<PAGE>
MARKED TO INDICATE CHANGES FROM POST-EFFECTIVE
AMENDMENTS NO. 1 AND 7
As filed with the Securities and Exchange Commission on March 13, 1996
Securities Act File No. 33-79858
Investment Company Act of 1940 File No. 811-8544
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 8 /X/
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 9 /X/
--------------
UAM FUNDS TRUST
(Exact Name of Registrant)
c/o United Asset Management Corporation
One International Place
Boston, Massachusetts 02110
(Address of Principal Executive Office)
Registrant's Telephone Number (617) 330-8900
Karl O. Hartmann
c/o Chase Global Funds Services Company
73 Tremont Street, Boston, MA 02108
(Name and Address of Agent for Service)
--------------
COPY TO:
Audrey C. Talley, Esq.
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
IT IS PROPOSED THAT THIS FILING BECOME EFFECTIVE
(CHECK APPROPRIATE BOX):
x Immediately upon filing pursuant to Paragraph (b)
o on (date) pursuant to Paragraph (b)
o 60 days after filing pursuant to paragraph (a) (1)
o on (date) pursuant to paragraph (a) (1)
o 75 days after filing pursuant to Paragraph (a) (2)
o on (date) pursuant to Paragraph (a) (2) of Rule 485.
REGISTRANT HAS PREVIOUSLY ELECTED AND HEREBY CONTINUES ITS ELECTION TO
REGISTER AN INDEFINITE NUMBER OF SHARES PURSUANT TO REGULATION 24F-2 UNDER
THE INVESTMENT COMPANY ACT OF 1940 AS AMENDED. REGISTRANT FILED ITS RULE
24F-2 NOTICE FOR THE FISCAL YEAR ENDED APRIL 30, 1995 ON JUNE 28, 1995.
<PAGE>
UAM FUNDS TRUST
FORM N-1A CROSS REFERENCE
<TABLE>
<CAPTION>
FORM N-1A ITEM NUMBER LOCATION IN PROSPECTUS
- --------------------- ----------------------
<S> <C>
Item 1. Cover Page...........................................Cover Page
Item 2. Synopsis.............................................Fees and Expenses; Summary:
About the Portfolio; Risk Factors
Item 3. Condensed Financial Information......................Financial Highlights
Item 4. General Description of Registrant....................Summary: About the Portfolio;
Risk Factors; Details on
Investment Policies, General Fund Information
Item 5. Management of the Fund...............................Summary: About the Portfolio; Fund
Management and Administration
Item 5A. Management's Discussion of
Fund Performance.....................................Included in Registrant's April 30, 1995
Annual Reports to Shareholders
Item 6. Capital Stock and Other Securities...................Buying, Selling and Exchanging Shares;
How Share Prices are Determined;
Dividends, Capital Gains
Distributions and Taxes
Item 7. Purchase of Securities Being Offered.................Buying, Selling and Exchanging Shares
Item 8. Redemption or Repurchase.............................Buying, Selling and Exchanging Shares
Item 9. Pending Legal Proceedings............................Not Applicable
</TABLE>
<TABLE>
<CAPTION>
LOCATION IN STATEMENT
FORM N-1A ITEM NUMBER OF ADDITIONAL INFORMATION
- --------------------- -------------------------
<S> <C>
Item 10. Cover Page...........................................Cover Page
Item 11. Table of Contents....................................Table of Contents
Item 12. General Information and History......................Investment Objectives and
Policies; General Information
Item 13. Investment Objectives and Policies...................Investment Objectives and
Policies; Investment Limitations
Item 14. Management of the Fund...............................Management of the Fund
Item 15. Control Persons and Principal
Holders of Securities................................Management of the Fund
Item 16. Investment Advisory and Other Services...............Investment Adviser
Item 17. Brokerage Allocation and Other Practices.............Portfolio Transactions
Item 18. Capital Stock and Other Securities...................General Information
Item 19. Purchase, Redemption and Pricing of
Securities Being Offered.............................Purchase of Shares; Redemption
of Shares
Item 20. Tax Status...........................................General Information; Federal Taxes
Item 21. Underwriters.........................................Management of the Fund
Item 22. Calculation of Performance Data......................Performance Calculations
Item 23. Financial Statements.................................Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate item so numbered in Part C to this Registration Statement.
<PAGE>
UAM FUNDS TRUST
POST-EFFECTIVE AMENDMENT NO. 8
PART A
The following Prospectuses are incorporated by reference to Post-Effective
Amendment No. 7 filed on August 28, 1995:
- - Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares
- - Chicago Asset Management Value/Contrarian Portfolio Institutional Class
Shares
- - MJI Global Bond Portfolio Institutional Class Shares
- - MJI International Equity Portfolio Institutional Class Shares
The following Prospectuses are also incorporated by reference to
Post-Effective Amendment No. 4 filed on February 9, 1995:
- - Hanson Equity Portfolio Institutional Class Shares
- - BHM&S Total Return Bond Portfolio Institutional Class Shares
- - BHM&S Total Return Bond Portfolio Institutional Service Class Shares
The following Prospectus is also incorporated by reference to Post-Effective
Amendment No. 3 filed on December 14, 1994:
- - IRC Enhanced Index Portfolio Institutional Class Shares
The following Prospectus is also incorporated by reference to Post-Effective
Amendment No. 2 filed on November 25, 1994:
- - Dwight Principal Preservation Portfolio Institutional Class Shares
The following Prospectuses are also incorporated by reference to
Post-Effective Amendment No. 1 filed on November 15, 1994:
- - Newbold's Equity Portfolio Institutional Class Shares
- - TJ Core Equity Portfolio Institutional Service Class Shares
<PAGE>
UAM FUNDS TRUST (THE "FUND")
PART A
The Prospectuses for the Newbold's Equity Portfolio and the TJ Core
Equity Portfolio (the "Portfolios") each dated January 29, 1995, as
supplemented October 31, 1995, are incorporated herein by reference to
Post-Effective Amendment No. 1 to Registrant's Registration Statement on Form
N-1A (File No. 33-79858) filed with the Securities and Exchange Commission on
November 15, 1994. Each Prospectus is supplemented by its respective
Financial Highlights as of February 29, 1996 filed herein to comply with the
Fund's undertaking to file a post-effective amendment containing reasonably
current financial statements which need not be audited within four to six
months of the commencement of the Portfolios.
<PAGE>
UAM FUNDS TRUST
NEWBOLD'S EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
SUPPLEMENT DATED MARCH 13, 1996 TO THE PROSPECTUS DATED JANUARY 29, 1995
FINANCIAL HIGHLIGHTS
(Unaudited)
The following table provides financial highlights for the Newbold's
Equity Portfolio (the "Portfolio") throughout the period presented and is
part of the Portfolio's unaudited financial statements for the period ended
February 29, 1996 which is included in the Portfolio's Statement of
Additional Information. The Statement of Additional Information and the
financial statements therein are available at no cost and can be requested by
writing to the address or calling the telephone number on the cover of the
Prospectus. The following should be read in conjunction with the financial
statements including the notes thereto.
September 13, 1995*
to February 29, 1996
(Unaudited)
- ------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
- ------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income.......................... 0.12+
Net Realized and Unrealized Gain on
Investments................................ 0.59
- ------------------------------------------------------------------------------
Total from Investment Operations............... 0.71
- ------------------------------------------------------------------------------
DISTRIBUTION
Net Investment Income.......................... (0.07)
Net Realized Gain.............................. (0.02)
- ------------------------------------------------------------------------------
Total Distributions........................ (0.09)
- ------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD................. $10.62
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL RETURN................................... 7.17%++
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (Thousands).......... $12,964
Ratio of Net Expenses to Average Net Assets.... 0.90%**+
Ratio of Net Investment Income to Average
Net Assets.................................. 2.63%**+
Portfolio Turnover Rate........................ 66%
- ------------------------------------------------------------------------------
* Commencement of Operations
** Annualized
+ Net of voluntarily waived fees and expenses assumed by the Adviser of
$0.04 per share for the period ended February 29, 1996.
++ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.
<PAGE>
UAM FUNDS TRUST
TJ CORE EQUITY PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
SUPPLEMENT DATED MARCH 13, 1996 TO THE PROSPECTUS DATED JANUARY 29, 1995
FINANCIAL HIGHLIGHTS
(Unaudited)
The following table provides financial highlights for the TJ Core Equity
Portfolio (the "Portfolio") throughout the period presented and is part of
the Portfolio's unaudited financial statements for the period ended February
29, 1996 which is included in the Portfolio's Statement of Additional
Information. The Statement of Additional Information and the financial
statements therein are available at no cost and can be requested by writing
to the address or calling the telephone number on the cover of the
Prospectus. The following should be read in conjunction with the financial
statements including the notes thereto.
September 13, 1995*
to February 29, 1996
(Unaudited)
- ------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
- ------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income.......................... 0.06+
Net Realized and Unrealized Gain/Loss
on Investments............................. 0.71
- ------------------------------------------------------------------------------
Total from Investment Operations........... 0.77
- ------------------------------------------------------------------------------
DISTRIBUTION
Net Investment Income.......................... (0.03)+
- ------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD................. $10.74
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL RETURN................................... 7.72%++
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (Thousands).......... $958
Ratio of Expenses to Average Net Assets........ 1.25%**+
Ratio of Net Investment Income to Average
Net Assets.................................. 1.46%**+
Portfolio Turnover Rate........................ 8%
- ------------------------------------------------------------------------------
* Commencement of Operations
** Annualized
+ Net of voluntarily waived fees and expenses assumed by the Adviser of
$0.48 per share for the period ended February 29, 1996.
++ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.
<PAGE>
UAM FUNDS TRUST
POST-EFFECTIVE AMENDMENT NO. 8
PART B
Statements of Additional Information included in this Post-Effective
Amendment No. 8:
- - Newbold's Equity Portfolio Institutional Class Shares
- - TJ Core Equity Portfolio Institutional Service Class Shares
The following Statements of Additional Information are also incorporated by
reference to Post-Effective Amendment No. 7:
- - Chicago Asset Management Intermediate Bond Portfolio Institutional Class
Shares
- - Chicago Asset Management Value/Contrarian Portfolio Institutional Class
Shares
- - MJI Global Bond Portfolio Institutional Class Shares
- - MJI International Equity Portfolio Institutional Class Shares
The following Statements of Additional Information are also incorporated by
reference to Post-Effective Amendment No. 4:
- - Hanson Equity Portfolio Institutional Class Shares
- - BHM&S Total Return Bond Portfolio Institutional Class Shares and
Institutional Service Class Shares
The following Statement of Additional Information is also incorporated by
reference to Post-Effective Amendment No. 3 filed on December 14, 1994:
- - IRC Enhanced Index Portfolio Institutional Class Shares
The following Statement of Additional Information is also incorporated by
reference to Post-Effective Amendment No. 2 filed on November 25, 1994:
- - Dwight Principal Preservation Portfolio Institutional Class Shares
<PAGE>
PART B
UAM FUNDS
NEWBOLD'S EQUITY PORTFOLIO
INSTITUTIONAL CLASS SHARES
STATEMENT OF ADDITIONAL INFORMATION
January 29, 1995, as amended March 13, 1996
This Statement is not a Prospectus but should be read in conjunction with the
Prospectus of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the
Newbold's Equity Portfolio Institutional Class Shares dated January 29, 1995.
To obtain the Prospectus, please call the UAM Funds Service Center:
1-800-638-7983
Table of Contents
PAGE
----
Investment Objective and Policies................................. 2
Purchase of Shares................................................ 5
Redemption of Shares.............................................. 5
Shareholder Services.............................................. 6
Investment Limitations............................................ 6
Management of the Fund............................................ 7
Investment Adviser................................................ 9
Portfolio Transactions............................................ 10
Performance Calculations.......................................... 10
General Information............................................... 13
Financial Statements.............................................. 14
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the investment objective and policies
of the Newbold's Equity Portfolio as set forth in the Prospectus for the
Portfolio:
SECURITIES LENDING
The Portfolio may lend its investment securities to qualified
institutional investors who need to borrow securities in order to complete
certain transactions, such as covering short sales, avoiding failures to
deliver securities or completing arbitrage operations. By lending its
investment securities, the Portfolio attempts to increase its income through
the receipt of interest on the loan. Any gain or loss in the market price of
the securities loaned that might occur during the term of the loan would be
for the account of the Portfolio. The Portfolio may lend its investment
securities to qualified brokers, dealers, domestic and foreign banks or other
financial institutions, so long as the terms, the structure and the aggregate
amount of such loans are not inconsistent with the Investment Company Act of
1940, as amended, (the "1940 Act") or the Rules and Regulations or
interpretations of the Securities and Exchange Commission (the "Commission")
thereunder, which currently require that (a) the borrower pledge and maintain
with the Portfolio collateral consisting of cash, an irrevocable letter of
credit issued by a domestic U.S. bank or securities issued or guaranteed by
the United States Government having a value at all times not less than 100%
of the value of the securities loaned, (b) the borrower add to such
collateral whenever the price of the securities loaned rises (i.e., the
borrower "marks to the market" on a daily basis), (c) the loan be made
subject to termination by the Portfolio at any time, and (d) the Portfolio
receives reasonable interest on the loan (which may include the Portfolio
investing any cash collateral in interest bearing short-term investments).
All relevant facts and circumstances, including the creditworthiness of the
broker, dealer or institution, will be considered in making decisions with
respect to the lending of securities, subject to review by the Board of
Trustees.
At the present time, the Staff of the Commission does not object if an
investment company pays reasonable negotiated fees in connection with loaned
securities so long as such fees are set forth in a written contract and
approved by the investment company's Board of Trustees. The Portfolio will
continue to retain any voting rights with respect to the loaned securities.
If a material event occurs affecting an investment on a loan, the loan must
be called and the securities voted.
HEDGING STRATEGIES
The Portfolio may engage in various portfolio strategies to hedge against
adverse movements in the equity markets. The Portfolio may buy or sell
futures contracts, write (i.e., sell) covered call options on its portfolio
securities, purchase put and call options on securities and engage in
transactions in related options on such futures. Each of these portfolio
strategies is described below. Although certain risks are involved in
options and futures transactions, the Adviser believes that, because the
Portfolio will engage in options and futures transactions only for hedging
purposes, the options and futures portfolio strategies of the Portfolio will
not subject it to the risks frequently associated with the speculative use of
options and futures transactions. While the Portfolio's use of hedging
strategies is intended to reduce the volatility of the net asset value of the
Portfolio shares, the Portfolio's net asset value will fluctuate. There can
be no assurance that the Portfolio's hedging transactions will be effective.
Also, the Portfolio may not necessarily be engaging in hedging activities
when movements in any particular equity market occur.
FUTURES CONTRACTS
The Portfolio may enter into futures contracts for the purposes of
hedging, remaining fully invested and reducing transactions costs. Futures
contracts provide for the future sale by one party and purchase by another
party of a specified amount of a specific security at a specified future time
and at a specified price. Futures contracts which are standardized as to
maturity date and underlying financial instrument are traded on national
futures exchanges. Futures exchanges and trading are regulated under the
Commodity Exchange Act by the Commodity Futures Trading Commission ("CFTC"),
a U.S. Government agency.
Although futures contracts by their terms call for actual delivery or
acceptance of the underlying securities, in most cases the contracts are
closed out before the settlement date without the making or taking of
delivery. Closing out an open futures position is done by taking an opposite
position ("buying" a contract which has previously been "sold" or "selling" a
contract previously "purchased") in an identical contract to terminate the
position. Brokerage commissions are incurred when a futures contract is
bought or sold.
Futures traders are required to make a good faith margin deposit in cash
or acceptable securities with a broker or custodian to initiate and maintain
open positions in futures contracts. A margin deposit is intended to assure
completion of
2
<PAGE>
the contract (delivery or acceptance of the underlying security) if it is not
terminated prior to the specified delivery date. Minimal initial margin
requirements are established by the futures exchange and may be changed.
Brokers may establish deposit requirements which are higher than the exchange
minimums. Futures contracts are customarily purchased and sold on margin
that may range upward from less than 5% of the value of the contract being
traded. After a futures contract position is opened, the value of the
contract is marked to market daily. If the futures contract price changes to
the extent that the margin on deposit does not satisfy margin requirements,
payment of additional "variation" margin will be required. Conversely, change
in the contract value may reduce the required margin, resulting in a
repayment of excess margin to the contract holder. Variation margin payments
are made to and from the futures broker for as long as the contract remains
open. The Portfolio expects to earn interest income on its margin deposits.
Traders in futures contracts may be broadly classified as either
"hedgers" or "speculators". Hedgers use the futures markets primarily to
offset unfavorable changes in the value of securities otherwise held for
investment purposes or expected to be acquired by them. Speculators are less
inclined to own the securities underlying the futures contracts which they
trade and use futures contracts with the expectation of realizing profits
from a fluctuation in interest rates. The Portfolio intends to use futures
contracts only for hedging purposes.
Regulations of the CFTC applicable to the Fund require that all of its
futures transactions constitute bona fide straddles or that the Fund's
commodity futures and option positions be for other purposes, to the extent
that the aggregate initial margins and premiums required to establish such
non-hedging positions do not exceed five percent of the liquidation value of
the Portfolio. The Portfolio will only sell futures contracts to protect
securities it owns against price declines or purchase contracts to protect
against an increase in the price of securities it intends to purchase. As
evidence of this hedging interest, the Portfolio expects that approximately
75% of its futures contracts purchases will be "completed", that is,
equivalent amounts of related securities will have been purchased or will be
purchased by the Portfolio on the settlement date of the futures contracts.
Although techniques other than the sale and purchase of futures contracts
could be used to control the Portfolio's exposure to market fluctuations, the
use of futures contracts may be a more effective means of hedging this
exposure. While the Portfolio will incur commission expenses in both opening
and closing out futures positions, these costs are lower than transaction
costs incurred in the purchase and sale of the underlying securities.
RESTRICTIONS ON THE USE OF FUTURES CONTRACTS
The Portfolio will not enter into futures contract transactions to the
extent that, immediately thereafter, the sum of its initial margin deposits
on open contracts exceeds 5% of the market value of its total assets. In
addition, the Portfolio will not enter into futures contracts to the extent
that its outstanding obligations to purchase securities under these contracts
would exceed 20% of its total assets.
RISK FACTORS IN FUTURES TRANSACTIONS
The Portfolio will minimize the risk that it will be unable to close out
a futures position by only entering into futures which are traded on national
futures exchanges and for which there appears to be a liquid secondary
market. However, there can be no assurance that a liquid secondary market
will exist for a particular futures contract at any given time. However,
there can be no assurance that a liquid secondary market will exist for any
particular futures contract at any specific time. Thus, it may not be
possible to close a futures position. In the event of adverse price
movements, the Portfolio would continue to be required to make daily cash
payments to maintain its required margin. In such situations, if the
Portfolio has insufficient cash, it may have to sell securities to meet daily
margin requirements at a time when it may be disadvantageous to do so. In
addition, the Portfolio may be required to make delivery of the instruments
underlying futures contracts it holds. The inability to close futures
positions also could have an adverse impact on the Portfolio's ability to
effectively hedge.
The risk of loss in trading futures contracts in some strategies can be
substantial due both to the low margin deposits required and the extremely
high degree of leverage involved in futures pricing. As a result, a
relatively small price movement in a futures contract may result in immediate
and substantial loss (as well as gain) to the investor. For example, if at
the time of purchase, 10% of the value of the futures contract is deposited
as margin, a subsequent 10% decrease in the value of the futures contract
would result in a total loss of the margin deposit, before any deduction for
the transaction costs, if the account were then closed out. A 15% decrease
would result in a loss equal to 150% of the original margin deposit if the
contract were closed out. Thus, a purchase or sale of a futures contract may
result in excess of the amount invested in the contract. However, because
the futures strategies of the Portfolio are engaged in only for hedging
purposes, the Adviser does not believe that the Portfolio is subject to the
risks of loss frequently associated with futures transactions. The Portfolio
3
<PAGE>
would presumably have sustained comparable losses if, instead of the futures
contract, it had invested in the underlying financial instrument and sold it
after the decline.
Utilization of futures transactions by the Portfolio does involve the
risk of imperfect or no correlation where the securities underlying the
futures contracts have different maturities than the portfolio securities
being hedged. It is also possible that the Portfolio could lose money on
futures contracts and also experience a decline in value of portfolio
securities. There is also the risk of loss by the Portfolio of margin
deposits in the event of bankruptcy of a broker with whom the Portfolio has
an open position in a futures contract or related option.
Most futures exchanges limit the amount of fluctuation permitted in
futures contract prices during a single trading day. The daily limit
establishes the maximum amount that the price of a futures contract may vary
either up or down from the previous day's settlement price at the end of a
trading session. Once the daily limit has been reached in a particular type
of contract, no trades may be made on that day at a price beyond that limit.
The daily limit governs only price movement during a particular trading day
and, therefore, does not limit potential losses because the limit may prevent
the liquidation of unfavorable positions. Futures contract prices have
occasionally moved to the daily limit for several consecutive trading days
with little or no trading thereby preventing prompt liquidation of futures
positions and subjecting some futures traders to substantial losses.
Futures contracts may be traded on foreign exchanges. Such transactions
are subject to the risks of governmental actions affecting trading in or the
prices of the securities. The value of such positions also could be
adversely affected by (i) other complex foreign political and economic
factors, (ii) lesser availability than in the United States of data on which
to make trading decisions, (iii) delays in the Portfolio's ability to act
upon economic events occurring in foreign markets during nonbusiness hours in
the United States, (iv) the imposition of different exercise and settlement
terms and procedures and margin requirements than in the United States, and
(v) lesser trading volume.
OPTIONS
The Portfolio may purchase and sell put and call options on securities
and futures contracts for hedging purposes. Investments in options involve
some of the same considerations that are involved in connection with
investments in futures contracts (e.g., the existence of a liquid secondary
market). In addition, the purchase of an option also entails the risk that
changes in the value of the underlying security or contract will not be fully
reflected in the value of the option purchased. Depending on the pricing of
the option compared to either the futures contract on which it is based or
the price of the securities being hedged, an option may or may not be less
risky than ownership of the futures contract or such securities. In general,
the market prices of options can be expected to be more volatile than the
market prices on the underlying futures contract or securities.
WRITING COVERED CALL OPTIONS
The principal reason for writing call options is to attempt to realize,
through the receipt of premiums, a greater return than would be realized on
securities alone. By writing covered call options, the Portfolio gives up
the opportunity, while the option is in effect, to profit from any price
increase in the underlying security above the option exercise price. In
addition, the Portfolio's ability to sell the underlying security will be
limited while the option is in effect unless the Portfolio effects a closing
purchase transaction. A closing purchase transaction cancels out the
Portfolio's position as the writer of an option by means of an offsetting
purchase of an identical option prior to the expiration of the option it has
written. Covered call options serve as a partial hedge against the price of
the underlying security declining. The Portfolio writes only covered options,
which means that so long as the Portfolio is obligated as the writer of the
option it will, in a segregated account with its custodian, maintain cash,
U.S. government securities or other high grade liquid debt securities
denominated in U.S. dollars with a value equal to or greater than the
exercise price of the underlying securities.
PURCHASING OPTIONS
The amount of any appreciation in the value of the underlying security
subject to a put will be partially offset by the amount of the premium paid
for the put option and any related transaction costs. Prior to its
expiration, a put option may be sold in a closing sale transaction and profit
or loss from a sale will depend on whether the amount received is more or
less than the premium paid for the put option plus the related transaction
costs. A closing sale transaction cancels out the Portfolio's position as
purchaser of an option by means of an offsetting sale of an identical option
prior to the expiration of the option it has purchased. In certain
circumstances, the Portfolio may purchase call options on securities held in
its investment portfolio on which it has written call options or on
securities which it intends to purchase.
4
<PAGE>
PURCHASE OF SHARES
Shares of the Portfolio may be purchased without sales commission at the
net asset value per share next determined after an order is received in
proper form by the Fund, and payment is received by the Fund's custodian.
The minimum initial investment required for the Portfolio is $100,000 with
certain exceptions as may be determined from time to time by the officers of
the Fund. An order received in proper form prior to the 4:00 p.m. close of
the New York Stock Exchange (the "Exchange") will be executed at the price
computed on the date of receipt; and an order received not in proper form or
after the 4:00 p.m. close of the Exchange will be executed at the price
computed on the next day the Exchange is open after proper receipt. The
Exchange will be closed on the following days: Good Friday, April 5, 1996;
Memorial Day, May 27, 1996; and Independence Day, July 4, 1996.
The Portfolio reserves the right in its sole discretion (1) to suspend
the offering of its shares, (2) to reject purchase orders when in the
judgment of management such rejection is in the best interests of the Fund,
and (3) to reduce or waive the minimum for initial and subsequent investment
for certain fiduciary accounts such as employee benefit plans or under
circumstances where certain economies can be achieved in sales of the
Portfolio's shares.
REDEMPTION OF SHARES
The Portfolio may suspend redemption privileges or postpone the date of
payment (1) during any period that both the Exchange and custodian bank are
closed or trading on the Exchange is restricted as determined by the
Commission, (2) during any period when an emergency exists as defined by the
rules of the Commission as a result of which it is not reasonably practicable
for the Portfolio to dispose of securities owned by it or to fairly determine
the value of its assets, and (3) for such other periods as the Commission may
permit. The Fund has made an election with the Commission to pay in cash all
redemptions requested by any shareholder of record limited in amount during
any 90-day period to the lesser of $250,000 or 1% of the net assets of the
Fund at the beginning of such period. Such commitment is irrevocable without
the prior approval of the Commission. Redemptions in excess of the above
limits may be paid, in whole or in part, in investment securities or in cash
as the Board of Trustees may deem advisable; however, payment will be made
wholly in cash unless the Board of Trustees believe that economic or market
conditions exist which would make such a practice detrimental to the best
interests of the Fund. If redemptions are paid in investment securities,
such securities will be valued as set forth in the Prospectus under "How
Share Prices are Determined", and a redeeming shareholder would normally
incur brokerage expenses if those securities were converted to cash.
No charge is made by the Portfolio for redemptions. Any redemption may
be more or less than the shareholder's initial cost depending on the market
value of the securities held by the Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services Company
(the "Administrator") from fraud, signature guarantees are required for
certain redemptions. Signature guarantees are required for (1) redemptions
where the proceeds are to be sent to someone other than the registered
shareowner(s) or the registered address or (2) share transfer requests. The
purpose of signature guarantees is to verify the identity of the party who
has authorized a redemption.
Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions,
national securities exchanges, registered securities associations, clearing
agencies and savings associations. A complete definition of eligible
guarantor institution is available from the Administrator. Broker-dealers
guaranteeing signatures must be a member of a clearing corporation or
maintain net capital of at least $100,000. Credit unions must be authorized
to issue signature guarantees. Signature guarantees will be accepted from any
eligible guarantor institution which participates in a signature guarantee
program.
The signature guarantee must appear either: (1) on the written request
for redemption; (2) on a separate instrument for assignment ("stock power")
which should specify the total number of shares to be redeemed; or (3) on all
stock certificates tendered for redemption and, if shares held by the Fund
are also being redeemed, on the letter or stock power.
5
<PAGE>
SHAREHOLDER SERVICES
The following supplements the shareholder services information set forth
in the Newbold's Equity Portfolio's Prospectus:
EXCHANGE PRIVILEGE
Institutional Class Shares of the Newbold's Equity Portfolio may be
exchanged for any other Institutional Class Shares of a Portfolio included
within the UAM Funds which is comprised of the Fund and UAM Funds, Inc. (See
the list of Portfolios of the UAM Funds - Institutional Class Shares at the
end of the Prospectus.) Exchange requests should be made by calling the Fund
(1-800-638-7983) or by writing to UAM Funds, UAM Funds Service Center, c/o
Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798.
The exchange privilege is only available with respect to Portfolios that are
registered for sale in the shareholder's state of residence.
Any such exchange will be based on the respective net asset values of the
shares involved. There is no sales commission or charge of any kind. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. You
may obtain a Prospectus for the Portfolio(s) you are interested in by calling
the UAM Funds Service Center at 1-800-638-7983.
Exchange requests may be made either by mail or telephone. Telephone
exchanges will be accepted only if the certificates for the shares to be
exchanged are held by the Fund for the account of the shareholder and the
registration of the two accounts will be identical. Requests for exchanges
received prior to 4:00 p.m. (Eastern Time) will be processed as of the close
of business on the same day. Requests received after 4:00 p.m. will be
processed on the next business day. Neither the Fund nor the Administrator
will be responsible for the authenticity of the exchange instructions
received by telephone. Exchanges may also be subject to limitations as to
amounts or frequency, and to other restrictions established by the Board of
Trustees to assure that such exchanges do not disadvantage the Fund and its
shareholders.
For Federal income tax purposes an exchange between Portfolios is a
taxable event, and, accordingly, a capital gain or loss may be realized. In a
revenue ruling relating to circumstances similar to the Fund's, an exchange
between series of a Fund was also deemed to be a taxable event. It is likely,
therefore, that a capital gain or loss would be realized on an exchange
between Portfolios; you may want to consult your tax adviser for further
information in this regard. The exchange privilege may be modified or
terminated at any time.
TRANSFER OF SHARES
Shareholders may transfer shares of the Portfolio to another person by
making a written request to the Fund. The request should clearly identify the
account and number of shares to be transferred, and include the signature of
all registered owners and all stock certificates, if any, which are subject
to the transfer. The signature on the letter of request, the stock
certificate or any stock power must be guaranteed in the same manner as
described under "Redemption of Shares." As in the case of redemptions, the
written request must be received in good order before any transfer can be
made.
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in the Prospectus.
Whenever an investment limitation sets forth a percentage limitation on
investment or utilization of assets, such limitation shall be determined
immediately after and as a result of the Portfolio's acquisition of such
security or other asset. Accordingly, any later increase or decrease
resulting from a change in values, net assets or other circumstances will not
be considered when determining whether the investment complies with the
Portfolio's investment limitations. Investment limitations (1), (2), (3) and
(4) are classified as fundamental. The Portfolio's fundamental investment
limitations cannot be changed without approval by a "majority of the
outstanding shares" (as defined in the 1940 Act) of the Portfolio. The
Portfolio will not:
(1) invest in physical commodities or contracts on physical commodities;
(2) purchase or sell real estate or real estate limited partnerships,
although it may purchase and sell securities of companies which deal
in real estate and may purchase and sell securities which are secured
by interests in real estate;
6
<PAGE>
(3) make loans except (i) by purchasing debt securities in accordance
with its investment objectives and (ii) by lending its portfolio
securities to banks, brokers, dealers and other financial
institutions so long as such loans are not inconsistent with the 1940
Act or the rules and regulations or interpretations of the Commission
thereunder;
(4) underwrite the securities of other issuers;
(5) invest in futures and/or options on futures unless (i) not more than
5% of the Portfolio's assets are required as deposit to secure
obligations under such futures and/or options on futures contracts
provided, however, that in the case of an option that is in-the-money
at the time of purchase, the in-the-money amount may be excluded in
computing such 5% and (ii) not more than 20% of the Portfolio's
assets are invested in futures and options;
(6) purchase on margin or sell short except as specified in (5) above;
(7) purchase or retain securities of an issuer if those officers and
directors of the Fund or its investment adviser owning more than 1/2
of 1% of such securities together own more than 5% of such
securities;
(8) invest more than an aggregate of 15% of the net assets of the
Portfolio, determined at the time of investment, in securities
subject to legal or contractual restrictions on resale or securities
for which there are no readily available markets;
(9) invest for the purpose of exercising control over management of any
company;
(10) write or acquire options or interests in oil, gas, mineral leases or
other mineral exploration or development programs; and
(11) investment in warrants, valued at the lower of cost or market,
exceeding 5.0% of the value of the Portfolio's net assets. Included
within that amount, but not to exceed 2.0% of the value of the
Portfolio's net assets, may be warrants which are not listed on the
New York or American Stock Exchanges. Warrants acquired by the
Portfolio in units or attached to securities may be deemed to be
without value.
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The Officers of the Fund manage its day-to-day operations and are
responsible to the Fund's Board of Trustees. The Trustees set broad policies
for the Fund and elect its Officers. The following is a list of the Trustees
and Officers of the Fund and a brief statement of their present positions and
principal occupations during the past five years:
MARY RUDIE BARNEBY* Trustee and Executive Vice President of the
1133 Avenue of the Americas Fund; President of Regis Retirement Plan
New York, NY 10036 Services since 1993; Former President of UAM
Fund Distributors, Inc.; Formerly responsible
for Defined Contribution Plan Services at a
division of the Equitable Companies, Dreyfus
Corporation and Merrill Lynch.
JOHN T. BENNETT, JR. Trustee of the Fund; President of Squam
College Road - RFD 3 Investment Management Company, Inc. and Great
Meredith, NH 03253 Island Investment Company, Inc.; President of
Bennett Management Company from 1988 to 1993.
J. EDWARD DAY Trustee of the Fund; Retired Partner in the
5804 Brookside Drive Washington office of the law firm Squire,
Chevy Chase, MD 20815 Sanders & Dempsey; Director, Medical Mutual
Liability Insurance Society of Maryland;
formerly, Chairman of The Montgomery County,
Maryland, Revenue Authority.
PHILIP D. ENGLISH Trustee of the Fund; President and Chief
16 West Madison Street Executive Officer of Broventure Company, Inc.;
Baltimore, MD 21201 Chairman of the Board of Chektec Corporation
and Cyber Scientific, Inc.
7
<PAGE>
WILLIAM A. HUMENUK Trustee of the Fund; Partner in the
4000 Bell Atlantic Tower Philadelphia office of the law firm Dechert
1717 Arch Street Price & Rhoads; Director, Hofler Corp.
Philadelphia, PA 19103
NORTON H. REAMER* Trustee, President and Chairman of the Fund;
One International Place President, Chief Executive Officer and a
Boston, MA 02110 Director of United Asset Management
Corporation; Director, Partner or Trustee of
each of the Investment Companies of the Eaton
Vance Group of Mutual Funds.
PETER M. WHITMAN, JR.* Trustee of the Fund; President and Chief
One Financial Center Investment Officer of Dewey Square Investors
Boston, MA 02111 Corporation ("DSI") since 1988; Director and
Chief Executive Officer of H. T. Investors,
Inc., formerly a subsidiary of DSI.
WILLIAM H. PARK* Vice President and Assistant Treasurer of the
One International Place Fund; Executive Vice President and Chief
Boston, MA 02110 Financial Officer of United Asset Management
Corporation.
ROBERT R. FLAHERTY* Treasurer of the Fund; Second Vice President
73 Tremont Street and Manager of Fund Administration and
Boston, MA 02108 Compliance of the Administrator since March
1995; formerly Senior Manager of Deloitte &
Touche LLP from 1985 to 1995.
KARL O. HARTMANN* Secretary of the Fund; Senior Vice President,
73 Tremont Street Secretary and General Counsel of Administrator;
Boston, MA 02108 Senior Vice President, Secretary and General
Counsel of Leland, O'Brien, Rubinstein
Associates, Inc. from November 1990 to November
1991.
HARVEY M. ROSEN* Assistant Secretary of the Fund; Senior Vice
73 Tremont Street President of the Administrator.
Boston, MA 02108
*This person is deemed to be an "interested person" of the Fund as that term
is defined in the 1940 Act.
REMUNERATION OF TRUSTEES AND OFFICERS
The Fund pays each Trustee, who is not also an officer or affiliated
person, a $150 quarterly retainer fee per active Portfolio which currently
amounts to $1,050 per quarter. In addition, each unaffiliated Trustee
receives a $2,000 meeting fee which is aggregated for all the Trustees and
allocated proportionately among the Portfolios of the Fund, UAM Funds, Inc.
as well as AEW Commercial Mortgage Securities Fund, Inc. and reimbursement
for travel and other expenses incurred while attending Board meetings.
Trustees who are also officers or affiliated persons receive no remuneration
for their service as Trustees. The Fund's officers and employees are paid by
either the Adviser, United Asset Management Corporation ("UAM"), or the
Administrator and receive no compensation from the Fund. The following table
shows aggregate compensation paid to each of the Fund's Trustees by the Fund
and total compensation paid by the Fund, UAM Funds, Inc. and AEW Commercial
Mortgage Securities Fund, Inc. (collectively the "Fund Complex") in the
fiscal year ended April 30, 1995.
8
<PAGE>
COMPENSATION TABLE
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Pension or Total Compensation
Aggregate Retirement Benefits Estimated Annual from Registrant and
Name of Person Compensation Accrued as Part of Benefits Upon Fund Complex Paid to
Position From Registrant* Fund Expenses Retirement Trustees
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr.,
Trustee $1,832 0 0 $24,650
J. Edward Day,
Trustee $1,832 0 0 $24,650
Philip D. English,
Trustee $1,832 0 0 $24,650
William A. Humenuk,
Trustee $1,832 0 0 $24,650
</TABLE>
* Since the Registrant did not complete its first full year since its
organization, the table above represents aggregate compensation on an
annualized basis for the fiscal year ended April 30, 1995.
PRINCIPAL HOLDERS OF SECURITIES
As of February 29, 1996, the following persons or organizations held of
record 5% or more of the shares of the Portfolio: Bryce Douglas Investment
Limited Partnership, Kimberton, PA, 15.6%; David G. Jones M.D., PC,
Allentown, PA, 9.6%; Newbold's/UAM Profit Sharing 401(k) Plan, c/o J.S.
Sadar, 950 Haverford Road, Bryn Mawr, PA, 8.8%; J. Keystone Food Corp.
Salaried Pension Plan, Bala Cynwyd, PA, 8.2%; The Chase Manhattan Bank, N.A.,
Custodian for the IRA Rollover of Warren Pearlman Goldburgh, Lyme, NH,
8.01%*; The Chase Manhattan Bank, N.A., Custodian for the IRA of Joseph F.
Rodgers M.D., Gladwynw, PA, 7.7%*; The Chase Manhattan Bank, N.A., Custodian
for the Rollover IRA of James D. Jamieson, Valley Forge, PA, 7.6%*; Mary Jane
Littlepage, Devon, PA, 6.2%
___________
* Denotes shares held by a trustee trustee or other fiduciary for which
beneficial ownership is disclaimed or presumed disclaimed.
INVESTMENT ADVISER
CONTROL OF ADVISER
Newbold's Asset Management, Inc. (the "Adviser") is a wholly-owned
subsidiary of UAM, a holding company incorporated in Delaware in December
1980 for the purpose of acquiring and owning firms engaged primarily in
institutional investment management. Since its first acquisition in August
1983, UAM has acquired or organized approximately 45 such wholly-owned
affiliated firms (the "UAM Affiliated Firms"). UAM believes that permitting
UAM Affiliated Firms to retain control over their investment advisory
decisions is necessary to allow them to continue to provide investment
management services that are intended to meet the particular needs of their
respective clients.
Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to
operate under their own firm name, with their own leadership and individual
investment philosophy and approach. Each UAM Affiliated Firm manages its own
business independently on a day-to-day basis. Investment strategies employed
and securities selected by UAM Affiliated Firms are separately chosen by each
of them. Several UAM Affiliated Firms also act as investment advisers to
separate series or Portfolios of UAM Funds, Inc., a registered investment
company.
9
<PAGE>
ADVISORY FEES
As compensation for services rendered by the Adviser under the
Investment Advisory Agreement, the Portfolio pays the Adviser an annual fee
in monthly installments, calculated by applying the following annual
percentage rates to the Portfolio's average daily net assets for the month:
Newbold's Equity Portfolio..................................... 0.50%
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreement authorizes the Adviser to select the
brokers or dealers that will execute the purchases and sales of investment
securities for the Portfolio and directs the Adviser to use its best efforts
to obtain the best execution with respect to all transactions for the
Portfolio. The Adviser may, however, consistent with the interests of the
Portfolio, select brokers on the basis of the research, statistical and
pricing services they provide to the Portfolio. Information and research
received from such brokers will be in addition to, and not in lieu of, the
services required to be performed by the Adviser under the Investment
Advisory Agreement. A commission paid to such brokers may be higher than
that which another qualified broker would have charged for effecting the same
transaction, provided that such commissions are paid in compliance with the
Securities Exchange Act of 1934, as amended, and that the Adviser determines
in good faith that such commission is reasonable in terms either of the
transaction or the overall responsibility of the Adviser to the Portfolio and
the Adviser's other clients.
It is not the Fund's practice to allocate brokerage or principal
business on the basis of sales of shares which may be made through
broker-dealer firms. However, the Adviser may place portfolio orders with
qualified broker-dealers who recommend the Portfolio or who act as agents in
the purchase of shares of the Portfolio for their clients. During the fiscal
year ended April 30, 1995, the entire Fund paid brokerage commissions of
approximately $15,000.
Some securities considered for investment by the Portfolio may also be
appropriate for other clients served by the Adviser. If purchases or sales
of securities consistent with the investment policies of the Portfolio and
one or more of these other clients served by the Adviser is considered at or
about the same time, transactions in such securities will be allocated among
the Portfolio and clients in a manner deemed fair and reasonable by the
Adviser. Although there is no specified formula for allocating such
transactions, the various allocation methods used by the Adviser, and the
results of such allocations, are subject to periodic review by the Fund's
Board of Trustees.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may from time to time quote various performance figures to
illustrate past performance. Performance quotations by investment companies
are subject to rules adopted by the Commission, which require the use of
standardized performance quotations or, alternatively, that every
non-standardized performance quotation furnished by the Fund be accompanied
by certain standardized performance information computed as required by the
Commission. Current yield and average annual compounded total return
quotations used by the Fund are based on the standardized methods of
computing performance mandated by the Commission. An explanation of those
and other methods used to compute or express performance follows.
YIELD
Current yield reflects the income per share earned by the Portfolio's
investment. The current yield of the Portfolio is determined by dividing the
net investment income per share earned during a 30-day base period by the
maximum offering price per share on the last day of the period and
annualizing the result. Expenses accrued for the period include any fees
charged to all shareholders during the base period.
This figure is obtained using the following formula:
Yield = 2[( a-b + 1 )(6) - 1]
---
cd
10
<PAGE>
where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that
were entitled to receive income distributions
d = the maximum offering price per share on the last day of the period.
TOTAL RETURN
The average annual total return of the Portfolio is determined by
finding the average annual compounded rates of return over 1, 5 and 10 year
periods that would equate an initial hypothetical $1,000 investment to its
ending redeemable value. The calculation assumes that all dividends and
distributions are reinvested when paid. The quotation assumes the amount was
completely redeemed at the end of each 1, 5 and 10 year period and the
deduction of all applicable Fund expenses on an annual basis.
These figures will be calculated according to the following formula:
P(1+T)(n) = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year periods at the end of the 1,
5 or 10 year periods (or fractional portion thereof).
The cumulative total rate of return for the Newbold's Equity Portfolio
from inception to the date of the financial statements included herein is
7.17%.
COMPARISONS
To help investors better evaluate how an investment in the Portfolio
might satisfy their investment objective, advertisements regarding the Fund
may discuss various measures of Fund performance as reported by various
financial publications. Advertisements may also compare performance (as
calculated above) to performance as reported by other investments, indices
and averages. The following publications, indices and averages may be used:
(a) Dow Jones Composite Average or its component averages - an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow Jones
Industrial Average), 15 utilities company stocks and 20 transportation
stocks. Comparisons of performance assume reinvestment of dividends.
(b) Standard & Poor's 500 Stock Index or its component indices - an
unmanaged index composed of 400 industrial stocks, 40 financial stocks,
40 utilities stocks and 20 transportation stocks. Comparisons of
performance assume reinvestment of dividend.
(c) The New York Stock Exchange composite or component indices - unmanaged
indices of all industrial, utilities, transportation and finance stocks
listed on the New York Stock Exchange.
(d) Wilshire 5000 Equity Index or its component indices - represents the
return on the market value of all common equity securities for which
daily pricing is available. Comparisons of performance assume
reinvestment of dividends.
(e) Lipper - Mutual Fund Performance Analysis and Lipper - Fixed Income
Fund Performance Analysis - measure total return and average current
yield for the mutual fund industry. Rank individual mutual fund
performance over specified time periods, assuming reinvestment of all
distributions, exclusive of any applicable sales charges.
(f) Morgan Stanley Capital International EAFE Index and World Index -
respectively, arithmetic, market value-weighted averages of the
performance of over 900 securities listed on the stock exchanges of
countries in Europe, Australia and the Far East, and over 1,400
securities listed on the stock exchanges of these continents, including
North America.
11
<PAGE>
(g) Goldman Sachs 100 Convertible Bond Index - currently includes 67 bonds
and 33 preferred. The original list of names was generated by screening
for convertible issues of 100 million or greater in market
capitalization. The index is priced monthly.
(h) Salomon Brothers GNMA Index - includes pools of mortgages originated
by private lenders and guaranteed by the mortgage pools of the
Government National Mortgage Association.
(i) Salomon Brothers High Grade Corporate Bond Index - consists of
publicly issued, non-convertible corporate bonds rated AA or AAA.
It is a value-weighted, total return index, including approximately
800 issues with maturities of 12 years or greater.
(j) Salomon Brothers Broad Investment Grade Bond - is a market-weighted
index that contains approximately 4,700 individually priced investment
grade corporate bonds rated BBB or better, U.S. Treasury/agency issues
and mortgage pass through securities.
(k) Lehman Brothers Long-Term Treasury Bond - is composed of all bonds
covered by the Lehman Brothers Treasury Bond Index with maturities of
10 years or greater.
(l) NASDAQ Industrial Index - is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only
and does not include income.
(m) Value Line - composed of over 1,600 stocks in the Value Line
Investment Survey.
(n) Russell 2000 - composed of the 2,000 smallest stocks in the Russell
3000, a market value-weighted index of the 3,000 largest U.S. publicly-
traded companies.
(o) Composite Indices - 60% Standard & Poor's 500 Stock Index, 30% Lehman
Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70%
Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35%
Standard & Poor's 500 Stock Index and 65% Salomon Brothers High Grade
Bond Index; all stocks on the NASDAQ system exclusive of those traded on
an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Salomon
Brothers High Grade Bond Index.
(p) CDA Mutual Fund Report published by CDA Investment Technologies, Inc. -
analyzes price, current yield, risk, total return and average rate of
return (average compounded growth rate) over specified time periods for
the mutual fund industry.
(q) Mutual Fund Source Book published by Morningstar, Inc. - analyzes
price, yield, risk and total return for equity funds.
(r) Financial publications: Business Week, Changing Times, Financial
World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial
Times, Global Investor, Wall Street Journal and Weisenberger Investment
Companies Service - publications that rate fund performance over
specified time periods.
(s) Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics - a statistical measure of change over time
in the price of goods and services in major expenditure groups.
(t) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates -
historical measure of yield, price and total return for common and small
company stock, long-term government bonds, U.S. Treasury bills and
inflation.
(u) Savings and Loan Historical Interest Rates - as published by the U.S.
Savings & Loan League Fact Book.
(v) Lehman Brothers Government/Corporate Index - is a combination of the
Government an Corporate Bond Indices. The Government Index includes
public obligations of the U.S. Treasury, issues of Government agencies,
and corporate debt backed by the U.S. Government. The Corporate Bond
Index includes fixed-rate nonconvertible corporate debt. Also included
are Yankee Bonds and nonconvertible debt issued by or guaranteed by
foreign or international governments and agencies. All issues are
investment grade (BBB) or higher, with maturities of at least one year
and an outstanding par value of at least $100 million for U.S.
Government issues and $25 million for
12
<PAGE>
others. Any security downgraded during the month is held in the index
until month-end and then removed. All returns are market value weighted
inclusive of accrued income.
(w) Lehman Brothers Intermediate Government/Corporate Index is an
unmanaged index composed of a combination of the Government and
Corporate Bond Indices. All issues are investment grade (BBB) or
higher, with maturities of one to ten years and an outstanding par
value of at least $l00 million for U.S. Government issues and $25
million for others. The Government Index includes public obligations
of the U.S. Treasury, issues of Government agencies, and corporate
debt backed by the U.S. Government. The Corporate Bond Index includes
fixed-rate nonconvertible corporate debt. Also included are Yankee
Bonds and nonconvertible debt issued by or guaranteed by foreign or
international governments and agencies. Any security downgraded
during the month is held in the index until month-end and then removed.
All returns are market value weighted inclusive of accrued income.
(x) Historical data supplied by the research departments of First Boston
Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill Lynch,
Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg L.P.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and
averages is not identical to the composition of investments in the Portfolio,
that the averages are generally unmanaged, and that the items included in the
calculations of such averages may not be identical to the formula used by the
Portfolio to calculate its performance. In addition, there can be no
assurance that the Portfolio will continue this performance as compared to
such other averages.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name The Regis Fund II as a Delaware
business trust on May 18, 1994. On October 31, 1995, the name of the Fund
was changed to "UAM Funds Trust." The Fund's principal office is located at
One International Place, Boston, MA 02110; however, all investor
correspondence should be directed to the Fund at UAM Funds Service Center,
c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA
02208-2798. The Fund's Agreement and Declaration of Trust permits the Fund to
issue an unlimited number of shares of beneficial interest, without par
value. The Trustees have the power to designate one or more series
("Portfolios") or classes of shares of beneficial interest without further
action by shareholders.
On each matter submitted to a vote of the shareholders, each holder of a
share shall be entitled to one vote for each whole share and a fractional
vote for each fractional share standing in his or her name on the books of
the Fund.
In the event of liquidation of the Fund, the holders of the shares of
each Portfolio or any class thereof that has been established and designated
shall be entitled to receive, when and as declared by the Trustees, the
excess of the assets belonging to that Portfolio, or in the case of a class,
belonging to that Portfolio and allocable to that class, over the liabilities
belonging to that Portfolio or class. The assets so distributable to the
holders of shares of any particular Portfolio or class thereof shall be
distributed to the holders in proportion to the number of shares of that
Portfolio or class thereof held by them and recorded on the books of the
Fund. The liquidation of any Portfolio or class thereof may be authorized at
any time by vote of a majority of the Trustees then in office.
Shareholders have no pre-emptive or other rights to subscribe to any
additional shares or other securities issued by the Fund or any Portfolio,
except as the Trustees in their sole discretion shall have determined by
resolution.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of the Portfolio's
net investment income, if any, together with any net realized capital gains
annually in the amount and at the times that will avoid both income
(including capital gains) taxes incurred and the imposition of the Federal
excise tax on undistributed income and capital gains. The amounts of any
income dividends or capital gains distributions cannot be predicted. See
discussion under "Dividends, Capital Gains Distributions and Taxes" in the
Prospectus.
Any dividend or distribution paid shortly after the purchase of shares
of the Portfolio by an investor may have the effect of reducing the per share
net asset value of the Portfolio by the per share amount of the dividend or
distribution. Furthermore, such dividends or distributions, although in
effect a return of capital, are subject to income taxes as set forth in the
Prospectus.
13
<PAGE>
As set forth in the Prospectus, unless the shareholder elects otherwise
in writing, all dividend and capital gains distributions are automatically
received in additional shares of the respective Portfolio of the Fund at net
asset value (as of the business day following the record date). This will
remain in effect until the Fund is notified by the shareholder in writing at
least three days prior to the record date that either the Income Option
(income dividends in cash and capital gains distributions in additional
shares at net asset value) or the Cash Option (both income dividends and
capital gains distributions in cash) has been elected. An account statement
is sent to shareholders whenever an income dividend or capital gains
distribution is paid.
Each Portfolio of the Fund will be treated as a separate entity (and
hence as a separate "regulated investment company") for Federal tax purposes.
Any net capital gains recognized by the Portfolio will be distributed to its
investors without need to offset (for Federal income tax purposes) such gains
against any net capital losses of another Portfolio.
FEDERAL TAXES
In order for the Portfolio to continue to qualify for Federal income tax
treatment as a regulated investment company under the Internal Revenue Code
of 1986, as amended (the "Code"), at least 90% of the Portfolio's gross
income for a taxable year must be derived from certain qualifying income,
i.e., dividends, interest, income derived from loans of securities and gains
from the sale or other disposition of stock, securities or foreign
currencies, or other related income, including gains from options, futures
and forward contracts, derived with respect to its business investing in
stock, securities or currencies. Any net gain realized from the closing out
of futures contracts will, therefore, generally be qualifying income for
purposes of the 90% requirement. Qualification as a regulated investment
company also requires that less than 30% of the Portfolio's gross income be
derived from the sale or other disposition of stock, securities, options,
futures or forward contracts (including certain foreign currencies not
directly related to the Fund's business of investing in stock or securities)
held less than three months. In order to avoid realizing excessive gains on
securities held for less than three months, the Portfolio may be required to
defer the closing out of futures contracts beyond the time when it would
otherwise be advantageous to do so. It is anticipated that unrealized gains
on futures contracts which have been open for less than three months as of
the end of the Portfolio's taxable year, and which are recognized for tax
purposes, will not be considered gains on securities held for less than three
months for the purposes of the 30% test.
Except for transactions the Portfolio has identified as hedging
transactions, the Portfolio is required for Federal income tax purposes to
recognize as income for the taxable year its net unrealized gains and losses
on forward currency and futures contracts as of the end of the taxable year
as well as those actually realized during the year. In most cases, any such
gain or loss recognized with respect to a regulated futures contract is
considered to be 60% long-term capital gain or loss and 40% short-term
capital gain or loss without regard to the holding period of the contract.
Recognized gain or loss attributable to a foreign currency forward contract
is treated as l00% ordinary income. Furthermore, foreign currency futures
contracts which are intended to hedge against a change in the value of
securities held by the Portfolio may affect the holding period of such
securities and, consequently, the nature of the gain or loss on such
securities upon disposition.
The Portfolio will distribute to shareholders annually any net capital
gains which have been recognized for Federal income tax purposes (including
unrealized gains at the end of the Portfolio's taxable year) on futures
transactions. Such distribution will be combined with distributions of
capital gains realized on the Portfolio's other investments, and shareholders
will be advised on the nature of the payment.
CODE OF ETHICS
The Fund has adopted a Code of Ethics which restricts to a certain
extent personal transactions by access persons of the Fund and imposes
certain disclosure and reporting obligations.
FINANCIAL STATEMENTS
The Financial Statements for the Portfolio for the period from
inception on September 13, 1995 to February 29, 1996 and selected per share
data and ratios and notes to the Financial Statements relating to the same
period are contained in this Statement of Additional Information.
14
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
FEBRUARY 29, 1996 (UNAUDITED)
VALUE
SHARES (000)+
- ------------------------------------------------------------------------
COMMON STOCKS (96.5%)
- ------------------------------------------------------------------------
AEROSPACE & DEFENSE (4.4%)
Boeing Co. 2,800 $ 227
Raytheon Co. 400 20
United Technologies Corp. 2,991 322
-------
569
- ------------------------------------------------------------------------
AUTOMOTIVE (0.8%)
Genuine Parts Co. 2,350 100
- ------------------------------------------------------------------------
BANKS (2.7%)
Bank of New York Co., Inc. 400 21
Fleet Financial Group, Inc. 4,900 202
NationsBank Corp. 1,700 125
-------
348
- ------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (6.7%)
Anheuser-Busch Cos., Inc. 1,850 125
Archer-Daniels-Midland Co. 8,290 159
Heinz (H.J.) Co. 300 10
RJR Nabisco Holdings Corp. 9,170 308
Unilever N.V. - New York Shares ADR 1,100 148
UST, Inc. 3,400 121
-------
871
- ------------------------------------------------------------------------
CHEMICALS (3.5%)
Betz Laboratories, Inc. 1,400 61
Grace (W.R.) & Co. 4,600 317
Mallinckrodt Group, Inc. 1,900 75
-------
453
- ------------------------------------------------------------------------
CONSTRUCTION (2.0%)
Masco Corp. 9,050 258
- ------------------------------------------------------------------------
CONSUMER NON-DURABLES (0.6%)
Browning-Ferris Industries, Inc. 2,800 83
- ------------------------------------------------------------------------
ELECTRONICS (1.4%)
General Electric Co. 2,200 166
Honeywell, Inc. 200 11
-------
177
- ------------------------------------------------------------------------
ENERGY (14.8%)
Amoco Corp. 2,950 205
Atlantic Richfield Co. 2,700 296
Chevron Corp. 5,400 300
Edison International 7,700 135
Exxon Corp. 2,985 237
Mobil Corp. 1,300 143
Phillips Petroleum Co. 4,300 150
Schlumberger Ltd. 3,500 255
USX-Marathon Group 10,800 200
-------
1,921
- ------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS-(CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
VALUE
SHARES (000)+
- ------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
- ------------------------------------------------------------------------
FINANCIAL SERVICES (4.2%)
Chubb Corp. 650 $ 63
Household International, Inc. 400 27
Providian Corp. 3,650 169
St. Paul Cos., Inc. 5,100 289
-------
548
- ------------------------------------------------------------------------
HEALTH CARE (8.6%)
Baxter International, Inc. 5,000 229
Bristol-Myers Squibb Co. 3,500 298
Rhone-Poulenc SA Sponsored ADR 3,550 90
U.S. Healthcare, Inc. 2,500 121
Warner Lambert Co. 3,800 376
-------
1,114
- ------------------------------------------------------------------------
INDUSTRIAL (1.1%)
Corning, Inc. 4,350 141
- ------------------------------------------------------------------------
INSURANCE (1.3%)
Aetna Life & Casualty Co. 2,150 163
- ------------------------------------------------------------------------
LODGING & RESTAURANTS (0.2%)
Darden Restaurants, Inc. 2,300 28
- ------------------------------------------------------------------------
MANUFACTURING (1.2%)
Cooper Industries, Inc. 3,800 147
Eastman Kodak Co. 100 7
-------
154
- ------------------------------------------------------------------------
METALS (2.4%)
Aluminum Company of America 5,400 306
- ------------------------------------------------------------------------
MULTI-INDUSTRY (0.0%)
Hanson plc ADR 350 5
- ------------------------------------------------------------------------
OFFICE EQUIPMENT (1.6%)
Pitney Bowes, Inc. 1,350 65
Xerox Corp. 1,100 143
-------
208
- ------------------------------------------------------------------------
PAPER & PACKAGING (2.4%)
International Paper Co. 3,700 132
James River Corp. of Virginia 2,500 66
Mead Corp. 2,350 117
-------
315
- ------------------------------------------------------------------------
RETAIL (3.7%)
American Stores Co. 9,400 274
Kmart Corp. 300 2
The Limited, Inc. 12,000 210
-------
486
- ------------------------------------------------------------------------
SERVICES (5.9%)
Dun & Bradstreet Corp. 4,300 272
New York Times Co. - Class A 5,250 144
WMX Technologies, Inc. 12,100 345
-------
761
- ------------------------------------------------------------------------
TELECOMMUNICATIONS (11.8%)
AT&T Corp. 6,150 391
GTE Corp. 7,500 322
NYNEX Corp. 7,900 407
Sprint Corp. 9,650 415
-------
1,535
- ------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS-(CONTINUED)
FEBRUARY 29, 1996 (UNAUDITED)
VALUE
SHARES (000)+
- ------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
- ------------------------------------------------------------------------
TEXTILES & APPAREL (1.0%)
Reebok International Ltd. 5,100 $ 135
- ------------------------------------------------------------------------
TRANSPORTATION (0.1%)
Norfolk Southern Corp. 100 8
- ------------------------------------------------------------------------
UTILITIES (14.1%)
Baltimore Gas & Electric Co. 3,800 108
Entergy Corp. 10,350 294
FPL Group, Inc. 5,900 263
General Public Utilities Corp. 6,250 209
Houston Industries, Inc. 6,100 138
Pacificorp 6,400 133
Panhandle Eastern Corp. 7,450 213
PECO Energy Co. 4,400 124
Southern Co. 5,700 136
Transcanada Pipelines LTD. 14,500 205
-------
1,823
- ------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $11,350) 12,510
- ------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS (0.3%)
- ------------------------------------------------------------------------
CONSUMER NON-DURABLES (0.3%)
RJR Nabisco Holdings, Series C, $0.6012 (COST $35) 5,650 39
- ------------------------------------------------------------------------
FACE
AMOUNT
(000)
- ------------------------------------------------------------------------
SHORT-TERM INVESTMENT (3.1%)
- ------------------------------------------------------------------------
REPURCHASE AGREEMENT (3.1%)
J.P. Morgan Securities, Inc. 5.25%, dated 2/29/96, due
3/1/96, to be repurchased at $403, collateralized by
$433 United States Treasury Notes 6.25%, due
8/15/23, valued at $411 (COST $403) $ 403 403
- ------------------------------------------------------------------------
TOTAL INVESTMENTS (99.9%) (COST $11,788) 12,952
- ------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.1%)
- ------------------------------------------------------------------------
Cash 1
Dividends Receivable 59
Receivable for Investments Sold 40
Receivable due from Investment Adviser 2
Other Assets 6
Payable for Investments Purchased (63)
Payable for Professional Fees (12)
Payable for Administrative Fees (3)
Payable for Custodian Fees (2)
Payable for Directors' Fees (1)
Other Liabilities (15)
-------
12
- ------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 1,220,607 outstanding Institutional Class shares
(unlimited authorization, no par value) $12,964
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 10.62
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
+ See Note A to Financial Statements.
ADR - American Depositary Receipt.
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
SEPTEMBER 13,
1995* TO
FEBRUARY 29,
1996
(IN THOUSANDS) (UNAUDITED)
- -------------------------------------------------------------------
INVESTMENT INCOME
Dividends............................ $ 162
Interest............................. 14
- -------------------------------------------------------------------
Total Income..................... 176
- -------------------------------------------------------------------
EXPENSES
Investment Advisory Fees - Note B
Basic Fees....................... $ 25
Less: Fees Waived................ (25) -
Registration and Filing Fees......... 17
Administrative Fees - Note C......... 15
Audit Fees........................... 11
Printing Fees........................ 9
Custodian Fees....................... 6
Directors' Fees - Note F............. 1
Other Expenses....................... 2
Fees Assumed by Adviser - Note B..... (16)
- -------------------------------------------------------------------
Net Expenses..................... 45
- -------------------------------------------------------------------
NET INVESTMENT INCOME.................... 131
- -------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS......... 491
- -------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
ON INVESTMENTS....................... 1,164
- -------------------------------------------------------------------
NET GAIN ON INVESTMENTS.................. 1,655
- -------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS............ 1,786
- -------------------------------------------------------------------
- -------------------------------------------------------------------
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
SEPTEMBER 13,
1995* TO
FEBRUARY 29,
1996
(IN THOUSANDS) (UNAUDITED)
- --------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income................................. $ 131
Net Realized Gain..................................... 491
Net Change in Unrealized Appreciation................. 1,164
- --------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations 1,786
- --------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income................................. (72)
Net Realized Gain...................................... (24)
- --------------------------------------------------------------------------
Total Distributions.................................. (96)
- --------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued - Regular....................................... 16,491
- In Lieu of Cash Distributions................. 83
Redeemed............................................... (5,300)
- --------------------------------------------------------------------------
Net Increase from Capital Share Transactions........... 11,274
- --------------------------------------------------------------------------
Total Increase......................................... 12,964
Net Assets:
Beginning of Period.................................... -
- --------------------------------------------------------------------------
End of Period (2)...................................... 12,964
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
(1) Shares Issued and Redeemed
Shares Issued.......................................... 1,736
In Lieu of Cash Distributions.......................... 8
Shares Redeemed........................................ (523)
- --------------------------------------------------------------------------
1,221
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
(2) Net Assets Consist of:
Paid in Capital........................................ $11,274
Undistributed Net Investment Income.................... 59
Accumulated Net Realized Gain.......................... 467
Unrealized Appreciation ............................... 1,164
-------
$12,964
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
*Commencement of Operations
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
SEPTEMBER 13,
1995* TO
FEBRUARY 29,
1996
(UNAUDITED)
- --------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD....................... $ 10.00
- --------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................................. 0.12+
Net Realized and Unrealized Gain...................... 0.59
- --------------------------------------------------------------------------
Total From Investment Operations................. 0.71
- --------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income................................. (0.07)
Net Realized Gain..................................... (0.02)
- --------------------------------------------------------------------------
Total Distributions.............................. (0.09)
- --------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............................. $ 10.62
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
TOTAL RETURN............................................... 7.17%++
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)...................... $12,964
Ratio of Net Expenses to Average Net Assets................ 0.9%**+
Ratio of Net Investment Income to Average Net Assets....... 2.63%**+
Portfolio Turnover Rate.................................... 66%
- --------------------------------------------------------------------------
* Commencement of Operations
** Annualized
+ Net of voluntarily waived fees and expenses assumed by the Adviser of
$0.04 per share for the period ended February 29, 1996.
++ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds Trust, formerly known as The Regis Fund II, and UAM Funds, Inc.,
formerly known as The Regis Fund, Inc., (collectively the "UAM Funds") were
organized on May 18, 1994 and October 11, 1988, respectively, and are
registered under the Investment Company Act of 1940, as amended, as open-end
management investment companies. Newbold's Equity Portfolio (the
"Portfolio"), a portfolio of UAM Funds Trust, began operations on September
13, 1995 with in kind transactions of securities with a value of $7,545,014,
including unrealized appreciation of $1,034,451. At February 29, 1996, the
UAM Funds were comprised of thirty-seven active portfolios. The financial
statements of the remaining portfolios are presented separately.
A. SIGNIFICANT ACCOUNTING POLICIES. The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the
Portfolio in the preparation of its financial statements.
1. SECURITY VALUATION: Securities listed on a securities exchange
for which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the
valuation is made or, if no sale occurred on such day, at the mean of the
bid and asked prices on such day. Price information on listed securities
is taken from the exchange where the security is primarily traded.
Over-the-counter and unlisted securities are valued between the current
bid and asked prices. Short-term investments that have remaining
maturities of sixty days or less at time of purchase are valued at
amortized cost, if it approximates market value.
The value of other assets and securities for which no quotations are
readily available is determined in good faith at fair value using methods
determined by the Board of Trustees.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to
qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code and to distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required in the
financial statements.
At February 29, 1996, the Portfolio's cost for Federal income tax
purposes was $11,788,000. Net unrealized appreciation for Federal income
tax purposes aggregated $1,164,000, of which $1,211,000 related to
appreciated securities and $47,000 related to depreciated securities.
3. REPURCHASE AGREEMENTS: In connection with transactions in
repurchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is marked-to-market on a daily basis to determine the adequacy
of the collateral. In the event of default on the obligation to
repurchase, the Portfolio has the right to liquidate the collateral and
apply the proceeds in satisfaction of the obligation. In the event of
default or bankruptcy by the other party to the agreement, realization
and/or retention of the collateral or proceeds may be subject to legal
proceedings.
4. DISTRIBUTIONS TO SHAREHOLDERS: Any distributions from net
investment income are normally declared and paid quarterly. Any realized
net capital gains will also be distributed annually. All distributions are
recorded on ex-dividend.
The amount and character of income and capital gain distributions are
determined in accordance with Federal income tax regulations which may
differ from generally accepted accounting principles.
21
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are determined based on the
specific identification method. Dividend income is recorded on the
ex-dividend date. Interest income is recognized on the accrual basis.
Most expenses of the UAM Funds can be directly attributed to a particular
portfolio. Expenses which cannot be directly attributed are apportioned
among the portfolios of the UAM Funds and AEW Commercial Mortgage
Securities Fund, Inc. ("AEW"), an affiliated closed-end management
investment company, based on their relative net assets.
B. ADVISORY SERVICES. Under the terms of an Advisory Agreement, Newbold's
Asset Management, Inc. (the "Adviser"), a wholly-owned subsidiary of United
Asset Management Corporation ("UAM"), provides investment advisory services
to the Portfolio at a fee calculated at an annual rate of 0.50% of the
Portfolio's average daily net assets. Through January 29, 1998, the Adviser
has voluntarily agreed to waive a portion of its advisory fees and/or assume
expenses on behalf of the Portfolio, if necessary, if the annual operating
expenses of the Portfolio exceed 0.90% of average daily net assets.
C. ADMINISTRATIVE SERVICES. The Chase Manhattan Bank, N.A., through its
affiliate Chase Global Funds Services Company ("CGFSC") (the
"Administrator"), provides administrative, fund accounting, dividend
disbursing and transfer agent services to the UAM Funds under an
Administrative Agreement (the "Agreement"). Pursuant to the Agreement, the
Administrator is entitled to receive annual fees, computed daily and payable
monthly, based on the combined aggregate average daily net assets of the UAM
Funds and AEW as follows: 0.20% of the first $200 million of the combined
aggregate net assets; plus 0.12% of the next $800 million of the combined
aggregate net assets; plus 0.08% of the combined aggregate net assets in
excess of $1 billion but less than $3 billion; plus 0.06% of the combined
aggregate net assets in excess of $3 billion. The fees are allocated among
the portfolios of the UAM Funds and AEW on the basis of their relative net
assets and are subject to a graduated minimum fee schedule per portfolio
which rises from $2,000 per month upon inception of a portfolio to $70,000
annually after two years. In addition, the Portfolio is charged certain out
of pocket expenses by the Administrator.
D. DISTRIBUTION SERVICES. UAM Fund Distributors, Inc. (the
"Distributor"), a wholly-owned subsidiary of UAM, distributes the shares of
the Portfolio. The Distributor does not receive any fees or other
compensation with respect to the Portfolio.
E. PURCHASES AND SALES. During the period ended February 29, 1996, the
Portfolio made purchases of $10,461,000 and sales of $6,078,000 of investment
securities other than U.S. Government and short-term securities. There were
no purchases or sales of long-term U.S. Government securities during the
period ended February 29, 1996.
F. TRUSTEES' FEES. Each Trustee, who is not an officer or affiliated
person, $2,000 per meeting attended which is allocated proportionally among
the active portfolios of the UAM Funds and AEW, plus a quarterly retainer of
$150 for each active portfolio of the UAM Funds and AEW and reimbursement for
expenses incurred in attending Trustee meetings.
G. OTHER. At February 29, 1996, 15.6% of total shares outstanding were
held by one record shareholder owning 10% or greater of the aggregate total
shares outstanding.
22
<PAGE>
PART B
UAM FUNDS
TJ CORE EQUITY PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES
STATEMENT OF ADDITIONAL INFORMATION
JANUARY 29, 1995, AS AMENDED MARCH 13, 1996
This Statement is not a Prospectus but should be read in conjunction with the
Prospectus of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the TJ
Core Equity Portfolio (the "Portfolio") Institutional Service Class Shares
dated January 29, 1995. To obtain the Prospectus, please call the UAM Funds
Service Center:
1-800-638-7983
Table of Contents
PAGE
Investment Objective and Policies............................... 2
Purchase of Shares.............................................. 5
Redemption of Shares............................................ 5
Shareholder Services............................................ 6
Investment Limitations.......................................... 7
Management of the Fund.......................................... 8
Investment Adviser.............................................. 9
Service and Distribution Plans.................................. 10
Portfolio Transactions.......................................... 12
Performance Calculations........................................ 12
General Information............................................. 15
Federal Taxes................................................... 16
Financial Statement............................................. 16
Appendix - Description of Ratings............................... A-1
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the investment objective and policies
of the Portfolio as set forth in the Prospectus:
FOREIGN SECURITIES
Investors should recognize that investing in foreign companies directly
or through the purchase of American Depositary Receipts ("ADRs") involves
certain special considerations which are not typically associated with
investing in U.S. companies. Since the securities of foreign companies are
frequently denominated in foreign currencies, investments may be affected
favorably or unfavorably by changes in currency rates and in exchange control
regulations, and may incur costs in connection with conversions between
various currencies.
As foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards and they may have policies that
are not comparable to those of domestic companies, there may be less
information available about certain foreign companies than about domestic
companies. Securities of some foreign companies are generally less liquid and
more volatile than securities of comparable domestic companies. There is
generally less government supervision and regulation of stock exchanges,
brokers and listed companies than in the U.S. In addition, with respect to
certain foreign countries, there is the possibility of expropriation or
confiscatory taxation, political or social instability, or diplomatic
developments which could affect U.S. investments in those countries.
Certain foreign governments levy withholding taxes on dividend and
interest income. Although in some countries a portion of these taxes are
recoverable, the non-recoverable portion of foreign withholding taxes will
reduce the income received from the companies comprising the Portfolios'
investments. However, these foreign withholding taxes are not expected to
have a significant impact.
SECURITIES LENDING
The Portfolio may lend its investment securities to qualified
institutional investors who need to borrow securities in order to complete
certain transactions, such as covering short sales, avoiding failures to
deliver securities or completing arbitrage operations. By lending its
investment securities, the Portfolio attempts to increase its income through
the receipt of interest on the loan. Any gain or loss in the market price of
the securities loaned that might occur during the term of the loan would be
for the account of the Portfolio. The Portfolio may lend its investment
securities to qualified brokers, dealers, domestic and foreign banks or other
financial institutions, so long as the terms, the structure and the aggregate
amount of such loans are not inconsistent with the Investment Company Act of
1940, as amended, (the "1940 Act") or the Rules and Regulations or
interpretations of the Securities and Exchange Commission (the "Commission")
thereunder, which currently require that (a) the borrower pledge and maintain
with the Portfolio collateral consisting of cash, an irrevocable letter of
credit issued by a domestic U.S. bank or securities issued or guaranteed by
the United States Government having a value at all times not less than 100%
of the value of the securities loaned, (b) the borrower add to such
collateral whenever the price of the securities loaned rises (i.e., the
borrower "marks to the market" on a daily basis), (c) the loan be made
subject to termination by the Portfolio at any time, and (d) the Portfolio
receives reasonable interest on the loan (which may include the Portfolio
investing any cash collateral in interest bearing short-term investments).
All relevant facts and circumstances, including the creditworthiness of the
broker, dealer or institution, will be considered in making decisions with
respect to the lending of securities, subject to review by the Board of
Trustees.
At the present time, the Staff of the Commission does not object if an
investment company pays reasonable negotiated fees in connection with loaned
securities so long as such fees are set forth in a written contract and
approved by the investment company's Board of Trustees. The Portfolio would
continue to retain any voting rights with respect to the loaned securities.
If a material event occurs affecting an investment on a loan, the loan must
be called and the securities voted.
HEDGING STRATEGIES
The Portfolio may engage in various portfolio strategies to hedge
against adverse movements in the equity, debt and currency markets. The
Portfolio may buy or sell futures contracts, write (i.e., sell) covered call
options on its portfolio securities, purchase put and call options on
securities and engage in transactions in stock index options and stock index
futures, and related options on such futures. Each of these portfolio
strategies is described below. Although certain risks are involved in options
and future transactions, the Adviser believes that, because the Portfolio
will engage in options and future transactions only for hedging purposes, the
options and futures portfolio strategies of the Portfolio will not subject it
to the risks frequently associated with the speculative use of options and
future transactions. While the Portfolio's use of hedging
2
<PAGE>
strategies is intended to reduce the volatility of the net asset value of the
Portfolio shares, the Portfolio's net asset value will fluctuate. There can
be no assurance that the Portfolio's hedging transactions will be effective.
Also, the Portfolio may not necessarily be engaging in hedging activities
when movements in any particular equity, debt or currency market occur.
FUTURES CONTRACTS
The Portfolio may enter into futures contracts for the purposes of
hedging, remaining fully invested and reducing transactions costs. Futures
contracts provide for the future sale by one party and purchase by another
party of a specified amount of a specific security at a specified future time
and at a specified price. Futures contracts which are standardized as to
maturity date and underlying financial instrument are traded on national
futures exchanges. Futures exchanges and trading are regulated under the
Commodity Exchange Act by the Commodity Futures Trading Commission ("CFTC"),
a U.S. Government Agency.
Although futures contracts by their terms call for actual delivery or
acceptance of the underlying securities, in most cases the contracts are
closed out before the settlement date without the making or taking of
delivery. Closing out an open futures position is done by taking an opposite
position ("buying" a contract which has previously been "sold" or "selling" a
contract previously "purchased") in an identical contract to terminate the
position. Brokerage commissions are incurred when a futures contract is
bought or sold.
Futures traders are required to make a good faith margin deposit in cash
or acceptable securities with a broker or custodian to initiate and maintain
open positions in futures contracts. A margin deposit is intended to assure
completion of the contract (delivery or acceptance of the underlying
security) if it is not terminated prior to the specified delivery date.
Minimal initial margin requirements are established by the futures exchange
and may be changed. Brokers may establish deposit requirements which are
higher than the exchange minimums. Futures contracts are customarily
purchased and sold on margin that may range upward from less than 5% of the
value of the contract being traded. After a futures contract position is
opened, the value of the contract is marked to market daily. If the futures
contract price changes to the extent that the margin on deposit does not
satisfy margin requirements, payment of additional "variation" margin will be
required. Conversely, change in the contract value may reduce the required
margin, resulting in a repayment of excess margin to the contract holder.
Variation margin payments are made to and from the futures broker for as long
as the contract remains open. The Portfolio expects to earn interest income
on its margin deposits.
Traders in futures contracts may be broadly classified as either
"hedgers" or "speculators". Hedgers use the futures markets primarily to
offset unfavorable changes in the value of securities otherwise held for
investment purposes or expected to be acquired by them. Speculators are less
inclined to own the securities underlying the futures contracts which they
trade and use futures contracts with the expectation of realizing profits
from a fluctuation in interest rates. The Portfolio intends to use futures
contracts only for hedging purposes.
Regulations of the CFTC applicable to the Fund require that all of its
futures transactions constitute bona fide straddles or that the Fund's
commodity futures and option positions be for other purposes, to the extent
that the aggregate initial margins and premiums required to establish such
non-hedging positions do not exceed five percent of the liquidation value of
the Portfolio. The Portfolio will only sell futures contracts to protect
securities it owns against price declines or purchase contracts to protect
against an increase in the price of securities it intends to purchase. As
evidence of this hedging interest, the Portfolio expects that approximately
75% of its futures contracts purchases will be "completed", that is,
equivalent amounts of related securities will have been purchased or will be
purchased by the Portfolio on the settlement date of the futures contracts.
Although techniques other than the sale and purchase of futures
contracts could be used to control the Portfolio's exposure to market
fluctuations, the use of futures contracts may be a more effective means of
hedging this exposure. While the Portfolio will incur commission expenses in
both opening and closing out future positions, these costs are lower than
transaction costs incurred in the purchase and sale of the underlying
securities.
RESTRICTIONS ON THE USE OF FUTURES CONTRACTS
The Portfolio will not enter into futures contract transactions to the
extent that, immediately thereafter, the sum of its initial margin deposits
on open contracts exceeds 5% of the market value of its total assets. In
addition, the Portfolio will not enter into futures contracts to the extent
that its outstanding obligations to purchase securities under these contracts
would exceed 20% of its total assets.
3
<PAGE>
RISK FACTORS IN FUTURES TRANSACTIONS
Positions in futures contracts may be closed out only on an exchange
which provides a secondary market for such futures. However, there can be no
assurance that a liquid secondary market will exist for any particular
futures contract at any specific time. Thus, it may not be possible to close
a futures position. In the event of adverse price movements, the Portfolio
would continue to be required to make daily cash payments to maintain its
required margin. In such situations, if the Portfolio has insufficient cash,
it may have to sell securities to meet daily margin requirements at a time
when it may be disadvantageous to do so. In addition, the Portfolio may be
required to make delivery of the instruments underlying futures contracts it
holds. The inability to close futures positions also could have an adverse
impact on the Portfolio's ability to effectively hedge.
The Portfolio will minimize the risk that it will be unable to close out
a futures position by only entering into futures which are traded on national
futures exchanges and for which there appears to be a liquid secondary
market. There can be no assurance, however, that a liquid secondary market
will exist for a particular futures contract at any given time.
The risk of loss in trading futures contracts in some strategies can be
substantial due both to the low margin deposits required and the extremely
high degree of leverage involved in futures pricing. As a result, a
relatively small price movement in a futures contract may result in immediate
and substantial loss (as well as gain) to the investor. For example, if at
the time of purchase, 10% of the value of the futures contract is deposited
as margin, a subsequent 10% decrease in the value of the futures contract
would result in a total loss of the margin deposit, before any deduction for
the transaction costs, if the account were then closed out. A 15% decrease
would result in a loss equal to 150% of the original margin deposit if the
contract were closed out. Thus, a purchase or sale of a futures contract may
result in excess of the amount invested in the contract. However, because
the futures strategies of the Portfolio are engaged in only for hedging
purposes, the Adviser does not believe that the Portfolio is subject to the
risks of loss frequently associated with futures transactions. The Portfolio
would presumably have sustained comparable losses if, instead of the futures
contract, it had invested in the underlying financial instrument and sold it
after the decline.
Utilization of futures transactions by the Portfolio does involve the
risk of imperfect or no correlation where the securities underlying the
futures contracts have different maturities than the Portfolio securities
being hedged. It is also possible that the Portfolio could both lose money on
futures contracts and also experience a decline in value of portfolio
securities. There is also the risk of loss by the Portfolio of margin
deposits in the event of bankruptcy of a broker with whom the Portfolio has
an open position in a futures contract or related option.
Most futures exchanges limit the amount of fluctuation permitted in
futures contract prices during a single trading day. The daily limit
establishes the maximum amount that the price of a futures contract may vary
either up or down from the previous day's settlement price at the end of a
trading session. Once the daily limit has been reached in a particular type
of contract, no trades may be made on that day at a price beyond that limit.
The daily limit governs only price movement during a particular trading day
and, therefore, does not limit potential losses because the limit may prevent
the liquidation of unfavorable positions. Futures contract prices have
occasionally moved to the daily limit for several consecutive trading days
with little or no trading thereby preventing prompt liquidation of futures
positions and subjecting some futures traders to substantial losses.
OPTIONS
The Portfolio may purchase and sell put and call options on securities
and futures contracts for hedging purposes. Investments in options involve
some of the same considerations that are involved in connection with
investments in futures contracts (e.g., the existence of a liquid secondary
market). In addition, the purchase of an option also entails the risk that
changes in the value of the underlying security or contract will not be fully
reflected in the value of the option purchased. Depending on the pricing of
the option compared to either the futures contract on which it is based or
the price of the securities being hedged, an option may or may not be less
risky than ownership of the futures contract or such securities. In general,
the market prices of options can be expected to be more volatile than the
market prices on the underlying futures contract or securities.
WRITING COVERED CALL OPTIONS
The principal reason for writing call options is to attempt to realize,
through the receipt of premiums, a greater return than would be realized on
securities alone. By writing covered call options, the Portfolio gives up
the opportunity, while the option is in effect, to profit from any price
increase in the underlying security above the option exercise price. In
addition, the Portfolio's ability to sell the underlying security will be
limited while the option is in effect unless the Portfolio effects a closing
purchase transaction. A closing purchase transaction cancels out the
Portfolio's position as the writer of an
4
<PAGE>
option by means of offsetting purchase of an identical option prior to the
expiration of the option it has written. Covered call options serve as a
partial hedge against the price of the underlying security declining. The
Portfolio writes only covered options, which means that so long as the
Portfolio is obligated as the writer of the option it will, through its
custodian, have deposited and maintained cash, U.S. Government securities or
other high grade liquid debt securities denominated in U.S. dollars with a
value equal to or greater than the exercise price of the underlying
securities.
PURCHASING OPTIONS
The amount of any appreciation in the value of the underlying security
subject to a put will be partially offset by the amount of the premium paid
for the put option and any related transaction costs. Prior to its
expiration, a put option may be sold in a closing sale transaction and profit
or loss from a sale will depend on whether the amount received is more or
less than the premium paid for the put option plus the related transaction
costs. A closing sale transaction cancels out the Portfolio's position as
purchaser of an option by means of an offsetting sale of an identical option
prior to the expiration of the option it has purchased. In certain
circumstances, the Portfolio may purchase call options on securities held in
its investment portfolio on which it has written call options or on
securities which it intends to purchase.
PURCHASE OF SHARES
Shares of the Portfolio may be purchased without sales commission at the
net asset value per share next determined after an order is received in
proper form by the Fund, and payment is received by the Fund's custodian.
The minimum initial investment required for the Portfolio is $100,000.
Certain exceptions to the minimums may be determined from time to time by the
officers of the Fund. An order received in proper form prior to the 4:00 p.m.
close of the New York Stock Exchange (the "Exchange") will be executed at the
price computed on the date of receipt; and an order received not in proper
form or after the 4:00 p.m. close of the Exchange will be executed at the
price computed on the next day the Exchange is open after proper receipt. The
exchange will be closed on the following days: Good Friday, April 5, 1996
Memorial day, May 27, 1996; and Independence Day, July 4, 1996.
The Portfolio reserves the right in its sole discretion (1) to suspend
the offering of its shares, (2) to reject purchase orders when in the
judgment of management such rejection is in the best interests of the Fund,
and (3) to reduce or waive the minimum for initial and subsequent investment
for certain fiduciary accounts such as employee benefit plans or under
circumstances where certain economies can be achieved in sales of the
Portfolio's shares.
REDEMPTION OF SHARES
The Portfolio may suspend redemption privileges or postpone the date of
payment (1) during any period that both the Exchange and custodian bank are
closed or trading on the Exchange is restricted as determined by the
Commission, (2) during any period when an emergency exists as defined by the
rules of the Commission as a result of which it is not reasonably practicable
for the Portfolio to dispose of securities owned by it or to fairly determine
the value of its assets, and (3) for such other periods as the Commission may
permit. The Fund has made an election with the Commission to pay in cash all
redemptions requested by any shareholder of record limited in amount during
any 90-day period to the lesser of $250,000 or 1% of the net assets of the
Fund at the beginning of such period. Such commitment is irrevocable without
the prior approval of the Commission. Redemptions in excess of the above
limits may be paid, in whole or in part, in investment securities or in cash
as the Board of Trustees may deem advisable; however, payment will be made
wholly in cash unless the Trustees believe that economic or market conditions
exist which would make such a practice detrimental to the best interests of
the Fund. If redemptions are paid in investment securities, such securities
will be valued as set forth in the Prospectus under "How Shares Prices are
Determined," and a redeeming shareholder would normally incur brokerage
expenses if he converted those securities to cash.
No charge is made by the Portfolio for redemptions. Any redemption may
be more or less than the shareholder's initial cost depending on the market
value of the securities held by the Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services
Company (the "Administrator") from fraud, signature guarantees are required
for certain redemptions. Signature guarantees are required for (1)
redemptions where the proceeds are to be sent to someone other than the
registered shareowner(s) or the registered address or (2) share transfer
requests. The purpose of signature guarantees is to verify the identity of
the party who has authorized a redemption.
5
<PAGE>
Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions,
national securities exchanges, registered securities associations, clearing
agencies and savings associations. A complete definition of eligible
guarantor institution is available from the Administrator. Broker-dealers
guaranteeing signatures must be a member of a clearing corporation or
maintain net capital of at least $100,000. Credit unions must be authorized
to issue signature guarantees. Signature guarantees will be accepted from any
eligible guarantor institution which participates in a signature guarantee
program.
The signature guarantee must appear either: (1) on the written request
for redemption; (2) on a separate instrument for assignment ("stock power")
which should specify the total number of shares to be redeemed; or (3) on all
stock certificates tendered for redemption and, if shares held by the Fund
are also being redeemed, on the letter or stock power.
SHAREHOLDER SERVICES
The following supplements the information set forth in the Portfolios'
Prospectuses under the heading "Buying, Selling and Exchanging Shares":
EXCHANGE PRIVILEGE
Shares of the Portfolio may be exchanged for any other Service Class
Shares of a Portfolio included in the UAM Funds which is comprised of the
Fund and UAM Funds, Inc. (For a list of those Portfolios currently offering
Service Class Shares, please call the UAM Funds Service Center.) Exchange
requests should be made by calling the Fund (1-800-638-7983) or by writing to
UAM Funds, UAM Funds Service Center, c/o Chase Global Funds Services Company,
P.O. Box 2798, Boston, MA 02208-2798. The exchange privilege is only
available with respect to Portfolios that are registered for sale in the
shareholder's state of residence of the other Portfolio.
Any such exchange will be based on the respective net asset values of
the shares involved. There is no sales commission or charge of any kind.
Before making an exchange into a Portfolio, a shareholder should read its
Prospectus and consider the investment objectives of the Portfolio to be
purchased. You may obtain a Prospectus for the Portfolio(s) you are
interested in by calling the UAM Funds Service Center at 1-800-638-7983.
Exchange requests may be made either by mail or telephone. Telephone
exchanges will be accepted only if the certificates for the shares to be
exchanged are held by the Fund for the account of the shareholder, and the
registration of the two accounts will be identical. Requests for exchanges
received prior to 4:00 p.m. (Eastern Time) will be processed as of the close
of business on the same day. Requests received after 4:00 p.m. will be
processed on the next business day. Neither the Fund nor the Administrator
will be responsible for the authenticity of the exchange instructions
received by telephone. Exchanges may also be subject to limitations as to
amounts or frequency and to other restrictions established by the Board of
Trustees to assure that such exchanges do not disadvantage the Fund and its
shareholders.
For Federal income tax purposes an exchange between Portfolios is a
taxable event, and, accordingly, a capital gain or loss may be realized. In a
revenue ruling relating to circumstances similar to the Fund's, an exchange
between series of a Fund was also deemed to be a taxable event. It is likely,
therefore, that a capital gain or loss would be realized on an exchange
between Portfolios; you may want to consult your tax adviser for further
information in this regard. The exchange privilege may be modified or
terminated at any time.
TRANSFER OF SHARES
Shareholders may transfer shares to another person by making a written
request to the Fund. The request should clearly identify the account and
number of shares to be transferred, and include the signature of all
registered owners and all stock certificates, if any, which are subject to
the transfer. The signature on the letter of request, the stock certificate
or any stock power must be guaranteed in the same manner as described under
"Redemption of Shares." As in the case of redemptions, the written request
must be received in good order before any transfer can be made.
6
<PAGE>
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in the Prospectus.
Whenever an investment limitation sets forth a percentage limitation on
investment or utilization of assets, such limitation shall be determined
immediately after and as a result of the Portfolio's acquisition of such
security or other asset. Accordingly, any later increase or decrease
resulting from a change in values, net assets or other circumstances will not
be considered when determining whether the investment complies with the
Portfolio's investment limitations. Investment limitations (1), (2), (3) and
(4) are classified as fundamental. The Portfolio's fundamental investment
limitations cannot be changed without approval by a "majority of the
outstanding shares" (as defined in the 1940 Act) of the Portfolio. The
Portfolio will not:
(1) invest in physical commodities or contracts on physical commodities;
(2) purchase or sell real estate or real estate limited partnerships,
although it may purchase and sell securities of companies which deal in
real estate and may purchase and sell securities which are secured by
interests in real estate;
(3) make loans except (i) by purchasing debt securities in accordance with
its investment objectives and (ii) by lending its portfolio securities to
banks, brokers, dealers and other financial institutions so long as such
loans are not inconsistent with the 1940 Act, or the rules and regulations
or interpretations of the Commission thereunder;
(4) underwrite the securities of other issuers;
(5) invest in stock, bond or interest rate futures and/or options on
futures unless (i) not more than 5% of the Portfolio's assets are required
as deposit to secure obligations under such futures and/or options on
futures contracts provided, however, that in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be
excluded in computing such 5% and (ii) not more than 20% of the Portfolio's
assets are invested in futures and options;
(6) purchase on margin or sell short except as specified in (5) above;
(7) purchase or retain securities of an issuer if those officers and
directors of the Fund or its investment adviser owning more than 1/2 of
1% of such securities together own more than 5% of such securities;
(8) invest more than an aggregate of 15% of the net assets of the
Portfolio, determined at the time of investment, in securities subject to
legal or contractual restrictions on resale or securities for which there
are no readily available markets;
(9) invest for the purpose of exercising control over management of any
company;
(10) write or acquire options or interests in oil, gas or other mineral
exploration or development programs; and
(11) investment in warrants, valued at the lower of cost or market,
exceeding 5.0% of the value of the Portfolio's net assets. Included within
that amount, but not to exceed 2.0% of the value of the Portfolio's net
assets, may be warrants which are not listed on the New York or American
Stock Exchanges. Warrants acquired by the Portfolio in units or attached
to securities may be deemed to be without value.
7
<PAGE>
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The Officers of the Fund manage its day-to-day operations and are
responsible to the Fund's Board of Trustees. The Trustees set broad policies
for the Fund and elect its Officers. The following is a list of the Trustees
and Officers of the Fund and a brief statement of their present positions and
principal occupations during the past five years.
MARY RUDIE BARNEBY* Trustee and Executive Vice President of the
1133 Avenue of the Americas Fund; President of Regis Retirement Plan
New York, NY 10036 Services since 1993; Former President of UAM
Fund Distributors, Inc.. Formerly responsible
for Defined Contribution Plan Services at a
division of the Equitable Companies, Dreyfus
Corporation and Merrill Lynch.
JOHN T. BENNETT, JR. Trustee of the Fund; President of Squam
College Road - RFD 3 Investment Management Company, Inc. and Great
Meredith, NH 03253 Island Investment Company, Inc.; President of
Bennett Management Company from 1988 to 1993.
J. EDWARD DAY Trustee of the Fund; Retired Partner in the
5804 Brookside Drive Washington office of the law firm Squire,
Chevy Chase, MD 20815 Sanders & Dempsey; Director, Medical Mutual
Liability Insurance Society of Maryland;
formerly, Chairman of The Montgomery County,
Maryland, Revenue Authority.
PHILIP D. ENGLISH Trustee of the Fund; President and Chief
16 West Madison Street Executive Officer of Broventure Company, Inc.;
Baltimore, MD 21201 Chairman of the Board of Chektec Corporation
and Cyber Scientific, Inc.
WILLIAM A. HUMENUK Trustee of the Fund; Partner in the
4000 Bell Atlantic Tower Philadelphia office of the law firm Dechert
1717 Arch Street Price & Rhoads; Director, Hofler Corp.
Philadelphia, PA 19103
NORTON H. REAMER* Trustee, President and Chairman of the Fund;
One International Place President, Chief Executive Officer and a
Boston, MA 02110 Director of United Asset Management
Corporation; Director, Partner or Trustee of
each of the Investment Companies of the Eaton
Vance Group of Mutual Funds.
PETER M. WHITMAN, JR.* Trustee of the Fund; President and Chief
One Financial Center Investment Officer of Dewey Square Investors
Boston, MA 02111 Corporation ("DSI") since 1988; Director and
Chief Executive Officer of H. T. Investors,
Inc., formerly a subsidiary of DSI.
WILLIAM H. PARK* Vice President and Assistant Treasurer of the
One International Place Fund; Executive Vice President and Chief
Boston, MA 02110 Financial Officer of United Asset Management
Corporation.
ROBERT R. FLAHERTY* Treasurer of the Fund; Second Vice President
73 Tremont Street and Manager of Fund Administration and
Boston, MA 02108 Compliance of the Administrator since March
1995; formerly Senior Manager of Deloitte &
Touche LLP from 1985 to 1995.
KARL O. HARTMANN* Secretary of the Fund; Senior Vice President,
73 Tremont Street Secretary and General Counsel of Administrator;
Boston, MA 02108 Senior Vice President, Secretary and General
Counsel of Leland, O'Brien, Rubinstein
Associates, Inc. from November 1990 to November
1991.
HARVEY M. ROSEN* Assistant Secretary of the Fund; Senior Vice
73 Tremont Street President of the Administrator.
Boston, MA 02108
* This person is deemed to be an "interested person" of the Fund as that term
is defined in the 1940 Act.
8
<PAGE>
REMUNERATION OF TRUSTEES AND OFFICERS
The Fund pays each Trustee, who is not also an officer or affiliated
person, a $150 quarterly retainer fee per active Portfolio which currently
amounts to $1,050 per quarter. In addition, each unaffiliated Trustee
receives a $2,000 meeting fee which is aggregated for all the Trustees and
allocated proportionately among the Portfolios of the Fund, UAM Funds, Inc.
as well as AEW Commercial Mortgage Securities Fund, Inc. and reimbursement
for travel and other expenses incurred while attending Board meetings.
Trustees who are also officers or affiliated persons receive no remuneration
for their service as Trustees. The Fund's officers and employees are paid by
either the Adviser, United Asset Management Corporation ("UAM"), or the
Administrator and receive no compensation from the Fund. The following table
shows aggregate compensation paid to each of the Fund's Trustees by the Fund
and total compensation paid by the Fund, UAM Funds, Inc. and AEW Commercial
Mortgage Securities Fund, Inc. (collectively the "Fund Complex") in the
fiscal year ended April 30, 1995.
COMPENSATION TABLE
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Pension or Total Compensation
Aggregate Retirement Benefits Estimated Annual from Registrant and
Name of Person Compensation Accrued as Part of Benefits Upon Fund Complex Paid to
Position From Registrant* Fund Expenses Retirement Trustees
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr.,
Trustee $1,832 0 0 $24,650
J. Edward Day,
Trustee $1,832 0 0 $24,650
Philip D. English,
Trustee $1,832 0 0 $24,650
William A. Humenuk,
Trustee $1,832 0 0 $24,650
</TABLE>
* Since the Registrant did not complete its first full year since its
organization, the table above represents aggregate compensation on an
annualized basis for the fiscal year ended April 30, 1995.
PRINCIPAL HOLDERS OF SECURITIES
As of February 295, 1996, the following persons or organizations held of
record 5% or more of the shares of the Portfolio:, as noted. Harnat & Co.,
P.O. Box 4044, Boston, MA, 98.9%*.
___________
* Denotes shares held by a trustee trustee or other fiduciary for which
beneficial ownership is disclaimed or presumed disclaimed.
The persons or organizations listed above as owning 25% or more of the
outstanding shares of a Portfolio may be presumed to "control" ( as that term
is defined in the 1940 Act) such Portfolio. As a result, those persons or
organizations could have the ability to vote a majority of the shares of the
Portfolio on any matter requiring the approval of shareholders of such
Portfolio.
INVESTMENT ADVISER
CONTROL OF ADVISER
Tom Johnson Investment Management, Inc., is a wholly-owned subsidiary of
UAM, a holding company incorporated in Delaware in December 1980 for the
purpose of acquiring and owning firms engaged primarily in institutional
investment management. Since its first acquisition in August 1983, UAM has
acquired or organized approximately 45 such
9
<PAGE>
wholly-owned affiliated firms (the "UAM Affiliated Firms"). UAM believes
that permitting UAM Affiliated Firms to retain control over their investment
advisory decisions is necessary to allow them to continue to provide
investment management services that are intended to meet the particular needs
of their respective clients.
Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to
operate under their own firm name, with their own leadership and individual
investment philosophy and approach. Each UAM Affiliated Firm manages its own
business independently on a day-to-day basis. Investment strategies employed
and securities selected by UAM Affiliated Firms are separately chosen by each
of them. Several UAM Affiliated Firms also act as investment advisers to
separate series or Portfolios of UAM Funds, Inc., a registered investment
company.
ADVISORY FEES
As compensation for services rendered by the Adviser under the Investment
Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly
installments, calculated by applying the following annual percentage rates to
the Portfolio's average daily net assets for the month:
TJ Core Equity Portfolio...................... 0.75%
SERVICE AND DISTRIBUTION PLANS
As stated in the Prospectus, UAM Fund Distributors, Inc. (formerly known
as RFI Distributors) may enter into agreements with broker-dealers and other
financial institutions ("Service Organizations"), pursuant to which they will
provide administrative support services to Institutional Service Class
("Service Class") shareholders who are their customers ("Customers") in
consideration of such Fund's payment of 0.25% (on an annualized basis) of the
average daily net asset value of the Service Class Shares held by the Service
Organization for the benefit of its Customers. Such services include:
(a) acting as the sole shareholder of record and nominee for beneficial
owners;
(b) maintaining account records for such beneficial owners of the Fund's
shares;
(c) opening and closing accounts;
(d) answering questions and handling correspondence from shareholders
about their accounts;
(e) processing shareholder orders to purchase, redeem and exchange shares;
(f) handling the transmission of funds representing the purchase price or
redemption proceeds;
(g) issuing confirmations for transactions in the Fund's shares by
shareholders;
(h) distributing current copies of prospectuses, statements of additional
information and shareholder reports;
(i) assisting customers in completing application forms, selecting
dividend and other account options and opening any necessary custody
accounts;
(j) providing account maintenance and accounting support for all
transactions; and
(k) performing such additional shareholder services as may be agreed upon
by the Fund and the Service Organization, provided that any such
additional shareholder service must constitute a permissible
non-banking activity in accordance with the then current regulations
of, and interpretations thereof by, the Board of Governors of the
Federal Reserve System, if applicable.
Each agreement with a Service Organization is governed by a shareholder
Service Plan (the "Service Plan") that has been adopted by the Fund's Board
of Trustees. Pursuant to the Service Plan, the Board of Trustees reviews, at
least quarterly, a written report of the amounts expended under each
agreement with Service Organizations and the purposes for which the
expenditures were made. In addition, arrangements with Service Organizations
must be approved annually by a majority of the Fund's Trustees, including a
majority of the Trustees who are not "interested persons" of the Fund as
defined in the 1940 Act and have no direct or indirect financial interest in
such arrangements.
10
<PAGE>
The Board of Trustees has approved the arrangements with Service
Organizations based on information provided by the Fund's service contractors
that there is a reasonable likelihood by affording the Fund greater
flexibility in connection with the servicing of the accounts of the
beneficial owners of its shares in an efficient manner. Any material
amendment to a Fund's arrangements with Service Organizations must be
approved by a majority of the Fund's Board of Trustees (including a majority
of the disinterested Trustees). So long as the arrangements with Service
Organizations are in effect, the selection and nomination of the members of
the Fund's Board of Trustees who are not "interested persons" (as defined in
the 1940 Act) of the Fund will be committed to the discretion of such
non-interested Trustees.
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a
Distribution Plan for the Service Class Shares of the Fund (the "Distribution
Plan"). The Distribution Plan permits the Fund to pay for certain
distribution, promotional and related expenses involved in the marketing of
only the Service Class Shares.
The Distribution Plan permits the Service Class Shares, pursuant to the
Distribution Agreement, to pay a monthly fee to the Distributor for its
services and expenses in distributing and promoting sales of the Service
Class Shares. These expenses include, among other things, preparing and
distributing advertisements, sales literature and prospectuses and reports
used for sales purposes, compensating sales and marketing personnel, and
paying distribution and maintenance fees to securities brokers and dealers
who enter into agreements with the Distributor. In addition, the Service
Class Shares may make payments directly to other unaffiliated parties who
either aid in the distribution of their shares or provide services to the
Class.
The maximum annual aggregate fee payable by the Fund under the Service
and Distribution Plans (the "Plans"), is 0.75% of the Service Class Shares'
average daily net assets for the year. The Fund's Board of Trustees may
reduce this amount at any time. Although the maximum fee payable under the
12b-1 Plan relating to the Service Class Shares is 0.75% of average daily net
assets of such class, the Board of Trustees has determined that the annual
fee, payable on a monthly basis, under the Plans relating to the Service
Class Shares, currently cannot exceed 0.50% of the average daily net assets
represented by the Service Class. While the current fee which will be
payable under the Service Plan has been set at 0.25%, the Plan permits a full
0.75% on all assets to be paid at any time following appropriate Board
approval.
All of the distribution expenses incurred by the Distributor and others,
such as broker/dealers, in excess of the amount paid by the Service Class
Shares will be borne by such persons without any reimbursement from such
classes. Subject to seeking best price and execution, the Fund may, from time
to time, buy or sell portfolio securities from or to firms which receive
payments under the Plans. From time to time, the Distributor may pay
additional amounts from its own resources to dealers for aid in distribution
or for aid in providing administrative services to shareholders.
The Plans, the Distribution Agreement and the form of dealer's and
services agreements have all been approved by the Board of Trustees of the
Fund, including a majority of the Trustees who are not "interested persons"
(as defined in the 1940 Act) of the Fund and who have no direct or indirect
financial interest in the Plan or any related agreements, by vote cast in
person at a meeting duly called for the purpose of voting on the Plan and
such Agreements. Continuation of the Plan, the Distribution Agreement and
the related agreements must be approved annually by the Board of Trustees in
the same manner, as specified above. No Service Class Shares have been
offered prior to the date of this Statement of Additional Information.
Each year the Trustees must determine whether continuation of the Plans
is in the best interest of the shareholders of Service Class Shares and that
there is a reasonable likelihood of the Plans providing a benefit to the
Class. The Plans, the Distribution Agreement and the related agreements with
any broker-dealer or others relating to a Class may be terminated at any time
without penalty by a majority of those Trustees who are not "interested
persons" or by a majority vote of the outstanding voting securities of the
Class. Any amendment materially increasing the maximum percentage payable
under the Plans must likewise be approved by a majority vote of the relevant
Class' outstanding voting securities, as well as by a majority vote of those
Trustees who are not "interested persons." Also, any other material
amendment to the Plans must be approved by a majority vote of the Trustees
including a majority of the Trustees of the Fund having no interest in the
Plans. In addition, in order for the Plans to remain effective, the
selection and nomination of Trustees who are not "interested persons" of the
Fund must be effected by the Trustees who themselves are not "interested
persons" and who have no direct or indirect financial interest in the Plans.
Persons authorized to make payments under the Plans must provide written
reports at least quarterly to the Board of Trustees for their review. The
National Association of Securities Dealers, Inc. has adopted amendments to
its Rules of Fair Practice relating to investment company sales charges. The
Fund and the Distributor intend to operate in compliance with these rules.
11
<PAGE>
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreement authorizes the Adviser to select the
brokers or dealers that will execute the purchases and sales of investment
securities for the Portfolio and directs the Adviser to use its best efforts
to obtain the best execution with respect to all transactions for the
Portfolio. The Adviser may, however, consistent with the interests of the
Portfolio, select brokers on the basis of the research, statistical and
pricing services they provide to the Portfolio. Information and research
received from such brokers will be in addition to, and not in lieu of, the
services required to be performed by the Adviser under the Investment
Advisory Agreement. A commission paid to such brokers may be higher than
that which another qualified broker would have charged for effecting the same
transaction, provided that such commissions are paid in compliance with the
Securities Exchange Act of 1934, as amended, and that the Adviser determines
in good faith that such commission is reasonable in terms either of the
transaction or the overall responsibility of the Adviser to the Portfolio and
the Adviser's other clients.
It is not the Fund's practice to allocate brokerage or principal business
on the basis of sales of shares which may be made through broker-dealer
firms. However, the Adviser may place portfolio orders with qualified
broker-dealers who recommend the Fund's Portfolios or who act as agents in
the purchase of shares of the Portfolios for their clients. During the
fiscal year ended April 30, 1995, the entire Fund paid brokerage commissions
of approximately $15, 000.
Some securities considered for investment by the Portfolio may also be
appropriate for other clients served by the Adviser. If purchases or sales
of securities consistent with the investment policies of the Portfolio and
one or more of these other clients served by the Adviser is considered at or
about the same time, transactions in such securities will be allocated among
the Portfolio and clients in manner deemed fair and reasonable by the
Adviser. Although there is no specified formula for allocating such
transactions, the various allocation methods used by the Adviser, and the
results of such allocations, are subject to periodic review by the Fund's
Board of Trustees.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may from time to time quote various performance figures to
illustrate past performance. Performance quotations by investment companies
are subject to rules adopted by the Commission, which require the use of
standardized performance quotations or, alternatively, that every
non-standardized performance quotation furnished by the Fund be accompanied
by certain standardized performance information computed as required by the
Commission. Current yield and average annual compounded total return
quotations used by the Fund are based on the standardized methods of
computing performance mandated by the Commission. An explanation of those
and other methods used to compute or express performance follows.
YIELD
Current yield reflects the income per share earned by the Portfolio's
investment. The current yield of the Portfolio is determined by dividing the
net investment income per share earned during a 30-day base period by the
maximum offering price per share on the last day of the period and
annualizing the result. Expenses accrued for the period include any fees
charged to all shareholders during the base period.
This figure is obtained using the following formula:
Yield = 2[( a-b + 1 )(6) - 1]
---
cd
where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period
that were entitled to receive income distributions
d = the maximum offering price per share on the last day of the period.
TOTAL RETURN
The average annual total return of the Portfolio is determined by finding
the average annual compounded rates of return over 1, 5 and 10 year periods
that would equate an initial hypothetical $1,000 investment to its ending
redeemable value. The calculation assumes that all dividends and
distributions are reinvested when paid. The quotation assumes the
12
<PAGE>
amount was completely redeemed at the end of each 1, 5 and 10 year period and
the deduction of all applicable Fund expenses on an annual basis.
These figures will be calculated according to the following formula:
P(1+T)(n) = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year periods at the end of the 1,
5 or 10 year periods (or fractional portion thereof).
The cumulative total rate of return for the TJ Core Equity Portfolio from
inception to the date of the financial statements included herein is 7.72%.
COMPARISONS
To help investors better evaluate how an investment in the Portfolios of the
Fund might satisfy their investment objective, advertisements regarding the
Fund may discuss various measures of Fund performance as reported by various
financial publications. Advertisements may also compare performance (as
calculated above) to performance as reported by other investments, indices
and averages. The following publications, indices and averages may be used:
(a) Dow Jones Composite Average or its component averages - an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow
Jones Industrial Average), 15 utilities company stocks and 20
transportation stocks. Comparisons of performance assume reinvestment
of dividends.
(b) Standard & Poor's 500 Stock Index or its component indices - an
unmanaged index composed of 400 industrial stocks, 40 financial
stocks, 40 utilities stocks and 20 transportation stocks.
Comparisons of performance assume reinvestment of dividend.
(c) The New York Stock Exchange composite or component indices -
unmanaged indices of all industrial, utilities, transportation and
finance stocks listed on the New York Stock Exchange.
(d) Salomon Brothers World Government Bond Index - The Salomon World
Government Bond Index is designed to provide a comprehensive measure
of total return performance of the domestic Government bond market of
thirteen countries. The index has been constructed with the aim of
choosing an "all inclusive" universe of institutionally traded
fixed-rate bonds. The selection of security types to be included in
the index is made with the aim of being as comprehensive as possible,
while satisfying the criterion of reasonable availability to domestic
and international institutions and the existence of complete pricing
and market profile data.
(e) Wilshire 5000 Equity index or its component indices - represents the
return on the market value of all common equity securities for which
daily pricing is available. Comparisons of performance assume
reinvestment of dividends.
(f) Lipper - Mutual Fund Performance Analysis and Lipper - Fixed Income
Fund Performance Analysis - measure total return and average current
yield for the mutual fund industry. Rank individual mutual fund
performance over specified time periods, assuming reinvestment of all
distributions, exclusive of any applicable sales charges.
(g) Morgan Stanley Capital International EAFE Index and World Index -
respectively, arithmetic, market value-weighted averages of the
performance of over 900 securities listed on the stock exchanges of
countries in Europe, Australia and the Far East, and over 1,400
securities listed on the stock exchanges of these continents, plus
North America.
13
<PAGE>
(h) Goldman Sachs 100 Convertible Bond Index - currently includes 67
bonds and 33 preferred. The original list of names was generated by
screening for convertible issues of 100 million or greater in market
capitalization. The index is priced monthly.
(i) Salomon Brothers GNMA Index - includes pools of mortgages originated
by private lenders and guaranteed by the mortgage pools of the
Government National Mortgage Association.
(j) Salomon Brothers High Grade Corporate Bond Index - consists of
publicly issued, non-convertible corporate bonds rated AA or AAA. It
is a value-weighted, total return index, including approximately 800
issues with maturities of 12 years or greater.
(k) Salomon Brothers Broad Investment Grade Bond - is a market-weighted
index that contains approximately 4,700 individually priced
investment grade corporate bonds rated BBB or better, U.S.
Treasury/agency issues and mortgage pass through securities.
(l) Lehman Brothers Long-Term Treasury Bond - is composed of all bonds
covered by the Lehman Brothers Treasury Bond Index with maturities of
10 years or greater.
(m) NASDAQ Industrial Index - is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only
and does not include income.
(n) Value Line - composed of over 1,600 stocks in the Value Line
Investment Survey.
(o) Russell 2000 - composed of the 2,000 smallest stocks in the Russell
3000, a market value-weighted index of the 3,000 largest U.S.
publicly-traded companies.
(p) Composite indices - 60% Standard & Poor's 500 Stock Index, 30% Lehman
Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70%
Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index;
35% Standard & Poor's 500 Stock Index and 65% Salomon Brothers High
Grade Bond Index; all stocks on the NASDAQ system exclusive of those
traded on an exchange, and 65% Standard & Poor's 500 Stock Index and
35% Salomon Brothers High Grade Bond Index.
(q) CDA Mutual Fund Report published by CDA Investment Technologies, Inc.
- analyzes price, current yield, risk, total return and average rate
of return (average compounded growth rate) over specified time
periods for the mutual fund industry.
(r) Mutual Fund Source Book published by Morningstar, Inc. - analyzes
price, yield, risk and total return for equity funds.
(s) Financial publications: Business Week, Changing Times, Financial
World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial
Times, Global Investor, Wall Street Journal and Weisenberger
Investment Companies Service - publications that rate fund
performance over specified time periods.
(t) Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics - a statistical measure of change over
time in the price of goods and services in major expenditure groups.
(u) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates
- historical measure of yield, price and total return for common and
small company stock, long-term government bonds, Treasury bills and
inflation.
(v) Savings and Loan Historical Interest Rates - as published by the U.S.
Savings & Loan League Fact Book.
(w) Historical data supplied by the research departments of First Boston
Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill
Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg
L.P.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and
averages is not identical to the composition of investments in the Portfolio,
that the averages are generally unmanaged, and that the items included in the
calculations of such averages may not be identical to
14
<PAGE>
the formula used by the Portfolio to calculate its performance. In addition,
there can be no assurance that the Portfolio will continue this performance
as compared to such other averages.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name The Regis Fund II, as a Delaware
business trust on May 18, 1994. On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust." The Fund's principal office is located at One
International Place, Boston, MA 02110; however, all investor correspondence
should be directed to the Fund at UAM Funds Service Center, c/o Chase Global
Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The Fund's
Agreement and Declaration of Trust permits the Fund to issue an unlimited
number of shares of beneficial interest, without par value. The Trustees
have the power to designate one or more series ("Portfolios") or classes of
shares of beneficial interest without further action by shareholders.
On each matter submitted to a vote of the shareholders, each holder of a
share shall be entitled to one vote for each whole share and a fractional
vote for each fractional share standing in his name on the books of the Fund.
In the event of liquidation of the Fund, the holders of the shares of
each Portfolio or any class thereof that has been established and designated
shall be entitled to receive, when and as declared by the Trustees, the
excess of the assets belonging to that Portfolio, or in the case of a class,
belonging to that Portfolio and allocable to that class, over the liabilities
belonging to that Portfolio or class. The assets so distributable to the
holders of shares of any particular Portfolio or class thereof shall be
distributed to the holders in proportion to the number of shares of that
Portfolio or class thereof held by them and recorded on the books of the
Fund. The liquidation of any Portfolio or class thereof may be authorized
at any time by vote of a majority of the Trustees then in office.
Shareholders have no pre-emptive or other rights to subscribe to any
additional shares or other securities issued by the Fund or any Portfolio,
except as the Trustees in their sole discretion shall have determined by
resolution.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of the Portfolio's
net investment income, if any, together with any net realized capital gains
in the amount and at the times that will avoid both income (including capital
gains) taxes incurred on it and the imposition of the Federal excise tax on
undistributed income and capital gains. The amounts of any income dividends
or capital gains distributions cannot be predicted. See the discussion under
"Dividends, Capital Gains Distributions and Taxes" in the Prospectus.
Any dividend or distribution paid shortly after the purchase of shares of
the Portfolio by an investor may have the effect of reducing the per share
net asset value of the Portfolio by the per share amount of the dividend or
distribution. Furthermore, such dividends or distributions, although in
effect a return of capital, are subject to income taxes as set forth in the
Prospectus.
As set forth in the Prospectus, unless the shareholder elects otherwise
in writing, all dividend and capital gains distributions are automatically
received in additional shares of the respective Portfolio of the Fund at net
asset value (as of the business day following the record date). This will
remain in effect until the Fund is notified by the shareholder in writing at
least three days prior to the record date that either the Income Option
(income dividends in cash and capital gains distributions in additional
shares at net asset value) or the Cash Option (both income dividends and
capital gains distributions in cash) has been elected. An account statement
is sent to shareholders whenever an income dividend or capital gains
distribution is paid.
Each Portfolio of the Fund will be treated as a separate entity (and
hence as a separate "regulated investment company") for Federal tax purposes.
Any net capital gains recognized by the Portfolio will be distributed to its
investors without need to offset (for Federal income tax purposes) such gains
against any net capital losses realized by another Portfolio.
CODE OF ETHICS
The Fund has adopted a Code of Ethics which restricts to a certain extent
personal transactions by access persons of the Fund and imposes certain
disclosure and reporting obligations.
15
<PAGE>
FEDERAL TAXES
In order for the Portfolio to qualify for Federal income tax treatment as
a regulated investment company under the Internal Revenue Code of 1986, as
amended (the "Code"), at least 90% of its gross income for a taxable year
must be derived from certain qualifying income, i.e., dividends, interest,
income derived from loans of securities and gains from the sale or other
disposition of stock, securities or foreign currencies, or other related
income, including gains from options, futures and forward contracts, derived
with respect to its business investing in stock, securities or currencies.
Any net gain realized from the closing out of futures contracts will,
therefore, generally be qualifying income for purposes of the 90%
requirement. Qualification as a regulated investment company also requires
that less than 30% of the Portfolio's gross income be derived from the sale
or other disposition of stock, securities, options, futures or forward
contracts (including certain foreign currencies not directly related to the
Fund's business of investing in stock or securities) held less than three
months. In order to avoid realizing excessive gains on securities held for
less than three months, the Portfolio may be required to defer the closing
out of futures contracts beyond the time when it would otherwise be
advantageous to do so. It is anticipated that unrealized gains on futures
contracts which have been open for less than three months as of the end of
the Portfolio's taxable year, and which are recognized for tax purposes, will
not be considered gains on securities held for less than three months for the
purposes of the 30% test.
Except for transactions the Portfolio has identified as hedging
transactions, in general the Portfolio is required for Federal income tax
purposes to recognize as income for each taxable year its net unrealized
gains and losses on some forward currency and some futures contracts as of
the end of each taxable year as well as those actually realized during the
year. In most cases, any such gain or loss recognized with respect to a
regulated futures contract is considered to be 60% long-term capital gain or
loss and 40% short-term capital gain or loss without regard to the holding
period of the contract. Recognized gain or loss attributable to a foreign
currency forward contract is treated as 100% ordinary income. Furthermore,
foreign currency futures contracts which are intended to hedge against a
change in the value of securities held by the Portfolio may affect the
holding period of such securities and, consequently, the nature of the gain
or loss on such securities upon disposition.
The Portfolio will distribute to shareholders annually any net capital
gains which have been recognized for Federal income tax purposes (including
unrealized gains at the end of the Portfolio's taxable year on futures
transactions). Such distribution will be combined with distributions of
capital gains realized on the Portfolio's other investments, and shareholders
will be advised as to the character of the payment.
The Portfolio will distribute to shareholders annually any net capital
gains which have been recognized for Federal income tax purposes.
Shareholders will be advised as to the character of the payments.
FINANCIAL STATEMENTS
The Financial Statements for the Portfolio for the period from inception
on September 28, 1995 to February 29, 1996 and selected per share data and
ratios and notes to the Financial Statements relating to the same period are
contained in this Statement of Additional Information.
16
<PAGE>
TJ CORE EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
FEBRUARY 29, 1996 (UNAUDITED)
VALUE
SHARES (000)+
- ------------------------------------------------------------------------
COMMON STOCKS (94.6%)
- ------------------------------------------------------------------------
AUTOMOTIVE (2.9%)
Ford Motor Corp. 900 $ 28
- ------------------------------------------------------------------------
BANKS (4.8%)
First Union Corp. 400 24
NationsBank Corp. 300 22
------
46
- ------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (11.1%)
Anheuser-Busch Cos., Inc. 200 14
Heinz (H.J.) Co. 1,000 34
Sara Lee Corp. 1,000 32
Unilever N.V. - New York Shares ADR 200 27
------
107
- ------------------------------------------------------------------------
BROADCASTING & PUBLISHING (6.8%)
Dun & Bradstreet Corp. 600 38
Gannett Co. 400 27
-------
65
- ------------------------------------------------------------------------
CHEMICALS (2.5%)
Mallinckrodt Group, Inc. 600 24
- ------------------------------------------------------------------------
ELECTRONICS (5.5%)
Emerson Electric Co. 200 15
General Electric Co. 500 38
-------
53
- ------------------------------------------------------------------------
ENERGY (9.0%)
Amoco Corp. 500 35
Coastal Corp. 600 22
Mobil Corp. 200 22
Repsol S.A. ADR 200 7
-------
86
- ------------------------------------------------------------------------
FINANCIAL SERVICES (6.1%)
American Express Co. 500 23
Federal National Mortgage Association 800 25
Lehman Brothers Holdings, Inc. 400 10
-------
58
- ------------------------------------------------------------------------
HEALTH CARE (2.7%)
United Healthcare Corp. 400 26
- ------------------------------------------------------------------------
HOLDING COMPANY (2.5%)
Textron, Inc. 300 24
- ------------------------------------------------------------------------
INSURANCE (2.7%)
ITT Hartford Group, Inc. 500 26
- ------------------------------------------------------------------------
LODGING & RESTAURANTS (1.3%)
ITT Corp. (New) 200 12
- ------------------------------------------------------------------------
MANUFACTURING (5.6%)
ITT Industries, Inc. 800 21
Tyco International Ltd. 900 33
-------
54
- ------------------------------------------------------------------------
METALS (1.7%)
USX-U.S. Steel Group, Inc. 500 16
- ------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
VALUE
SHARES (000)+
- ------------------------------------------------------------------------
COMMON STOCKS-(CONTINUED)
- ------------------------------------------------------------------------
OFFICE EQUIPMENT (2.0%)
Pitney Bowes, Inc. 400 19
- ------------------------------------------------------------------------
PAPER & PACKAGING (4.2%)
McGraw-Hill Companies, Inc. 300 26
Union Camp Corp. 300 14
-------
40
- ------------------------------------------------------------------------
PHARMACEUTICALS (4.7%)
Bristol-Myers Squibb Co. 300 26
Merck & Co., Inc. 300 20
-------
46
- ------------------------------------------------------------------------
RETAIL (2.3%)
Dillard Department Stores, Class A 700 22
- ------------------------------------------------------------------------
SERVICES (3.3%)
WMX Technologies, Inc. 1,100 31
- ------------------------------------------------------------------------
TECHNOLOGY (6.3%)
Avnet, Inc. 800 40
Compaq Computer Corp. 400 20
-------
60
- ------------------------------------------------------------------------
UTILITIES (6.6%)
AT&T Corp. 400 26
GTE Corp. 600 26
Telefonos de Mexico S.A. ADR, Class L 400 12
-------
64
- ------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $843) 907
- ------------------------------------------------------------------------
TOTAL INVESTMENTS (94.6%) (Cost $843) 907
- ------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (5.4%)
- ------------------------------------------------------------------------
Cash 73
Receivable due from Investment Adviser 5
Dividends Receivable 3
Payable for Professional Fees (11)
Payable for Administrative Fees (4)
Payable for Custodian Fees (2)
Payable for Directors' Fees (1)
Other Liabilities (12)
--------
51
- ------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 89,245 outstanding Institutional Service Class
shares (unlimited authorization, no par value) $958
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $10.74
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
+ See Note A to Financial Statements.
ADR - American Depositary Receipt.
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
TJ CORE EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
SEPTEMBER 28,
1995* TO
FEBRUARY 29,
1996
(IN THOUSANDS) (UNAUDITED)
- -------------- ---------------
Investment Income
Dividends ..................................... $8
Interest ...................................... 1
- ----------------------------------------------------------------------
Total Income ............................... 9
- ----------------------------------------------------------------------
EXPENSES
Investment Advisory Fees - Note B
Basic Fees.................................. $ 3
Less: Fees Waived........................... (3) -
Administrative Fees - Note C .................. 13
Audit Fees .................................... 11
Printing Fees.................................. 8
Custodian Fees ................................ 3
Registration and Filing ....................... 3
Directors' Fees - Note F....................... 1
Distribution Fees.............................. 1
Other Expenses................................. 1
Fees Assumed by Adviser - Note B............... (37)
- ----------------------------------------------------------------------
Net Expenses................................ 4
- ----------------------------------------------------------------------
NET INVESTMENT INCOME............................ 5
- ----------------------------------------------------------------------
NET REALIZED LOSS ON INVESTMENTS................. (7)
- ----------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION ON INVESTMENTS ................... 64
- ----------------------------------------------------------------------
NET GAIN ON INVESTMENTS.......................... 57
- ----------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..................... $62
- ----------------------------------------------------------------------
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
TJ CORE EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
SEPTEMBER 28,
1995* TO
FEBRUARY 29,
1996
(IN THOUSANDS) (UNAUDITED)
- --------------- -------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income ................................... $5
Net Realized Loss........................................ (7)
Net Change in Unrealized Appreciation.................... 64
- ------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations .. 62
- ------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income ................................... (2)
- ------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued - Regular ........................................ 944
- In Lieu of Cash Distributions................... 2
Redeemed ................................................ (48)
- ------------------------------------------------------------------------------
Net Increase from Capital Share Transactions........... 898
- ------------------------------------------------------------------------------
Total Increase ......................................... 958
Net Assets:
Beginning of Period ..................................... -
- ------------------------------------------------------------------------------
End of Period (2) ....................................... $958
- ------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued ........................................... 94
In Lieu of Cash Distributions............................ 1
Shares Redeemed ......................................... (5)
- ------------------------------------------------------------------------------
89
- ------------------------------------------------------------------------------
(2) Net Assets Consist of:
Paid in Capital ........................................ $898
Undistributed Net Investment Income ..................... 3
Accumulated Net Realized Loss .......................... (7)
Unrealized Appreciation.................................. 64
- ------------------------------------------------------------------------------
$958
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
TJ CORE EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
SEPTEMBER 28,
1995* TO
FEBRUARY 29,
1996
(UNAUDITED)
- ------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD................... $10.00
- ------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income............................. 0.06+
Net Realized and Unrealized Gain/Loss............. 0.71
- ------------------------------------------------------------------------------
Total from Investment Operations............... 0.77
- ------------------------------------------------------------------------------
DISTRIBUTION
Net Investment Income............................. (0.03)+
- ------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD......................... $10.74
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL RETURN........................................... 7.72%++
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (Thousands).................. $958
Ratio of Expenses to Average Net Assets................ 1.25%**+
Ratio of Net Investment Income to Average Net Assets... 1.46%**+
Portfolio Turnover Rate................................ 8%
- ------------------------------------------------------------------------------
* Commencement of Operations
** Annualized
+ Net of voluntarily waived fees and expenses assumed by the Adviser of
$0.48 per share for the period ended February 29, 1996.
++ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
TJ CORE EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds Trust, formerly known as The Regis Fund II, and UAM Funds,
Inc., formerly known as The Regis Fund, Inc., (collectively the "UAM Funds")
were organized on May 18, 1994 and October 11, 1988, respectively, and are
registered under the Investment Company Act of 1940, as amended, as open-end
management investment companies. TJ Core Equity Portfolio (the "Portfolio"),
a portfolio of UAM Funds Trust, began operations on September 28, 1995. At
February 29, 1996, the UAM Funds were comprised of thirty-seven active
portfolios. The financial statements of the remaining portfolios are
presented separately.
A. SIGNIFICANT ACCOUNTING POLICIES. The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the
Portfolio in the preparation of its financial statements.
1. SECURITY VALUATION: Securities listed on a securities exchange
for which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the
valuation is made or, if no sale occurred on such day, at the mean of the
bid and asked prices on such day. Price information on listed securities
is taken from the exchange where the security is primarily traded.
Over-the-counter and unlisted securities are valued between the current
bid and asked prices. Short-term investments that have remaining
maturities of sixty days or less at time of purchase are valued at
amortized cost, if it approximates market value.
The value of other assets and securities for which no quotations are
readily available is determined in good faith at fair value using methods
determined by the Board of Trustees.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify
as a regulated investment company under Subchapter M of the Internal
Revenue Code and to distribute all of its taxable income. Accordingly,
no provision for Federal income taxes is required in the financial
statements.
At February 29, 1996, the Portfolio's cost for Federal income tax
purposes was $843,000. Net unrealized appreciation for Federal income
tax purposes aggregated $64,000, of which $69,000 related to appreciated
securities and $5,000 related to depreciated securities.
3. REPURCHASE AGREEMENTS: In connection with transactions in
repurchase agreements, the Portfolio's custodian bank takes possession
of the underlying securities, the value of which exceeds the principal
amount of the repurchase transaction, including accrued interest. To the
extent that any repurchase transaction exceeds one business day, the
value of the collateral is marked-to-market on a daily basis to determine
the adequacy of the collateral. In the event of default on the obligation
to repurchase, the Portfolio has the right to liquidate the collateral
and apply the proceeds in satisfaction of the obligation. In the event
of default or bankruptcy by the other party to the agreement, realization
and/or retention of the collateral or proceeds may be subject to legal
proceedings.
4. DISTRIBUTIONS TO SHAREHOLDERS: Any distributions from net
investment income are normally declared and paid quarterly. Any realized
net capital gains will also be distributed annually. All distributions
are recorded on ex-dividend.
The amount and character of income and capital gain distributions
are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles.
6
<PAGE>
TJ CORE EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
5. OTHER: Security transactions are accounted for on trade date,
the date the trade was executed. Costs used in determining realized gains
and losses on the sale of investment securities are determined based on
the specific identification method. Dividend income is recorded on the
ex-dividend date. Interest income is recognized on the accrual basis.
Most expenses of the UAM Funds can be directly attributed to a particular
portfolio. Expenses which cannot be directly attributed are apportioned
among the portfolios of the UAM Funds and AEW Commercial Mortgage
Securities Fund, Inc. ("AEW"), an affiliated closed-end management
investment company, based on their relative net assets.
B. ADVISORY SERVICES. Under the terms of an Advisory Agreement, TJ
Investment Management, Inc. (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio at a fee calculated at an annual rate of 0.75% of
the Portfolio's average daily net assets. Through January 1, 1997, the
Adviser has voluntarily agreed to waive a portion of its advisory fees and/or
assume expenses on behalf of the Portfolio, if necessary, if the annual
operating expenses of the Portfolio exceed 1.25% of average daily net assets.
C. ADMINISTRATIVE SERVICES. The Chase Manhattan Bank, N.A., through its
affiliate Chase Global Funds Services Company ("CGFSC") (the
"Administrator"), provides administrative, fund accounting, dividend
disbursing and transfer agent services to the UAM Funds under an
Administration Agreement (the "Agreement"). Pursuant to the Agreement, the
Administrator is entitled to receive annual fees, computed daily and payable
monthly, based on the combined aggregate average daily net assets of the UAM
Funds and AEW as follows: 0.20% of the first $200 million of the combined
aggregate net assets; plus 0.12% of the next $800 million of the combined
aggregate net assets; plus 0.08% of the combined aggregate net assets in
excess of $1 billion but less than $3 billion; plus 0.06% of the combined
aggregate net assets in excess of $3 billion. The fees are allocated among
the portfolios of the UAM Funds and AEW on the basis of their relative net
assets and are subject to a graduated minimum fee schedule per portfolio
which rises from $2,000 per month upon inception of a portfolio to $70,000
annually after two years. In addition, the Portfolio is charged certain out
of pocket expenses by the Administrator.
D. DISTRIBUTION AND SERVICE PLANS. UAM Fund Distributors, Inc. (the
"Distributor"), a wholly-owned subsidiary of UAM, distributes the shares of
the Portfolio. The Portfolio has adopted a Distribution and Service Plan
(the "Plans") on behalf of the Institutional Service Class Shares pursuant to
Rule 12b-1 under the 1940 Act. Under the Plans the Portfolio may not incur
distribution or service costs which exceed an annual rate of 0.75% of the
Portfolio's net assets. The Portfolio is not currently making payments under
the Distribution Plan. Under the Service Plan the Portfolio reimburses the
Distributor or the Service Organization for payments made at an annual rate
of 0.25% of the average daily value of Institutional Service Class Shares
owned by clients of such Service Organizations.
E. PURCHASES AND SALES. During the period ended February 29, 1996, the
Portfolio made purchases of $908,000 and sales of $59,000 of investment
securities other than U.S. Government and short-term securities. There were
no purchases or sales of long-term U.S. Government securities during the
period ended February 29, 1996.
F. TRUSTEES' FEES. Each Trustee, who is not an officer or affiliated
person, $2,000 per meeting attended which is allocated proportionally among
the active portfolios of the UAM Funds and AEW, plus a quarterly retainer of
$150 for each active portfolio of the UAM Funds and AEW and reimbursement for
expenses incurred in attending Trustee meetings.
G. OTHER. At February 29, 1996, 98.9% of total shares outstanding were
held by one record shareholder owning 10% or greater of the aggregate total
shares outstanding.
7
<PAGE>
APPENDIX - DESCRIPTION OF RATINGS
DESCRIPTION OF CORPORATE BOND RATINGS
MOODY'S INVESTORS SERVICE CORPORATE BOND RATINGS
Aaa - Bonds which are Aaa are judged to be the best quality; They carry
the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an
exceptionally stable margin, and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or fluctuation
of protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
Moody's applies numerical modifiers 1, 2 and 3 in the Aa and A rating
categories. The modifier 1 indicates that the security ranks at a higher end
of the rating category, modifier 2 indicates a mid-range rating and the
modifier 3 indicates that the issue ranks at the lower end of the rating
category.
Baa - Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS
AAA - Bonds rated AAA have the highest rating assigned by Standard &
Poor's to a debt obligation and indicate an extremely strong capacity to pay
principal and interest.
AA - Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only to a small degree.
A - Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than bonds in higher
rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for debt in this category than for debt in higher rated categories.
A-1
<PAGE>
PART C
UAM FUNDS TRUST
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS:
1. This Post-Effective Amendment No. 8 is filed to comply with the
Registrant's undertaking to file a Post-Effective Amendment containing
reasonably current financial statements, which need not be audited, within
four to six months of the commencement date of the Newbold's Equity Portfolio
and the TJ Core Equity Portfolio (the "Portfolios"). The following unaudited
financial statement for the Portfolios are included in Part B of this
Post-Effective Amendment:
(a) Statement of Net Assets as of February 29, 1996;
(b) Statement of Operations for the period ended February 29, 1996;
(c) Statement of Changes in Net Assets for the period ended
February 29, 1996;
(d) Financial Highlights as of February 29, 1996; and
(e) Notes to Financial Statements.
2. The Annual Reports of the Chicago Asset Management Intermediate Bond
Portfolio, the Chicago Asset Management Value/Contrarian Portfolio and the
MJI International Equity Portfolio (the "Portfolios") are incorporated by
reference in their respective SAIs. The Annual Reports for the fiscal year
ended April 30, 1995 have previously been filed with the Securities and
Exchange Commission (the "Commission") . The audited financial statements
included in the Annual Reports are:
(a) Statement of Net Assets as of April 30, 1995;
(b) Statement of Operations for the period ended April 30, 1995;
(c) Statement of Changes in Net Assets for the period ended April
30, 1995;
(d) Financial Highlights as of April 30, 1995;
(e) Notes to Financial Statements; and
(f) Report of Independent Accountants.
<PAGE>
(b) EXHIBITS
Exhibits previously filed by the Fund are incorporated by reference to such
filings. The following table describes the location of all exhibits. In the
table, the following reference is used: PEA7 = Post-Effective Amendment No. 7
filed on August 28, 1995, PEA4 = Post-Effective Amendment No. 4 filed on
February 9, 1995, PEA3 = Post-Effective Amendment No. 3 filed on December 14,
1994, PEA2 = Post-Effective Amendment No. 2 filed on November 25, 1994, PEA1
= Post-Effective Amendment No. 1 filed on November 15, 1994, RS = original
Registration Statement on Form N-1A filed June 3, 1994; Pre EA =
Pre-Effective Amendment No. 1 filed August 24, 1994.
EXHIBIT INCORPORATED BY
- ------- REFERENCE TO (LOCATION):
------------------------
1 Declaration of Trust RS
A. Certificate of Amendment to
Certificate of Trust Filed herewith
2 By-Laws RS
3 Not Applicable
4 Specimen Share Certificate PEA1, PEA2, PEA3, PEA4
5 Forms of Investment Advisory Agreements RS, PEA1, PEA2, PEA3, PEA4
6 Form of Distribution Agreement RS
7 Not Applicable
8 Form of Custody Agreements RS
9 Form of Fund Administration Agreement Pre EA
10 Opinion and Consent of Counsel Pre EA
11 Consent of Independent Accountants
A. Consent of Independent Accountants
with respect to 1995
Annual Reports PEA7
12 Other Financial Statements
A. 1995 Annual Reports PEA7
13 Agreement for Providing Initial Capital Pre EA
14 Not Applicable
15 Not Applicable
16 Not Applicable
18. Rule 18f-3 Multiple Class Plan Filed herewith
24. Powers of Attorney RS, PEA7
27. Financial Data Schedules for the period
ended February 29, 1996 Filed herewith
<PAGE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Registrant is not controlled by or under common control with any person.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
NUMBER OF RECORD HOLDERS
TITLE OF CLASS OR SERIES AS OF FEBRUARY 29, 1996
- ------------------------ ------------------------
<S> <C>
BHM&S Total Return Bond Portfolio Institutional Class Shares.......................3
BHM&S Total Return Bond Portfolio Institutional Service Class Shares...............4
Chicago Asset Management Value/Contrarian Portfolio Institutional Class Shares.....7
Chicago Asset Management Intermediate Bond Portfolio Institutional Class Shares....6
IRC Enhanced Index Portfolio Institutional Class Shares............................4
MJI Global Bond Portfolio Institutional Class Shares...............................1
MJI International Equity Portfolio Institutional Class Shares.....................40
Newbold's Equity Portfolio Institutional Class Shares.............................21
TJ Core Equity Portfolio Institutional Service Class Shares........................3
</TABLE>
ITEM 27. INDEMNIFICATION
Reference is made to Article VI of Registrant's Declaration of Trust, which
is incorporated herein by reference. Registrant hereby also makes the
undertaking consistent with Rule 484 under the Securities Act of 1933, as
amended.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to the caption "Fund Management and Administration" in the
Prospectuses constituting Part A of this Registration Statement and
"Investment Adviser" in Part B of this Registration Statement. The
information required by this Item 28 with respect to each director, officer,
or partner of each investment adviser of the Registrant is incorporated by
reference to the Forms ADV filed by the investment advisers listed below with
the Securities and Exchange Commission pursuant to the Investment Advisers
Act of 1940, as amended, on the dates and under the File numbers indicated:
INVESTMENT ADVISER DATE FILED FILE NO.
- ------------------ ---------- --------
Chicago Asset Management Company March 7, 1996 801-20197
Murray Johnstone International Ltd. May 5, 1995 801-34926
Newbold's Asset Management, Inc. April 6, 1995 801-33560
Tom Johnson Investment Management, Inc. March 25, 1995 801-42549
Dwight Asset Management Company April 10, 1995 801-45304
Lotsoff Capital Management April 10, 1995 801-19825
Investment Research Company April 16, 1995 801-31292
Hanson Investment Management Company April 10, 1995 801-14817
Barrow, Hanley, Mewhinney & Strauss, Inc. April 4, 1995 801-31237
Chicago Asset Management Company, Murray Johnstone International Ltd.,
Newbold's Asset Management, Inc., Tom Johnson Investment Management, Inc.,
Dwight Asset Management Company, Investment Research Company, Hanson
Investment Management Company and Barrow, Hanley, Mewhinney & Strauss, Inc.
are wholly-owned affiliates of United Asset Management Corporation ("UAM"), a
Delaware Corporation owning firms engaged primarily in institutional
investment management.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) UAM Fund Distributors, the firm which acts as sole distributor of the
Registrant's shares, also acts as sole distributor for UAM Funds, Inc.
(b) Not applicable.
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The books, accounts and other documents required by Section 31(a) under the
Investment Company Act of 1940, as amended, and the rules promulgated
thereunder will be maintained in the physical possession of the Registrant,
the Registrant's Advisers, Registrant's Transfer and Administrative Agent
(Chase Global Funds Services Company, 73 Tremont Street, Boston,
Massachusetts 02108) and the Registrant's Custodian Bank.
ITEM 31. MANAGEMENT SERVICES
Not Applicable
<PAGE>
ITEM 32. UNDERTAKINGS
(a) Not applicable
(b) (i) Registrant hereby undertakes to file a Post-Effective Amendment
including reasonably current financial statements which need not be
certified for the MJI Global Bond Portfolio, within four to six
months from the effective date of the Portfolio.
(ii) Registrant hereby undertakes to file a Post-Effective Amendment
including reasonably current financial statements which need not be
certified for the Dwight Principal Preservation Portfolio, within
four to six months from the effective date of the Portfolio.
(iii)Registrant hereby undertakes to file a Post-Effective Amendment
including reasonably current financial statements which need not be
certified for the IRC Enhanced Index Portfolio, within four to six
months from the effective date of the Portfolio.
(iv) Registrant hereby undertakes to file a Post-Effective Amendment
including reasonably current financial statements which need not be
certified for the Hanson Equity Portfolio and the BHM&S Total
Return Bond Portfolios, within four to six months from the
effective date of each such Portfolio.
(c) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
(d) Registrant hereby undertakes to call a meeting of shareholders for
the purpose of voting upon the question of the removal of a Trustee
or Trustees when requested in writing to do so by the holders of at
least 10% of the Registrant's outstanding shares and in connection
with such meeting to comply with the provisions of Section 16(c) of
the Investment Company Act of 1940, as amended, relating to
shareholder communications.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston and Commonwealth of
Massachusetts on the 13th day of March, 1996. The Registrant certifies that
it meets all of the requirements for effectiveness of this Amendment pursuant
to Rule 485(b) under the Securities Act of 1933.
UAM FUNDS TRUST
*
--------------------------
Norton H. Reamer
Chairman and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
* , Chairman and President
- ------------------------------
Norton H. Reamer
* , Trustee
- ------------------------------
Mary Rudie Barneby
* , Trustee
- ------------------------------
John T. Bennett, Jr.
* , Trustee
- ------------------------------
J. Edward Day
* , Trustee
- ------------------------------
Philip D. English
* , Trustee
- ------------------------------
William A. Humenuk
* , Trustee
- ------------------------------
Peter M. Whitman, Jr.
/s/ Robert R. Flaherty , Treasurer and Principal
- ------------------------------ Financial and Accounting Officer
Robert R. Flaherty
/s/ Karl O. Hartmann
- ------------------------------
* Karl O. Hartmann
(Attorney-in-Fact)
<PAGE>
UAM FUNDS TRUST
(FORMERLY THE REGIS FUND II)
FILE NOS. 811-8544/33-79858
POST-EFFECTIVE AMENDMENT NO. 8
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
1 (A) Certificate of Amendment to
Certificate of Trust
18 Rule 18f-3 Multiple
Class Plan
27 Financial Data Schedules
for the period ended
February 29, 1996
<PAGE>
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF TRUST
OF
THE REGIS FUND II
Pursuant to Sections 3810(b)(1) and 3811(a)(2) of the Delaware Business
Trust Act, as amended, the undersigned hereby certifies that:
1. The name of the business trust is THE REGIS FUND II (the "Trust").
2. Article FIRST of the Certificate of Trust of the Trust shall be
amended to provide as follows:
FIRST: The name of the business trust is "UAM Funds Trust."
3. The effective date of this Certificate of Amendment is October 31,
1995.
IN WITNESS WHEREOF, the undersigned, being a trustee of the Trust, had
duly executed this Certificate of Amendment this 26th day of October, 1995.
THE REGIS FUND II
/s/ Norton H. Reamer
--------------------
Norton H. Reamer
<PAGE>
UAM FUNDS, INC.
UAM FUNDS TRUST
MULTIPLE CLASS PLAN
PURSUANT TO SEC RULE 18F-3
I. INTRODUCTION
This Multiple Class Plan (the "Plan") has been adopted pursuant to Rule
18f-3 under the Investment Company Act of 1940 (the "Act") by UAM Funds, Inc.
and UAM Funds Trust (the "Funds") for their portfolios and classes of their
portfolios. The Plan has been approved by separate actions of a majority of
the Board of Directors, and the Board of Trustees, respectively, including a
majority of the directors and trustees who are not interested persons of the
respective Fund, cast in person at a meeting called for the purpose of voting
on such Plan. Such approval by the directors/trustees included a
determination that the Plan as adopted, including the expense allocation, is
in the best interests of each class individually and each of the Funds as a
whole.
The Plan, as adopted at a meeting of the Board of each Fund held on
December 14, 1995 and called for such purpose, does not make any material
change in the multiple classes arrangements, as to the nature of the classes
offered, and expense allocations previously approved by each Board pursuant
to an existing order of exemption (The Regis Fund, Inc., et al., SEC Rel.
IC-20250, April 26, 1994). Before any material amendment to the Plan, a
majority of the directors/trustees of each Fund, and a majority of the
directors/trustees who are not interested persons of the respective Fund,
shall find that the Plan as proposed to be adopted or amended, including the
expense allocation, is in the best interests of each class individually and
each of the Funds as a whole. Before any material amendment to the Plan, the
directors/trustees shall request and evaluate such information as may be
reasonably necessary to evaluate the Plan.
* * *
II. ELEMENTS OF THE PLAN
The Plan provides that:
1. Existing shares of each portfolio of a Fund ("Existing Shares") are
those shares offered prior to implementation of a multiple class structure
for the Portfolio.
2. New shares of each portfolio of a Fund ("New Shares") are those
separate classes of shares with characteristics designed for a particular
market for mutual funds.
3. Each class of New Shares would be identical in all respects to the
Existing Shares except for its class designation, the allocation of certain
expenses, voting rights (as described below) and exchange privileges. As a
result, each portfolio's investment objectives, policies and
<PAGE>
restrictions would apply to the New Shares of any portfolio to the same
extent as to the Existing Shares of such portfolio.
4. The Existing Shares are no load and are not offered in connection
with a Rule 12b-1 Distribution Plan. In addition to the current class of
Existing Shares the Fund may offer several classes of New Shares (1) in
connection with a Distribution Plan adopted Pursuant to Rule 12b-1 (a
"Distribution Plan" or "12b-1 Plan") and/or (2) in connection with a non-Rule
12b-1 shareholder services plan ("Shareholder Services Plan"). Shares
offered subject to each of the Distribution Plan or Shareholder Services Plan
are hereinafter referred to as the "Distribution Shares" and "Shareholder
Services Plan Shares," respectively. The Distribution Plan and the
Shareholder Services Plan are sometimes collectively referred to herein as
"Distribution and Service Plans." The Fund may offer an unlimited number of
different classes of shares, either in connection with a Plan, with more than
one Plan, or without any of the Plans.
5. Each class shall have: (a) exclusive voting rights on any matter
submitted to shareholders that relates solely to its arrangements; (b)
separate voting rights on any matter submitted to shareholders in which the
interests of one class differ from the interests of any other class; and (c)
in all other respects the same rights and obligations as each other class.
6. Under each class of the Distribution Plan and the Shareholder
Services Plan, either the Fund (on behalf of a portfolio) or the Distributor
(such election to be at the discretion of the Fund) enters into servicing
agreements ("Service Agreements") with banks, broker-dealers or other
institutions, including the Distributor if the Fund so elects, ("Service
Organizations") concerning the provision of certain services to the customers
("Customers") of the Service Organizations, which Customers from time to time
beneficially own shares which are offered pursuant to the particular Plan or
Plans. In addition, Service Agreements under the Distribution Plan also
contemplate an asset-based charge to compensate Service Organizations for the
distribution of Distribution Shares and the provision of certain additional
services to Customers, which services arguably could be considered to be
distribution-related. The Shareholder Services Plan (and the Service
Agreements related thereto) will be used with respect to Service
Organizations authorized to provide services under a Shareholder Services
Plan. The Distribution Plan (and the Service Agreements related thereto)
would be used with respect to the Service Organizations authorized to provide
distribution and other services under the Distribution Plan. Under each
Plan, the Fund or the Distributor (which would be reimbursed by the Fund)
would pay a Service Organization for its services and assistance in
accordance with the terms of the relevant Plan and the particular Service
Agreement. (Such payments are hereinafter referred to as "Service
Payments.") Service Payments with respect to a Shareholder Services Plan are
"Service Fees," and Service Payments with respect to a Distribution Plan are
either "Service Fees," "asset-based sales charges" or both, as defined in
Article III, Section 26 of the National Association of Securities Dealers,
Inc. ("NASD") Rules of Fair Practice.
7. Consistent with the requirements of Rule 18f-3, and as described
herein, each class shall have a different arrangement for shareholder
services or the distribution of securities or both, and shall pay all of the
expenses of that arrangement. As set forth below each class, to
<PAGE>
the extent that it also complies with the I.R.S. Ruling governing the Funds'
multiple class structure:
(a) may pay a different share of other expenses, not including advisory
or custodial fees or other expenses related to management of the Portfolio's
assets, if these expenses are actually incurred in a different amount by that
class, or if the class receives services of a different kind or to a
different degree than other classes;
(b) may pay a different advisory fee to the extent that any difference
in amount paid is the result of the application of the same performance fee
provisions in the advisory contract of the company to the different
investment performance of each class;
(c) expenses may be waived or reimbursed by the portfolio's Adviser,
Distributor, or any other provider of services to the portfolio;
(d)(1) income, realized and unrealized capital gains and losses, and
expenses of the portfolio not allocated to a particular class (except as
permitted in paragraph (d)(2) of this section) shall be allocated to each
class on the basis of the net asset value of that class in relation to the
net asset value of the Portfolio;
(d)(2) for portfolios operating under Rule 2a-7 under the 1940 Act
(including the provision allowing the calculation of net assets on an
amortized cost basis), and for other portfolios declaring distribution of net
investment income daily that maintain the same net asset value per share in
each class, may be allocated:
(i) To each share without regard to class, provided that the
Portfolio has received undertakings from its Adviser, Distributor or any
other provider of services to the portfolio, agreeing to waive or reimburse
the portfolio for payments to such service provider by one or more classes,
to the extent necessary to assure that all classes of the portfolio
maintain the same net asset value per share; or
(ii) On the basis of relative net assets (settled shares). For
purposes of this Plan, "relative net assets (settled shares)" are net
assets valued in accordance with generally accepted accounting principles
but excluding the value of subscriptions receivable, in relation to the net
assets of the Portfolio.
III. IMPLEMENTATION OF THE PLAN
A. DISTRIBUTION PLAN SERVICES
The distribution-related services to be provided by Service
Organizations to the Fund and/or its Customers under the Distribution Plan of
the Fund may include, but are not limited to, the following:
<PAGE>
- advertising the availability of services and products;
- designing material to send to customers and developing methods of making
such materials accessible to customers;
- providing information about the product needs of customers;
- providing facilities to solicit Fund sales and to answer questions from
prospective and existing investors about the Fund;
- receiving and answering correspondence from prospective investors,
including requests for sales literature, prospectuses and statements of
additional information;
- displaying and making sales literature and prospectuses available on the
Service Organization's premises;
- acting as liaison between shareholders and the Fund, including obtaining
information from the Fund and providing performance and other information
about the Fund; and
- providing additional personal services and/or shareholder account
maintenance services like those listed below as Shareholder Services
Plan Services or additional distribution-related services as may be
agreed to by the Service Organization in the future (collectively, the
"Distribution Plan Services").
The Service Agreement provides for compensation to broker-dealers for
their efforts to sell the Distribution Shares to their brokerage customers
and prospective customers.
B. SHAREHOLDER SERVICES PLAN SERVICES
The personal and account maintenance services to be provided by Service
Organizations to their Customers under the Shareholder Services Plan of the
Fund may include, but are not limited to, the following:
- acting as the sole shareholder of record and nominee for all beneficial
owners;
- maintaining account records for each shareholder who beneficially owns
Shareholder Services Plan Shares;
- opening and closing accounts; answering questions and handling
correspondence from shareholders about their accounts;
<PAGE>
- processing shareholder orders to purchase, redeem and exchange
Shareholder Services Plan Shares;
- posting interest;
- handling the transmission of funds representing the purchase price or
redemption proceeds;
- issuing confirmations for transactions in Shareholder Services Plan
Shares by shareholders;
- distributing current copies of prospectuses, statements of additional
information and shareholder reports;
- assisting Customers in completing application forms, selecting dividend
and other account options and opening custody accounts with the Service
Organization;
- providing account maintenance and accounting support for all
transactions; and
- similar personal services and/or shareholder account maintenance
services as may be agreed to by the Service Organization in the future
(collectively, the "Shareholder Services Plan Services")
Service Organizations may charge other fees to their Customers who are
the beneficial owners of Distribution Shares or Shareholder Services Plan
Shares in connection with their Customer accounts.(1) These fees would be in
addition to any amounts received by the Service Organization under a Service
Agreement.
C. OTHER SERVICES
Other services may include, but are not limited to, services not
provided by existing service providers, such as the adviser, distributor,
transfer agent or under a shareholder services plan or distributor plan.
D. APPLICATION OF PLANS TO CLASSES
Because the Fund may sell its shares to a broad range of institutions
other than banks, it is likely, as a result of legal constraints imposed on
certain banks, which constraints preclude
______________________
(1) Examples of these fees would include custody account fees and "sweep"
fees, I.E., a fee charged by the Service Organization for automatically
moving money from an account with the Service Organization and investing it
in Shareholder Services Plan Shares of the Fund.
<PAGE>
receipt of Rule 12b-1 payments in connection with the distribution of shares,
the Fund would adopt a Shareholder Services Plan with respect to a separate
class of New Shares of the Fund. The Shareholder Services Plan (and the
Service Agreements related thereto) would be used with respect to Service
Organizations authorized to provided only personal and account maintenance
services under a Shareholder Services Plan and the Distribution Plan (and the
Service Agreements related thereto) would be used with respect to the Service
Organizations authorized to provide the distribution and distribution-related
and liaison services under the Distribution Plan. The Fund may also
establish additional classes of New Shares either in connection with a
Shareholder Services Plan and/or a Distribution Plan or without any of such
Plans. When a 12b-1 Plan and a Shareholder Services Plan are adopted with
respect to a single class of shares, the Directors will apply the analysis
required under Rule 12b-1(d) to the aggregate amount paid under such Plans in
order to assure that, to the extent that the Plans may be deemed to overlap
in some respects, compensation shall not be duplicative as a result of the
use of both Plans.(2)
E. CALCULATION OF NET ASSET VALUE AND ALLOCATION OF EXPENSES
With respect to all bond portfolios and equity portfolios, the net asset
value ("NAV") of all outstanding shares representing interest in the same
portfolio will be computed on the same days and at the same times. The
procedures for calculating NAV's of each class start with the prior day's
closing NAV adjusted for net capital transactions. The gross income of all
portfolios will be allocable among the classes of shares based upon the
relative net asset values. The result is then divided by the number of
shares outstanding relating to that class. The methodology for dividend
distributions shall depend upon the dividend policy adopted for the
respective portfolio. For the bond and equity portfolios, a maximum dividend
rate is determined for each class's distributable income by determining the
total distributable income, adding all class specific fees and expenses
(described below) and then dividing the result by shares outstanding. From
this maximum dividend rate incremental Class Expenses are deducted.
For money market portfolios, the maximum dividend rate by class is
determined by dividing undistributed income attributable to each class by the
number of shares of each class eligible to receive dividends.
Dividends paid to each class of shares in a portfolio shall be declared
and paid on the same days and at the same times and, except as noted with
respect to the expenses of Service Payments and Class Expenses, shall be
determined in the same manner and paid in the same amounts per outstanding
share. Except for the money market portfolios (which maintain a constant net
asset value per share, and declare dividends on a daily basis) the net asset
value per share of the classes of shares of each Portfolio will vary.
______________________
(2) While no class of shares of a portfolio would be offered in connection
with more than one Distribution Plan or Shareholder Services Plan, a single
form of each Plan might be adopted by more than one portfolio (E.G., all
portfolios might adopt a common form of any one of the Plans). All
portfolios may offer classes in connection with more than one Plan.
<PAGE>
Expenses of the Fund that cannot be attributed directly to any one
portfolio ("Fund Expenses") will be allocated to each portfolio based on the
relative net assets of such portfolio.(3) Fund Expenses could include, for
example, Directors' fees and expenses, unallocated audit and legal fees,
insurance premiums, expenses relating to shareholder reports and printing
expenses.
Certain expenses may be attributable to a particular portfolio, but not
a particular class ("Portfolio Expenses"). All such Portfolio Expenses shall
be allocated to each class of shares in a portfolio on the basis of the
relative net asset values of the classes of that portfolio. Portfolio
Expenses may include, for example, advisory fees and custodian fees, and fees
related to preparation of separate documents of a particular portfolio, such
as an annual report for such portfolio. Expenses borne by a portfolio shall
be borne pro rata by its shareholders on the basis of the applicable net
asset value of the classes of such portfolio, except for (a) the Service
Payments that are made under a Distribution Plan or Shareholder Service Plan
that has been adopted in connection with a class of shares and (b) Class
Expenses.
All Class Expenses incurred by a class of shares will be borned on a pro
rata basis by the outstanding shares of such class. Class Expenses could
consist of (a) transfer agent fees attributable to a specific class of
shares; (b) printing and postage expenses related to preparing and
distributing materials such as shareholder reports, prospectuses and proxy
statements to current shareholders of a specific class; (c) Securities and
Exchange Commission and Blue Sky registration fees incurred by a class of
shares; (d) the expense of personnel and services as required to support the
shareholders of a specific class; (e) Directors fees or expenses incurred as
a result of issues relating to one class of shares; (f) accounting expenses
relating solely to one class of shares; and (g) legal expenses relating to a
specific class of shares.
All allocations of Class Expenses may be limited if necessary to
preserve a portfolio's qualification as a regulated investment company under
subchapter M of the Internal Revenue Code of 1986, as amended.
F. EXCHANGES.
Except as noted herein, each class of shares may be exchanged only for
shares of the same class in another portfolios of the Fund (in all events to
be limited to within the same "group of investment companies" as the term is
defined in Rule 11a-3 of the Act). Exchanges will be permitted among classes
should a shareholder cease to be eligible to purchase shares of the original
class by reason of a change in the shareholder's status. Exchanges among
classes may be made when a shareholder of a class becomes eligible to
purchase shares of another class and ineligible to purchase shares of the
class originally held. For example, when an investor who beneficially owned
shares held by an institution becomes the holder of legal title by reason of
a distribution from the institutional account. Such distributions may be
occasioned by a termination of a trust and distribution of the corpus of the
trust to beneficiaries. An individual would become the holder of shares
designed for institutions, and the individual may desire the
______________________
(3) This shall not preclude a Fund from allocating expenses, from time to
time as it deems appropriate, among portfolios using alternative methods,
including allocations based on the number of shares of each portfolio.
<PAGE>
services offered by Service Organizations in substitution of the services
formerly provided by the trustee of such trust. In such case, an exchange
may occur upon the request of the shareholder.
* * *
IV. INITIAL CLASSES
At the date of adoption of this Plan, the Funds have authorized the
issuance of two classes of shares which are subject to this Plan:
A. Institutional Class
Characteristics: No-load, no service fee or asset-based sales charge.
B. Institutional Service Class
Characteristics: Service fee, distribution fee or both.
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