
Company Series and The Global Small Company Series (collectively the "Global
Series"). The Advisor serves as administrator of the Global Series.

The investment objectives, policies and investment limitations of each Series
are set forth below. The investment objective of a Series may not be changed
without the affirmative vote of a majority of the outstanding voting securities
of that Series. The Trust sells its shares to institutional investors only.
Shares of each Series may be issued for cash and/or securities in which a Series
is authorized to invest. In addition, when acquiring securities from an
institutional investor in consideration of the issuance of its shares, a Series
may accept securities

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from the transferor which it would not otherwise purchase pursuant to its
investment policies, as described below. Any such acquisition would be very
small in relation to the then total current value of the assets acquired by a
Series in any such transaction.

THE U.S. LARGE COMPANY SERIES

The U.S. Large Company Series seeks, as its investment objective, to approximate
the investment performance of the Standard & Poor's 500 Composite Stock Index
(the "S&P 500 Index"), in terms of its total investment return. The Series
intends to invest in all of the stocks that comprise the S&P 500 Index in
approximately the same proportions as they are represented in the Index. The
amount of each stock purchased for the Series, therefore, will be based on the
issuer's respective market capitalization. The S&P 500 Index is comprised of a
broad and diverse group of stocks most of which are traded on the NYSE.
Generally, these are the U.S. stocks with the largest market capitalizations
and, as a group, they represent approximately 70% of the total market
capitalization of all publicly traded U.S. stocks. Under normal market
conditions, at least 95% of the Series' assets will be invested in the stocks
that comprise the S&P 500 Index.

Ordinarily, portfolio securities will not be sold except to reflect additions or
deletions of the stocks that comprise the S&P 500 Index, including mergers,
reorganizations and similar transactions and, to the extent necessary, to
provide cash to pay redemptions of the Series' shares. The Series may lend
securities to qualified brokers, dealers, banks and other financial institutions
for the purpose of earning additional income. For information concerning
Standard & Poor's Ratings Group, a Division of The McGraw-Hill Companies ("S&P")
and disclaimers of S&P with respect to the Series, see "STANDARD & POOR'S
INFORMATION AND DISCLAIMERS," below.

THE ENHANCED U.S. LARGE COMPANY SERIES

The Enhanced U.S. Large Company Series seeks, as its investment objective, to
achieve a total return which exceeds the total return performance of the S&P 500
Index. The Series may invest in all of the stocks represented in the S&P 500
Index, options on stock indices, stock index futures, options on stock index
futures, swap agreements on stock indices and, to the extent permissible
pursuant to the Investment Company Act of 1940, shares of investment companies
that invest in stock indices. The S&P 500 Index is comprised of a broad and
diverse group of stocks most of which are traded on the NYSE. Generally, these
are the U.S. stocks with the largest market capitalizations and, as a group,
they represent approximately 70% of the total market capitalization of all
publicly traded U.S. stocks.

The Series may, from time to time, also invest in options on stock indices,
stock index futures, options on stock index futures and swap agreements based on
indices other than, but similar to, the S&P 500 Index (such instruments whether
or not based on the S&P 500 Index hereinafter collectively referred to as "Index
Derivatives"). The Series may invest all of its assets in Index Derivatives
(See Item 4(c) "Risks"). Assets of the Series not invested in S&P 500 stocks or
Index Derivatives may be invested in the same types of short-term fixed income
obligations as

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may be acquired by The DFA Two-Year Global Fixed Income Series and, to the
extent allowed by the Investment Company Act of 1940, shares of money market
mutual funds (collectively, "Fixed Income Investments"). (See "INVESTMENT
OBJECTIVES AND POLICIES - FIXED INCOME SERIES - Description of Investments.")
Investments in the securities of other investment companies will involve
duplication of certain fees and expenses.

The percentage of assets of the Series that will be invested at any one time in
S&P 500 Index stocks, Index Derivatives and Fixed Income Investments may vary
from time to time, within the discretion of the Advisor and according to
restraints imposed by the Investment Company Act of 1940. The Series will
maintain a segregated account consisting of liquid assets (or, as permitted by
applicable regulation, enter into offsetting positions) to cover its open
positions in Index Derivatives to avoid leveraging of the Series.

The Series will enter into positions in futures and options on futures only to
the extent such positions are permissible with respect to applicable rules of
the Commodity Futures Trading Commission without registering the Series or the
Trust as a commodities pool operator. In addition, the Series may not be able
to utilize Index Derivatives to the extent otherwise permissible or desirable
because of constraints imposed by the Internal Revenue Code of 1986, as amended
(the "Code") or by unanticipated illiquidity in the marketplace for such
instruments. For more information about Index Derivatives, see Item 4(c)
"Risks."

It is the position of the Securities and Exchange Commission ("SEC") that over-
the-counter options are illiquid. Accordingly, the Series will invest in such
options only to the extent consistent with its 15% limit on investment in
illiquid securities.

STANDARD AND POOR'S - INFORMATION AND DISCLAIMERS

Neither The U.S. Large Company Series nor The Enhanced U.S. Large Company Series
(together, the "Large Company Series") are sponsored, endorsed, sold or promoted
by S&P. S&P makes no representation or warranty, express or implied, to the
owners of the Large Company Series or any member of the public regarding the
advisability of investing in securities generally or in the Large Company Series
particularly or the ability of the S&P 500 Index to track general stock market
performance. S&P's only relationship to the Large Company Series is the
licensing of certain trademarks and trade names of S&P and of the S&P 500 Index
which is determined, composed and calculated by S&P without regard to the Large
Company Series. S&P has no obligation to take the needs of the Large Company
Series or their respective owners into consideration in determining, composing
or calculating the S&P 500 Index. S&P is not responsible for and has not
participated in the determination of the prices and amount of the Large Company
Series or in the issuance or sale of the Large Company Series or in the
determination or calculation of the equation by which the Large Company Series
are to be converted into cash. S&P has no obligation or liability in connection
with the administration, marketing or trading of the Large Company Series.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX
OR ANY DATA INCLUDED THEREIN, AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS,
OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED

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BY LICENSEE, OWNERS OF THE PRODUCT, OR ANY OTHER PERSON OR ENTITY FROM THE USE
OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR
IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL
DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH
DAMAGES.

INVESTMENT OBJECTIVES AND POLICIES - U.S. VALUE SERIES

The investment objective of The U.S. Large Cap Value Series (the "Large Cap
Value Series"), The Tax-Managed U.S. Marketwide Value Series (the "Tax-Managed
Marketwide Value Series"), U.S. 4-10 Value Series (the "4-10 Value Series") and
U.S. 6-10 Value Series (the "6-10 Value Series") (collectively the "U.S. Value
Series") is to achieve long-term capital appreciation. Ordinarily, each Series
will invest at least 80% of its assets in a broad and diverse group of readily
marketable common stocks of U.S. companies which the Advisor believes to be
value stocks at the time of purchase. Securities are considered value stocks
primarily because a company's shares have a high book value in relation to their
market value (a "book to market ratio"). In measuring value, the Advisor may
consider additional factors such as cash flow, economic conditions and
developments in the issuer's industry. Generally, a company's shares will be
considered to have a high book to market ratio if the ratio equals or exceeds
the ratios of any of the 30% of companies with the highest positive book to
market ratios whose shares are listed on the NYSE and, except as described below
under "Portfolio Construction," will be considered eligible for investment.

The Large Cap Value Series will purchase common stocks of companies whose market
capitalizations equal or exceed those of the companies having the median market
capitalization of companies whose shares are listed on the NYSE, and the 6-10
Value Series will purchase common stocks of companies whose market
capitalizations are smaller than that of the company having the median market
capitalization of companies listed on the NYSE. The Tax-Managed Marketwide Value
Series will purchase common stocks of companies whose market capitalizations are
equal to the market capitalizations of companies in the 1st through 8th deciles
of those companies listed on the NYSE. The 4-10 Value Series will purchase
common stocks of companies whose market capitalizations are equal to the market
capitalizations of companies in the 4th through 10th deciles of those companies
listed on the NYSE. With respect to the 9th and 10th deciles, the 4-10 Value
Series will only purchase such common stocks when it is advantageous to do so
through block trades with the Advisor's other accounts.

THE TAX-MANAGED MARKETWIDE VALUE SERIES. The Tax-Managed Marketwide Value
Series seeks to minimize the impact of federal taxes on returns by managing its
portfolio in a manner that will defer the realization of net capital gains and
may minimize the receipt of dividend income in order to minimize taxable
distributions to investors.

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When selling securities, the Tax-Managed Marketwide Value Series typically will
select the highest cost shares of the specific security in order to minimize the
realization of capital gains. In certain cases, the highest cost shares may
produce a short-term capital gain. Since short-term capital gains are taxed at
higher tax rates than long-term capital gains, the highest cost shares with a
long-term holding period may be disposed of instead. The Tax-Managed Marketwide
Value Series will seek, when possible, not to dispose of a security until the
long-term holding period for capital gains for tax purposes has been satisfied.
Additionally, the Tax-Managed Marketwide Value Series may, when consistent with
all other tax management policies, sell securities in order to realize capital
losses. Realized capital losses can be used to offset realized capital gains,
thus reducing capital gains distributions. However, realization of capital
gains is not entirely within the Advisor's control. Capital gains distributions
may vary considerably from year to year; there will be no capital gains
distributions in years when the Tax-Managed Marketwide Value Series realizes net
capital losses. The timing of purchases and sales of securities may be managed
to minimize the receipt of dividends to the extent possible. With respect to
dividends that are received, the Tax-Managed Marketwide Value Series may not be
eligible to flow through the dividends received deduction attributable to
holdings in U.S. equity securities to corporate shareholders, if because of
timing activities, the requisite holding period of the dividend paying stock is
not met. Portfolio holdings may be managed to emphasize low dividend-yielding
securities.

The Tax-Managed Marketwide Value Series is expected to deviate from its market
capitalization weightings to a greater extent than the non-tax managed Series.
For example, the Advisor may exclude the stock of a company that meets
applicable market capitalization criterion in order to avoid dividend income,
and the Advisor may sell the stock of a company that meets applicable market
capitalization criterion in order to realize a capital loss. Additionally,
while the U. S. Value Series are managed so that securities will generally be
held for longer than one year, the Tax-Managed Marketwide Value Series may
dispose of any securities whenever the Advisor determines that such disposition
would be consistent with the tax management strategies of the Tax-Managed
Marketwide Value Series.

Although the Advisor seeks to manage the Tax-Managed Marketwide Value Series in
order to minimize the realization of capital gains and possible taxable dividend
income during a particular year, the Tax-Managed Marketwide Value Series may
nonetheless distribute taxable gains and taxable income to shareholders from
time to time. Furthermore, shareholders may be required to pay taxes on the
Tax-Managed Marketwide Value Series' capital gains, if any, realized upon the
sale of the Tax-Managed Marketwide Value Series' assets to meet redemptions of
shares of the Tax-Managed Marketwide Value Series. The redeeming shareholder
will be required to pay taxes on the shareholder's capital gains realized on a
redemption, whether paid in cash or in kind, if the amount realized on
redemption is greater than the amount of the shareholder's tax basis in the
shares sold.

PORTFOLIO CONSTRUCTION. The Series may invest a portion of their assets,
ordinarily not more than 20%, in high quality, highly liquid fixed income
securities such as money market instruments and short-term repurchase
agreements. The Series will purchase securities that are listed on the
principal U.S. national securities exchanges and traded OTC.

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Each of the U.S. Value Series will be structured on a market capitalization
basis, by generally basing the amount of each security purchased on the issuer's
relative market capitalization, with a view to creating in each Series a
reasonable reflection of the relative market capitalizations of its portfolio
companies. However, the Advisor may exclude the securities of a company that
otherwise meets the applicable criteria described above if the Advisor
determines in its best judgment that other conditions exist that make the
inclusion of such security inappropriate.

Deviation from strict market capitalization weighting also will occur in the
Series because they intend to purchase round lots only and, with respect to the
4-10 Value Series and the Tax-Managed Marketwide Value Series, because they
intend to purchase common stocks in the 4th through 10th deciles only (in the
case of the 4-10 Value Series) and in the 1st through 8th deciles only (in the
case of the Tax-Managed Marketwide Value Series) through block trades, as
described above. Furthermore, in order to retain sufficient liquidity, the
relative amount of any security held by a Series may be reduced, from time to
time, from the level which strict adherence to market capitalization weighting
would otherwise require. A portion, but generally not in excess of 20%, of a
Series' assets may be invested in interest-bearing obligations, as described
above, thereby causing further deviation from strict market capitalization
weighting. The Series may make block purchases of eligible securities at
opportune prices even though such purchases exceed the number of shares which,
at the time of purchase, strict adherence to the policy of market capitalization
weighting would otherwise require. In addition, the Series may acquire
securities eligible for purchase or otherwise represented in their portfolios at
the time of the exchange in exchange for the issuance of their shares. (See "In
Kind Purchases" in Item 7(b).) While such purchases and acquisitions might
cause a temporary deviation from market capitalization weighting, they would
ordinarily be made in anticipation of further growth of the assets of a Series.
On not less than a semi-annual basis, for each Series the Advisor will calculate
the book to market ratio necessary to determine those companies whose stocks may
be eligible for investment.

PORTFOLIO TRANSACTIONS. The Series do not intend to purchase or sell securities
based on the prospects for the economy, the securities markets or the individual
issuers whose shares are eligible for purchase. As described above under
"Portfolio Construction," investments will be made in virtually all eligible
securities on a market capitalization weighted basis.

Generally, securities will be purchased with the expectation that they will be
held for longer than one year. The Large Cap Value Series and Tax-Managed
Marketwide Value Series may sell portfolio securities when the issuer's market
capitalization falls substantially below that of the issuer with the minimum
market capitalization which is then eligible for purchase by the Series. The
4-10 and 6-10 Value Series each may sell portfolio securities when the issuer's
market capitalization increases to a level that substantially exceeds that of
the issuer with the largest market capitalization which is then eligible for
investment by the Series. However, securities may be sold at any time when, in
the Advisor's judgment, circumstances warrant their sale.

In addition, the Large Cap Value Series and Tax-Managed Marketwide Value Series
may sell portfolio securities when their book to market ratio falls
substantially below that of the security with the lowest such ratio that is then
eligible for purchase by the Series. The 4-10 and 6-10 Value Series may also
sell portfolio securities in the same circumstances, however, each Series

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anticipates generally to retain securities of issuers with relatively smaller
market capitalizations for longer periods, despite any decrease in the issuer's
book to market ratio.

With regard to the Tax-Managed Marketwide Value Series, management strategies
used to defer the realization of accrued capital gains and to minimize dividend
income might from time to time cause deviation from market capitalization
weighting. The Tax-Managed Marketwide Value Series is not expected to adhere to
its market capitalization weightings with the same precision as the 4-10 and
6-10 Value Series. (See "Tax-Managed Marketwide Value Series" above.)

INVESTMENT OBJECTIVES AND POLICIES - SMALL COMPANY SERIES

The U.S. 6-10 Small Company, U.S. 9-10 Small Company, Japanese Small Company,
Pacific Rim Small Company, United Kingdom Small Company and Continental Small
Company Series of the Trust (the "Small Company Series"), each has an investment
objective to achieve long-term capital appreciation. The Small Company Series
provide investors with access to securities portfolios consisting of small U.S.,
Japanese, United Kingdom, European and Pacific Rim companies. Company size will
be determined for purposes of these Series solely on the basis of a company's
market capitalization. "Market capitalization" for domestic securities will be
calculated by multiplying the price of a company's stock by the number of its
shares of outstanding common stock. "Market capitalization" for foreign
securities will be calculated using the number of outstanding stocks similar to
domestic common stocks.

Each Small Company Series intends to invest at least 80% of its assets in equity
securities of U.S., Japanese, United Kingdom, European and Pacific Rim small
companies, as defined herein, and as applicable to the Series. Each Small
Company Series will be structured to reflect reasonably the relative market
capitalizations of its portfolio companies. The Advisor believes that over the
long term the investment performance of small companies is superior to large
companies, not only in the U.S. but in other developed countries as well, and
that investment in the Series is an effective way to improve global
diversification. Investors which, for a variety of reasons, may choose not to
make substantial, or any, direct investment in companies whose securities will
be held by the Small Company Series, may participate in the investment
performance of these companies through ownership of a Series' stock.

THE U.S. 6-10 SMALL COMPANY SERIES

The U.S. 6-10 Small Company Series (the "U.S. 6-10 Series") will invest in a
broad and diverse group of small U.S. companies having readily marketable
securities. References in this registration statement to a "small U.S. company"
mean a company whose securities are traded in the U.S. securities markets and
whose market capitalization is not larger than the largest of those in the
smaller one-half (deciles 6 through 10) of companies listed on the New York
Stock Exchange ("NYSE"). The Series will purchase common stocks of companies
whose shares are listed on the NYSE, the American Stock Exchange ("AMEX") and
traded in the over-the-counter market ("OTC"). The 6-10 Series may invest in
securities of foreign issuers which are traded in the U.S. securities markets,
but such investments may not exceed 5% of the gross assets of the Series. It is
the intention of the U.S. 6-10 Series to acquire a portion of the common stock
of each eligible NYSE, AMEX and OTC company on a market capitalization weighted
basis. In

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the future, the U.S. 6-10 Series may purchase common stocks of small U.S.
companies which are listed on other U.S. securities exchanges. In addition, the
Series is authorized to invest in private placements of interest-bearing
debentures that are convertible into common stock. Such investments are
considered illiquid, and the value thereof together with the value of all other
illiquid investments may not exceed 15% of the value of the Series' net assets
at the time of purchase.

THE U.S. 9-10 SMALL COMPANY SERIES

The U.S. 9-10 Small Company Series (the "U.S. 9-10 Series") will invest in a
broad and diverse segment of small U.S. companies having readily marketable
stocks, and whose market capitalization is not larger than the largest of those
in the quintile of companies listed on the NYSE having the smallest market
capitalizations (smallest 20%). The U.S. 9-10 Series will purchase stocks of
companies whose share are listed on the NYSE or AMEX or traded OTC. The U.S.
9-10 Series may invest in securities of foreign issuers which are traded in the
U.S. securities markets, but such investments may not exceed 5% of the gross
assets of the Series. There is some overlap in the companies in which the U.S.
9-10 Series and the U.S. 6-10 Series invest. It is the intention of the U.S.
9-10 Series to acquire a portion of the stock of each eligible NYSE, AMEX and
OTC company on a market capitalization weighted basis. (See "INVESTMENT
OBJECTIVES AND POLICIES - SMALL COMPANY SERIES - Portfolio Construction.") In
the future, the U.S. 9-10 Series may include stocks of small U.S. companies
which are listed on other U.S. securities exchanges. The U.S. 9-10 Series is
authorized to invest in privately placed convertible debentures and the value
thereof together with the value of all other illiquid investments may not exceed
10% of the value of the Series' net assets at the time of purchase.

THE JAPANESE SMALL COMPANY SERIES

The Japanese Small Company Series (the "Japanese Series") will invest in a broad
and diverse group of readily marketable stocks of Japanese small companies
which are traded in the Japanese securities markets. Generally, reference in
this registration statement to the term "Japanese small company" means a company
located in Japan whose market capitalization is not larger than the largest of
those in the smaller one-half (deciles 6 through 10) of companies whose
securities are listed on the First Section of the Tokyo Stock Exchange ("TSE").

While the Japanese Series will invest primarily in the stocks of small companies
which are listed on the TSE, it may acquire the stocks of Japanese small
companies which are traded in other Japanese securities markets as well. It is
the intention of the Japanese Series to acquire a portion of the stock of each
of these companies on a market capitalization weighted basis. The Japanese
Series also may invest up to 5% of its assets in convertible debentures issued
by Japanese small companies. (See "INVESTMENT OBJECTIVES AND POLICIES - SMALL
COMPANY SERIES -Portfolio Construction.")

THE UNITED KINGDOM SMALL COMPANY SERIES

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The United Kingdom Small Company Series (the "United Kingdom Series") will
invest in a broad and diverse group of readily marketable stocks of United
Kingdom small companies which are traded principally on the International Stock
Exchange of the United Kingdom and the Republic of Ireland ("ISE"). Generally,
reference in this registration statement to a "United Kingdom small company"
means a company organized in the United Kingdom, with shares listed on the ISE
whose market capitalization is not larger than the largest of those in the
smaller one-half (deciles 6 through 10) of companies included in the Financial
Times-Actuaries All Share Index ("FTA").

The FTA is an index of stocks traded on the ISE, which is similar to the S&P 500
Index, and is used by investment professionals in the United Kingdom for the
same purposes as investment professionals in the U.S. use the S&P 500 Index.
While the FTA typically will be used by the United Kingdom Series to determine
the maximum market capitalization of any company whose stock the Series will
purchase, acquisitions by the United Kingdom Series will not be limited to
stocks which are included in the FTA. The United Kingdom Series will not,
however, purchase shares of any investment trust or of any company whose market
capitalization is less than $5,000,000.

It is the intention of the United Kingdom Series to acquire a portion of the
stock of each eligible company on a market capitalization basis. The United
Kingdom Series also may invest up to 5% of its assets in convertible debentures
issued by United Kingdom small companies. (See "INVESTMENT OBJECTIVES AND
POLICIES - SMALL COMPANY SERIES - Portfolio Construction.")

THE CONTINENTAL SMALL COMPANY SERIES

The Continental Small Company Series (the "Continental Series") is authorized to
invest in readily marketable stocks of a broad and diverse group of small
companies organized under the laws of certain European countries. As of the
date of this registration statement, the Continental Series may invest in small
companies located in Austria, Belgium, Denmark, Finland, France, Germany,
Ireland, Italy, the Netherlands, Norway, Spain, Sweden, and Switzerland, whose
shares are traded principally in securities markets located in those countries.
Company size will be determined by the Advisor in a manner that will compare the
market capitalizations of companies in all countries in which the Continental
Series invests. The Advisor typically will use the appropriate country indices
of the Financial Times-Actuaries World Index ("FTW") converted to a common
currency, the United States dollar, and aggregated to define "small companies."
The FTW consists of a series of country indices which contain generally the
largest companies in the major industry sectors in proportion to their market
capitalization whose shares are available for purchase by non-resident
investors. Its constituents represent about 70% of the total market
capitalization of the respective markets. Generally, companies with publicly
traded stock whose market capitalizations are not greater than the largest of
those in the smallest 20% (9th and 10th deciles) of companies listed in the FTW
as combined for the countries in which the Continental Series invests will be
considered to be "small companies" and will be eligible for purchase by the
Continental Series.

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While the Advisor typically will use the aggregated FTW indices to determine the
maximum size of eligible portfolio companies, portfolio acquisitions will not be
limited to stocks listed on the FTW for any country. The Continental Series
does not intend, however, to purchase shares of any company whose market
capitalization is less than the equivalent of $5,000,000. The Continental
Series intends to acquire a portion of the stock of each eligible company on a
market capitalization basis. The Continental Series also may invest up to 5% of
its assets in convertible debentures issued by European small companies. The
Continental Series has acquired the stocks of small companies located in
Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands,
Norway, Spain, Sweden and Switzerland. When the Advisor determines that the
investments of the Continental Series in the stocks of small companies in those
countries are sufficiently diverse, the stocks of small companies located in
other European countries may be acquired on a country-by-country basis. In
addition, the Advisor may in its discretion either limit further investments in
a particular country or divest the Continental Series of holdings in a
particular country. (See "INVESTMENT OBJECTIVES AND POLICIES - SMALL COMPANY
SERIES - Portfolio Construction.")

THE PACIFIC RIM SMALL COMPANY SERIES

The Pacific Rim Small Company Series (the "Pacific Rim Series") is authorized to
invest in stocks of a broad and diverse group of small companies located in
Australia, New Zealand and Pacific Rim Asian countries whose shares are traded
principally on the securities markets located in those countries. As of the
date of this registration statement, the Pacific Rim Series may invest in small
companies located in Australia, Hong Kong, Malaysia, New Zealand and Singapore.
In the future, the Advisor may add small companies located in other Pacific Rim
Asian countries as securities markets in these countries become accessible. In
addition, the Advisor may in its discretion either limit further investments in
a particular country or divest the Pacific Rim Series of holdings in a
particular country. As of September 10, 1998, the Pacific Rim Series ceased
offering its shares to new investors as a consequence of certain restrictions
imposed by the Malaysian government on the repatriation of assets by foreign
investors, such as the Pacific Rim Series. (See "Item 4(c) - Risks - Investing
in Emerging Markets.")

Company size will be determined by the Advisor in a manner that will compare the
market capitalizations of the companies in all countries in which the Pacific
Rim Series invests. The Advisor typically will use the appropriate country
indices of the FTW converted to a common currency and aggregated, to define
"small companies." Generally, companies with publicly traded stock whose market
capitalizations are not greater than the largest of those in the smallest 30% of
companies (8th, 9th and 10th deciles) listed in the FTW as combined for the
countries in which the Pacific Rim Series invests will be considered to be
"small companies" and will be eligible for purchase by the Pacific Rim Series.

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small companies located in the Pacific Rim. (See "INVESTMENT OBJECTIVES AND
POLICIES - SMALL COMPANY SERIES - Portfolio Construction.")

PORTFOLIO CONSTRUCTION

Each Small Company Series is structured by generally basing the amount of each
security purchased on the issuer's relative market capitalization with a view to
creating in each Series a reasonable reflection of the relative market
capitalizations of its portfolio companies. The following discussion applies to
the investment policies of the Small Company Series.

The decision to include or exclude the shares of an issuer will be made on the
basis of such issuer's relative market capitalization determined by reference to
other companies located in the same country; except with respect to Continental
and Pacific Rim Series, such determination shall be made by reference to other
companies located in all countries in which the Series invest. Company size is
measured in terms of local currencies in order to eliminate the effect of
variations in currency exchange rates, except that Continental and Pacific Rim
Series each will measure company size in terms of a common currency. Even
though a company's stock may meet the applicable market capitalization
criterion, it may not be purchased if (i) in the Advisor's judgment, the issuer
is in extreme financial difficulty, (ii) the issuer is involved in a merger or
consolidation or is the subject of an acquisition or (iii) a significant portion
of the issuer's securities are closely held. Further, securities of real estate
investment trusts will not be acquired (except as a part of a merger,
consolidation or acquisition of assets). In addition, the Advisor may exclude
the stock of a company that otherwise meets applicable market capitalization
criterion if the Advisor determines in its best judgment that other conditions
exist that make the purchase of such stock inappropriate.

Deviation from strict market capitalization weighting also will occur because
the Advisor intends to purchase round lots only. Furthermore, in order to
retain sufficient liquidity, the relative amount of any security held may be
reduced from time to time from the level which strict adherence to market
capitalization weighting would otherwise require. A portion, but generally not
in excess of 20%, of assets may be invested in interest-bearing obligations,
such as money-market instruments for this purpose, thereby causing further
deviation from strict market capitalization weighting.

Block purchases of eligible securities may be made at opportune prices even
though such purchases exceed the number of shares which, at the time of
purchase, strict adherence to the policy of market capitalization weighting
would otherwise require. In addition, each Small Company Series may, in
exchange for the issuance of shares, acquire securities eligible for purchase or
otherwise represented in their portfolios at the time of the exchange. (See "In
Kind Purchases" in Item 7(b).) While such purchases and acquisitions might
cause a temporary deviation from market capitalization weighting, they would
ordinarily be made in anticipation of further growth of assets.

If securities must be sold in order to obtain funds to make redemption payments,
they may be repurchased as additional cash becomes available. In most
instances, however, management would anticipate selling securities which had
appreciated sufficiently to be eligible for sale and,

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<PAGE>

therefore, would not need to repurchase such securities. (See "INVESTMENT
OBJECTIVES AND POLICIES - SMALL COMPANY SERIES - Portfolio Transactions.")

Changes in the composition and relative ranking (in terms of market
capitalization) of the stocks which are eligible for purchase take place with
every trade when the securities markets are open for trading due, primarily, to
price fluctuations of such securities. On a not less than semi-annual basis,
the Advisor will determine the market capitalization of the largest small
company eligible for investment. Common stocks whose market capitalizations
are not greater than such company will be purchased. Additional investments
generally will not be made in securities which have appreciated in value
sufficiently to be excluded from the Advisor's then current market
capitalization limit for eligible portfolio securities. This may result in
further deviation from strict market capitalization weighting and such deviation
could be substantial if a significant amount of holdings increase in value
sufficiently to be excluded from the limit for eligible securities, but not by a
sufficient amount to warrant their sale. (See "INVESTMENT OBJECTIVES AND
POLICIES -SMALL COMPANY PORTFOLIOS - Portfolio Transactions.") A further
deviation from market capitalization weighting may occur if a Series invests a
portion of its assets in convertible debentures.

It is management's belief that the stocks of small companies offer, over a long
term, a prudent opportunity for capital appreciation, but, at the same time,
selecting a limited number of such issues for investment involves greater risk
than investing in a large number of them.

Generally, current income is not sought as an investment objective, and
investments will not be based upon an issuer's dividend payment policy or
record. However, many of the companies whose securities will be selected for
investment do pay dividends. It is anticipated, therefore, that dividend income
will be received. Also, each Small Company Series may lend securities to
qualified brokers, dealers, banks and other financial institutions for the
purpose of realizing additional income. (See "Securities Loans" below.)

PORTFOLIO TRANSACTIONS

On a periodic basis, the Advisor will review the holdings of each of the Small
Company Series and determine which, at the time of such review, are no longer
considered small U.S., Japanese, United Kingdom, European or Pacific Rim
companies. The present policy of the Advisor (except with respect to the U.S.
6-10 Series) is to consider portfolio securities for sale when they have
appreciated sufficiently to rank, on a market capitalization basis, more than
one full decile higher than the company with the largest market capitalization
that is eligible for purchase by the particular Small Company Series as
determined periodically by the Advisor. As of the date of this registration
statement, the Advisor has established the following policy with respect to the
U.S. 6-10 Series: securities held by the Series which have appreciated in value
will be considered for sale when the market capitalization of the issuer has
increased sufficiently to rank it in the largest 50% (deciles 5 through 1)
based on market capitalization of securities listed on the NYSE. The Advisor
may, from time to time, revise such policies if, in the opinion of the Advisor,
such revision is necessary to maintain appropriate market capitalization
weighting.

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Securities which have depreciated in value since their acquisition will not be
sold solely because prospects for the issuer are not considered attractive, or
due to an expected or realized decline in securities prices in general.
Securities may be disposed of, however, at any time when, in the Advisor's
judgment, circumstances, such as (but not limited to) tender offers, mergers and
similar transactions, or bids made for block purchases at opportune prices,
warrant their sale. Generally, securities will not be sold to realize
short-term profits, but when circumstances warrant, they may be sold without
regard to the length of time held. Generally, securities will be purchased with
the expectation that they will be held for longer than one year and will be held
until such time as they are no longer considered an appropriate holding in light
of the policy of maintaining portfolios of companies with small market
capitalizations.

THE DFA INTERNATIONAL VALUE SERIES

The investment objective of The DFA International Value Series is to achieve
long-term capital appreciation. The Series operates as a diversified investment
company and seeks to achieve its objective by investing in the stocks of large
non-U.S. companies that the Advisor believes to be value stocks at the time of
purchase. Securities are considered value stocks primarily because a company's
shares have a high book value in relation to their market value (a "book to
market ratio"). In measuring value, the Advisor may consider additional factors
such as cash flow, economic conditions and developments in the issuer's
industry. Generally, the shares of a company in any given country will be
considered to have a high book to market ratio if the ratio equals or exceeds
the ratios of any of the 30% of companies in that country with the highest
positive book to market ratios whose shares are listed on a major exchange, and,
except as described below, will be considered eligible for investment. The
Series intends to invest in the stocks of large companies in countries with
developed markets. As of the date of this registration statement, the Series
may invest in the stocks of large companies in Australia, Austria, Belgium,
Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Malaysia,
the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden,
Switzerland and the United Kingdom. As the Series' asset growth permits, it may
invest in the stocks of large companies in other developed markets.

As of September 10, 1998, the Series ceased investing additional funds in
Malaysia as a consequence of certain restrictions imposed by the Malaysian
government on the repatriation of assets by foreign investors, such as the
Series. (See "Item 4(c) - Risks - Investing in Emerging Markets.")

Under normal market conditions, at least 65% of the Series' assets will be
invested in companies organized or having a majority of their assets in or
deriving a majority of their operating income in at least three non-U.S.
countries and no more than 40% of the Series' assets will be invested in such
companies in any one country. The Series reserves the right to invest in index
futures contracts to commit funds awaiting investment or to maintain liquidity.
Such investments entail certain risks. (See "Risks" in Item 4(c).)

As of the date of this registration statement, the Series intends to invest in
companies having at least $800 million of market capitalization, and the Series
will be approximately market capitalization weighted. The Advisor may reset
such floor from time to time to reflect changing

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<PAGE>

market conditions. In determining market capitalization weights, the Advisor,
using its best judgment, will seek to eliminate the effect of cross holdings on
the individual country weights. As a result, the weighting of certain countries
in the Series may vary from their weighting in international indices such as
those published by The Financial Times, Morgan Stanley Capital International or
Salomon/Russell. The Advisor, however, will not attempt to account for cross
holding within the same country. The Advisor may exclude the stock of a company
that otherwise meets the applicable criteria if the Advisor determines in its
best judgment that other conditions exist that make the purchase of such stock
for the Series inappropriate.

Deviation from market capitalization weighting also will occur because the
Series intends to purchase round lots only. Furthermore, in order to retain
sufficient liquidity, the relative amount of any security held by the Series may
be reduced from time to time from the level which adherence to market
capitalization weighting would otherwise require. A portion, but generally not
in excess of 20%, of the Series' assets may be invested in interest-bearing
obligations, such as money-market instruments, thereby causing further deviation
from market capitalization weighting. Such investments would be made on a
temporary basis pending investment in equity securities pursuant to the Series'
investment objective.

The Series may make block purchases of eligible securities at opportune prices
even though such purchases exceed the number of shares which, at the time of
purchase, adherence to the policy of market capitalization weighting would
otherwise require. In addition, the Series may acquire securities eligible for
purchase or otherwise represented in its portfolio at the time of the exchange
in exchange for the issuance of its shares. (See "In Kind Purchases" in Item
7(b).) While such transactions might cause a temporary deviation from market
capitalization weighting, they would ordinarily be made in anticipation of
further growth of the assets of the Series.

Changes in the composition and relative ranking (in terms of market
capitalization and book to market ratio) of the stocks which are eligible for
purchase by the Series take place with every trade when the securities markets
are open for trading due, primarily, to price fluctuations of such securities.
On a periodic basis, the Advisor will prepare a list of eligible large companies
with high book to market ratios whose stock are eligible for investment; such
list will be revised not less than semi-annually. Only common stocks whose
market capitalizations are not less than such minimum will be purchased by the
Series. Additional investments will not be made in securities which have
depreciated in value to such an extent that they are not then considered by the
Advisor to be large companies. This may result in further deviation from market
capitalization weighting and such deviation could be substantial if a
significant amount of the Series' holdings decrease in value sufficiently to be
excluded from the then current market capitalization requirement for eligible
securities, but not by a sufficient amount to warrant their sale.

It is management's belief that the value stocks of large companies offer, over a
long term, a prudent opportunity for capital appreciation, but, at the same
time, selecting a limited number of such issues for inclusion in the Series
involves greater risk than including a large number of them. The Advisor does
not anticipate that a significant number of securities which meet the market
capitalization criteria will be selectively excluded from the Series.

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<PAGE>

The Series does not seek current income as an investment objective, and
investments will not be based upon an issuer's dividend payment policy or
record. However, many of the companies whose securities will be included in the
Series do pay dividends. It is anticipated, therefore, that the Series will
receive dividend income. The Series may lend securities to qualified brokers,
dealers, banks and other financial institutions for the purpose of realizing
additional income. (See "Securities Loans" below.)

Securities which have depreciated in value since their acquisition will not be
sold by the Series solely because prospects for the issuer are not considered
attractive, or due to an expected or realized decline in securities prices in
general. Securities may be disposed of, however, at any time when, in the
Advisor's judgment, circumstances warrant their sale, such as tender offers,
mergers and similar transactions, or bids made for block purchases at opportune
prices. Generally, securities will not be sold to realize short-term profits,
but when circumstances warrant, they may be sold without regard to the length of
time held. Generally, securities will be purchased with the expectation that
they will be held for longer than one year, and will be held until such time as
they are no longer considered an appropriate holding in light of the policy of
maintaining a portfolio of companies with large market capitalizations and high
book to market ratios.

In addition to the policies discussed in response to this Item, investment
limitations have been adopted by each Series and are noted in response to Items
12(b) and (c) of Part B.

INVESTMENT OBJECTIVES AND POLICIES - GLOBAL SERIES

The investment objective of each of the Global Series is to achieve long-term
capital appreciation. The Global Value Series provides investors with access to
securities portfolios consisting of stocks of large U.S. and non-U.S. companies
that have high book to market ratios. The Global Large Company Series provides
investors with access to securities portfolios consisting of stocks that
comprise the S&P 500 Index and stocks of large non-U.S. companies in Europe,
Australia and the Far East. The Global Small Company Series provides investors
with access to securities portfolios consisting of stocks of small Japanese, UK,
European, Pacific Rim and U.S. companies.

Each of the Global Series seeks to achieve its investment objective by investing
virtually all of its assets in other Series of the Trust, or in portfolios of
other registered investment companies that are managed by the Advisor, including
DFA Investment Dimensions Group Inc. ("DFAIDG"). (The Series of the Trust, the
portfolios of DFAIDG, and the series of any other registered investment company
that is advised by the Advisor in which the Global Series may invest, from time
to time, are referred to as the "Master Series.") The Global Series sell their
shares to institutional investors located in the United States and abroad.
These institutional investors may include registered and unregistered investment
companies. Investors which, for a variety of reasons, may choose not to make
substantial, or any, direct investment in the companies whose securities will be
held by the Master Series, may participate in the investment performance of
those companies through ownership of shares in one or more Global Series.

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<PAGE>

PORTFOLIO CONSTRUCTION. The Global Series will invest in the Master Series in
such relative portions as determined by the Trust's management from time to
time. As of the date of this registration statement, each Global Series intends
to invest in the shares of the following Master Series:

Global Value Series
Large Cap Value Series
The DFA International Value Series

Global Large Company Series
U.S. Large Company Series
Large Cap International Portfolio of DFAIDG

Global Small Company Series
U.S. 6-10 Series
Japanese Series
Continental Series
United Kingdom Series
Pacific Rim Series

For a complete description of the investment objectives and policies, portfolio
construction and portfolio transactions for each Master Series, see "Investment
Objectives, Principal Investment Strategies, and Related Risks - The U.S. Large
Company Series," "INVESTMENT OBJECTIVES AND POLICIES - U.S. VALUE SERIES" and
"INVESTMENT OBJECTIVES AND POLICIES - SMALL COMPANY SERIES" in this registration
statement.

The Global Large Company Series intends to invest in shares of the Large Cap
International Portfolio of DFAIDG (the "Large Cap International Portfolio").
The investment objective of the Large Cap International Portfolio is to achieve
long-term capital appreciation by investing in the stocks of non-U.S. large
companies in Europe, Australia and the Far East. Generally, the companies whose
stocks will be selected by the advisor for the Large Cap International Portfolio
will be in the largest 50% in terms of market capitalization for each country.
Under normal market conditions, at least 65% of the Large Cap International
Portfolio's assets will be invested in companies organized or having a majority
of their assets in or deriving a majority of their operating income in at least
three non-U.S. countries. The Large Cap International Portfolio reserves the
right to invest in index futures contracts to commit funds awaiting investment
or to maintain liquidity. The Large Cap International Portfolio does not seek
current income as an investment objective and investments will not be based upon
an issuer's dividend payment policy or record. However, many of the companies
whose securities will be included in the Large Cap International Portfolio do
pay dividends. It is anticipated, therefore, that the Large Cap International
Portfolio will receive dividend income.

While each Global Series currently intends to invest in the specific Master
Series identified above, each Global Series may invest in other Master Series,
in such portions as may be

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<PAGE>

determined from time to time by the Trust's management. In addition, each
global series may invest in U.S. government obligations, U.S. government
agency obligations, bank obligations and commercial paper. (See "INVESTMENT
OBJECTIVES AND POLICIES - FIXED INCOME SERIES - Description of Investments"
in this registration statement.) Periodically, the Trust's management will
determine the allocation of the assets by each Global Series in the Series'
corresponding Master Series. In setting the target allocations, the Trust's
management will first consider the market capitalizations of all eligible
companies in each of the Master Series. The Trust's management will
calculate the market capitalizations for each Master Series, other than The
U.S. Large Company Series, in the manner described in this registration
statement. In determining the target allocations, the Trust's management,
using its best judgment, will seek to eliminate the effect of cross holdings
between companies on a portfolio by portfolio basis and may take into account
the existence of substantial private or government ownership of the shares of
a company. The Trust's management may also consider such other factors as it
deems appropriate with respect to determining the target allocations. When
the Trust's management determines that market forces have caused fundamental
changes in the relative values of companies owned by the Master Series, the
Trust's management intends to modify the target allocations of the Global
Series. To maintain target weights during the period, adjustments may be
made by applying future purchases by the respective Global Series in
proportion necessary to rebalance the investment portfolio of the Global
Series.

As a consequence of certain restrictions imposed by the Malaysian government
on the repatriation of assets by foreign investors, the Pacific Rim Series is
not presently available for investment. Therefore, The Global Small Company
Series is not currently investing in that Master Series.

THE EMERGING MARKETS SERIES AND THE EMERGING MARKETS SMALL CAP SERIES

The investment objective of both The Emerging Markets Series and The Emerging
Markets Small Cap Series is to achieve long-term capital appreciation. Each
Series operates as a diversified investment company and seeks to achieve its
investment objective by investing in emerging markets designated by the
Investment Committee of the Advisor ("Approved Markets"). Each Series invests
its assets primarily in Approved Market equity securities listed on bona fide
securities exchanges or actively traded on OTC markets. These exchanges or OTC
markets may be either within or outside the issuer's domicile country, and the
securities may be listed or traded in the form of International Depository
Receipts ("IDRs") or American Depository Receipts ("ADRs"). As of September 10,
1998, the Emerging Markets Series and the Emerging Markets Small Cap Series
ceased investing additional funds in Malaysia as a consequence of certain
restrictions imposed by the Malaysian government on the repatriation of
assets by foreign investors such as the Series. (See "Item 4(c) - Risks -
Investing in Emerging Markets.")

SERIES' CHARACTERISTICS AND POLICIES. The Emerging Markets Series will seek a
broad market coverage of larger companies within each Approved Market. This
Series will attempt to own shares of companies whose aggregate overall share of
the Approved Market's total public market capitalization is at least in the
upper 40% of such capitalization, and can be as large as 75%. The

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Emerging Markets Series may limit the market coverage in the smaller emerging
markets in order to limit purchases of small market capitalization companies.

The Emerging Markets Small Cap Series will seek a broad market coverage of
smaller companies within each Approved Market. This Series will attempt to own
shares of companies whose market capitalization is less than $1.5 billion. On a
periodic basis, the Advisor will review the holdings of the Emerging Markets
Small Cap Series and determine which, at the time of such review, are no longer
considered small emerging market companies. The present policy is to consider
portfolio securities for sale when they have appreciated sufficiently to rank,
on a market capitalization basis, 100% larger than the largest market
capitalization that is eligible for purchase as set by the Advisor for that
Approved Market.

Each Series may not invest in all such companies or Approved Markets described
above or achieve approximate market weights, for reasons which include
constraints imposed within Approved Markets (E.G., restrictions on purchases by
foreigners), and each Series' policy not to invest more than 25% of its assets
in any one industry.

Under normal market conditions, the Emerging Markets Series will invest at least
65% of its assets in Approved Market securities, and the Emerging Markets Small
Cap Series will invest at least 65% of its assets in small company (as defined
above) Approved Market Securities. Approved Market securities are defined to be
(a) securities of companies organized in a country in an Approved Market or for
which the principal trading market is in an Approved Market, (b) securities
issued or guaranteed by the government of an Approved Market country, its
agencies or instrumentalities, or the central bank of such country, (c)
securities denominated in an Approved Market currency issued by companies to
finance operations in Approved Markets, (d) securities of companies that derive
at least 50% of their revenues primarily from either goods or services produced
in Approved Markets or sales made in Approved Markets and (e) Approved Markets
equity securities in the form of depositary shares. Securities of Approved
Markets may include securities of companies that have characteristics and
business relationships common to companies in other countries. As a result, the
value of the securities of such companies may reflect economic and market forces
in such other countries as well as in the Approved Markets. The Advisor,
however, will select only those companies which, in its view, have sufficiently
strong exposure to economic and market forces in Approved Markets such that
their value will tend to reflect developments in Approved Markets to a greater
extent than developments in other regions. For example, the Advisor may invest
in companies organized and located in the United States or other countries
outside of Approved Markets, including companies having their entire production
facilities outside of Approved Markets, when such companies meet the definition
of Approved Markets securities so long as the Advisor believes at the time of
investment that the value of the company's securities will reflect principally
conditions in Aproved Markets.

The Advisor defines the term "emerging market" to mean a country which is
considered to be an emerging market by the International Finance Corporation.
Approved emerging markets may not include all such emerging markets. In
determining whether to approve markets for investment, the Board of Trustees
will take into account, among other things, market liquidity, investor
information, government regulation, including fiscal and foreign exchange
repatriation rules and the availability of other access to these markets by the
investors of each of the Series.

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As of the date of this registration statement, the following countries are
designated as Approved Markets: Argentina, Brazil, Chile, Greece, Hungary,
Indonesia, Israel, Mexico, Philippines, Poland, Portugal, Korea, Thailand and
Turkey. Countries that may be approved in the future include but are not
limited to Colombia, Czech Republic, India, Jordan, Nigeria, Pakistan, Republic
of China (Taiwan), Republic of South Africa, Venezuela and Zimbabwe.

Each Series may invest up to 35% of its assets in securities of issuers that are
not Approved Markets securities, but whose issuers the Advisor believes derive a
substantial proportion, but less than 50%, of their total revenues from either
goods and services produced in, or sales made in, Approved Markets.

Pending the investment of new capital in Approved Market equity securities, each
Series will typically invest in money market instruments or other highly liquid
debt instruments denominated in U.S. dollars (including, without limitation,
repurchase agreements). In addition, each Series may, for liquidity, or for
temporary defensive purposes during periods in which market or economic or
political conditions warrant, purchase highly liquid debt instruments or hold
freely convertible currencies, although neither Series expects the aggregate of
all such amounts to exceed 10% of its net assets under normal circumstances.
Both Series also may invest in shares of other investment companies that invest
in one or more Approved Markets, although they intend to do so only where access
to those markets is otherwise significantly limited. The Series may also invest
in money market mutual funds for temporary cash management purposes. The
Investment Company Act of 1940 limits investment by a Series in shares of other
investment companies as follows: (1) no more than 10% of the value of a Series'
total assets may be invested in shares of other investment companies; (2) a
Series may not own securities issued by an investment company having an
aggregate value in excess of 5% of the value of the total assets of the Series;
and (3) a Series may not own more than 3% of the total outstanding voting stock
of an investment company. If either Series invests in another investment
company, the Series' shareholders will bear not only their proportionate share
of expenses of the Series (including operating expenses and the fees of the
Advisor), but also will bear indirectly similar expenses of the underlying
investment company. In some Approved Markets, it will be necessary or advisable
for a Series to establish a wholly-owned subsidiary or a trust for the purpose
of investing in the local markets. Each Series also may invest up to 5% of its
assets in convertible debentures issued by companies organized in Approved
Markets.

PORTFOLIO CONSTRUCTION. Each Series' policy of seeking broad market
diversification means that the Advisor will not utilize "fundamental" securities
research techniques in identifying securities selections. The decision to
include or exclude the shares of an issuer will be made primarily on the basis
of such issuer's relative market capitalization determined by reference to other
companies located in the same country. Company size is measured in terms of
reference to other companies located in the same country and in terms of local
currencies in order to eliminate the effect of variations in currency exchange
rates. Even though a company's stock may meet the applicable market
capitalization criterion, it may not be included in a Series for one or more of
a number of reasons. For example, in the Advisor's judgment, the issuer may be
considered in extreme financial difficulty, a material portion of its securities
may be closely held and not likely available to support market liquidity, or the
issuer may be a "passive foreign investment

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company" (as defined in the Code). To this extent, there will be the exercise
of discretion and consideration by the Advisor which would not be present in the
management of a portfolio seeking to represent an established index of broadly
traded domestic securities (such as the S&P 500 Index). The Advisor will also
exercise discretion in determining the allocation of investments as between
Approved Markets.

It is management's belief that equity investments offer, over a long term, a
prudent opportunity for capital appreciation, but, at the same time, selecting a
limited number of such issues for inclusion in a Series involves greater risk
than including a large number of them.

Neither Series seeks current income as an investment objective, and investments
will not be based upon an issuer's dividend payment policy or record. However,
many of the companies whose securities will be included in a Series do pay
dividends. It is anticipated, therefore, that both Series will receive dividend
income.

Generally, securities will be purchased with the expectation that they will be
held for longer than one year. However, securities may be disposed of at any
time when, in the Advisor's judgment, circumstances warrant their sale.
Generally, securities will not be sold to realize short-term profits, but when
circumstances warrant, they may be sold without regard to the length of time
held.

For the purpose of converting U.S. dollars to another currency, or vice versa,
or converting one foreign currency to another foreign currency, each Series may
enter into forward foreign exchange contracts. In addition, to hedge against
changes in the relative value of foreign currencies, each Series may purchase
foreign currency futures contracts. A Series will only enter into such a
futures contract if it is expected that the Series will be able readily to close
out such contract. There can, however, be no assurance that it will be able in
any particular case to do so, in which case the Series may suffer a loss.

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INVESTMENT OBJECTIVES AND POLICIES - FIXED INCOME SERIES

THE DFA ONE-YEAR FIXED INCOME SERIES

The investment objective of The DFA One-Year Fixed Income Series is to achieve a
return in excess of the rate of inflation with a minimum of risk. The Series
will pursue its objective by investing its assets in U.S. government
obligations, U.S. government agency obligations, dollar-denominated obligations
of foreign issuers issued in the U.S., bank obligations, including U.S.
subsidiaries and branches of foreign banks, corporate obligations, commercial
paper, repurchase agreements and obligations of supranational organizations.
Generally, the Series will acquire obligations which mature within one year from
the date of settlement, but substantial investments may be made in obligations
maturing within two years from the date of settlement when greater returns are
available. It is the Series' policy that the weighted average length of
maturity of investments will not exceed one year. The Series principally
invests in certificates of deposit, commercial paper, bankers' acceptances,
notes and bonds. The Series will invest more than 25% of its total assets in
obligations of U.S. and/or foreign banks and bank holding companies when the
yield to maturity on these instruments exceeds the yield to maturity on all
other eligible portfolio investments of similar quality for a period of five
consecutive days when the NYSE is open for trading. (See "Investments in the
Banking Industry" in this Item 4 below.)

THE DFA TWO-YEAR GLOBAL FIXED INCOME SERIES

The investment objective of The DFA Two-Year Global Fixed Income Series is to
maximize total returns consistent with preservation of capital. The Series will
invest in obligations issued or guaranteed by the U.S. and foreign governments,
their agencies and instrumentalities, corporate debt obligations, bank
obligations, commercial paper, repurchase agreements, obligations of other
domestic and foreign issuers having quality ratings meeting the minimum
standards described in "Description of Investments," securities of domestic or
foreign issuers

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<PAGE>

denominated in U.S. dollars but not trading in the United States, and
obligations of supranational organizations, such as the World Bank, the European
Investment Bank, European Economic Community and European Coal and Steel
Community. At the present time, the Advisor expects that most investments will
be made in the obligations of issuers which are in developed countries, such as
those countries which are members of the Organization of Economic Cooperations
and Development ("OECD"). However, in the future, the Advisor anticipates
investing in issuers located in other countries as well. Under normal market
conditions, the Series will invest at least 65% of the value of its assets in
issuers organized or having a majority of their assets in, or deriving a
majority of their operating income in, at least three different countries, one
of which may be the United States.

The Series will acquire obligations that have a dollar-weighted average length
of maturity not to exceed two years. Because many of the Series' investments
will be denominated in foreign currencies, the Series will also enter into
forward foreign currency contracts solely for the purpose of hedging against
fluctuations in currency exchange rates. The Series will invest more than 25%
of its total assets in obligations of U.S. and/or foreign banks and bank holding
companies when the yield to maturity on these instruments exceeds the yield to
maturity on all other eligible portfolio investments of similar quality for a
period of five consecutive days when the NYSE is open for trading. (See
"Investments in the Banking Industry" in this Item 4 below.)

DESCRIPTION OF INVESTMENTS

The following is a description of the categories of investments which may be
acquired by The DFA One-Year Fixed Income Series and Two-Year Global Fixed
Income Series (the "Fixed Income Series").

<TABLE>
<CAPTION>
Permissible
Categories:
-----------
<S> <C>
The DFA One-Year Fixed Income Series 1-6, 8
The DFA Two-Year Global Fixed Income Series 1-10
</TABLE>

1. U.S. GOVERNMENT OBLIGATIONS - Debt securities issued by the U.S.
Treasury which are direct obligations of the U.S. government, including bills,
notes and bonds.

2. U.S. GOVERNMENT AGENCY OBLIGATIONS - Issued or guaranteed by U.S.
government-sponsored instrumentalities and federal agencies, including the
Federal National Mortgage Association, Federal Home Loan Bank and the Federal
Housing Administration.

3. CORPORATE DEBT OBLIGATIONS - Non-convertible corporate debt securities
(e.g., bonds and debentures) which are issued by companies whose commercial
paper is rated Prime-1 by Moody's Investors Services, Inc. ("Moody's") or A-1 by
S&P and dollar-denominated obligations of foreign issuers issued in the U.S. If
the issuer's commercial paper is unrated, then the debt security would have to
be rated at least AA by S&P or Aa2 by Moody's. If there is neither a commercial
paper rating nor a rating of the debt security, then the Advisor must

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<PAGE>

determine that the debt security is of comparable quality to equivalent issues
of the same issuer rated at least AA or Aa2.

4. BANK OBLIGATIONS - Obligations of U.S. banks and savings and loan
associations and dollar-denominated obligations of U.S. subsidiaries and
branches of foreign banks, such as certificates of deposit (including marketable
variable rate certificates of deposit) and bankers' acceptances. Bank
certificates of deposit will only be acquired from banks having assets in excess
of $1,000,000,000.

5. COMMERCIAL PAPER - Rated, at the time of purchase, A-1 or better by
S&P or Prime-1 by Moody's, or, if not rated, issued by a corporation having an
outstanding unsecured debt issue rated Aaa by Moody's or AAA by S&P, and having
a maximum maturity of nine months.

6. REPURCHASE AGREEMENTS - Instruments through which the Series purchase
securities ("underlying securities") from a bank, or a registered U.S.
government securities dealer, with an agreement by the seller to repurchase the
security at an agreed price, plus interest at a specified rate. The underlying
securities will be limited to U.S. government and agency obligations described
in (1) and (2) above. The Series will not enter into a repurchase agreement
with a duration of more than seven days if, as a result, more than 10% of the
value of the Series' total assets would be so invested. The Series will also
only invest in repurchase agreements with a bank if the bank has at least
$1,000,000,000 in assets and is approved by the Investment Committee of the
Advisor. The Advisor will monitor the market value of the securities plus any
accrued interest thereon so that they will at least equal the repurchase price.

7. FOREIGN GOVERNMENT AND AGENCY OBLIGATIONS - Bills, notes, bonds and
other debt securities issued or guaranteed by foreign governments, or their
agencies and instrumentalities.

8. SUPRANATIONAL ORGANIZATION OBLIGATIONS - Debt securities of
supranational organizations such as the European Coal and Steel Community, the
European Economic Community and the World Bank, which are chartered to promote
economic development.

9. FOREIGN ISSUER OBLIGATIONS - Debt securities of non-U.S. issuers rated
AA or better by S&P or Aa2 or better by Moody's.

10. EURODOLLAR OBLIGATIONS - Debt securities of domestic or foreign
issuers denominated in U.S. dollars but not trading in the United States.

Investors should be aware that the net asset values of the Fixed Income Series
may change as general levels of interest rates fluctuate. When interest rates
increase, the value of a portfolio of fixed-income securities can be expected to
decline. Conversely, when interest rates decline, the value of a portfolio of
fixed-income securities can be expected to increase.

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<PAGE>

INVESTMENTS IN THE BANKING INDUSTRY

The DFA One-Year Fixed Income and Two-Year Global Fixed Income Series will
invest more than 25% of their total respective assets in obligations of U.S.
and/or foreign banks and bank holding companies when the yield to maturity on
these investments exceeds the yield to maturity on all other eligible portfolio
investments for a period of five consecutive days when the NYSE is open for
trading. For the purpose of this policy, which is a fundamental policy of each
Series and can only be changed by a vote of the shareholders of each Series,
banks and bank holding companies are considered to constitute a single industry,
the banking industry. When investment in such obligations exceeds 25% of the
total net assets of any of these Series, such Series will be considered to be
concentrating their investments in the banking industry. As of the date of this
registration statement, The DFA One-Year Fixed Income Series is not
concentrating its investments in this industry and the Two-Year Global Fixed
Income Series is concentrating its investments in this industry. The types of
bank and bank holding company obligations in which The DFA One-Year Fixed Income
and Two-Year Global Fixed Income Series may invest include: certificates of
deposit, bankers' acceptances, commercial paper and other debt obligations and
which mature within two years of the date of settlement, provided such
obligations meet each Series' established credit rating criteria as stated under
"Description of Investments." In addition, both Series are authorized to invest
more than 25% of their total assets in Treasury bonds, bills and notes and
obligations of federal agencies and instrumentalities.

PORTFOLIO STRATEGY

The DFA One-Year Fixed Income and Two-Year Global Fixed Income Series will be
managed with a view to capturing credit risk premiums and term or maturity
premiums. The term "credit risk premium" means the anticipated incremental
return on investment for holding obligations considered to have greater credit
risk than direct obligations of the U.S. Treasury, and "maturity risk premium"
means the anticipated incremental return on investment for holding securities
having maturities of longer than one month compared to securities having a
maturity of one month. The Advisor believes that credit risk premiums are
available largely through investment in high grade commercial paper,
certificates of deposit and corporate obligations. The holding period for
assets of the Series will be chosen with a view to maximizing anticipated
returns, net of trading costs.

The Fixed Income Series are expected to have high portfolio turnover rates due
to the relatively short maturities of the securities to be acquired. The rate
of portfolio turnover will depend upon market and other conditions; it will not
be a limiting factor when management believes that portfolio changes are
appropriate. While the Fixed Income Series acquire securities in principal
transactions and, therefore, do not pay brokerage commissions, the spread
between the bid and asked prices of a security may be considered to be a "cost"
of trading. Such costs ordinarily increase with trading activity. However, as
stated above, securities ordinarily will be sold when, in the Advisor's
judgment, the monthly return of the Fixed Income Series will be increased as a
result of portfolio transactions after taking into account the cost of trading.
It is anticipated that securities will be acquired in the secondary markets for
short term instruments.

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<PAGE>

SECURITIES LOANS

Each Series of the Trust may lend securities to qualified brokers, dealers,
banks and other financial institutions for the purpose of earning additional
income. While a Series may earn additional income from lending securities,
such activity is incidental to the investment objective of a Series. The value
of securities loaned may not exceed 33-1/3% of the value of a Series' total
assets. In connection with such loans, a Series will receive collateral
consisting of cash or U.S. Government securities, which will be maintained at
all times in an amount equal to at least 100% of the current market value of the
loaned securities. In addition, the Series will be able to terminate the loan
at any time and will receive reasonable interest on the loan, as well as amounts
equal to any dividends, interest or other distributions on the loaned
securities. In the event of the bankruptcy of the borrower, the Trust could
experience delay in recovering the loaned securities. Management believes that
this risk can be controlled through careful monitoring procedures.

The U.S. 6-10 Small Company Series and U.S. 9-10 Small Company Series may invest
in securities of foreign issuers that are traded in the U.S. securities markets,
but such investments may not exceed 5% of the gross assets of the Series.

The U.S. Large Company Series may invest generally not more than 5% of its net
assets in the same types of short-term fixed income obligations as may be
acquired by The DFA One-Year Fixed Income Series, in order to maintain liquidity
or to invest temporarily uncommitted cash balances. (See "Investment Objectives
and Policies - Fixed Income Series - The DFA One-Year Fixed Income Series" in
Items 4(a) and (b).)

The U.S. Large Company Series, the U.S. Value Series and The DFA International
Value Series may acquire stock index futures contracts and options thereon in
order to commit funds awaiting investment in stocks or maintain cash liquidity.
To the extent that such Series invest in futures contracts and options thereon
for other than bona fide hedging purposes, no Series will enter into such
transactions if, immediately thereafter, the sum of the amount of margin
deposits and premiums paid for open futures options would exceed 5% of the
Series' total assets, after taking into account unrealized profits and
unrealized losses on such contracts it has entered into; provided, however,
that, in the case of an option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in calculating the 5%. Such investments
entail certain risks. (See "Risks" in Item 4(c).)

4(c) RISKS

Please note that while the following discussion relates to the risks of certain
investments by certain Series, it should be understood that, with respect to the
Global Series, the discussion applies to the Master Series in which the Global
Series invest.

SMALL COMPANY SECURITIES

Typically, securities of small companies are less liquid than securities of
large companies. Recognizing this factor, management will endeavor to effect
securities transactions in a manner

26
<PAGE>

to avoid causing significant price fluctuations in the market for these
securities. In addition, the prices of small company securities may fluctuate
more sharply than those of other securities.

FOREIGN SECURITIES

The Japanese Small Company, United Kingdom Small Company, Continental Small
Company, Pacific Rim Small Company, Enhanced U.S. Large Company, DFA One-Year
Fixed Income, Two-Year Global Fixed Income, DFA International Value, Global
Value, Global Large Company and Global Small Company Series [(IN THE CASE OF THE
GLOBAL SERIES, THROUGH THEIR INVESTMENTS IN THE MASTER SERIES), AND THE LARGE
CAP INTERNATIONAL PORTFOLIO,] invest in foreign issuers. Such investments
involve risks that are not associated with investments in U.S. public companies.
Such risks may include legal, political and or diplomatic actions of foreign
governments, such as imposition of withholding taxes on interest and dividend
income payable on the securities held, possible seizure or nationalization of
foreign deposits, establishment of exchange controls or the adoption of other
foreign governmental restrictions which might adversely affect the value of the
assets held by the Series. (Also see "Foreign Currencies and Related
Transactions" below.) Further, foreign issuers are not generally subject to
uniform accounting, auditing and financial reporting standards comparable to
those of U.S. public companies and there may be less publicly available
information about such companies than comparable U.S. companies. The Enhanced
U.S. Large Company, DFA One-Year Fixed Income and Two-Year Global Fixed Income
Series also may invest in obligations of supranational organizations. The value
of the obligations of these organizations may be adversely affected if one or
more of their supporting governments discontinue their support. Also, there can
be no assurance that any of the Series will achieve its investment objective.

The economies of many countries in which The Japanese Small Company, United
Kingdom Small Company, Continental Small Company, Pacific Rim Small Company,
Enhanced U.S. Large Company, DFA One-Year Fixed Income, Two-Year Global Fixed
Income, DFA International Value, Global Value, Global Large Company and Global
Small Company Series [AND LARGE CAP INTERNATIONAL PORTFOLIO] invest are not as
diverse or resilient as the U.S. economy, and have significantly less financial
resources. Some countries are more heavily dependent on international trade and
may be affected to a greater extent by protectionist measurers of their
governments, or dependent upon a relatively limited number of commodities and,
thus, sensitive to changes in world prices for these commodities.

In many foreign countries, stock markets are more variable than U.S. markets for
two reasons. Contemporaneous declines in both (i) foreign securities prices in
local currencies and (ii) the value of local currencies in relation to the U.S.
dollar can have a significant negative impact on the net asset value of a Series
that holds the foreign securities. The next asset value of the Series is
denominated in U.S. dollars, and therefore, declines in market price of both the
foreign securities held by a Series and the foreign currency in which those
securities are denominated will be reflected in the net asset value of the
Series' shares.

INVESTING IN EMERGING MARKETS

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<PAGE>

The investments of The Emerging Markets Series and The Emerging Markets Small
Cap Series involve risks that are in addition to the usual risks of investing in
developed foreign markets. A number of emerging securities markets restrict,
to varying degrees, foreign investment in stocks. Repatriation of investment
income, capital and the proceeds of sales by foreign investors may
require governmental registration and/or approval in some emerging countries.
In some jurisdictions, such restrictions and the imposition of taxes are
intended to discourage shorter- rather than longer-term holdings. While The
Emerging Markets Series and The Emerging Markets Small Cap Series will invest
only in markets where these restrictions are considered acceptable to the
Advisor, new or additional repatriation restrictions might be imposed subsequent
to a Series' investment. If such restrictions were imposed subsequent to
investment in the securities of a particular country, a Series might, among
other things, discontinue the purchasing of securities in that country. Such
restrictions will be considered in relation to the Series' liquidity needs and
other factors and may make it particularly difficult to establish the fair
market value of particular securities from time to time. The valuation of
securities held by a Series is the responsibility of the Board of Trustees,
acting in good faith and with advice from the Advisor. (See "Pricing of Fund
Shares" in Item 7(a).) Further, some attractive equity securities may not be
available to the Series because foreign shareholders hold the maximum amount
permissible under current laws.

Relative to the U.S. and to larger non-U.S. markets, many of the emerging
securities markets in which The Emerging Markets Series and The Emerging Markets
Small Cap Series may invest are relatively small, have low trading volumes,
suffer periods of illiquidity and are characterized by significant price
volatility. Such factors may be even more pronounced in jurisdictions where
securities ownership is divided into separate classes for domestic and
non-domestic owners. These risks are heightened for investments in small
company emerging markets securities.

In addition, many emerging markets, including most 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 countries. In an attempt to control inflation,
wage and price controls have been imposed at times in certain countries.
Certain emerging markets have recently transitioned, or are in the process of
transitioning, from centrally controlled to market-based economies. There can
be no assurance that such transitions will be successful.

Brokerage commissions, custodial services and other costs relating to investment
in foreign markets generally are more expensive than in the United States; this
is particularly true with respect to emerging markets. Such markets have
different settlement and clearance procedures. In certain markets there have
been times when settlements do not keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. The inability
of a Series to make intended securities purchases due to settlement problems
could cause the Series to miss investment opportunities. Inability to dispose
of a portfolio security caused by settlement problems could result either in
losses to a Series due to subsequent declines in value of the portfolio security
or, if a Series has entered into a contract to sell the security, could result
in possible liability to the purchaser.

28
<PAGE>

The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for a Series' portfolio securities in such
markets may not be readily available. The Series' portfolio securities in the
affected markets will be valued at fair value determined in good faith by or
under the direction of the Board of Trustees.

Government involvement in the private sector varies in degrees among the
emerging securities markets contemplated for investment by the Series. Such
involvement may, in some cases, include government ownership of companies in
certain commercial business sectors, wage and price controls or imposition of
trade barriers and other protectionist measures. With respect to any developing
country, there is no guarantee that some future economic or political crisis
will not lead to price controls, forced mergers of companies, expropriation, the
creation of government monopolies, or other measures which could be detrimental
to the investments of a Series.

On September 1, 1998, the Malaysian government announced a series of capital and
foreign exchange controls on the Malaysian currency, the ringgit, and on
transactions on the Kuala Lampur Stock Exchange, that operated to severely
constrain or prohibit foreign investors, including the Series, from repatriating
assets. Pursuant to these regulations, the Series was not permitted to convert
the proceeds of the sale of their Malaysian investments into U.S. dollars prior
to September 1, 1999.

As a consequence of these developments, the Series ceased investing additional
funds in Malaysia effective September 10, 1998. On February 4, 1999, the
Malaysian government announced the imposition of a levy on repatriation of
portfolio capital. The levy replaced the 12-month holding period imposed under
the September 1, 1998 exchange control rules. The amount of the levy depends on
the duration that funds have been held in Malaysia. With respect to funds
invested in Malaysia prior to February 15, 1999, which includes the funds
invested by the Series, profits from investment made during the 12-month holding
period are exempt from imposition of a levy. A levy will be imposed, however,
on the amount of capital that is repatriated. Although there is some confusion
in the market concerning the mechanics of the levy, it appears that any
principal repatriated after one year from September 1, 1998 will not attract any
levy. Principal amounts that are repatriated within one year will be subject to
a levy at a decreasing rate, depending on the duration the principal is held.
The Advisor is closely monitoring the situation to determine when to begin
divesting the Series of its Malaysian assets without adverse affect. With
respect to the current Malaysian investments owned by the Series, the Series are
presently valuing the securities at current market prices and discounting the
U.S. dollar-ringgit currency exchange rate. Pending further clarification from
Malaysian regulatory authorities regarding the controls identified above, the
Series are treating their investments in Malaysian securities as illiquid. As
of April 30, 1999, Malaysian securities constitute approximately the
following percentages of the net asset value of the following Series: Pacific
Rim Small Company Series, 28.64%; The Emerging Markets Series, 7.10%; and The
Emerging Markets Small Cap Series, 7.94%. Malaysian securities constitute less
than one percent of the net asset value of the remaining Series.

29
<PAGE>

Taxation of dividends and capital gains received by non-residents varies among
countries with emerging markets and, in some cases, is high in relation to
comparable U.S. rates. Particular tax structures may have the intended or
incidental effect of encouraging long holding periods for particular securities
and/or the reinvestment of earnings and sales proceeds in the same jurisdiction.
In addition, emerging market jurisdictions typically have less well-defined tax
laws and procedures than is the case in the United States, and such laws may
permit retroactive taxation so that The Emerging Markets Series and The Emerging
Markets Small Cap Series could in the future become subject to local tax
liability that it had not reasonably anticipated in conducting its investment
activities or valuing its assets.

FOREIGN CURRENCIES AND RELATED TRANSACTIONS

Investments of the Japanese, United Kingdom, Continental and Pacific Rim Series,
The DFA International Value Series, Large Cap International Portfolio, The
Emerging Markets Series, The Emerging Markets Small Cap Series, many of the
investments of The DFA Two-Year Global Fixed Income Series and, to a lesser
extent, the investments of The Enhanced U.S. Large Company Series, will be
denominated in foreign currencies. Changes in the relative values of foreign
currencies and the U.S. dollar, therefore, will affect the value of investments
of the Series. The Series may purchase foreign currency futures contracts and
options in order to hedge against changes in the level of foreign currency
exchange rates. Such contracts involve an agreement to purchase or sell a
specific currency at a future date at a price set in the contract and enable the
Series to protect against losses resulting from adverse changes in the
relationship between the U.S. dollar and foreign currencies occurring between
the trade and settlement dates of Series securities transactions, but they also
tend to limit the potential gains that might result from a positive change in
such currency relationships. Gains and losses on investments in futures and
options thereon depend on the direction of securities prices, interest rates and
other economic factors.

INTRODUCTION OF THE EURO

On January 1, 1999, the European Monetary Union ("EMU") introduced a common
currency, the Euro, replacing its members' national currencies. This
development may affect Series' investments in EMU countries to the extent the
introduction of the Euro changes investment practices, opportunities, risks and
investor behavior or creates administrative problems. The Advisor and its
global custodians are attempting to assure on an ongoing basis that the Series
will remain unaffected by any transition-related disruptions. However, they
cannot guarantee that their efforts will succeed completely. The relative value
of the U.S. dollar and Euro will fluctuate. Accordingly, currency risk
(discussed above) will continue to apply to Series' investments in EMU
countries.

BORROWING

Each Series, except the U.S. 9-10 Series, Japanese Series and The DFA One-Year
Fixed Income Series, has reserved the right to borrow amounts not exceeding 33%
of its net assets for the purposes of making redemption payments. When
advantageous opportunities to do so exist, the Series may purchase securities
when borrowings exceed 5% of the value of the Series' net assets.

30
<PAGE>

Such purchases can be considered to be "leveraging," and in such circumstances,
the net asset value of the Series may increase or decrease at a greater rate
than would be the case if the Series had not leveraged. The interest payable on
the amount borrowed would increase the Series' expenses and if the appreciation
and income produced by the investments purchased when the Series has borrowed
are less than the cost of borrowing, the investment performance of the Series
will be reduced as a result of leveraging.

PORTFOLIO STRATEGIES

The method employed by the Advisor to manage each Series, except The U.S. Large
Company Series, The Enhanced U.S. Large Company Series and the Fixed Income
Series, will differ from the process employed by many other investment advisors
in that the Advisor will rely on fundamental analysis of the investment merits
of securities to a limited extent to eliminate potential portfolio acquisitions
rather than rely on this technique to select securities. Further, because
securities generally will be held long-term and will not be eliminated based on
short-term price fluctuations, the Advisor generally will not act upon general
market movements or short-term price fluctuations of securities to as great an
extent as many other investment advisors. The U.S. Large Company Series will
operate as an index fund and, therefore, represents a passive method of
investing in all stocks that comprise the S&P 500 Index which does not entail
selection of securities based on the individual investment merits of their
issuers. The investment performance of The U.S. Large Company Series is
expected to approximate the investment performance of the S&P 500 Index, which
tends to be cyclical in nature, reflecting periods when stock prices generally
rise or fall.

FUTURES CONTRACTS AND OPTIONS ON FUTURES

All Series except The U.S. 9-10 and 6-10 Small Company Series and The DFA
One-Year Fixed Income Series may invest in index futures contracts and options
on index futures. To the extent that such Series invest in futures contracts
and options thereon for other than bona fide hedging purposes, no Series will
enter into such transactions if, as a result, more than 5% of its net assets
would then consist of margin deposits and premiums required to establish such
positions, after taking into account unrealized profits and unrealized losses on
such contracts it has entered into; provided, however, that, in the case of an
option that is in-the-money at the time of purchase, the in-the-money amount may
be excluded in calculating the 5%.

These investments entail the risk that an imperfect correlation may exist
between changes in the market value of the stocks owned by the Series and the
prices of such futures contracts and options, and, at times, the market for such
contracts and options might lack liquidity, thereby inhibiting a Series' ability
to close a position in such investments. Gains or losses on investments in
options and futures depend on the direction of securities prices, interest rates
and other economic factors, and the loss from investing in futures transactions
is potentially unlimited. Certain restrictions imposed by the Code may limit
the ability of a Series to invest in futures contracts and options on futures
contracts.

OPTIONS ON STOCK INDICES

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<PAGE>

The Enhanced U.S. Large Company Series may purchase put and call options and
write put and call options on stock indices and stock index futures listed on
national securities exchanges or traded in the over-the-counter market. The
Enhanced U.S. Large Company Series may use these techniques to hedge against
changes in securities prices or as part of its overall investment strategy. An
option on an index is a contract that gives the holder of the option, in return
for a premium, the right to buy from (in the case of a call) or sell to (in the
case of a put) the writer of the option the cash value of the index at a
specified exercise price at any time during the term of the option. Upon
exercise, the writer of an option on an index is obligated to pay the difference
between the cash value of the index and the exercise price multiplied by the
specified multiplier for the index option. (An index is designed to reflect
specified facets of a particular financial or securities market, a specific
group of financial instruments or securities, or certain economic indicators.)
A stock index fluctuates with changes in the market values of the stocks
included in the index.

With respect to the writing of options, the writer has no control over the time
when it may be required to fulfill its obligation. Prior to exercise or
expiration, an option may be closed out by an offsetting purchase or sale of an
option on the same series. There can be no assurance, however, that a closing
purchase or sale transaction can be effected when The Enhanced U.S. Large
Company Series desires.

The Enhanced U.S. Large Company Series may write covered straddles consisting of
a combination of a call and a put written on the same index. A straddle will be
covered when sufficient assets are deposited to meet The Enhanced U.S. Large
Company Series' immediate obligations. The Series may use the same liquid
assets to cover both the call and put options where the exercise price of the
call and the put are the same or the exercise price of the call is higher than
that of the put. In such cases, the Series will also segregate liquid assets
equivalent to the amount, if any, by which the put is "in the money."

The effectiveness of purchasing stock index options will depend upon the extent
to which price movements in The Enhanced U.S. Large Company Series' portfolio
correlate with price movements of the stock index selected. Because the value
of an index option depends upon movements in the level of the index rather than
the price of a particular stock, whether the Series will realize a gain or loss
from the purchase of options on an index depends upon movements in the level of
stock prices in the stock market generally or, in the case of certain indices,
in an industry or market segment, rather than movements in the price of a
particular stock. If The Enhanced U.S. Large Company Series takes positions in
options instruments contrary to prevailing market trends, the Series could be
exposed to the risk of a loss. Certain restrictions imposed on The Enhanced
U.S. Large Company Series by the Code may limit the ability of such Series to
invest in options.

SWAPS

The Enhanced U.S. Large Company Series may enter into equity index swap
agreements for purposes of attempting to obtain a particular desired return at a
lower cost to the Series than if the Series had invested directly in an
instrument that yielded that desired return. Swap agreements are two-party
contracts entered into primarily by institutional investors for periods

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ranging from a few weeks to more than one year. In a standard "swap"
transaction, two parties agree to exchange the returns (or differentials in
rates of return) earned or realized on particular predetermined investments or
instruments. The gross returns to be exchanged or "swapped" between the parties
are generally calculated with respect to a "notional amount," i.e., the return
on or increase in value of a particular dollar amount invested in a group of
securities representing a particular index.

The "notional amount" of the swap agreement is only a fictive basis on which to
calculate the obligations which the parties to a swap agreement have agreed to
exchange. Most swap agreements entered into by The Enhanced U.S. Large Company
Series would calculate the obligations of the parties to the agreement on a "net
basis." Consequently, the Series' current obligations (or rights) under a swap
agreement will generally be equal only to the net amount to be paid or received
under the agreement based on the relative values of the positions held by each
party to the agreement (the "net amount"). The Enhanced U.S. Large Company
Series' current obligations under a swap agreement will be accrued daily (offset
against amounts owed to the Series) and any accrued but unpaid net amounts owed
to a swap counterparty will be covered by the maintenance of a segregated
account consisting of liquid assets to avoid any potential leveraging of the
Series' portfolio. The Enhanced U.S. Large Company Series will not enter into a
swap agreement with any single party if the net amount owed or to be received
under existing contracts with that party would exceed 5% of the Series' assets.

Because they are two-party contracts and because they may have terms of greater
than seven days, swap agreements may be considered to be illiquid, and,
therefore, swap agreements entered into by The Enhanced U.S. Large Company
Series and other illiquid securities will be limited to 15% of the net assets of
the Series. Moreover, The Enhanced U.S. Large Company Series bears the risk of
loss of the amount expected to be received under a swap agreement in the event
of the default or bankruptcy of a swap agreement counterparty. The Advisor will
cause The Enhanced U.S. Large Company Series to enter into swap agreements only
with counterparties that the Investment Committee of the Advisor has approved.
Certain restrictions imposed on the Enhanced U.S. Large Company Series by the
Code may limit the Series' ability to use swap agreements. The swap market is a
relatively new market and is largely unregulated. It is possible that
developments in the swaps market, including potential government regulation,
could adversely affect The Enhanced U.S. Large Company Series' ability to
terminate existing swap agreements or to realize amounts to be received under
such agreements.

BANKING INDUSTRY CONCENTRATIONS

Concentrating in obligations of the banking industry may involve additional risk
by foregoing the safety of investing in a variety of industries. Changes in the
market's perception of the riskiness of banks relative to non-banks could cause
more fluctuations in the net asset value of The DFA One-Year Fixed Income and
Two-Year Global Fixed Income Series than might occur in less concentrated
portfolios.

YEAR 2000 ISSUE

33
<PAGE>

Unless modified, many computer programs will not properly process information
from the year 2000 on. While the issue is international in scope, there is
particular concern with foreign entities. The Advisor has taken steps designed
to ensure that its computers and those of the Series' service providers (e.g.,
custodians) will operate properly. The Series may be negatively affected if the
Advisor's efforts prove inadequate, and/or year 2000 problems hurt portfolio
securities or economic conditions generally.

RESPONSES TO ITEM 5 HAVE BEEN OMITTED PURSUANT TO PARAGRAPH 2(b) OF INSTRUCTION
B OF THE GENERAL INSTRUCTIONS TO FORM N-1A

ITEM 6. MANAGEMENT, ORGANIZATION, AND CAPITAL STRUCTURE

(a)(1) INVESTMENT ADVISER.

(i) Dimensional Fund Advisors Inc., 1299 Ocean Avenue, 11th Floor, Santa
Monica, California 90401, serves as investment advisor to each of the Series,
except the Global Series, for which it serves as the administrator. The
Advisor was organized in May 1981 and is engaged in the business of providing
investment management services to institutional investors. Assets under
management total approximately $28 billion.

Pursuant to an investment management agreement with the Trust with respect to
each Series except the Global Series, the Advisor manages the investment and
reinvestment of their assets. The Advisor also provides the Trust with records
concerning the Advisor's activities which the Trust is required to maintain and
renders regular reports to the Trust's officers and the Board of Trustees. The
Advisor also provides all of the Series with a trading department and selects
brokers and dealers to effect securities transactions.

INVESTMENT SERVICES - UNITED KINGDOM AND CONTINENTAL SMALL COMPANY SERIES

Pursuant to Sub-Advisory Agreements with the Advisor, Dimensional Fund Advisors
Ltd. ("DFAL"), 14 Berkeley Street, London, W1X 5AD, England, a company that is
organized under the laws of England, has the authority and responsibility to
select brokers or dealers to execute securities transactions for the United
Kingdom and Continental Series. DFAL's duties include the maintenance of a
trading desk for the Series and the determination of the best and most efficient
means of executing securities transactions. On at least a semi-annual basis
the Advisor reviews the holdings of the United Kingdom and Continental Series
and reviews the trading process and the execution of securities transactions.
The Advisor is responsible for determining those securities which are eligible
for purchase and sale by these Series and may delegate this task, subject to its
own review, to DFAL. DFAL maintains and furnishes to the Advisor information
and reports on United Kingdom and European small companies, including its
recommendations of securities to be added to the securities that are eligible
for purchase by the Series. DFAL is a member of the Investment Management
Regulatory Organization Limited ("IMRO"), a self regulatory organization for
investment managers operating under the laws of England. The Advisor owns 100%
of the outstanding shares of DFAL.

INVESTMENT SERVICES - JAPANESE AND PACIFIC RIM SMALL COMPANY SERIES

34
<PAGE>

Pursuant to Sub-Advisory Agreements with the Advisor, DFA Australia Limited
("DFA Australia"), Suite 2001 Gateway, 1 MacQuarie Place, Sydney, New South
Wales 2000, Australia, the successor to Dimensional Fund Advisors Asia Inc., has
the authority and responsibility to select brokers and dealers to execute
securities transactions for the Japanese and Pacific Rim Series. DFA
Australia's duties include the maintenance of a trading desk for each Series and
the determination of the best and most efficient means of executing securities
transactions. On at least a semi-annual basis, the Advisor reviews the holdings
of the Japanese and Pacific Rim Series and reviews the trading process and the
execution of securities transactions. The Advisor is responsible for
determining those securities which are eligible for purchase and sale by these
Series and may delegate this task, subject to its own review, to DFA Australia.
DFA Australia maintains and furnishes to the Advisor information and reports on
Japanese and Pacific Rim small companies, including its recommendations of
securities to be added to the securities that are eligible for purchase by each
Series. The Advisor beneficially owns 100% of DFA Australia.

CONSULTING SERVICES - DFA INTERNATIONAL VALUE SERIES, EMERGING MARKETS SERIES
AND EMERGING MARKETS SMALL CAP SERIES

The Advisor has entered into a Consulting Services Agreement with DFAL and DFA
Australia, respectively. Pursuant to the terms of each Consulting Services
Agreement, DFAL and DFA Australia provide certain trading and administrative
services to the Advisor with respect to DFA International Value Series, Emerging
Markets Series and Emerging Markets Small Cap Series.

6(a)(1)(ii) For the fiscal year ended November 30, 1998, the Advisor received a
fee for its services which, on an annual basis, equaled the following percentage
of the average net assets of each Series:

<TABLE>
<CAPTION>
Series Management Fee
------ --------------
<S> <C>
U.S. Large Company 0.025%

Enhanced U.S. Large Company 0.05%

U.S. Large Cap Value 0.10%

U.S. 4-10 Value 0.10%

U.S. 6-10 Value 0.20%

U.S. 6-10 Small Company 0.03%

U.S. 9-10 Small Company 0.10%

DFA International Value 0.20%

Japanese Small Company 0.10%

Pacific Rim Small Company 0.10%
</TABLE>

35
<PAGE>

<TABLE>
<CAPTION>
Series Management Fee
------ --------------
<S> <C>
United Kingdom Small Company 0.10%

Continental Small Company 0.10%

Emerging Markets 0.10%

Emerging Markets Small Cap 0.20%

DFA One-Year Fixed Income 0.05%

DFA Two-Year Global Fixed Income 0.05%
</TABLE>

The management fee applicable to The Tax-Managed Marketwide Value Series, which
had not commenced operations as of November 30, 1998, is equal to 0.20% of the
Series' average net assets on an annual basis. While The Global Value Series,
The Global Large Company Series and The Global Small Company Series are not
subject to a management fee, investments by the Global Series in the Master
Series are subject to the management fees charged by the respective Master
Series.

6(a)(2) PORTFOLIO MANAGER. Investment decisions for all Series (except the
Global Series) are made by the Investment Committee of the Advisor which meets
on a regular basis and also as needed to consider investment issues. The
Investment Committee is composed of certain officers and directors of the
Advisor who are elected annually.

6(a)(3) LEGAL PROCEEDINGS. Not applicable.

6(b) CAPITAL STOCK. Not applicable.

ITEM 7. SHAREHOLDER INFORMATION

(a) PRICING OF FUND SHARES. The net asset value per share of each Series is
calculated as of the close of the NYSE by dividing the total market value of the
Series' investments and other assets, less any liabilities, by the total
outstanding shares of the stock of the Series. The value of the shares of each
Series will fluctuate in relation to its own investment experience. The value
of the shares of the Global Series will fluctuate in relation to the investment
experience of the Master Series in which the Global Series invest. Securities
held by the Series which are listed on the securities exchange and for which
market quotations are available are valued at the last quoted sale price of the
day or, if there is no such reported sale, The U.S. 6-10 Small Company, The U.S.
9-10 Small Company, The U.S. Large Company, The DFA International Value, the
U.S. Value, The Emerging Markets and The Emerging Markets Small Cap Series value
such securities at the mean between the most recent quoted bid and asked prices.
Price information on listed securities is taken from the exchange where the
security is primarily traded. Securities issued by open-end investment
companies, such as the Series, are valued using their respective net asset
values for purchase orders placed at the close of the NYSE. Unlisted securities
for

36
<PAGE>

which market quotations are readily available are valued at the mean between the
most recent bid and asked prices. The value of other assets and securities for
which no quotations are readily available (including restricted securities) are
determined in good faith at fair value in accordance with procedures adopted by
the Board of Trustees. The net asset values per share of the Japanese, Pacific
Rim, Continental, United Kingdom, The DFA International Value, The DFA Two-Year
Global Fixed Income, The Emerging Markets and The Emerging Markets Small Cap and
the Large Cap International Portfolio are expressed in U.S. dollars by
translating the net assets of each Series using the mean price for the dollar as
quoted by generally recognized reliable sources.

The value of the shares of the Fixed Income Series will tend to fluctuate with
interest rates because, unlike money-market funds, such Series do not seek to
stabilize the value of their shares by use of the "amortized cost" method of
asset valuation. Net asset value includes interest on fixed income securities
which is accrued daily. Securities which are traded OTC and on a stock exchange
will be valued according to the broadest and most representative market, and it
is expected that for bonds and other fixed-income securities this ordinarily
will be the OTC market. Securities held by the Fixed Income Series may be
valued on the basis of prices provided by a pricing service when such prices are
believed to reflect the current market value of such securities. Other assets
and securities for which quotations are not readily available will be valued in
good faith at fair value using methods determined by the Board of Trustees.

Generally, trading in foreign securities markets is completed each day at
various times prior to the close of the NYSE. The values of foreign securities
held by those Series that invest in such securities are determined as of such
times for the purpose of computing the net asset value of the Series. If events
which materially affect the value of the investments of the Series occur
subsequent to the close of the securities market on which such securities are
primarily traded, the investments affected thereby will be valued at "fair
value" as described above.

Certain of the securities holdings of The Emerging Markets Series and The
Emerging Markets Small Cap Series in Approved Markets may be subject to tax,
investment and currency repatriation regulations of the Approved Markets that
could have a material effect on the valuation of the securities. For example, a
Series might be subject to different levels of taxation on current income and
realized gains depending upon the holding period of the securities. In general,
a longer holding period (e.g., 5 years) may result in the imposition of lower
tax rates than a shorter holding period (e.g., 1 year). The Series may also be
subject to certain contractual arrangements with investment authorities in an
Approved Market which require a Series to maintain minimum holding periods or to
limit the extent of repatriation of income and realized gains. As a result, the
valuation of particular securities at any one time may depend materially upon
the assumptions that a Series makes at that time concerning the anticipated
holding period for the securities. Absent special circumstances as determined
by the Board of Trustees, it is presently intended that the valuation of such
securities will be based upon the assumption that they will be held for at least
the amount of time necessary to avoid higher tax rates or penalties and currency
repatriation restrictions. However, the use of such valuation standards will
not prevent the Series from selling such securities in a shorter period of time
if the Advisor considers the earlier sale to be a more prudent course of action.
Revision in valuation of those securities

37
<PAGE>

will be made at the time of the transaction to reflect the actual sales proceeds
inuring to the Series.

Futures contracts are valued using the settlement price established each day on
the exchange on which they are traded. The value of such futures contracts held
by a Series are determined each day as of such close.

It is management's belief that payment of a reimbursement fee by each investor,
which is used to defray significant costs associated with investing proceeds of
the sale of the Series' shares to such investors, will eliminate a dilutive
effect such costs would otherwise have on the net asset value of shares held by
existing investors. Therefore, the shares of The Emerging Markets, Emerging
Markets Small Cap, Japanese, Pacific Rim and Continental Series are sold at an
offering price which is equal to the current net asset value of such shares plus
a reimbursement fee. The amount of the reimbursement fee represents
management's estimate of the costs reasonably anticipated to be associated with
the purchase of securities by that Series, and is paid to the Series and used by
it to defray such costs. Such costs include brokerage commissions on listed
securities and imputed commissions on OTC securities. The reimbursement fee for
The Emerging Markets Series and the Japanese Series, expressed as a percentage
of the net asset value of each Series' shares, is 0.50%. The reimbursement fee
for The Emerging Markets Small Cap, Pacific Rim and Continental Series,
expressed as a percentage of the net assets of each Series' shares, is 1.00%.
Reinvestments of dividends and capital gains distributions paid by the Series
and in-kind investments are not subject to a reimbursement fee.

The offering price of shares of each Series, except for The Emerging Markets,
Emerging Markets Small Cap, Japanese, Pacific Rim, Continental and Global Small
Company Series, is the net asset value thereof next determined after the receipt
of the investor's funds by the Custodian, provided that the purchase order in
good order has been received by the Transfer Agent; no sales charge or
reimbursement fee is imposed.

In the case of the Global Small Company Series, the reimbursement fee is equal
to a blended rate of the reimbursement fees of its underlying Master Series.
The blended rate is determined on a quarterly basis and is based upon the target
allocations for the Master Series then in effect at the end of each quarter.
The blended rate will be calculated by multiplying the rate of reimbursement fee
of each Master Series by a fraction equal to the portion of the assets of the
Global Small Company Series which, at such time, is being allocated to each
Master Series and adding the results thereof. If there is a change to the
reimbursement fee of a Master Series during a quarter, the blended rate will be
recalculated to reflect such change in the Master Series' reimbursement fee.

The Trust bears all of its own costs and expenses, including: services of its
independent accountants, legal counsel, brokerage fees, commissions and transfer
taxes in connection with the acquisition and disposition of portfolio
securities, taxes, insurance premiums, costs incidental to meetings of its
shareholders and trustees, the cost of filing its registration statement under
federal securities law, reports to shareholders, and transfer and dividend
disbursing agency, administrative services and custodian fees. Expenses
allocable to a particular Series are so

38
<PAGE>

allocated and expenses of the Trust which are not allocable to a particular
Series are borne by each Series on the basis of its relative net assets.

7(b) PURCHASE OF FUND SHARES. The Trust's shares have not been registered
under the Securities Act of 1933, which means that its shares may not be sold
publicly. However, the Trust may sell its shares through private placements
pursuant to available exemptions from registration under that Act.

Shares of the Trust are sold only to other investment companies and certain
institutional investors. Shares of The Emerging Markets, Emerging Markets Small
Cap, Japanese, Pacific Rim, Continental and Global Small Company Series are sold
at a price which is equal to the net asset value of such shares plus a
reimbursement fee. (See Item 7(a).) Shares of the other Series are sold at net
asset value without a sales charge. Shares are purchased at the net asset value
next determined after the Trust receives the order in proper form. All
investments are credited to the shareholder's account in the form of full and
fractional shares of the Series calculated to three decimal places. In the
interest of economy and convenience, certificates for shares will not be issued.

IN KIND PURCHASES

If accepted by the Trust, shares of the Series may be purchased in exchange for
securities which are eligible for purchase or otherwise represented in the
Series' portfolios at the time of the exchange as described in this registration
statement or in exchange for local currencies in which such securities of the
Japanese, United Kingdom, Pacific Rim, Continental, The DFA International Value,
The Emerging Markets, The Emerging Markets Small Cap, The DFA Two-Year Global
Fixed Income and The Enhanced U.S. Large Company Series are denominated.
Subject to approval by the Advisor, shares of The Global Value Series, The
Global Large Company Series and The Global Small Company Series may be purchased
in any freely convertible currency and the necessary foreign exchange
transactions will be arranged on behalf of, and at the expense of, the investor.
Investors settling in any currency other than U.S. dollars are advised that a
delay in processing a purchase of shares of a Global Series may occur to allow
for currency conversion. Securities and local currencies to be exchanged which
are accepted by the Trust and Trust shares to be issued therefore will be
valued, as set forth under "Pricing of Fund Shares" in Item 7(a), at the time of
the next determination of net asset value after such acceptance. All dividends,
interest, subscription, or other rights pertaining to such securities shall
become the property of the Series whose shares are being acquired and must be
delivered to the Trust by the investor upon receipt from the issuer. Investors
who desire to purchase shares of the Japanese, United Kingdom, Pacific Rim,
Continental, Global Value, Global Large Company, Global Small Company, The DFA
International Value or DFA Two-Year Global Fixed Income Series with local
currencies should first contact the Advisor for wire instructions.

The Trust will not accept securities in exchange for shares of a Series unless:
(1) such securities are eligible to be included, or otherwise represented, in
the Series' portfolios at the time of exchange and current market quotations are
readily available for such securities; (2) the investor represents and agrees
that all securities offered to be exchanged are not subject to any restrictions
upon their sale by the Series under the Securities Act of 1933 or under the laws
of the country in

39
<PAGE>

which the principal market for such securities exists, or otherwise; and (3) at
the discretion of the Series, the value of any such security (except U.S.
Government Securities) being exchanged together with other securities of the
same issuer owned by the Series will not exceed 5% of the net assets of the
Series immediately after the transaction. (See Items 4(a) and (b) above.)
Investors interested in such exchanges should contact the Advisor. Investors
should also know that an in-kind purchase of shares of a Series may result in
taxable income; an investor desiring to make an in-kind purchase should consult
its tax advisor.

7(c) REDEMPTION OF FUND SHARES. As stated above in response to Item 7(b),
"Purchase of Fund Shares," the Trust's shares have not been registered under
the Securities Act of 1933, which means that its shares are restricted
securities which may not be sold unless registered or pursuant to an available
exemption from that Act.

Investors who desire to redeem shares of a Series must first contact the Advisor
at (310) 395-8005. Redemptions are processed on any day on which the Trust is
open for business and are effected at the Series' net asset value next
determined after the Series receives a redemption request in good form.

Redemption payments in cash will ordinarily be made within seven days after
receipt of the redemption request in good form. However, the right of
redemption may be suspended or the date of payment postponed in accordance with
the Investment Company Act of 1940. The amount received upon redemption may be
more or less than the amount paid for the shares depending upon the fluctuations
in the market value of the assets owned by the Series.

When in the best interests of a Series, the Series (other than The Tax-Managed
U.S. Marketwide Value Series, The Global Value Series, The Global Large Company
Series and The Global Small Company Series) may pay the redemption price in
whole or in part by a distribution of portfolio securities from the Series of
the shares being redeemed in lieu of cash in accordance with Rule 18f-1 under
the Investment Company Act of 1940. Each Global Series is authorized to make
redemption payments solely by a distribution of portfolio securities that the
Global Series receives from a Master Series (or to pay the redemption price with
a combination of securities and cash), when it is determined by the Advisor, in
its capacity as administrator to the Global Series, to be in the best interests
of the Global Series. Investors may incur brokerage charges and other
transaction costs selling securities that were received in payment of
redemptions. The Japanese Small Company, United Kingdom Small Company,
Continental Small Company, Pacific Rim Small Company, Emerging Markets, Emerging
Markets Small Cap, Two-Year Global Fixed Income and DFA International Value
Series reserve the right to redeem their shares in the currencies in which their
investments are denominated. The Global Series reserve the right to redeem
their shares in the currencies in which their respective Master Funds'
investments are denominated. Investors may incur charges in converting such
currencies to dollars and the value of the securities may be affected by
currency exchange fluctuations.

Although the redemption payments will ordinarily be made within seven days after
receipt, payment to investors redeeming shares which were purchased by check
will not be made until the Trust can verify that the payments for the purchase
have been, or will be, collected, which

40
<PAGE>

may take up to fifteen days or more. Investors may avoid this delay by
submitting a certified check along with the purchase order.

For additional information about redemption of Trust shares, see Item 18 in
Part B.

7(d) DIVIDENDS AND DISTRIBUTIONS. Except for the Partnership Series (defined
below), the Trust's policy is to distribute substantially all net investment
income not previously distributed during the year from the Small Company Series,
U.S. 4-10 Value Series, U.S. 6-10 Value Series, the Global Series and the DFA
International Value Series together with any net realized capital gains in
December of each year. In addition, the Corporate Series (as defined below)
will distribute all net investment income earned through the end of November
each year in the month of November. Dividends from net investment income of The
Enhanced U.S. Large Company Series and U.S. Large Cap Value Series, are
distributed quarterly, and any net capital gains are distributed annually after
November 30. Net investment income, which is accrued daily, will be distributed
monthly (except for January) by The DFA One-Year Fixed Income Series and
quarterly by The DFA Two-Year Global Fixed Income Series. Any net realized
capital gains of the Fixed Income Series will be distributed annually after the
end of the fiscal year. Shareholders of the Trust (other than shareholders of
the Partnership Series) will automatically receive all income dividends and
capital gains distributions in additional shares of the Series whose shares they
hold at net asset value (as of the business date following the dividend record
date), unless as to The U.S. 6-10 Small Company Series, U.S. 9-10 Small Company
Series, the Fixed Income Series and the U.S. Value Series, upon written notice
to PFPC, the shareholder selects one of the following options: (i) Income
Option -- to receive income dividends in cash and capital gains distributions in
additional shares at net asset value; (ii) Capital Gains Option -- to receive
capital gains distributions in cash and income dividends in additional shares at
net asset value; or (iii) Cash Option --to receive both income dividends and
capital gains distributions in cash. While shareholders of The Enhanced U.S.
Large Company Series will automatically receive all capital gains distributions
in additional shares of the Series, upon written notice to the Transfer Agent,
they may receive all income dividends in cash. Shareholders of the Global
Series may select the Cash Option described in clause (iii) in the preceding
sentence.

7(e) TAX CONSEQUENCES. Each Series of the Trust, other than the Japanese,
United Kingdom, Pacific Rim, Continental, The U.S. Large Company, The Emerging
Markets, The Emerging Markets Small Cap and The Tax-Managed Marketwide Value
Series, is classified as a separate corporation for U.S. federal income tax
purposes (collectively, referred to as the "Corporate Series").

The Japanese, United Kingdom, Pacific Rim, Continental, The U.S. Large Company,
The Emerging Markets, The Emerging Markets Small Cap and Tax-Managed Marketwide
Value Series (together, the "Partnership Series") are classified as partnerships
for U.S. federal income tax purposes.

For U.S. federal income tax purposes, any income dividends which the shareholder
receives from a Corporate Series, as well as any distributions derived from the
excess of net short-term capital gain over net long-term capital loss, are
treated as ordinary income whether the shareholder has elected to receive them
in cash or in additional shares. Shareholders of a Corporate Series are

41
<PAGE>

notified annually by the Trust as to the U.S. federal tax status of dividends
and distributions paid by the Corporate Series whose shares they own.

Dividends which are declared by a Corporate Series in October, November or
December to shareholders of record in such a month but which, for operational
reasons, may not be paid to the shareholder until the following January, will be
treated for U.S. federal income tax purposes as if paid by a Corporate Series
and received by the shareholder on December 31 of the calendar year in which
they are declared.

The sale of shares of a Corporate Series by redemption is a taxable event and
may result in a capital gain or loss. Any loss incurred on sale or exchange of
shares of the Corporate Series, held for six months or less, will be treated as
a long-term capital loss to the extent of capital gain dividends received with
respect to such shares.

The Series may be required to report to the Internal Revenue Service ("IRS") any
taxable dividend or other reportable payment (including share redemption
proceeds) and withhold 31% of any such payments made to individuals and other
non-exempt shareholders who have not provided a correct taxpayer identification
number and made certain required certifications that appear in the Shareholder
Application form. A shareholder may also be subject to backup withholding if
the IRS or a broker notifies the Corporate Series that the number furnished by
the shareholder is incorrect or that the shareholder is subject to backup
withholding for previous under-reporting of interest or dividend income.

Shareholders should also consult their tax advisors with respect to the
applicability of any state and local intangible property or income taxes to
their shares of the Corporate Series and distributions and redemption proceeds
received from the Corporate Series.

The Partnership Series' taxable year-end will be November 30. Although, as
described above, the Partnership Series will not be subject to U.S. federal
income tax, they will file appropriate U.S. federal income tax returns.

Redemptions of shares in a Partnership Series may be taxable. In general, a
redemption of shares resulting in a distribution of cash by a Partnership Series
to an investor in excess of that investor's tax basis in its shares of such
Partnership Series is taxable to the extent of such excess.

The Partnership Series will inform investors promptly after the close of each
fiscal year of the source of dividends and distributions at the time they are
paid and will promptly advise investors of their allocable share of a
Partnership Series' income, gains, losses, deductions and credits for U.S.
federal income tax purposes.

Investors may wish to contact their tax advisors to determine the applicability
of state and local taxes to their distributive share of a Partnership Series'
income, gains, losses, deductions, and credits.

ITEM 8. DISTRIBUTION ARRANGEMENTS

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<PAGE>

(a) SALES LOADS. Not applicable.

(b) RULE 12B-1 FEES. Not applicable.

(c) MASTER-FEEDER FUNDS. Certain shareholders of the Series are open-end
investment companies and unregistered investment companies that seek to achieve
their investment objectives by investing all of their investable assets in one
or more corresponding Series of the Trust (the "Feeder Portfolios"). Each
Feeder Portfolio has the same investment objective, policies and limitations as
the corresponding Series in which it invests. The master-feeder structure is
unlike many other investment companies that directly acquire and manage their
own portfolio of securities. The investment experience of each Feeder Portfolio
will correspond directly with the investment experience of its corresponding
Series, and the investment experience of each Global Series will correspond
directly with the investment experience of its corresponding Master Series.

RESPONSES TO ITEM 9 HAVE BEEN OMITTED PURSUANT TO PARAGRAPH 2(b) OF INSTRUCTION
B OF THE GENERAL INSTRUCTIONS TO FORM N-1A

PART B:

ITEM 10. COVER PAGE AND TABLE OF CONTENTS Not applicable.

ITEM 11. FUND HISTORY

(a) The Trust was organized as a Delaware business trust on October 27, 1992.
Until August 1, 1997, The U.S. 6-10 Value Series was named The U.S. Small Cap
Value Series.

(b) Not applicable.

ITEM 12. DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS

(a) CLASSIFICATION. The Trust is an open-end, management investment company
registered under the Investment Company Act of 1940. Each Series operates as a
diversified investment company. Further, no Series will invest more than 25% of
its total assets in securities of companies in a single industry.

(b) AND (c) INVESTMENT STRATEGIES AND RISKS AND FUND POLICIES. In addition
to the policies stated in response to Item 4 of Part A, each of the Series has
adopted certain limitations which may not be changed with respect to any Series
without the approval of a majority of the outstanding voting securities of the
Series. A "majority" is defined as the lesser of: (1) at least 67% of the
voting securities of the Series (to be affected by the proposed change) present
at a meeting, if the holders of more than 50% of the outstanding voting
securities of the Series are present or represented by proxy, or (2) more than
50% of the outstanding voting securities of such Series.

The Series will not:

43
<PAGE>

(1) invest in commodities or real estate, including limited partnership
interests therein, although they may purchase and sell securities of companies
which deal in real estate and securities which are secured by interests in real
estate, and all Series except The U.S. 9-10 and 6-10 Small Company Series and
The DFA One-Year Fixed Income Series may purchase or sell financial futures
contracts and options thereon; and The Enhanced U.S. Large Company Series may
purchase, sell and enter into indices-related futures contracts, options on such
futures contracts, securities-related swap agreements and other derivative
instruments;

(2) make loans of cash, except through the acquisition of repurchase agreements
and obligations customarily purchased by institutional investors;

(3) as to 75% of the total assets of a Series, invest in the securities of any
issuer (except obligations of the U.S. Government and its instrumentalities) if,
as a result, more than 5% of the Series' total assets, at market, would be
invested in the securities of such issuer; provided that this limitation applies
to 100% of the total assets of The U.S. 9-10 Small Company Series;

(4) purchase or retain securities of an issuer if those officers and trustees of
the Trust or officers and directors of the Advisor owning more than 1/2 of 1% of
such securities together own more than 5% of such securities; provided that The
U.S. 4-10 Value Series, The Global Value Series, The Global Large Company
Series, The Global Small Company Series and The Tax-Managed U.S. Marketwide
Value Series are not subject to this limitation;

(5) borrow, except from banks and as a temporary measure for extraordinary or
emergency purposes and then, in no event, in excess of 5% of a Series' gross
assets valued at the lower of market or cost; provided that each Series, except
The DFA One-Year Fixed Income Series, U.S. 9-10 Small Company Series and the
Japanese Series, may borrow amounts not exceeding 33% of their net assets from
banks and pledge not more than 33% of such assets to secure such loans;

(6) pledge, mortgage, or hypothecate any of its assets to an extent greater than
10% of its total assets at fair market value, except as described in (5) above;
provided that The U.S. 4-10 Value Series, The Global Value Series, The Global
Large Company Series, The Global Small Company Series and The Tax-Managed U.S.
Marketwide Value Series are not subject to this limitation;

(7) invest more than 10% of the value of the Series' total assets in illiquid
securities, which include certain restricted securities, repurchase agreements
with maturities of greater than seven days, and other illiquid investments;
provided that The U.S. 4-10 Value, The Tax-Managed U.S. Marketwide Value,
Enhanced U.S. Large Company, The DFA Two-Year Global Fixed Income, The Emerging
Markets Small Cap Series are not subject to this limitation, and The DFA
International Value Series, The U.S. 6-10 Value Series, The U.S. Large Cap Value
Series, The Global Value Series, The Global Large Company Series, The Global
Small Company Series, The U.S. 6-10 Small Company Series and The Emerging
Markets Series may invest not more than 15% of their total assets in illiquid
securities;

(8) engage in the business of underwriting securities issued by others;

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<PAGE>

(9) invest for the purpose of exercising control over management of any company;
provided that The U.S. 9-10 Small Company Series, The U.S. 4-10 Value Series,
The Global Value Series, The Global Large Company Series, The Global Small
Company Series and The Tax-Managed U.S. Marketwide Value Series are not subject
to this limitation;

(10) invest its assets in securities of any investment company, except in
connection with a merger, acquisition of assets, consolidation or
reorganization; provided that (a) The Emerging Markets, Emerging Markets Small
Cap, Japanese, United Kingdom, Pacific Rim and Continental Series are not
subject to this limitation; (b) each of the U.S. 4-10 Value, Tax-Managed U.S.
Marketwide Value, Enhanced U.S. Large Company, Emerging Markets, Emerging
Markets Small Cap, Japanese, United Kingdom, Pacific Rim, Continental, The
Global Value, The Global Large Company and The Global Small Company Series may
invest assets in securities of investment companies and units of such companies
such as, but not limited to, S&P Depository Receipts; and (c) the U.S. 9-10
Small Company Series is not subject to this limitation;

(11) invest more than 5% of its total assets in securities of companies which
have (with predecessors) a record of less than three years' continuous
operation; provided that The U.S. 9-10 Small Company Series, The U.S. 4-10 Value
Series, The Global Value Series, The Global Large Company Series, The Global
Small Company Series and The Tax-Managed U.S. Marketwide Value Series are not
subject to this limitation;

(12) acquire any securities of companies within one industry if, as a result of
such acquisition, more than 25% of the value of the Series' total assets would
be invested in securities of companies within such industry; except The DFA
One-Year Fixed Income and Two-Year Global Fixed Income Series shall invest more
than 25% of their total assets in obligations of banks and bank holding
companies in the circumstances described in this registration statement in
"Investments in the Banking Industry" under Item 4 of Part A;

(13) write or acquire options (except as described in (1) above) or interests in
oil, gas or other mineral exploration, leases or development programs except
that (a) the Enhanced U.S. Large Company Series may write or acquire options;
and (b) The Global Value Series, The Global Large Company Series, The Global
Small Company Series and The U.S. 4-10 Value Series are not subject to these
limitations; and (c) The Tax-Managed U.S. Marketwide Value Series may write or
acquire options;

(14) purchase warrants; however, each Series, except The DFA One-Year Fixed
Income Series and Two-Year Global Fixed Income Series (the "Fixed Income
Series"), may acquire warrants as a result of corporate actions involving its
holdings of other equity securities; and The U.S. 4-10 Value Series, The Global
Value Series, The Global Large Company Series, The Global Small Company Series
and The Tax-Managed U.S. Marketwide Value Series are not subject to this
limitation;

(15) purchase securities on margin or sell short; provided that The U.S. 4-10
Value Series, The Global Value Series, The Global Large Company Series, The
Global Small Company

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<PAGE>

Series and The Tax-Managed U.S. Marketwide Value Series are not subject to the
limitation on selling securities short;

(16) acquire more than 10% of the voting securities of any issuer; provided that
(a) this limitation applies only to 75% of the assets of The U.S. Value Series,
The Emerging Markets Series and The Emerging Markets Small Cap Series; and (b)
The U.S. 9-10 Small Company Series, The Tax-Managed U.S. Marketwide Value
Series, The Global Value Series, The Global Large Company Series and The Global
Small Company Series are not subject to this limitation; or

(17) issue senior securities (as such term is defined in Section 18(f) of the
Investment Company Act of 1940), except to the extent permitted under the Act.

The investment limitations described in (3), (4), (7), (9), (10), (11), (12) and
(16) above do not prohibit The Global Value Series, The Global Large Company
Series and The Global Small Company Series from investing all or substantially
all of their assets in the shares of other registered, open-end investment
companies, such as the Master Series. The investment limitations of the Master
Series are the same as those of the corresponding Global Series.

The investment limitations described in (1) and (15) above do not prohibit each
Series that may purchase or sell financial futures contracts and options thereon
from making margin deposits to the extent permitted under applicable
regulations; and the investment limitations described in (1), (13) and (15)
above do not prohibit The Enhanced U.S. Large Company Series from (i) making
margin deposits in connection with transactions in options; and (ii) maintaining
a short position, or purchasing, writing or selling puts, calls, straddles,
spreads or combinations thereof in connection with transactions in options,
futures, and options on futures and transactions arising under swap agreements
or other derivative instruments.

For purposes of (5) above, The Emerging Markets Series and The Emerging Markets
Small Cap Series may borrow in connection with a foreign currency transaction or
the settlement of a portfolio trade. The only type of borrowing contemplated
thereby is the use of a letter of credit issued on such Series' behalf in lieu
of depositing initial margin in connection with currency futures contracts, and
the Series have no present intent to engage in any other types of borrowing
transactions under this authority. Although (2) above prohibits cash loans, the
Series are authorized to lend portfolio securities. (See "Securities Loans" in
Item 4 of Part A.)

Although (2) above prohibits cash loans, the Global Series are authorized to
lend portfolio securities. Inasmuch as the Global Series will only hold shares
of the Master Series, the Global Series do not intend to lend those shares.

For the purposes of (7) above, The DFA One-Year Fixed Income and Two-Year Global
Fixed Income Series may invest in commercial paper that is exempt from the
registration requirements of the Securities Act of 1933 (the "1933 Act") subject
to the requirements regarding credit ratings stated in this registration
statement under Item 4. Further, pursuant to Rule 144A under the 1933 Act, the
Series may purchase certain unregistered (i.e. restricted) securities upon a
determination that a liquid institutional market exists for the securities. If
it is decided that a liquid market does exist, the securities will not be
subject to the 10% or 15% limitation on

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<PAGE>

holdings of illiquid securities stated in (7) above. While maintaining
oversight, the Board of Trustees has delegated the day-to-day function of making
liquidity determinations to the Advisor. For Rule 144A securities to be
considered liquid, there must be at least two dealers making a market in such
securities. After purchase, the Board of Trustees and the Advisor will continue
to monitor the liquidity of Rule 144A securities.

Although not a fundamental policy subject to shareholder approval: (1) The U.S.
6-10 Series, Japanese Series, United Kingdom Series, Pacific Rim Series and
Continental Series and The Global Small Company Series (indirectly, through its
investment in the Master Series), will not purchase interests in any real estate
investment trust; and (2) The Enhanced U.S. Large Company, U.S. 4-10 Value,
Tax-Managed U.S. Marketwide Value, Two-Year Global Fixed Income, Emerging
Markets Small Cap Series, The Global Small Company Series, The Global Value
Series and The Global Large Company Series do not intend to invest more than
15% of their net assets in illiquid securities.

The Japanese, United Kingdom, Pacific Rim, Continental, DFA International Value,
The DFA Two-Year Global Fixed Income, The Emerging Markets and The Emerging
Markets Small Cap Series, The Global Small Company Series, The Global Value
Series, and The Global Large Company Series (indirectly, through its
investment in the Master Series) may acquire and sell forward foreign currency
exchange contracts in order to hedge against changes in the level of future
currency rates. Such contracts involve an obligation to purchase or sell a
specific currency at a future date at a price set in the contract. While the
U.S. Value Series and The DFA International Value Series have retained authority
to buy and sell financial futures contracts and options thereon, they have no
present intention to do so.

Notwithstanding any of the above investment restrictions, The Emerging Markets
Series and The Emerging Markets Small Cap Series may establish subsidiaries or
other similar vehicles for the purpose of conducting their investment operations
in Approved Markets, if such subsidiaries or vehicles are required by local laws
or regulations governing foreign investors such as the Series or whose use is
otherwise considered by the Series to be advisable. Such Series would "look
through" any such vehicle to determine compliance with their investment
restrictions.

Subject to future regulatory guidance, for purposes of those investment
limitations identified above that are based on total assets, "total assets"
refers to the assets that the Series owns, and does not include assets which the
Series does not own but over which it has effective control. For example, when
applying a percentage investment limitation that is based on total assets, the
Series will exclude from its total assets those assets which represent
collateral received by the Series for its securities lending transactions.

Unless otherwise indicated, all limitations applicable to the Series'
investments apply only at the time that a transaction is undertaken. With
respect to illiquid securities, if a fluctuation in value causes a Series to go
above its limitation on investment in illiquid securities, the Board will
consider what action, if any, should be taken to reduce the percentage to the
applicable limitation. Any subsequent change in a rating assigned by any rating
service to a security or change in the percentage of a Series' assets invested
in certain securities or other instruments resulting from market fluctuations or
other changes in a Series' total assets will not require a Series to dispose of
an investment until the Advisor determines that it is practicable to sell or

47
<PAGE>

closeout the investment without undue market or tax consequences. In the event
that ratings services assign different ratings to the same security, the Advisor
will determine which rating it believes best reflects the security's quality and
risk at that time, which may be the higher of the several assigned ratings.

Because the structure of each Series, except the Fixed Income Series, is based
on the relative market capitalizations of eligible holdings, it is possible that
the Series might include at least 5% of the outstanding voting securities of one
or more issuers. In such circumstances, the Trust and the issuer would be
deemed "affiliated persons" under the Investment Company Act of 1940 and certain
requirements of the Act regulating dealings between affiliates might become
applicable.

OPTIONS ON STOCK INDICES

The Enhanced U.S. Large Company Series may purchase and sell options on stock
indices. With respect to the sale of call options on stock indices, pursuant to
published positions of the Securities and Exchange Commission ("SEC"), The
Enhanced U.S. Large Company Series will either (1) maintain with its custodian
liquid assets equal to the contract value (less any margin deposits); (2) hold a
portfolio of stocks substantially replicating the movement of the index
underlying the call option; or (3) hold a separate call on the same index as the
call written where the exercise price of the call held is (a) equal to or less
than the exercise price of the call written, or (b) greater than the exercise
price of the call written, provided the difference is maintained by the Series
in liquid assets in a segregated account with its custodian. With respect to
the sale of put options on stock indices, pursuant to published SEC positions,
The Enhanced U.S. Large Company Series will either (1) maintain liquid assets
equal to the exercise price (less any margin deposits) in a segregated account
with its custodian; or (2) hold a put on the same index as the put written where
the exercise price of the put held is (a) equal to or greater than the exercise
price of the put written, or (b) less than the exercise price of the put
written, provided an amount equal to the difference is maintained by the Series
in liquid assets in a segregated account with its custodian.

Prior to the earlier of exercise or expiration, an option may be closed out by
an offsetting purchase or sale of an option of the same series (type, exchange,
underlying index, exercise price, and expiration). There can be no assurance,
however, that a closing purchase or sale transaction can be effected when The
Enhanced U.S. Large Company Series desires.

The Enhanced U.S. Large Company Series will realize a gain from a closing
purchase transaction if the cost of the closing option is less than the premium
received from writing the option, or, if it is more, the Series will realize a
loss. The principal factors affecting the market value of a put or a call
option include supply and demand, interest rates, the current market price of
the underlying index in relation to the exercise price of the option, the
volatility of the underlying index, and the time remaining until the expiration
date.

If an option written by The Enhanced U.S. Large Company Series expires, the
Series realizes a gain equal to the premium received at the time the option was
written. If an option purchased by the Series expires unexercised, the Series
realizes a loss equal to the premium paid.

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<PAGE>

The premium paid for a put or call option purchased by The Enhanced U.S. Large
Company Series is an asset of the Series. The premium received for an option
written by the Series is recorded as a deferred credit. The value of an option
purchased or written is marked to market daily and is valued at the closing
price on the exchange on which it is traded or, if not traded on an exchange or
no closing price is available, at the mean between the last bid and asked
prices.

RISKS ASSOCIATED WITH OPTIONS ON INDICES

There are several risks associated with transactions in options on indices. For
example, there are significant differences between the securities and options
markets that could result in an imperfect correlation between these markets,
causing a given transaction not to achieve its objectives. The value of an
option position will reflect, among other things, the current market price of
the underlying index, the time remaining until expiration, the relationship of
the exercise price, the term structure of interest rates, estimated price
volatility of the underlying index and general market conditions. A decision as
to whether, when and how to use options involves the exercise of skill and
judgment, and even a well-conceived transaction may be unsuccessful to some
degree because of market behavior or unexpected events.

Options normally have expiration dates of up to 90 days. The exercise price of
the options may be below, equal to or above the current market value of the
underlying index. Purchased options that expire unexercised have no value.
Unless an option purchased by The Enhanced U.S. Large Company Series is
exercised or unless a closing transaction is effected with respect to that
position, The Enhanced U.S. Large Company Series will realize a loss in the
amount of the premium paid and any transaction costs.

A position in an exchange-listed option may be closed out only on an exchange
that provides a secondary market for identical options. Although The Enhanced
U.S. Large Company Series intends to purchase or write only those options for
which there appears to be an active secondary market, there is no assurance that
a liquid secondary market will exist for any particular option at any specific
time. Closing transactions may be effected with respect to options traded in
the over-the-counter markets only by negotiating directly with the other party
to the option contract, or in a secondary market for the option if such a market
exists. There can be no assurance that The Enhanced U.S. Large Company Series
will be able to liquidate an over-the-counter option at a favorable price at any
time prior to expiration. In the event of insolvency of the counter-party, the
Series may be unable to liquidate an over-the-counter option. Accordingly, it
may not be possible to effect closing transactions with respect to certain
options, with the result that The Enhanced U.S. Large Company Series would have
to exercise those options which they have purchased in order to realize any
profit. With respect to options written by The Enhanced U.S. Large Company
Series, the inability to enter into a closing transaction may result in material
losses to the Series.

Index prices may be distorted if trading of a substantial number of securities
included in the index is interrupted causing the trading of options on that
index to be halted. If a trading halt occurred, The Enhanced U.S. Large Company
Series would not be able to close out options which it had purchased and may
incur losses if the underlying index moved adversely before trading resumed. If
a trading halt occurred and restrictions prohibiting the exercise of options
were imposed through the close of trading on the last day before expiration,
exercises on that day

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<PAGE>

would be settled on the basis of a closing index value that may not reflect
current price information for securities representing a substantial portion of
the value of the index.

The Enhanced U.S. Large Company Series' activities in the options markets may
result in higher fund turnover rates and additional brokerage costs; however,
the Series may also save on commissions by using options as a hedge rather than
buying or selling individual securities in anticipation or as a result of market
movements.

INVESTMENT LIMITATIONS ON OPTIONS TRANSACTIONS

The ability of The Enhanced U.S. Large Company Series to engage in options
transactions is subject to certain limitations. The Enhanced U.S. Large
Company Series will only invest in over-the-counter options to the extent
consistent with the 15% limit on investments in illiquid securities.

FUTURES CONTRACTS

Please note that while the following discussion relates to the policies of
certain Series with respect to futures contracts, it should be understood that,
with respect to the Global Series, the discussion applies to the Master Series
in which the Global Series invest.

All Series except The U.S. 9-10 and 6-10 Small Company Series and The DFA
One-Year Fixed Income Series may enter into index futures contracts and options
on index futures contracts for the purpose of remaining fully invested and to
maintain liquidity to pay redemptions. In addition, The Enhanced U.S. Large
Company Series may use futures contracts and options thereon to hedge against
securities prices or as part of its overall investment strategy.
Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of defined securities at a specified future
time and at a specified price. Futures contracts which are standardized as to
maturity date and underlying financial instrument are traded on national futures
exchanges. The Series will be required to make a margin deposit in cash or
government securities with a broker or custodian to initiate and maintain
positions in futures contracts. Minimal initial margin requirements are
established by the futures exchange, and brokers may establish margin
requirements which are higher than the exchange requirements. After a futures
contract position is opened, the value of the contract is marked to market
daily. If the futures contract price changes to the extent that the margin on
deposit does not satisfy margin requirements, payment of additional "variation"
margin will be required. Conversely, reduction in the contract value may reduce
the required margin resulting in a repayment of excess margin to the Series.
Variation margin payments are made to and from the futures broker for as long as
the contract remains open. The Series expect to earn income on their margin
deposits. To the extent that a Series invests in futures contracts and options
thereon for other than bona fide hedging purposes, no Series will enter into
such transactions if, as a result, more than 5% of its net assets would then
consist of initial margin deposits and premiums required to establish such
positions, after taking into account unrealized profits and unrealized losses on
such contracts it has entered into; provided, however, that, in the case of an
option that is in-the-money at the time of purchase, the in-the-money amount may
be excluded in calculating the 5%. Pursuant to published positions of the SEC,
the Series may be required to maintain

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<PAGE>

segregated accounts consisting of liquid assets (or, as permitted under
applicable regulation, enter into offsetting positions) in connection with its
futures contract transactions in order to cover its obligations with respect to
such contracts. Positions in futures contracts may be closed out only on an
exchange which provides a secondary market. However, there can be no assurance
that a liquid secondary market will exist for any particular futures contract at
any specific time. Therefore, it might not be possible to close a futures
position and, in the event of adverse price movements, the Series would continue
to be required to continue to make variation margin deposits. In such
circumstances, if the Series has insufficient cash, it might have to sell
portfolio securities to meet daily margin requirements at a time when it might
be disadvantageous to do so. Management intends to minimize the possibility
that it will be unable to close out a futures contract by only entering into
futures which are traded on national futures exchanges and for which there
appears to be a liquid secondary market.

REPURCHASE AGREEMENTS

In addition, all of the Series (directly or indirectly through the Master
Series) may invest in repurchase agreements. In the event of the bankruptcy
of the other party to a repurchase agreement, the Trust could experience
delay in recovering the securities underlying such agreements. Management
believes that this risk can be controlled through stringent security
selection criteria and careful monitoring procedures.

12(d) TEMPORARY DEFENSIVE POSITION. The information required by this item
is provided in response to Item 4(b) of Part A.

12(e) PORTFOLIO TURNOVER. Generally, securities will be purchased with the
expectation that they will be held for longer than one year. Generally,
securities will be held until such time as, in the Advisor's judgment, they are
no longer considered an appropriate holding in light of the policy of
maintaining portfolios of companies with small market capitalization.

The portfolio turnover rate for the Tax-Managed U.S. Marketwide Value Series is
anticipated to be approximately 60%. The portfolio turnover rates for each of
The Global Value Series, The Global Large Company Series and The Global Small
Company Series are anticipated to be between 0 and 100%. Initially turnover
rates are difficult to predict because they reflect purchases and redemptions
from funds, rather than the purchase and sale of underlying securities.

Ordinarily, portfolio securities in The U.S. Large Company Series will not be
sold except to reflect additions or deletions of the stocks that comprise the
S&P 500 Index, including mergers, reorganizations and similar transactions and,
to the extent necessary, to provide cash to pay redemptions of the Series'
shares.

ITEM 13. MANAGEMENT OF THE FUND

(a), (b) AND (c) The Trust has a Board of Trustees, which is responsible for
establishing Trust policies and for overseeing the management of the Trust. The
names, locations and dates of birth of the trustees and officers of the Trust
and a brief statement of their present positions and principal occupations
during the past five years are set forth below. As used below, "DFA

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<PAGE>

Entities" refers to the following: Dimensional Fund Advisors Inc., Dimensional
Fund Advisors Ltd., DFA Australia Limited, DFA Investment Dimensions Group Inc.
(Registered Investment Company), Dimensional Emerging Markets Value Fund Inc.
(Registered Investment Company), Dimensional Investment Group Inc. (Registered
Investment Company) and DFA Securities Inc.

TRUSTEES

David G. Booth*, 12/2/46, Trustee, President and Chairman-Chief Executive
Officer, Santa Monica, CA. President, Chairman-Chief Executive Officer and
Director of the following companies: Dimensional Fund Advisors Inc., DFA
Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc.,
Dimensional Investment Group Inc. and Dimensional Emerging Markets Value Fund
Inc. Chairman and Director, Dimensional Fund Advisors Ltd.

George M. Constantinides, 9/22/47, Trustee, Chicago, IL. Leo Melamed Professor
of Finance, Graduate School of Business, University of Chicago. Director, DFA
Investment Dimensions Group Inc., Dimensional Investment Group Inc. and
Dimensional Emerging Markets Value Fund Inc.

John P. Gould, 1/19/39, Trustee, Chicago, IL. Steven G. Rothmeier Distinguished
Service Professor of Economics, Graduate School of Business, University of
Chicago. Trustee, First Prairie Funds (registered investment company).
Director, DFA Investment Dimensions Group Inc., Dimensional Investment Group
Inc., Dimensional Emerging Markets Value Fund Inc. and Harbor Investment
Advisors. Executive Vice President, Lexecon Inc. (economics, law, strategy and
finance consulting).

Roger G. Ibbotson, 5/27/43, Trustee, New Haven, CT. Professor in Practice of
Finance, Yale School of Management. Director, DFA Investment Dimensions Group
Inc., Dimensional Investment Group Inc., Dimensional Emerging Markets Value Fund
Inc., Hospital Fund, Inc. (investment management services) and BIRR Portfolio
Analysis, Inc. (software products). Chairman, Ibbotson Associates, Inc.,
Chicago, IL (software, data, publishing and consulting).

Merton H. Miller, 5/16/23, Trustee, Chicago, IL. Robert R. McCormick
Distinguished Service Professor Emeritus, Graduate School of Business,
University of Chicago. Director, DFA Investment Dimensions Group Inc.,
Dimensional Investment Group Inc. and Dimensional Emerging Markets Value Fund
Inc. Public Director, Chicago Mercantile Exchange.

Myron S. Scholes, 7/1/42, Trustee, Menlo Park, CA. Frank E. Buck Professor
Emeritus of Finance, Stanford University. Director, DFA Investment Dimensions
Group Inc., Dimensional Investment Group Inc., Dimensional Emerging Markets
Value Fund Inc. Consultant, Arbor Investors.

Rex A. Sinquefield*, 9/7/44, Trustee, Chairman-Chief Investment Officer, Santa
Monica, CA. Chairman-Chief Investment Officer and Director, Dimensional Fund
Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment
Dimensions Group Inc., Dimensional Investment Group Inc. and Dimensional
Emerging Markets Value Fund Inc. Chairman, Chief Executive Officer and Director,
Dimensional Fund Advisors Ltd.

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<PAGE>

* Interested Trustee of the Trust.

OFFICERS

Arthur Barlow, 11/7/55, Vice President, Santa Monica, CA. Vice President of all
DFA Entities.

Truman Clark, 4/8/41, Vice President, Santa Monica, CA. Vice President of all
DFA Entities. Consultant until October 1995 and Principal and Manager of
Product Development, Wells Fargo Nikko Investment Advisors, San Francisco, CA
from 1990-1994.

Robert Deere, 10/8/57, Vice President, Santa Monica, CA. Vice President of all
DFA Entities.

Irene R. Diamant, 7/16/50, Vice President and Secretary, Santa Monica, CA. Vice
President and Secretary of all DFA Entities except Dimensional Fund Advisors
Ltd. for which she is Vice President.

Richard Eustice, 8/5/65, Vice President and Assistant Secretary, Santa Monica,
CA. Vice President and Assistant Secretary of all DFA Entities.

Eugene Fama, Jr., 1/21/61, Vice President, Santa Monica, CA. Vice President of
all DFA Entities.

Kamyab Hashemi-Nejad, 1/22/61, Vice President, Controller and Assistant
Secretary, Santa Monica, CA. Vice President, Controller and Assistant Treasurer
of all DFA Entities.

Stephen P. Manus, 12/26/50, Vice President, Santa Monica, CA. Managing
Director, ANB Investment Management and Trust Company from 1985-1993; President,
ANB Investment Management and Trust Company from 1993-1997. Vice President of
all DFA Entities.

Karen McGinley, 3/10/66, Vice President, Santa Monica, CA. Vice President of
all DFA Entities.

Catherine L. Newell, 5/7/64, Vice President and Assistant Secretary, Santa
Monica, CA. Associate, Morrison & Foerster, LLP from 1989-1996. Vice President
and Assistant Secretary of all DFA Entities except Dimensional Fund Advisors
Ltd. for which she is Vice President.

David Plecha, 10/26/61, Vice President, Santa Monica, CA. Vice President of all
DFA Entities.

George Sands, 2/8/56, Vice President, Santa Monica, CA. Vice President of all
DFA Entities.

Michael T. Scardina, 10/12/55, Vice President, Chief Financial Officer and
Treasurer, Santa Monica, CA. Vice President, Chief Financial Officer and
Treasurer of all DFA Entities.

Jeanne C. Sinquefield, Ph.D., 12/2/46, Executive Vice President, Santa Monica,
CA. Executive Vice President of all DFA Entities.

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<PAGE>

Scott Thornton, 3/1/63, Vice President, Santa Monica, CA. Vice President of all
DFA Entities.

Weston Wellington, 3/1/51, Vice President, Santa Monica, CA. Vice President of
all DFA Entities. Vice President, Director of Research, LPL Financial Services,
Inc., Boston, MA 1987-1994.

Rex A. Sinquefield, Trustee, Chairman-Chief Investment Officer of the Trust, and
Jeanne C. Sinquefield, Executive Vice President of the Trust, are husband and
wife.

13(d) COMPENSATION. Set forth below is a table listing, for each Trustee
entitled to receive compensation, the compensation received from the Trust
during the fiscal year ended November 30, 1998, and the total compensation
received from all four registered investment companies for which the Advisor
serves as investment advisor during that same fiscal year.

<TABLE>
<CAPTION>
Aggregate Total Compensation
Compensation from Trust and Fund
Trustee from Trust Complex
------- ---------- -------
<S> <C> <C>
George M. Constantinides $5,000 $30,000
John P. Gould $5,000 $30,000
Roger G. Ibbotson $5,000 $30,000
Merton H. Miller $5,000 $30,000
Myron S. Scholes $5,000 $30,000
</TABLE>

13(e) SALES LOADS. Not applicable.

ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

(a) CONTROL PERSONS. As of April 30, 1999, the following persons may be deemed
to control the following Series either by owning more than 25% of the voting
securities of such Series directly or, through the operation of pass-through
voting rights, by owning more than 25% of the voting securities of a feeder
portfolio investing its assets in the Series:

U.S. 4-10 VALUE SERIES
<S> <C>
West Virginia Investment Management Board
One Cantley Drive
Charleston, WV 25314 100%

THE DFA INTERNATIONAL VALUE SERIES

BellSouth Corporation
1155 Peachtree Street N.E.
Atlanta, GA 30309 27.03%

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JAPANESE SMALL COMPANY SERIES

BellSouth Corporation
1155 Peachtree Street N.E.
Atlanta, GA 30309 40.02%

PACIFIC RIM SMALL COMPANY SERIES

BellSouth Corporation
1155 Peachtree Street N.E.
Atlanta, GA 30309 42.90%

UNITED KINGDOM SMALL COMPANY SERIES

BellSouth Corporation
1155 Peachtree Street N.E.
Atlanta, GA 30309 35.29%

CONTINENTAL SMALL COMPANY SERIES

BellSouth Corporation
1155 Peachtree Street N.E.
Atlanta, GA 30309 35.78%

EMERGING MARKETS SMALL CAP SERIES

South Dakota Retirement System
4009 W. 49th Street, Suite 300
Sioux Falls, SD 57105 67.77%
</TABLE>

14(b) PRINCIPAL HOLDERS. As of April 30, 1999, the following shareholders
owned beneficially at least 5% of the outstanding shares of the Series, as set
forth below. Unless otherwise indicated, the address of each shareholder is
1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401.

THE U.S. LARGE COMPANY SERIES
<S> <C>
Blackrock Funds -
Index Equity Portfolio
c/o PFPC
400 Bellevue Parkway
Wilmington, DE 19809 66.74%

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<PAGE>

DFA Investment Dimensions Group Inc. -
The U.S. Large Company Portfolio 33.01%

ENHANCED U.S. LARGE COMPANY SERIES

DFA Investment Dimensions Group Inc.
Enhanced U.S. Large Company Portfolio 100%

THE U.S. LARGE CAP VALUE SERIES

DFA Investment Dimensions Group Inc. -
The U.S. Large Cap Value Portfolio 64.04%

Dimensional Investment Group Inc. -
U.S. Large Cap Value Portfolio III 24.60%

Dimensional Investment Group Inc. -
RWB/DFA U.S. High Book to Market Portfolio 7.05%

TAX-MANAGED U.S. MARKETWIDE VALUE SERIES

DFA Investment Dimensions Group Inc.
Tax-Managed U.S. Marketwide Value Portfolio 74.09%

Dimensional Investment Group Inc.
Tax-Managed U.S. Marketwide Value Portfolio II 25.89%

U.S. 4-10 VALUE SERIES

-West Virginia Investment Management Board
One Cantley Drive
Charleston, WV 25314 100%

THE U.S. 6-10 VALUE SERIES

DFA Investment Dimensions Group Inc. -
The U.S. 6-10 Value Portfolio 97.02%

THE U.S. 6-10 SMALL COMPANY SERIES

DFA Investment Dimensions Group Inc. -
The U.S. 6-10 Small Company Portfolio 63.35%

Dimensional Investment Group Inc. -
DFA 6-10 Institutional Portfolio 20.03%

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<PAGE>

The California Wellness Foundation
6320 Canoga Avenue, Suite 1700
Woodland Hills, CA 91367 16.62%

THE U.S. 9-10 SMALL COMPANY SERIES

DFA Investment Dimensions Group Inc. -
The U.S. 9-10 Small Company Portfolio 100%

THE DFA INTERNATIONAL VALUE SERIES

BellSouth Corporation
1155 Peachtree Street N.E.
Atlanta, GA 30309 27.03%

Dimensional Investment Group Inc. -
DFA International Value Portfolio 26.27%

Dimensional Investment Group Inc. -
DFA International Value Portfolio III 15.54%

DFA Investment Dimensions Group Inc. -
RWB/DFA International High Book to Market Portfolio 15.45%

Dimensional Investment Group Inc. -
DFA International Value Portfolio IV 6.43%

Mac & Co.
c/o Mellon Bank
P.O. Box 3198
Pittsburgh, PA 15230-3198 5.06%

JAPANESE SMALL COMPANY SERIES

DFA Investment Dimensions Group Inc.
Japanese Small Company Portfolio 61.04%

DFA Investment Dimensions Group Inc.
International Small Company Portfolio 38.96%

PACIFIC RIM SMALL COMPANY SERIES

DFA Investment Dimensions Group Inc.
Pacific Rim Small Company Portfolio 64.68%

DFA Investment Dimensions Group Inc.

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<PAGE>

International Small Company Portfolio 35.32%

UNITED KINGDOM SMALL COMPANY SERIES

DFA Investment Dimensions Group Inc.
United Kingdom Small Company Portfolio 59.08%

DFA Investment Dimensions Group Inc.
International Small Company Portfolio 40.92%

CONTINENTAL SMALL COMPANY SERIES

DFA Investment Dimensions Group Inc.
Continental Small Company Portfolio 61.06%

DFA Investment Dimensions Group Inc.
International Small Company Portfolio 38.94%

THE EMERGING MARKETS SERIES

DFA Investment Dimensions Group Inc. -
Emerging Markets Portfolio 97.12%

EMERGING MARKETS SMALL CAP SERIES

South Dakota Retirement System
4009 W. 49th Street, Suite 300
Sioux Falls, SD 57105 67.77%

DFA Investment Dimensions Group Inc.
Emerging Markets Small Cap Portfolio 31.73%

THE DFA ONE-YEAR FIXED INCOME SERIES

DFA Investment Dimensions Group Inc. -
The DFA One-Year Fixed Income Portfolio 88.45%

Gateway 2000, Inc.
610 Gateway Drive
North Sioux City, SD 57049 11.51%

DFA TWO-YEAR GLOBAL FIXED INCOME SERIES

DFA Investment Dimensions Group Inc. -
DFA Two-Year Global Fixed Income Portfolio 100%

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<PAGE>

LARGE CAP INTERNATIONAL PORTFOLIO OF DFAIDG

Charles Schwab & Company, Inc.*
101 Montgomery Street
San Francisco, CA 94104 77.85%

National Investor Services Corp.*
55 Water Street
New York, NY 10041 5.77%
</TABLE>

- --------------------
*Owner of record only.

14(c) MANAGEMENT OWNERSHIP. As of April 30, 1999, the trustees and officers
as a group owned less than 1% of each Series' outstanding stock.

ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES

(a) INVESTMENT ADVISERS. The information provided in response to this item is
in addition to the information provided in response to Items 6(a)(1) and (2) in
Part A and Items 13(a), (b) and (c) in this Part B.

David G. Booth and Rex A. Sinquefield, directors and officers of the Advisor and
Trustees and officers of the Trust, and shareholders of the Advisor's
outstanding voting stock, may be considered controlling persons of the Advisor.

For the services its provides as investment advisor to each Series of the Trust,
the Advisor is paid a monthly fee calculated as a percentage of average net
assets of the Series. For the fiscal periods ended November 30, 1996, 1997 and
1998, as applicable, the Series paid management fees as set forth in the
following table:

<TABLE>
<CAPTION>
1996 1997 1998
(000) (000) (000)
<S> <C> <C> <C>
U.S. Large Company $ 62 $ 160 $ 293

Enhanced U.S. Large Company $ 386 $ 17 $ 26

U.S. Large Cap Value $ 699 $1,255 $1,667

U.S. 4-10 Value n/a n/a $ 86

U.S. 6-10 Value $ 699 $3,534 $4,743

U.S. 6-10 Small Company $ 81 $ 102 $ 150

59
<PAGE>

U.S. 9-10 Small Company n/a n/a $1,458

DFA International Value $2,124 $2,997 $3,466

Japanese Small Company $ 106 $ 258 $ 181

Pacific Rim Small Company $ 65 $ 230 $ 133

United Kingdom Small Company $ 52 $ 180 $ 157

Continental Small Company $ 100 $ 351 $ 334

Emerging Markets $ 111 $ 226 $ 220

Emerging Markets Small Cap n/a $ 47 $ 37

DFA One-Year Fixed Income $ 82 $ 392 $ 420

DFA Two-Year Global Fixed
Income $ 69 $ 185 $ 214
</TABLE>

The Japanese Small Company, United Kingdom Small Company, Pacific Rim Small
Company and Continental Small Company Series commenced operations on August 10,
1996. The Emerging Markets Small Cap Series commenced operations on December 2,
1996. The U.S. 9-10 Small Company Series commenced operations on December 1,
1997, and The U.S. 4-10 Value Series commenced operations on February 6, 1998.
The Tax-Managed U.S. Marketwide Value Series had not commenced operations as of
November 30, 1998. While The Global Value Series, The Global Large Company
Series and The Global Small Company Series are not subject to a management
fee, investments by the Global Series in the Master Series are subject to the
management fees charged by the respective Master Series.

From December 1, 1993 through August 8, 1996, the Advisor agreed to waive its
fee under the Investment Management Agreement with respect to The DFA
International Value Series to the extent necessary to keep the cumulative annual
expenses of the Series to not more than .45% of average net assets of the Series
on an annualized basis.

The Advisor pays DFAL quarterly fees of 12,500 pounds sterling for services to
each of the United Kingdom and Continental Series. The Advisor pays DFA
Australia fees of $13,000 per year for services to each of the Japanese and
Pacific Rim Series.

15(b) PRINCIPAL UNDERWRITER. The Trust distributes its own shares. It has,
however, entered into an agreement with DFA Securities Inc., a wholly-owned
subsidiary of the Advisor, pursuant to which DFA Securities Inc. is responsible
for supervising the sale of shares of each Series. No compensation is paid by
the Trust to DFA Securities Inc. under this agreement.

15(c) SERVICES PROVIDED BY EACH INVESTMENT ADVISER AND EXPENSES PAID BY THIRD
PARTIES.

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<PAGE>

The information provided in response to this item is in addition to the
information provided in response to Item 6(a)(1) and (2) of Part A.

Initially, the investment management agreement with respect to each Series is in
effect for a period of two years. Thereafter, each agreement may continue in
effect for successive annual periods, provided such continuance is specifically
approved at least annually by a vote of the Trust's Board of Trustees or, by a
vote of the holders of a majority of the Series' outstanding voting securities,
and in either event by a majority of the trustees who are not parties to the
agreement or interested persons of any such party (other than as trustees of the
Trust), cast in person at a meeting called for that purpose. An investment
management agreement may be terminated without penalty at any time by the Series
or by the Advisor on 60 days' written notice and will automatically terminate in
the event of its assignment as defined in the Investment Company Act of 1940.

15(d) SERVICE AGREEMENTS. Not applicable.

15(e) OTHER INVESTMENT ADVICE. Not applicable.

15(f) DEALER REALLOWANCES. Not applicable.

15(g) RULE 12B-1 PLANS. Not applicable.

15(h) OTHER SERVICE PROVIDERS.

(1) AND (2) PFPC Inc. ("PFPC"), 400 Bellevue Parkway, Wilmington, Delaware
19809, serves as the administrative and accounting services, dividend disbursing
and transfer agent for all Trust Series. The services provided by PFPC are
subject to supervision by the executive officers and the Board of Trustees of
the Trust, and include day-to-day keeping and maintenance of certain records,
calculation of the offering price of the shares, preparation of reports, liaison
with its custodians, and transfer and dividend disbursing agency services. For
its services, each Series pays PFPC annual fees which are set forth in the
following table:

U.S. 9-10 SMALL COMPANY SERIES
U.S. 6-10 SMALL COMPANY SERIES
U.S. 6-10 VALUE SERIES
U.S. LARGE CAP VALUE SERIES
TAX-MANAGED U.S. MARKETWIDE VALUE SERIES
ENHANCED U.S. LARGE COMPANY SERIES
CHARGES FOR EACH SERIES:
.1025% of the first $300 million of net assets
.0769% of the next $300 million of net assets
.0513% of the next $250 million of net assets
.0205% of net assets over $850 million

PFPC charges a minimum fee of $58,800 per year to each of the Large Cap Value,
Tax-Managed U.S. Marketwide Value Series and 6-10 Value Series. PFPC charges
the Enhanced U.S. Large Company Series a minimum fee of $75,000 per year.

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<PAGE>

PFPC has agreed that it may from time to time limit the fee rates and the
minimum fees for these Series.

DFA TWO-YEAR GLOBAL FIXED INCOME SERIES
.1230% of the first $150 million of net assets
.0820% of the next $150 million of net assets
.0615% of the next $300 million of net assets
.0410% of the next $250 million of net assets
.0205% of net assets over $850 million

The Series is subject to a minimum fee of $75,000 per year. PFPC has agreed
to limit the minimum fee for the Series from time to time.

JAPANESE SMALL COMPANY SERIES
UNITED KINGDOM SMALL COMPANY SERIES
PACIFIC RIM SMALL COMPANY SERIES
CONTINENTAL SMALL COMPANY SERIES
DFA INTERNATIONAL VALUE SERIES
LARGE CAP INTERNATIONAL PORTFOLIO
EMERGING MARKETS SERIES
EMERGING MARKETS SMALL CAP SERIES
CHARGES FOR EACH SERIES:
.1230% of the first $300 million of net assets
.0615% of the next $300 million of net assets
.0410% of the next $250 million of net assets
.0205% of net assets over $850 million
The DFA International Value, Large Cap International, Emerging Markets and
Emerging Markets Small Cap Series are each subject to minimum fees of $75,000
per year. The Pacific Rim Small Company Series is subject to a minimum fee of
$100,000 per year. PFPC has agreed to limit the minimum fee for these Series
from time to time.

DFA ONE-YEAR FIXED INCOME SERIES
.0513% of the first $100 million of net assets
.0308% of the next $100 million of net assets
.0205% of net assets over $200 million

U.S. LARGE COMPANY SERIES
.0150% of net assets

U.S. 4-10 VALUE SERIES
.0160% of net assets

THE GLOBAL VALUE SERIES
$2,600 (includes custodian fees)
THE GLOBAL LARGE COMPANY SERIES

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<PAGE>

$2,600 (includes custodian fees)
THE GLOBAL SMALL COMPANY SERIES
$2,950 per month (includes custodian fees)

15(h)(3) Citibank, N.A. ("Citibank"), 111 Wall Street, New York, New York,
10005, is the global custodian for the following Series: DFA International
Value Series, the Japanese Small Company Series, the Pacific Rim Small Company
Series, the United Kingdom Small Company Series, the Continental Small Company
Series, DFA Two-Year Global Fixed Income Series, and Enhanced U.S. Large Company
Series (co-custodian with PFPC Trust Company). The Chase Manhattan Bank, 4
Chase Metrotech Center, Brooklyn, NY 11245, serves as the custodian for the
Emerging Markets Series and Emerging Markets Small Cap Series, and PFPC Trust
Company, 400 Bellevue Parkway, Wilmington, DE 19809, serves as the custodian
for all other Series of the Trust. The custodians maintain separate accounts
for the Series; make receipts and disbursements of money on behalf of the
Series; and collect and receive income and other payments and distributions on
account of the Series' portfolio securities. The custodians do not participate
in decisions relating to the purchase and sale of portfolio securities.

PricewaterhouseCoopers LLP, 2400 Eleven Penn Center, Philadelphia, Pennsylvania
19103, the Trust's independent accountant, audit the Trust's financial
statements on an annual basis.

15(h)(4) Not applicable.

ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES

16(a) AND (c) BROKERAGE TRANSACTIONS AND BROKERAGE SELECTION. The following
table depicts brokerage commissions paid by the following Series:

BROKERAGE COMMISSIONS
FISCAL YEARS ENDED NOVEMBER 30, 1996, 1997 AND 1998

<TABLE>
<CAPTION>
1996 1997 1998
<S> <C> <C> <C>
U.S. Large Company $ 72,262 $ 40,689 $ 15,841

Enhanced U.S. Large Company $ 1,650 $ 10,284 $ 2,210

U.S. Large Cap Value $ 934,452 $ 929,005 $1,116,421

U.S. 4-10 Value n/a n/a $ 717,873

U.S. 6-10 Value $2,754,009 $4,591,853 $4,289,226

U.S. 6-10 Small Company $ 473,887 $ 855,652 $1,022,535

U.S. 9-10 Small Company $1,704,251 $1,641,020 $1,541,534

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<PAGE>

DFA International Value $1,251,242 $1,133,787 $ 763,022

Japanese Small Company $ 466,795 $ 602,098 $ 300,862

Pacific Rim Small Company $ 181,812 $ 485,846 $ 316,644

United Kingdom Small Company $ 86,854 $ 68,028 $ 116,482

Continental Small Company
Series $ 214,631 $ 145,195 $ 278,568

Emerging Markets $ 437,088 $ 559,853 $ 375,895

Emerging Markets Small Cap n/a $ 123,081 $ 40,579
</TABLE>

During the fiscal year ended November 30 1998, the Large Cap International
Portfolio, a portfolio of DFAIDG, paid brokerage commissions of $32,512. The
Global Value Series, The Global Large Company Series and The Global Small
Company Series had not commenced operations prior to the date of this
registration statement.

The substantial increases or decreases in the amount of brokerage commissions
paid by certain Series from year to year indicated in the foregoing table
resulted from increases or decreases in the amount of securities bought and sold
by those Series.

The DFA One-Year Fixed Income and Two-Year Global Fixed Income Series acquire
and sell securities on a net basis with dealers which are major market markers
in such securities. The Investment Committee of the Advisor selects dealers on
the basis of their size, market making and credit analysis ability. When
executing portfolio transactions, the Advisor seeks to obtain the most favorable
price for the securities being traded among the dealers with whom such Series
effects transactions.

16(b) COMMISSIONS. No commissions were paid to affiliates or affiliates of
affiliates during fiscal years 1996, 1997 or 1998.

Portfolio transactions will be placed with a view to receiving the best price
and execution.

The OTC companies eligible for purchase by The U.S. 6-10 Small Company Series,
The U.S. 9-10 Small Company Series, The U.S. 4-10 Value Series and The U.S. 6-10
Value Series are thinly traded securities. Therefore, the Advisor believes it
needs maximum flexibility to effect OTC trades on a best execution basis. To
that end, the Advisor places buy and sell orders with market makers, third
market brokers, Instinet and with brokers on an agency basis when the Advisor
determines that the securities may not be available from other sources at a more
favorable price. Third market brokers enable the Advisor to trade with other
institutional holders directly on a net

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<PAGE>

basis. This allows the Advisor to sometimes trade larger blocks than would be
possible by going through a single market maker.

Instinet is an electronic information and communication network whose
subscribers include most market makers as well as many institutions. Instinet
charges a commission for each trade executed on its system. On any given trade,
The U.S. 6-10 Small Company Series, The U.S. 9-10 Small Company Series and the
U.S. Value Series, by trading through Instinet, would pay a spread to a dealer
on the other side of the trade plus a commission to Instinet. However, placing
a buy (or sell) order on Instinet communicates to many (potentially all) market
makers and institutions at once. This can create a more complete picture of the
market and thus increase the likelihood that the Series can effect transactions
at the best available prices.

Brokerage commissions for transactions in securities listed on the Tokyo Stock
Exchange ("TSE") and other Japanese securities exchanges are fixed. Under the
current regulations of the TSE and the Japanese Ministry of Finance, member and
non-member firms of Japanese exchanges are required to charge full commissions
to all customers other than banks and certain financial institutions, but
members and licensed non-member firms may confirm transactions to banks and
financial institution affiliates located outside Japan with institutional
discounts on brokerage commissions. The Japanese Small Company Series has been
able to avail itself of institutional discounts. The Series' ability to effect
transactions at a discount from fixed commission rates depends on a number of
factors, including the size of the transaction, the relation between the cost to
the member or the licensed non-member firm of effecting such transaction and the
commission receivable, and the law, regulation and practice discussed above.
There can be no assurance that the Series will continue to be able to realize
the benefit of discounts from fixed commissions.

The Series will seek to acquire and dispose of securities in a manner which
would cause as little fluctuation in the market prices of stocks being purchased
or sold as possible in light of the size of the transactions being effected, and
brokers will be selected with this goal in view. The Advisor monitors the
performance of brokers which effect transactions for the Series to determine the
effect that the Series' trading has on the market prices of the securities in
which they invest. The Advisor also checks the rate of commission being paid by
the Series to their brokers to ascertain that they are competitive with those
charged by other brokers for similar services. DFAL performs these services for
the United Kingdom and Continental Small Company Series and DFA Australia
performs these services for the Japanese and Pacific Rim Small Company Series.
Transactions also may be placed with brokers who provide the Advisor or
sub-advisors with investment research, such as reports concerning individual
issuers, industries and general economic and financial trends and other research
services. The Investment Management Agreements permit the Advisor knowingly to
pay commissions on such transactions which are greater than another broker might
charge if the Advisor, in good faith, determines that the commissions paid are
reasonable in relation to the research or brokerage services provided by the
broker or dealer when viewed in terms of either a particular transaction or the
Advisor's overall responsibilities to the Trust. Research services furnished by
brokers through whom securities transactions are effected may be used by the
Advisor in servicing all of its accounts and not all such services may be used
by the Advisor with respect to the Trust. Brokerage transactions may be placed
with securities firms that are affiliated with an affiliate of

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<PAGE>

the Advisor. Commission paid on such transactions would be commensurate with
the rate of commissions paid on similar transactions to brokers that are not so
affiliated.

16(d) DIRECTED BROKERAGE. During the fiscal year ended November 30, 1998,
the Series paid commissions for securities transactions to brokers which
provided market price monitoring services, market studies and research services
to the Series as follows:

<TABLE>
<CAPTION>
VALUE OF
SECURITIES BROKERAGE
TRANSACTIONS COMMISSIONS
<S> <C> <C>
U.S. Large Cap Value $ 71,611,201 $ 65,046

U.S. 4-10 Value $ 89,593,893 $ 260,598

U.S. 6-10 Value $328,395,637 $ 983,614

U.S. 6-10 Small Company $210,827,199 $ 497,918

U.S. 9-10 Small Company $121,765,353 $ 345,522

DFA International Value $ 2,427,926 $ 15,569

Japanese Small Company $ 22,628,881 $ 150,514

Pacific Rim Small Company $ 8,995,911 $ 39,849

TOTAL: $856,246,001 $ 2,358,630
</TABLE>

16(e) REGULAR BROKER DEALERS. Not applicable.

ITEM 17. CAPITAL STOCK AND OTHER SECURITIES

(a) CAPITAL STOCK. All twenty Series issue shares of beneficial interest with
a par value of $.01 per share without a sales load. The shares of each Series,
when issued and paid for in accordance with this registration statement, will be
fully paid and nonassessable shares, with equal, non-cumulative voting rights,
except as described below, and no preferences as to conversion, exchange,
dividends, redemptions or any other feature. Shareholders shall have the right
to vote only (i) for removal of Trustees, (ii) with respect to such additional
matters relating to the Trust as may be required by the applicable provisions of
the Investment Company Act of 1940, including Section 16(a) thereof, and (iii)
on such other matters as the Trustees may consider necessary or desirable. In
addition, the shareholders of each Series will be asked to vote on any proposal
to change a fundamental investment policy (i.e. a policy that may be changed
only with the approval of shareholders) of that Series. If a shareholder of The
Emerging Markets, The Emerging Markets Small Cap, The U.S. Large Company,
Japanese, Pacific Rim, United Kingdom or Continental Series redeems its entire
interest in the Series or becomes

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<PAGE>

bankrupt, a majority in interest of the remaining shareholders in such Series
must vote within 120 days to approve the continuing existence of the Series or
the Series will be liquidated. All shares of the Trust entitled to vote on a
matter shall vote without differentiation between the separate Series on a
one-vote-per-share basis; provided however, if a matter to be voted on affects
only the interests of not all Series, then only the shareholders of such
affected Series shall be entitled to vote on the matter. Investments in The
Emerging Markets, The Emerging Markets Small Cap, The U.S. Large Company,
Japanese, Pacific Rim, United Kingdom and Continental Series may not be
transferred, but an investor may withdraw all or any portion of their investment
at any time at net asset value. If liquidation of the Trust should occur,
shareholders would be entitled to receive on a per class basis the assets of the
particular Series whose shares they own, as well as a proportionate share of
Trust assets not attributable to any particular class. The Trust's by-laws
provide that meetings of shareholders shall be called for the purpose of voting
upon the question of removal of one or more Trustees upon the written request of
the holders of not less than 10% of the outstanding shares.

The Trust does not intend to hold annual meetings; it may, however, hold a
meeting for such purposes as changing fundamental investment limitations,
approving a new investment management agreement or any other matters which are
required to be acted on by shareholders under the Investment Company Act of
1940. Shareholders may receive assistance in communicating with other
shareholders in connection with the election or removal of Trustees similar to
the provisions contained in Section 16(c) of the Investment Company Act of 1940.

17(b) OTHER SECURITIES. Not applicable.

ITEM 18. PURCHASE, REDEMPTION AND PRICING OF SHARES

The information provided in response to this item is in addition to the
information provided in response to Item 7 in Part A.

(a) AND (c) PURCHASE OF SHARES AND OFFERING PRICE. The Trust will accept
purchase and redemption orders on each day that the NYSE is open for business,
regardless of whether the Federal Reserve System is closed. However, no
purchases by wire may be made on any day that the Federal Reserve System is
closed. The Trust will generally be closed on days that the NYSE is closed.
The NYSE is scheduled to be open Monday through Friday throughout the year
except for days closed to recognize New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas Day. The Federal Reserve System is closed on the
same days as the NYSE, except that it is open on Good Friday and closed on
Columbus Day and Veterans' Day. Orders for redemptions and purchases will not
be processed if the Trust is closed. The TSE is closed on the following days in
1999: January 1 and 15, February 11, March 22, April 29, May 3, 4 and 5, July
20, September 15 and 23, October 11, November 3 and 23 and December 23, 30 and
31. Orders for the purchase and redemption of shares of the Japanese Series
received on those days will be priced as of the close of the NYSE on the next
day that the TSE is open for trading.

The Trust reserves the right, in its sole discretion, to suspend the offering of
shares of any or all Series or reject purchase orders when, in the judgment of
management, such suspension or

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<PAGE>

rejection is in the best interest of the Trust or a Series. Securities accepted
in exchange for shares of a Series will be acquired for investment purposes and
will be considered for sale under the same circumstances as other securities in
the Portfolio.

The Trust may suspend redemption privileges or postpone the date of payment:
(1) during any period when the NYSE is closed, or trading on the Exchange is
restricted as determined by the SEC, (2) during any period when an emergency
exists as defined by the rules of the SEC as a result of which it is not
reasonably practicable for the Trust to dispose of securities owned by it, or
fairly to determine the value of its assets and (3) for such other periods as
the SEC may permit.

18(b) FUND REORGANIZATIONS. Not applicable.

18(d) REDEMPTION IN KIND. The Trust has filed a notice of election pursuant to
Rule 18f-1 under the Investment Company Act of 1940. However, The Tax-Managed
U.S. Marketwide Value Series, The Global Value Series, The Global Large Company
Series and The Global Small Company Series have opted out of this election.
(See Item 7(c) of Part A.)

ITEM 19. TAXATION OF THE FUND

The information provided in response to this item is in addition to the
information provided in response to Items 7(d) and (e) in Part A.

Each Corporate Series intends to qualify each year as a regulated investment
company under Subchapter M of the Code, so that it will not be liable for U.S.
federal income taxes to the extent that its net investment income and net
realized capital gains are distributed.

If a Series of the Trust, including the Partnership Series, purchases shares in
certain foreign investment entities, called "passive foreign investment
companies" ("PFIC"), the Series (and in the case of the Partnership Series, its
investors) may be subject to U.S. federal income tax and a related interest
charge on a portion of any "excess distribution" or gain from the disposition of
such shares even if such income is distributed as a taxable dividend by the
Corporate Series to its shareholders or, in the case of the Partnership Series,
even if such income is distributed to its investors.

The Series of the Trust, including the Partnership Series, may be subject to
foreign withholding taxes on income from certain of their foreign securities.
If more than 50% in value of the total assets of a Corporate Series at the end
of its fiscal year are invested in securities of foreign corporations, the
Corporate Series may elect to pass-through to its shareholders their pro rata
share of foreign income taxes paid by the Corporate Series. If this election is
made, shareholders will be (i) required to include in their gross income their
pro rata share of foreign source income (including any foreign taxes paid by the
Corporate Series), and (ii) entitled to either deduct their share of such
foreign taxes in computing their taxable income or to claim a credit for such
taxes against their U.S. federal income tax, subject to certain limitations
under the Code.

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<PAGE>

Shareholders will be informed by the Corporate Series at the end of each
calendar year regarding the shareholder's proportionate share of taxes paid to
any foreign country or possession of the United States, and gross income derived
from sources within any foreign country or possession of the United States.

The Enhanced U.S. Large Company Series' investments in Index Derivatives are
subject to complex tax rules which may have the effect of accelerating income or
converting, in part, what otherwise would have been long-term capital gain into
short-term capital gain. These rules may affect both the amount, character and
timing of income distributed to shareholders of The Enhanced U.S. Large Company
Series.

For the Corporate Series with the principal investment policy of investing in
foreign equity securities and non-equity domestic investments, it is anticipated
that only a small portion of such Corporate Series' dividends will qualify for
the corporate dividends received deduction. To the extent that such Corporate
Series pay dividends which qualify for this deduction, the availability of the
deduction is subject to certain holding period and debt financing restrictions
imposed under the Code on the corporation claiming the deduction.

Since virtually all of the net investment income from The DFA One-Year Fixed
Income and Two-Year Global Fixed Income Series is expected to arise from earned
interest, it is not expected that any of such Series' distributions will be
eligible for the dividends received deduction for corporations.

The Trust may accept securities or local currencies in exchange for shares of a
Series. A gain or loss for U.S. federal income tax purposes may be realized by
investors in a Corporate Series who are subject to U.S. federal taxation upon
the exchange depending upon the cost of the securities or local currency
exchanged. (See "In Kind Purchases" in Item 7(b).)

Shareholders of the Corporate Series who are not U.S. persons for purposes of
U.S. federal income taxation should consult with their tax advisors regarding
the applicability of U.S. withholding and other taxes to distributions received
by them from the Corporate Series and the application of foreign tax laws to
these distributions. Series shares held by the estate of a non-U.S. investor
may also be subject to U.S. estate tax.

The Partnership Series are series of a trust organized under Delaware law. The
Partnership Series will not be subject to any U.S. federal income tax. Instead,
each investor will be required to report separately on its own U.S. federal
income tax return its distributive share (as determined in accordance with the
governing instruments of the Partnership Series) of a Partnership Series'
income, gains, losses, deductions and credits. Each investor will be required
to report its distributive share regardless of whether it has received a
corresponding distribution of cash or property from a Partnership Series. An
allocable share of a tax-exempt investor's income will be "unrelated business
taxable income" ("UBTI") only to the extent that a Partnership Series borrows
money to acquire property or invests in assets that produce UBTI. In addition
to U.S. federal income taxes, investors in the Partnership Series may also be
subject to state and local taxes on their distributive share of a Partnership
Series' income.

69
<PAGE>

While the Partnership Series are not classified as "regulated investment
companies" under Subchapter M of the Code, the Partnership Series' assets,
income and distributions will be managed in such a way that an investor in the
Series will be able to satisfy the requirements of Subchapter M of the Code,
assuming that the investor invested all of its assets in a Partnership Series
for such Series' entire fiscal year.

There are certain other tax issues that will be relevant to only certain of the
investors; for instance, investors that are segregated asset accounts and
investors who contribute assets rather than cash to the Partnership Series. It
is intended that contributions of assets will not be taxable provided certain
requirements are met. Such investors are advised to consult their own tax
advisors as to the tax consequences of an investment in the Partnership Series.

Investors in the Partnership Series who are not U.S. persons for purposes of
U.S. federal income taxation should consult with their tax advisors to determine
the applicability of U.S. withholding by a Partnership Series on interest,
dividends and any other items of fixed or determinable annual or periodical
gains, profits and income included in such investors' distributive share of a
Partnership Series' income. Non-U.S. investors may also wish to contact their
tax advisors to determine the applicability of foreign tax laws. Series shares
held by the estate of a non-U.S. investor may be subject to U.S. estate tax.

The Tax-Managed Marketwide Value Series may time investments to minimize the
receipt of dividends. These actions could result in the Tax-Managed Marketwide
Value Series being unable to flow through the dividends received deduction to
corporate shareholders. This will occur if the Tax-Managed Marketwide Value
Series does not hold the stock of a domestic (U.S.) corporation for the
requisite holding period to be eligible for pass-through of the dividends
received deduction.

The Advisor seeks to manage the Tax-Managed Marketwide Value Series in order to
minimize the realization of net capital gains where possible and may minimize
taxable dividend distributions during a particular year. However, the
realization of capital gains and receipt of income is not entirely within the
Advisor's control. Thus, capital gains distributions may vary considerably from
year to year. There will be no capital gains distributions in years when the
Tax-Managed Marketwide Value Series realizes net capital losses. Furthermore,
the realization of capital gains by a shareholder on the sale of portfolio
shares will depend on whether a shareholder's redemption price exceeds his or
her tax basis in the shares sold. If a shareholder elects to receive capital
gains distributions in cash, instead of reinvesting them in additional shares,
the capital at work in the Tax-Managed Marketwide Value Series will be reduced.
Also, purchases of shares in the Tax-Managed Marketwide Value Series shortly
before the record date for a dividend or capital gains distribution may cause of
portion of the investment to be returned to the shareholder as a taxable
distribution, regardless of whether the distribution is being reinvested or paid
in cash.

ITEM 20. UNDERWRITERS. Not applicable.

ITEM 21. CALCULATION OF PERFORMANCE DATA

70
<PAGE>

(a) MONEY MARKET FUNDS. Not applicable.

(b) OTHER FUNDS. Following are quotations of the annualized percentage total
returns for the one-, five-, and ten-year periods ended November 30, 1998 (as
applicable) using the standardized method of calculation required by the SEC.
For those Series in effect for less than one, five or ten years, the time
periods during which the Series have been active have been substituted for the
periods stated (which in no case extends prior to the effective date of the
registration statement relating to a particular Series).

<TABLE>
<CAPTION>
ONE FIVE TEN
YEAR YEARS YEARS
---- ----- -----
<S> <C> <C> <C>
The U.S. Large Company Series 23.60 22.91 20.90
(95 months)

The Enhanced U.S. Large Company Series 24.00 31.76 NA
(28 months)

The U.S. Large Cap Value Series 11.92 18.30 17.01
(69 months)

The U.S. 4-10 Value Series -15.54 NA NA
(9 months)

The U.S. 6-10 Value Series -9.05 14.47 15.05
(68 months)

The U.S. 6-10 Small Company Series -8.97 12.26 12.38
(69 months)

The U.S. 9-10 Small Company Series -10.81 NA NA

The DFA International Value Series 12.49 6.44 NA
(57 months)

The Japanese Small Company Series -2.53 -31.50 NA
(27 months)

The Pacific Rim Small Company Series -24.33 -26.61 NA
(27 months)

The United Kingdom Small Company Series -13.20 1.25 NA
(27 months)

71
<PAGE>

The Continental Small Company Series 18.71 15.33 NA
(27 months)

The Emerging Markets Series -12.78 -3.05 NA
(55 months)

The Emerging Markets Small Cap Series -16.48 -19.26 NA
(23 months)

The DFA One-Year Fixed Income Series 5.90 5.64 5.44
(69 months)

The DFA Two-Year Global Fixed Income Series 6.48 6.74 NA
(33 months)
</TABLE>

The Global Value Series, The Global Large Company Series and The Global Small
Company Series had not commenced operations as of November 30, 1998.

As the following formula indicates, the average annual total return is
determined by finding the average annual compounded rates of return over the
stated time period that would equate a hypothetical initial purchase order of
$1,000 to its redeemable value (including capital appreciation/depreciation and
dividends and distributions paid and reinvested less any fees charged to a
shareholder account) at the end of the stated time period. The calculation
assumes that all dividends and distributions are reinvested at the public
offering price on the reinvestment dates during the period. The quotation
assumes the account was completely redeemed at the end of each period and the
deduction of all applicable charges and fees. According to the SEC formula:

P(1 + T)n = ERV

where:

P = a hypothetical initial payment of $1,000

T = average annual total return

n = number of years

ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the one-, five-, and ten-year periods at the end of the one-,
five-, and ten-year periods (or fractional portion thereof).

ITEM 22. FINANCIAL STATEMENTS.

(a)-(c) The audited financial statements and financial highlights of the Trust
for its fiscal year ended November 30, 1998 as set forth in the Trust's annual
report to shareholders, including the

72
<PAGE>

report of PricewaterhouseCoopers LLP, independent accountants, are incorporated
herein by reference. The audited annual report does not contain any data
regarding The Tax-Managed U.S. Marketwide Value Series, The Global Value Series,
The Global Large Company Series and The Global Small Company Series because they
had not commenced operations as of November 30, 1998.

73
<PAGE>

THE DFA INVESTMENT TRUST COMPANY
(THE "REGISTRANT")

PART C: OTHER INFORMATION

ITEM 23. EXHIBITS:
(a) CHARTER, AS NOW IN EFFECT.
(1) Agreement and Declaration of Trust.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 5 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: December 1, 1995.

(2) Certificate of Trust dated September 11, 1992.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(3) Certificate of Amendment to Certificate of
Trust dated January 15, 1993.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(b) Existing bylaws or instruments corresponding thereto.
(1) By-Laws.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.
Not applicable.

<PAGE>

(c) Instruments defining the rights of holders of the
securities being registered including where applicable,
the relevant portion of the articles or incorporation or
bylaws of the Registrant.
Not applicable.

(d) Investment advisory contracts relating to the management
of the assets of the Registrant.
(1) Investment Management Agreement dated January
6, 1993 between the Registrant and Dimensional
Fund Advisors Inc. ("DFA") on behalf of The U.S.
6-10 Small Company Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(2) Investment Management Agreement between the
Registrant and DFA on behalf of The U.S. Large
Company Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 5 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: December 1, 1995.

(3) Investment Management Agreement dated January 6,
1993 between the Registrant and DFA on behalf of
The DFA One-Year Fixed Income Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(4) Investment Management Agreement dated January 6,
1993 between the Registrant and DFA on behalf of
The U.S. Large Cap Value Series (formerly The
U.S. Large Cap High Book to Market Series).
INCORPORATED HEREIN BY REFERENCE TO:

<PAGE>

Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(5) Investment Management Agreement dated January 6,
1993 between the Registrant and DFA on behalf of
The U.S. 6-10 Value Series (formerly The U.S.
Small Cap High Book to Market Series).
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(6) Investment Management Agreement dated December 1,
1993 between the Registrant and DFA on behalf of
The DFA International Value Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(7) Investment Management Agreement dated October 18,
1996 between the Registrant and DFA on behalf of
The Emerging Markets Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(8) Investment Management Agreement dated February 8,
1996 between the Registrant and DFA on behalf of
The Enhanced U.S. Large Company Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment

<PAGE>

No. 6 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: February 7, 1996.

(9) Investment Management Agreement dated February 8,
1996 between the Registrant and DFA on behalf of
The DFA Two-Year Global Fixed Income Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 6 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: February 7, 1996.

(10) Investment Management Agreement dated February 8,
1996 between the Registrant and DFA on behalf of
The DFA Two-Year Corporate Fixed Income Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 6 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: February 7, 1996.

(11) Investment Management Agreement dated February 8,
1996 between the Registrant and DFA on behalf of
The DFA Two-Year Government Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 6 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: February 7, 1996.

(12) Investment Management Agreement dated August 7,
1996 between the Registrant and DFA on behalf of
The Japanese Small Company Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 7 to the Registrant's

<PAGE>

Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: August 7, 1996.

(13) Investment Management Agreement dated August 7,
1996 between the Registrant and DFA on behalf of
The United Kingdom Small Company Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 7 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: August 7, 1996.

(14) Investment Management Agreement dated August 7,
1996 between the Registrant and DFA on behalf of
The Pacific Rim Small Company Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 7 to Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: August 7, 1996.

(15) Investment Management Agreement dated August 7,
1996 between the Registrant and DFA on behalf of
The Continental Small Company Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 7 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: August 7, 1996.

(16) Investment Management Agreement dated October 18,
1996 between the Registrant and DFA on behalf of
The Emerging Markets Small Cap Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 9 to the Registrant's
Registration Statement on

<PAGE>

Form N-1A.
File No.: 811-07436.
Filing Date: February 24, 1997.

<PAGE>

(17) Investment Management Agreement dated November
28, 1996 between the Registrant and DFA on behalf
of The U.S. 9-10 Small Company Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 12 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: November 28, 1997.

(18) Investment Management Agreement dated November
28, 1996 between the Registrant and DFA on behalf
of The U.S. 4-10 Value Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 12 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: November 28, 1997.

(19) Form of Investment Management Agreement dated
December 7, 1998 between the Registrant and DFA
on behalf of the Tax-Managed U.S. Marketwide
Value Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 16 to the Registrant's
Registration Statement on
Form N-1A.
File No: 811-07436.
Filing Date: December 7, 1998.

(20) Sub-Advisory Agreement among the Registrant, DFA
and Australia Pty Ltd. ("DFA-Australia") dated
August 7, 1996 on behalf of The Japanese Small
Company Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 7 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: August 7, 1996.

<PAGE>

(21) Sub-Advisory Agreement among the Registrant, DFA
and Dimensional Fund Advisors Ltd. ("DFAL") dated
August 7, 1996 on behalf of The United Kingdom
Small Company Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 7 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: August 7, 1996.

(22) Sub-Advisory Agreement among the Registrant, DFA
and DFA-Australia dated August 7, 1996 on behalf
of The Pacific Rim Small Company Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 7 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: August 7, 1996.

(23) Sub-Advisory Agreement among the Registrant, DFA
and DFAL dated August 7, 1996 on behalf of The
Continental Small Company Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 7 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: August 7, 1996.

(24) Consultant Services Agreement between
Dimensional Fund Advisors Inc. and
Dimensional Fund Advisors Ltd. on behalf of:
THE DFA INVESTMENT TRUST COMPANY
* DFA International Value Series
* Emerging Markets Small Cap Series
* Emerging Markets Series
* Tax-Managed U.S. Marketwide Value Series

DFA INVESTMENT DIMENSIONS GROUP
INC.
* DFA International Small Cap Value Portfolio

<PAGE>

* VA International Value Portfolio
* Large Cap International Portfolio
* Tax-Managed DFA International Value
Portfolio; and

DIMENSIONAL EMERGING MARKETS
FUND, INC.

INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 16 to
the Registrant's Registration Statement on
Form N-1A.
File No: 811-07436.
Filing Date: December 7, 1998.

(25) Consultant Services Agreement between
Dimensional Fund Advisors Inc. and
DFA Australia Ltd. on behalf of:
THE DFA INVESTMENT TRUST COMPANY
* DFA International Value Series
* Emerging Markets Small Cap Series
* Emerging Markets Series
* Tax-Managed U.S. Marketwide Value Series

DFA INVESTMENT DIMENSIONS GROUP
INC.
* DFA International Small Cap Value Portfolio
* VA International Value Portfolio
* Large Cap International Portfolio
* Tax-Managed DFA International Value
Portfolio; and

DIMENSIONAL EMERGING MARKETS
FUND, INC.

INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 16 to the Registrant's
Registration Statement on
Form N-1A.
File No: 811-07436.
Filing Date: December 7, 1998.

<PAGE>

(e) Underwriting or distribution contract between the
Registrant and a principal underwriter, and
specimens or copies of all agreements between
principal underwriters and dealers.
Agreement dated January 6, 1993 between the
Registrant and DFA Securities Inc.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(f) Bonus, profit sharing, pension or similar
contracts or arrangements wholly or partly for
the benefit of directors or officers of the
Registrant in their official capacity; Describe
in detail any such plan not included in a formal
document.
Not applicable.

(g) Custodian agreements and depository contracts
under Section 17(f) of the Investment Company Act
of 1940, as amended [15 U.S.C. 80a 17(f)]
concerning the Registrant's securities and
similar investments including the schedule of
remuneration.
(1) Custodian Agreement between the
Registrant and PNC Bank, N.A. (formerly
Provident National Bank N.A.).
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(2) Custodian Agreement dated December 1,
1993 between Registrant and Boston Safe
Deposit and Trust Company.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(3) Addendum to the Custodian Agreements.
(a) Addendum Number 1 dated
December 8, 1998 between

<PAGE>

PNC and the Registrant on behalf
of each series of the Registrant.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 17 to the Registrant's
Registration statement on
Form N-1A.
File No.: 811-07436.

Filing Date: March 24, 1999.

(b) Addendum Number 2 dated May 28,
1999 between PNC and the
Registrant on behalf of each
series of the Registrant is
electronically filed herewith as
Exhibit EX-99.b8.

(4) Global Custody Agreement dated January
18, 1994 between the Registrant and The
Chase Manhattan Bank, N.A. on behalf of
The Emerging Markets Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(5) Custodial Services Agreement dated
January 13, 1998 between the Registrant
and Citibank, N.A.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.
(i) Manual Transmission Authorization.
(ii) Manual Transmission Procedures.

(h) Other material contracts not made in the ordinary
course of business to be performed in whole or in
part on or after the filing date of the
Registration Statement.

(1) Transfer Agency Agreement dated January
15, 1993 between the Registrant and PFPC
Inc. (formerly known as Provident
Financial Processing Corporation.)
("PFPC").
INCORPORATED HEREIN BY REFERENCE TO:

<PAGE>

Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(i) Appendix A: Authorized Persons to Give
Oral and Written
Instructions

(ii) Schedule A: Listing of Statistical
Reports

(2) Amendments to the Transfer Agency Agreement.
(a) Amendment Number 1 dated December 1,
1993 between the Registrant and PFPC on
behalf of The International Value
Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(3) Addendum to the Transfer Agency Agreement.
(a) Addendum Number 1 dated December 8, 1998
between PFPC and the Registrant on
behalf of each series of the Registrant.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 17 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 24, 1999.

(b) Addendum Number 2 dated May 28, 1999
between PFPC and the Registrant on
behalf of each series of the Registrant
is electronically filed herewith as
Exhibit EX -99.b9.1.

(4) Administration and Accounting Services Agreement
dated January 15, 1993 between the Registrant and
PFPC.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's

<PAGE>

Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.
(5) Amendments to the Administration and Accounting
Services Agreement.
(a) Amendment Number 1 dated December 1,
1993 between PFPC and the Registrant on
behalf of The DFA International Value
Series.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 14 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 3, 1998.

(6) Addendum to the Administration and Accounting
Services Agreement.
(a) Addendum Number 1 dated December 8, 1998
between PFPC and the Registrant on
behalf of each series of the Registrant.
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment
No. 17 to the Registrant's
Registration Statement on
Form N-1A.
File No.: 811-07436.
Filing Date: March 24, 1999.

(b) Addendum Number 2 dated May 28, 1999
between PFPC and the Registrant on
behalf of each series of the Registrant
is electronically filed herewith as
Exhibit EX99.b9.2.

(7) Administration Agreement dated May 28, 1999
between DFA and the Registrant on behalf of The
Global Value Series, The Global Large Company
Series and The Global Small Company Series is
electronically filed herewith as Exhibit
EX-99.b9.3.

(i) An opinion and consent of counsel regarding the legality
of the securities being registered, stating whether the
securities will, when sold, be legally issued, fully paid
and non-assessable.
Not applicable.

<PAGE>

(j) Any other opinions, appraisals or rulings and related
consents relied on in preparing this Registration
Statement and required by Section 7 of the 1933 Act [15
U.S.C. 77g]. Consent of PricewaterhouseCoopers LLP is
electronically filed herewith as Exhibit EX-99.B11.

(k) All Financial statements omitted from Item 23. Not
applicable.

(l) Any agreements or understandings made in consideration for
providing the initial capital between or among the
Registrant, the underwriter, adviser, promoter or initial
stockholders and written assurances from promoters or
initial stockholders that purchases were made for
investment purposes and not with the intention of
redeeming or reselling.
Not applicable.

(m) Any plan entered into by Registrant under Rule
12b-1, and any agreements with any person relating to
the Plan's implementation.
Not applicable.

(n) Any plan entered into by Registrant pursuant to Rule
18f-3, any agreement with any person relating to the
plan's implementation, and any amendment to the plan or
agreement.
Not Applicable.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

If an investor beneficially owns more than 25% of the outstanding
voting securities of a feeder fund that invests all of its
investable assets in a Series of the Trust, then the feeder fund
and its corresponding Series may be deemed to be under the common
control of such investor. Accordingly, certain feeder portfolios
of DFA Investment Dimensions Group ("DFA IDG") and Dimensional
Investment Group ("DIG"), both Maryland corporations and
registered investment companies, may be deemed to be under common
control with their corresponding Series of the Trust. As of
April 30, 1999,

<PAGE>

the following persons beneficially owned more than 25% of the
outstanding voting securities of the feeder portfolios investing
in the Trust:

<TABLE>

<S> <C>
DFA IDG
JAPANESE SMALL COMPANY PORTFOLIO
BellSouth Corporation
1155 Peachtree Street N.E.
Atlanta, GA 30309-3610 65.57%
-----

UNITED KINGDOM SMALL COMPANY PORTFOLIO
BellSouth Corporation
1155 Peachtree Street N.E.
Atlanta, GA 30309-3610 59.73%
-----

CONTINENTAL SMALL COMPANY PORTFOLIO
BellSouth Corporation
1155 Peachtree Street N.E.
Atlanta, GA 30309-3610 58.59%
-----

PACIFIC RIM SMALL COMPANY PORTFOLIO
BellSouth Corporation
1155 Peachtree Street N.E.
Atlanta, GA 30309-3610 66.32%
-----

U.S. 4-10 VALUE PORTFOLIO
Dimensional Fund Advisors Inc.
(see above address) 100.00%
------

DIG
6-10 INSTITUTIONAL PORTFOLIO
BAYCARE Health System
323 Jefford Street
Clearwater, FL 34617 48.24%
-----

U.S. 6-10 VALUE PORTFOLIO II
BellSouth Corporation 401(k)
1155 Peachtree Street N.E.
Atlanta, GA 30309-3610 100.00%
------

U.S. LARGE CAP VALUE PORTFOLIO II
BellSouth Corporation 401(k)
1155 Peachtree Street N.E.
Atlanta, GA 30309-3610 100.00%
------

<PAGE>

DFA INTERNATIONAL VALUE PORTFOLIO II
BellSouth Corporation 401(k)
(see above address) 100.00%
------

EMERGING MARKETS PORTFOLIO II
Citibank Savings Incentive Plan
153 E. 53rd Street
New York, NY 10043 100.00%
------

DFA INTERNATIONAL VALUE PORTFOLIO IV
Citibank Savings Incentive Plan
153 E. 53rd Street
New York, NY 10043 100.00%
------
</TABLE>

ITEM 25. INDEMNIFICATION.
Reference is made to Article VII of the Registrant's Agreement
and Declaration of Trust and to Article X of the Registrant's
By-Laws, which are incorporated herein by reference.

Pursuant to Rule 484 under the Securities Act of 1933, as
amended, the Registrant furnishes the following undertaking:
"Insofar as indemnification for liability arising under the
Securities Act of 1933 (the "Act") may be permitted to
trustees, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is,
therefore, 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 a
trustee, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person in
connection with the securities 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
issue."

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

Dimensional Fund Advisors Inc., the investment manager for
the Registrant, is also the investment manager for three
other registered open-end investment companies, DFA
Investment Dimensions Group Inc.,

<PAGE>

Dimensional Emerging Markets Value Fund Inc. and Dimensional
Investment Group Inc. The Advisor also serves as sub-advisor
for certain other registered investment companies. For
additional information, please see "Management of the Trust"
in PART A and "Management of the Registrant" in PART B of
this Registration Statement. Additional information as to
the Advisor and the directors and officers of the Advisor is
included in the Advisor's Form ADV filed with the Commission
(File No. 801-16283), which is incorporated herein by
reference and sets forth the officers and directors of the
Advisor and information as to any business, profession,
vocation or employment of a substantial nature engaged in by
those officers and directors during the past two years.

ITEM 27. PRINCIPAL UNDERWRITERS.
(a) Not applicable.

(b) Registrant distributes its own shares. It has entered
into an agreement with DFA Securities Inc. which
provides that DFA Securities Inc., 1299 Ocean Avenue,
11th Floor, Santa Monica, CA 90401, will supervise
the sale of Registrant's shares.

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The accounts and records of the Registrant will be located
at the office of the Registrant and at additional locations,
as follows:

NAME ADDRESS
The DFA Investment Trust Company 1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401

PFPC Inc. 400 Bellevue Parkway
Wilmington, DE 19809

The Chase Manhattan Bank 4 Chase MetroTech Center
Brooklyn, NY 11245

ITEM 29. MANAGEMENT SERVICES.
There are no management-related service contracts not
discussed in Part A or Part B.

ITEM 30. UNDERTAKINGS.
(a) Not applicable

(b) Not applicable

<PAGE>

(c) The Registrant undertakes to furnish each person to
whom this Post-Effective Amendment is delivered a
copy of its latest annual report to shareholders,
upon request and without charge.

(d) The Registrant hereby undertakes to promptly call a
meeting of shareholders for the purpose of voting
upon the question of removal of any trustee or
trustees when requested in writing to do so by the
record holders of not less than 10 per centum of the
Registrant's outstanding shares and to assist its
shareholders in accordance with the requirements of
Section 16(c) of the Investment Company Act of 1940
relating to shareholder communications.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Investment Company Act of 1940, as
amended, the Registrant has duly caused this Post-Effective Amendment No. 18 to
its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Santa Monica, the State of California,
as of the 27th day of May, 1999.

THE DFA INVESTMENT TRUST COMPANY
(REGISTRANT)

BY: /s/ IRENE R. DIAMANT
-----------------------------------------
IRENE R. DIAMANT
VICE PRESIDENT
(NAME AND TITLE)

<PAGE>

EXHIBIT INDEX

N-1A EDGAR
EXHIBIT NO. EXHIBIT NO. DESCRIPTION
<S> <C> <C>
23(g)(3) EX-99.b8 Custodian Agreement Addendum No. 2
dated May 28, 1999 between PNC
and the Registrant on behalf of
each series of the Registrant.

23(h)(3) EX-99.b9.1 Transfer Agency Agreement Addendum
No. 2 dated May 28, 1999 between
PFPC and the Registrant on behalf
of each series of the Registrant.

23(h)(6) EX-99.b9.2 Administration and Accounting Services
Agreement Addendum No. 2 dated May 28,
1999 between PFPC and the Registrant
on behalf of each series of the Registrant.

23(h)(7) EX-99-b9.3 Administration Agreement dated May 28,
1999 between DFA and the Registrant on
behalf of The Global Value Series,
The Global Large Company Series and The
Global Small Company Series.

23(j) EX-99.b11 Consent of PriceWaterhouseCoopers LLP

</TABLE>

<PAGE>

Exhibit 99.b8

THE DFA INVESTMENT TRUST COMPANY

CUSTODIAN AGREEMENT
ADDENDUM NUMBER TWO

THIS AGREEMENT is made as of the 28th day of May, 1999 by and between THE
DFA INVESTMENT TRUST COMPANY, a Delaware business trust (the "Fund"), and PNC
BANK, N.A., formerly "Provident National Bank," a national banking association
("PNC").

W I T N E S S E T H :

WHEREAS, the Fund is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended;

WHEREAS, the Fund has retained PNC to serve as the Fund's custodian
pursuant to a Custodian Agreement dated January 15, 1993 (the "Agreement"),
which, as of the date hereof, is in full force and effect;

WHEREAS, PNC presently provides such services to the existing series of
shares of the Fund, and has agreed to provide such services to three new series
of the Fund, designated as The Global Value Series, The Global Large Company
Series and The Global Small Company Series (collectively, the "New Series"); and

WHEREAS, Section 1 of the Agreement provides that the Fund may from time to
time issue additional series and, in such event, the provisions of the Agreement
shall apply to such series as may be mutually agreed to by the Fund and PNC;

NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound thereby, the parties agree:

1. The Agreement is hereby amended by replacing the current Schedule A of
the Agreement in its entirety with "Schedule A, Amended and Restated May 28,
1999," reflecting the addition of the New Series, and attached hereto.

2. The fee schedules of PNC applicable to the series that are listed on
Schedule A shall be as agreed to in writing from time to time.

3. In all other respects, the Agreement shall remain unchanged and in
full force and effect.

4. This Addendum may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Addendum Number Two
to the Agreement to be executed by their duly authorized officers designated
below on the day

<PAGE>

and year first above written.

THE DFA INVESTMENT TRUST COMPANY

By: /s/ IRENE R. DIAMANT
------------------------------
IRENE R. DIAMANT
VICE PRESIDENT

PNC BANK, N.A.

By: /s/ JOSEPH GRAMLICH
------------------------------
JOSEPH GRAMLICH
SENIOR VICE PRESIDENT

<PAGE>

AMENDED AND RESTATED
MAY 28, 1999

SCHEDULE A

SERIES OF
THE DFA INVESTMENT TRUST COMPANY

THE U.S. 9-10 SMALL COMPANY SERIES
THE U.S. 6-10 SMALL COMPANY SERIES
THE U.S. LARGE COMPANY SERIES
THE ENHANCED U.S. LARGE COMPANY SERIES
THE U.S. 6-10 VALUE SERIES
THE U.S. LARGE CAP VALUE SERIES
THE U.S. 4-10 VALUE SERIES
THE JAPANESE SMALL COMPANY SERIES
THE PACIFIC RIM SMALL COMPANY SERIES
THE UNITED KINGDOM SMALL COMPANY SERIES
THE EMERGING MARKETS SERIES
THE DFA INTERNATIONAL VALUE SERIES
THE EMERGING MARKETS SMALL CAP SERIES
THE CONTINENTAL SMALL COMPANY SERIES
THE DFA ONE-YEAR FIXED INCOME SERIES
THE DFA TWO-YEAR GLOBAL FIXED INCOME SERIES
THE DFA TAX-MANAGED U.S. MARKETWIDE VALUE SERIES
THE GLOBAL VALUE SERIES
THE GLOBAL LARGE COMPANY SERIES
THE GLOBAL SMALL COMPANY SERIES

<PAGE>

Exhibit 99.b9.1

THE DFA INVESTMENT TRUST COMPANY

TRANSFER AGENCY AGREEMENT
ADDENDUM NUMBER TWO

THIS AGREEMENT is made as of the 28th day of May, 1999 by and between THE
DFA INVESTMENT TRUST COMPANY, a Delaware business trust (the "Fund"), and PFPC
INC., formerly "Provident Financial Processing Corporation," a Delaware
corporation (the "Transfer Agent").

W I T N E S S E T H :

WHEREAS, the Fund is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended;

WHEREAS, the Fund has retained the Transfer Agent to serve as the Fund's
transfer agent, registrar and dividend disbursing agent, pursuant to a Transfer
Agency Agreement dated January 15, 1993 (the "Agreement"), which, as of the date
hereof, is in full force and effect;

WHEREAS, the Transfer Agent currently provides such services to the
existing series of shares of the Fund, and has agreed to provide such services
to three new series of the Fund, designated as The Global Value Series, The
Global Large Company Series and The Global Small Company Series (collectively
the "New Series"); and

WHEREAS, Paragraph 1 of the Agreement provides that any series of shares
created by the Fund after the date of the Agreement shall be included thereunder
upon the mutual agreement of the Fund and the Transfer Agent;

NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound thereby, the parties agree:

1. The Agreement is hereby amended by replacing the current
Schedule B of the Agreement in its entirety with "Schedule B, Amended and
Restated May 28, 1999," reflecting the addition of the New Series, and attached
hereto.

2. The fee schedules of PFPC applicable to the series that are
listed on Schedule B shall be as agreed to in writing, from time to time.

3. In all other respects, the Agreement shall remain unchanged and
in full force and effect.

4. This Addendum may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Addendum
Number Two to the Agreement to be executed by their duly authorized officers
designated below on the day and year first above written.

THE DFA INVESTMENT TRUST COMPANY

By: /s/ IRENE R. DIAMANT
-------------------------------------
IRENE R. DIAMANT
VICE PRESIDENT

PFPC INC.

By: /s/ JOSEPH GRAMLICH
-------------------------------------
JOSEPH GRAMLICH
SENIOR VICE PRESIDENT

<PAGE>

AMENDED AND RESTATED
May 28, 1999

SCHEDULE B

SERIES OF
THE DFA INVESTMENT TRUST COMPANY

THE U.S. 9-10 SMALL COMPANY SERIES
THE U.S. 6-10 SMALL COMPANY SERIES
THE U.S. LARGE COMPANY SERIES
THE ENHANCED U.S. LARGE COMPANY SERIES
THE U.S. 6-10 VALUE SERIES
THE U.S. LARGE CAP VALUE SERIES
THE U.S. 4-10 VALUE SERIES
THE JAPANESE SMALL COMPANY SERIES
THE PACIFIC RIM SMALL COMPANY SERIES
THE UNITED KINGDOM SMALL COMPANY SERIES
THE EMERGING MARKETS SERIES
THE DFA INTERNATIONAL VALUE SERIES
THE EMERGING MARKETS SMALL CAP SERIES
THE CONTINENTAL SMALL COMPANY SERIES
THE DFA ONE-YEAR FIXED INCOME SERIES
THE DFA TWO-YEAR GLOBAL FIXED INCOME SERIES
THE TAX-MANAGED U.S. MARKETWIDE VALUE SERIES
THE GLOBAL VALUE SERIES
THE GLOBAL LARGE COMPANY SERIES
THE GLOBAL SMALL COMPANY SERIES

<PAGE>

Exhibit 99.b9.2

THE DFA INVESTMENT TRUST COMPANY

ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
ADDENDUM NUMBER TWO

THIS AGREEMENT is made as of the 28th day of May, 1999 by and between
THE DFA INVESTMENT TRUST COMPANY, a Delaware business trust (the "Fund"), and
PFPC INC., formerly "Provident Financial Processing Corporation," a Delaware
corporation ("PFPC").

W I T N E S S E T H :

WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended;

WHEREAS, the Fund has retained PFPC to provide certain administration and
accounting services pursuant to an Administration and Accounting Services
Agreement dated January 15, 1993 (the "Agreement"), which, as of the date
hereof, is in full force and effect;

WHEREAS, PFPC presently provides such services to the existing series of
shares of the Fund, and has agreed to provide such services to three new series
of the Fund, designated as The Global Value Series, The Global Large Company
Series and The Global Small Company Series (collectively, the "New Series"); and

WHEREAS, Paragraph 1 of the Agreement provides that PFPC shall provide such
services to any series organized by the Fund after the date of the Agreement as
agreed to in writing by the Fund and PFPC;

NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound thereby, the parties agree:

2. The fee schedules of PFPC applicable to the series that are
listed on Schedule B shall be as agreed to in writing, from time to time.

3. In all other respects, the Agreement shall remain unchanged and
in full force and effect.

4. This Addendum may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Addendum
Number Two to the Agreement to be executed by their duly authorized officers
designated below on the day and year first above written.

THE DFA INVESTMENT TRUST COMPANY

By: /s/ IRENE R. DIAMANT
----------------------------------
IRENE R. DIAMANT
VICE PRESIDENT

PFPC INC.

By: /s/ JOSEPH GRAMLICH
----------------------------------
JOSEPH GRAMLICH
SENIOR VICE PRESIDENT

<PAGE>

AMENDED AND RESTATED
MAY 28, 1999

SCHEDULE B

SERIES OF
THE DFA INVESTMENT TRUST COMPANY

THE U.S. 9-10 SMALL COMPANY SERIES
THE U.S. 6-10 SMALL COMPANY SERIES
THE U.S. LARGE COMPANY SERIES
THE ENHANCED U.S. LARGE COMPANY SERIES
THE U.S. 6-10 VALUE SERIES
THE U.S. LARGE CAP VALUE SERIES
THE U.S. 4-10 VALUE SERIES
THE JAPANESE SMALL COMPANY SERIES
THE PACIFIC RIM SMALL COMPANY SERIES
THE UNITED KINGDOM SMALL COMPANY SERIES
THE EMERGING MARKETS SERIES
THE DFA INTERNATIONAL VALUE SERIES
THE EMERGING MARKETS SMALL CAP SERIES
THE CONTINENTAL SMALL COMPANY SERIES
THE DFA ONE-YEAR FIXED INCOME SERIES
THE DFA TWO-YEAR GLOBAL FIXED INCOME SERIES
THE TAX-MANAGED U.S. MARKETWIDE VALUE SERIES
THE GLOBAL VALUE SERIES
THE GLOBAL LARGE COMPANY SERIES
THE GLOBAL SMALL COMPANY SERIES

<PAGE>

Exhibit 99.b9.3

THE DFA INVESTMENT TRUST COMPANY

THE GLOBAL VALUE SERIES

THE GLOBAL LARGE COMPANY SERIES

THE GLOBAL SMALL COMPANY SERIES

ADMINISTRATION AGREEMENT

AGREEMENT made this 28th day of May, 1999, by and between THE DFA
INVESTMENT TRUST COMPANY, a Delaware business trust (the "Fund"), on behalf of
THE GLOBAL VALUE SERIES, THE GLOBAL LARGE COMPANY SERIES and THE GLOBAL SMALL
COMPANY SERIES (the "Portfolios"), separate series of the Fund, and DIMENSIONAL
FUND ADVISORS INC., a Delaware corporation (the "Administrator").

WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940, as heretofore
amended and supplemented;

WHEREAS, the Portfolios, as separate series of the Fund, desire to
avail themselves of the services, assistance and facilities of an administrator
and to have an administrator perform various administrative and other services
for them; and

WHEREAS, the Administrator desires to provide such services to the
Portfolios.

NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:

1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolios, subject
to the direction of the board of trustees and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein.

2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.

A. The Administrator shall supervise the administrative affairs of
the Fund as they pertain to the Portfolios. Specifically, the Administrator
shall:

(1) supervise the services provided to the Fund for the benefit
of the Portfolios by the Portfolios' custodian, transfer and
dividend disbursing agent, printers, insurance carriers (as
well as agents and brokers), independent accountants, legal
counsel and other persons who provide services to the Fund
for the benefit of the Portfolios;

<PAGE>

(2) assist the Fund to comply with the provisions of applicable
federal, state, local and foreign securities, tax,
organizational and other laws that (i) govern the business
of the Fund in respect of the Portfolios (EXCEPT THOSE THAT
GOVERN INVESTMENT OF THE PORTFOLIOS' ASSETS), (ii) regulate
the offering of the Portfolios' shares, and (iii) provide
for the taxation of the Portfolios;

(3) provide the shareholders of the Portfolios with such
information regarding the operation and affairs of the
Portfolios, and their investment in their shares, as they or
the Fund may reasonably request;

(4) assist the Portfolios to conduct meetings of their
shareholders if and when called by the board of trustees of
the Fund;

(5) furnish such information as the board of trustees of the
Fund may require regarding any investment company in whose
shares the Portfolios may invest; and

(6) provide such other administrative services for the benefit
of the Portfolios as the board of trustees may reasonably
request.

B. In carrying out its responsibilities under Section A herein, to the
extent the Administrator deems necessary or desirable and at the expense of the
Portfolios, the Administrator shall be entitled to consult with, and obtain the
assistance of, the persons described in Section A, paragraph (1) herein who
provide services to the Fund.

C. The Administrator, at its own expense, shall provide the Fund with
such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolios.

3. EXPENSES OF THE FUND. It is understood that the Portfolios will pay
all of their own expenses incurred to conduct their administrative affairs.

4. COMPENSATION OF THE ADMINISTRATOR. It is understood that there
shall be no fees paid to the Administrator for the services to be rendered by
the Administrator to the Portfolios as provided in Section 2 of this Agreement.

5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
to the Fund or in respect of the Portfolios are not to be deemed exclusive, and
the Administrator shall be free to render similar services to others as long as
its services to the Fund or in respect of the Portfolios are not impaired
thereby.

6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement
shall be deemed to protect the Administrator against any liability to the Fund
or its shareholders to which

<PAGE>

it might otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or the reckless disregard of
its obligations under this Agreement.

7. DURATION AND TERMINATION.

A. This Agreement shall become effective on the date written
below, provided that prior to such date it shall have been approved by the board
of trustees of the Fund, and shall continue in effect until terminated by the
Fund or the Administrator on 60 days' written notice to the other.

B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.

8. SEVERABILITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.

9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and effective on the 28th day of May, 1999.

DIMENSIONAL FUND ADVISORS INC. THE DFA INVESTMENT TRUST
COMPANY

By: /s/ Rex Sinquefield By: /s/ David G. Booth
----------------------------- ------------------------
Chairman-Chief Investment Officer President

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in this Post-Effective Amendment
No. 18 (File No. 811-7436) under the Investment Company Act of 1940 to the
Registration Statement on Form N-1A of The DFA Investment Trust Company of our
report for The U.S. 9-10 Small Company Series, The U.S. 6-10 Small Company
Series, The U.S. Large Company Series, The Enhanced U.S. Large Company Series,
The U.S. 6-10 Value Series, The U.S. Large Cap Value Series, The U.S. 4-10 Value
Series, The Japanese Small Company Series, The Pacific Rim Small Company Series,
The United Kingdom Small Company Series, The Emerging Markets Series, The DFA
International Value Series, The Emerging Markets Small Cap Series, The
Continental Small Company Series, The DFA One-Year Fixed Income Series, and The
DFA Two-Year Global Fixed Income Series (collectively, the "Portfolios"), dated
January 15, 1999 on our audits of the financial statements and financial
highlights of the Portfolios of The DFA Investment Trust Company as of November
30, 1998 and for the respective periods then ended, which report is included in
the Annual Reports to Shareholders.

We also consent to the reference to our firm under the captions "Investment
Advisory and Other Services" and "Financial Statements" in the Statement of
Additional Information.

PricewaterhouseCoopers LLP

2400 Eleven Penn Center
Philadelphia, PA
May 27, 1999