<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
December 22, 1999
Dear Shareholder:
We are pleased to present the annual report for Schroder Series Trust for
the fiscal year ended October 31, 1999.
The U.S. economy delivered another solid performance in the 12-month period
ended October 31, 1999, with real gross domestic product (GDP) expanding by an
estimated 3.8%, after a 4.3% gain in the same period ended October 31, 1998. As
was the case in 1998, this year's performance was all the more impressive given
that it occurred in the face of continued deterioration in the trade deficit.
Led by robust growth in consumer spending and capital investment, domestic
demand appears to have turned in its second consecutive year of 5% plus growth.
Moreover, U.S. core inflation showed no acceleration over the course of the year
in spite of the robust pace of economic growth and tight conditions in the labor
market. Rapid productivity growth more than offset increases in nominal labor
costs. Brutally competitive conditions in most industries prevented companies
from raising prices of finished goods. An increase in oil prices drove headline
U.S. inflation higher as the year progressed, however, and the Federal Reserve
Bank started to take back the 75 basis points of easing it had implemented in
late 1998.
Against the backdrop of strong growth in the broad economy, the U.S. stock
market as measured by the S&P 500 Index continued to post strong returns. For
the year, large cap stocks outperformed small cap stocks, and across the board,
growth stocks strongly outpaced value stocks. The S&P 500, which is dominated by
large capitalization stocks, gained 25.7% for the 12 months ended October 31,
1999, while the small cap Russell 2000 Index returned 14.9% and the S&P MidCap
400 Index returned 21.1% during the same period. Within these broad market
figures, the disparities between the technology segment, a group that more than
doubled in value during the year, and many other segments of the market were
quite stark.
While strong U.S. economic growth was seen as a positive for the stock
market, it kindled fears of inflation among bond investors. As a result,
longer-term interest rates rose as much as 1.5% from their lows of the autumn of
1998.
Looking ahead, we anticipate that domestic growth will slow moderately in
the coming year as higher interest rates and a vigilant Federal Reserve lean
against economic activity. We would not be surprised to see a further small
increase in the Fed Funds interest rate target in the first half of 2000 as
monetary policymakers seek to keep the economy on a sustainable path.
Nonetheless, a healthier international environment should aid U.S. exports, and
at the moment there seems no apparent reason to believe that the U.S. economic
expansion is in any great peril.
Recently, the sustainability of historically high valuations for many stocks
has been called into question. Schroders continues to believe that our strong
fundamental research is the key to successful investment management and that its
investment process can add value by identifying the companies that are well
positioned to maintain their earnings prospects.
We thank you for your support of Schroder Series Trust. We welcome your
comments and look forward to servicing your investment needs in the years to
come.
Sincerely,
/s/ Alexandra Poe
Alexandra Poe
PRESIDENT
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER LARGE CAPITALIZATION EQUITY FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (AS OF OCTOBER 31, 1999)
PERFORMANCE
For the fiscal year ended October 31, 1999, the Schroder Large
Capitalization Equity Fund Investor Shares returned 23.35%. The S&P 500 Index
rose 25.67% over the same period. The Fund began offering Advisor Shares in
January 1999 and these shares do not have a full fiscal year of performance.
Strong stock selection in the capital goods, consumer cyclicals and health
care sectors contributed positively to the Fund's performance. The Fund's
technology holdings delivered solid gains, but paled in comparison to the S&P's
technology holdings, thus detracting from the Fund's performance relative to the
Index. Sector allocation added to performance, especially the Fund's underweight
position in consumer staples.
MARKET BACKGROUND
The signal concern of the U.S. equity markets over the fiscal year has been
the direction of interest rates. The sizzling pace of U.S. economic growth,
recovering Asian economies, and a burgeoning U.S. international trade deficit,
pushed rates higher and pressured the value of the U.S. dollar. Few signs of an
imminent slowing in the U.S. economy pressured the stock and bond markets
through the summer. Housing has yet to roll over, and consumer spending has
maintained substantial momentum. Core inflation results, nevertheless, have
remained benign. This environment, combined with a vigilant Federal Reserve
bank, afforded U.S. equity markets a strong rally in October as investors
discounted higher interest rates.
Paradoxically, it was earlier dollar strength that influenced relative
sector performance in the market, as multi-national consumer products companies
announced that currency changes would reduce top line performance. Other
underperforming sectors included financials and health care, the former from
interest rate concerns and the latter from the same and potential election year
legislation. Communication services was the clear winner away from technology.
The regional BELL operating companies outperformed significantly as two major
mergers drew closer to completion and BELL ATLANTIC filed to provide long
distance service in New York. Technology was, again, another big driver for
index and sector performance. The technology heavy NASDAQ Composite led all
major indices.
PORTFOLIO REVIEW
Among our top performers over the period were EMC CORP., SUN MICROSYSTEMS
and TELLABS, all doubling or more in price over the holding period. We believe
that all three stocks are ideally positioned for the boom in communications and
computer networking. The largest contributors to performance were GENERAL
ELECTRIC, INTERNATIONAL BUSINESS MACHINES, AMERICAN INTERNATIONAL GROUP, and
BRISTOL MYERS SQUIBB. The Fund uses a market capitalization-weighted strategy to
determine the weighting of individual stocks within the portfolio. All four of
these stocks have market capitalizations in excess of $150 billion, and were,
therefore, among the largest holdings in the portfolio during the fiscal period.
Additionally, our investment process leads us to look for companies with solid
long-term growth rates. We believe that the above companies possess unique
global franchises, excellent management teams, and visible business prospects,
all of which are key for stable long-term earnings growth. The biggest
detractors to performance were XEROX, PHILIP MORRIS and UNUM. These stocks no
longer met our investment criteria and were sold during the period.
OUTLOOK
In the near term, we believe that sustained price appreciation for U.S.
stocks remains problematic. A slowing economy in response to higher short-term
rates appears necessary to restart the cycle of lower long-term rates and rising
equities. As earnings for the market begin to decelerate, we believe that the
Fund's portfolio will be well positioned due to the stability of our holdings'
long-term earnings prospects.
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER LARGE CAPITALIZATION EQUITY FUND
- --------------------------------------------------------------------------------
Going forward, the Fund will remain diversified and sector weightings should
not play a large role in relative performance over the long term. Our emphasis
will continue to be on strong stock selection across most sectors. We have
reduced the number of Fund holdings over the fiscal year, with a goal of forty
stocks or less. We believe that this concentrated structure will allow for
improved focus and ultimately improved stock selection.
We will continue to focus on high quality, large cap stocks. In particular,
we look for visible earnings growth, skilled management teams and attractively
priced securities relative to the relevant peer group or overall market. These
criteria are crucial to our stock selection process.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF OCTOBER 31, 1999, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO
MANAGERS ON THE DATE THIS REPORT IS PUBLISHED OR ANY TIME THEREAFTER. THESE
VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR
INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD
CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT
PROGRAMS.
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER LARGE CAPITALIZATION EQUITY FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
IN SCHRODER LARGE CAPITALIZATION EQUITY FUND - INVESTOR SHARES*
VS. STANDARD & POOR'S 500 INDEX
<S> <C> <C>
LARGE CAP EQUITY FUND S&P 500 INDEX
Feb-94 10,000.00 10,000.00
9,960.00 9,901.00
9,450.00 9,469.32
Apr-94 9,510.00 9,590.52
9,730.00 9,747.81
9,400.00 9,508.99
9,700.00 9,820.88
9,980.01 10,223.54
9,490.00 9,974.08
Oct-94 9,450.01 10,198.50
9,080.01 9,827.27
9,214.23 9,972.72
9,425.93 10,231.01
9,889.69 10,630.02
10,050.90 10,943.61
Apr-95 10,313.01 11,265.35
10,575.12 11,715.96
10,786.62 11,987.77
11,199.75 12,385.77
11,330.80 12,416.73
11,522.34 12,940.72
Oct-95 11,209.84 12,894.13
11,824.77 13,460.18
11,820.17 13,719.97
12,226.78 14,186.44
12,457.86 14,318.38
12,655.95 14,455.83
Apr-96 12,787.57 14,668.34
12,875.80 15,046.78
12,744.47 15,103.96
12,228.32 14,436.36
12,503.45 14,740.97
13,107.37 15,570.89
Oct-96 13,382.63 16,000.64
14,492.05 17,210.29
14,180.47 16,869.53
15,044.06 17,923.87
15,125.29 18,063.68
14,635.24 17,319.45
Apr-97 15,229.43 18,353.43
16,162.99 19,463.81
16,746.47 20,335.79
18,123.03 21,954.52
16,839.92 20,725.06
17,469.74 21,860.80
Oct-97 16,886.25 21,130.65
17,563.39 22,108.99
17,904.11 22,489.27
18,088.53 22,738.90
19,222.68 24,378.37
20,372.19 25,626.55
Apr-98 20,286.63 25,885.38
19,860.61 25,440.15
21,520.96 26,473.02
21,307.90 26,189.76
17,945.51 22,402.72
19,180.17 23,838.73
Oct-98 20,925.56 25,776.82
21,988.58 27,338.90
23,686.10 28,913.62
23,951.38 30,122.20
23,350.20 29,185.40
24,041.37 30,352.82
Apr-99 24,555.85 31,527.47
23,917.40 30,783.43
25,988.65 32,491.91
25,245.37 31,478.16
24,626.86 31,323.92
24,360.89 30,465.64
Oct-99 25,812.80 32,394.12
</TABLE>
The S&P 500 Index is a market weighted composite index of 500 large
capitalization U.S. companies and reflects the reinvestment of dividends.
*The line shown presents performance information for Investor Shares only.
Performance of Advisor Shares of the Fund will be less than the line shown for
Investor Shares due to shareholder servicing fees paid by Advisor Shares.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
ONE YEAR ENDED FIVE YEARS ENDED INCEPTION TO
OCTOBER 31, 1999 OCTOBER 31, 1999 OCTOBER 31, 1999*
----------------- ----------------- ------------------
<S> <C> <C> <C>
Schroder Large Capitalization
Equity Fund--Investor Shares..... 23.35% 22.25%(a) 18.07%
<CAPTION>
INCEPTION TO
OCTOBER 31, 1999**
-------------------
<S> <C> <C> <C>
Schroder Large Capitalization
Equity Fund--Advisor Shares...... 8.99%
</TABLE>
(a) Average annual total return
* Average annual total return from commencement of Fund operations
(February 16, 1994)
** Total return from inception date of Advisor Shares (January 19, 1999)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER LARGE CAPITALIZATION EQUITY FUND
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1999
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- -------------------------------------------------------------------
General Electric Co. 6.9%
Microsoft Corp. 6.6
American International Group, Inc. 4.9
Bristol-Myers Squibb Co. 4.8
SBC Communications, Inc. 4.2
Wal-Mart Stores, Inc. 4.2
Lucent Technologies, Inc. 4.1
IBM Corp. 3.8
MCI WorldCom, Inc. 3.3
Conoco, Inc. 2.8
----------
Total 45.6%
==========
</TABLE>
INVESTMENT BY SECTOR
<TABLE>
<CAPTION>
SECTOR % OF NET ASSETS
<S> <C>
- -------------------------------------------------------------------
Banks 3.6%
Capital Goods 13.2
Computer Hardware 10.5
Computer Software 6.6
Consumer Cyclicals 8.5
Consumer Staples 6.0
Energy 7.8
Financial Services 16.1
Health Care 9.7
Telecommunications 15.2
Cash Equivalents and Other Net Assets 2.8
----------
Total 100.0%
==========
</TABLE>
- --------------------------------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SMALL CAPITALIZATION VALUE FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (AS OF OCTOBER 31, 1999)
PERFORMANCE
The Schroder Small Capitalization Value Fund's Investor Shares had a total
return of 3.40% for the fiscal year ended October 31, 1999, compared with the
Russell 2000 Index which gained 14.87% over the same period. Over the same
12-month period, the Russell 2000 Value Index returned 0.72%.
MARKET BACKGROUND/PORTFOLIO REVIEW
The past fiscal year has been a challenging period for small cap value
managers. Value investing and small cap investing have been out-of-favor for the
past several years. Equity performance in fiscal year 1999 was dominated by a
narrow group of very large capitalization growth issues, heavily in the
technology and internet sectors. Valuations of the high growth equity leaders
jumped significantly over the past year while valuations, as measured by
Price/Earnings ratio ("P/E") and P/E to growth rate, of small capitalization
issues contracted. This contraction has occurred as the earnings growth rates
for these smaller issues were actually accelerating and the outlook for further
earnings improvement in 2000 was favorable. At the end of the fiscal year, the
average P/E of the Fund's holdings was 12.8x calendar 2000 earnings estimates
compared with projected 3 year growth of 17% while the Russell 2000 traded at
17.8x with 14% projected growth. In stark comparison, large cap stocks as
represented by the S&P 500 were trading at 23.4x with 8% projected growth.
Market valuation discrepancies have become extreme. While investors chase
dot-coms and other price-to-concept ratio stocks, the bargain basement of
ignored values is growing daily. THE WALL STREET JOURNAL recently dubbed this
phenomenon "irrational indifference," the opposite of Alan Greenspan's
"irrational exuberance" description of the stock markets several quarters ago.
The Fund is laced with many examples of companies which we believe represent
undervalued opportunities.
A good example of such an opportunity is FLOWERS INDUSTRIES, which the Fund
recently purchased when the company's stock hit a new low in the $13 area.
Flowers Industries is a multi-regional bread and pie baking company. A year ago
Flowers began construction on a state of the art production facility for its
Mrs. Smith's frozen pie division. Start-up problems have disrupted this year's
crucial holiday business, and the stock plummeted. But Flowers owns 55% of
Keebler. Keebler is growing earnings 30% this year and is expected to continue
to deliver above industry average sales and earnings growth in 2000 with good
cash flow. Based on the Fund's purchase price and the market value of Keebler,
Flowers' $1.6 billion bread and pie baking business was being valued at a
negative $0.15 per share. Additionally, Flowers has a 4% dividend yield. In
essence, we believe that the Fund indirectly owns interest in a high quality
food company (Keebler) at an attractive market price valuation and is earning 4%
to own an interest in Flowers' baking business, which we expect to recover next
year. We believe Flowers is worth $17.50 - $25.25 on a sum-of-the parts basis.
We believe that the catalyst to realize this value is the turnaround currently
occurring at Mrs. Smith's and/or a financial transaction to unlock the hidden
value.
Another strong indication of the attractive valuations in our segment of the
market is the large number of acquisitions which have occured over the past
year. Over the last fiscal year eight of the Fund's holdings have been acquired.
OUTLOOK
We remain optimistic that earnings growth of the Fund's holdings will remain
above average in 2000 as overseas economies continue to improve. The Fund
remains overweighted in energy, industrials, and basic materials, which look
especially cheap based on 2000 earnings expectations. Moreover, we have relied
on the effects of market anxiety over temporary Y2K and Taiwanese earthquake
disruptions to add to our technology exposure at what we believe to be favorable
prices. We continue to underweight consumer issues.
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SMALL CAPITALIZATION VALUE FUND
- --------------------------------------------------------------------------------
We continue to believe that our fundamental approach to security analysis
will differentiate our intermediate and long term performance and look forward
to the return of what we believe are more "rational" valuation standards.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF OCTOBER 31, 1999, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO
MANAGERS ON THE DATE THIS REPORT IS PUBLISHED OR ANY TIME THEREAFTER. THESE
VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR
INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD
CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT
PROGRAMS.
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SMALL CAPITALIZATION VALUE FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
IN SCHRODER SMALL CAPITALIZATION VALUE FUND - INVESTOR SHARES*
VS. RUSSELL 2000 INDEX
<S> <C> <C>
SMALL CAP VALUE FUND RUSSELL 2000 INDEX
10,000.00 10,000.00
Feb-94 9,880.00 9,982.00
9,660.00 9,454.95
9,800.01 9,510.73
Apr-94 9,690.00 9,404.21
9,460.01 9,084.47
9,520.00 9,233.46
9,800.00 9,747.76
9,810.00 9,715.59
9,770.00 9,677.70
Oct-94 9,299.99 9,286.72
9,490.46 9,536.54
9,210.45 9,416.37
9,540.19 9,808.10
9,743.11 9,976.80
10,023.20 10,198.28
Apr-95 10,383.31 10,373.69
10,643.31 10,912.09
11,193.57 11,540.62
11,353.62 11,779.51
11,363.84 11,990.37
10,774.05 11,454.40
Oct-95 11,374.17 11,935.48
11,710.90 12,250.58
11,521.18 12,237.10
12,171.82 12,618.90
12,321.53 12,876.32
13,241.95 13,565.21
Apr-96 13,592.86 14,099.68
12,782.72 13,520.18
11,742.21 12,339.87
12,602.91 13,056.82
13,042.76 13,567.47
13,062.32 13,358.53
Oct-96 14,053.75 13,908.90
14,511.90 14,273.31
14,511.90 14,273.31
14,511.90 14,273.31
14,511.90 14,273.31
14,511.90 14,273.31
15,038.69 14,558.78
15,071.77 14,206.46
14,589.47 13,535.91
Jan-97 15,116.15 13,573.81
16,608.12 15,083.22
17,573.05 15,730.29
Apr-97 18,680.15 16,461.75
19,459.11 16,838.72
20,412.61 18,071.32
19,391.98 17,277.99
19,118.55 17,165.68
19,174.00 17,466.08
Oct-97 18,470.31 17,190.12
19,837.11 18,460.46
20,930.14 19,221.04
21,072.46 19,326.75
19,848.15 18,285.04
19,431.34 18,323.44
Apr-98 18,259.63 16,841.07
14,602.23 13,570.54
15,656.51 14,633.11
16,802.57 15,230.14
17,466.27 16,028.20
17,983.27 17,020.34
Oct-98 17,215.38 17,246.72
15,559.26 15,849.73
15,612.16 16,096.99
17,413.81 17,539.28
18,382.02 17,795.35
19,084.21 18,599.70
Apr-99 18,952.53 18,090.07
18,156.52 17,420.74
17,613.64 17,424.22
17,375.86 17,495.66
Oct-99
</TABLE>
The Russell 2000 Index is a market capitalization weighted broad based index of
2000 small capitalization U.S. companies.
*The line shown presents performance information for Investor Shares only.
Performance of Advisor Shares of the Fund will be less than the line shown for
Investor Shares due to shareholder servicing fees paid by Advisor Shares.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
ONE YEAR ENDED FIVE YEARS ENDED INCEPTION TO
OCTOBER 31, 1999 OCTOBER 31, 1999 OCTOBER 31, 1999*
------------------- ----------------- ------------------
<S> <C> <C> <C>
Schroder Small Capitalization Value
Fund--Investor Shares............ 3.40% 12.21%(a) 10.17%
<CAPTION>
ONE YEAR ENDED INCEPTION TO
OCTOBER 31, 1999 OCTOBER 31, 1999**
------------------- ------------------
<S> <C> <C> <C>
Schroder Small Capitalization Value
Fund--Advisor Shares............. 2.94% -6.99%
</TABLE>
(a) Average annual total return
* Average annual total return from commencement of Fund operations
(February 16, 1994)
** Average annual total return from inception of Advisor Shares
(September 26, 1997)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SMALL CAPITALIZATION VALUE FUND
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1999
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- -------------------------------------------------------------------
Symantec Corp. 4.8%
Protective Life Corp. 3.7
Valassis Communications, Inc. 3.3
Tektronix, Inc. 3.3
Veeco Instruments, Inc. 3.3
Flowers Industries, Inc. 3.2
Alpharma, Inc. 3.1
OM Group, Inc. 3.1
Aptargroup, Inc. 3.1
Air Express International Corp. 3.1
----------
Total 34.0%
==========
</TABLE>
INVESTMENT BY SECTOR
<TABLE>
<CAPTION>
SECTOR % OF NET ASSETS
<S> <C>
- -------------------------------------------------------------------
Banks & Finance 6.8%
Basic Industry 13.4
Capital Goods 5.6
Consumer Cyclicals 4.2
Consumer Discretionary 5.8
Consumer Staples 4.1
Electronics 11.0
Energy 9.6
Health Care 3.1
Insurance 6.7
Technology 10.7
Telecommunications 1.7
Transportation 3.1
Utilities 6.2
Cash Equivalents and Other Net Assets 8.0
----------
Total 100.0%
==========
</TABLE>
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER MIDCAP VALUE FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (AS OF OCTOBER 31, 1999)
PERFORMANCE
The Schroder MidCap Value Fund's total return was 11.98% for Investor Shares
and 11.73% for Advisor Shares for the fiscal year ended October 31, 1999. The
S&P MidCap 400 Index gained 21.07% for the same period while the average Lipper
Mid Cap Value Fund gained 8.73% for the same period.
MARKET BACKGROUND/PORTFOLIO REVIEW
The fiscal year ended October 31, 1999, was marked by the huge performance
gulf which occurred between value investing and growth investing. For
perspective, the S&P 400 has a growth component and a value component. The S&P
400 Value Index increased 4.05% in the twelve-month period while the S&P 400
Growth Index advanced 40.28%. Equity markets have rewarded an increasingly
narrow group of larger, rapidly growing companies, mainly in the technology (and
internet) sector. Their valuations have been bid up to record breaking levels
while the vast majority of stocks have traded flat to down, despite generally
improving earnings results and growth prospects. At the fiscal year end
securities in the technology sector comprised 23% of the S&P 400 Index overall,
but represented 36% of the S&P 400 Growth Index and only 12% of the S&P 400
Value Index. The Fund's technology exposure was 19%. Currently the
price-earnings ratios ("P/E") of technology stocks are 80% higher than those of
non-technology stocks. Interestingly, three years ago technology stocks traded
at 19% discount to non-technology stocks.
Relative to large cap stocks, the valuations of mid cap stocks have been
very depressed. The average P/E of the Fund's holdings as of October 31, 1999,
was 12.9x calendar 2000 earnings with projected 3 year growth of 17%. As of the
same date, the S&P 400 Index traded at 16.3x with 19% projected growth and the
S&P 500 Index traded at 23.4x with 8% projected growth.
We are optimistic that the market will broaden over the next several months
to address the huge valuation disparities. A major catalyst should be above
average earnings growth, particularly in cyclically sensitive businesses, as
overseas economies continue to improve. The Fund remains overweighted in basic
materials, which look especially cheap, based on 2000 earnings expectations, and
energy.
The Fund has been overweighted in energy since the first calendar quarter of
1999 based on OPEC production cuts for oil and a lack of drilling activity for
North American natural gas. Oil prices have doubled since the Fund's energy
purchases were made and gas prices have risen 70%. The group rallied into the
spring and summer, but our holdings have given up significant ground over the
past quarter. At current levels, the exploration and production companies are
trading at the low end of their normal price to cash flow ratio ranges and have
only been this cheap 10% of the time over the last 6 years despite improving
demand from increased global economic activity and winter heating needs. Higher
demand for drilling equipment and services is expected to result in significant
earnings and cash flow accelerations in the oil service sector. Accordingly we
continue to have a positive outlook on the sector and expect that the Fund will
remain overweighted.
OUTLOOK
We believe that the MidCap Value Fund is well positioned to participate as
equity markets broaden. We are confident that the Fund's holdings are trading at
below average valuations with catalysts which should draw other interested
investors into these holdings. Our biggest challenge is selecting the stocks
with the best catalysts from the plethora of bargains available.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF OCTOBER 31, 1999, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO
MANAGERS ON THE DATE THIS REPORT IS PUBLISHED OR ANY TIME THEREAFTER. THESE
VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR
INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD
CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT
PROGRAMS.
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER MIDCAP VALUE FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
IN SCHRODER MIDCAP VALUE FUND - INVESTOR SHARES*
VS. STANDARD &POOR'S MIDCAP 400 INDEX
<S> <C> <C>
MIDCAP VALUE FUND S&P MIDCAP 400 INDEX
Aug-97 10,000.00 10,000.00
10,320.00 9,988.00
10,880.38 10,562.31
Oct-97 10,360.29 10,102.85
10,360.29 10,252.37
10,700.11 10,650.16
10,449.73 10,447.81
11,349.45 11,312.89
11,989.56 11,823.10
Apr-98 11,989.56 12,038.28
11,439.24 11,496.56
11,308.83 11,568.99
10,559.06 11,120.11
8,199.11 9,050.66
8,799.28 9,895.99
Oct-98 9,718.81 10,780.69
10,418.56 11,318.65
10,933.24 12,685.94
10,422.66 12,192.46
9,992.20 11,553.57
10,471.83 11,875.92
Apr-99 11,711.69 12,812.93
11,601.60 12,868.02
11,731.54 13,556.46
11,361.99 13,269.06
10,831.39 12,813.93
10,590.93 12,417.98
Oct-99 10,881.12 13,051.30
</TABLE>
The S&P MidCap 400 Index is a market weighted composite index of 400 stocks in
the middle capitalization sector of the U.S. equities market.
*The line shown presents performance information for Investor Shares only.
Performance of Advisor Shares of the Fund will be less than the line shown for
Investor Shares due to shareholder servicing fees paid by Advisor Shares.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
ONE YEAR ENDED INCEPTION TO
OCTOBER 31, 1999 OCTOBER 31, 1999*
----------------- ------------------
<S> <C> <C>
Schroder MidCap Value Fund--Investor
Shares................................ 11.98% 3.84%
<CAPTION>
ONE YEAR ENDED INCEPTION TO
OCTOBER 31, 1999 OCTOBER 31, 1999**
----------------- -------------------
<S> <C> <C>
Schroder MidCap Value Fund--Advisor
Shares................................ 11.73% 16.29%
</TABLE>
* Average annual total return from commencement of Fund operations
(August 1, 1997)
** Average annual total return from inception date of Advisor Shares
(October 23, 1998)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER MIDCAP VALUE FUND
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1999
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- -------------------------------------------------------------------
Reliastar Financial Corp. 3.9%
BJ Services Co. 3.7
Valassis Communications, Inc. 3.6
Parametric Technology Corp. 3.6
Manpower, Inc. 3.5
Flowers Industries, Inc. 3.5
Genzyme Corp. 3.4
Nucor Corp. 3.4
Ceridian Corp. 3.3
NCR Corp. 3.3
----------
Total 35.2%
==========
</TABLE>
INVESTMENT BY SECTOR
<TABLE>
<CAPTION>
SECTOR % OF NET ASSETS
<S> <C>
- -------------------------------------------------------------------
Banks & Finance 11.6%
Basic Industry 10.8
Capital Goods 2.8
Consumer Cyclicals 15.0
Consumer Staples 5.7
Energy 12.1
Health Care 6.6
Insurance 3.9
Services 3.5
Technology 19.1
Telecommunications 3.0
Utilities 2.9
Cash Equivalents and Other Net Assets 3.0
----------
Total 100.0%
==========
</TABLE>
- --------------------------------------------------------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INVESTMENT GRADE INCOME FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (As of October 31, 1999)
PERFORMANCE
The Schroder Investment Grade Income Fund's Investor Shares had a total
return of -0.78% for the fiscal year ended October 31, 1999. The Lehman Brothers
Aggregate Bond Index returned 0.53% over the same period. Effective August 24,
1999, the Fund's comparative performance index was changed from the Lehman
Brothers Government/Corporate Bond Index because we believe that the Aggregate
Bond Index is more representative of the Fund's permissible investment universe.
Accordingly, for most of the year ended October 31, 1999, the Fund was managed
against the Government/Corporate Bond Index which returned - 0.66% during the
twelve-month period. It is important to note that the Investment Grade Income
Fund is a professionally managed mutual fund while the Index is not available
for investment and is unmanaged.
MARKET BACKGROUND
It was a difficult year for the U.S. fixed income markets. Interest rates
rose substantially throughout fiscal 1999, resulting in the significant negative
returns in U.S. Treasuries, with the exception of those securities with the
shortest maturities. Fears about last fall's global liquidity crisis gradually
gave way to concerns over the strength of the U.S. economy. Tightening labor
markets and escalating inflation worries culminated in the Federal Reserve
raising the Federal Funds rate twice, each time by one-quarter percent.
Longer-term interest rates rose as much as one-and-a-half percent from the lows
of last fall due to heightened inflation concerns sparked by global economic
growth and surging commodity prices.
In the first half of the fiscal year, corporate, mortgage, and asset-backed
markets significantly outperformed government bonds as liquidity improved and
investors sought to take advantage of historically wide yield spreads versus
U.S. Treasuries. The yield spreads between non-Treasuries and Treasuries moved
steadily tighter during this period and more than offset the negative effect of
lower Treasury prices.
By May, however, there were clear signs that this spread tightening had run
its course. Renewed concerns about liquidity began to develop during the summer,
largely due to increasing market worries about owning risky assets at the turn
of the century. This led to investors reducing their positions in non-Treasury
securities. Additionally, the expectation that non-Treasury new issuance would
surge in the third quarter to avoid Y2K-related funding problems further swamped
supply. Non-Treasury yield spreads surpassed the levels reached during the 1998
liquidity crisis, causing these sectors to significantly underperform
Treasuries, before investor fears subsided and spreads tightened approaching the
Fund's fiscal year-end.
PORTFOLIO REVIEW
In the first half of the fiscal year, we maximized the Fund's exposure to
corporate, mortgage and asset-backed securities in order to take advantage of
their historically large yield premiums. In particular, we emphasized low
investment grade and Yankee bonds, as these offered the most attractive total
return potential. The Fund benefited relative to its peers from the significant
outperformance of these sectors versus Treasuries.
During the second half of the fiscal year, we moved the Fund from an
overweight to a neutral position in non-Treasury securities. We focused on
adding value primarily through security selection rather than sector allocation.
Unlike many of its peers, which suffered from an overabundance of risky assets
during this period, the Fund benefited from our emphasis on quality securities
offering liquidity. Throughout the year, we held the average maturity of the
Fund within a tight range so that we were able to minimize the effect of adverse
interest rate movements. The Fund had a relatively high portfolio turnover rate
(300.53%) during the fiscal year due to an active portfolio management strategy
used for the Fund as compared to prior periods. We expect to use an active
strategy for the Fund in future periods as well.
- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INVESTMENT GRADE INCOME FUND
- --------------------------------------------------------------------------------
OUTLOOK
Looking forward, we believe that the Schroder Investment Grade Income Fund
is well positioned to take advantage of the market opportunities which lie
ahead. We believe that non-Treasury securities are likely to continue to deliver
strong gains as Y2K concerns subside into the new year. Consequently, we favor
overweighting corporate, mortgage and asset-backed securities at slightly wider
yield spreads to Treasuries than prevailed a year ago. We also expect to
continue to add value for the Fund through security selection, maintaining our
focus on investment grade securities with high credit ratings and stable cash
flow characteristics. Interest rates have risen sharply in recent periods, which
should, in turn, result in reduced inflationary risks. In this event, we expect
to lengthen the Fund's average maturity in order to take advantage of the higher
interest rate environment.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF OCTOBER 31, 1999, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO
MANAGERS ON THE DATE THIS REPORT IS PUBLISHED OR ANY TIME THEREAFTER. THESE
VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR
INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD
CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT
PROGRAMS.
- --------------------------------------------------------------------------------
14
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INVESTMENT GRADE INCOME FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
IN SCHRODER INVESTMENT GRADE INCOME FUND - INVESTOR SHARES
VS. LEHMAN BROTHERS GOVERNMENT/CORPORATE INDEX
AND LEHMAN BROTHERS AGGREGATE BOND INDEX
<S> <C> <C> <C>
INVESTMENT GRADE LEHMAN BROTHERS LEHMAN BROTHERS
INCOME FUND GOV'T/CORP. INDEX AGGREGATE BOND INDEX
Feb-94 10,000.00 10,000.00 10,000.00
9,968.28 9,945.00 9,956.00
9,708.24 9,701.35 9,710.09
Apr-94 9,577.60 9,620.83 9,632.41
9,547.75 9,603.51 9,631.44
9,502.35 9,581.42 9,610.25
9,695.85 9,773.05 9,801.50
9,688.63 9,776.96 9,813.26
9,526.09 9,629.33 9,669.00
Oct-94 9,510.52 9,618.73 9,660.30
9,492.07 9,601.42 9,639.05
9,567.39 9,664.79 9,705.56
9,727.24 9,850.35 9,897.73
9,983.07 10,078.88 10,133.30
10,047.05 10,146.41 10,195.11
Apr-95 10,186.15 10,288.46 10,337.84
10,626.28 10,719.55 10,737.91
10,699.82 10,805.30 10,816.30
10,643.11 10,763.16 10,792.51
10,771.49 10,900.93 10,923.09
10,859.24 11,012.12 11,029.05
Oct-95 10,995.72 11,174.00 11,172.43
11,167.57 11,358.37 11,340.01
11,319.20 11,525.34 11,498.77
11,398.43 11,596.79 11,574.66
11,160.78 11,350.94 11,373.27
11,069.26 11,255.59 11,293.65
Apr-96 10,974.07 11,177.93 11,230.41
10,931.27 11,158.93 11,207.95
11,058.07 11,307.34 11,358.13
11,072.45 11,333.35 11,388.80
11,049.20 11,305.02 11,369.44
11,235.93 11,506.25 11,567.27
Oct-96 11,477.50 11,774.34 11,824.06
11,672.62 11,990.99 12,026.25
11,548.89 11,857.89 11,914.41
11,548.89 11,857.89 11,914.41
11,548.89 11,857.89 11,914.41
11,548.89 11,857.89 11,914.41
11,548.89 11,857.89 11,914.41
11,562.75 11,872.12 11,951.34
11,581.25 11,897.05 11,981.22
11,441.11 11,755.47 11,848.23
11,594.42 11,927.10 12,025.95
11,687.18 12,038.03 12,140.20
11,811.06 12,182.48 12,284.67
Apr-97 12,131.14 12,555.27 12,616.35
12,012.26 12,414.65 12,509.12
12,178.03 12,609.56 12,693.00
12,358.26 12,811.31 12,877.05
12,389.16 12,879.21 12,936.28
12,498.18 13,014.44 13,066.94
Oct-97 12,679.41 13,197.95 13,234.20
12,643.90 13,171.55 13,223.61
12,672.98 13,212.38 13,268.57
12,719.87 13,278.44 13,337.57
12,844.53 13,420.52 13,464.27
12,944.72 13,557.41 13,578.72
Apr-98 12,939.54 13,568.26 13,607.23
13,185.39 13,832.84 13,829.03
13,536.12 14,228.46 14,152.63
13,357.44 14,127.44 14,077.62
13,444.27 14,212.20 14,157.86
13,471.16 14,247.73 14,200.34
Oct-98 13,558.72 14,348.89 14,301.16
13,242.80 14,007.39 14,050.89
13,346.09 14,077.42 14,128.17
13,380.79 14,112.62 14,173.38
13,220.22 13,967.26 14,050.07
13,155.45 13,923.96 14,005.11
Apr-99 13,156.76 13,884.97 13,944.89
13,112.03 13,873.86 13,937.92
13,228.73 13,998.73 14,099.60
13,252.54 14,035.13 14,151.77
Oct-99
</TABLE>
The Lehman Brothers Government/Corporate Index is a composite of approximately
5000 investment grade government and corporate debt issues with maturities
greater than one year.
The Lehman Brothers Aggregate Bond Index is a composite index which measures the
total universe of investment grade fixed income securities in the U.S.,
including government, corporate, mortgage-backed, asset-backed and international
dollar-denominated bonds, all with maturities greater than one year.
Effective August 24, 1999, the Fund's comparative performance index was changed
from the Lehman Brothers Government/Corporate Index to the Lehman Brothers
Aggregate Bond Index. The change was made because the investment adviser
believes that the Aggregate Bond Index is more representative of the Fund's
permissible investment universe.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
ONE YEAR ENDED FIVE YEARS ENDED INCEPTION TO
OCTOBER 31, 1999 OCTOBER 31, 1999 OCTOBER 31, 1999*
----------------- ----------------- ------------------
<S> <C> <C> <C>
Schroder Investment Grade Income
Fund--Investor Shares............ -0.78% 6.87%(a) 5.08%
</TABLE>
(a) Average annual total return
* Average annual total return from commencement of operations (February 22,
1994)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
- --------------------------------------------------------------------------------
15
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INVESTMENT GRADE INCOME FUND
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1999
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- -------------------------------------------------------------------
Government National Mortgage Association
7.000% 07/15/29 5.9%
Federal National Mortgage Association
6.000% 10/01/13 4.5
Federal National Mortgage Association
6.000% 12/01/28 3.4
U.S. Treasury Bonds
5.250% 02/15/29 3.1
U.S. Treasury Bonds
7.250% 05/15/16 2.5
LB Commercial Mortgage Trust
6.120% 10/15/08 2.5
Federal National Mortgage Association TBA
7.500% 12/01/99 2.4
Government National Mortgage Association TBA
7.500% 12/15/99 2.3
First Union-Chase Commercial Mortgage 1999-C2
0.908% 11/1/99 2.2
Contimortgage Home Equity
6.440% 12/15/12 2.1
----------
Total 30.9%
==========
</TABLE>
INVESTMENT BY SECTOR
<TABLE>
<CAPTION>
SECTOR % OF NET ASSETS
<S> <C>
- -------------------------------------------------------------------
Asset-Backed Securities 9.0%
Corporate Bonds 36.9
Mortgage-Backed Securities 42.5
U.S. Treasury Securities 11.1
Cash Equivalents and Other Net Assets 0.5
----------
Total 100.0%
==========
</TABLE>
CREDIT QUALITY
<TABLE>
<CAPTION>
% OF MARKET VALUE
RATING OF INVESTMENTS
<S> <C>
- ---------------------------------------------------------------------
U.S. Treasury Securities 11.2%
U.S. Government Agencies/ Mortgage-Backed
Securities 38.6
AAA 13.1
AA 2.5
A 9.3
Baa 25.3
-----------
Total 100.0%
===========
</TABLE>
- --------------------------------------------------------------------------------
16
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM INVESTMENT FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (As of October 31, 1999)
PERFORMANCE
For the fiscal year ended October 31, 1999, the Schroder Short-Term
Investment Fund's Investor Shares had a total return of 3.62%. The 90 Day U.S.
Treasury Bill returned 4.75% over the same period.
While the Fund's higher yielding products contributed to performance, its
longer maturity structure relative to the 90 Day U.S. Treasury Bill during a
period of negative bond returns detracted from performance.
MARKET BACKGROUND
Interest rates rose substantially throughout fiscal 1999, leading to
significant negative returns in U.S. Treasuries for all but the shortest
maturities. Fears about last fall's global liquidity crisis gradually gave way
to concerns about the strength of the U.S. economy. Tightening labor markets and
escalating inflation worries ultimately culminated in the Federal Reserve
raising the Federal Funds rate twice, each time by one-quarter percent, from
4.75% to 5.25%. Rebounding global economic growth and surging commodity prices
resulted in heightened inflation concerns which, in turn, led to a steeper yield
curve.
Overall, non-Treasury securities outperformed government bonds during fiscal
1999. During the first half of the year, shrinking risk and liquidity premium
led to substantial tightening of yield spreads relative to U.S. Treasuries and
more than offset the negative effect of lower U.S. Treasury prices.
In the latter half of fiscal 1999, there was a resurgence of liquidity
concerns, this time relating to investors' increasing reluctance to own volatile
assets over the turn of the century. Specifically, companies aggressively pre-
funded their year-end liquidity needs by offering special rates to attract
investors into post-Y2K maturities, and this helped to steepen the money market
yield curve. Meanwhile, investors continued to demand extra compensation for
owning assets over the actual turn of the year, far in excess of prior years'
risk premium.
PORTFOLIO REVIEW
Throughout fiscal 1999, the Fund focused on adding value via two central
themes. First, maturities were opportunistically increased during periods of
market weakness to lock in higher yields. Towards the end of the year, the
maturity of a portion of the Fund's portfolio was extended past December into
early 2000 to take advantage of the particularly attractive rates available by
investing over December 31.
More importantly, an increasing percentage of funds were allocated to higher
yielding structured products, consisting primarily of AAA-rated mortgage and
asset-backed securities. These investments offered considerable yield advantages
over traditional corporate securities, while maintaining the highest credit
quality.
OUTLOOK
The steepness of the money market yield curve and the relatively wide credit
spreads currently prevailing in the marketplace are the most important factors
determining the Fund's investment policy going into the new fiscal year. While
we believe strong economic growth should continue into 2000, empirical inflation
has been low and is likely to remain so. Consequently, we anticipate that the
Federal Reserve is not embarking on a protracted period of tighter monetary
policy, but will raise rates only once or twice in the new year. Therefore, we
look to take advantage of the steep yield curve, extending maturities at more
attractive rates. Also, we expect the Fund to maintain a high exposure to
non-Treasury securities as we expect their yields to fall relative to U.S.
Treasuries as Y2K concerns fade and economic fundamentals remain favorable.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF OCTOBER 31, 1999, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO
MANAGERS ON THE DATE THIS REPORT IS PUBLISHED OR ANY TIME THEREAFTER. THESE
VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR
INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD
CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT
PROGRAMS.
- --------------------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM INVESTMENT FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF$10,000 INVESTMENT SHORT-TERM INVESTMENT FUND 90 DAY U.S. TREASURY BILL
IN SCHRODER SHORT-TERM INVESTMENT FUND - INVESTOR SHARES
VS. 90 DAY U.S. TREASURY BILL
DATE
<S> <C> <C>
Jan-94 10,000.00 10,000.00
10,014.62 10,018.00
9,994.64 10,045.05
9,997.67 10,075.18
Apr-94 9,957.44 10,107.42
10,005.57 10,143.81
10,046.60 10,180.33
10,066.90 10,218.00
10,114.32 10,256.82
10,143.43 10,297.85
Oct-94 10,183.29 10,340.07
10,202.91 10,386.60
10,246.01 10,436.46
10,292.37 10,488.64
10,347.75 10,541.08
10,382.49 10,592.74
Apr-95 10,445.09 10,644.64
10,497.10 10,696.80
10,538.49 10,747.07
10,571.84 10,797.59
10,625.41 10,847.25
10,656.19 10,896.07
Oct-95 10,694.74 10,945.10
10,735.93 10,995.45
10,778.94 11,043.83
10,831.76 11,091.31
10,859.36 11,136.79
10,899.54 11,183.56
Apr-96 10,926.79 11,235.01
10,966.12 11,283.32
11,005.60 11,332.97
11,058.43 11,382.83
11,100.45 11,431.78
11,140.41 11,482.08
Oct-96 11,192.77 11,531.45
11,234.18 11,581.03
11,265.64 11,629.67
11,265.64 11,629.67
11,265.64 11,629.67
11,265.64 11,629.67
11,265.64 11,629.67
As of 3/98 Prospectus, Fund expenses are: 11,265.64 11,629.67
Actual expenses as of 11,265.64 11,629.67
Index and Fund returns for partial month of January (close
of 1/10-1/31/94) 11,265.64 11,629.67
11,308.45 11,679.68
11,346.90 11,729.90
11,378.67 11,781.52
Apr-97 11,432.15 11,831.00
11,475.59 11,883.06
11,530.67 11,932.96
11,575.64 11,984.28
11,621.95 12,035.81
11,671.92 12,086.36
Oct-97 11,723.28 12,137.12
11,760.79 12,184.46
11,813.71 12,238.07
11,864.51 12,290.69
11,910.78 12,344.77
11,954.85 12,397.85
Apr-98 11,984.74 12,449.92
12,041.07 12,502.21
12,084.42 12,555.97
12,129.13 12,608.71
12,187.35 12,666.71
12,272.66 12,717.38
Oct-98 12,321.75 12,760.61
12,356.25 12,809.10
12,392.09 12,856.50
12,444.13 12,904.07
12,434.18 12,953.10
12,511.27 13,002.32
Apr-99 12,537.54 13,050.43
12,540.05 13,101.33
12,571.40 13,152.43
12,644.32 13,203.72
12,651.90 13,255.21
12,737.93 13,308.23
Oct-99 12,767.23 13,364.13
</TABLE>
The 90 Day U.S. Treasury Bill return represents a four-week average return on
the 90 Day U.S. Treasury Bill.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
ONE YEAR ENDED FIVE YEARS ENDED INCEPTION TO
OCTOBER 31, 1999 OCTOBER 31, 1999 OCTOBER 31, 1999*
----------------- ----------------- ------------------
<S> <C> <C> <C>
Schroder Short-Term Investment
Fund--Investor Shares............ 3.62% 4.64%(a) 4.31%
</TABLE>
(a) Average annual total return
* Average annual total return from commencement of operations (January 11,
1994)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
- --------------------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM INVESTMENT FUND
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1999
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- -------------------------------------------------------------------
Green Tree Financial Corp.
1996-10 A4
6.420% 05/15/00 6.1%
Green Tree Financial Corp.
1993-3 A5
5.750% 10/15/18 5.5
Federal National Mortgage Association Pool #
303766
7.500% 12/01/01 5.5
FNMA Series 1998-65 Class A1
5.53% 09/16/00 5.3
Green Tree Financial Corp.
1998-B A4
6.390% 06/18/01 5.3
Green Tree Financial Corp.
1992-2 A4
8.150% 02/15/00 4.3
Federal National Mortgage Association 1992-94 G
7.000% 10/25/05 4.2
Ford Credit Auto Owner Trust
1998-B A3
5.850% 12/15/99 4.2
General Motors Acceptance Corp.
Medium Term Note
6.211% 10/30/00 4.1
Ford Motor Credit Company
5.210% 11/01/99 3.7
----------
Total 48.2%
==========
</TABLE>
INVESTMENT BY SECTOR
<TABLE>
<CAPTION>
SECTOR % OF NET ASSETS
<S> <C>
- -------------------------------------------------------------------
Asset-Backed Securities 49.9%
Commercial Paper 21.0
Corporate Bonds 4.1
Mortgage-Backed Securities 21.2
Cash Equivalents and Other Net Assets 3.8
----------
Total 100.0%
==========
</TABLE>
CREDIT QUALITY
<TABLE>
<CAPTION>
% OF MARKET VALUE
RATING OF INVESTMENTS
<S> <C>
- ---------------------------------------------------------------------
U.S. Government Issues 23.5%
AAA or A1 / P1 72.4
A 4.1
-----------
Total 100.0%
===========
</TABLE>
- --------------------------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER LARGE CAPITALIZATION EQUITY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS - 97.2%
BANKS - 3.6%
22,000 Bank America Corporation $ 1,416,250
26,400 Fleet Boston Corporation (1) 1,151,700
------------
2,567,950
------------
CAPITAL GOODS - 13.2%
22,700 AlliedSignal, Incorporated 1,292,482
36,000 General Electric Company 4,880,250
16,700 Textron, Incorporated 1,289,031
29,700 United Technologies Corporation 1,796,850
------------
9,258,613
------------
COMPUTER HARDWARE - 10.5%
21,800 EMC Corporation (1) 1,591,400
25,600 Intel Corporation 1,982,400
26,900 International Business Machines
Corporation 2,646,288
7,200 Sun Microsystems, Incorporated (1) 761,850
5,800 Tellabs, Incorporated (1) 366,850
------------
7,348,788
------------
COMPUTER SOFTWARE - 6.6%
50,100 Microsoft Corporation (1) 4,637,381
------------
CONSUMER CYCLICAL - 8.5%
9,900 GAP, Incorporated 367,538
21,700 Home Depot, Incorporated 1,638,350
10,100 Infinity Broadcasting
Corporation (1) 349,081
11,900 Lowe's Companies, Incorporated 654,500
51,900 Wal-Mart Stores, Incorporated 2,942,081
------------
5,951,550
------------
CONSUMER STAPLES - 6.0%
18,300 Anheuser Busch Company, Incorporated 1,314,169
21,300 Bestfoods 1,251,375
15,500 Procter & Gamble Company 1,625,562
------------
4,191,106
------------
ENERGY - 7.8%
19,400 Chevron Corporation 1,771,463
72,900 Conoco, Incorporated 2,000,194
23,300 Exxon Corporation 1,725,656
------------
5,497,313
------------
<CAPTION>
SHARES VALUE
- ----------- ------------
<C> <S> <C>
FINANCIAL SERVICES - 16.1%
33,407 American International Group,
Incorporated $ 3,438,833
29,700 Associates First Capital Corporation 1,084,050
31,700 Capital One Financial Corporation 1,680,100
31,400 Citigroup, Incorporated 1,699,525
27,900 Federal Home Loan Mortgage Corporation 1,508,344
7,200 Morgan Stanley Dean Witter & Company 794,250
23,100 Wells Fargo Company 1,105,912
------------
11,311,014
------------
HEALTH CARE - 9.7%
43,600 Bristol-Myers Squibb Company 3,349,025
4,400 Guidant Corporation 217,250
39,000 Medtronic, Incorporated 1,350,375
11,100 Pharmacia & Upjohn, Incorporated 598,706
27,100 Schering-Plough Corporation 1,341,450
------------
6,856,806
------------
TELECOMMUNICATIONS - 15.2%
23,100 Bell Atlantic Corporation 1,500,056
13,800 GTE Corporation 1,035,000
44,480 Lucent Technologies, Incorporated 2,857,840
26,700 MCI WorldCom, Incorporated (1) 2,291,194
58,329 SBC Communications, Incorporated 2,971,133
------------
10,655,223
------------
Total Common Stocks
(Cost $56,143,424) 68,275,744
------------
SHORT-TERM INVESTMENT - 1.9%
1,313,602 SSgA U.S. Government Money Market Fund,
4.888%(2) (Cost $1,313,602) 1,313,602
------------
Total Investments - 99.1%
(Cost $57,457,026) 69,589,346
Other Assets Less Liabilities - 0.9% 631,593
------------
Total Net Assets - 100% $ 70,220,939
============
</TABLE>
- ------------------
(1) Denotes non-income producing security.
(2) Interest rate shown is 7-day yield as of October 31, 1999.
See notes to financial statements.
- --------------------------------------------------------------------------------
20
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SMALL CAPITALIZATION VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS - 92.0%
BANKS & FINANCE - 6.8%
45,000 Cullen/Frost Bankers, Incorporated $ 1,299,375
65,000 Waddell & Reed Financial, Incorporated 1,560,000
43,300 Webster Financial Corporation 1,239,463
------------
4,098,838
------------
BASIC INDUSTRY - 13.4%
69,300 Aptargroup, Incorporated 1,862,437
55,500 Geon Company 1,456,875
38,600 Minerals Technologies, Incorporated 1,664,625
50,000 OM Group, Incorporated 1,875,000
70,000 Steel Dynamics, Incorporated (1) 958,125
45,500 Titanium Metals Corporation 273,000
------------
8,090,062
------------
CAPITAL GOODS - 5.6%
170,000 AGCO Corporation 1,827,500
82,000 Gerber Scientific, Incorporated 1,547,750
------------
3,375,250
------------
CONSUMER CYCLICALS - 4.2%
53,100 Sinclair Broadcast Group, Incorporated
(1) 531,000
47,000 Valassis Communications, Incorporated
(1) 2,021,000
------------
2,552,000
------------
CONSUMER DISCRETIONARY - 5.8%
81,400 Polaroid Corporation 1,816,238
88,000 WestPoint Stevens, Incorporated 1,666,500
------------
3,482,738
------------
CONSUMER STAPLES - 4.1%
112,900 Flowers Industries, Incorporated 1,905,187
16,300 Robert Mondavi Corporation 588,838
------------
2,494,025
------------
ELECTRONICS - 11.0%
49,300 International Rectifier
Corporation (1) 958,269
55,000 Millipore Corporation 1,753,125
59,100 Tektronix, Incorporated 1,994,625
57,900 Veeco Instruments, Incorporated (1) 1,964,981
------------
6,671,000
------------
<CAPTION>
SHARES VALUE
- ----------- ------------
<C> <S> <C>
ENERGY - 9.6%
28,500 BJ Services Company (1) $ 977,906
100,000 Forest Oil Corporation (1) 1,337,500
178,300 Newpark Resources,
Incorporated (1) 1,147,806
102,000 Plains Resources, Incorporated (1) 1,753,125
132,000 Titan Exploration, Incorporated (1) 552,750
------------
5,769,087
------------
HEALTH CARE - 3.1%
53,500 Alpharma, Incorporated 1,882,531
------------
INSURANCE - 6.7%
65,000 Horace Mann Educators Corporation 1,832,188
61,500 Protective Life Corporation 2,225,531
------------
4,057,719
------------
TECHNOLOGY - 10.7%
75,500 National Data Corporation 1,812,000
60,700 Symantec Corporation (1) 2,898,425
102,800 Titan Corporation 1,721,900
------------
6,432,325
------------
TELECOMMUNICATIONS - 1.7%
17,600 Plantronics, Incorporated (1) 1,030,700
------------
TRANSPORTATION - 3.1%
69,800 Air Express International Corporation 1,858,425
------------
UTILITIES - 6.2%
12,000 California Water Service Group 348,000
15,200 E'Town Corporation 700,150
53,000 Philadelphia Suburban Corporation 1,219,000
71,772 Southern Union Company 1,453,383
------------
3,720,533
------------
Total Common Stocks
(Cost $47,020,309) 55,515,233
------------
SHORT-TERM INVESTMENT - 4.3%
2,569,760 SSgA U.S. Government Money Market Fund,
4.888%(2) (Cost $2,569,760) 2,569,760
------------
Total Investments
(Cost $49,590,069) - 96.3% 58,084,993
Other Assets Less Liabilities - 3.7% 2,250,053
------------
Total Net Assets - 100% $ 60,335,046
============
</TABLE>
- ------------------
(1) Denotes non-income producing security.
(2) Interest rate shown is 7-day yield as of October 31, 1999.
See notes to financial statements.
- --------------------------------------------------------------------------------
21
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER MIDCAP VALUE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS - 97.0%
BANKS & FINANCE - 11.6%
14,070 Charter One Financial, Incorporated $ 345,594
8,900 Compass Bancshares, Incorporated 237,519
14,600 Heller Financial, Incorporated 346,750
19,000 Peoples Heritage Financial Group,
Incorporated 361,000
------------
1,290,863
------------
BASIC INDUSTRY - 10.8%
5,800 Great Lakes Chemical Corporation 205,900
8,900 Millipore Corporation 283,688
7,300 Nucor Corporation 378,687
15,900 Smurfit-Stone Container Corporation (1) 343,838
------------
1,212,113
------------
CAPITAL GOODS - 2.8%
8,700 Deere & Company 315,375
------------
CONSUMER CYCLICALS - 15.0%
16,700 A.H. Belo Corporation 340,263
20,300 Saks, Incorporated (1) 348,906
15,300 Supervalu, Incorporated 321,300
9,300 Valassis Communications, Incorporated
(1) 399,900
10,900 Viad Corporation 267,731
------------
1,678,100
------------
CONSUMER STAPLES - 5.7%
23,200 Flowers Industries, Incorporated 391,500
6,900 Suiza Foods Corporation (1) 248,831
------------
640,331
------------
ENERGY - 12.1%
12,200 BJ Services Company (1) 418,612
8,800 Burlington Resources, Incorporated 306,900
8,000 Devon Energy Corporation 311,000
9,400 Weatherford International, Incorporated 318,425
------------
1,354,937
------------
<CAPTION>
SHARES VALUE
- ----------- ------------
<C> <S> <C>
HEALTH CARE - 6.6%
10,000 Genzyme Corporation (1) $ 382,500
11,000 Watson Pharmaceuticals, Incorporated (1) 349,250
------------
731,750
------------
INSURANCE - 3.9%
10,100 Reliastar Financial Corporation 433,669
------------
SERVICES - 3.5%
11,200 Manpower, Incorporated 393,400
------------
TECHNOLOGY - 19.1%
16,900 Ceridian Corporation (1) 370,744
12,700 Harris Corporation 284,956
11,100 NCR Corporation (1) 367,688
20,900 Parametric Technology
Corporation (1) 398,406
7,000 SCI Systems, Incorporated (1) 345,625
16,700 Sterling Software, Incorporated (1) 366,356
------------
2,133,775
------------
TELECOMMUNICATIONS - 3.0%
8,400 CenturyTel, Incorporated 339,675
------------
UTILITIES - 2.9%
6,500 FPL Group, Incorporated 327,031
------------
Total Common Stocks
(Cost $10,262,138) 10,851,019
------------
SHORT-TERM INVESTMENT - 3.5%
389,062 SSgA U.S. Government Money Market Fund,
4.888%(2) (Cost $389,062) 389,062
------------
Total Investments
(Cost $10,651,200) - 100.5% 11,240,081
------------
Liabilities in Excess of Other Assets -
(0.5%) (56,966)
------------
Total Net Assets - 100.0% $ 11,183,115
============
</TABLE>
- ------------------
(1) Denotes non-income producing security.
(2) Interest rate shown is 7-day yield as of October 31, 1999.
See notes to financial statements.
- --------------------------------------------------------------------------------
22
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INVESTMENT GRADE INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- -----------
<C> <S> <C>
ASSET-BACKED SECURITIES - 9.0%
$ 412,262 Commercial Resecuritization Trust
Series 1999-1 Class A
6.740% 01/27/2009 $ 392,502
Contimortgage Home Equity Loan Trust
520,000 Series 1997-4 Class A5
6.440% 12/15/2012 517,780
400,000 Series 1996-3 Class A6
7.820% 02/15/2016 400,945
460,000 Ford Credit Auto Owner Trust
Series 1998-B Class A3
5.850% 10/15/2001 454,124
459,681 Green Tree Financial Corporation
Series 1992-2 Class A4
8.150% 01/15/2018 470,704
-----------
Total Asset-Backed Securities
(Cost $2,291,407) 2,236,055
-----------
U. S. GOVERNMENT SECURITIES - 11.1%
United States Treasury Bonds
880,000 5.250% 02/15/2029 (1) 762,330
585,000 7.250% 05/15/2016 (1) 630,278
30,000 7.875% 02/15/2021 34,677
United States Treasury Notes
500,000 4.250% 11/15/2003 469,701
485,000 5.750% 11/30/2002 482,951
60,000 6.000% 07/31/2002 60,219
225,000 6.000% 08/15/2004 225,624
110,000 6.875% 05/15/2006 114,237
-----------
Total U.S. Government Securities
(Cost $2,836,081) 2,780,017
-----------
MORTGAGE-BACKED SECURITIES - 42.5%
COLLATERALIZED MORTGAGE OBLIGATIONS -- 10.8%
19,884,328 Bear Stearns Commercial Mortgage
Securities, Incorporated (2)
Series 1999-2 Class X
0.260% 11/01/1999 403,900
500,000 FHLMC
Series 1543 Class PJ
7.000% 10/15/2022 496,221
12,060,447 First Union-Chase Commercial Mortgage
Series 1999-2 Class IO
0.908% 11/01/1999 555,440
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- -----------
<C> <S> <C>
FNMA
$ 205,000 Series 1999-32 Class PK
6.000% 02/25/2028 $ 191,163
448,668 Series 1999-1 Class B
6.500% 02/18/2004 442,143
670,000 LB Commercial Mortgage Trust
Series 1998-c4 Class A1
6.210% 10/15/2008 619,904
-----------
2,708,771
-----------
MORTGAGE PASS-THROUGH SECURITIES - 31.7%
FHLMC
540,000 6.000% 05/01/2029 504,056
203,631 Pool # G00432
8.000% 01/01/2026 207,958
FNMA
1,171,747 Pool # 409344
6.000% 10/01/2013 1,126,708
920,000 Pool # 449149
6.000% 12/01/2028 857,900
326,555 Pool # 303945
7.000% 12/01/2010 326,249
414,755 Pool # 250030
7.000% 05/01/2024 407,497
428,473 Pool # 303909
7.000% 05/01/2026 420,975
595,000 TBA (3)
7.500% 12/01/2099 595,186
422,118 Pool # 313205
10.000% 12/01/2020 455,360
GNMA
350,785 Pool # 780350
6.500% 05/15/2009 344,756
430,723 Pool # 375991
7.000% 01/15/2024 422,646
1,500,149 Pool # 513722
7.000% 07/15/2029 1,472,022
580,000 TBA (3)
7.500% 12/15/2099 581,813
177,918 Pool # 423825
8.000% 06/15/2026 181,921
-----------
7,905,047
-----------
Total Mortgage-Backed Securities (Cost
$10,723,713) 10,613,818
-----------
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
23
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INVESTMENT GRADE INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- -----------
<C> <S> <C>
CORPORATE BONDS - 36.9%
INDUSTRIALS - 10.6%
$ 285,000 Comdisco, Incorporated
6.000% 01/30/2002 $ 276,913
85,000 Electronic Data Systems Corporation
7.450% 10/15/2029 85,300
275,000 IMC Global, Incorporated
7.400% 11/01/2002 273,911
255,000 Kroger Company
8.000% 09/15/2029 253,527
335,000 Lexmark International Group,
Incorporated
6.750% 05/15/2008 313,956
500,000 RJR Nabisco, Incorporated (2)
7.375% 05/15/2003 489,476
495,000 Royal Caribbean Cruises, Limited
8.250% 04/01/2005 506,371
465,000 Saks, Incorporated
7.000% 07/15/2004 436,984
-----------
2,636,438
-----------
MEDIA/TELECOMMUNICATIONS - 3.6%
260,000 J Seagram & Sons, Incorporated
6.250% 12/15/2001 257,050
255,000 Time Warner, Incorporated
6.625% 05/15/2029 222,947
430,000 USA Networks, Incorporated
6.750% 11/15/2005 410,959
-----------
890,956
-----------
OIL - 1.0%
245,000 Amerada Hess Corporation
7.875% 10/01/2029 242,856
-----------
REITS, INSURANCE, FINANCE & BANKING - 10.9%
250,000 AFC Capital Trust I
8.207% 02/03/2027 240,941
285,000 American Financial Group, Incorporated
7.125% 04/15/2009 261,427
190,000 Capital One Financial Corporation
7.250% 05/01/2006 182,150
245,000 CIT Group, Incorporated
5.875% 10/15/2008 219,222
400,000 Conseco, Incorporated
6.800% 06/15/2005 370,072
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- -----------
<C> <S> <C>
$ 290,000 Countrywide Home Loan, Incorporated
6.850% 06/15/2004 $ 285,707
200,000 Duke Realty Limited Partnership
6.800% 02/12/2009 184,583
295,000 EOP Operating Limited Partnership
6.800% 01/15/2009 270,233
425,000 Ford Motor Credit Company
6.125% 01/09/2006 403,886
330,000 Presidential Life Corporation
7.875% 02/15/2009 305,534
-----------
2,723,755
-----------
TRANSPORTATION - 2.3%
295,000 American Airlines, Incorporated
Series 1999-1 Class A2
7.024% 10/15/2009 292,767
300,000 Delta Air Lines, Incorporated
6.650% 03/15/2004 291,915
-----------
584,682
-----------
UTILITIES - 1.6%
250,000 Coastal Corporation
6.375% 02/01/2009 230,199
155,000 Southern Union Company
8.250% 11/15/2029 158,483
-----------
388,682
-----------
YANKEE BONDS - 6.9%
325,000 Abbey National Plc
7.950% 10/26/2029 332,904
375,000 Credit Suisse First Boston (2)
7.900% 05/01/2049 356,628
450,000 Merita Bank (2)
7.150% 12/29/2049 439,005
270,000 Quebec Province Canada
7.500% 09/15/2029 271,572
320,000 Republic of Korea
8.875% 04/15/2008 334,344
-----------
1,734,453
-----------
Total Corporate Bonds
(Cost $9,448,595) 9,201,822
-----------
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
24
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INVESTMENT GRADE INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
SHORT-TERM INVESTMENTS - 4.8%
57,767 SSgA Money Market Fund 5.134% (4) $ 57,767
1,145,185 SSgA U.S. Government Money Market Fund
4.888% (4) 1,145,185
-----------
Total Short-Term Investments
(Cost $1,202,952) 1,202,952
-----------
Total Investments
(Cost $26,502,748) - 104.3% 26,034,664
Liabilities in Excess of Other Assets -
(4.3%) (1,077,774)
-----------
Total Net Assets - 100% $24,956,890
===========
</TABLE>
- ------------------
(1) A portion of this security has been segregated by the Custodian Bank to
cover the forward commitment purchase.
(2) Pursuant to Rule 144A of the Securities Act of 1933, these securities may
be resold in transactions exempt from registration, normally to qualified
institutional buyers. At October 31, 1999, these securities aggregated
$1,689,009 or 6.8% of the assets of the Fund.
(3) Settlement of mortgage backed securities is on a delayed delivery basis
with the final maturity to be announed (TBA) in the future. At October 31,
1999, the cost of the Fund's forward commitment purchases was $1,172,286.
(4) Interest rate shown is 7-day yield as of October 31, 1999.
See notes to financial statements.
- --------------------------------------------------------------------------------
25
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM INVESTMENT FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- -----------
<C> <S> <C>
ASSET-BACKED SECURITIES - 49.9%
$ 803,132 Banc One Auto Grantor Trust
Series 1996-A Class A
6.100% 10/15/02 $ 803,803
827,986 Chase Manhattan Auto Owner Trust
Series 1997-B Class A3
6.350% 02/15/2001 828,927
532,640 Chase Manhattan RV Owner Trust
Series 1997-A Class A5
6.050% 11/15/04 530,860
Contimortgage Home Equity Loan Trust
1,000,000 Series 1998-2 Class A3
6.130% 06/15/2001 993,672
1,000,000 Series 1997-4 Class A5
6.440% 09/15/2001 995,731
310,000 Series 1996-3 Class A6
7.830% 07/15/2001 310,732
1,435,911 FNMA Series 1998-65 Class A1
5.530% 09/16/2000 1,432,091
1,140,000 Ford Credit Auto Owner Trust
Series 1998-B Class A3
5.850% 12/15/1999 1,125,439
48,066 General Motors Acceptance Corporation
Series 1997-A Class A
6.500% 11/15/1999 48,295
Green Tree Financial Corporation
1,503,123 Series 1993-3 Class A5
5.750% 10/15/2018 1,500,817
1,450,000 Series 1998-B Class A4
6.390% 06/18/2001 1,433,914
1,659,858 Series 1996-10 Class A4
6.420% 05/15/2000 1,657,923
1,141,787 Series 1992-2 Class A4
8.150% 02/15/2000 1,169,168
256,703 Series 1994-8 Class A4
8.500% 04/15/2025 263,603
415,123 Money Store Auto Trust
Series 1997-4 Class A2
6.350% 3/20/04 416,721
-----------
Total Asset-Backed Securities
(Cost $13,622,251) 13,511,696
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- -----------
<C> <S> <C>
MORTGAGE-BACKED SECURITIES - 21.2%
COLLATERALIZED MORTGAGE OBLIGATIONS - 11.6%
$19,585,151 Bear Stearns Commercial Mortgage
Securities, Incorporated (1)
Series 1999-2 Class X
0.260% 11/01/1999 $ 397,823
132,174 FHLMC
Series 2020 Class A
6.250% 2/15/08 131,907
11,122,151 First Union-Chase Commercial Mortgage
Series 1999-2 Class IO
0.908% 11/01/1999 512,227
1,132,542 FNMA
Series 1992-94 Class G
7.000% 10/25/2005 1,139,306
931,000 Series 1992-31 Class M
7.750% 03/25/2022 946,900
-----------
3,128,163
-----------
MORTGAGE PASS-THROUGH SECURITIES - 9.6%
FNMA
1,471,914 Pool # 303766
7.500% 12/01/2001 1,483,413
556,857 Pool # 313205
10.000% 11/25/1999 600,710
505,437 GNMA
Pool # 1989
8.500% 03/20/2000 520,917
-----------
2,605,040
-----------
Total Mortgage-Backed Securities
(Cost $5,839,153) 5,733,203
-----------
CORPORATE BOND - 4.1%
1,125,000 General Motors Acceptance Corporation
MTN (2)
6.211% 10/30/2000 (Cost $1,122,255) 1,124,055
-----------
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
26
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM INVESTMENT FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
OCTOBER 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- -----------
<C> <S> <C>
COMMERCIAL PAPER - 21.0%
American Express Company
$ 500,000 4.780% 01/10/2000 $ 494,186
600,000 5.160% 11/02/1999 599,914
300,000 Associates First Capital Corporation
5.270% 11/04/1999 299,868
Ford Motor Credit Company
1,000,000 5.210% 11/02/1999 999,855
300,000 5.220% 11/02/1999 299,957
General Electric Capital Corporation
500,000 5.240% 11/02/1999 499,927
800,000 5.280% 11/05/1999 799,179
500,000 John Deere Capital Corporation
5.120% 11/02/1999 499,929
1,200,000 Prudential Funding Corporation
5.220% 11/03/1999 1,199,652
-----------
Total Commercial Paper
(Cost $5,693,634) 5,692,467
-----------
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
SHORT-TERM INVESTMENT - 3.7%
1,002,046 SSgA U.S. Government Money Market Fund
4.888%(3)
(Cost $1,002,046) $ 1,002,046
-----------
Total Investments
(Cost $27,279,339) - 99.9% 27,063,467
Other Assets Less Liabilities - 0.1% 38,817
-----------
Total Net Assets - 100% $27,102,284
===========
</TABLE>
- ------------------
(1) Pursuant to Rule 144A of the Securities Act of 1933, this security may be
resold in transactions exempt from registration, normally to qualified
institutional buyers. At October 31, 1999, this security aggregated
$397,823 or 1.5% of the assets of the Fund.
(2) Floating rate security.
(3) Interest rate shown is 7-day yield as of October 31, 1999.
See notes to financial statements.
- --------------------------------------------------------------------------------
27
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
<TABLE>
<CAPTION>
LARGE SMALL
CAPITALIZATION CAPITALIZATION MIDCAP INVESTMENT SHORT-TERM
EQUITY VALUE VALUE GRADE INCOME INVESTMENT
FUND FUND FUND FUND FUND
--------------- --------------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in
securities, at
value--Note 2 $69,589,346 $58,084,993 $11,240,081 $26,034,664 $27,063,467
Dividends receivable 48,908 19,270 6,857 0 0
Interest receivable 7,180 8,884 3,300 317,749 102,189
Receivable for
securities sold 647,363 2,019,651 0 115,386 0
Receivable for Trust
shares sold 93,476 619,462 119,219 8,068 48
Deferred organizational
costs 0 0 12,422 0 0
Prepaid expenses 4,456 15,102 1,871 487 0
Due from Investment
Advisor--Note 3 1,565 0 5,313 0 3,731
----------- ----------- ----------- ----------- -----------
Total Assets 70,392,294 60,767,362 11,389,063 26,476,354 27,169,435
LIABILITIES
Payable for securities
purchased 0 295,433 122,087 1,443,010 0
Payable for Trust
shares redeemed 65,656 23,824 7,750 22,546 0
Advisory fees
payable--Note 3 29,273 69,074 8,213 0 8,927
Shareholder servicing
fees payable--Note 4 83 354 35 0 0
Accounts payable and
accrued expenses 76,343 43,631 67,863 53,908 58,224
----------- ----------- ----------- ----------- -----------
Total Liabilities 171,355 432,316 205,948 1,519,464 67,151
----------- ----------- ----------- ----------- -----------
Net Assets $70,220,939 $60,335,046 $11,183,115 $24,956,890 $27,102,284
=========== =========== =========== =========== ===========
NET ASSETS
Capital paid-in $53,472,492 $49,636,957 $10,971,537 $26,196,362 $27,521,403
Undistributed
(distributions in
excess of) net
investment income 76,906 (229,129) 1,706 13,399 9,205
Accumulated net
realized gain (loss)
on investments 4,539,221 2,432,294 (379,009) (784,787) (212,452)
Net unrealized
appreciation
(depreciation) of
investments 12,132,320 8,494,924 588,881 (468,084) (215,872)
----------- ----------- ----------- ----------- -----------
Net Assets $70,220,939 $60,335,046 $11,183,115 $24,956,890 $27,102,284
=========== =========== =========== =========== ===========
INVESTOR SHARES:
Net Assets $70,168,672 $60,206,344 $11,179,401 $24,956,890 $27,102,284
Net asset value,
offering and
redemption price per
share $ 14.58 $ 13.10 $ 10.88 $ 9.06 $ 9.74
Total shares
outstanding at
end of period 4,813,987 4,594,544 1,027,132 2,753,564 2,781,248
ADVISOR SHARES:
Net Assets $ 52,267 $ 128,702 $ 3,714 $ 0 $ 0
Net asset value,
offering and
redemption price per
share $ 14.55 $ 12.99 $ 10.86 $ 0.00 N/A(1)
Total shares
outstanding at
end of period 3,592 9,904 342 0 N/A(1)
Cost of securities $57,457,026 $49,590,069 $10,651,200 $26,502,748 $27,279,339
</TABLE>
- ------------------
(1) See Note 1.
See notes to financial statements.
- --------------------------------------------------------------------------------
28
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1999
<TABLE>
<CAPTION>
LARGE SMALL
CAPITALIZATION CAPITALIZATION MIDCAP INVESTMENT SHORT-TERM
EQUITY VALUE VALUE GRADE INCOME INVESTMENT
FUND FUND FUND FUND FUND
---------------- --------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income $ 743,599 $ 534,780 $ 128,031 $ 0 $ 0
Interest income 63,422 102,492 24,533 1,779,638 1,744,684
Foreign taxes withheld 0 0 (131) (167) 0
---------------- --------------- --------------- ---------------- ---------------
Total Income 807,021 637,272 152,433 1,779,471 1,744,684
EXPENSES
Investment advisory
fees--Note 3 518,439 628,271 103,995 135,703 111,813
Shareholder servicing
fees--Note 4 82 298 35 0 0
Administrative
fees--Note 3 81,899 78,559 16,530 34,405 36,320
Custodian fees 40,213 83,600 53,955 44,399 38,100
Audit fees 18,001 18,001 17,999 17,999 18,001
Legal fees 19,999 20,000 19,999 20,000 19,999
Printing expenses 10,000 10,000 7,515 10,000 10,000
Trustees fees--Note 5 7,519 8,331 1,295 2,952 3,800
Transfer agent fees 117,655 138,999 32,175 36,700 68,022
Organizational expenses 6,139 6,066 5,715 6,479 4,045
Registration fees 20,185 16,000 20,437 17,195 17,636
Insurance 5,835 6,466 1,007 2,751 2,943
Other 3,461 4,308 1,663 2,467 2,866
---------------- --------------- --------------- ---------------- ---------------
Total Expenses 849,427 1,018,899 282,320 331,050 333,545
Expenses borne by
Investment
Adviser--Note 3 (24,946) (25,751) (125,949) 0 (45,235)
Expenses waived by
Investment
Adviser--Note 3 (172,805) 0 0 (135,703) 0
---------------- --------------- --------------- ---------------- ---------------
Net Expenses 651,676 993,148 156,371 195,347 288,310
---------------- --------------- --------------- ---------------- ---------------
Net Investment
Income (Loss) 155,345 (355,876) (3,938) 1,584,124 1,456,374
---------------- --------------- --------------- ---------------- ---------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS
Net realized gain
(loss) on investments 5,187,928 3,167,389 993,461 (767,652) (94,336)
Change in net
unrealized
appreciation
(depreciation) of
investments 8,769,491 (793,982) 295,984 (1,029,249) (354,992)
---------------- --------------- --------------- ---------------- ---------------
Net Gain (Loss) 13,957,419 2,373,407 1,289,445 (1,796,901) (449,328)
---------------- --------------- --------------- ---------------- ---------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $ 14,112,764 $ 2,017,531 $ 1,285,507 $ (212,777) $ 1,007,046
================ =============== =============== ================ ===============
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
29
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LARGE CAPITALIZATION EQUITY FUND
---------------------------------
Year Ended Year Ended
10/31/99 10/31/98
---------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
From operations:
Net investment income
(loss) $ 155,345 $ 205,818
Net realized gain
(loss) on
investments 5,187,928 17,791,908
Change in net
unrealized
appreciation
(depreciation) of
investments 8,769,491 (7,399,855)
------------ -----------
Net increase (decrease)
in net assets
resulting from
operations 14,112,764 10,597,871
Net equalization
credits 0 0
Dividends and
distributions to
Investor
Shareholders:
From net investment
income (180,868) (267,881)
From net realized
capital gains (13,211,192) (8,235,872)
Dividends and
distributions to
Advisor Shareholders:
From net investment
income 0 0
From net realized
capital gains 0 0
Net increase (decrease)
from Investor share
transactions 8,757,128 13,048,089
Net increase (decrease)
from Advisor share
transactions 48,660 0
------------ -----------
TOTAL INCREASE
(DECREASE) 9,526,492 15,142,207
NET ASSETS
Beginning of period 60,694,447 45,552,240
------------ -----------
End of period $ 70,220,939 $60,694,447
============ ===========
Including undistributed
(distributions in
excess of) net
investment income $ 76,906 $ 121,839
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
30
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SMALL CAPITALIZATION VALUE FUND
-------------------------------
Year Ended Year Ended
10/31/99 10/31/98
-------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
From operations:
Net investment income
(loss) $ (355,876) $ (123,184)
Net realized gain
(loss) on
investments 3,167,389 1,642,336
Change in net
unrealized
appreciation
(depreciation) of
investments (793,982) (13,419,656)
----------- ------------
Net increase (decrease)
in net assets
resulting from
operations 2,017,531 (11,900,504)
Net equalization
credits 0 0
Dividends and
distributions to
Investor
Shareholders:
From net investment
income 0 0
From net realized
capital gains (1,240,172) (14,815,244)
Dividends and
distributions to
Advisor Shareholders:
From net investment
income 0 0
From net realized
capital gains (1,465) (3,017)
Net increase (decrease)
from Investor share
transactions (8,380,105) (2,176,361)
Net increase (decrease)
from Advisor share
transactions 76,649 (7,484)
----------- ------------
TOTAL INCREASE
(DECREASE) (7,527,562) (28,902,610)
NET ASSETS
Beginning of period 67,862,608 96,765,218
----------- ------------
End of period $60,335,046 $ 67,862,608
=========== ============
Including undistributed
(distributions in
excess of) net
investment income $ (229,129) $ 0
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
31
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MIDCAP VALUE FUND
------------------------
Year Ended Year Ended
10/31/99 10/31/98
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
From operations:
Net investment income
(loss) $ (3,938) $ (7,338)
Net realized gain
(loss) on
investments 993,461 (1,230,448)
Change in net
unrealized
appreciation
(depreciation) of
investments 295,984 234,550
----------- -----------
Net increase (decrease)
in net assets
resulting from
operations 1,285,507 (1,003,236)
Net equalization
credits 0 0
Dividends and
distributions to
Investor
Shareholders:
From net investment
income (4,932) 0
From net realized
capital gains 0 0
Dividends and
distributions to
Advisor Shareholders:
From net investment
income 0 0
From net realized
capital gains 0 0
Net increase (decrease)
from Investor share
transactions (584,251) 1,421,327
Net increase (decrease)
from Advisor share
transactions 0 3,184
----------- -----------
TOTAL INCREASE
(DECREASE) 696,324 421,275
NET ASSETS
Beginning of period 10,486,791 10,065,516
----------- -----------
End of period $11,183,115 $10,486,791
=========== ===========
Including undistributed
(distributions in
excess of) net
investment income $ 1,706 $ 4,932
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
32
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INVESTMENT GRADE INCOME FUND
----------------------------
Year Ended Year Ended
10/31/99 10/31/98
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
From operations:
Net investment income
(loss) $ 1,584,124 $ 1,478,965
Net realized gain
(loss) on
investments (767,652) 937,282
Change in net
unrealized
appreciation
(depreciation) of
investments (1,029,249) (316,048)
----------- -----------
Net increase (decrease)
in net assets
resulting from
operations (212,777) 2,100,199
Net equalization
(debits) credits (7,624) 2,797
Dividends and
distributions to
Investor
Shareholders:
From net investment
income (1,589,130) (1,482,588)
From net realized
capital gains (875,449) 0
Dividends and
distributions to
Advisor Shareholders:
From net investment
income 0 0
From net realized
capital gains 0 0
Net increase (decrease)
from Investor share
transactions (491,917) 830,443
Net increase (decrease)
from Advisor share
transactions 0 0
----------- -----------
TOTAL INCREASE
(DECREASE) (3,176,897) 1,450,851
NET ASSETS
Beginning of period 28,133,787 26,682,936
----------- -----------
End of period $24,956,890 $28,133,787
=========== ===========
Including undistributed
(distributions in
excess of) net
investment income $ 13,399 $ 12,850
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
33
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENT FUND
--------------------------
Year Ended Year Ended
10/31/99 10/31/98
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
From operations:
Net investment income
(loss) $ 1,456,374 $ 1,328,646
Net realized gain
(loss) on
investments (94,336) (74)
Change in net
unrealized
appreciation
(depreciation) of
investments (354,992) 113,160
----------- -----------
Net increase (decrease)
in net assets
resulting from
operations 1,007,046 1,441,732
Net equalization
credits 0 0
Dividends and
distributions to
Investor
Shareholders:
From net investment
income (1,456,374) (1,334,421)
From net realized
capital gains 0 0
Dividends and
distributions to
Advisor Shareholders:
From net investment
income 0 0
From net realized
capital gains 0 0
Net increase (decrease)
from Investor share
transactions (2,502,606) 2,600,601
Net increase (decrease)
from Advisor share
transactions 0 0
----------- -----------
TOTAL INCREASE
(DECREASE) (2,951,934) 2,707,912
NET ASSETS
Beginning of period 30,054,218 27,346,306
----------- -----------
End of period $27,102,284 $30,054,218
=========== ===========
Including undistributed
(distributions in
excess of) net
investment income $ 9,205 $ (3,572)
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
34
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER LARGE CAPITALIZATION EQUITY FUND--INVESTOR SHARES
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--INVESTOR SHARES
For an Investor Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
Net Asset Value at
Beginning of Period $ 14.75 $ 14.48 $ 12.18 $ 11.12 $ 9.45
------- -------- ------- ------- -------
Income from Investment
Operations:
Net Investment Income 0.03(1) 0.05(1) 0.10 0.11 0.11(1)
Net Realized and
Unrealized Gain
(Loss) on Investments 3.01 2.95 3.04 1.92 1.63
------- -------- ------- ------- -------
Total from Investment
Operations 3.04 3.00 3.14 2.03 1.74
------- -------- ------- ------- -------
Less Distributions:
From Net Investment
Income (0.04) (0.09) (0.11) (0.13) (0.07)
From Net Realized
Capital Gains (3.17) (2.64) (0.73) (0.84) 0.00
------- -------- ------- ------- -------
Total Distributions (3.21) (2.73) (0.84) (0.97) (0.07)
------- -------- ------- ------- -------
Net Asset Value at End of
Period $ 14.58 $ 14.75 $ 14.48 $ 12.18 $ 11.12
======= ======== ======= ======= =======
Total Return 23.35% 23.91% 26.18% 19.30% 18.63%
Ratios & Supplemental
Data
Net Assets at End of
Period (000's) $70,169 $ 60,694 $45,552 $42,905 $38,088
Ratio of Operating
Expenses to Average
Net Assets 0.94%(1) 1.04%(1) 1.23% 1.26% 1.40%(1)
Ratio of Net Investment
Income to Average Net
Assets 0.23% 0.36% 0.63% 0.94% 1.27%
Portfolio Turnover Rate 99.56% 161.11% 64.91% 56.83% 83.15%
</TABLE>
- --------------
(1) Net Investment Income is after reimbursement of certain expenses and/or a
management fee waiver by the Investment Adviser (See Note 3 to the Trust's
financial statements.) Had the Investment Adviser not undertaken to pay,
reimburse or waive expenses related to the Fund, the Net Investment Income
per share and Ratio of Operating Expenses to Average Net Assets would have
been as follows: 1999-- $0.00 and 1.19%, 1998--$0.03 and 1.20%, 1995--$0.11
and 1.45%, respectively.
See notes to financial statements.
- --------------------------------------------------------------------------------
35
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER LARGE CAPITALIZATION EQUITY FUND--ADVISOR SHARES
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--ADVISOR SHARES
For an Advisor Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
For the
Period Ended
October 31, 1999 (1)
<S> <C>
- ---------------------------------------------------------------------------
Net Asset Value at Beginning of Period $ 13.35
-----------------
Income from Investment Operations:
Net Investment Income (0.01)(2)
Net Realized and Unrealized Gain (Loss) on
Investments 1.21
-----------------
Total from Investment Operations 1.20
-----------------
Less Distributions:
From Net Investment Income 0.00
From Net Realized Capital Gains 0.00
-----------------
Total Distributions 0.00
-----------------
Net Asset Value at End of Period $ 14.55
=================
Total Return 8.99%(3)
Ratios & Supplemental Data
Net Assets at End of Period (000's) $ 52
Ratio of Operating Expenses to Average Net
Assets 1.19%(2)(4)
Ratio of Net Investment Income to Average Net
Assets (0.13)%(4)
Portfolio Turnover Rate 99.56%(5)
</TABLE>
- --------------
(1) For the period January 19, 1999 (initial offering date of Advisor Shares of
the Fund) through October 31, 1999.
(2) Net Investment Income is after reimbursement of certain expenses and/or a
management fee waiver by the Investment Adviser (See Note 3 to the Trust's
financial statements.) Had the Investment Adviser not undertaken to pay,
reimburse or waive expenses related to the Fund, the Net Investment Income
per share and Ratio of Operating Expenses to Average Net Assets would have
been as follows:
1999--$(6.98) and 76.86%, respectively.
(3) Not annualized.
(4) Annualized.
(5) Represents the Fund's portfolio turnover rate for the entire year ended
October 31, 1999.
See notes to financial statements.
- --------------------------------------------------------------------------------
36
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SMALL CAPITALIZATION VALUE FUND--INVESTOR SHARES
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--INVESTOR SHARES
For an Investor Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
Net Asset Value at
Beginning of Period $ 12.91 $ 17.67 $ 13.05 $ 10.77 $ 9.77
------- -------- ------- ------- -------
Income from Investment
Operations:
Net Investment Income
(Loss) (0.08) (0.02) (0.05) (0.05) (0.03)(1)
Net Realized and
Unrealized Gain
(Loss) on Investments 0.51 (2.05) 5.65 2.34 1.03
------- -------- ------- ------- -------
Total from Investment
Operations 0.43 (2.07) 5.60 2.29 1.00
------- -------- ------- ------- -------
Less Distributions:
From Net Realized
Capital Gains (0.24) (2.69) (0.98) (0.01) 0.00
------- -------- ------- ------- -------
Total Distributions (0.24) (2.69) (0.98) (0.01) 0.00
------- -------- ------- ------- -------
Net Asset Value at End of
Period $ 13.10 $ 12.91 $ 17.67 $ 13.05 $ 10.77
======= ======== ======= ======= =======
Total Return 3.40% (13.29)% 48.46% 21.17% 10.27%
Ratios & Supplemental
Data
Net Assets at End of
Period (000's) $60,206 $ 67,814 $96,709 $48,614 $47,929
Ratio of Operating
Expenses to Average
Net Assets 1.50% 1.29% 1.32% 1.43% 1.56%(1)
Ratio of Net Investment
Income to Average Net
Assets (0.54)% (0.14)% (0.36)% (0.34)% (0.29)%
Portfolio Turnover Rate 101.72% 87.51% 77.48% 81.63% 45.74%
</TABLE>
- --------------
(1) Net Investment Income (Loss) is after reimbursement of certain expenses by
the Investment Adviser. (See Note 3 to the Trust's financial statements.)
Had the Investment Adviser not undertaken to pay or reimburse expenses
related to the Fund, the Net Investment Income per share and Ratio of
Operating Expenses to Average Net Assets would have been as follows:
1995--$(0.03) and 1.62%, respectively.
See notes to financial statements.
- --------------------------------------------------------------------------------
37
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SMALL CAPITALIZATION VALUE FUND--ADVISOR SHARES
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--ADVISOR SHARES
For an Advisor Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Year Ended
October 31, Period Ended
------------------------ October 31,
1999 1998 1997 (1)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
Net Asset Value at Beginning of
Period $ 12.86 $ 17.67 $ 18.29
--------- --------- ---------
Income from Investment Operations:
Net Investment Income (Loss) (0.11)(2) (0.02)(2) (0.01)
Net Realized and Unrealized Gain
(Loss) on Investments 0.48 (2.10) (0.61)
--------- --------- ---------
Total from Investment Operations 0.37 (2.12) (0.62)
--------- --------- ---------
Less Distributions:
From Net Realized Capital Gains (0.24) (2.69) 0.00
--------- --------- ---------
Total Distributions (0.24) (2.69) 0.00
--------- --------- ---------
Net Asset Value at End of Period $ 12.99 $ 12.86 $ 17.67
========= ========= =========
Total Return 2.94% (13.63)% (3.39)%(3)
Ratios & Supplemental Data
Net Assets at End of Period
(000's) $ 129 $ 49 $ 56
Ratio of Operating Expenses to
Average Net Assets 1.75%(2) 1.54%(2) 1.46%(4)
Ratio of Net Investment Income to
Average Net Assets (0.84)% (0.42)% 0.63%(4)
Portfolio Turnover Rate 101.72% 87.51% 77.48%(5)
</TABLE>
- --------------
(1) For the period September 26, 1997 (initial offering date of Advisor Shares
of the Fund) through October 31, 1997.
(2) Net Investment Loss is after reimbursement of certain expenses by the
Investment Adviser. (See Note 3 to the Trust's financial statements.) Had
the Investment Adviser not undertaken to pay or reimburse expenses related
to the Fund, the Net Investment Income per share and Ratio of Operating
Expenses to Average Net Assets would have been as follows: 1999--$(2.71)
and 23.27%, 1998--$(3.68) and 77.44%, respectively.
(3) Not annualized.
(4) Annualized.
(5) Represents the Fund's portfolio turnover rate for the entire fiscal year
ended October 31, 1997.
See notes to financial statements.
- --------------------------------------------------------------------------------
38
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER MIDCAP VALUE FUND--INVESTOR SHARES
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--INVESTOR SHARES
For an Investor Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Year Ended
October 31, Period
---------------------- October 31,
1999 1998 1997 (1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------
Net Asset Value at Beginning of
Period $ 9.72 $ 10.36 $ 10.00
-------- -------- --------
Income from Investment Operations:
Net Investment Income (Loss) (2) 0.00 (0.01) 0.00
Net Realized and Unrealized Gain
(Loss) on Investments 1.16 (0.63) 0.36
-------- -------- --------
Total from Investment Operations 1.16 (0.64) 0.36
-------- -------- --------
Less Distributions:
From Net Realized Capital Gains 0.00 0.00 0.00
-------- -------- --------
Total Distributions 0.00 0.00 0.00
-------- -------- --------
Net Asset Value at End of Period $ 10.88 $ 9.72 $ 10.36
======== ======== ========
Total Return 11.98% (6.18)% 3.60%(3)
Ratios & Supplemental Data
Net Assets at End of Period
(000's) $ 11,179 $ 10,484 $ 10,066
Ratio of Operating Expenses to
Average Net Assets (2) 1.35% 1.35% 1.35%(4)
Ratio of Net Investment Income to
Average Net Assets (0.03)% (0.06)% (0.13)%(4)
Portfolio Turnover Rate 174.98% 165.62% 11.96%(3)
</TABLE>
- --------------
(1) For the period August 1, 1997 (commencement of investment operations)
through October 31, 1997.
(2) Net Investment Income (Loss) is after reimbursement of certain expenses by
the Investment Adviser (See Note 3 to the Trust's financial statements.)
Had the Investment Adviser not undertaken to pay or reimburse expenses
related to the Fund, the Net Investment Income per share and Ratio of
Operating Expenses to Average Net Assets would have been as follows:
1999--$(0.11) and 2.28%, 1998--$(0.12) and 2.47%, 1997--$(0.06) and 4.33%,
respectively.
(3) Not annualized.
(4) Annualized.
See notes to financial statements.
- --------------------------------------------------------------------------------
39
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER MIDCAP VALUE FUND--ADVISOR SHARES
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--ADVISOR SHARES
For an Advisor Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Year Ended Period Ended
October 31, October 31,
1999 1998 (1)
<S> <C> <C>
- -----------------------------------------------------------------------
Net Asset Value at Beginning of Period $ 9.72 $ 9.30
-------- --------
Income from Investment Operations:
Net Investment Loss (2) (0.03) (0.00)
Net Realized and Unrealized Gain on
Investments 1.17 0.42
-------- --------
Total from Investment Operations 1.14 0.42
-------- --------
Less Distributions:
From Net Realized Capital Gains 0.00 0.00
-------- --------
Total Distributions 0.00 0.00
-------- --------
Net Asset Value at End of Period $ 10.86 $ 9.72
======== ========
Total Return 11.73% 4.52%(3)
Ratios & Supplemental Data
Net Assets at End of Period (000's) $ 4 $ 3
Ratio of Operating Expenses to Average
Net Assets (2) 1.60% 1.60%(4)
Ratio of Net Investment Income to
Average Net Assets (0.28)% (1.06)%(4)
Portfolio Turnover Rate 174.98% 165.62%(5)
</TABLE>
- --------------
(1) For the period October 23, 1998 (initial offering date of Advisor Shares of
the Fund) through October 31, 1998.
(2) Net Investment Loss is after reimbursement of certain expenses by the
Investment Adviser (See Note 3 to the Trust's financial statements.) Had
the Investment Adviser not undertaken to pay or reimburse expenses related
to the Fund, the Net Investment Income per share and Ratio of Operating
Expenses to Average Net Assets would have been as follows: 1999--$(55.97)
and 517.02%, 1998--$(1.38) and 671.68%, respectively.
(3) Not annualized.
(4) Annualized.
(5) Represents the Fund's portfolio turnover rate for the entire fiscal year
ended October 31, 1998.
See notes to financial statements.
- --------------------------------------------------------------------------------
40
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INVESTMENT GRADE INCOME FUND--INVESTOR SHARES
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--INVESTOR SHARES
For an Investor Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
Net Asset Value at
Beginning of Period $ 10.00 $ 9.77 $ 9.70 $ 9.93 $ 9.14
-------- -------- ------- ------- --------
Income from Investment
Operations:
Net Investment
Income (1) 0.55 0.54 0.49 0.53 0.59
Net Realized and
Unrealized Gain
(Loss) on Investments (0.62) 0.23 0.16 (0.11) 0.79
-------- -------- ------- ------- --------
Total from Investment
Operations (0.07) 0.77 0.65 0.42 1.38
-------- -------- ------- ------- --------
Less Distributions:
From Net Investment
Income (0.56) (0.54) (0.49) (0.53) (0.59)
From Net Realized
Capital Gains (0.31) 0.00 (0.09) (0.12) 0.00
-------- -------- ------- ------- --------
Total Distributions (0.87) (0.54) (0.58) (0.65) (0.59)
-------- -------- ------- ------- --------
Net Asset Value at End of
Period $ 9.06 $ 10.00 $ 9.77 $ 9.70 $ 9.93
======== ======== ======= ======= ========
Total Return (0.78)% 8.10% 7.68% 4.38% 15.62%
Ratios & Supplemental
Data
Net Assets at End of
Period (000's) $ 24,957 $ 28,134 $26,683 $23,708 $ 23,704
Ratio of Operating
Expenses to Average
Net Assets (1) 0.72% 0.89% 1.12% 1.12% 1.06%
Ratio of Net Investment
Income to Average Net
Assets 5.81% 5.47% 5.58% 5.46% 6.35%
Portfolio Turnover Rate 300.53% 112.69% 43.65% 68.76% 113.50%
</TABLE>
- --------------
(1) Net Investment Income is after reimbursement of certain expenses and/or a
management fee waiver by the Investment Adviser (See Note 3 to the Trust's
financial statements.) Had the Investment Adviser not undertaken to pay,
reimburse or waive expenses related to the Fund, the Net Investment Income
per share and Ratio of Operating Expenses to Average Net Assets would have
been as follows: 1999-- $0.50 and 1.22%, 1998--$0.51 and 1.25%, 1997--$0.47
and 1.33%, 1996--$0.52 and 1.24%, 1995--$0.56 and 1.50%, respectively.
See notes to financial statements.
- --------------------------------------------------------------------------------
41
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM INVESTMENT FUND--INVESTOR SHARES
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--INVESTORS SHARES
For an Investor Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
Net Asset Value at
Beginning of Period $ 9.90 $ 9.87 $ 9.87 $ 9.88 $ 9.88
------- -------- ------- -------- -------
Income from Investment
Operations:
Net Investment Income 0.51(1) 0.46(1) 0.46(1) 0.45 0.49(1)
Net Realized and
Unrealized Gain
(Loss) on Investments (0.16) 0.03 (0.00) 0.00 0.00
------- -------- ------- -------- -------
Total from Investment
Operations 0.35 0.49 0.46 0.45 0.49
------- -------- ------- -------- -------
Less Distributions:
From Net Investment
Income (0.51) (0.46) (0.46) (0.45) (0.49)
In Excess of Net
Investment Income 0.00 0.00 0.00 (0.01) 0.00
------- -------- ------- -------- -------
Total Distributions (0.51) (0.46) (0.46) (0.46) (0.49)
------- -------- ------- -------- -------
Net Asset Value at End of
Period $ 9.74 $ 9.90 $ 9.87 $ 9.87 $ 9.88
======= ======== ======= ======== =======
Total Return 3.62% 5.09% 4.74% 4.63% 5.02%
Ratios & Supplemental
Data
Net Assets at End of
Period (000's) $27,102 $ 30,054 $27,346 $ 30,527 $33,936
Ratio of Operating
Expenses to Average
Net Assets 1.03%(1) 1.03%(1) 1.03%(1) 1.00% 0.95%(1)
Ratio of Net Investment
Income to Average Net
Assets 5.21% 4.65% 4.64% 4.50% 4.91%
Portfolio Turnover Rate 92.23% 92.95% 65.57% 154.66% 27.86%
</TABLE>
- --------------
(1) Net Investment Income is after reimbursement of certain expenses by the
Investment Adviser (See Note 3 to the Trust's financial statements.) Had
the Investment Adviser not undertaken to pay or reimburse expenses related
to the Fund, the Net Investment Income per share and Ratio of Operating
Expenses to Average Net Assets would have been as follows: 1999--$0.49 and
1.19%, 1998--$0.45 and 1.12%, 1997--$0.46 and 1.05%, 1995--$0.47 and 1.08%,
respectively.
See notes to financial statements.
- --------------------------------------------------------------------------------
42
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION
Schroder Series Trust (the "Trust"), is an open-end series management
investment company registered under the Investment Company Act of 1940, as
amended. The Trust was organized as a business trust under the laws of The
Commonwealth of Massachusetts on May 6, 1993. The Trust has an unlimited
number of authorized shares, which are divided into five separate investment
portfolios--Schroder Large Capitalization Equity Fund, Schroder Small
Capitalization Value Fund, Schroder MidCap Value Fund, Schroder Investment
Grade Income Fund and Schroder Short-Term Investment Fund (collectively, the
"Funds"). The Funds (except Schroder Short-Term Investment Fund) are presently
authorized to issue two classes of shares--"Investor Shares" and "Advisor
Shares." As of October 31, 1999, each Fund had Investor Shares outstanding and
Schroder Large Capitalization Equity Fund, Schroder Small Capitalization Value
Fund and Schroder MidCap Value Fund had Advisor Shares outstanding.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by
the Funds which are in conformity with generally accepted accounting
principles.
VALUATION OF INVESTMENTS
Equity securities traded on a national securities exchange are valued at
their last reported sale price on the principal exchange. In the absence of
sales that day, such securities are valued at the mean of the closing bid and
ask prices ("mid-market price") or, if none, the last sales price on the
preceding trading day. Securities traded in over-the-counter markets are
valued at the most recently reported mid-market price. Debt securities with
remaining maturities of more than 60 days are valued on the basis of
valuations provided by pricing services that determine valuations for normal
institutional size trading units of debt securities, or through obtaining
independent quotes from market makers. Short-term debt instruments with a
remaining maturity of 60 days or less are valued at amortized cost, which
approximates market value unless the investment adviser believes another
valuation is more appropriate. Securities for which current market quotations
are not readily available are valued at fair value as determined in accordance
with procedures approved by the Board of Trustees of the Trust ("Trustees").
REPURCHASE AGREEMENTS
When entering into repurchase agreements, it is each Fund's policy that
the Fund take into its possession, through its custodian, the underlying
collateral and monitor the collateral's value at the time the agreement is
entered into and on a daily basis during the term of the repurchase agreement
to ensure that it equals or exceeds the repurchase price. In the event of
default or bankruptcy by the other party to the agreement, realization and/or
retention of the collateral may be subject to legal proceedings.
INVESTMENT TRANSACTIONS
Investment security transactions are recorded as of trade date. Realized
gains and losses on sales of investments are determined on the basis of
identified cost.
INVESTMENT INCOME
Dividend income is recorded on the ex-dividend date. Interest income is
recorded on the accrual basis.
- --------------------------------------------------------------------------------
43
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
EXPENSES
Expenses are recorded on the accrual basis. Most of the expenses of the
Trust can be directly attributed to a specific Fund and/or class of shares.
Expenses not directly attributed to a specific Fund and/or class of shares are
allocated among the Funds and/or classes of shares in such a manner as deemed
equitable by Schroder Investment Management North America Inc. ("SIMNA"),
investment adviser to the Trust, or the Trustees.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income are declared and
distributed at least annually for Schroder Large Capitalization Equity Fund,
Schroder Small Capitalization Value Fund and Schroder MidCap Value Fund;
declared and distributed monthly for Schroder Investment Grade Income Fund;
and declared daily and distributed monthly for Schroder Short-Term Investment
Fund. Distributions from net realized capital gains, if any, are declared and
distributed at least annually. Distributions are recorded on the ex-dividend
date.
With respect to each Fund that currently offers two classes of shares,
investment income, common expenses of a Fund, and gains/losses on investments
are allocated to both classes of a Fund based on the respective daily net
assets of each class of such Fund. Shareholder servicing fees related to
Advisor Shares are charged directly to that class. Neither class has
preferential dividend rights. Income dividends, if any, paid by a Fund on its
two classes of shares will normally differ in amount due to the differing
expenses borne by each class.
DEFERRED ORGANIZATION COSTS
Costs and expenses of the Funds paid by SIMNA and its affiliates in
connection with the organization of the Funds and the initial public offering
of their shares have been deferred by the Funds and are being amortized on a
straight-line basis from the date operations commenced over a period that it
is expected a benefit will be realized, not to exceed five years. Except for
Schroder MidCap Value Fund, each of the Funds has fully amortized such
amounts. SIMNA has agreed with respect to each of the Funds that, if any of
the initial shares of a Fund are redeemed during such amortization period by
any holder thereof, the redemption proceeds will be reduced for any
unamortized organization expenses in the same ratio as the number of shares
redeemed bears to the number of initial shares held at the time of redemption.
For this purpose, SIMNA has specified that its initial investment in the
Schroder MidCap Value Fund was in the amount of $100,000.
EQUALIZATION
Schroder Investment Grade Income Fund follows an accounting practice known
as equalization by which a portion of the proceeds from sales and costs of
redemptions of Fund shares equivalent, on a per share basis, to the amount of
undistributed net investment income on the date of the transaction is credited
or charged to undistributed net investment income. As a result, undistributed
net investment income per share is unaffected by sales and redemptions of the
Fund's shares.
FEDERAL INCOME TAXES
It is the policy of the Trust for each Fund to qualify as a "regulated
investment company" by complying with the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended. By so qualifying, the Funds will
not be subject to federal income taxes to the extent that, among other things,
they distribute substantially all of their taxable income, including realized
capital gains, for the fiscal year. In addition, by distributing during each
calendar year substantially all of their net investment income, capital gains
and certain other amounts, if any, the Funds will not be subject to a federal
excise tax.
- --------------------------------------------------------------------------------
44
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As of October 31, 1999, the Funds listed below had net tax basis capital
loss carryforwards, for Federal income tax purposes, that may be applied
against taxable gains until their expiration date as follows.
<TABLE>
<CAPTION>
EXPIRATION
DATES
FUND AMOUNT OCTOBER 31,
- ---- ---------- -----------
<S> <C> <C>
Schroder MidCap Value Fund $ 280,206 2006
Schroder Investment Grade Income Fund 782,503 2007
Schroder Short-Term Investment Fund 104,408 2004
Schroder Short-Term Investment Fund 4,553 2005
Schroder Short-Term Investment Fund 2,632 2006
Schroder Short-Term Investment Fund 100,859 2007
</TABLE>
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
Real Estate Mortgage Investment Conduit (REMIC), paydowns and losses deferred
due to wash sales and excise tax regulations.
NOTE 3. INVESTMENT ADVISORY FEES AND ADMINISTRATION AGREEMENT
The Trust has entered into an investment advisory agreement with SIMNA.
Under the agreement, SIMNA provides investment management services, and is
entitled to receive for its services compensation monthly at the following
annual rates based on average daily net assets of each Fund taken separately:
0.75% for Schroder Large Capitalization Equity Fund; 0.95% for Schroder Small
Capitalization Value Fund; 0.90% for Schroder MidCap Value Fund; 0.50% for
Schroder Investment Grade Income Fund; and 0.40% for Schroder Short-Term
Investment Fund.
Throughout the fiscal period SIMNA was contractually obligated to waive a
portion of the investment advisory fees it was entitled to receive from
Schroder Large Capitalization Equity Fund and from Schroder Investment Grade
Income Fund. As a result, during the period of the waiver, Schroder Large
Capitalization Equity Fund paid investment advisory fees to SIMNA at the
annual rate of 0.50% of the Fund's average daily net assets, and Schroder
Investment Grade Income Fund paid no investment advisory fees.
In addition, throughout the fiscal period SIMNA was contractually
obligated to reduce its compensation and, if necessary, to pay certain
expenses of each of the Funds to the extent that a Fund's total operating
expenses attributable to its Investor Shares and its Advisor Shares exceed the
following annual rates: 1.55% and 1.80% of average daily net assets
attributable to Investor Shares and Advisor Shares, respectively, of Schroder
Large Capitalization Equity Fund; 1.70% and 1.95% of average daily net assets
attributable to Investor Shares and Advisor Shares, respectively, of Schroder
Small Capitalization Value Fund; 1.35% and 1.60% of average daily net assets
attributable to Investor Shares and Advisor Shares, respectively, of Schroder
MidCap Value Fund; 1.12% and 1.37% of average daily net assets attributable to
Investor Shares and Advisor Shares, respectively, of Schroder Investment Grade
Income Fund; and 1.03% of average daily net assets attributable to Investor
Shares of Schroder Short-Term Investment Fund. The Trust paid all expenses not
assumed by SIMNA, including Trustees' fees, auditing, legal, custodial, and
shareholder servicing and shareholder reporting expenses. It is anticipated
that SIMNA will continue these fee waivers and expense reimbursements
throughout the current fiscal year.
Until July 1, 1999, Schroder Capital Management Inc. ("SCM") served as
investment adviser to the Trust. On that date, SCM merged into SIMNA, a newly
organized Delaware Corporation. SCM and SIMNA are both wholly owned
subsidiaries of Schroder U.S. Holdings Inc.
- --------------------------------------------------------------------------------
45
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Trust has also entered into an Administration Agreement with State
Street Bank and Trust Company ("State Street"). Under the Administration
Agreement, the Trust pays compensation to State Street at the following annual
rates based on the average daily net assets of each Fund taken separately:
0.08% of the first $125 million of each Fund's average daily net assets, 0.06%
of the next $125 million of each Fund's average daily net assets and 0.04% of
each Fund's average daily net assets in excess of $250 million, subject to
certain minimum requirements.
Effective June 1, 1999, the terms of the Administration Agreement were
amended. Under the revised Administration Agreement, the Trust in addition to
other Schroder Funds managed by SIMNA, pay complex fees according to the
following annual rates based on the combined average daily net assets of all
such funds of: 0.06% of the first $1.7 billion of such assets, 0.04% of the
next $1.7 billion of such assets, and 0.02% of such assets in excess of $3.4
billion, subject to certain minimum requirements.
NOTE 4. SHAREHOLDER SERVICING PLAN
The Trust has adopted a shareholder servicing plan for the Advisor Shares
of each Fund except Schroder Short-Term Investment Fund. Under the plan,
Schroder Fund Advisors Inc. or shareholder servicing organizations provide
administrative support services to their customers who hold a Fund's Advisor
Shares. For these shareholder services, Schroder Fund Advisors Inc. receives
compensation monthly at an annual rate of up to 0.25% of the average daily net
assets of each Fund attributable to its Advisor Shares.
NOTE 5. TRANSACTIONS WITH AFFILIATES
TRUSTEES' FEES
The Trust pays no compensation to Trustees who are interested persons of
the Trust, SIMNA or Schroder Fund Advisors Inc. Trustees who are not
interested persons of the Trust, SIMNA or Schroder Fund Advisors Inc. receive
an annual retainer of $11,000 for their services as Trustees of all open end
investment companies distributed by Schroder Fund Advisors Inc., and $1,250
per meeting attended in person or $500 per meeting attended by telephone.
Members of an Audit Committee for one or more of the investment companies will
receive an additional $1,000 per year. Payment of the annual retainer will be
allocated among the various investment companies based on their relative net
assets. Payment of meeting fees will be allocated only among those investment
companies to which the meeting relates.
NOTE 6. INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for each Fund, for the year ended October 31, 1999 were
as follows:
<TABLE>
<CAPTION>
NON-GOVERNMENT GOVERNMENT NON-GOVERNMENT GOVERNMENT
PURCHASES PURCHASES SALES SALES
-------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Schroder Large Capitalization
Equity Fund $67,251,333 $ 0 $66,591,812 $ 1,626,664
Schroder Small Capitalization
Value Fund 64,776,266 0 73,390,092 0
Schroder MidCap Value Fund 19,266,423 0 18,945,844 0
Schroder Investment Grade
Income Fund 27,532,520 50,014,869 26,655,089 52,557,810
Schroder Short-Term Investment
Fund 12,508,481 8,858,724 18,873,595 1,000,000
</TABLE>
- --------------------------------------------------------------------------------
46
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The identified cost for federal income tax purposes of investments owned
by each Fund and their respective gross unrealized appreciation and
depreciation at October 31, 1999 were as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
IDENTIFIED GROSS UNREALIZED APPRECIATION/
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
----------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
Schroder Large Capitalization
Equity Fund $57,457,551 $12,749,485 $ (617,690) $12,131,795
Schroder Small Capitalization
Value Fund 49,652,697 9,839,352 (1,407,056) 8,432,296
Schroder MidCap Value Fund 10,750,002 941,157 (451,078) 490,079
Schroder Investment Grade
Income Fund 26,505,032 86,782 (557,150) (470,368)
Schroder Short-Term Investment
Fund 27,279,339 10,123 (225,995) (215,872)
</TABLE>
The aggregate cost of each Fund's investments was substantially the same
for book and federal income tax purposes at October 31, 1999.
NOTE 7. SHAREHOLDERS' TRANSACTIONS
Following is a summary of shareholder transactions for each Fund:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1999 OCTOBER 31, 1998
------------------------- -------------------------
SHARES DOLLARS SHARES DOLLARS
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
SCHRODER LARGE CAPITALIZATION
EQUITY FUND
INVESTOR CLASS
Shares sold 1,065,957 $ 14,839,763 2,358,624 $ 33,242,828
Shares issued to
shareholders in
reinvestment 1,029,955 13,358,523 672,845 8,486,981
Shares redeemed (1,395,856) (19,441,158) (2,063,508) (28,681,720)
----------- ------------ ----------- ------------
Net increase 700,056 $ 8,757,128 967,961 $ 13,048,089
=========== ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 19, 1999
TO OCTOBER 31, 1999
-------------------------
SHARES DOLLARS
----------- ------------
<S> <C> <C> <C> <C>
SCHRODER LARGE CAPITALIZATION
EQUITY FUND
ADVISOR CLASS
Shares sold 3,592 $ 48,660
Shares issued to
shareholders in
reinvestment 0 0
Shares redeemed 0 0
----------- ------------
Net increase 3,592 $ 48,660
=========== ============
</TABLE>
- --------------------------------------------------------------------------------
47
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1999 OCTOBER 31, 1998
------------------------- -----------------------
SHARES DOLLARS SHARES DOLLARS
----------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
SCHRODER SMALL CAPITALIZATION
VALUE FUND
INVESTOR CLASS
Shares sold 1,514,759 $ 20,003,670 2,332,423 $33,749,377
Shares issued to
shareholders in
reinvestment 94,824 1,228,923 987,453 14,680,429
Shares redeemed (2,267,904) (29,612,698) (3,538,630) (50,606,167)
----------- ------------ ---------- -----------
Net decrease (658,321) $ (8,380,105) (218,754) $(2,176,361)
=========== ============ ========== ===========
SCHRODER SMALL CAPITALIZATION
VALUE FUND
ADVISOR CLASS
Shares sold 10,122 $ 136,082 4,118 $ 50,654
Shares issued to
shareholders in
reinvestment 112 1,442 81 1,208
Shares redeemed (4,143) (60,875) (3,566) (59,346)
----------- ------------ ---------- -----------
Net increase (decrease) 6,091 $ 76,649 633 $ (7,484)
=========== ============ ========== ===========
SCHRODER MIDCAP VALUE FUND
INVESTOR CLASS
Shares sold 232,021 $ 2,461,359 612,837 $ 6,657,769
Shares issued to
shareholders in
reinvestment 473 4,931 0 0
Shares redeemed (283,558) (3,050,541) (506,218) (5,236,442)
----------- ------------ ---------- -----------
Net (decrease) increase (51,064) $ (584,251) 106,619 $ 1,421,327
=========== ============ ========== ===========
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 23, 1998
TO OCTOBER 31, 1998
-------------------------
SHARES DOLLARS
----------- ------------
<S> <C> <C> <C> <C>
SCHRODER MIDCAP VALUE FUND
ADVISOR CLASS
Shares sold 0 $ 0 342 $ 3,184
Shares issued to
shareholders in
reinvestment 0 0 0 0
Shares redeemed 0 0 0 0
---------- ----------- ----------- ------------
Net increase 0 $ 0 342 $ 3,184
========== =========== =========== ============
</TABLE>
- --------------------------------------------------------------------------------
48
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1999 OCTOBER 31, 1998
------------------------- -------------------------
SHARES DOLLARS SHARES DOLLARS
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
SCHRODER INVESTMENT GRADE
INCOME FUND
INVESTOR CLASS
Shares sold 709,924 $ 6,783,285 413,213 $ 4,144,975
Shares issued to
shareholders in
reinvestment 259,505 2,462,955 147,906 1,460,393
Shares redeemed (1,029,427) (9,738,157) (479,624) (4,772,128)
Income equalization
(received) paid 0 7,624 0 (2,797)
----------- ------------ ----------- ------------
Net (decrease) increase (59,998) $ (484,293) 81,495 $ 830,443
=========== ============ =========== ============
SCHRODER SHORT-TERM INVESTMENT
FUND
INVESTOR CLASS
Shares sold 2,428,306 $ 23,834,847 2,559,113 $ 25,265,801
Shares issued to
shareholders in
reinvestment 146,085 1,433,189 135,287 1,334,916
Shares redeemed (2,828,024) (27,770,642) (2,430,714) (24,000,116)
----------- ------------ ----------- ------------
Net (decrease) increase (253,633) $ (2,502,606) 263,686 $ 2,600,601
=========== ============ =========== ============
</TABLE>
NOTE 8. BENEFICIAL INTEREST
The following table shows the number of shareholders each owning
beneficially or of record 5% or more of a class of shares of a Fund
outstanding as of October 31, 1999 and the total percentage of the class of
shares of the Fund held by such shareholder.
<TABLE>
<CAPTION>
5% OR GREATER SHAREHOLDERS
---------------------------
NUMBER % OF CLASS HELD
-------- -----------------
<S> <C> <C>
Schroder Large Capitalization Equity
Fund--Investor 3 74.83%
Schroder Large Capitalization Equity
Fund--Advisor 2 100.00%
Schroder Small Capitalization Value
Fund--Investor 4 33.37%
Schroder Small Capitalization Value
Fund--Advisor 2 100.00%
Schroder MidCap Value Fund--Investor 4 56.79%
Schroder MidCap Value Fund--Advisor 1 100.00%
Schroder Investment Grade Income
Fund--Investor 3 81.26%
Schroder Short-Term Investment
Fund--Investor 2 92.62%
</TABLE>
NOTE 9. TAX INFORMATION NOTICE (UNAUDITED)
For Federal income tax purposes, the following information is furnished
with respect to the distributions of the Trust for its fiscal year ended
October 31, 1999:
Schroder Large Capitalization Equity Fund and Schroder MidCap Value Fund
had 20.95% and 92.57% of 1999 dividends qualify for the corporate dividends
received deduction.
Schroder Large Capitalization Equity Fund, Schroder Small Capitalization
Value Fund and Schroder Investment Grade Income Fund designated $10,300,134
and $1,241,637 and $570,350, respectively, as long term capital gains
dividends for the purposes of the dividends paid deduction.
- --------------------------------------------------------------------------------
49
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
On December 13, 1999, the Funds made the following per share distributions
to shareholders of record December 10, 1999.
<TABLE>
<CAPTION>
NET INVESTMENT SHORT TERM LONG TERM
INCOME CAPITAL GAIN CAPITAL GAIN
-------------- ------------ ------------
<S> <C> <C> <C>
Schroder Large Capitalization
Equity Fund--Investor Shares..... $0.023845 $ 0.14617 $ 0.86388
Schroder Large Capitalization
Equity Fund--Advisor Shares...... -- 0.14617 0.86388
Schroder Small Capitalization Value
Fund--Investor Shares............ -- -- 0.57285
Schroder Small Capitalization Value
Fund--Advisor Shares............. -- -- 0.57285
Schroder MidCap Value
Fund--Investor Shares............ 0.003103 -- --
Schroder MidCap Value Fund--Advisor
Shares........................... -- -- --
</TABLE>
NOTE 10. PORTFOLIO INVESTMENT RISKS
For more complete risk disclosure, please refer to the Trust's current
prospectus.
- --------------------------------------------------------------------------------
50
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER SERIES TRUST
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of Schroder Series Trust:
We have audited the statements of assets and liabilities, including the
schedules of investments, of Schroder Series Trust (a Massachusetts business
trust comprising, respectively, the Schroder Large Capitalization Equity Fund,
Schroder Small Capitalization Value Fund, Schroder MidCap Value Fund, Schroder
Investment Grade Income Fund and Schroder Short-Term Investment Fund) as of
October 31, 1999, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, except for the Schroder MidCap Value Fund, which is for
the two years in the period then ended, and for the period ended October 31,
1997. These financial statements and financial highlights are the responsibility
of the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1999, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective funds constituting Schroder Series Trust as of October 31,
1999, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended, except
for the Schroder MidCap Value Fund, which is for the two years in the period
then ended and for the period ended October 31, 1997 in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
New York, New York
December 14, 1999
- --------------------------------------------------------------------------------
51
<PAGE>
INVESTMENT ADVISER
Schroder Investment Management
North America Inc.
787 Seventh Avenue, 34th Floor
New York, NY 10019
TRUSTEES
Nancy A. Curtin, CHAIRMAN
David N. Dinkins
Peter E. Guernsey
Sharon L. Haugh
John I. Howell
Peter S. Knight
William L. Means
Clarence F. Michalis
Hermann C. Schwab
DISTRIBUTOR
Schroder Fund Advisors Inc.
787 Seventh Avenue, 34th Floor
New York, NY 10019
TRANSFER & SHAREHOLDER
SERVICING AGENT
Boston Financial Data Services, Inc.
CUSTODIAN
State Street Bank and Trust Company
INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP
COUNSEL
Ropes & Gray
The information contained in this report is
intended for the general information of the
shareholders of the Trust. This report is not
authorized for distribution to prospective
investors unless preceded or accompanied
by a current Trust prospectus which contains
important information concerning the Trust.
Schroder Series Trust
P.O. Box 8507
Boston, MA 02266
800-464-3108
[SCHRODER LOGO]
------------------------------------------
Schroder Series Trust
Schroder Large
Capitalization Equity Fund
Schroder Small
Capitalization Value Fund
Schroder MidCap
Value Fund
Schroder Investment
Grade Income Fund
Schroder Short-Term
Investment Fund
ANNUAL REPORT
October 31, 1999
WS1299AR
