<PAGE>
SCHRODER SERIES TRUST
PROSPECTUS SUPPLEMENT
To Investor Shares Prospectus dated March 1, 2000
SHORT-TERM INVESTMENT FUND
The Board of Trustees of Schroder Series Trust has voted to terminate
Schroder Short-Term Investment Fund. Upon termination, the Fund's net
assets will be distributed to its shareholders in complete liquidation of
the Fund. The Trust has not set a specific date for the termination,
although it is expected that the Fund will terminate in late June, 2000.
LARGE CAPITALIZATION EQUITY FUND
(1) The information relating to Schroder Large Capitalization Equity
Fund and Mr. Paul Morris is deleted from the table under "Portfolio
Managers" on page 16 of the Prospectus. Investment decisions for that Fund
are made by Schroder's U.S. equity investment team.
(2) The Board of Trustees of Schroder Series Trust has approved an
Agreement and Plan of Reorganization pursuant to which Schroder Large
Capitalization Equity Fund would merge into Schroder U.S. Diversified
Growth Fund, a series of Schroder Capital Funds (Delaware). If shareholders
of Schroder Large Capitalization Equity Fund likewise approve the Agreement
and Plan of Reorganization, it is expected that the merger will occur in
September, 2000.
INVESTMENT GRADE INCOME FUND
The Board of Trustees of Schroder Investment Grade Income Fund has
approved a change to the investment objective, and certain investment policies,
of the Fund. The Fund's name would also be changed to "Schroder Total Return
Fixed Income Fund." Implementation of the changes is subject to shareholder
approval of the change to the Fund's investment objective. It is expected that
shareholders will be asked to approve the changes at a shareholder meeting in
the summer of 2000. If shareholders approve the change to the Fund's investment
objective, the information relating to the Fund beginning on page 6 of the
Prospectus and ending immediately before the bar chart on page 7 is expected to
read as follows:
- INVESTMENT OBJECTIVE. To seek maximum long-term total return
consistent with preservation of capital.
- PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests at least
65% of its assets in fixed-income securities that are "investment
grade" quality. To be considered "investment grade," the securities
must be rated (at the time of
<PAGE>
investment) in one of the four highest grades by Moody's Investors
Service, Inc. or Standard and Poor's Ratings Services, or determined
by Schroder to be of comparable quality. The Fund may invest the
remainder of its assets in securities rated below investment grade.
The Fund normally expects to invest a substantial portion of its
assets in U.S. Government securities. The Fund may also invest in a
variety of other fixed-income securities, including corporate debt
securities, preferred stocks, and money market instruments. The Fund
may invest up to 20% of its assets in debt securities denominated in
currencies other than the U.S. dollar, including up to 10% of its
assets in securities of developing countries and of private issuers in
those countries.
The Fund may invest a substantial portion of its assets in
mortgage-backed certificates and other securities representing
ownership interests in mortgage pools, including collateralized
mortgage obligations, and in other types of asset-backed securities.
In addition, the Fund may buy or sell a variety of derivative and
related instruments with respect to fixed-income securities, indices
and interest rates for risk management or investment purposes. These
may include short sales, options, futures contracts, and options on
futures contracts.
The Fund may trade its portfolio securities actively to take advantage
of perceived inefficiencies in the fixed-income markets based on
Schroder's research and analyses regarding market sectors, individual
issuers, and market conditions. The Fund's active trading strategy may
lead to high levels of portfolio turnover, which may involve higher
Fund expenses and tax liability for shareholders.
The Fund will normally maintain an average portfolio duration of
between three and seven years. Portfolio duration is a measure of the
expected life of a fixed income security that was developed as a more
precise alternative to the concept of "term to maturity", and is used
to determine the sensitivity of a security's price to changes in
interest rates.
- PRINCIPAL RISKS.
DEBT SECURITIES. The principal risks of investing in the Fund include
the risk that interest rates will rise or fall in ways not anticipated
by Schroder. For example, if interest rates were to rise, the value of
fixed-income securities held by the Fund would typically fall.
Securities having longer durations would tend to experience greater
price declines in response to rising interest rates. If the Fund's
portfolio duration is relatively long at a time when interest rates
were to rise, the value of the Fund's shares would likely fall more
than if the Fund had invested in securities with shorter durations. By
contrast, if interest rates were to fall, the value of fixed-income
securities held by the Fund would typically rise. Securities having
shorter durations would tend to experience smaller price increases in
response to falling interest rates. If the Fund's portfolio duration
is relatively short at a time
<PAGE>
when interest rates were to decline, the value of the Fund's shares
would likely rise less than if the Fund had invested in securities
with longer durations.
The Fund is also subject to the risk that the issuer of a fixed-income
security will have its credit rating downgraded or will be unable to
pay its obligations when due. This could cause the Fund's portfolio
securities to decline in value, especially where an issuer defaults on
its obligations.
JUNK BONDS. The Fund may invest up to 35% of its assets in securities
rated below investment grade (sometimes referred to as "junk bonds").
Lower-rated securities lack outstanding investment characteristics and
have speculative characteristics and are subject to greater credit and
market risks than higher-rated securities. The lower ratings of such
securities reflect a greater possibility that adverse changes in the
financial condition of the issuer or in general economic conditions,
or an unanticipated rise in interest rates, may impair the ability of
the issuer to make payments of interest and principal. The values of
lower rated securities held by the Fund may be more volatile than
those of higher rated securities.
MORTGAGE-BACKED SECURITIES. The Fund's investment in mortgage-backed
securities may involve special risks relating to unscheduled
prepayment on the mortgages underlying the securities. Falling
interest rates tend to increase prepayments, which could significantly
shorten the effective maturities of mortgage-backed securities.
Similarly, rising interest rates tend to reduce prepayments, which
could significantly lengthen the effective maturities. When interest
rates decline, significant unscheduled prepayments on the underlying
mortgages would have to be reinvested at the then-prevailing lower
rates. Therefore, the Fund's mortgage-backed securities may have less
potential for capital appreciation during periods of falling interest
rates than other fixed-income securities of comparable maturities.
However, the securities have a comparable risk of decline in market
value during periods of rising interest rates. The Fund's investments
in other types of asset-backed securities are subject to risks similar
to those associated with mortgage-backed securities.
SHORT SALES. The Fund may sell securities short. The Fund may sell a
security short and borrow the same security from a broker or other
institution to complete the sale when Schroder anticipates that the
price of the security will decline, or when Schroder attempts to take
advantage of temporary disparities in pricing in the fixed-income
securities markets. Short positions may result in a loss if the market
price of the security in question increases between the date when the
Fund enters into the short position and the date when the Fund closes
the short position, or if a portfolio strategy of which the short
position is a part is otherwise unsuccessful.
FOREIGN SECURITIES. Investments in foreign securities entail risks not
present in domestic investments including, among others, risks related
to political or economic instability, currency exchange, and taxation.
Investments in securities
<PAGE>
of issuers in developing countries may experience high levels of
volatility. Risks of investing in such countries include greater
political and economic instability than in foreign developed markets,
currency transfer restrictions, a more limited number of potential
buyers, and uncertainties associated with dependence on revenue from
particular commodities or international aid.
ACTIVE TRADING STRATEGY. The Fund is also subject to the risk that
Schroder's active trading strategy will not be successful, which
depends greatly on Schroder's ability to analyze and identify
inefficiencies accurately in fixed-income markets, sectors and
issuers, and to predict market movements generally.
DERIVATIVES. The Fund's use of derivative instruments involves the
risk that the instrument may not work as intended due to unanticipated
developments in market conditions or other causes. Derivatives often
involve the risk that the other party to the transaction will be
unable to meet its obligations or that the Fund will be unable to
close out the position at any particular time or at an acceptable
price. When the Fund uses derivatives for investment purposes, it
could lose more than the original cost of the investment and its
potential loss could be unlimited. Also, suitable derivative
transactions may not be available in all circumstances, and there can
be no assurance that the Fund will engage in these transactions when
that would be beneficial.
In the future, the Fund's investment objective and strategies may be
changed solely by vote of the Trustees.
If you have any questions regarding these matters, please contact
Schroder at (800) 464-3108.
June 14, 2000
<PAGE>
SCHRODER SERIES TRUST
PROSPECTUS SUPPLEMENT
To Advisor Shares Prospectus dated March 1, 2000
SCHRODER LARGE CAPITALIZATION EQUITY FUND
(1) The information relating to Schroder Large Capitalization Equity
Fund and Mr. Paul Morris is deleted from the table under "Portfolio Managers"
on page 15 of the Prospectus. Investment decisions for that Fund are made by
Schroder's U.S. equity investment team.
(2) The Board of Trustees of Schroder Series Trust has approved an
Agreement and Plan of Reorganization pursuant to which Schroder Large
Capitalization Equity Fund would merge into Schroder U.S. Diversified Growth
Fund, a series of Schroder Capital Funds (Delaware). If shareholders of
Schroder Large Capitalization Equity Fund likewise approve the Agreement and
Plan of Reorganization, it is expected that the merger will occur in September,
2000.
INVESTMENT GRADE INCOME FUND
The Board of Trustees of Schroder Investment Grade Income Fund has
approved a change to the investment objective, and certain investment policies,
of the Fund. The Fund's name would also be changed to "Schroder Total Return
Fixed Income Fund." Implementation of the changes is subject to shareholder
approval of the change to the Fund's investment objective. It is expected that
shareholders will be asked to approve the changes at a shareholder meeting in
the summer of 2000. If shareholders approve the change to the Fund's investment
objective, the information relating to the Fund beginning on pages 6 and 7 of
the Prospectus is expected to read as follows:
- INVESTMENT OBJECTIVE. To seek maximum long-term total return
consistent with preservation of capital.
- PRINCIPAL INVESTMENT STRATEGIES. The Fund normally invests at least
65% of its assets in fixed-income securities that are "investment
grade" quality. To be considered "investment grade," the securities
must be rated (at the time of investment) in one of the four highest
grades by Moody's Investors Service, Inc. or Standard and Poor's
Ratings Services, or determined by Schroder to be of comparable
quality. The Fund may invest the remainder of its assets in securities
rated below investment grade.
The Fund normally expects to invest a substantial portion of its
assets in U.S. Government securities. The Fund may also invest in a
variety of other fixed-income securities, including corporate debt
securities, preferred stocks, and
<PAGE>
money market instruments. The Fund may invest up to 20% of its assets
in debt securities denominated in currencies other than the U.S.
dollar, including up to 10% of its assets in securities of developing
countries and of private issuers in those countries.
The Fund may invest a substantial portion of its assets in mortgage-
backed certificates and other securities representing ownership
interests in mortgage pools, including collateralized mortgage
obligations, and in other types of asset-backed securities. In
addition, the Fund may buy or sell a variety of derivative and related
instruments with respect to fixed-income securities, indices and
interest rates for risk management or investment purposes. These may
include short sales, options, futures contracts, and options on
futures contracts.
The Fund may trade its portfolio securities actively to take advantage
of perceived inefficiencies in the fixed-income markets based on
Schroder's research and analyses regarding market sectors, individual
issuers, and market conditions. The Fund's active trading strategy may
lead to high levels of portfolio turnover, which may involve higher
Fund expenses and tax liability for shareholders.
The Fund will normally maintain an average portfolio duration of
between three and seven years. Portfolio duration is a measure of the
expected life of a fixed income security that was developed as a more
precise alternative to the concept of "term to maturity", and is used
to determine the sensitivity of a security's price to changes in
interest rates.
- PRINCIPAL RISKS.
DEBT SECURITIES. The principal risks of investing in the Fund include
the risk that interest rates will rise or fall in ways not anticipated
by Schroder. For example, if interest rates were to rise, the value of
fixed-income securities held by the Fund would typically fall.
Securities having longer durations would tend to experience greater
price declines in response to rising interest rates. If the Fund's
portfolio duration is relatively long at a time when interest rates
were to rise, the value of the Fund's shares would likely fall more
than if the Fund had invested in securities with shorter durations. By
contrast, if interest rates were to fall, the value of fixed-income
securities held by the Fund would typically rise. Securities having
shorter durations would tend to experience smaller price increases in
response to falling interest rates. If the Fund's portfolio duration
is relatively short at a time when interest rates were to decline, the
value of the Fund's shares would likely rise less than if the Fund had
invested in securities with longer durations.
The Fund is also subject to the risk that the issuer of a fixed-income
security will have its credit rating downgraded or will be unable to
pay its obligations when due. This could cause the Fund's portfolio
securities to decline in value, especially where an issuer defaults on
its obligations.
<PAGE>
JUNK BONDS. The Fund may invest up to 35% of its assets in securities
rated below investment grade (sometimes referred to as "junk bonds").
Lower-rated securities lack outstanding investment characteristics and
have speculative characteristics and are subject to greater credit and
market risks than higher-rated securities. The lower ratings of such
securities reflect a greater possibility that adverse changes in the
financial condition of the issuer or in general economic conditions,
or an unanticipated rise in interest rates, may impair the ability of
the issuer to make payments of interest and principal. The values of
lower rated securities held by the Fund may be more volatile than
those of higher rated securities.
MORTGAGE-BACKED SECURITIES. The Fund's investment in mortgage-backed
securities may involve special risks relating to unscheduled
prepayment on the mortgages underlying the securities. Falling
interest rates tend to increase prepayments, which could significantly
shorten the effective maturities of mortgage-backed securities.
Similarly, rising interest rates tend to reduce prepayments, which
could significantly lengthen the effective maturities. When interest
rates decline, significant unscheduled prepayments on the underlying
mortgages would have to be reinvested at the then-prevailing lower
rates. Therefore, the Fund's mortgage-backed securities may have less
potential for capital appreciation during periods of falling interest
rates than other fixed-income securities of comparable maturities.
However, the securities have a comparable risk of decline in market
value during periods of rising interest rates. The Fund's investments
in other types of asset-backed securities are subject to risks similar
to those associated with mortgage-backed securities.
SHORT SALES. The Fund may sell securities short. The Fund may sell a
security short and borrow the same security from a broker or other
institution to complete the sale when Schroder anticipates that the
price of the security will decline, or when Schroder attempts to take
advantage of temporary disparities in pricing in the fixed-income
securities markets. Short positions may result in a loss if the market
price of the security in question increases between the date when the
Fund enters into the short position and the date when the Fund closes
the short position, or if a portfolio strategy of which the short
position is a part is otherwise unsuccessful.
FOREIGN SECURITIES. Investments in foreign securities entail risks not
present in domestic investments including, among others, risks related
to political or economic instability, currency exchange, and taxation.
Investments in securities of issuers in developing countries may
experience high levels of volatility. Risks of investing in such
countries include greater political and economic instability than in
foreign developed markets, currency transfer restrictions, a more
limited number of potential buyers, and uncertainties associated with
dependence on revenue from particular commodities or international
aid.
ACTIVE TRADING STRATEGY. The Fund is also subject to the risk that
Schroder's active trading strategy will not be successful, which
depends greatly on Schroder's
<PAGE>
ability to analyze and identify inefficiencies accurately in fixed-
income markets, sectors and issuers, and to predict market movements
generally.
DERIVATIVES. The Fund's use of derivative instruments involves the
risk that the instrument may not work as intended due to unanticipated
developments in market conditions or other causes. Derivatives often
involve the risk that the other party to the transaction will be
unable to meet its obligations or that the Fund will be unable to
close out the position at any particular time or at an acceptable
price. When the Fund uses derivatives for investment purposes, it
could lose more than the original cost of the investment and its
potential loss could be unlimited. Also, suitable derivative
transactions may not be available in all circumstances, and there can
be no assurance that the Fund will engage in these transactions when
that would be beneficial.
In the future, the Fund's investment objective and strategies may be
changed solely by vote of the Trustees.
If you have any questions regarding these matters, please contact
Schroder at (800) 464-3108.
June 14, 2000
